Difficulties in adopting Industry 4.0 in logistics and SCM in Manufacturing sector

Abstract

Industry 4.0 technologies have been revolutionizing the way people doing business. This technological breakthrough has triggered multifacet changes in logistics and SCM, from sourcing, order handling, manufacturing to tracking locations and managing transportation, which improves efficiency. Thus, it is urgent for companies, especially manufacturers, to capture the opportunities from the latest wave of tech innovations, including AM, AIRs, AGVs, CPS and IoT. This study delves into difficulties that companies face when integrating Industry 4.0 in logistics and SCM and identifies key factors that have impact on that adoption. The literature review was used to gather results from existing academic articles and reports retrieved from academic database, such as: Emerald, SpringerLink, etc., meanwhile semistructured interviews were conducted to collect practical insights from people who were working in logistics and SCM. Comparative analysis was utilised to highlight the differences and similarities between findings of the literature review and those of interviews. TOE framework, the descendant of DOI framework, and a logistics oriented Industry 4.0 application model were applied to analyze the results. The findings consist of nine challenges that enterprises need to overcome when integrating Industry 4.0. The study also presents nine key elements affecting the application of Industry 4.0, including two technological factors, four organizational factors and three environmental factors. The study is limited to a small number of articles reviewed and a few interviewees. All in all, the results of this research provides comprehensive insights into barriers that companies might confront while applying Industry 4.0 and main determinants of the integrations, facilitating the decision-making process of managers and business owners.