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Corporate survival in Industry 4.0 era: the enabling role of lean-digitized manufacturing

Morteza Ghobakhloo (Department of Industrial Engineering, University of Hormozgan, Bandar Abbas, Iran) (Department of Mechanical and Manufacturing Engineering, University Putra Malaysia, Serdang, Malaysia)
Masood Fathi (School of Engineering Science, University of Skövde, Skövde, Sweden)

Journal of Manufacturing Technology Management

ISSN: 1741-038X

Publication date: 25 July 2019

Abstract

Purpose

The purpose of this paper is to demonstrate how small manufacturing firms can leverage their Information Technology (IT) resources to develop the lean-digitized manufacturing system that offers sustained competitiveness in the Industry 4.0 era.

Design/methodology/approach

The study performs an in-depth five years case study of a manufacturing firm, and reports its journey from failure in the implementation of enterprise resource planning to its success in integrating IT-based technology trends of Industry 4.0 with the firm’s core capabilities and competencies while pursuing manufacturing digitization.

Findings

Industry 4.0 transition requires the organizational integration of many IT-based modern technologies and the digitization of entire value chains. However, Industry 4.0 transition for smaller manufacturers can begin with digitization of certain areas of operations in support of organizational core strategies. The development of lean-digitized manufacturing system is a viable business strategy for corporate survivability in the Industry 4.0 setting.

Research limitations/implications

Although the implementation of lean-digitized manufacturing system is costly and challenging, this manufacturing strategy offers superior corporate competitiveness in the long run. Since this finding is rather limited to the present case study, assessing the business value of lean-digitized manufacturing system in a larger scale research context would be an interesting avenue for future research.

Practical implications

Industry 4.0 transition for typical manufacturers should commensurate with their organizational, operational and technical particularities. Digitization of certain operations and processes, when aligned with the firm’s core strategies, capabilities and procedures, can offer superior competitiveness even in Industry 4.0 era, meaning that the strategic plan for successful Industry 4.0 transition is idiosyncratic to each particular manufacturer.

Social implications

Manufacturing digitization can have deep social implications as it alters inter- and intra-organizational relationships, causes unemployment among low-skilled workforce, and raises data security and privacy concerns. Manufacturers should take responsibility for their digitization process and steer it in a direction that simultaneously safeguards economic, social and environmental sustainability.

Originality/value

The strategic roadmap devised and employed by the case company for managing its digitization process can better reveal what manufacturing digitization, mandated by Industry 4.0, might require of typical manufacturers, and further enable them to better facilitate their digital transformation process.

Keywords

Citation

Ghobakhloo, M. and Fathi, M. (2019), "Corporate survival in Industry 4.0 era: the enabling role of lean-digitized manufacturing", Journal of Manufacturing Technology Management, Vol. 31 No. 1, pp. 1-30. https://doi.org/10.1108/JMTM-11-2018-0417

Publisher

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Emerald Publishing Limited

Copyright © 2019, Emerald Publishing Limited