The impact of Industry 4.0 implementation on supply chains

Abstract

PurposeThe study aims to analyse the impact of Industry 4.0 implementation on supply chains and develop an implementation framework by considering potential drivers and barriers for the Industry 4.0 paradigm.Design/methodology/approachA critical literature review is performed to explore the key drivers and barriers for Industry 4.0 implementation under four business dimensions: strategic, organisational, technological and legal and ethical. A system dynamics model is later developed to understand the impact of Industry 4.0 implementation on supply chain parameters, by including both the identified driving forces and barriers for this technological transformation. The results of the simulation model are utilised to develop a conceptual model for a successful implementation and acceleration of Industry 4.0 in supply chains.FindingsIndustry 4.0 is predicted to bring new challenges and opportunities for future supply chains. The study discussed several implementation challenges and proposed a framework for an effective adaption and transition of the Industry 4.0 concept into supply chains.Research limitations/implicationsThe results of the simulation model are utilised to develop a conceptual model for a successful implementation and acceleration of Industry 4.0 in supply chains.Practical implicationsThe study is expected to benefit supply chain managers in understanding the challenges for implementing Industry 4.0 in their network.Originality/valueSimulation analysis provides examination of Industry 4.0 adoption in terms of its impact on supply chain performance and allows incorporation of both the drivers and barriers of this technological transformation into the analysis. Besides providing an empirical basis for this relationship, a new conceptual framework is proposed for Industry 4.0 implementation in supply chains.