Industry 4.0 : Impact on Manufacturing Strategies and Performance

Abstract: The fourth industrial revolution, also known as Industry 4.0, is based on digital industrial technology developments. The purpose of Industry 4.0 is to transform industrial manufacturing through digitalization and new technologies. The introduction of Industry 4.0 has led companies to consider digitalization as essential for company strategies. For decades, companies have aspired to increase performance by using advanced production practices, such as different operation methods and advanced manufacturing technologies. The intention of introducing these practices is to advance companies towards high performance by implementing advanced techniques. One way of utilizing the potential of new technologies is by an adoption of the concept Industry 4.0. This research studies the impact of Industry 4.0 on companies current manufacturing strategies and operational performance. The study is carried out by conducting case studies on two companies with connections to the concept of Industry 4.0 and implementations of Industry 4.0 technologies such as big data, Internet of things, the Cloud concepts, simulations, and autonomous robots. Through theoretical and comparative analysis and discussion, the study found that an adoption to Industry 4.0 as a concept is a long and stepwise process. Successful Industry 4.0 adaption requires integration of Industry 4.0 with current manufacturing strategies. Implementation of certain Industry 4.0 technologies can have an impact on operational performance if these are integrated with advancements of manufacturing practices. The practices of manufacturing strategies are significantly associated with operational performance. In other cases, the impact of implementing new technologies linger, and is not directly noticeable. With this in consideration, the value of these new technologies should not be limited to operational measurements such as financial measures.