Development of A Structural Model For The Adoption of Industry Gupta
Development of A Structural Model For The Adoption of Industry Gupta
Article
Development of a Structural Model for the Adoption of
Industry 4.0 Enabled Sustainable Operations for
Operational Excellence
Sumit Gupta 1 , Basai Prathipati 1 , Govind Sharan Dangayach 2 , Posinasetti Nageswara Rao 3
and Sandeep Jagtap 4, *
1 Department of Mechanical Engineering, Amity School of Engineering and Technology, Amity University,
Noida 201313, UP, India
2 Department of Mechanical Engineering, Malaviya National Institute of Technology, J.L.N. Marg,
Jaipur 302017, RAJ, India
3 Department of Technology, University of Northern Iowa, Cedar Falls, IA 50614-0178, USA
4 Sustainable Manufacturing Systems Centre, School of Aerospace, Transport & Manufacturing,
Cranfield University, Cranfield MK43 0AL, UK
* Correspondence: [email protected]
Abstract: In the current competitive scenario, SMEs need to adopt advanced technology in order to
comprehend the dynamics of Industry 4.0 and the sustainable operations for operational excellence.
The present study discusses the relationship between Industry 4.0 with sustainable operations and
operational excellence. A research model is proposed and assessed through structural equation
modelling (SEM). The current research shows that if SMEs adopt Industry 4.0 practices and the use of
advanced robotics in order to minimize human intervention, as well as smart logistics that react to
changes in production capacity, virtual reality and dynamic simulation techniques, then SMEs can
Citation: Gupta, S.; Prathipati, B.; significantly achieve sustainability in manufacturing operations. Furthermore, this study will help
Dangayach, G.S.; Rao, P.N.; Jagtap, S. companies to attain an operational excellence with greater efficiency and productivity. Therefore,
Development of a Structural Model SMEs need to focus on sustainable manufacturing practices.
for the Adoption of Industry 4.0
Enabled Sustainable Operations for Keywords: Industry 4.0; sustainable operations; operational excellence; small and medium enter-
Operational Excellence. Sustainability prises (SMEs); digitalization
2022, 14, 11103. https://doi.org/
10.3390/su141711103
complete the customer demands within a minimum amount of time [10]. In India, SMEs
have very limited technological innovations and a lack of skilled labor, which may be a
hinderance to the implementation of Industry 4.0 [11,12].
Indian SMEs are also facing sustainability issues in their business practices and are
under pressure because of volatile customer demands and the necessity to meet their
demands within a shorter timeframe. The customers focus more on customized and
greener products that produce less carbon emissions throughout the product’s life cycle [13].
In order to compete with global industries, Indian industries must also upgrade their
manufacturing systems using Industry 4.0 and sustainable operations [14]. The main
reason behind the limited adoption level of these practices is the higher investment costs for
Industry 4.0 and sustainable operations [3]. Furthermore, the incomplete implementation of
these practices results in market losses and a lack of resources. Indian SMEs are struggling
to adopt advanced manufacturing systems and require more attention in the current
digital era. This study focuses on adopting Industry 4.0 practices in order for Indian
SMEs to achieve operational excellence and sustainable operations. This study intends
not to generalize the outcomes but to emphasize the adoption of Industry 4.0 practices for
operational excellence.
The structure of this paper is as follows; Section 2 represents a review of the literature.
Section 3 describes the development of research hypotheses. Section 4 discusses the research
methodology. Section 5 focuses on the data analysis and interpretation. Section 6 presents
the results and discussion. Section 7 provides the managerial implications and Section 8
presents the conclusion.
2. Literature Review
In the last few years, policymakers, academics and industry professionals have shown
a growing interest in Industry 4.0 and in sustainable operation methods. Research that has
been published lately in this field demonstrates a similar level of interest for these methods
among practitioners in developing countries. To the contrary, there is less information
accessible on sustainable operations and Industry 4.0 tools, techniques and methods in
developing nations. A limited number of articles is available in the various databases, that
are not fully accessible to the policymakers and to industries. Therefore, it is essential to
find the relevant literature to review for this study. In order to do this, we have used the
following search terms for our literature article collection: “sustainable manufacturing”
AND “Industry 4.0” OR “cyber-physical systems” OR “circular economy” OR “digital
twin” OR “4th industrial revolution” OR “I4.0” The above-discussed search terms are used
for the article collection. The literature suggested that in the competitive global market,
many industries move away from the concept of a linear economy, towards a more circular
economy, which helps to enhance their organizational performance [15]. However, some
industries adopt lean and green practices using Industry 4.0 for sustainability [16].
Organizations can adopt the circular economy in Industry 4.0 in order to achieve
sustainability with new emerging technologies [1]. However, the adoption level of these
technologies is limited with regards to sustainability within the developing economies,
due to a weak infrastructure and lack of skilled labor [17]. Nevertheless in past studies, it
has been found that sustainable operations and Industry 4.0 can contribute to operational
excellence [18].
transparency within the organization [19]. The role of 3D printing is significant in Industry
4.0 as it helps to support sustainability by generating less scrap and carbon emissions
during the production phase [20]. Using big data, helpful information from large datasets
can be extracted and used for intelligent decision-making [21,22]. Studies have provided a
roadmap for the implementation of Industry 4.0 in the last few years, but these studies are
very generalized [23].
Figure
Figure1.1.Proposed
Proposedtheoretical
theoreticalmodel
modeland
andhypotheses.
hypotheses.
3. Development of Hypotheses
On the basis of the literature review, some existing evidence and research questions
RQ1, RQ2 and RQ3, the hypotheses have been established.
RQ1: What is the role of Industry 4.0 for sustainable operations?
Sustainability 2022, 14, 11103 4 of 10
3. Development of Hypotheses
On the basis of the literature review, some existing evidence and research questions
RQ1, RQ2 and RQ3, the hypotheses have been established.
RQ1: What is the role of Industry 4.0 for sustainable operations?
4. Research Methodology
The present study emphasizes the adoption of practices related to Industry 4.0, as well
as to sustainable operations in order to achieve operational excellence. It is cross-sectional
and the data is collected through a survey. In the initial phase, a number of Indian SMEs
were selected for the collection of data. Once the surveys were returned, the responses
were collected and analyzed.
The composite reliability (CR) was evaluated with the internal reliability (IR). In
the present study, the value of the CR is greater than 0.7 and the value of the IR using
Cronbach’s alpha is greater than 0.7 for all constructs, which is within the acceptable
limits [40,41].
The convergent validity (CV) was evaluated using the average variance explained
(AVE). According to Fornell and Larcker [42], the value of AVEs should be greater than
0.5. In this study, the value of the AVE for Industry 4.0 practices, sustainable operations
and operational excellence is greater than 0.5, as shown in Table 2. This means that the CV
is confirmed.
The discriminant validity (DV) was evaluated by comparing Cronbach’s alpha to
its mean correlations for each construct [43]. Table 3 represents the mean correlations of
Industry 4.0 practices, sustainable operations and operational excellence on the diagonals.
In this study, the value of Cronbach’s alpha is greater than the mean correlation as shown
in Table 3. Thus, the discriminate validity was verified.
Std. Cronbach’s
Constructs Mean IN SO OE
Deviation Alpha
IN 3.924 0.657 0.828 0.817
SO 3.497 0.591 0.739 0.330 ** 0.619
OE 4.179 0.573 0.737 0.497 ** 0.289 ** 0.723
** Correlation is significant at the 0.01 level (2-tailed).
7. Managerial Implications
The findings reported in this study may be useful to managers and policymakers.
Profit margins may be improved by using numerous Industry 4.0 and sustainable opera-
tion tools and techniques at the industrial level. In order to further investigate the links
between Industry 4.0 and sustainable operations, the presented research and survey might
be employed. The research may be used to create a model for implementing Industry
4.0 and sustainable operations that is both comprehensive and informative for industry
management.
8. Conclusions
As discussed in this study, the various emerging Industry 4.0 practices (IN), sustain-
able operations (SO) and operational excellence (OE) have been evaluated in the context
of Indian SMEs. It was found that the various emerging technologies of Industry 4.0
have many business opportunities in the Indian SME sector. The statistical results show
that if the SMEs adopt Industry 4.0 practices, namely the installation of cyber devices to
machine/physical components, the use of advanced robotics in order to minimize human
intervention, smart logistics that react to changes in the production capacity and virtual
reality and dynamic simulation techniques etc., then SMEs can significantly achieve sus-
tainability in manufacturing operations. An environmental and social sustainability can
be achieved, but economic sustainability will be achieved following a return on invest-
ment. The Indian Government is trying to provide every possible financial support for
the advancement of Indian SMEs. By adopting Industry 4.0 in SMEs, this will help to
achieve operational excellence within the company with greater efficiency and productivity.
Furthermore, SMEs need to focus on sustainable manufacturing practices by using optimal
and efficient logistics transportation, minimizing waste production across the supply chain
and on remanufacturing.
Sustainability 2022, 14, 11103 9 of 10
Supplementary Materials: The following supporting information can be downloaded at: https://
www.mdpi.com/article/10.3390/su141711103/s1.
Author Contributions: Conceptualization, S.G. and B.P.; methodology, B.P.; software, S.G.; validation,
S.G., B.P. and S.J.; formal analysis, G.S.D.; investigation, P.N.R.; resources, S.G.; data curation, B.P.;
writing—original draft preparation, S.G., B.P. and S.J.; writing—review and editing, G.S.D. and P.N.R.;
visualization, G.S.D.; supervision, P.N.R.; project administration, S.G.; funding acquisition, S.J. All
authors have read and agreed to the published version of the manuscript.
Funding: This research received no external funding.
Institutional Review Board Statement: Not applicable.
Informed Consent Statement: Not applicable.
Data Availability Statement: Not applicable.
Conflicts of Interest: The authors declare no conflict of interest.
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