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PRODUCTION & MANUFACTURING RESEARCH

2020, VOL. 8, NO. 1, 244–272


https://doi.org/10.1080/21693277.2020.1781705

ARTICLE

Pros and cons of implementing Industry 4.0 for the


organizations: a review and synthesis of evidence
Michael Sony
Faculty of Engineering, Namibia University of Science & Technology, Windhoek, Namibia

ABSTRACT ARTICLE HISTORY


Industry 4.0 is one of the trending topics among the academicians Received 10 December 2019
and practitioners around the world. The pros and cons of Industry Accepted 3 June 2020
4.0 are significantly important because it will help the organiza­ KEYWORDS
tions to make a sensible decision regarding its implementation. Industry 4.0; cyber-physical
Though there are many studies on Industry 4.0, there is a dearth of systems; pros; cons;
academic literature which collates and analyses the Pros and Cons advantages
of Industry 4.0. The purpose of this paper is to investigate what are
the pros and cons of implementation of Industry 4.0 in organiza­
tions from academic perspective. A comprehensive and systema­
tic literature review is conducted on the earlier studies on Industry
4.0. Descriptive, categorical, keyword and thematic analysis are
conducted on the final sample of sixty-four articles. This study
finds nine pros and seven cons while implementing Industry 4.0 in
organizations and also the future research directions is explicated.

1. Introduction
The fourth industrial revolution is one of the trending topics among both the
academicians and practitioners (Chiarello et al., 2018; Frank et al., 2019; Sony &
Naik, 2019a). One of the main concept behind Industry 4.0 is smart manufacturing
(Kagermann et al., 2013; Manavalan & Jayakrishna, 2019), along with the integration
of the factory with the whole product life cycle,and supply chain activities
(Dalenogare et al., 2018; S.Wang, Wan, Li et al., 2016). The three main types of
integration recommended in Industry 4.0 is vertical, horizontal and end-to-end
integration (S. Wang, Wan, Li et al., 2016; S. Wang, Wan, Zhang et al., 2016).
Industry 4.0 thus, relies on advances in automation and digital technologies to
gather, analyse and provide useful information in the real-time to the manufacturing
systems (Bagheri et al., 2015; Liao et al., 2017; Rauch et al., 2019). The advances in
automation and communication technologies such as internet of things (IoT), cloud
computing, big data and analytics, made this integration possible through cyber-
physical systems (CPS) (L. Fantini et al., 2018; Sony & Naik, 2020; L. Wang et al.,
2015). Industry 4.0 has a very complex system of architecture for manufacturing,
therefore, effective implementation is a subject of research (Bagheri et al., 2015;
Frank et al., 2019). A comprehensive definition of Industry 4.0 based on the role

CONTACT Michael Sony [email protected] Faculty of Engineering, Namibia University of Science & Technology,
Windhoek, Namibia
© 2020 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group.
This is an Open Access article distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/
by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
PRODUCTION & MANUFACTURING RESEARCH 245

strategy is given by Piccarozzi et al. (2018) ‘Industry 4.0 refers to the integration of
Internet of Things technologies into industrial value creation enabling manufacturers
to harness entirely digitized, connected, smart, and decentralized value chains able to
deliver greater flexibility and robustness to firm competitiveness and enable them to
build flexible and adaptable business structures, [acquiring] the permanent ability for
internal evolutionary developments in order to cope with a changing business envir­
onment as the result of a purposely formulated strategy implemented over time’. This
definition was adopted from previous studies (Koether, 2018; Prause, 2015), and
further, it combines technical aspects with implementation methodology.
Furthermore, the introduction of Industry 4.0 must be purposefully introduced
into the organization and strategically combined to produce positive results
(Piccarozzi et al., 2018). The adoption of technologies among organizations may
change based on the location of the organization, level of ICT infrastructure,
culture, level of education, economic & political stability, and perceived advantage
which may interfere in the value perception and level of investment in technologies
of Industry 4.0 (Castellacci, 2008; Frank et al., 2019).Besides, Industry 4.0 study is
a concept that is ill-defined and non-consensual (Pereira & Romero, 2017).
A strategic definition of Industry 4.0 by Piccarozzi et al. (2018) clarifies Industry
4.0 from a strategic perspective. However, the strategic implications can only be
assessed if there is an understanding of the pros and cons of the concept. Therefore,
there is a need for a study which collates and analysis the pros and cons for
implementation of Industry 4.0 in organizations from an academic perspective, so
that the stakeholders are well informed. Besides, the understanding of pros and cons
will help the organizations to successfully determine on its implementation. To
capture the academic perspective of Industry 4.0, in terms of pros and cons
a systematic literature review is envisaged. There were some previous literature
reviews on Industry 4.0and some of the most prominent ones are summarised in
Appendix A.The examination of previous literature reviews on Industry 4.0 depicts
that there is yet to be a study which collates and analyses literature on the pros and
cons evidence systematically on Industry 4.0. Such a study is imperative because the
current literature needs to be analysed critically based on current evidence as
regards to the pros and cons of Industry 4.0 by taking an academic perspective so
that effective implementation strategy could be formulated by the stakeholders. The
pros and cons studies usually help to improvise the understanding of any concept
from an academic perspective, which the stakeholders can rely on for decision
making. Some excellent studies on pros and cons of various concepts have helped
researchers in various areas to appreciate the concepts, thereby extending the
boundaries of understanding (Antony, 2004; Coulter, 1997; Gwinn & Vallyathan,
2006; Michael & McCathie, 2005). This study is therefore intended to collate and
analyse the current state of research on the pros and cons of Industry 4.0. The
research question guiding this study is

RQ1: What are the pros of Industry 4.0?

RQ2: What are the cons of Industry 4.0?


246 M. SONY

This paper is structured as follows, section 2 is devoted to methodology. The descrip­


tive, categorical analysis are carried out in section 3. The pros of Industry 4.0 are
explicated in section 5 and cons in section 6. The future research directions, conclusion
and limitations are presented at last.

2. Research method
The systematic literature review has been used in various disciplines to organise and
synthesize the research findings from multiple studies. This is conducted in an orderly
and transparent manner. Tranfield et al. (2003) have suggested a methodological
approach to systematic reviews so that the review process is transparent, replicable
and rational. This study uses the methodology suggested by Tranfield et al. (2003)to
bring in transparency and replicability in the research. The main objective of the
systematic review is that it builds a firm foundation for future research. Besides, it
also aids in theory building, byaligning the present studies conceptually and also
unearthingthe areas for future research (Webster & Watson, 2002). Figures 1 and 2
depicts the research protocol used in the study.

2.1. Data sources


The search strings for this study was divided into three parts. Part 1 was devoted to
Industry 4.0. As Industry 4.0 is known by synonymous names. Therefore, this study
used the search strings used in previous literature review on Industry 4.0 by Liao et al.
(2017) and Buer et al. (2018), so that all synonymous names of Industry 4.0 are
captured. Part 2 and Part 3 of the search string was designed to capture the pros and
cons which are specific to the study. Appendix B depicts the search strategy used in this
study. Part 1 and part 2 was used for extracting pros related literature and part 1 and
part 3 for cons related studies. The database accessed for this study was Ebsco,
Proquest, Emerald, Google Scholar, IEEE explore, Science Direct, Taylor Francis,
Web of Science, Scopus, OMICS open access Journals, JSTOR, andInderscience.
Though some scholars have recommended the exclusion of conference proceedings
from SLRs (Scott-Findlay and Estabrooks, 2006), the present study included them to
extract insights relating to this emerging research area (Flick, 2015).

2.2. Screening
The second phase involved in this study is screening articles for review. The errors which
can creep in this phase are systematic error or bias. The protocol suggested by Popay et al.
(2006)was used to limit the aforementioned error and bias. This protocol is detailed in
Figure 2 to obtain its final sample of articles. The first step was a broad search to find
abstracts that met the screening criteria, i.e. Industry 4.0, Industrie 4.0, the fourth
industrial revolution, the 4th industrial revolution, smart manufacturing, smart factory,
smart factories, Cyber-physical system, Cyber-physical production system, CPS, Internet of
things, industrial Internet, big data, digitization, digitization, digitilisation, digitisation
plus advantages, benefits, pros, strength, strengths, positives, gains, pluses, highlights,
PRODUCTION & MANUFACTURING RESEARCH 247

Define research objectives and


Planning
develop research protocol
view

Identify target database and key


search words

Electronic search of databases


included in the study were Ebsco,
Proquest, Emerald, Google
Executing Scholar, IEEE explore, Science
Direct, Taylor Francis, Web of
Science, Scopus, OMICS open
access Journals, JSTOR,
Inderscience (268 papers)

Study of the title and abstract of


each paper
Eliminate papers based on the
title, abstract and duplication
Detailed study of extracted
papers (154 papers)
Reason based elimination upon
reading full text

Classification and Synthesis of(64


papers) based on identified
parameters

The findings are testified


Reporting

Figure 1. Systematic review methodology.

positive effects or disadvantages, weakness, cons, drawbacks, obstacles, challenges, downs,


losses, negative effects, minusin the title or abstract of the article.
If the articles are from predatory journals it was excluded and Beall’s list and Cabell’s list
was the criteria used for elimination (Beall, 2012; Berger and Cirasella, 2015 (Das & Chatterjee,
2018)). Subsequently, the titles and abstracts of the articles were then examined in depth. This
further helped to remove irrelevant papers to the research question. The abstracts of the
residual papers were critically studied for the inclusion/exclusion criteria. The reference list of
each of the research paper was read to further improve the search criteria. The total number of
articles that came up initially and a breakdown of each stage is shown in Figure 1.
248 M. SONY

Figure 2. Literature review protocol.

3. Data analysis
The main goal of this research was to discover the pros and cons of Industry 4.0. The
Industry 4.0 articles were identified and it was decided to identify the patterns, directions,
similarities, and differences in Industry 4.0 articles (Burke & Hutchins, 2007; Conn et al.,
PRODUCTION & MANUFACTURING RESEARCH 249

2003; Smith et al., 2009; Whittemore, 2005). Sixty-four articles were extracted after
review considering the research objective of the study. These articles were analysed,
and the themes of success factors emerged from the analysis is termed as the pros and cos
of Industry 4.0.

3.1. Descriptive analysis


In this section, the descriptive analysis of the articles is conducted. The timeline dis­
tribution of all the articles is explicated in Figure 3. Since 2014 there have been articles
published on Industry 4.0 implementation. The trend suggestsan increasing research
interest among the researchers on Industry 4.0.
To understand the geographical location of the authors who have published articles in
reputed journals which uses English as a language of communication, we performed
a country-wise analysis of the trend of articlesin Figure 4. As expected, most articles are
from Germany. This is understandable as Industry 4.0 had its beginning in Germany
(Lasi et al., 2014) and also authors are publishing in reputed English language journals so

16 15
14 13 13
12 11 11
10
8
6
4
2 1
0
2014 2015 2016 2017 2018 2019

Figure 3. Year-wise distribution of articles.

25
20
20

15 14
12

10
5
5 4
3 3
2 2 2
1 1 1 1 1
0

Figure 4. Country-wise analysis of articles.


250 M. SONY

30 27

25

20
14
15

10 7 7 6
5 2 1
0
Emerald Google Scholar IEEE JSTOR Scopus Springer Taylor & Francis

Figure 5. The database wise articles.

that knowledge is disseminated about Industry 4.0. Likewise, authors from the UK and
the US are also working on it.
Figure 5 illustrates the database wise analysis of articles. It represents that all major
databaseshave articles on the pros and cons of Industry 4.0.

3.2. Categorical analysis


The categorical analyses are conducted to study the pattern in previous research on the
pros and cons of Industry 4.0. Figure 6 describes the sector-wise analysisand it is shown
that manufacturing sector articles were dominating compared to the service sector. It is
observed that articles exclusive in service sectors were missing on the pros and cons of
Industry 4.0. Studies which concentrated on service and manufacturing sector were
categorised under ‘both’ category and studies which did not concentrate on any sector
were classified as ‘none’.
The nature of the study was analysed based on two concepts whether it is conceptual
or practical. Conceptual papers were those papers without any empirical data. Practical
papers had some real-time empirical analysis. Figure 7 designates that most studies were
of conceptual type rather than practical articles. This describes a need for research for
practical studies on Pros and Cons of Industry 4.0.

35 33

30

25
20
20

15
11
10

0
Both Manufacturing None

Figure 6. Sector wise analysis.


PRODUCTION & MANUFACTURING RESEARCH 251

38%
Conceptual
Practical
62%

Figure 7. Nature of study.

The method of data collection used in the studies was analysed. Figure 8 expounds that
researchers have employed a variety of data collection methods such as public docu­
ments, questionnaire, past literature, and interview. However, since most of the studies
were conceptual, therefore there were many studies without any data collection and
therefore, a need for future research on pros and cons using empirical data is needed.

3.3. Keyword analysis


The keyword in a paper is a significant concept represented in a paper. The preliminary
analysis of the keywords transpired the main research focus areas of the papers. Around
323 keywords from the literature were analysed. Clustering of keywords to form a theme
will enable in categorization (Liao et al., 2017; Yoon & Park, 2005). The conceptual
scheme used for categorization of keywords is depicted as a flow chart in Figure 9.

25

21 21
20

15

10 9 9

5 4

0
Interview Literature Review Nil Public documents Questionnaire

Figure 8. Nature of data collection.


252 M. SONY

Figure 9. Keyword categorization process into master themes.

To cite an example of this clustering scheme used in this study Cyber-Physical


systems, Cyber-physical- integration, cyber-physical production systems were classified
under the master theme cyber physical systems. The six master themes of the articles
represented 236 keywords for more than 73%. The remaining keywords were not
categorized as they were not related to Industry 4.0 such as literature Review, SME,
&Model. These were excluded as they did not contribute to the theme of the pros and
cons of Industry 4.0 and will also increase the number of the master theme which would
have defeated the objective of keyword analysis. The six master themes were a) Industry
4.0 b) Smart factory c) Cyber-Physical-Systems d) Internet of Things, e) Smart Products
& Services f) Sustainability. Figure 10 depicts the distribution of the master themes of the
keywords.

23, 10% 38, 16%


Manufacturing
26, 11%
Smart factory
Cyber Physical Systems

33, 14% 50, 21% Internet of Things


Smart Products & Services
Sustainability
66, 28%

Figure 10. Distribution of keywords.


PRODUCTION & MANUFACTURING RESEARCH 253

The authors have conceptualised the master theme of cyber-physical systems as the
central concept in Industry 4.0, which was followed by a smart factory, internet of things,
smart products and services and sustainability. Most of the authors have also conceptua­
lised the study in terms of manufacturing sectors only suggesting a need for future
research on services

4. Thematic analysis of literatures for pros of Industry 4.0


The sixty-four articles were read in detail. For each paper, the master categorization was
conceived for analysis in terms of the pros and cons of Industry 4.0. The papers were read
by the authors first independently and first-order thematic analysis was carried out in
terms of pros and cons. The first order themes were further clustered into a second-order
master for pros and cons. The master themes of pros and cons are depicted in Table 1.
Both the authors compared the themes and master themes in terms of frequency to
compute the interrater agreement by percentages. The percentage of agreement was
above 90% and disagreements were discussed, and consensual agreements were reached.

4.1. Strategic competitive advantage


Industry 4.0 implementation due to smart products and services is transforming the
erstwhile mechanical and electrical products,into products that combine hardware,
sensors, software’s, data storage, microprocessors, and connectivity to unleash a new
wave of competition wherein the traditional manufacturers will have a tough time to
survive (Piccarozzi et al., 2018; Shrouf et al., 2014). The previous revolutions gave huge
productivity gains and growth for the economy, but the products were largely not much
affected radically. However, Industry 4.0 implementation will create products wherein IT
is an integral part of every product (Lichtblau et al., 2015). This leads to structural
changes and scope to create a business opportunity in each phase of the product life
cycle (Sony & Naik, 2019b). Moreover, in its intended useful life,the traditional product-
centric organization will transform to servitizationresulting in a new wave of opportunity
for the organization implementing Industry 4.0 (Ennis et al., 2018). In a competitive
sense, these smart products will create product differentiation, customer segmentation,
dynamic price setting, value-added services, and closer customer relationships (Porter &
Heppelmann, 2014). The buyers will have a large amount of product usage data and its
analytics (Lichtblau et al., 2015) which will facilitate more bargaining power for

Table 1. Summary of the pros and cons of Industry 4.0.


Sr No Pros Cons
1 Strategic competitive advantage Negative impact of data sharing in a competitive environment
2 Organizational efficiency & effectiveness Total implementation of industry 4.0 is necessary for success
3 Organization agility Handling employees and trade unions apprehensions
4 Manufacturing innovation Need for highly skilled labour
5 Profitability Socio-technical implications of industry 4.0
6 Improved product safety & quality Cybersecurity
7 Delightful customer experience High initial cost
8 Improved operations
9 Environmental and social benefits
254 M. SONY

customers. Also, in the due course, there would be rival firms who would offer the value-
added services at a competitive price. The rivalries among the firms will now be in terms
of product differentiation and value-added services. The firms will not only vie for the
price of the product, but also other value-added customised services (Porter &
Heppelmann, 2014). These healthy rivalries among organizations will bring to markets
better products, which would be affordable and used to meets the needs of customers.
One of the challenges of implementation of Industry 4.0 will be cost, technological know-
how, and IT systems (Lasi et al., 2014)as such the new entrants will have a toughtime
entering the markets. The barrier to new entry will further depend on themarkets, where
there are competitors who have implemented vertical, horizontal and end-to-end inte­
gration. As it would be difficult for the new entrants to enter such high barrier markets
due to high-end automation, computing advances and strategic integration mechanisms
adopted by the organizations. The high market entry barriers would be broken by the
new firms by strategically using technology for the three forms of integration in Industry
4.0.The threat of substitute products will be low originally. This is because of product
differentiation in the eyes of the customers due to technology-enabled products.
However, in the due course the firms with products- service centric business models
will be a substitute threat. The bargaining power of suppliers will primarily be small due
to the horizontal integration of Industry 4.0 wherein cross-linking of different companies
in a value chain is strategically carried out (Sony, 2018). Nevertheless, with time, due to
the perceived superiority of each organization, will create issues which may be utilised by
rival firms leading to fierce bargaining powers.

4.2. Organizational efficiency& effectiveness


Organizations strive to achieve efficiency and effectiveness in organizational performance
to survive in the market place (Argenti, 2018). Efficiency is the amount of output for
a given amount of input and effectiveness is the resource getting ability of the organiza­
tion. Organizational efficiency is built on the concept of a resource-based view, which
calls for developing the dynamic capability to appropriate, adapt, integrate and reconfi­
gure for internal and external organizational competence (Roy & Khastagir, 2016). The
vertical integration in Industry 4.0 using hierarchical subsystems within organization to
create a reconfigurable and flexible manufacturing systems (S. Wang, Wan, Zhang et al.,
2016)will result in developing an appropriate, adapt, integrate, internal physical and
informational subsystems within the organization which willaffectinto reduction in losses
in resources and thereby improving organizational efficiency. The smart machines in
vertical integration will be dynamically reconfigured resulting in efficient use of resources
(Kamble et al., 2018). The horizontal integration will result in physical and information
subsystem across the value chain (Rajnai & Kocsis, 2018) for the products and services
across the organizations resulting in efficient handling of supply chains thereby improv­
ing the organizational output. The end-to-end integration which is product-centric value
creation integration (Cimini et al., 2019)which will result in organizations achieving
efficiency due to better use of resources in the value chain of the products. Therefore, one
of the pros of Industry 4.0 is organizational efficiency. The organization effectiveness is
defined as ‘ the degree to which an organization realizes its goals’(Daft, 2015). It could be
due to the degree of overall success, market share, profitability, growth rate, and
PRODUCTION & MANUFACTURING RESEARCH 255

innovativeness of the organization in comparison with key competitors. The degree of


implementation of vertical integration, horizontal integration and end-to-end integra­
tion will result in creating a competitive advantage for the organization compared to the
competitors, as the high degree of automation will produce products of high quality,
competitively priced and the high degree of customization. The competitive advantage
could result in a large market share, resulting in profitability and overall success for the
organization. Organization efficiency and effectiveness will improve drastically due to the
implementation of Industry 4.0.

4.3. Organization agility


Organization agility is the competence by which an organization deals with uncertainty
in the marketplace and by using rapid response to transform this opportunity into
innovative products and services (A. Carvalho et al., 2017; Panda & Rath, 2017). The two-
imperativefacet of organizational agility is quickness and innovativeness (Argenti, 2018;
A. M. Carvalho et al., 2017; Sony, 2019). Quickness means responding on time and
innovativeness is meant by the quality of the response. Previous studies have broadly
defined organizational capability which will help the organization in sensing and
responding to customer needs, competitor actions, and Government regulations (Z.
Cai et al., 2013; Panda & Rath, 2017). Organization agility will result in the long-term
performance of the organization over time. The vertical integration is the integration of
networked manufacturing systems which is the integration of aggregation and hierarchal
levels of value creation within the organization. The intelligent network of manufacturing
cells, production lines and other aspects of product manufacturing and selling within the
organization such as marketing, and sales will help to quickly respond to customer
demands.This will also enable the scope to manufacture innovative and customised
products to meet customer needs. The intelligent cross-linking of various subsystems
within the organization through a self-regulating and decentralised framework will create
a possibility to manufacture a small lot of products in an economically viable manner
meeting the customer need for customization. The horizontal integration which is
a cross-company and company internal cross-linking within the value chain will make
the entire supply chain responsive to meet customer needs. The end-to-end integration
through it’s intelligent cross-linking and digitalization throughout all phases of the
product life cycle will help to develop innovative products as per the customer needs.
The new and innovative services will also be possible due to end-to-end integration due
to servitization of products which is integrations of various services during the life cycle
of the products (Ennis et al., 2018; Huxtable & Schaefer, 2016).

4.4. Manufacturing innovation


The development of innovative technologies which is connected through IoT, artificial
intelligence and smart manufacturing is generating a new wave of innovation in manu­
facturing (Blackburn et al., 2017). The industrial equipment’s which communicates with
other machines and users in a self-regulating and automated process which warrants the
low degree of human intervention, dynamic communications & control in automated
modules between shop floor and markets are creating a new manufacturing paradigm
256 M. SONY

(Iansiti & Lakhani, 2014; Porter & Heppelmann, 2014). The smart factory will, therefore,
be connected and flexible manufacturing systems which use big data from production and
operations to market demand to create a manufacturing revolution leading to a huge
competitive advantage compared to traditional manufacturers (MacDougall, 2014; Sjödin
et al., 2018). The Industry 4.0 production lines will be designed to accommodate high mix
and low volumes which are a challenge for traditional manufacturing processes. The
advances in automation, digitization and cross-linking integration will make this
a possibility in Industry 4.0 due to manufacturing innovation. These new manufacturing
processes will be ideally suited to new product introduction and experimentation in design.

4.5. Profitability
Cyber-physical system is one of the main concepts behind the implementation of the smart
factory in Industry 4.0. Various architectures are proposed by automation agencies to
implement Industry 4.0. A popular 5 C architecture developed by Saldivar et al. (2015)is
a connection, conversion, cyber, cognition and configuration.The connection is the phy­
sical connection of machines and their components for accurate and reliable data.
Conversion is the data obtained from the connection are converted into information.
Cyber is the massive information hub, which is used for prediction, analysing, monitoring
the functioning of machines connected in a hub. Cognition is the analytical part wherein
information is further processed through AI networks and to decide the best course of
action. The configuration is again the feedback element to the physical part. The extended
model of 8 C is more comprehensive and includes coalition, content and customer (Jiang,
2018). The coalition focusses on the value chain and product chain integration mechanism
in terms of the production process. Customer part captures the role in terms of the
customer usage data, and specs in the loop of the production process and content part
are used for extracting, storing and inquiring of product traceability.To implement this
architecture, it requires a huge cost of installation of the hardware, software and other
allied integration software’s. The cost would be fixed cost for the initial installation,
training and variable cost in terms of operations and maintenance cost (Rubmann et al.,
2015). Though the implementation of such architectures requires initial huge initial
investments (Jiang, 2018). But once the intelligence is built into products and processes,
the costs will plunge. Some of the factors which will impact the reduction in costs are fewer
quality problems, less material waste, lower personnel and operating costs.Nevertheless,
other costs such as maintenance cost might increase, but the speed and ability to handle
such a high product mix impeccably will also lower the total costs in the long run. Likewise,
it is expected due to the large market share organization implementing Industry 4.0 will be
profitable in the long run.It will also open new opportunities to serve larger markets,
customized & Smart products, intelligent products and operations to offer services to
accompany the products will capture a large customer base and also customer loyalty
(Tseng et al., 2018). Industry 4.0 thus can result in short and long-run profits.

4.6. Improved product safety& quality


Product safety plays an important factor in both the manufacturing and retail industries
(Chen & Hua, 2017). There is customer willingness to pay more for safe and high-quality
PRODUCTION & MANUFACTURING RESEARCH 257

products (Wessells & Anderson, 1995). In the product life cycle, consumer product
stakeholders such as product design house, manufacturer, testing laboratories, retailers
from product supply chain are taking unavoidable responsibility to ensure the product
safety in the whole product life cycle (L. Cai, 2011). The use product safety data such as
product recall data, common incident problems, solutions, improved quality manage­
ment systems, self- regulating and automatic monitoring of predefined quality charac­
teristics through the implementation of vertical, horizontal and end-to-end integration in
Industry 4.0 will reduce the safety and quality issues (Li & Lau, 2017). Artificial intelli­
gence willbe applied to quality testing at different phases of the production process, to
monitor and test the product quality (Radziwill, 2018).Therefore, the implementation of
Industry 4.0 will result in improved product safety and quality.

4.7. Delightful customer experience


The customer experience engulfs all the aspects of the company openings. It includes
quality of customer care, advertising, packaging, product and service features, ease of use,
and reliability. It is the internal and subjective response a customer has in response to any
direct or indirect contact with the company (C. Meyer & Schwager, 2007). One of the
important customer experience definitions are ‘the customer experience originates from
a set of interactions between a customer and a product, a company, or part of its
organization, which provoke a reaction. This experience is strictly personal and implies
the customer’s involvement at different levels (rational, emotional, sensorial, physical, and
spiritual)’(Gentile et al., 2007). The classical pyramid model expounds the company-
customer, company-employee and employee-customer interactions area three-
dimensional pyramid with technology at its apex (Parasuraman, 2000). This model
suggests that technology will form the central tenant in customer experience. The
automation and computing technologies in Industry 4.0 will result in customers gaining
more power and control (Camarinha-Matos et al., 2017; Tjahjono et al., 2017).With the
implementation of Industry 4.0, the responsiveness and profound information availabil­
ity will increase due to vertical, horizontal and end to end integration. The new informa­
tion can be strategically parted to the customers to create a unique customer service
experience. Thus,manufacturers will have an opportunity to co-create a delightful cus­
tomer experience for the customers, which will result in a competitive advantage. This is
because customers do not mind paying more for delightful customer experience
(Gilmore & Pine, 2002). To cite an example the customers will be able to track their
products even in the production line, for customized products. The detailedand the
contextual data due to integration mechanism will form the foundation for swiftlydecid­
ing the issues between customers and manufacturer.

4.8. Improved operations


Industry 4.0 stresses on process optimization even before value creation is realised in
practice. The simulation of production activities and supply chain could be one of the
reasons for this optimization. The vertical and horizontal integration will result in shorter
time to market and a considerable reduction in lead times (Rudtsch et al., 2014). The last-
minute changes or volatility in the market can be handled in a better manner. Thus, the
258 M. SONY

manufacturing companies will produce exactly what is needed by the customers


(Rüttimann & Stöckli, 2016). The improved coordination in the supply chain due to real-
time data will result in the reduction of inventory across all elements in the supply chain
(Oettmeier & Hofmann, 2017). The awareness of the smart products will result in fewer
quality faults, reduced scrap rate, reliable production systems, and overall quality level of
the manufacturing process will increase (G. G. Meyer et al., 2011). The availability of
product life data will result in an opportunity to continuously improve the product
quality (Lee et al., 2014). Therefore, implementing Industry 4.0 will result in an improved
operational advantage for the organization.

4.9. Environmental and social benefits


Industry 4.0 implementation will reduce the emission of greenhouse gases, this is because
due to vertical integration data regarding traceable carbon footprints or emission data
will be strictly monitored by an algorithm which will control the various parameters
(Peukert et al., 2015). The resource efficiency will improve and thereby reducing waste
andimprove energy efficiency (J. Müller et al., 2017; Kiel et al., 2017).Additive manufac­
turing is considered as one of the enablers of Industry 4.0. This will further reduce the
physical transport and logistics processes (Magdalena, 2016; Oettmeier & Hofmann,
2017).Concerning the social benefits, the management and decisions will be transparent
and based on the data (Kiel et al., 2017). The physically demanding work or ergonomi­
cally awkward positions which are difficult for humans will be performed by robots. The
smart, autonomous and self-regulating production process will take care of the mono­
tonous jobs in the production process thereby improving the quality of work-life for
humans (Kagermann, 2015).

5. Thematic analysis of cons of Industry 4.0


The cons which have been unearthed in this study are tabulated in Table 1.

5.1. Negative impact of data sharingin a competitive environment


The digital connectivity using vertical, horizontal and end-to-end integration during
the implementation of Industry 4.0 will facilitate data sharing (S. Wang, Wan, Li et al.,
2016) within a competitive environment resulting in a transparent business ecosystem
in an online platform (J. M. Müller, Kiel et al., 2018). This implies two issues 1) the high
degree of transparency may result in risks such as cyber-attacks, industrial spying, and
other challenges such as data rights, and access. 2) The organizations which set the
platform standards will hinder the other organizations with well-established unique
selling points and may also drive them out of the business (W. Zhou et al., 2017).To
meet the challenges, organizations mustredesign the existing business models and
devise business strategies. The research evidence on the impact on the adoption of
technologies in a competitive market environment is mixed. Novel technologies can be
used to outperform the competitors (Zhu et al., 2003) and also a negative relationship
between adoption of technology in the competitive market is revealed (Rodríguez-
Ardura & Meseguer-Artola, 2010). Thus in a market where the competition is very
PRODUCTION & MANUFACTURING RESEARCH 259

scarce firms will allocate more resources for technological advances compared to
a market where the competition is intense (Rodríguez-Ardura & Meseguer-Artola,
2010).A recent quantitative study has offered evidence that irrespective of the size of
the company the competitiveness and future viability prevents organizations to imple­
ment Industry 4.0 (J. M. Müller, Kiel et al., 2018).

5.2. Total implementation of Industry 4.0 is necessary for success


The total implementation of Industry 4.0 is necessary for the success of this initiative (J
Müller & Voigt, 2017). This is difficult because Industry 4.0 implementation must be
designed for different production structures or company sizes (Erol et al., 2016).
Allocation of financial resources is a challenge and therefore, some organizations due
to financial crunches adopt retrofitting of established production and logistics systems
(Hirsch-Kreinsen, 2014). Industry 4.0 should not be implemented in an isolated manner
and it will not yield sustainable results. The synchronization and coordination with
existing production equipment’s and processes will result in complicated processes and
costs, which will be very difficult for the organizations such as SME’s (J. M. Müller, Buliga
et al., 2018). Previous studies have explicated the importance of organizational charac­
teristics such as 1) complexity of existing systems 2) integration and 3) organizational
readiness (Bhatt & Grover, 2005; Chau & Tam, 1997; Ramdani et al., 2009). A recent
survey in Germany depicted that the complexity of integration Industry 4.0 into existing
organizational hierarchies and structures as well as into production and logistics systems,
that is, retrofitting, prevents companies from pursuing novel manufacturing paradigms
(J. M. Müller, Kiel et al., 2018).Therefore, for the success of Industry 4.0, there should be
a total implementation of Industry 4.0.

5.3. Handling employeesand trade unions apprehensions


Industry 4.0 is expected to have a far-reaching impact on the employees (Bonekamp &
Sure, 2015). It is expected that jobs with a low degree of skills will be performed by
automated robots or CPS (Bonekamp & Sure, 2015). The employees will have to
acquire new skills to operate and maintain the Industry 4.0 systems (Bonekamp &
Sure, 2015; Singer, 2015; Sony & Naik, 2019b). Besides, employees have to accept and
displaya willingness to learn about new technology (J. M. Müller, Kiel et al., 2018).
While implementing any new technology, user anxiety while operating a technology
initiativeis very high (Heinssen et al., 1987). Using technology, by the employers are
very critical for the success of Industry 4.0(J. M. Müller, Kiel et al., 2018).
Consequently, the acceptance of Industry 4.0 technology by the employees is a major
concern. The trade unions of the organizations may resist for the Industry 4.0
initiatives as it involves a radical changein terms of how traditional work, is carried
out in the organization (Johansson & Abrahamsson, 2009; Lasi et al., 2014; Singer,
2015). Theresistance of the trade unions would be becausethe information about
Industry 4.0 was not disseminated properly or the trade unions were not taken into
confidence during the preliminary phase of implementation of Industry 4.0. Therefore,
handling the employees and trade unions will a major challenge for the success of
Industry 4.0
260 M. SONY

5.4. Need for highly skilled labour


The implementation of Industry 4.0 will result in a need for employees which are multi-
skilled (Bonekamp & Sure, 2015). The work design in the cyber-physical system era would
undergo a sea change (Waschull et al., 2019). A sample representation of skill set would be
technical, methodological, social, and personal competencies (Hecklau et al., 2016). The
technical competencies expected of employees are state-of-the-art knowledge,technical
skills,process understanding,media skills,coding skills and understanding IT security
(Sony & Naik, 2019b). The methodological competence expected of employees is creativ­
ity,entrepreneurial thinking,problem-solving,conflict solving,decision making,analytical
skills,research skills and efficiency orientation (Hecklau et al., 2016). The social compe­
tencies anticipated for Industry 4.0 would be intercultural skills,language skills,commu­
nication skills,networking skills,ability to work in a team,ability to be compromising and
cooperative,ability to transfer knowledge, and leadership skills (Brkic et al., 2019). The
personal competencies expected of the employees would be flexibility,ambiguity tolerance,
motivation to learn,ability to work under pressure,sustainable mindset and compliance
(Hecklau et al., 2016). The availability of employees with these skills will be a challenge
(Bonekamp & Sure, 2015). Besides, training the existing employees to acquire such skills
will also warrant strategic training modules and programs which will involve costs as
attrition of employees would be high. Therefore, the need for highly skilled employees will
escalate and it will be difficult to meet the needs of the organizations.

5.5. Socio-technical implications of Industry 4.0


Industry 4.0 is a socio-technical system. For the successful and sustainable implementa­
tion of Industry 4.0, the joint optimization of Socio-technical systems is desired (Davies
et al., 2017). Therefore, while implementing the integration architecture for Industry 4.0,
the socio-technical systems theory should be included in every phase of integration.
Ifsuch an approach is not adopted it may result in some social complications such as
polarisation of job profiles, divide in the employability of graduates, a proliferation of
knowledge societies. Some of the social problems as a result of Industry 4.0 (Avis, 2018)
would be a) Polarisation of Jobs and with that the income disparity (David, 2015; Frey
et al., 2016) b) There would be a shift in favour of capital away from labour (Lordon,
2014) c) Rise in monopolisation (Harvey, 2014) d) technical unemployment which is
based on skilled labour shortages (Rainie & Anderson, 2017 e) Demographic changes
which may benefit either the older or young workers (Goodhart & Pradhan, 2017) f)
deskilling or upskilling of employees (MacCrory et al., 2014) g) a population deprived of
waged labour (Avent, 2016) h) growth of precariousness in society (Standing, 2016)i)
threat to ecology (Hajkowicz et al., 2016). Hence, the implementation of Industry 4.0
should be a joint optimization between the social and technical systems.

5.6. Cyber security


Industry 4.0 warrants the digital networking of people, products and machines.
Moreover, the closely related intelligent data processing, digital value-added services
and business processes work transparently to develop standardisation. The popular
PRODUCTION & MANUFACTURING RESEARCH 261

architectures such as 1)Reference Architectural Model Industry 4.0 (RAMI 4.0)


(Hankel & Rexroth, 2015) and the Industrial Internet Reference Architecture
(IIRA) (Flatt et al., 2016) have been developed. The information transparency and
digital opening of CPS expose them to host of cyber-security issues such as process
manipulation, shut down by cyber-attacks, know-how protection, data protection,
product protection, and other sensitive data protection (Flatt et al., 2016).
Cybersecurity will be imperative, and lack of proper strategy will derail the business
functioning by antisocial elements. Thus, Industry 4.0 initiatives to be successful
a tough measureis a must.

5.7. High initial cost


Industry 4.0 implementation in an organization will result in horizontal, vertical and
end-to-end integration (S. Wang, Wan, Li et al., 2016). To design and implement the
architecture as per the business needs substantial initial investment in terms of cost and
time is required (Lasi et al., 2014; Singer, 2015). The capital expenditure cost is signifi­
cant, and the money must be raised for implementing Industry 4.0 (Rojko, 2017). In the
long run, the cost will break even resulting in profitability, however, the initial cost
required for implementing Industry 4.0 is high.Another point to consider is that high
initial cost it is also related with the highly skilled labour at the beginning. This is because
everything is prone to be automated, and it will include all the massive workload that it is
needed to develop the software tools to operate. To cite an example of Additive
Manufacturing facility, which is considered one of the Industry 4.0 enablers, the setting
up of the machines and post processing of equipment is very expensive. However, the
developing of the working environment and the need of highly skilled developers though
it is costlyinitially, it is only needed at the beginning. After that few operators with not so
high qualifications are needed in the long run during the operations. Organizations
should consider that the high skilled labour is more needed just at the beginning, and
later on thein the long run operations are very less.

6. Research directions
This study has critically analysed the evidence based on the extant literature on the pros
and cons of Industry 4.0. Based on the findings, the following future research areas are
suggested.

● Competitive advantage for the organizations implementing Industry 4.0 will vary
depending on the type of the organization (Porter & Heppelmann, 2014), life cycle
stage of the organization (Gupta & Chin, 1993) and the degree of competition in the
markets (Rodríguez-Ardura & Meseguer-Artola, 2010). Future research should
explore the relationships between the three constructs and how successful the
implementation of Industry 4.0 will result ina competitive advantage for the orga­
nization in the short and long run.
● Organizational effectiveness and efficiency will be improved in an organization after
the implementation of Industry 4.0 (Argenti, 2018; Kamble et al., 2018). The long-
term impact of Industry 4.0 on these measures should be studied organizations
262 M. SONY

varied by the size, type, location of the organization.The employee’s response to


organizational effectiveness and efficiency will also be an important aspect and
research should also be directed in this expanse.
● The two dimensions of organizational agility i.e. responsiveness and quickness
(Argenti, 2018)will have to be investigated across the vertical, horizontal and
end-to -end integration mechanisms of Industry 4.0. The enablers for organiza­
tional agility in the three-integration mechanism will be an interesting area to
explore as such a study will help the organizations to focus on key aspects.
Another area of research would be to investigate the factors hinder organiza­
tional agility in organizations which have implemented the three modes of
integration Industry 4.0.
● Industry 4.0 organizations depicted the initial evidence of manufacturing innova­
tion (Almada-Lobo, 2016). The phenomenon of manufacturing innovation should
be studied longitudinally because it will help to understand in the long run how
successful the organizations are in delivering high mix and low volumes products
and the customer response to it.
● Previous studies have suggested that implementing Industry 4.0 will result in profit­
ability for the organizations (Satoglu et al., 2018). However, these studies have given
cross-sectional results. It would be interesting to explore organizations for long term
profitability using longitudinal data in different sectors on the manufacturing and
service sectors.
● There is some preliminary evidence that implementing Industry 4.0 can improve the
safety of product or services (Chen & Hua, 2017; Radziwill, 2018) and improve
quality of the products (Foidl & Felderer, 2015). The empirical investigation is
needed further to investigate the impact of Industry 4.0 on other dimensions of
product and services quality.
● Industry 4.0 has the potential to improve the customer experience due to the
availability of big data due to vertical, horizontal and end-to-end integration
(Camarinha-Matos et al., 2017; Rashid & Tjahjono, 2016). The future studies
should explore how the big data in Industry 4.0 can be used to design customer
experience at a personal level to impact on the rational, emotional, sensorial,
physical, and spiritual levels.
● Operational excellence due to the implementation of Industry 4.0, can be realised
even before value creation due to the advances in automation and computing power
(Rudtsch et al., 2014). Future research should study the impact of implementation
Industry 4.0 on different operational measures.
● Industry 4.0 implementation has the potential to reduce greenhouse gases (Peukert
et al., 2015) and also to improve resource efficiency (J. Müller et al., 2017). Future studies
may be conducted on the impact of various environmental parameters after the
implementation of Industry 4.0. The social benefits can also be seen in termsof benefits
for employees and other stakeholders external to the organizations.
● The negative impact of data sharing in competitive markets are evidenced
(J. M. Müller, Kiel et al., 2018), therefore future studies may explore the impact
of the Industry 4.0 technology adoption in different market structures and their
impact on data sharing will help to clarify the underpinnings behind the data
sharing paradox.
PRODUCTION & MANUFACTURING RESEARCH 263

● The employee acceptance of advanced technologies is a challenge (Walczuch et al.,


2007). It depends on employee personality, therefore future study should explore the
impact of various employee personality in terms of Big Five factors (openness, con­
scientiousness, extraversion, agreeableness and neuroticism) on Industry 4.0 technology
acceptance. Likewise, the trade unions acceptance of technology at the workplace is also
a challenge (Avis, 2018; Manwaring, 1981), because of various factors of Industry 4.0
such as reskilling of workers, reorganization of work may be detrimental to the trade
unions goals if the trade unions are not well informed. Research should be directed at
developing and testing dispute resolution models for acceptance of Industry 4.0 by the
trade unions so that it can be accepted on merits by the trade unions.
● Employees during Industry 4.0 implementation would be multi-skilled and the rate
of acquiring the skills should be continuous (Bonekamp & Sure, 2015; Hecklau et al.,
2016). The future research should explore these concepts in such a dynamic and
integrated environment how the employees should adapt to the skill requirement of
Industry 4.0. Another point to consider is that Industry 4.0 gives a wonderful
opportunity for the workers to become part of the intelligent system in terms of
generating data to program machines and optimize the process flows and having
useful information to support their work and cooperate with smart systems
(Peruzzini et al., 2018). The employee’s ability to process the information and act
accordingly will be an intelligent area to research upon.
● The socio-technical impact of vertical, horizontal and end-to-end integration in Industry
4.0 in terms of people, infrastructure, technology, process, culture and goals should be
studied as the longitudinalmanner for exploring the long-term impact of Industry 4.0 on
various stakeholders. Such studies will impart a holistic understanding of Industry 4.0

7. Conclusion & limitations


The main objective of this study was to review and analyse the extant literature on the pros and
cons of Industry 4.0 in a systematic manner to provide insights from an academic perspective.
This study identified. The pros of Industry 4.0 found after a detailed analysis of the literature are
a strategiccompetitive advantage, organizational efficiency & effectiveness, organization agility,
manufacturing innovation, profitability, improved product safety & quality, delightful custo­
mer experience, improved operations and environmental and social benefits. The cons identi­
fied in this study are the negative impact of data sharing in a competitive environment, total
implementation of Industry 4.0 is necessary for success, handling employees and trade unions
apprehensions, need for highly skilled labour, socio-technical implications of Industry 4.0,
cybersecurity and high initial cost.
The limitations of this study are limited by the database searched. Also, only English
language literature was considered, and other language studies were excluded. Being
a systematic literature review it must abide by certain inclusion and exclusion criteria. As
most of the reputed journals are published in English, this study has explored only English
Language articles, however, the study could further be improved by literature from other
languages.
Further concluding despite these imitations, reported in this section, this systematic review
has reported the current status of the pros and cons of Industry 4.0. This study has further
highlighted the suggestion for future research direction based on the gaps found in the
264 M. SONY

literature. As a part of the future study, we intend to investigate various stakeholder’s percep­
tion of Industry 4.0 pros and cons which will help to compare with the academic perspective.

Acknowledgments
We thank the anonymous reviewers for the constructive suggestion, which has helped us immen­
sely to revise the paper and improve its quality.

ORCID
Michael Sony http://orcid.org/0000-0002-8003-5216

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Appendix A: Industry 4.0 Literature reviews

Author Main Contributions


(K. Zhou et al., 2015) This conference paper relevant aspects of Industry 4.0 in relation to strategic planning, key
technologies, opportunities, and challenges
(Khan & Turowski, The paper why we need changes in our traditional manufacturing systems and discussed
2016) some of challenges faced by manufacturers.
(Liao et al., 2017) The study summarises the main research directions, applied standards, the employed
software and hardware.
(Lu, 2017) This study summarises the content, scope, and findings of Industry 4.0 by examining the
existing literatures in all the databases within the Web of Science. Also, the critical issue of
the interoperability of Industry 4.0 was delineated and a conceptual framework of
interoperability regarding Industry 4.0 is proposed.
(Hofmann & Rusch, The authors summarise the study on Industry 4.0 in the context of logistics management. The
2017) Industry 4.0 implications in the context of Just-in-Time/Just-in-Sequence and cross-
company Kanban systems were conducted in this study.
(Pereira & Romero, The literature review summarises the concept of the technological dimension of Industry 4.0,
2017) and to realises its impacts.
(Zhong et al., 2017) They summarise the topics such as intelligent manufacturing, Internet of Things (IoT)-
enabled manufacturing, and cloud manufacturing.
(Lu, 2017) The conducts a comprehensive review on Industry 4.0 and presents an overview of the
content, scope, findings and technologies of Industry 4.0
(Dallasega et al., 2018) They present a framework to help the practitioners and managers to identify Industry 4.0
methods that can increase proximity in the construction supply chain due to Industry 4.0
implementation
(Saucedo-Martínez This study analyses categorically recent advances through qualitative and segmentation
et al., 2018) methods allowing to reveal trends and areas of opportunity in the industry sense of 4.0
(Moeuf et al., 2018) They summarise the existing applied research covering different Industry 4.0 issues about
SMEs
(Kamble et al., 2018) They summarise the different research approaches used to study Industry 4.0 and the current
status of research in the domains of Industry 4.0 to build a sustainable Industry 4.0
framework
(Piccarozzi et al., 2018) They analyse and classify studies of Industry 4.0 in management literature, to find a unique
definition.
(Xu et al., 2018) They survey the state of art technologies of Industry 4.0. The challenges of these
technologies are identified.
(Bag et al., 2018) They review is directed to identify the Industry 4.0 enablers of supply chain sustainability and
propose a framework to bridge the theoretical gaps.
(Hamzeh et al., 2018) This paper conducts a survey study on Industry 4.0 for local New Zealand manufacturing.
(Sony & Naik, 2019b) They present a literature review to summarise the key factors for assessing the Industry 4.0
readiness for the organizations.
(Muhuri et al., 2019) Using bibliometric analysis, they summarise the state of art trends in Industry 4.0
272 M. SONY

Appendix B: Search keyword string

Part 1 Part 2 Part 3


Industry 4.0 Advantages Disadvantages
Or Or Or
Industrie 4.0 Benefits Weakness
Or Or Or
The fourth industrial revolution Pros Cons
Or Or Or
The 4th industrial revolution Strength Drawbacks
Or Or Or
Smart manufacturing Strengths Obstacles
Or Or Or
Smart Factory Positives Challenges
Or Or Or
Smart factories Gains Downs
Or Or Or
Cyber physical system Pluses Losses
Or Or Or
Cyber physical production system Highlights Negative effects
Or Or Or
CPS Positive effects Minus
Or
Internet of things
Or
Industrial Internet
Or
Big data
Or
Digitization
Or
Digitization
Or
Digitilisation
Or
Digitisation

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