Assessment of Risks for Successful Implementation of Industry 4.0

Abstract

Introduction:: The transformation happening globally, though referred by different names and nomenclatures, the overall objective to inspire digitalization and smart practices by reducing human intervention and enhancing machines intelligent to take on the global manufacturing and production to another level of excellence is a proven fact now. However, earlier research has been found, lacking in the strategic approach to evaluate and analyze the I4.0 adoption related risks for its implementation. This ultimately deprived organizations of multitude of the benefits of I4.0 adoption. Objective:: This research proposes a systematic methodology for understanding and evaluating the most evident risks in the context of I4.0 implementation. Method:: The research is mainly based on the inputs from experts/consultants along with robust literature review and researcher’s experience in the area of risks handling. The MCDM methods used for investigation and assessment are Fuzzy AHP and Fuzzy TOPSIS. The outcomes of the study are further validated through sensitivity analysis and real world scenario. Results:: Technical and Information Technology (IT) risks are found to be on the top of the priority list, which needs urgent attention while embarking on I4.0 adoption in the industry and the most important criteria, which needed urgent attention was, Information Security. The paper has also developed the ‘Industry 4.0 Risks Iceberg model’ and systematicaly categoried the challenges into 5 dimensions for easy assessment and analysis. Discussion:: The transformation happening globally, though referred by different names and nomenclatures, the overall objective to inspire digitalization and smart practices by reducing human intervention and enhancing machines intelligent to take on the global manufacturing and production to another level of excellence is a proven fact now. However, earlier research has been found, lacking in the strategic approach to evaluate and analyze the I4.0 adoption related risks for its implementation. This ultimately deprived organizations of multitude of the benefits of I4.0 adoption. Conclusions:: This systematic and holistic study of the I4.0 associated risks can be used to find the most critical and crucial risks based on which the strategies and policies may be modified to harness the best of I4.0. This will not only ensure the returns on investment but also will build the trust in the system. The research would be very beneficial to managers, academicians, researchers and technocrats who would be involved in I4.0 implementation.

Key performance indicator based dynamic decision-making framework for sustainable Industry 4.0 implementation risks evaluation: reference to the Indian manufacturing industries

“…The noteworthy result of this study is that cost, information security, and virtualization are three important KPIs. Contemplating to this the study affirms the finding by Mittal et al ( 2019 ), Gadekar et al ( 2020 ), and Ghobakhloo and Iranmanesh ( 2021 ) that information security, as described through the standards and procedures of data acquisition, processing, cloud computing, and analytics, is one of the most critical KPIs. Attention to this will be helpful to mitigate the risks related to issues on the way to the successful adoption of the I4.0 vision.…”

“…The study used FDEMATEL to establish that IT infrastructure is the most important KPI among the 16 chosen. This finding attracts urgent attention from researchers and policymakers in developing countries like India because of the prevailing low state of IT infrastructure (Gadekar et al, 2020 ; Luthra et al, 2020 ). Except for a few very large companies, no other companies have dared to install dedicated and customized infrastructure for company use, as it needs heavy capital investment.…”

“…But it comes with lots of complexity, uncertainty, and massive costs (Bonilla et al, 2018 ; Machado et al, 2019 ). In the absence of cybersecurity solutions, internet-based technologies and online platforms have raised high apprehensions related to data security and transparency restricting manufacturers from welcoming I4.0 open-heartedly despite having equipped with other necessary resources (Gadekar et al, 2020 ; Parhi et al, 2021 ). Sooner or later, the companies will have to inculcate the new normal of I4.0.…”

“…The I4.0 emerging technology’s multi-faceted advantages like seamless interconnectivity and data exchange among all factory devices and machines are one of the significant advantages that clearly differentiate it from the age-old traditional approach (Bauer et al, 2015 ). The strong collaboration of technologies like big data analytics (BDA), Internet of Things (IoT), Industrial Internet of Things (IIoT), artificial intelligence (AI), machine learning (ML), cloud computing (CC), robots, and cobots, cyber-physical systems (CPS), Additive manufacturing, Digital twin and augmented reality/virtual reality (AR/VR) also add value to the overall digital transformation happening in manufacturing industry around the world (Arbabian & Wagner, 2020 ; Gadekar et al, 2020 ; Türkeş et al, 2019 ). Figure 1 elucidates the insights of I4.0 in a real-world scenario.…”

“…Further, the unknown nature and dimensions of these challenges restrict decision-makers from making quick decisions, ultimately aggravating the I4.0 implementation risks impact negatively (Birkel et al, 2019 ). This most urgent concern motivates researchers to identify and prioritize the highest prominent I4.0 risks, which are observed missing in past studies or addressed in a very limited manner (Gadekar et al, 2020 ). The critical synthesis, analysis, and application carried out in this study will fill the gap of missing extant literature and speed up the progression of sustainable I4.0 adoption.…”