Overcoming Scalability Barriers in Manufacturing Marketplaces: A Framework for Trust-Centric Platforms
DOI:
https://doi.org/10.47672/ajscm.2786Keywords:
Manufacturing Platforms; Supply Chain Management; Digital Marketplace; Trust, Transaction Cost TheoryAbstract
Purpose: Despite heavy investment, digital manufacturing marketplaces have struggled to scale beyond niche adoption. This study examines the underlying causes and proposes a new framework for building a trust-centric, scalable platform. The framework identifies three core principles: (1) efficient matchmaking, (2) enduring trust, and (3) effortless collaboration, as levers for transforming fragmented manufacturing networks. It demonstrates how trust-enabled platforms can trigger network effects, lower external transaction costs, and reshape supply chain strategies.
Materials and Methods: An exploratory mixed-method approach was used, combining an extensive literature review of academic and industry sources with semi-structured interviews involving platform architects, manufacturing SMEs, and supply chain managers. Insights from these interviews, analyzed thematically, were synthesized with the literature to develop the proposed framework.
Findings: The study finds that today’s manufacturing marketplaces lack scalability and broad adoption due to limited transparency in supplier capabilities, cost-centric matchmaking, and “black box” models that hinder communication and customization. To overcome these barriers, platforms must actively engineer trust by promoting performance-based visibility and enabling direct, accountable collaboration. A platform grounded in Efficient Matchmaking, Enduring Trust, and Effortless Collaboration can create self-reinforcing network effects and substantially reduce external transaction costs. As these costs decline, firms are increasingly incentivized to outsource manufacturing, potentially decoupling production from product development and allowing greater focus on innovation.
Unique Contribution to Theory, Practice, and Policy: The findings extend Transaction Cost Theory (TCT) by demonstrating that trust-enforced digital marketplaces can reduce firm boundaries. Theoretically, this suggests expanding TCT to account for platform-enabled trust mechanisms that lower coordination costs. In practice, firms are advised to reconsider make-or-buy decisions as outsourcing via high-trust platforms becomes safer and cheaper. This allows firms to externalize manufacturing and devote internal resources to innovation. Policymakers are urged to update trade and antitrust policies to accommodate hyper-scalable manufacturing service platforms that are redefining industrial structures.
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