Fourth industrial (r)evolution? Investigating the use of technology bundles and performance implications

Purpose

The purpose of this paper is to investigate how different manufacturing technologies are bundled together and how these bundles influence operations performance and, indirectly, business performance. With the emergence of Industry 4.0 (I4.0) technologies, manufacturing companies can use a wide variety of advanced manufacturing technologies (AMT) to build an efficient and effective production system. Nevertheless, the literature offers little guidance on how these technologies, including novel I4.0 technologies, should be combined in practice and how these combinations might have a different impact on performance.

Design/methodology/approach

Using a survey study of 165 manufacturing plants from 11 different countries, we use factor analysis to empirically derive three distinct manufacturing technology bundles and structural equation modeling to quantify their relationship with operations and business performance.

Findings

Our findings support an evolutionary rather than a revolutionary perspective. I4.0 technologies build on traditional manufacturing technologies and do not constitute a separate direction that would point towards a fundamental digital transformation of companies within our sample. Performance effects are rather weak: out of the three technology bundles identified, only “automation and robotization” have a positive influence on cost efficiency, while “base technologies” and “data-enabled technologies” do not offer a competitive advantage, neither in terms of cost nor in terms of differentiation. Furthermore, while the business performance impact is positive, it is quite weak, suggesting that financial returns on technology investments might require longer time periods.

Originality/value

Relying on a complementarity approach, our research offers a novel perspective on technology implementation in the I4.0 era by investigating novel and traditional manufacturing technologies together.