Managerial challenges of Industry 4.0: an empirically backed research agenda for a nascent field

The increasing intelligence of products and systems, their intra-company cross-linking and their cross-company integration into value creation networks is referred to as Industry 4.0. Academics and practitioners, largely agreeing on the global importance of this proclaimed industrial revolution, have published many contributions on the topic. Research, however, is rather focused on investigating single technologies in quite specific application domains and largely neglects the profound managerial challenges underlying Industry 4.0. Given the recent plea for a more active contribution from the management science community, we strive to establish Industry 4.0 as a challenging but promising field for management research, and aim to assist scholars in engaging with the topic. Therefore, we first gather and analyze extant contributions by means of a systematic literature review and synthesize the information gained into 18 managerial challenges of Industry 4.0 falling into six interrelated clusters: (1) strategy and analysis, (2) planning and implementation, (3) cooperation and networks, (4) business models, (5) human resources and (6) change and leadership. Considering that Industry 4.0 is still an emerging topic and publications may therefore not always be found in highly ranked journals, we aimed to increase the confidence in our findings and triangulated our data by conducting an online survey of industry experts and academics that allows us to qualify the identified challenges in terms of importance and future research need. On this basis, we present an empirically backed research agenda and suggest fruitful avenues for future research in three basic categories: practice-enhancing research, knowledge-enhancing research, and high-impact research.     

The role of absorptive capacity and innovation strategy in the design of industry 4.0 business Models - A comparison between SMEs and large enterprises

Technological innovations often lead to redesigns in the business models of established companies, requiring them to incorporate new external knowledge into internal activities. Against this background, this study integrates the concepts of business model design, absorptive capacity, and innovation strategy into a novel research model, which analyzes the redesign of established business models in response to the emergence of Industry 4.0. Industry 4.0, also known as the Industrial Internet of Things, constitutes a contemporary research context that is highly relevant for corporate practice but scarcely regarded in management literature until now. The article contains an analysis of data from 221 German industrial enterprises, conducted through structural equation modeling, with separate data for small and medium-sized enterprises (SMEs) and large enterprises. First, the results indicate that the acquisition, assimilation, transformation, and exploitation of knowledge from the environment enable companies to engage in both exploratory and exploitative innovation strategies. Furthermore, the paper includes an evaluation of the role of exploratory and exploitative innovation strategies that reflects in efficiency-centered and novelty-centered business model designs. The distinct characteristics differentiating SMEs from large enterprises are also explained. The implications of absorptive capacity on innovation strategies, which influence the redesign of extant business models, are discussed from a research and managerial perspective.     

Overcoming pandemic challenges through product innovation: The role of digital technologies and servitization

The fast-changing scenario related to the COVID-19 pandemic calls for firms to rapidly redefine and innovate their strategies to sustain their businesses, with research emphasizing the key roles of digital technologies and servitization. We aim to enrich the theoretical debate on this matter by assessing how small and medium-sized enterprises (SMEs) achieve product innovation under time constraints by leveraging two specific technology groups (information and communication technologies [ICT] and Industry 4.0 data-processing technologies) and servitization. The research is based on a mixed-method approach consisting of an original survey completed by 257 Italian SMEs (grounded on a previous qualitative study about such SMEs' behaviors during the first Italian lockdown), followed by in-depth interviews with the owners and/or managers of the eight SMEs that participated in the survey. The results show a positive relationship between the increased use of digital technologies (ICT and Industry 4.0 data-processing technologies) during the pandemic with servitization and, in turn, with product innovation. Specifically, the increased use of ICT during the pandemic had a direct positive effect on product innovation, while Industry 4.0 data-processing technologies affected product innovation only through the full mediation of servitization. The qualitative study allowed us to highlight how the different kinds of digital technologies supported SMEs’ innovation (servitization and product innovation) during the pandemic. The theoretical and practical contributions of this study are discussed.     

A guide for supply chain integration in SMEs

Supply chain integration (SCI) is a competitive business approach for enterprises that has not been implemented as widely as expected in small and medium-sized enterprises (SMEs). One of the factors explaining this low level of application is the lack of methodologies to develop SCI that fit the characteristics of this type of enterprise. In this article, we present a methodology that enables SMEs to achieve correct SCI in a manner that is simple, straightforward and oriented towards their particular characteristics. Thus, SMEs will be able to align and coordinate the aims, resources, decisions, methods, business processes and employees involved in the supply chain. The methodology addresses the problem of SMEs SCI and it was produced by applying the case study research method to 30 industrial SMEs. The methodology is organised in phases and the activities to be performed, the techniques and supporting tools to be used, as well as the expected outcomes are all described for each phase. With this methodology, it becomes possible to overcome the main barriers that prevent SMEs from achieving a correct integration of their supply chains. In addition to the methodology, this article also outlines the significant benefits observed in the 30 enterprises as a result of its application.     

The propagation of lean thinking in SMEs

Abstract

Small and Medium-sized Enterprises (SMEs) play a pivotal role in economic growth, industrial output, and employment creation. However, SMEs are often ignored by researchers as far as the adoption of lean is concerned in comparison to Large Enterprises (LEs). Therefore, the literature regarding lean implementation in SMEs is not conspicuous, and many SMEs have only a limited understanding and awareness of lean. This paper offers a comprehensive literature review with a focus on the implementation of lean in SMEs and explores the applicability of lean thinking in such environments. An attempt is made to provide an analysis of lean practices that have been applied in SMEs and critical success factors for lean transformation in SMEs. It also contributes to the field of lean implementation research by proposing a framework for lean in SMEs and identifies the scope of future research.     

Implementation of S-DBR in four manufacturing SMEs: a research case study

Production planning and control systems (PPCs) are tools that have a major effect on the performance of manufacturing companies. An inappropriate determination of the applicability of PPCs could seriously jeopardise the ability to achieve competitive priorities. This mistake can be expensive for any company, but proper implementation is particularly critical for small and medium enterprises (SMEs), which are characterised by limited access to financial resources. Simplified Drum–Buffer–Rope (S-DBR) is a PPC control approach that is characterised by minimum detail in the planning stage and a primary emphasis on the control of execution. Therefore, this approach is a suitable choice for the highly variable context of SMEs. This study aims to explore the practical issues related to S-DBR implementation in four Ecuadorian SMEs through case study research. The case analysis within this study first identifies the choices made in the implementation process design within the four companies according to process and product characteristics. We then conduct a cross-case analysis to explore the effects of the S-DBR implementation process designs on a group of performance measures. Our research findings provide new insights into the S-DBR implementation process in the context of SMEs, and the effects of this approach on performance measures.     

Business intelligence and analytics value creation in Industry 4.0: a multiple case study in manufacturing medium enterprises

Abstract

Medium enterprises (MEs) form a majority of enterprises in several regions, yet they are underrepresented in the literature. The digital transformation known as Industry 4.0 (I4.0) brings new data streams into enterprises. MEs and large enterprises will both leverage business intelligence and analytics (BI&A) to improve their business performance, so the study of the conditions favouring value creation of BI&A is of interest. However, there are few studies focusing on the impact of business intelligence and analytics (BI&A) on value creation in I4.0 and none focusing on MEs. Using a multiple case-study design, this paper explores factors linked to BI&A business value creation in manufacturing MEs that are undergoing an I4.0 transformation. Findings suggest enterprises resources and capabilities are not sufficient to predict business value: organizational learning and organizational culture have a non-negligible influence for MEs.     

A critical investigation of Industry 4.0 in manufacturing: theoretical operationalisation framework

Increasing global competition on product quality and production costs, and the need for flexibility in production petition for transformed production processes which enable high level of connectivity and integration between business processes and systems. Much of the conventional computer- integrated efforts and advanced manufacturing technologies are limited in scope and restricted to only some organisational areas. Such limited scope, which stems from limited connectivity and integration between manufacturing and enterprise systems, confines the achievement of full potential of these systems within manufacturing. Industry 4.0, characterised by computing developments, can create a platform for addressing integration challenge through enabling comprehensive connectivity. Hence, this paper, through following deductive research paradigm and using systems theory as the theoretical base, aims to investigate recent academic research and industrial reports in the area of Industry 4.0 and smart manufacturing to provide detailed insights on execution of Industry 4.0, and to propose a theoretical framework for operationalisation of Industry 4.0 in manufacturing.     

Proactive international strategies of cluster SMEs

In this conceptual paper, proactive international strategies of small- and medium-sized enterprises (SMEs) in the cluster context are discussed. The majority of cluster SMEs assume passive roles as network participants in the process of internationalisation. However, a smaller fraction adopts proactive strategies to foreign expansion acting as leaders of networks. SMEs as network leaders are embedded in the source clusters and dependent on local networks that provide them with complementary resources. We assert that this mutual dependence between a firm's resources and the development of industrial agglomeration should be reflected in the strategic options that SMEs adopt when going international. This paper contributes by synthesising and evaluating a comprehensive range of SME-strategic options and by proposing the proactive competitive strategies of SMEs in the international arena that are both feasible and effective. The feasibility of adopting a specific strategy means the suitability for this group of companies, considering their characteristics. The evaluation of the effectiveness of each strategy was performed according to the objectives of avoiding lock-in and of protecting and developing the core competencies embedded in cluster networks. We address the research gap in evaluating the outcomes of SME international strategies and in synthesising a comprehensive range of cluster SMEs' strategic options.     

Evolution of industry 4.0 and international business: A systematic literature review and a research agenda

Industry 4.0 has attracted significant attention from researchers in the international business field for a decade. This paper critically analyzes the literature on the relationships between Industry 4.0 and international business. A systematic literature review of 59 studies published between 2011 and December 2020 is conducted. Using the Theory, Context, Characteristics, and Method (TCCM) framework, the review identifies various gaps in research and proposes future research agenda. The results show that (1) Industry 4.0 modifies specific domains in the field of international competitiveness and organization and (2) international business affects the choices and opportunities of adopting Industry 4.0. The need for further theoretical development in the relationships between international business and Industry 4.0 is observed especially in terms of location choices, global value chains, international organizations and international trade. The results contribute to the relevant research field and provide substantial managerial implications.     

Defining and assessing industry 4.0 maturity levels – case of the defence sector

Abstract

Firms do not currently fully appreciate the complex characteristics of Industry 4.0 and as a result are uncertain about what it represents for them. In this study, an assessment model is developed to measure the level of implementation of Industry 4.0 technologies, around three dimensions: ‘Factory of the Future’, ‘People and Culture’, and ‘Strategy’. The ‘Factory of the Future’ is the main dimension and is composed of eight attributes: Additive Manufacturing, Cloud, Manufacturing Execution System, Internet of Things and Cyber Physical Systems, Big Data, Sensors, e-Value Chains, and Autonomous Robots. The study uses a defence manufacturing firm to develop, test and validate the model and report on 12 partners. We concluded that the focal firm has an Industry 4.0 maturity level of 59.35, above the sector average of 55.58. This research contributes by empirically developing a model and providing an analysis of major firms in the Defence supply network.     

How planning and capital budgeting improve SME performance

This paper focuses on the use of strategic planning among small and medium sized enterprises (SMEs) in the UK manufacturing sector. It analyses the relationship between the intensity of strategic planning, business objectives, perceived performance, changes in the business environment and the use of capital budgeting techniques. Capital budgeting is of particular interest as an area of investigation, and is one which has seldom featured in previous studies of strategic planning behaviour. These issues were investigated via a survey of UK manufacturing SMEs carried out in the winter of 1996/97.

The key results suggest that SMEs incorporate a range of objectives into their strategic planning process, with profit improvement perceived to be the most important objective, followed by sales growth. SMEs engaged in detailed strategic planning are more likely to use formal capital budgeting techniques, including the net present value method, which is consistent with maximising the companys' value. Perceived profitability and success in achieving organisational objectives were positively associated with planning detail, suggesting that strategic planning is a key component improving performance. Planning detail was also associated with a significantly higher level of perceived change in the business environment.     

Drivers of internationalization success: a conjoint choice experiment on German SME managers

Internationalization is a common growth strategy for small and medium-sized enterprises (SMEs). However, SMEs face several challenges within the internationalization process. As SMEs are characterized by limited resources, managers are constantly involved in a decision-making process concerning the allocation of the SMEs’ resources. Therefore, internationalization can be understood as a complex, multidimensional decision process. Based on a set of 2244 internationalization decisions made by German SME managers, the present study examines how eight strategic and structural factors drive the perceived international success of SMEs. When applying conjoint choice analysis, the results suggest that especially equity financing in the internationalization process, an appropriate market selection as well as proactive motives, and a long-term scope can drive SMEs’ international success. Moreover, it becomes evident that strategic factors are more relevant for successful internationalization than structural factors.     

Performance measurement systems in SMEs: A review for a research agenda

In recent years, literature has identified the increasing complexity of small and medium-sized enterprises (SMEs) and highlighted their sensitivity to differences in managerial culture and management systems. Research has shown that performance measurement systems (PMSs) could play an important role in supporting managerial development in these companies. In this paper, the literature on performance measurement in manufacturing SMEs is reviewed and the diffusion, characteristics and determinants of performance measurement in SMEs are analysed. Shortcomings in the performance measurement systems are highlighted and the many factors that seem to constrain PMSs in manufacturing SMEs are defined, e.g. lack of financial and human resources, wrong perception of the benefits of PMS implementation, short-term strategic planning. Moreover, using dimensions defined according to the information found in the literature, two PMS models specifically developed for SMEs are compared with generic PMS models. The comparison points out an evolution in PMS models over time; in particular, the models developed in the last 20 years are more horizontal, process-oriented and focus on stakeholder needs. However, it is not clear whether these changes are due to the evolution of the generic models or an attempt to introduce models suited to the needs of SMEs. To clarify this matter and better to understand PMSs in SMEs, further theoretical and empirical studies are necessary. The main issues still requiring investigation are listed in a research agenda at the end of the paper.     

合作知识创新中基于Stackelberg博弈的资源共享决策模型

在跨组织的合作知识创新中,如何合理地分配和共享资源至关重要。本文研究了合作知识创新中的跨组织资源共享及合作维系的条件,采用博弈论方法,把合作知识创新看作是一个领导组织和多个从属组织的Stackel berg主从博弈决策模型,领导组织作为主方给出最优参与率策略,各跟随组织作为从方以总体投入以及参与率策略响应,求出了知识创新投入的均衡值、领导组织的参与、各跟随者的参与率以及创新的总体期望收益。文中指出,只有领导组织的边际收益和各从属组织边际收益之和保持最优比,合作才可能形成并有效维系。     

Knowledge management based collaboration moderator services to support SMEs in virtual organizations

Abstract

Collaboration Moderator Services (CMS) are discussed as a Knowledge management service for SMEs operating in a virtual organization (VO). In this research, a CMS supports the pre-creation stage of a VO by quickly identifying potential business opportunities and collaborative partners. Text mining techniques are used to analyze calls for tender documents based on the competencies and areas of interest stored in the shared information about companies in a collaboration pool. A case study of UK-based SMEs demonstrates the application of text mining as a knowledge discovery tool, supporting SMEs at the pre-creation stage of a VO. Results show that text mining can be used to (1) identify possible business opportunities for SMEs in the collaborative network (2) Indicate potential collaborations between pairs of SMEs using link analysis and (3) Raise awareness of business opportunities and possible SME partners for multi-enterprise collaborations using a dimensional matrix.     

基于信号传递博弈的产业集群中小企业融资分析

产业集群内中小企业多采用互助担保模式进行融资。他们的融资成功,不仅可以为中小企业的创新发展提供可能,同时也促进了产业集群的转型升级。本文为解决集群内中小企业融资过程中存在的逆向选择问题,提出了一个信号传递博弈模型,并对其分离均衡进行了分析。结果表明:担保公司应设置有效的担保机制,减小高收益能力企业加入共同担保基金时的出资额F₁,增大低收益能力企业的出资额F₂,同时提高可为高收益能力企业的担保比例n₁;而集群内中小企业则应努力提高自身的收益能力θ,使之与低收益能力企业的θ₂差距尽可能大。     

Entrepreneurship,globalization, and public policy

This paper examines the impact of governmental policies in influencing the path of internationalization of small- and medium-sized enterprises (SMEs). It focuses on the role of institutions mandated to assist internationalization, as exemplified by Canada's Export Development Corporation (EDC). We illustrate and examine critically the role that governments typically play in assisting and influencing the international expansion of domestic firms. We argue that the activities of agencies such as EDC — mainly in financing and in insuring against the risks inherent in export activities — may actually be counterproductive to the long-term interests of many SMEs by skewing managers' decisions toward direct exporting, rather than toward indirect exporting by entering the value chain of already-established multinational enterprises (MNEs). A consequence may be to divert the constrained resources of entrepreneurial firms away from their greatest comparative advantage — innovation — toward managing direct entry into international markets in which they are at a comparative disadvantage relative to larger established MNEs. Highly innovative SMEs might be better off by leaving the internationalization of their innovations to MNEs and sharing some of the international direct exporting profits with them instead. The implications are relevant for governmental policies toward internationalizing SMEs not just in Canada but in open, market-oriented economies everywhere.     

Risk management in SMEs: A systematic literature review and future directions

Small- and Medium-sized Enterprises (SMEs) are considered as the backbone of European economics and growth; however, their peculiar features and the limited resources drive them to adopt different tools and methods when compared to large companies. In particular, the approach adopted in SMEs for Risk Management (RM) seems not to be specifically studied and understood. To this extent, the aim of the paper is to outline the development and the state of the art of RM in SMEs, grasping new future research opportunities in this field. By conducting a systematic literature review with bibliometric tools, 61 papers published until the end of 2016 have been selected and analysed. They demonstrate that some RM streams, such as financial RM and Enterprise RM, are among the most studied in the literature. However, a holistic approach is still not diffused nor sufficiently developed in SMEs, even if the types of identified risks are increasing. There are new emerging RM streams. In particular, the relevance of Project RM, Strategic RM, and Supply Chain RM has been increasing, and it pushes researchers and practitioners to deepen the knowledge of the tools and practices that characterise them. New theoretical and practical studies on RM in SMEs will support them in protecting their business and leveraging their business value, taking advantage of the management of different types of risks.