Readiness for and adoption of Industry 4.0 among small and medium sized enterprises in the Malaysian furniture industry

Abstract

The furniture industry is the fastest growing sub-sector in the Malaysian wood-based industry. Although it has grown tremendously over the years, it is characterized by stagnating value-addition. To improve industrial competitiveness, automation and technology application has emerged as a possible solution. A study was conducted to evaluate the influence of company size towards their readiness and adoptability of automation and Industry 4.0. A questionnaire-based survey involving large-, medium-, small-, and micro-sized furniture manufacturers throughout Malaysia was conducted with 160 respondents. The analysis of the results from the survey showed that there was a significant relationship between company size and their readiness for Industry 4.0. The results showed that small- and medium-sized enterprises (SMEs) are more hesitant in adopting technology due to the high cost required and the lack of skilled workers to cope with the new technology, compared to the large sized companies. The factor analysis revealed that the three main groups of the factor affecting decisions towards adopting industry 4.0 are government policy, difficulty in implementation, and expected benefit. This study suggests that providing incentives for the application of automation and technology will be required when the goal is greater uptake of technology among furniture manufacturers.