The implementation of Industry 40 has a far-reaching impact on industrial value creation Studies on its opportunities and challenges for companies are still scarce However, the high practical and theoretical relevance of digital and connected manufacturing technologies implies that it is essential to understand the underlying dynamics of their implementation Thus, this study examines the relevance of Industry 40-related opportunities and challenges as drivers for Industry 40 implementation in the context of sustainability, taking a differentiated perspective on varying company sizes, industry sectors, and the company’s role as an Industry 40 provider or user A research model comprising relevant Industry 40-related opportunities and challenges as antecedents for its implementation is hypothesized In order to test the model, partial least square structural equation modeling is applied for a sample of 746 German manufacturing companies from five industry sectors The results show that strategic, operational, as well as environmental and social opportunities are positive drivers of Industry 40 implementation, whereas challenges with regard to competitiveness and future viability as well as organizational and production fit impede its progress Moreover, it is shown that the perception of Industry 40-related opportunities and challenges as antecedents to Industry 40 implementation depends on different company characteristics

What Drives the Implementation of Industry 4.0? The Role of Opportunities and Challenges in the Context of Sustainability

The Industrial Internet of Things (IIoT) poses several implications on manufacturers in terms of economic, ecological, and social aspects referring to the Triple Bottom Line (TBL) of sustainable value creation. Due to its technical core, the current research focused on its technical fundamentals, whereas the economic discussion is still in its infancy. This paper aims at painting a comprehensive and structured picture of IIoT-related economic, ecological, and social benefits and challenges. For this purpose, we employ an exploratory multiple case study approach based on semi-structured expert interviews in 46 manufacturing companies from three leading German industries. Our study contributes to the sparse body of scientific IIoT literature by analysing the IIoT’s implications according to the TBL. We show that, in order to qualify for sustainable industrial value creation, the IIoT requires an extension of the established TBL by three further dimensions, i.e., technical integration, data and information, ...

Sustainable industrial value creation: benefits and challenges of industry 4.0

The term servitization has been used in recent years to describe a growing service orientation among product manufacturers, who are increasingly moving from simply selling products to offering supportive services tailored to the product (Baines et al. 2009; Wise and Baumgartner 1999; Vandermerwe and Rada 1988). These services range from traditional product-related services such as maintenance, repair, and training to advanced customer-oriented services (Lay 2014; Oliva and Kallenberg 2003; Mathieu 2001). Advanced services typically take the form of product-service systems (PSS), or physical products bundled with intangible services in a customized manner to fulfill highly individual customer needs (Tukker and Tischner 2006; Goedkoop et al. 1999). These innovative, individualized product-service bundles increase the value delivered to the customer and hence increase the competitiveness of the provider (Boyt and Harvey 1997). The move toward servitization has coincided with a rising trend toward digitalization, with manufacturers equipping products with intelligent digital systems that allow the products to operate independently of human intervention and communicate with other machines. As a logical consequence of the confluence of servitization with this trend toward intelligent machines, an increasing number of manufacturers are using digital systems to support their services (Minister and Meiren 2011), creating totally new industrial product-service offerings, such as comprehensive remote services that bring digital and physical systems together to pave the way for, for instance, availability guarantees. These new kinds of offerings may in turn lead to far-reaching reconfigurations of the mechanisms of value creation in manufacturing. Thus, manufacturers cannot afford to ignore these emerging forces, which have the power to completely reshape the industrial landscape. Companies that do not keep up with these developments may find themselves threatened with extinction in the near future, as competitors with more customized, responsive offerings gain advantage. Three practical case studies from our joint research projects on servitization show how companies can combine digital systems with PSS to harvest value and build competitive advantage. Services Innovation and Digitalization Previous studies of servitization have assumed that manufacturers move from product manufacturer to solution provider along a defined transformation path (Gebauer, Fleisch, and Friedli 2005; Gebauer 2004). This transition path is typically described as taking place in stages, with each stage offering different potentials for differentiation (see, for example, Matthyssens and Vandenbempt 2010; Gebauer, Bravo-Sanchez, and Fleisch 2008; Matthyssens and Vandenbempt 2008; Penttinen and Palmer 2007; Oliva and Kallenberg 2003; More 2001). At the end of the path, manufacturers offer innovative PSS, such as availability guarantees or build-operate-transfer (BOT) models, which increase customer value on the one hand and create competitive advantage for the provider on the other (Brady, Davies, and Gann 2005; Boyt and Harvey 1997). While PSS have been widely discussed--see Velamuri, Neyer, and Moslein (2011) for a review of the literature--the effect of the digital revolution on this servitization pathway has been less well explored. Most articles have dealt with the new challenges and impacts of digitalized services, focusing on how they differ from more traditional product-related services. What is missing in the literature is a comprehensive framework bringing together the emerging trends of servitization and digitalization in one conceptual structure. The integration of digitalization with services innovation has important implications for services. For instance, because digital services can be provided independent of manufacturer and customer location, traditional service characteristics like perishability and inseparability do not apply to digital service creation (Holtbriigge, Holzmuller, and von Wangenheim 2007). …

Digitalized Product-Service Systems in Manufacturing Firms: A Case Study Analysis: Linking Digital Systems with Physical Products to Create Novel Product-Service Bundles That Provide Services Independently and Proactively Can Enable Advanced Services and Promote Growth

The sustainable business model pattern taxonomy—45 patterns to support sustainability-oriented business model innovation

The Industrial Internet of Things (IIoT) confronts industrial manufactures with economic, ecological, as well as social benefits and challenges, referring to the Triple Bottom Line of sustainability. So far, research has mainly investigated its dimensions in isolation or economic aspects have not been compared with ecological and social perspectives. Further, research misses studies that are devoted to the special characteristics and requirements of Small and Medium-sized Enterprises (SMEs). This study aims to contribute to close this research gap, providing a research context that encompasses all three dimensions of sustainability. The results are based on data obtained from 329 SMEs, 222 in Germany and 107 in China, therefore allowing for a comparison of the concepts “Industrie 4.0” and “Made in China 2025” in the context of SMEs. In general, German SMEs expect a lower impact through “Industrie 4.0”, perceiving the concept as more beneficial for larger enterprises. We further find that Chinese SMEs foremost see social benefits. Challenges whilst introducing “Industrie 4.0”by German SMEs as well as several frame conditions are perceived more relevant than for “Made in China 2025”, as seen by Chinese SMEs. The paper closes with implications for research and practice based on these findings.

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Sustainable Industrial Value Creation in SMEs: A Comparison between Industry 4.0 and Made in China 2025

Companies nowadays face a myriad of business opportunities as a direct consequence of manifold disruptive technology developments. As a basic characteristic, disruptive technologies lead to a severe shift in value-creation networks giving rise to new market segments. One of the key challenges is to anticipate the business logics within these nascent and formerly unknown markets. Business model patterns promise to tackle this challenge. They can be interpreted as proven business model elements, which reveal valuable insights about pursued business logics. The approach in general helps increasing efficiency in business models design processes, but especially lacks methodological support so far. The paper at hand, therefore presents a methodology for pattern-based business model design simplifying development and analysis of business models for disruptive technologies. The methodology has been validated within several industrial projects.

Business model patterns for disruptive technologies

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Innovationen für die Märkte von morgen: Strategische Planung von Produkten, Dienstleistungen und Geschäftsmodellen

Digitisation leads to far-reaching changes of products in all industries and has a massive impact on the global innovation landscape. For manufacturing companies, it is crucial to strategically ali...

Julian Echterfeld

Papers

Business model patterns for disruptive technologies

Innovationen für die Märkte von morgen: Strategische Planung von Produkten, Dienstleistungen und Geschäftsmodellen

Digitising product portfolios

Innovationen für die Märkte von morgen

Strategische Produkt- und Prozessplanung