Performance Evaluation Framework under the Influence of Industry 4.0: The Case of the Czech Manufacturing Industry

Abstract

The current economic situation creates general pressure to increase performance. Any inefficient use of production factors will lead to problems and long-term economic unsustainability in many industries. The effects of the Covid-19 pandemic will also have a negative impact on all sectors of the economy and the faster onset of the fourth industrial revolution. The article, therefore, proposes a new framework for the performance evaluation of the manufacturing industry, which is based on the composite performance indicator. This indicator is obtained by a cross-sectoral comparison of all sub-key performance indicators. Using cluster analysis and analysis of variance, a total of 6 indicators to evaluate performance in the manufacturing industry were selected as statistically significant. The added value of the whole concept is its direct independence on the economic situation, which eliminates short-term economic oscillations that would be reflected in classical methods of performance evaluation otherwise. The results show that some industries are more efficient in the long run due to their effective investments in the capital, which replaces the labour factor and creates room for the realization of relatively higher profits. By contrast, some sectors, despite high investments, do not achieve the desired level of performance – these investments are not efficient or they are complementary to the labour factor, thus denying the principles of Industry 4.0. It thus creates preconditions for increasing dependence on external factors and, at the same time, makes the given sectors in a freely competitive environment economically unsustainable in the long run.