Sustainable Industrial Value Creation: Benefits and Challenges of Industry 4.0

Abstract

The Industrial Internet of Things (IIoT) poses several implications on manufacturers in terms of economic, ecological, and social aspects referring to the Triple Bottom Line (TBL) of sustainable value creation. Due to its technical core, the current research focused on its technical fundamentals, whereas the economic discussion is still in its infancy. This paper aims at painting a comprehensive and structured picture of IIoT-related economic, ecological, and social benefits and challenges. For this purpose, we employ an exploratory multiple case study approach based on semi-structured expert interviews in 46 manufacturing companies from three leading German industries. Our study contributes to the sparse body of scientific IIoT literature by analysing the IIoT’s implications according to the TBL. We show that, in order to qualify for sustainable industrial value creation, the IIoT requires an extension of the established TBL by three further dimensions, i.e., technical integration, data and information, and public context.

What Drives the Implementation of Industry 4.0? The Role of Opportunities and Challenges in the Context of Sustainability

“…This results in reduced process faults, a lower scrap rate, more reliable production systems, and minimized downtime. Eventually, the overall quality level of manufacturing increases [3,75]. Furthermore, connected goods enable the collection and analysis of information about product use and features over the product's entire life cycle.…”

“…With regard to social aspects, Industry 4.0-related flexibility and improvement of management processes and decisions due to transparency are enabled by the availability of real-time data throughout entire supply chains [3]. Likewise and based on the digitized connection of corporate functions, including home office and tele-work approaches, working time models are expected to become more adaptable and susceptible to individualization.…”

“…For instance, new competitors that offer smart and connected product solutions or even entirely new business models, such as platforms, can emerge quickly, threatening the current market position of Sustainability 2018, 10, 247 7 of 24 established players. Likewise, increasingly competitive dynamics and facilitated market entrance of new competitors are among the most critical challenges in the Industry 4.0 era [3].…”

“…Associated with this flexibility, Industry 4.0 aims at overcoming contemporary challenges, such as intensifying global competition, volatile markets and demands, required customization, as well as decreasing innovation and product life cycles. Industry 4.0 serves as a useful and targeted approach to deal with these challenging requirements [1,3].…”

Consequences of Industry 4.0 in Business and Economics

“…The study suggests managers explore further forms of business model innovation, and create customer-driven, rather than product-oriented innovations . Another study deals with the fact that the industrial Internet of Things poses several implications on manufacturers in terms of economic, ecological, and social aspects referring to the triple bottom line of sustainable value creation (Kiel et al 2017).…”