Managing resilience of micro, small and medium enterprises (MSMEs) during COVID-19: analysis of barriers

Micro- Small and Medium Enterprises (MSMEs) are very significant for a country’s economy due to their contribution to manufacturing, sales and Gross Domestic Product (GDP) growth. The global market competition and standards have been compelling MSMEs to improve quality, reduce waste, improve environmental performance and optimize the cost of products by implementing sustainable practices. The combined approach of lean and sustainable practices can help MSMEs to minimize emissions from waste and manufacture low-cost products with energy-efficient technology. However, MSMEs face many challenges while implementing lean and sustainability tools. Therefore, the main aim of this study is to identify the barriers which create obstruction in the implementation of lean-led sustainable manufacturing practices in Indian MSMEs and prioritize them by calculating their weights. The study also proposes a framework for the integration of blockchain technology in the supply chain to overcome the barriers for the implementation of lean and sustainable manufacturing practices. Extensive literature reviews and experts’ opinions have been used to identify the critical barriers for the implementation of lean-led sustainable manufacturing practices in manufacturing firms. A total of forty barriers were selected and further categorized under seven main categories of barriers. The main category barriers and subcategory barriers are ranked based on the weight obtained through Best Worst Method (BWM). The ranking results are further analysed to assess the reliability and robustness using sensitivity analysis. The study reveals that economic and managerial barriers, knowledge and awareness barriers and organizational barriers are the most prominent category of barriers for lean and sustainable manufacturing. The study found that ‘Lack of awareness among customers towards sustainability’, ‘initial capital investment and low financial profit’, ‘lack of knowledge about potential benefits from sustainable products and practices’ and ‘resistance to change due to past failure’ are the most critical barriers for implementation of lean-led sustainable practices in Indian MSMEs. The study has analysed the features of blockchain technology and their effect on the performance of lean-led sustainable supply chain. The findings of the study will help managers and practitioners in Indian MSMEs from certain perspectives to develop an effective and efficient strategy to overcome these barriers and become sustainable. Therefore, this study provides valuable insights for researchers and practitioners.

This study examines the financial management of Micro Small and Medium Enterprises (MSMEs) in Indonesia and Malaysia which are the drivers of the economy in both countries, but this sector has not been able to become an independent sector and become the foundation of the national economy in both countries. The problem is that financial management in Micro Small and Medium Enterprises (MSMEs) ignores the importance of financial management standards, the problem is that poor financial management makes Micro Small and Medium Enterprises (MSMEs) insignificant in advancing the economy. The method used is descriptive qualitative with a case study approach. Data were obtained from MSME actors by distributing questionnaires and interviews. The results of this study indicate that MSME financial management in Indonesia is not as good as Micro Small and Medium Enterprises (MSMEs) in Malaysia, meaning that Malaysia has better MSME management, this can be seen from various research indicators, namely: planning indicators, budget use, recording, reporting and controlling. Micro Small and Medium Enterprises (MSMEs) in Indonesia and Malaysia when compared to Indonesian Micro Small and Medium Enterprises (MSMEs) do not have good planning, have not carried out standard records, standardized reporting, are not concerned with standard financial statements, balance sheets, profit and loss, cash flow, do not have or install systems in their business units, such as control of systems and procedures, billing records of sales notes, it is very clear that Micro Small and Medium Enterprises (MSMEs) in Indonesia have not done so. Meanwhile, from the other side, when compared to Indonesian MSME respondents, the level is very small, more so for micro cart businesses, small shops that are not in the form of their own buildings, the context is very small. In Malaysia, micro, small and medium enterprises are not comparable to the conditions in Indonesia, while in Malaysia, the Micro Small and Medium Enterprises (MSMEs) already have a more appropriate place. Thus, it is easier for Micro Small and Medium Enterprises (MSMEs) in Malaysia to get banking support, while Micro Small and Medium Enterprises (MSMEs) in Indonesia are still difficult to upgrade and are still difficult to enter the bank compared to Malaysia.

PurposeThis study aims to identify, analyze and rank the critical success factors (CSFs) of Lean Six Sigma (LSS) implementation in Indian manufacturing sector based micro, small and medium enterprises (MSMEs). This study provides critical insight for managers and researchers aspiring for successful implementation of LSS in Indian manufacturing MSMEs.Design/methodology/approachThe CSFs were extracted from literature followed by a questionnaire-based survey from 120 industry professionals with extensive knowledge and experience about LSS working in Indian manufacturing MSMEs. Further, the CSFs were grouped based on their fundamental relevance and ranked using best worst method (BWM) approach using inputs from LSS experts.FindingsThis study provides insights on success factors that have helped Indian manufacturing MSMEs to implement LSS. The findings signify that “Strategy based CSFs” were ranked as the top most important factors, followed by two other category factors namely “Bottom-Line CSFs” and “Supplier based and other category-based CSFs”.Research limitations/implicationsThe proposed research is specifically relevant to the context of MSMEs in the Indian manufacturing sector. In the future, the same approach can be extended to a global context, encompassing service sector-based MSMEs in healthcare and finance.Practical implicationsThis study provides valuable inputs for managers, decision-makers, industrial practitioners and researchers about Indian manufacturing MSMEs. The identified CSFs and their prioritization offer a roadmap for successful adoption of LSS. Managers can allocate resources, and make strategic decisions based on the prioritized CSFs. Decision-makers can align their initiatives with the identified CSFs. Industrial practitioners gain insights to enhance their LSS initiatives, and researchers can focus their efforts on areas critical to LSS implementation in Indian MSMEs. Furthermore, the structured approach employed in this study can be adopted by various MSME sectors globally, thereby broadening the comprehension of LSS implementation.Originality/valueThis study contributes to the existing body of knowledge by addressing the gaps in literature on CSFs related to LSS adoption within Indian manufacturing MSMEs. While LSS has been widely studied, there is limited focus on its adoption in the context of Indian MSMEs. The combination of extensive literature review, questionnaire-based survey and the application of the BWM approach for prioritizing CSFs adds originality to the research.

This study aims to determine the Determinants of the Performance of Small and Medium Enterprises (SMEs) in Barru Regency. The method used in this study is a quantitative approach and the type of research conducted is survey research. The population used is Small and Medium Enterprises in the manufacturing industry sector in Barru Regency, which is 1672 business units. The number of samples is 94 small and medium enterprises. The data sources used are primary data and secondary data. Analysis of the data used is multiple linear regression analysis. The results of this study indicate that the aspects of finance, environment, marketing, human resources, entrepreneurial ability and economic aspects have a positive and significant effect on the performance of small and medium enterprises in Barru Regency. The greater the equity, loan capital, the level of profits and capital accumulation, the greater the performance of small and medium enterprises. The better the technology and quality control, the availability of business places, government policies, seasons and infrastructure, the better the performance of small and medium enterprises. The more market demand, the better competing pricing, promotion, distribution channels and marketing areas, the better the performance of small and medium enterprises. The better the level of formal education, leadership, experience in business and the amount of motivation and skills in the performance of small and medium enterprises. The greater the desire for achievement, personal responsibility, management ability and innovation ability, the better the performance of small and medium enterprises. the higher the level of income of the community, the availability of jobs, a business climate and good investment and the better the economic growth, the better the performance of small and medium enterprises.

Orientation: This study explored the composite business success index (CBSI), a novel framework designed to enhance small and medium enterprise (SME) competitiveness in South Africa by integrating financial and cultural metrics. Research purpose: The aim was to introduce CBSI as a tool for assessing small and medium enterprise performance, combining financial indicators like the cash conversion cycle (CCC) and Altman Z-score with cultural metrics such as the Configurational Accuracy Score for a more holistic evaluation. Motivation for the study: Small and medium enterprises in South Africa face significant challenges, including financial instability and misalignment of organisational culture. Existing performance models often fail to address these non-financial factors, which CBSI integrates into one evaluative tool to improve both financial health and cultural alignment. Research design, approach and method: A pragmatist research approach integrated quantitative and qualitative methodologies, including financial data from small and medium enterprise statements, semi-structured interviews with small and medium enterprise owners and experts and questionnaires to collect cultural data for insight into the role of culture in small and medium enterprise success. Main findings: Composite Business Success Index proved effective in predicting small and medium enterprise performance. Higher CBSI scores (> 0.65) were associated with successful small and medium enterprises, while lower scores (< 0.50) indicated areas for improvement, highlighting the link between financial stability and organisational alignment. Practical/managerial implications: The CBSI offers small and medium enterprise leaders actionable insights for enhancing financial performance and organisational culture, boosting competitiveness and long-term sustainability. Contribution/value-add: By integrating both financial and cultural metrics into a single framework, the CBSI provides a novel tool for assessing and developing small and medium enterprise performance for the small and medium enterprise managers.

PurposeThe presence of barriers in the supply chain finance (SCF) of small and medium enterprises (SMEs) cripples the productivity and efficiency of SMEs and makes it challenging to execute strategies. SCF barriers can be internal and external which tend to impede the desired performance and profitability of the SMEs. Therefore, the purpose of this paper is to discern the possible SCF barriers and analyze the criticality of the barriers to understand how they impact on the SMEs market of India.Design/methodology/approachThis study proposes a novel hybrid approach called best worst method (BWM) to evaluate the discerned barriers. BWM technique is espoused to appraise the SCF barriers, so that the decision-makers can rationally comprehend the reason behind dominance of one barrier over other. Although such an assessment may possibly vary for different industries, that is why proposed approach is generic in nature and can be applied in real-world cases. The robustness of the suggested model is also assessed through sensitivity analysis.FindingsSCF barriers are identified through extensive literature review and inputs from the industry. The results derived through BWM approach concludes that the “Financial Barriers” are censorious and foremost inhibitors for SMEs to flourish, therefore, require special attention by the top management. Likewise, “Supply and Suppliers Barriers” are ranked second, conversely, “Market and Policy Related Barriers” are found least critical in nature in SMEs of India.Research limitations/implicationsThis work is specific to SCF barriers and other barriers have not been touched upon. The study is based on expert panel opinion for seeking information which is restricted to Indian context, as the members of the expert panel belong to same geography.Practical implicationsThis research could aid decision-makers and strategists to comprehend the deep-rooted initiatives to achieve a comprehensive implication of SCF across SC network. By assessing SCF barriers, this study helps SMEs to understand their shortfalls and in answering the pertinent question of how to gain excellence in this intensely competitive market.Originality/valueSMEs are considered as engines of economic development worldwide. India too is striving for increasing the growth and development of SMEs in every aspect, to gain operational excellence, to make profits or employment generation but presence of SCF barriers makes it difficult to achieve this in Indian SMEs. Therefore, it is imperative to analyze the criticality of the SCF barriers to understand how they impact on SMEs market of India. The paper illustrates the modeling of SCF barriers among SMEs using BWM approach, exhibiting how comprehending barriers can improvise productivity and efficiency of the SCs in SMEs.

Research aims: The purpose of this study was to determine the credit distribution level used as working capital assistance for Micro, Small, and Medium Enterprises (MSMEs) during the COVID-19 pandemic.Design/Methodology/Approach: This study used a sample of 8 cities/regencies in East Java. Meanwhile, the Micro, Small, and Medium Enterprises (MSMEs) credit recipients were the population of the sample areas. This research's analysis model was panel data regression (generalized least square) by considering the emergence of heteroscedasticity in cross-section data between regional objects. The control variables outside the COVID-19 were the BI rate, third-party funds (TPF), and inflation.Research findings: This study’s results showed that the COVID-19 pandemic had a significant negative impact only on medium-sized business loans, while micro and small business loans are more resilient. Besides, Micro, Small, and Medium Enterprises (MSMEs) credit was significantly positively influenced by TPF; inflation did not affect credit; the BI rate only negatively affected medium-sized business credit.Theoretical contribution/Originality: Studies on Micro, Small, and Medium Enterprises (MSMEs) credit-related to economic phenomena and monetary policy have been widely carried out. However, the catastrophic virus that causes long-term economic uncertainty and impacts banks and Micro, Small, and Medium Enterprises (MSMEs) still requires in-depth study. Also, this study employed the GLS model that considers heteroscedasticity, which is still rarely used in previous studies.Practitioner/Policy implication: This research can be essential information for the Indonesian Financial Services Authority (Otoritas Jasa Keuangan or OJK) and Bank Indonesia (BI) in policymaking, both regulatory aspects and bank liquidity provision, in stimulating Micro, Small, and Medium Enterprises (MSMEs) credit, especially in the COVID-19 pandemic era.Research limitation/implication: The impact of COVID-19 on Micro, Small, and Medium Enterprises (MSMEs) loans is still classified based on micro, small and medium. It is still not grouped based on the Micro, Small, and Medium Enterprises (MSMEs) business sector in various cities and regencies in East Java. The analysis has not been clustered based on the spatial concentration of the Micro, Small, and Medium Enterprises (MSMEs) recipient areas.

The current data from the Central Bureau of Statistics of Indonesia (BPS) regarding the number of small, medium enterprises (SMEs) and large enterprises (LEs) in Indonesia from year 1999 until 2008 indeed demonstrated a dynamic behavior. Thus, the paper has objectives to discuss and propose policies such as; first, from operational side: providing market information in order to give more access for market demand, market capacity. This strategy will in the long term lead to a better production planning. Second, from the financing side: using profit-sharing principle of financing (PSP) to cope with such dynamics behavior in order to support a sustainable quantity growth of SMEs. System dynamics approach is applied to understand this behavior. Some relevant variables included in the simulation model are potential demand, aggregate demand, and quantity of SMEs and LEs. Modular system of simple production coordination and a guarantee mechanism based on a PSP were attached to the generic system that has generated overshoot and collapse behavior, in order to minimize or even avoids the rapid decreasing number of SMEs in stock. Simulation conducted in this paper has implemented two policy levers, which are first; a production coordination system through information sharing and second; financing mechanism with PSP contract for Small Enterprises (SEs). Based on the simulation done for this paper, such policy levers could support the development of SMEs in term of its quantity in order to keep it grow instead of “collapse.” The paper also shows the added value creation of PSP principle in economy and minimization of the agency risk with double layers referencing method. This paper re-emphasizes first; the use of production coordination to support positive growth number of SMEs especially to prevent collapse after experiencing overshoot growth, and second; proposes a financing mechanism for SMEs based on PSP principle to prevent SMEs from the operational failure. This paper also proposes the use of double layer referencing system to minimize agency risk in the area of PSP contract agreement.

Marketing strategy holds a very important control in the success of product acceptance in the community, but many Small and Medium Enterprise (SME) ignore this. Labels and packaging are one of the keys for Small and Medium Enterprise (SME) to further increase the selling value of their products. Empowerment activities to improve the quality of Small and Medium Enterprise (SME) are carried out through assistance in making labels on packaged products. The object of this activity is Small and Medium Enterprise (SME) actors in Besuk Village, Bantaran District, and Probolinggo Regency. One of the Small and Medium Enterprise (SME) products in this village is banana chips, cassava chips, elephant ears, and lard. The problem with these Small and Medium Enterprise (SME) is the low quality of label and packaging designs for their products, as well as the lack of supporting facilities and infrastructure for designing product packaging labels. So that the products of Small and Medium Enterprise (SME) partners are less attractive than similar competitor products. The Small and Medium Enterprise (SME) products in Besuk Village it self also do not have a broad market share, so they are constrained in increasing the number of products that will be produced. Implementation methods used include: 1) pre-activity; 2) core activities; 3) activity evaluation. Where the problem solving of the Small and Medium Enterprise (SME) constraints above is in the form of assisting in making labels on packaged products so that they can meet the existing label requirements and also look more attractive. The results of the activity are in the form of training on the manufacture of product packaging labels as well as the manufacture of ready to use designs for these Small and Medium Enterprise (SME).

Small and medium enterprises (SMEs) form an integral part of Indian economy. In India, small and medium enterprises contribute about 45 percent of the gross turnover in the manufacturing sector and 40 percent of total exports. They are source of employment to large number of people and contribute significantly to growth and GDP of an economy. Small and medium enterprises in India are adopting innovative practices and technologies to sustain competitive environment. There are many small and medium enterprises in India that are innovating and using knowledge as a source of success. But these small-scale enterprises however lose out to the big enterprises in terms of financial sustainability, range of products, marketing clout, brand and bargaining power. These barriers often act as road block for success of small and medium enterprises in India. But, it is observed that there are number of small and medium enterprises that find ways in overcoming these barriers and become innovative in the process. The present study focuses on identifying barriers that affect innovative behavior of small and medium enterprises in India. To be more specific, following research issues have been examined: understand the different barriers faced by small and medium enterprises in their innovative behavior and how small and medium enterprises overcome them? The study is an attempt to seek answer to these questions. Extensive literature review includes the concept of innovation, innovation process and barriers faced by SMEs. Different government, private associations are approached for data collection. The study is conducted on four sectors: Automotive Component, Textile (Garment manufacturing), Pharmaceutical and Information Technology. The result shows that most of the enterprises face barriers in innovating such as shortage of technical know-how, shortage of skilled manpower and high cost of innovation.

The dynamics of urban development coupled with economic growth have contributed positively to the development of small and medium enterprises (SMEs). Optimizing the utilization and strengthening of the capacity of SMEs’ human resources will encourage increased productivity of economic enterprises and the sustainability of small and medium enterprises (SMEs). This study aims to analyze (1) strengthening the capacity of human resources (HR) of small and medium enterprises to work as a determinant of increasing the productivity of small and medium enterprises (SMEs) and labor absorption; (2) the effect of strengthening the capacity of human resources (HR), business productivity, technology utilization, and business diversification on the sustainability of small and medium enterprises (SMEs); and (3) optimizing the role of government in supporting business development, increasing productivity, business stability and sustainability of small and medium enterprises (SMEs). This study uses a sequential explanatory design approach. Data were obtained through observation, in-depth interviews, surveys, and documentation. Qualitative analysis in this study was carried out through a process of data reduction, data presentation, and conclusion drawing, while the quantitative analysis in this study uses quantitative descriptive analysis, correlation, and multiple regression. The results showed that strengthening the capacity of human resources, coupled with the use of technology, and followed by diversification of business, had a positive contribution to increasing the productivity of small and medium enterprises (SMEs). Furthermore, strengthening human resource capacity, business productivity, technology utilization, and business diversification simultaneously have a positive and significant correlation to the sustainability of small and medium enterprises (SMEs) with a determination coefficient of 72.3%. This study recommends that government policy support through strengthening human resource capacity, increasing business productivity, technology utilization, and business diversification have an impact on the sustainability of small and medium enterprises (SMEs) in Makassar City, Indonesia.

This study wanted to know how the application of accounting at the micro small and medium enterprises (MSMEs), especially MSMEs in the town of Bandar Lampung as a first step in establishing research and development activities are appropriate at a time when that will come. The variables that will be seen as the application of accounting in MSMEs are: recording system and reporting for financial transactions, knowledge of micro small and medium businesses (MSMEs) on accounting, knowledge of micro small and medium businesses (MSMEs) about the tax, the use of information technology in business, and business decision-making system. The conclusion that can be generated from research that uses 55 micro small medium enterprises (MSMEs) as a sample of the research are: the micro small and medium businesses (MSMEs), most have not been doing the accounting process as a recording system that produces financial reports. The small micro business medium enterprises (MSMEs) have sufficient knowledge about the concept - general concepts of accounting but does not have sufficient knowledge about accounting process itself. Most of the small and medium businesses (MSMEs) do not have enough knowledge about taxation. the majority of the perpetrators of small and medium enterprises (MSMEs) are not applying information technology in their business field. Most of the small and medium businesses (MSMEs) make operational decisions with a rational business but still make plans only limited in memory just is not translated in the form of documents.  Keywords: Accounting Aplication, Micro Small and Medium Enterprises

This study investigates the role of communication resilience in Indonesian Micro, Small, and Medium Enterprises (MSMEs) during the COVID-19 pandemic, focusing on how effective communication strategies contribute to MSME resilience and business continuity. Utilizing a systematic literature review of Scopus articles published between 2020 and 2024, the research is grounded in resilience theory, crisis communication, and organizational communication. The COVID-19 pandemic has significantly impacted businesses globally, with MSMEs being particularly vulnerable due to limited resources. This study aims to identify the factors influencing MSME resilience, the communication strategies used, the challenges in implementing these strategies, and the policy implications for supporting MSMEs in building resilience. Key findings highlight several factors that influence MSME resilience, such as adaptable business models, access to financial resources, the use of digital technologies, and effective crisis communication strategies. Effective communication is crucial for maintaining stakeholder trust, managing information flow, and coordinating crisis responses efficiently. Challenges in implementing effective communication strategies include limited technological infrastructure, lack of communication expertise, and cultural barriers, which can impede MSMEs' crisis response. Addressing these challenges is essential for enhancing the resilience of MSMEs.The study provides policy implications, suggesting that governments and stakeholders should enhance MSMEs' communication capabilities through training programs, financial support for digital infrastructure, and tailored communication guidelines for crisis situations. This research contributes to theoretical knowledge on resilience and communication in the context of MSMEs and offers practical insights for policymakers, business owners, and practitioners. By addressing the communication challenges faced by MSMEs, stakeholders can better support these enterprises in achieving resilience and ensuring business continuity during crises. This study highlights the importance of effective communication in MSMEs' ability to navigate and survive crises, providing a roadmap for future research and practical interventions in this critical area.

The high number of migrants in the city of Yogyakarta has resulted in increased opportunities for Micro, Small and Medium Enterprises (MSMEs) in Culinary and Handicrafts. The large amount of data collected by the Cooperative Office, which reached thousands, caused inas to have difficulties in determining what training was needed by MSMEs and also difficulties in choosing which MSMEs would receive training held by the Cooperative Office. In addition, the Yogyakarta Cooperatives and UMKM Office had difficulties in selecting which UMKM needed to receive these trainings. Grouping can be used as a strategy in selecting MSMEs and determining training according to their individual needs. The purpose of this study was to group SMEs using the Agglomerative Hierarchical Clustering Single Linkage method and its application to provide recommendations for MSME groups to the Yogyakarta Cooperative and MSME Office. The results of the recommendations for the number of groups can be used in providing implementation, design, and evaluation of the development and empowerment of MSME data in the City of Yogyakarta. This study uses the Agglomerative Hierarchical Clustering Single Linkage method. The stages in this research are Load Data, Cleaning Data, Data Selection, Transformation Data, Clustering Process with AHC single linkage, Silhouette Coefficient, and Knowledge Representation. This research resulted in 2 group recommendations from a total of 1336 Culinary MSME data and 3 group recommendations from a total of 145 Handicraft MSME data. The results of the silhouette score test in the Culinary Sector are included in the strong structure category with a value of 0.79 and the Crafts Sector is included in the Medium Structure category with a value of 0.615. From the number of these groups, recommendations were obtained for improving a service in increasing MSMEs, especially those with a turnover of less than 10 million, marketing purposes within the Yogyakarta area, and not having financial assistance from the government. The high number of immigrants in the city of Yogyakarta has resulted in increased opportunities for Micro, Small and Medium Enterprises (MSMEs) in the Culinary and Crafts sector. The large number of MSMEs creates increasingly higher competitiveness. Apart from that, the large amount of data collected by the Department of Cooperatives and MSMEs, which reaches thousands, causes the Department to have difficulties in efforts to improve and empower these MSMEs. Grouping is one method that can be used as a strategy in mapping MSMEs, especially in efforts to improve and empower MSMEs through training conducted by the Department. The aim of this research is to group MSMEs using the Agglomerative Hierarchical Clustering (AHC) method in an effort to achieve strategies for improving and empowering MSMEs. The focus of this research is[a1] MSMEs in the craft sector and MSMEs in the culinary sector. The results of this research provide 2 group recommendations from a total of 1336 Culinary MSME data and 3 group recommendations from a total of 145 Craft MSME data. The silhouette score test results in the Culinary Sector are in the strong structure category with a value of 0.79 and in the Crafts Sector are in the Medium Structure category with a value of 0.615. From the number of groups in the two MSMEs, strategies were obtained to improve and empower MSMEs, especially those with a turnover of less than 10 million, marketing objectives within the Yogyakarta area, and not having capital assistance from the government. [a1]the result of the revision of the Abstract

PurposeThe primary aim of this research is to conduct a comprehensive investigation into the essential elements of Industry 4.0 implementation within Indian Micro, Small and Medium Enterprises (MSMEs). Acknowledging the MSME sector as a crucial contributor to the Indian economy and industrial development, the study delves into the assessment of MSMEs based on Industry 4.0 components. Additionally, it explores the profound impact of these components on various performance factors, including organizational performance, sustainability performance and human-related aspects. The paper further ranks these identified components based on their significance within the MSME sector.Design/methodology/approachEmploying a combination of methodological approaches, the research utilizes the Best and Worst Method (BWM), Data Envelopment Analysis (DEA) and calculates the Maturity Index for Industry 4.0 components. The BWM, a recognized multi-criteria decision-making technique, is initially applied to determine the weights and rankings of the identified components. Furthermore, the study evaluates 30 MSMEs, spanning manufacturing and service sectors, through the DEA approach. Industry 4.0 components are treated as inputs, and performance factors serve as outputs. Data for the analysis are collected through questionnaires distributed to the selected MSMEs. Lastly, the Maturity Index for MSMEs is also calculated.FindingsFrom the result of the BWM method “assistive manufacturing” was found to be a highly weighted key component of Industry 4.0. From the DEA analysis out of 30 MSMEs 13 SMEs were highlighted as being efficient, whereas 17 MSMEs were judged to be inefficient. Furthermore, from the maturity index calculation, overall Maturity Index was determined to be 3.33 which shows that Industry 4.0 is in its initial stage of implementation, but it has gained pace in its implementation.Practical implicationsThe research contributes to practical implications by offering a more accurate assessment of the state of Industry 4.0 implementation within MSMEs. The introduced maturity index proves instrumental in pinpointing key components that have received inadequate attention. This information is crucial for MSME managers and policymakers, guiding them in allocating resources effectively, addressing areas requiring attention and facilitating progress in the implementation of Industry 4.0. The study serves as a valuable tool for MSMEs to enhance their overall operational efficiency.Originality/valueThe research’s originality lies in its application of a comprehensive approach, combining BWM, DEA and the introduction of a maturity index for Industry 4.0 components in the MSME context. By employing these methodologies, the study not only identifies influential components but also provides a nuanced understanding of their relative significance. The research contributes significantly to the broader understanding of Industry 4.0 adoption, particularly, in the vital MSME sector within the Indian context. The findings are valuable for researchers, practitioners and policymakers seeking insights into improving the efficiency and effectiveness of MSMEs in the era of Industry 4.0.