Soft and Hard Total Quality Management Practices Promote Industry 4.0 Readiness: A SEM-Neural Network Approach

Abstract

Industry 4.0 (I4.0) is a technological development in the manufacturing industry that has revolutionized Total Quality Management (TQM) practices. There has been scant empirical research on the multidimensional perspective of TQM. Thus, this study aims to empirically examine the effect of the multidimensional view of TQM (soft and hard) on I4.0 readiness in small and medium-sized (SMEs) manufacturing firms. Based on the sociotechnical systems (STS) theory, a framework has been developed and validated empirically through an online survey of 209 Malaysian SMEs manufacturing firms. Unlike the existing TQM studies that used structural equation modeling (SEM), a two-stage analysis was performed in this study. First, the SEM approach was used to determine which variable significantly affects I4.0 readiness. Second, the artificial neural network (ANN) technique was adopted to rank the relative influence of significant predictors obtained from SEM. The results show that the soft and hard TQM practices have supported the I4.0 readiness. Moreover, the results highlight that hard TQM practices have mediating role between soft TQM practices and I4.0 readiness. The ANN results affirmed that customer focus is considered an important TQM factor for I4.0 managerial readiness, advanced manufacturing technology for operational readiness and top management commitment for technology readiness. In a nutshell, the SEM-ANN approach uniquely contributes to the TQM and I4.0 literature. Finally, the findings can help managers to prioritize firms’ soft and hard quality practices that promote I4.0 implementation, especially in emerging economies.