Industry 4.0 maturity and readiness assessment: an empirical validation using Confirmatory Composite Analysis

Abstract

Manufacturing enterprises’ business operations are expected to be significantly transformed by Industry 4.0 technologies. However, due to a lack of solid assessment framework and procedures to evaluate the current status and readiness to change in the academic literature, many manufacturing firms frequently fail to assess, assimilate, or struggle to implement Industry 4.0 technologies and processes. To fill this need, this research proposes a novel multi-dimensional analytical framework and indicators for assessing Industry 4.0 maturity and preparedness. This framework include-six dimensions and 32 indicators that have been tested with reference to a large multinational steel manufacturing company. The study employed CCA and IPMA analysis techniques to validate the survey data from the case company. The results support and verify the status wherein the supply chain dimension has the highest performance, and the business model dimension has the lowest in terms of Industry 4.0 maturity and readiness status. The framework and index thus developed have practical relevance as it is easy to understand, interpret and validate in any other manufacturing organization. Furthermore, this study is the first to apply the structural equation modelling technique, i.e. CCA and IPMA, to evaluate Industry 4.0 maturity and readiness from a developing country perspective in the context of steel manufacturing.