Articulo 19
Articulo 19
Articulo 19
ARTICLE
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
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.
2.2. 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
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.
16 15
14 13 13
12 11 11
10
8
6
4
2 1
0
2014 2015 2016 2017 2018 2019
25
20
20
15 14
12
10
5
5 4
3 3
2 2 2
1 1 1 1 1
0
30 27
25
20
14
15
10 7 7 6
5 2 1
0
Emerald Google Scholar IEEE JSTOR Scopus Springer Taylor & Francis
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.
35 33
30
25
20
20
15
11
10
0
Both Manufacturing None
38%
Conceptual
Practical
62%
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.
25
21 21
20
15
10 9 9
5 4
0
Interview Literature Review Nil Public documents Questionnaire
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
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.
(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.
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.
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).
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
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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