Industry 4.0: a supply chain innovation perspective

TLDR

Industry 4.0 refers to the digitalisation of the industrial sector. The study examines how Industry 4.0 affects supply chain management through the lens of supply chain innovation. The authors applied structured content analysis to over 200 use cases of Industry 4.0‑enabled supply chain innovation, categorising it into process, technology, and business architecture dimensions. The study finds that Industry 4.0‑enabled supply chain innovation expands beyond productivity to scalability and flexibility, is largely driven by analytics and smart devices while neglecting human‑centric technologies, and that established firms maintain existing architectures whereas startups transform their models, adopting problem‑driven engineering or asset‑light, business‑driven approaches, with digitalisation achieved via platform‑based crowdsourcing or on‑demand customised services.

Abstract

The Fourth Industrial Revolution – also known as Industry 4.0 (i4.0) – comprises the digitalisation of the industrial sector. This paper uses the theoretical lens of supply chain innovation (SCI) to investigate the implications of i4.0 on supply chain management. For these purposes, the method of structured content analysis is applied to more than 200 use cases of i4.0-enabled SCI introduced by both established and startup companies. i4.0-enabled SCI manifests along three dimensions: process, technology, and business architecture. The key findings of this study can be summarised as follows: first, i4.0-enabled SCI extends the initial focus on productivity improvements in SC processes towards scalability and flexibility. Second, extant i4.0 solutions rely mostly on analytics and smart things while omitting smart people technology and the human-centric approach associated with the i4.0 paradigm. Third, established companies adopt i4.0 merely to sustain their existing business architectures while startup companies radically change their operating models, relying heavily on data analytics and the platform economy. Consequently, established companies pursue a problem-driven, engineering-based approach to SCI while startup companies follow an ‘asset-light’, business-driven approach. Lastly, there are two distinct approaches to digitalising operational SC processes: platform-based crowdsourcing of standard processes and on-demand provision of customised services.