Author: Temitayo Abiodun
Abiodun, Temitayo, 2023 Digital Transformation for Production Performance, Flinders University, College of Science and Engineering
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Industry 4.0, the digital transformation of industrial production, seeks to address production’s performance challenges. It aims to optimize industrial production through technological and organizational changes that integrate the value chain end-to-end, inducing smartness along the chain. The internationalization of the production value chain through globalization increased the technological, socio-economic, and legal requirements of operating the enterprises that form the chain. It increased the variability in the economic environment of production and complicated the social license requirements. The pace of technological change, growing sustainable business advocacy, and requirements for product customization also created challenges that further increase the complexity of industrial production. Furthermore, the COVID-19 pandemic underscored the importance of flexibility of production infrastructure during crises.
Existing literature remains limited in capturing the complexity of the industrial digital transformation process and its value proposition. To advance the practice of industrial digital transformation, this study addresses the overarching research question ‘what is the value proposition of Industry 4.0, and how is it delivered’? The question is addressed by modelling the industrial digital transformation process and determining the contribution of digital transformation maturity to production performance. In addressing this issue, this study uses a mixed-method approach. It first uses qualitative research to develop a model for the Industry 4.0 process and its value proposition in organizations - how Industry 4.0 integrates digital technology into the production process, develops smart enterprise organizational capabilities, and delivers performance benefits. It then robustly tests this model with production managers using quantitative research. The results guide managers in creating digital transformation strategies for their organizations.
The study makes theoretical contributions to the digital transformation literature by providing a model for driving digital transformation maturity in production organizations and establishing its performance impacts across the value chain. The study integrates and extends the systems, maturity modelling, and dynamic capability theories. This study’s outcomes are important in assisting organizations in assessing their level of digital transformation maturity to progress their Industry 4.0 journey.
The study finds that technology use builds smartness across the value chain – factory, supply chain, and products. Furthermore, the study provides insights into the value delivery potential of different value chain segments. It established that digital transformation investment in the factory has higher value potential than the supply chain and products. It provides a deeper context to investments in industrial digital transformation and guides management strategy.
The study also provides practical implications for managers. It establishes that Industry 4.0 fosters the smartness of organizations. Smartness equips the enterprise with the flexibility to respond robustly to challenges of economic variability, customization, and increasing cost of the social license of doing business. The nuances of smartness across the value chain give managers levers to craft strategies targeting their specific organizational priorities, including productivity, sustainability, customer experience, and worker safety.
Keywords: Industry 4.0, Digital Transformation, Industrial Production Performance.
Subject: Science, Technology and Enterprise thesis
Thesis type: Doctor of Philosophy
Completed: 2023
School: College of Science and Engineering
Supervisor: Professor Giselle Rampersad