Unfolding the Impact of Quality 4.0 Practices on Industry 4.0 and Circular Economy Practices: A Hybrid SEM-ANN Approach

Abstract

In the era of Industry 4.0, Quality 4.0 (Q4.0) relates to quality management. To that end, it focuses on digital technologies that integrate social and technical resources and offer the best possible product and service to its customers. Few real-world studies have been done on the social and technical aspects of Q4.0. Thus, the purpose of this study is to investigate empirically the impact of social and technical Q4.0 on I4.0 technologies and circular economy practices (CEP) in small- and medium-sized (SME) manufacturing enterprises. A framework based on the resource-based view (RBV) theory is developed and empirically validated by an online questionnaire of 189 Malaysian SME manufacturing enterprises. In contrast to the other existent QM investigations, which made use of structural equation modelling (SEM), this study performed an analysis in two stages. First, the Q4.0 practices that significantly influence I4.0 technologies and CEP are identified using the SEM approach. Second, the significant predictors obtained from SEM are ranked according to their relative importance using the artificial neural network (ANN) technique. The findings indicate that social and technical Q4.0 practices have improved I4.0 technologies and CEP. The findings also highlight the role performed by technical Q4.0 practices as a mediator between social Q4.0 practices, I4.0 technologies, and CEP. The findings of ANN highlight that the role of social and technical Q4.0 are crucial to the successful deployment of I4.0 technologies and CEP in manufacturing companies. The purpose of the current research is to shed light on the importance of Q4.0 multidimensions, hence contributing to theory application, especially given the scarcity of multidimensional perspectives of Q4.0 literature. In essence, the SEM-ANN methodology adds something new to the bodies of literature on Q4.0, I4.0, and CEP. As an outcome of the research, organisations can develop innovative strategies to adopt Q4.0 by gaining a better understanding of the elements that contribute to effective Q4.0 implementation in the digital transformation era.