Track: Industry 4.0

Abstract

Abstract

Industry 4.0 is a concept developed in Germany to resolve the 'polylemma of production' and reestablish the competitive advantage of manufacturing firms in 'high-wage' economies by delivering mass customization through integrated manufacturing systems. Digital Transformation (D.T.) projects focused on 'Industry 4.0' implementation is capital intensive and require People, Process, Technology, and Data readiness to pursue those projects. Achievement of digital readiness does not pave the way for a complete and drastic transformation. Sudden upgradation of operations and implementation of drastic changes to attain 'industry 4.0' status has a high probability of becoming another case study like the robotics strategy that Roger Smith and G.M. adopted in the 1980s. The ‘speedfactory’ was established in Germany and the United States based on the 'industry 4.0' concept. However, after three years, the operations got discontinued, and the 'speedfactory' was shifted to a country that would fall under the category of an emerging economy. A key question is why would the speedfactory work in an emerging economy when it failed in Germany and the U.S.?  This research article seeks to provide a theory as to why based on the ‘Resource Based-View’ theory (Barney, 1991) and follows the methodology of interpretive consolidation of quantitative and qualitative research (Haneef, 2011) to analyze the reasoning behind implementing ‘Industry 4.0’ in emerging economies. Specifically, this article proposes the ‘Resource Partnership Model’ for strategic implementation of 'industry 4.0' to realize sustainable competitive advantage in manufacturing firms in emerging economies. In this context, Resource Partnership Model describes the utilization of socially complex resources and the unique historical position of a manufacturing firm by forming strategic partnerships and then proceed to implement ‘industry 4.0’. This model also cautions that rapid adaptation of digital technologies (without strategic partnerships) by manufacturing firms in emerging economies would result in serious resource waste and performance pitfalls.

Keywords

Industry 4.0, Implementation, Emerging Economies, Strategic Partnerships, Resource Partnership Model