Are smart manufacturing systems beneficial for all SMEs? Evidence from Korea

Abstract

Purpose

Through the resource-based view (RBV) and contingency theory, this study empirically investigates the impacts of smart manufacturing systems' maturity levels on the performance of small and medium-sized enterprises (SMEs). Moreover, it aims to examine how industry types (i.e. high- and low-tech industries) and human-resource factors (i.e. the proportion of production workers to total workers) as contingency factors influence the effects of smart manufacturing systems.

Design/methodology/approach

The study conducted an empirical investigation of a sample of 163 Korean manufacturing SMEs. This study used an ordinary least squares regression to examine the impacts of the maturity levels of smart manufacturing systems on financial performance. Moreover, the impacts on operational efficiency were analysed using data envelopment analysis based on bootstrap methods and Tobit regression.

Findings

The RBV results indicate that the higher the maturity levels of smart manufacturing systems, the higher the financial performance and operational efficiency. Moreover, based on contingency theory, this study reveals that the effect of the maturity levels of smart manufacturing systems on financial performance and operational efficiency depends on firms' industry types and the proportion of production workers.

Research limitations/implications

This study shows that the introduction of smart manufacturing systems can help SMEs achieve better financial performance and operational efficiency. However, their effectiveness is contingent on firms' industry types and the characteristics of their human resources.

Practical implications

Since the effects of the maturity levels of smart manufacturing systems on SME performance differ depending on their industries and the characteristics of human resources, managers need to consider them when introducing or investing in smart manufacturing systems.

Originality/value

Based on the RBV and contingency theory, this is the first empirical study to examine the moderating effects of industry types and the proportion of production workers on the impacts of the maturity levels of smart manufacturing systems on the financial performance and operational efficiency of SMEs.

Citation

Jang, S., Chung, Y. and Son, H. (2022), "Are smart manufacturing systems beneficial for all SMEs? Evidence from Korea", Management Decision, Vol. 60 No. 6, pp. 1719-1743. https://doi.org/10.1108/MD-12-2020-1632