The Relationship of Industry 4.0 and Business Performance in Malaysian Manufacturing Firms: A PLS-SEM Model

Abstract

Since the last decade, the industrial sector had rapidly evolved with the presence of state-of-the-art technologies that had transformed industries, society, as well as processes due to the novel opportunities stipulated by Industry 4.0 Digital Technologies. Thus, manufacturing industry internationally have been pursuing the paradigm shift and attempting to implement Industry 4.0 Digital Technologies into their respective organizations. However, albeit the fact that Industry 4.0 had promised substantial improvement to manufacturing system and processes, the correlation and influence of Industry 4.0 Digital Technologies upon Business Performance are still ambivalent as there are insufficient empirical data and studies to support the implementation and lots of challenges were met during the process of implementation. Therefore, the paper aims to provide empirical evidence collected from manufacturing firms in Malaysia via questionnaire to bridge the literature gap by identifying the correlation concerning Industry 4.0 Digital Technologies and Business Performance with Partial Least Squares Structural Equation Modelling (PLS-SEM) method to model their correlation. Accordingly, 124 responses were gathered, and results implied that Industry 4.0 Digital Technologies are directly positive correlated with Business Performance. In other words, manufacturing firms intending on achieving high excellence in Business Performance, Industry 4.0 Digital Technologies will be the impeccable solution.