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

Abstract

Abstract:The implementation of Industry 4.0 has a far-reaching impact on industrial value creation. Studies on its opportunities and challenges for companies are still scarce. However, the high practical and theoretical relevance of digital and connected manufacturing technologies implies that it is essential to understand the underlying dynamics of their implementation. Thus, this study examines the relevance of Industry 4.0-related opportunities and challenges as drivers for Industry 4.0 implementation in the context of sustainability, taking a differentiated perspective on varying company sizes, industry sectors, and the company's role as an Industry 4.0 provider or user. A research model comprising relevant Industry 4.0-related opportunities and challenges as antecedents for its implementation is hypothesized. In order to test the model, partial least square structural equation modeling is applied for a sample of 746 German manufacturing companies from five industry sectors. The results show that strategic, operational, as well as environmental and social opportunities are positive drivers of Industry 4.0 implementation, whereas challenges with regard to competitiveness and future viability as well as organizational and production fit impede its progress. Moreover, it is shown that the perception of Industry 4.0-related opportunities and challenges as antecedents to Industry 4.0 implementation depends on different company characteristics.

Business Model Innovation of Industry 4.0 Solution Providers Towards Customer Process Innovation

“…This does not correspond exactly with Bauernhansl's theory, which, however, does not distinguish between Industry 4.0 suppliers and users and rather estimates general savings potentials [32]. Further, SMEs have proven to focus on operational and production-related benefits of Industry 4.0 rather than the strategic benefits or such benefits that unfold across the supply chain [10].…”

“…The finding that solution providers rated the potential for reducing their customers' production costs the highest is a further indication that a strong production focus of the solutions exists. This explanation is also supported by the fact that those customer goals can be most strongly supported by Industry 4.0-based solutions [10].…”

“…Further, the results show the difficulty of estimating generally valid savings potentials, which can vary greatly depending on the application or solution [1,10]. The finding that solution providers rated the potential for reducing their customers' production costs the highest is a further indication that a strong production focus of the solutions exists.…”

“…In general, for manufacturing companies, industrial services create advantages, such as differentiation from competitors and customer loyalty [10]. Industry 4.0 now enables completely new business models through the combination of technologically perfected production facilities and extended integration of employees, customers and product users.…”

Fourth industrial revolution: a way forward to attain better performance in the textile industry

“…Companies must ensure proper implementation of Industry 4.0 to maximise its benefits. According to different studies, the implementation of technology is crucial (Müller, Kiel & Voigt, 2018;Oesterreich & Teuteberg, 2016;Tortorella & Fettermann, 2018;Zawra et al, 2017).…”