The Product Customization Process in Relation to Industry 4.0 and Digitalization

Abstract

Today’s customer no longer wants one-size-fits-all products but expects products and services to be as tailored as possible. Mass customization and personalization are becoming a trend in the digitalization strategy of enterprises and manufacturing in Industry 4.0. The purpose of the paper is to develop and validate a conceptual model for leveraging Industry 4.0 and digitalization to support product customization. We explored the implications and impacts of Industry 4.0 and digitalization on product customization processes and determine the importance of variables. We applied structural equation modeling (SEM) to test our hypotheses regarding the antecedents and consequences of digitalization and Industry 4.0. We estimated the process model using the partial least squares (PLS) method, and goodness of fit measures show acceptable values. The proposed model considers relationships between technology readiness, digitalization, internal and external integration, internal value chain, and customization. The results show the importance of digitalization and technology readiness for product customization. The results reveal that the variable of internal integration plays a crucial mediating role in applying new technologies and digitalization for customization. The paper’s main contribution is the conclusion that, for successful implementation of the customization process, models are required to focus on the internal and external factors of the business environment. Our findings are supported by various practical applications of possible product customization.