Implementing Industry 4.0 and lean practices for business performance in manufacturing: Case of Malaysia

Abstract

Manufacturing industries had embraced the trend of conceiving a robust manufacturing system and enhancing business performance with the implementation of Industry 4.0 digital technologies and lean manufacturing practices. Despite multiple studies being conducted to identify the correlation between Industry 4.0 digital technologies, lean manufacturing practices, and business performance, ambiguous and conflicting statements are often being debated among researchers. Hence, this study aims to provide empirical evidence gathered from Malaysian manufacturing industries using questionnaires to investigate and model their correlation and explore the mediating influence of Industry 4.0 digital technologies on lean manufacturing practices and business performance using PLS-SEM. Consequently, the findings from 124 respondents were compared with prior studies and revealed that both Lean Manufacturing Practices and Industry 4.0 Digital Technologies are positively correlated with one another, and they positively influence business performance, which findings are coherent with prior studies and fortifying the urgency of implementing both concepts for business performance enhancement. Moreover, this study successfully revealed that Industry 4.0 digital technologies mediate lean manufacturing practices and business performance proving the importance of Industry 4.0 to solving Lean’s limitation, which is not studied in prior studies. In addition, the framework in this study is more practical in providing appropriate theoretical and managerial insights for future action and works due to its medium predictive power associated. In a nutshell, this study effectively implies the substantial roles and reinforced the pragmatisms of implementing both lean manufacturing practices and Industry 4.0 digital technologies concurrently for business excellence.