Impact of industry 4.0 technologies on operations resilience : adverse effects of COVID-19 as a moderator

In the era of Industry 4.0, manufacturing firms are focused towards implementing a broad range of Industry 4.0 technologies and expect those technologies to shield them from disruptions. Rapid technology upgrades, adoption of new technologies and digitalised operations have been common during the COVID-19 pandemic, where remote working labour, skill shortages, supply shortages, and demand issues caused operations uncertainties. This study investigates the effects of Industry 4.0 technologies and incremental innovation on the operations resilience of Australian manufacturing firms operated under various COVID-19 challenges. Based on survey data collected from 117 manufacturing firms, it finds that Industry 4.0 capabilities lead to operations resilience only through incremental innovations and that COVID-19 effects moderate the relationship between Industry 4.0 capabilities and operations resilience. There was no empirical evidence for the moderating role of COVID-19 effects on the relationship between incremental innovation and operations resilience. Based on the findings, we argue that Industry 4.0 capabilities translate stronger into operations resilience for firms that experience substantial adverse effects than for those that experience lower negative effects. Our results confirm the benefits of manufacturing firms investing in a broad range of Industry 4.0 technologies to achieve operations resilience in highly disrupted environments where the survival of firms is threatened and the importance of developing capabilities for incremental innovation. Our findings assure managers of manufacturing firms of the benefits of technology investments and provide a rationale for those weighing alternatives to achieve operations resilience.