Industry 4.0 readiness of organisations towards the success of digital supply chain adoption

Abstract

The digital transformation of organisations is often referred to as Industry 4.0 (I4) or the fourth industrial revolution. I4 technologies impact a wide range of business areas and support supply chain integration by capturing and transferring real-time data/information. Several studies have reported on various topics associated with I4 readiness and implementation. These studies have emphasised that I4 implementation at the firm and supply chain levels is complex due to various challenges. Industry practitioners are ambiguous about organisations' preparedness for implementing I4 for digital supply chain (DSC) performance enhancement. Present research on supply chain management (SCM) lacks empirical evidence of the effect of I4 on the success of digital supply chain adoption and supply chain performance (SCP) enhancement and the impact of dynamic capabilities on DSC performance. Thus, it raises the question of how I4 readiness can guide and support I4 adoption at the firm level within the supply chain, thus influencing supply chain performance through dynamic capabilities. Therefore, drawing on socio-technical theory, dynamic capability view theory, and resource dependency theory, this empirical study develops a conceptual model for the success of the digital supply chain adoption process by integrating I4 readiness, dynamic supply chain capabilities, and supply chain performance. It evaluates the relationships among I4 readiness, dynamic SC capabilities, and SC performance with empirical evidence to enrich the literature on integrating I4 readiness and supply chain management. This study considers the wholistic nature of I4 readiness when testing its effect on the strategic level supply chain performance support with the socio-technical systems theory. The dynamic capability view and resource dependence theory offer a new perspective by considering the mediation role of supply chain dynamic capabilities and the success of DSC adoption leading toward DSC performance. Moreover, this study provides managerial insights into digitalisation adoption process guidelines and a strategic roadmap for SC practitioners to transform conventional SCs into DSCs. The study guides supply chain practitioners on I4 readiness assessment considering the socio-technical aspects. Also, this study presents strategies realised by mature manufacturing organisations to overcome I4 adoption challenges. The study shows that supply chain practitioners assessing the I4 readiness and developing supply chain dynamic capabilities can gain a competitive advantage through cost leadership and differentiation in the supply chain.

Date of Award	2023
Original language	English