Modeling the Industry 4.0 adoption for sustainable production in Micro, Small & Medium Enterprises

Abstract

The objective of making an organization ‘sustainable’ needs development on the economic, environmental, and social fronts. Indian Micro, Small & Medium Enterprises are facing the competition posed by rising technological advances in the market. Thus, Industry 4.0 intervention shall be highly useful in this context. This study assesses the barriers involved in implementing Industry 4.0 for sustainable production, and it attempts to find causality among the barriers using the ‘Decision Making Trial and Evaluation Laboratory’ method. The study considers eight barriers to implement Industry 4.0 for sustainable production. These barriers are inter-related and have causal relationships among them. This causality is represented graphically. The applied method delineates barriers under consideration for causality into two groups, namely; ‘influencer’ and ‘influenced.’ It also illustrates the strength of the influence of one barrier over the other through numerical values. The prime contribution of this study is to not only find the influencing barriers but also to mitigate them by allocating scarce organizational resources. Mitigating the influencing barriers would help in managing the influenced challenges. ‘Technological upgradation’, ‘lack of policy frameworks’ are the top two barriers that find its place in the hierarchy of importance established by this study. These barriers are also classified into the ‘cause’ group. Also, this study establishes that ‘difficulty in access to credit’ and ‘non-readiness of the workforce’ in adopting Industry 4.0 are ‘influenced’ barriers. This study shall be of importance to the small business practitioners and government analysts in evaluating barriers in implementing sustainable production initiatives using Industry 4.0. With this, Indian Micro, Small & Medium Enterprise needs to upgrade by upskilling young working population for the forthcoming technological revolution of Industry 4.0. Finally, we suggest several important implications for managers and policymakers.