Success Mechanisms of Smart Factories in Small and Medium-Sized Enterprises

Abstract

Although large companies have progressed in digital transformation (DT) of factories using Internet of Things (IoT) and artificial intelligence (AI), small and medium-sized enterprises (SMEs) have not progressed enough. However, considering the efficiency and value creation of the entire supply chain, it is important to promote a smart factory in not only large companies but also SMEs. This study examines the success factors and mechanisms based on the case studies of Japanese SMEs that have successfully implemented smart factories. Then, its characteristics are compared with those of large companies. Specifically, in SMEs, where the top management and the factory floor are in close proximity, if the purposes and vision of DT are clear and the top management understands its possibilities and limitations, successful experiences can spread throughout the company through trial and error using an in-house system optimized for the factory floor. This study reveals that the success mechanism makes it easier for SMEs to promote DX than for large companies under certain conditions, which is a new finding and a theoretical contribution. The practical contribution of this study is that it guides SMEs to promote DT in factories in SMEs based on this mechanism.