Adoption of Industry 4.0 Technologies and Company Competitiveness: Case Studies from a Post-Transition Economy

Adoption of Industry 4.0 Technologies and Company Competitiveness: Case Studies from a Post-Transition Economy Marta Götz Associate Professor, Department of Business and International Relations, [email protected] Vistula University, ul. Stokłosy 3, 02-787 Warszawa, Poland Barbara Jankowska Associate Professor at the Department of International Competitiveness, [email protected] Poznań University of Economics and Business; al. Niepodległości 10, 61-875 Poznań, Poland Abstract anufacturers face increased cost pressures advantage of a firm could be modified in the era of Industry and market volatility. Product life cycles are 4.0 as a result of a sector’s transformation and changing getting shorter. Production has to be faster and relationships with partners. These findings correspond with Mincreasingly local. The acceleration of «time-to-market» the literature stressing the uncertainty and complexity of the could happen thanks to the solutions of Industry 4.0 (I4.0), digital economy in general, as well as difficulties with the with supply chains morphing into highly adaptive networks precise measurement of the expected benefits. The fourth with integrated entities. In this paper, we seek to explore the industrial revolution emphasizes «the race to the top», potential impact of I4.0’s adoption upon the competitiveness giving priority to quality rather than to cost reduction as a of the firms (foreign subsidiaries among others) and ask method of improving competitiveness and, since it implies about the nature of modernization as part of the global the emergence of connected companies, truly linked to one value chain in which the enterprise operates. Our research another, the disappearance of clear boundaries between based on four case studies reveals that the competitive them. eywords: Industry 4.0; digital technologies; post-transition Citation: Götz ., Jankowska B. (2020) Adoption of Industry economy; manufacturing; case study; competitiveness; 4.0 Technologies and Company Competitiveness: Case product life cycle Studies from a Post-Transition Economy. Foresight and STI Governance, vol. 14, no 4, pp. 61–78. DOI: 10.17323/2500-2597.2020.4.61.78 © 2021 by the authors. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (http://creativecommons.org/licenses/by/4.0/). 20202020 Vol.Vol. 1414 NoNo 44 FORESIGHTFORESIGHT ANDAND STISTI GOVERNANCEGOVERNANCE 6161 New Business Models anufacturers face increased cost pressure lytics; Autonomous Robots; Simulation; Horizon- and market volatility. Product life cycles tal and Vertical System Integration; The Industrial are getting shorter. Production must be Internet of Things; Cybersecurity, the Cloud; Ad- Mfaster and increasingly local. New business models ditive 3D Manufacturing; and Augmented Reality based on manufacturing as a service (MaaS) have [Rüßmann et al., 2015]. Smart technologies used in emerged [Aquilante et al., 2016]. The acceleration of the manufacturing processes are translated into ho- “time-to-market” could happen thanks to the solu- listic digitalized models of products and factories tions of Industry 4.0 (I4.0), with supply chains mor- (digital factory) [Lasi et al., 2014; Lucke et al., 2008] phing into highly adaptive networks with integrated (see examples at Table 1). entities. What is different about the current revolu- Various studies confirm that companies face signifi- tion from previous ones is that it has been initiated cant challenges in managing their digital transfor- in society and has influenced industry rather than mation. Based on a survey of nearly 200 large and other way round – “its main drivers are the inven- medium-sized Slovenian companies, Štemberger et tion of social networks and smart devices (…) this al. [Štemberger et al., 2019] showed that there are development of interconnectivity pushes into the six different successful organizational patterns. The industrial sector today” [Schuh et al., 2014]. The re- most successful turned out to be the business–IT sults obtained by Edquist et al. [Edquist et al., 2019] partnership, where the CEO and the IT department demonstrate that a 10-percentage-point increase in are jointly responsible for the digital transforma- the growth of Internet of Things (IoT) connections tion. The results obtained also demonstrate the (regarded as one of the major I4.0 technologies) need for orchestrating the activities and actors of per inhabitant is associated with a 0.23-percentage- digital transformations. point increase in TFP growth. Additionally, draw- I4.0 stands for a multidimensional system of value ing on a growth-accounting framework, these au- creation covering numerous terms in the manage- thors showed that the potential global annual aver- ment of organizational as well as technological and age contribution to growth by the IoT of 0.99% per manufacturing-related variables that can be classi- annum between 2018 and 2030. fied and where several interdependencies between In this paper, we seek to identify how much I4.0 has them may be identified [Nosalska et al., 2019]. This been adopted by the companies in the study, how transforms current business models since, as noted much they understand the concept of I4.0, and thus, by [Kagermann et al., 2013], it requires companies we aim to demonstrate the potential impact of I4.0’s to reorganize the context of their operations and adoption upon the competitiveness of the firms. We their own strategic capabilities. Thus, actions in also attempt to ask about the nature of moderniza- both directions– externally and internally oriented tion as part of the global value chain in which the efforts – are needed. enterprise operates. The complexity of I4.0 comes in many forms and shapes. The current understanding of the nature Premises of Industry 4.0 of Industry 4.0 is still blurred with various uncer- Industry 4.0 represents a smart manufacturing net- tainties arising, which leads to different scenarios working concept that “marries physical production seeming equally possible today [Culot et al., 2020]. and operations with smart digital technology, ma- It can be depicted by the holistic digitalized mod- chine learning, and big data to create a more holis- els – business models which use VR, AR, or digi- tic and better-connected ecosystem for companies tal twins but at the same time incorporate digital that focus on manufacturing and supply chain man- change into HR or broader management processes, agement.”1 The term I4.0 emerged in Germany dur- not merely in production. I.40 more than ever be- ing the Hannover Fair (originally – Industrie 4.0). fore highlights the importance of interdependen- However, other countries adopted slightly different cies between the structure of the industry and the terminology – “Industrial Internet” in the United performance of companies. Mutual interlocking re- States and “Internet +” in the People’s Republic of lations between processes going on within the sec- China [Wang et al., 2016]. I4.0 is founded upon four tors and those occurring at the firm level turned key sub-concepts: Cyber-Physical Systems (CPS), out to be critical for the successful implementation the Internet of Things, the Internet of Services, and of digital technologies due the integrative nature of Smart Factories [Hermann et al., 2015]. Since from I4.0 solutions [Kagermann et al., 2013; Rüßmann et a technical point of view much of I4.0 is about digi- al., 2015]. The ability to control digital structures, tization and automation, the transformation of con- information availability, and information access temporary business models is to be expected. Such would also influence firm boundaries or even con- a transformation has already begun and is reflected stitute new forms of firm boundaries [Leih et al., in the development of digital value chains [Lasi et 2015]. Assets (information) and control (through al., 2014]. This has all happened since companies digital structures) might not any longer lie within began exploiting the nine technology advances company’s boundaries but result from some forms which are the backbone of I4.0: Big Data and Ana- of integration. Thus, new concepts of firm bound- 62 FORESIGHT AND STI GOVERNANCE Vol. 14 No 4 2020 Götz ., Jankowska B., pp. 61–78 aries may be required, such as the “open business will greatly determine the structural characteristics model” [Chesbrough, 2006]. Moreover, adjacent of the industry as well as the behavior and perfor- concepts such as networks or platforms have al- mance of firms. To identify the impact of I4.0 upon ready commanded increasing importance [Zott et the structural characteristics of an industry, firms al., 2011]. can use the analytical model of the five competi- The new industrial revolution shifts our attention tive forces and the value chain concept developed from studying simple classical supply buyer-seller by M.E. Porter [Porter, 1979]. The five competi- relations to seeing them as a whole system and net- tive forces model indirectly affects the challenges work of value creation and value capturing among and opportunities of integration that are typical for co-opetitive players. Hence, the complexity of pro- the fourth industrial revolution. The integration duction networks depicts the number of relations, that is possible thanks to automation may facili- the non-linearity of such relations, the rapidly tate the performance by firms of more complex and changing positions within networks, and hence the advanced yet agile roles. Related to this, the value necessity of agile approaches and lean management. chain concept recognizes a company as a chain of interdependent processes – primary and supportive I4.0 also implies that competitiveness and competi- activities – as well as sees the whole industry as a tive advantages arise not simply from owned assets value network that is dedicated to the creation of as merely seen in the approach of ‘firm as a bundle margin for companies thanks to providing broadly of resources’ but derives from seeing it as part of understood value for customers. Both these spheres digital ecosystem.

Load more