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Industry 4.0 determinants and competitive advantage

Industry 4.0 determinants and competitive advantage
Industry 4.0 determinants and competitive advantage


The 4.0 sector aims to achieve a level of high performance, productivity, and automation (Ślusarczyk, 2018; Thames & Schaefer, 2016). Industry 4.0 plays a major and important role in the manufacturing sector; directly linked to efficiency (Imran et al., 2018; Rüßmann, et al., 2015). The core scope of Industry 4.0 incorporates advanced analytics and Internet-based technologies, which combine both competitive advantage and sustainability (Roblek et al., 2016). SMEs must maintain or create a competitive advantage for the future (Todericiu & Stăniţ, 2015). With the expected disruption in Industry 4.0 and the current challenges facing SMEs, there is a threat involving SMEs that may lose their current competitive advantage (Lewandowski et al., 2013). As Industrialization 4.0 poses significant opportunities and risks; therefore, a new system is needed to ensure that SMEs will enter into advanced production systems. More importantly, Industry 4.0 allows today’s small companies to become the bullies of tomorrow.

In Malaysia, the important role of SMEs is constantly highlighted, especially through their contributions to promoting development, employment, income, and SMEs, which are considered important in the Malaysian economic transformation program (Wan Hooi & Sing Ngui, 2014). Therefore, SMEs are considered as the pillars and support of the Malaysian financial system (Kayadibi et al., 2013). SMEs recorded a 2018 increase of USD 126.3 billion to GDP of 38.3% compared to USD 117.9 billion in 2017 by 37.8 percent (Department of Statistics Malaysia, DOSM, 2019). Most of these SMEs do not enjoy a strong international presence; many can be international shippers (MITI, 2018). In partnership with various existing businesses, including the National e-commerce Program or Digital Free-Trade Zone (DFTZ), Malaysia plans to provide a healthy environment for SMEs to rebuild and adopt Industry 4.0 smart technology to achieve global competitiveness (MITI, 2018 ). According to Lewandowski et al. (2013), the efficiency of SMEs and operations is not easy due to the restriction of access to budget and resource resources, insufficient funding, and unfriendly market environments that support large SMEs.

In addition, poor management technology, lack of new technology and services, and high investment will create serious barriers to SMEs and lead to customer losses (Lewandowski et al., 2013). In line with MITI (2018), Malaysian SMEs are responsible for the rapid deployment of broadband infrastructure, limited digital integration, and digital integration of key government agencies; current training programs are not sufficiently targeted for Industry 4.0, very few local providers offer Industry 4.0 solutions, and a shortage of professionals. These challenges contribute to the sustainability of performance for Malaysian SMEs. As a result, the implementation of Industry 4.0 will address all of these challenges. Industry 4.0 plays a key role in managing Information Technology (IT) concerns and has a significant and dynamic impact on improving product and service quality (Imran et al., 2018). Industry 4.0 technologies, including “Big Data”, “Internet of Things (IoT)” and “Cloud Computing” play a useful role in enhancing competitive profitability. This study will therefore explore the role and effect of Industry 4.0’s decision to create a competitive advantage for Malaysian SMEs.

Industry 4.0 analysis remains incomplete despite extensive research in both analytical and comprehensive analysis methods (Lu, 2017). Subsequently, this study provides a conceptual model, including Industry 4.0 resolutions, and demonstrates the impact of Industry 4.0 on SMEs. It shows how Industry 4.0 resolutions work to improve sustainable growth and gain competitive advantage at the organizational level. This study involves the following contributions to the available information. The new framework was built based on competitive advantage; including Industry 4.0 resolutions, namely, high commitment, personnel management, procurement management, smart product, and project management, and the mediation effect of Industry 4.0 implementation between Industry 4.0 indicators and competitive advantage.

This paper is edited; in the following sequence, current research styles are exemplary in the introduction; the literature review describes Industry 4.0 considerations, competitive advantages, sustainability, and the most commonly featured features of Industry 4.0 in current courses, which help to create a framework and thinking, a method that reflects the type of work. Finally, the conclusion talks about donations and results.

Focusing on the above definition, the study discusses the literature available in full to answer questions, what decisions affect the successful deployment of Industry 4.0, how these decisions affect competitive profitability, and whether there is a mediating effect of Industry 4.0 between definitions and competitive advantage at the organizational level? These questions are critical in terms of operational perspective as organizations need to learn what decisions they need to adapt to in order to effectively use Industry 4.0.

Industry 4.0

Industry 4.0 was developed in 2011 with tertiary institutions and private organizations in the German Federal government program. It was a strategic plan to create new production processes to improve the competitiveness and performance of national business (Henning Kagermann, Wolf-Dieter Lukas, 2013). The term reflects the modern era of production systems by incorporating various innovative and innovative technologies to help the organization produce additional products (Dalenogare et al., 2018; Shiyong Wang et al., 2016). Field 4.0 requires the social and technological transformation of human work in production processes where all the activities of the trading organization take place in smart strategies (Longo et al., 2017; Stock et al., 2018) and focus on ICT (Raguseo et al., 2016).

Table 1: The Indistrial Revolution

Determinants of Industry 4.0

The industry 4.0 looks vague, but the number of studies in recent years has increased at an unprecedented rate (Brettel et al., 2014; Mhurihuri al al., 2019). Organizations do not have a proper process for the acquisition and implementation of Industry 4.0 and the framework (Sony & Naik, 2019a). Concerns about competitive profitability remain a challenge for organizations to connect with Industry 4.0. Therefore, academics have suggested that the decisions of Industry 4.0 will be understood to reflect the magnitude of the import and use of Industry 4.0 effectively to achieve competitive advantage. Subsequently, the study identified a set of Industry 4.0 decisions and evaluated them, which are thought to be important in achieving Industry 4.0 in achieving competitive advantage (Kamble et al., 2018).

Table 2: The determinants of Industry 4.0 in ht existing literature.

Industry 4.0 includes a number of standard text reviews (Liao et al., 2017). Shinohara et al. (2017) provided a set of Industry 4.0 shortcuts, in which they suggested further study of an improved list of definitions that could be most helpful in sustainable manufacturing activities. De Sousa Jabbour et al. (2018) conducted a study showing a number of sustainable production decisions in Industry 4.0, and (Singh, 2018) conducted a study of key aspects of Industry 4.0 using a systematic management approach.

Competitive Benefits

Competitiveness can be attributed to comparative tests between organizations in the business sector or the external environment (Lewis, 2000), which are more involved in gaining competitive advantage (Depperu & Cerrato, 2005). Therefore, both competition and competitive advantage are portrayed as multi-faceted ideas expressed at the national, international, commercial and organizational level (Anca,

2010). Competitive gains can play a significant role in maintaining enduring wealth or organization (Porter, 1998). Therefore, organizations can move forward ahead of the competition by creating a competitive advantage. Any country cannot function without having competing organizations, and corporate competition makes the nation competitive (Chikán, 2008). That’s why; competitive advantage has received a great deal of attention in research (Arslan & Tathdil, 2012).


The following model is proposed to understand the relationship between the determination of Industry 4.0, its successful implementation and competitive advantage,

Figure-1: Research Framework

Top Management Commitment, Industry 4.0 and Competitive Benefit

The commitment of senior management is critical to technological change (de Sousa Jabbour et al., 2018). The use of smart technologies has been expanded in the manufacturing sector, and people involved in the use of technology have strengthened their technology, and organizations have improved their technical skills (Hardaway et al., 2016).

The commitment of senior management is also important as they ‘manage’ the organization’s finances; in budget allocation, strategic change and implementation, unnecessary disruptions, and related emergencies, the participation of senior management is required for resources to be available. Therefore, researchers have shown that broader data performance, management commitment, and staff strategy can help address technical challenges, gain competitive advantages, and improve financial and environmental efficiency to be discussed in Industry 4.0 (El-Kassar & Singh, 2019). The commitment of senior management allows it to be successfully incorporated into the product development process, which provides a competitive opportunity for an adopted approach (Latan et al., 2018). Therefore, relationships can be expressed as follows:

Human Resource Management, Industry 4.0 and Competitive Benefit

Human resources include specific technologies and qualifications, such as education, knowledge, skills, consultation, and communication, mind-building and personal behavior (Kostopoulos et al., 2015). Human resource management is considered to be one of the critical forces in which organizations can support employees’ talents, strengths, actions, and attitudes towards their goals and objectives (Shamim et al.,2016). By planning human capital effectively, organizational management can improve employee intelligence, record keeping, and learning (Bedolla et al., 2017). With the emergence of sustainability on the company’s agenda, human resource management is central to the development of technologies, collaborative approaches, and business skills needed to support organizational direction (Yong et al., 2020).

Industry 4.0 seeks the successful installation of equipment, processes, and human products. Therefore, organizations can reap competitive benefits, including production costs and time savings as well as improved product quality (Albers et al., 2016; Gebhardt et al., 2015). Pasban & Nojedeh (2016) pointed out that human skill is critical to all corporate management functions and requires sufficient expertise, knowledge, ingenuity, and expertise to meet customer needs and thus can create competitive advantage. Therefore, related relationships can be defined as follows:

Procurement Management, Industry 4.0 and Competitive Benefit

Industry 4.0 ushering in a period of time when all corporate purchases are digitized, and supply chain management is restructured. Previously, manufacturers have been the alternative, but the supply chain is about survival in unpredictable, volatile, dynamic and irrational market conditions (Bag et al., 2018). A supply chain is the process of converting items into finished items and then creating and delivering them to the organization’s final buyer (Stadtler, 2008). Improves confidence and coordination and accelerates stock building (Jayaram, 2016).

Industry 4.0 requires smart purchases to create competitive advantage (Sony & Naik, 2019b; Vendrell-Herrero et al., 2017). Digital integration and integration using Cyber-Physical System (CPS), “Internet of Things (IoT)” and “Cloud Computing” with multiple distribution features can increase the organization’s scope for data capture and data processing, as well as technology monitoring and control (Sony & Naik, 2019a). Production and supply chains must be properly connected in order for the organization to function effectively. Therefore, the active 4.0 industry needs to create smart supply chains in the right place and at the right time with the right volume of required components (Kovács & Kot, 2016). Therefore, the organization can achieve competitive advantage. Therefore, thoughts can be expressed as fofollowin

Smart Product, Industry 4.0 and Competitive Benefit

Industry 4.0 includes major industrial enhancements that affect products and processes as well as general changes in production, smart factories, and machinery that enable the production of intelligent products (Schmidt et al., 2015). Industrial background and consumer expectations are highly variable in intelligent products, which have increased the additional functions and difficulties created in emerging technology connections (Persson, 2016). Therefore, smart product plays an important role in industrial transformation. Intelligent products can store a wide variety of information, process it, and interact with industry networks. On the other hand, as an integral part of today’s industrial model, smart products represent more opportunities in companies with competitively profitable markets (Nunes et al., 2017). Smart products are key ingredients in the achievement of Industry 4.0 (Lichtblau et al., 2014). The integration of products, production processes and the physical environment will allow the organization to control, direct, and maximize competitive advantage (Cheng et al., 2017). The situation led to the formation of the following ideas:

Project Management, Industry 4.0 and Competitive Benefit

Industrie 4.0 incorporates a series of systematic applications in its implementation in a systematic and systematic way (Rojko, 2017). Compared to standard organizations, companies need to start a variety of projects to make Industry 4.0, and effective project management will also be a key component (Shamim et al., 2016). In contrast, the success of project management depends on the personnel tasks assigned to the projects (De Meyer et al., 2002).

Project management is a unique activity and includes ingenuity, innovation, and competitive advantage (Davies & Brady, 2016). DeFillippi & Arthur (1998) have shown that project management contributes significantly to creating competitive advantage. Therefore, thoughts can be written,

Finally, the relationship between Industry 4.0 and Competitive Advantage is valued as follows,

Research Methodology

The new determining model of Industry 4.0 and their impact on the sustainability and achievement of the proposed competition (Figure 1) of Malaysian SMEs. The study will conduct a separate study on Malaysian SMEs, while SME Corporation will provide samples for data collection. The study will be conducted in various regions of Malaysia. A structured questionnaire will be used to collect data, and the measurement materials will include questions related to all the variables suggested in the framework. Statistical statistics


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