European Manufacturing Survey Research Articles

Digital production technologies and exports

ABSTRACT This paper studies the relationship between digital production technologies and exports. Using data from the European Manufacturing Survey 2018 for Austrian, Croatian, German and Swiss manufacturing firms, we apply structural equation modelling to examine two possible transmission channels between digital production technologies and exports: first through productivity; second, through product-related services. The results reveal some heterogeneity in the ways different technologies relate to exports: while robots show a positive link with exports through the productivity channel, additive manufacturing and connected sensors are found to be positively related only to services which in turn influence exports. The results for logistics technologies, in contrast, suggest a positive relation with export activity through both channels.

Exploring Relations Between Methods of Assuring Quality, Certified Management Systems, Adoption of Technologies and Company Performance

Abstract Research purpose. Integrating advanced technological solutions into production management and control systems heralds a new era of enhanced efficiency and defect mitigation in manufacturing processes. A significant reduction in human errors marks this advancement and encompasses the adoption of technological and environmental innovations. These elements, in synergy with quality assurance methods and certified management systems, are the foundations for the factory of the future. However, the pace of adoption of these digital technologies varies across different companies and industrial sectors and is influenced by distinct factors. This research aims to investigate the relations between methods of assuring quality in production, certified management systems, adoption of digital technologies for production management and control, and the performance of manufacturing companies in terms of product quality and customer satisfaction. Design / Methodology / Approach. In this study, the authors employed a multivariable analysis approach, utilizing data from the Latvian and Finnish subsets of the European Manufacturing Survey 2022 (EMS, 2022) data collection. Findings. Manufacturers utilizing traditional quality and production management approaches tend to adopt new technologies. However, using digital technologies to manage and control manufacturing processes alone does not ensure better product quality and increased customer satisfaction. Originality / Value / Practical implications. The study enhances understanding of the nexus between established production management practices and the integration of digital technologies. Insights into this interplay enable manufacturing companies to streamline their digital transformation, optimizing operations for the benefit of the company, its customers, and the environment.

Do green practices and technologies mediate lean manufacturing’s impact on industrial performance? Evidence from the European manufacturing survey

Purpose This study aims to analyze the mediating role that green practices (GPs) and green technologies (GTs) play in the relationship between lean manufacturing (LM) and industrial performance (IP). It is suggested that GPs and GTs are crucial for transforming lean routines into enhanced performance that simultaneously meet current environmental requirements. Design/methodology/approach The hypotheses are tested using a mixed methodology, which includes a partial least squares structural equation modeling approach and a fuzzy-set qualitative comparative analysis (fsQCA) applied to a multisectoral sample from three European countries (Spain, Sweden and Croatia). Findings The results confirm that GPs mediate the relationship between LM and IP; however, in the case of GTs, this mediation does not appear to occur, although GTs emerge as a peripheral condition in the subsequent fsQCA. These findings highlight the need to avoid an exclusively technocentric approach and underscore the importance of implementing green organizational practices alongside technology investments to achieve successful lean initiatives. Practical implications It seems clear that managers should apply GPs, combined with LM, to improve sustainability and efficiency and should apply GTs once a more mature lean-green culture has been established. Originality/value In recent years, the scientific community has increasingly focused on the impact of implementing GPs and GTs on IP within LM plants. However, to the authors’ knowledge, no study has yet analyzed the combined effect of both initiatives. This paper seeks to address this gap by examining, in aggregate, the moderating effect of GPs and GTs on IP in LM plants.

Coming Home in the Age of Industry 4.0? The Effects of Offshoring and Backshoring on Manufacturing Companies’ Success

This study explores the effects of offshoring and backshoring on value creation per employee within the manufacturing sector by investigating the difference between firms that did and those that did not engage in corresponding relocation activities. Historically, offshoring has been a strategy to reduce costs and increase efficiency. However, the rise of advanced digital technologies and changing market dynamics have sparked a countertrend toward backshoring. Using data from the European Manufacturing Survey, this research examines how these strategies impact value creation, also taking into account the roles of sales growth and export intensity as potential moderators. The results of hierarchical regression analysis indicate that neither firms that have engaged in offshoring of production nor firms that have engaged in offshoring of R&D have significantly higher or lower value creation per employee than those that did not. In contrast, firms that have engaged in backshoring of production realize higher value creation when coupled with high sales growth. Firms that have engaged in backshoring of R&D, on the other hand, realize higher value creation when combined with high export intensity. These findings highlight the importance of aligning strategic decisions with both technological capabilities and market conditions to enhance productivity. The study suggests that a balanced and holistic approach, integrating both offshoring and backshoring strategies tailored to specific business contexts, can optimize value creation and maintain competitiveness in a rapidly evolving global landscape.

Exploring the relationships between digital transformation, organizational slack and business performance: a configurational approach

PurposeThe survival of companies today hinges on their adaptability and flexibility, with digital transformation (DT) and organizational slack (OS) playing crucial roles. Despite their recognized importance, these factors are often studied separately. This study aims to explore how OS facilitates DT and evaluate their synergies and trade-offs to improve performance.Design/methodology/approachUsing data from the European Manufacturing Survey, structural equation modeling (PLS-SEM) and fuzzy set qualitative comparative analysis (fsQCA), we investigate causal relationships and possible combinations between different dimensions of OS and DT that contribute to business performance.FindingsWe confirmed the positive effect of OS and DT on business performance, highlighting the importance of organizational over technological factors. While not definitively establishing OS as a precursor to DT, our findings underscore the need for human and operational slack to improve performance, especially in less technology-intensive contexts.Research limitations/implicationsOur findings evidence that decision-makers should integrate OS with DT initiatives to improve the firm’s competitiveness. However, it is worth noting that while OS seems essential in low-tech shopfloors, its importance is lower in high-tech environments. Furthermore, within the possible combinations, managers should promote operational slack and digitalization, as it seems fundamental to improve business performance.Originality/valueThis article contributes to the management field in three ways. First, it clarifies controversies by providing evidence of the positive roles of DT and OS as drivers of competitiveness for manufacturing firms. Second, we verify that OS is not directly linked to DT, challenging existing assumptions. Third, it investigates the combinations of OS and DT that drive business performance improvement, emphasizing their synergies and trade-offs.

Adopting Industry 4.0 technologies through lean tools: evidence from the European Manufacturing Survey

PurposeIn recent years, the emergence of Industry 4.0 technologies as a way of increasing productivity has attracted the attention of the manufacturing industry. This study aims to investigate the relationship between Industry 4.0 technologies and lean tools (LTs) by measuring how the internalisation of LTs influences the adoption of Industry 4.0 technologies and how the synergy between them helps improve productivity in European manufacturing firms.Design/methodology/approachResults from 1,298 responses were used to analyse linear regression and study the correlation between the use of LTs and Industry 4.0 technologies.FindingsResults show that the companies analysed tend to implement more Industry 4.0 technologies when their level of lean internalisation is high.Originality/valueThis study provides useful information for managers of manufacturing firms by showing the correlation between LT internalisation and Industry 4.0 technologies, corroborating that optimal implementation of these technologies is preceded by a high level of LT internalisation. Furthermore, although there are studies showing the relationship between LTs and Industry 4.0 technologies, none consider the intensity of their implementation.

Sustainability orientation, industrial big data and product innovation: Evidence from the European manufacturing sector

Sustainability is one of the greatest challenges for industry today. The purpose of this paper is to study the influence of sustainability orientation on product innovation in the European manufacturing sector, with a particular focus on the direct and mediating effect of industrial big data use, something that has been largely neglected so far. The data used for the purpose of the present study were collected from the European Manufacturing Survey (EMS) 2018 edition, consisting of 1,123 surveys administered in Austria, Spain, Croatia, Lithuania, Slovakia, Slovenia and Serbia. Binary logistic regressions and Hayes mediation models are used to test the hypotheses. Results suggest that sustainability orientation practices and industrial big data use positively influence product innovation, and that industrial big data use mediates the relation between sustainability orientation and product innovation. The findings have implications for both theory and practice.

The Evaluation of Industry 5.0 Concepts: Social Network Analysis Approach

During 2022 and 2023, Industry 5.0 attracted a lot of attention. Many articles and papers regarding the basics of Industry 5.0, its pillars, and a comparison of Industry 5.0 and Industry 4.0, Society 5.0, and Operator 5.0 have been published. Although the concept of Industry 5.0 is relatively new, companies from developed countries that have a high level of implementation of Industry 4.0 have already started the transition to Industry 5.0. Even though Industry 5.0 enables developing countries to become a part of developed countries’ value chains, it is not known which path to Industry 5.0 developing countries are taking. To fill this gap, the authors proposed research questions regarding the key indicators for measuring the levels of implementation of Industry 5.0 approaches in the manufacturing sector of the Republic of Serbia. This research includes insights from 146 manufacturing companies, gathered in 2022 as a part of the European Manufacturing Survey. The main findings of this study show that the most important indicator when it comes to human-centricity is training and competence development of production employees with a task-specific focus; the implementation of measures for improving efficiency in material consumption is significant for achieving sustainability; and the use of standardized and detailed work instructions is crucial in order to become resilient.

Insights into the digitalization-performance relationship: the role of flexibility and quality enhancing organizational practices

Although still in its early stages for the average manufacturing firm, the adoption of digital technologies has arrived in production systems. In response to these changes, firms are transforming their production systems and processes to accommodate this trend towards digitalization, constituting Industry 4.0. To make change effective, manufacturing firms are implementing advance production technologies and complement these with the necessary organizational changes in the production processes. Building on the premises of diffusion of innovation theory, the resource-based view and socio-technical systems theory, the present study examines whether the relation between the implementation of digital technologies and flexibility- and quality-enhancing organizational practices have a direct and moderating effect on the operational efficiency of manufacturing firms. The data come from a questionnaire-survey among 502 Spanish and Dutch organizations that responded to the European Manufacturing Survey in 2015 and 2018. Using a concatenated and multi-country dataset, the results reveal that both digitalization and organizational practices affect operational efficiency positively, but the impacts are mostly on different efficiencies, i.e. digitalization results in more efficiency regarding quality aspects (scrap rate, quality complaints), while organizational practices impact lead time and not-on-time-delivery efficiencies, and quality complaints. Both technologies and flexibility- and quality-enhancing organizational practices are seemingly needed, and sometimes even complement each other, but they do not provide synergy effects in combination. Last, early adoption of the digital technologies can help to further improve operational efficiencies.

Simultaneous Use of Digital Technologies and Industrial Robots in Manufacturing Firms

This paper presents the use of digital technologies and industrial robots in manufacturing firms. More importantly, we look at the relationship between the use of digital technologies and industrial robots within the Industry 4.0 concept. We also use a specific Industry 4.0 Readiness index to assess manufacturing firms’ Industry 4.0 readiness level and analyze the relationship between the achieved readiness level and the use of industrial robots. The research is based on data from 118 manufacturing firms from a European Manufacturing Survey. Based on statistical analysis, we present the results that show a significant correlation between the use of specific digital technologies and two types of industrial robots. Our study also points out that manufacturing firms with a higher Industry 4.0 readiness level tend to use industrial robots more frequently.

Performance effects of green production capability and technology in manufacturing firms

The proclamation of the sustainable development goals is driving companies to implement protective measures that favour the environment, thereby occupying a strategic place in the creation of green product innovation (GPI). This new management paradigm could be impacting capabilities, techniques, technologies, efficient energy use and green-oriented production policies and systems. Therefore, one of the challenges is to configure green production capabilities (GPC) coordinated with the technology dimension (TECH) because the design of ecological products and their manufacture requires the backup of capabilities and the possible support of green technology. To this effect, this article aims to establish the impact of the association of GPC and TECH on organisational performance. To do so, we test whether the adoption and high implementation of GPC and TECH affect environmental and financial performance. Empirical evidence is supported by the European Manufacturing Survey (EMS), using a sample of 1018 manufacturing companies from seven European countries. Our results show that the adoption of GPC and TECH and their high levels of implementation have a significant impact on environmental and financial performance. Regarding the association between the implementation of GPC and TECH, its contribution to environmental performance but not financial performance is evidenced. Furthermore, at high levels of implementation of this association, there is no significant effect on either environmental or financial performance. These findings drive theoretical and practical implications and provide opportunities for academics, managers and government bodies.

Digital Servitization and Firm Performance: Technology Intensity Approach

Digital servitization provides radical changes in the offer of products from manufacturing firms. The purpose of this paper is to investigate the impact of digital servitization on manufacturing firm performance and demonstrate the role of technology intensity, product-related services, and digital solutions in different industry sectors. This research collected data from 240 manufacturing firms from the Republic of Serbia under the European manufacturing survey from 2018. Multivariate regression analysis was used to test the impact of product-related services and digital solutions on manufacturing firm performance according to technology intensity. The findings show that the impact of digital servitization is more significant with the higher technology intensity level of the industry sector. Furthermore, the results show that Data-based services based on Big Data Analysis have the highest impact on manufacturing firm performance in all categories of technology intensity. Moreover, results from the fixed panel regression show production managers which combination of product-related services along with digital solutions make the highest financial performance according to the technology intensity of the firm.

Investigation of the Industry 4.0 Technologies Adoption Effect on Circular Economy

Industry 4.0 technologies’ adoption became a reality in manufacturing and other industrial companies. The effects of this adoption on several areas including the Circular Economy are interesting in the research field. Deep research and investigation of various Industry 4.0 technologies’ relationships with the Circular Economy are presented in this article. The investigation is based on collected data from 798 companies in five countries, Lithuania, Slovakia, Austria, Croatia, and Slovenia as part of the European Manufacturing Survey project in 2018. After filtering the data, groups’ comparison is used to form potential prospective relationships in connection with the presented literature. A logistics regression test is used by SPSS software to validate the hypotheses and potential relations. Based on the achieved results, it seems that both Industry 4.0 and non-Industry 4.0 technologies can have significant relations with Circular Economy technologies, so they can be potentially influenced or enhanced by both. Similarly, an investigation of the relations between the development of products with improved environmental impact and the use of Industry 4.0 technologies showed no clear dominance of Industry 4.0 technologies over non-Industry 4.0. Finally, there are two of the twelve investigated technologies that have a significant relationship (potential impact) on both the Circular Economy technologies and product development with improved environmental impact.

“Do technologies really affect that much? exploring the potential of several industry 4.0 technologies in today’s lean manufacturing shop floors”

We investigated the synergies and trade-offs between lean management practices and digital transformation promoted via Industry 4.0 (I4.0) technologies in current manufacturing shop floors. We used a fuzzy-set qualitative comparative analysis to examine possible interactions in a sample of 568 European manufacturing plants from the European Manufacturing Survey. Our results show that various causal pathways exist between lean practices and I4.0 technologies that contribute to improving industrial performance, highlighting the influence of vertical and horizontal data integration (VHDI) even ahead of other more extended applications, such as robotics. Furthermore, our results reveal that the combination of I4.0 technologies analyzed (VHDI, advanced robotics, and additive manufacturing) can lead to sufficient conditions for improving plant performance. From a management point of view, our findings underline the need to avoid myopic attitudes toward I4.0 opportunities. Lean programs should be designed with technological issues in mind, as digital features can establish powerful mechanisms that develop and reinforce the contributions of operational routines to manufacturing strengths in the face of new market requirements. In addition, managers must take into account the implications of the new situation: continuous learning and workforce training will be essential for workers to adapt to the requirements that digital transformation of shop floors has brought about.

The interplay between product innovation and servitization: the mediating role of digitalization

PurposeThe article aims to focus on the debate around the interplay between product innovation and servitization. Two conflicting approaches characterize the debate, disagreeing as to whether product innovation and servitization are complementary or not.Design/methodology/approachThe authors examine two competing models proposing a direct effect of product innovation on servitization and an indirect effect through digitalization, using the sample of 500 manufacturing firms of a country participating in the European Manufacturing Survey, 2018 edition.FindingsThe results reveal that product innovation has no direct effect on servitization. However, the authors found that digitalization capabilities mediate the effect of product innovation and servitization. The present findings reveal that product innovation has a substantial indirect effect on servitization through digitalization capabilities, supporting the approach proposing the complementarity between product innovation and servitization.Research limitations/implicationsThe data used in this paper correspond to a single country. The limited geographical sampling frame may likewise limit the generalizability of the findings. Researchers are encouraged to replicate the analysis with data from other countries, and to further enrich the analysis with complementary path options and resulting performance measures.Practical implicationsWhen applying a capabilities perspective, the authors find that product innovation capability is not directly related to servitization as capability. The present findings point toward the fact that if companies only have product innovation capability, this does not facilitate servitization. If companies have both product innovation capability and digitalization capability, such a situation facilitates servitization, a decision which often falls within managers’ responsibilities.Originality/valueExisting studies focus on antecedents and/or outcomes of single issues, either product innovation, servitization or digitalization. Only some offer dual associations (product innovation and servitization, digitalization and servitization), and even less position simultaneously at the intersection of the three pillars. Herein lies the novelty of the present approach and analysis, which explains the extent to which product innovation, digitalization and servitization are related.

Performance Implications of Organizational and Technological Innovation: An Integrative Perspective

Manufacturing firms engage in various innovation activities to achieve a sustainable competitive advantage. Although technological innovation is considered one of the key performance drivers, organizational innovation has become increasingly prominent. This study analyzes the relationship between organizational and technological innovation and examines their effect on firm performance in the manufacturing context. The empirical evidence is based on the European Manufacturing Survey (EMS)—Serbian data set gathered in 2018. Hypotheses on the relationship between organizational and technological innovations and firm performance are tested by structural equation modeling using data from 240 Serbian manufacturing firms. The results have shown that technological concepts strongly mediate the impact of organizational factors on firm performance (return on sales—ROS). Moreover, it could be said that, in contrast to the individual approach, to foster a ROS, a synergic effect of organizational and technological concepts is needed, implying the need for an integrative perspective in the process of innovation.

Capabilities and organisational dimensions conducive to green product innovation: Evidence from Croatian and Spanish manufacturing firms

AbstractThis paper aims to determine which configuration of green innovation capabilities (GICs) and organisational dimensions (ODs) leads to achieving green product innovation (GPI). We used data collected through the European Manufacturing Survey (EMS) from manufacturing firms in Spain and Croatia considered to be innovators. After conducting a cluster analysis, we identified a group of firms that still develop conventional product innovations (CPIs) and three groups of firms at different stages of GPI development. The four clusters were characterised using different variables, or determinants of GPI, associated with seven GICs and five ODs that favour GPI. According to the findings, all the GICs and ODs under analysis have a positive impact on GPI development, which results in the consolidation of a framework that organisations could use to manage green innovation. By empirically showing the relevance of applying these constructs, this study makes contributions to the Resource‐Based Theory (RBT), along with its extension to GICs, and points to the need to associate them with the ODs to achieve GPI towards the challenge of sustainable development.

Implementation of Circular Economy Technologies: An Empirical Study of Slovak and Slovenian Manufacturing Companies

Circular Economy (CE) practices and technologies are essential for increasing sustainability performance in manufacturing. Due to the increasing number of environmental regulations and growing public awareness of environmental issues, especially in the EU, CE is increasingly seen as a valuable factor in improving competitiveness. Therefore, there is a need for a fuller understanding of the ways in which CE technologies can be implemented into the manufacturing industries. The aim of this paper is to contribute to the identification of the characteristics of manufacturing companies and their perceptions of the barriers to the adoption of CE technologies. This survey-based study of 241 manufacturing companies (comprising a sub-sample of Slovak and Slovenian companies from the more extensive European Manufacturing Survey) uses a series of statistical tests to examine the implementation of three CE technologies. The results show that there is significant relationship between the adoption of CE technologies in manufacturing companies and their size, location, R&D activities, company age and product batch size. Finally, the research reveals the surprising finding that there is no apparent link between the perception of CE barriers and the plans of companies to implement selected CE technologies.

Performance effects of digital technology adoption and product & service innovation – A process-industry perspective

European manufacturing companies face increasing pressure to adopt digitalization technologies discussed in the emerging paradigm of Industry 4.0. On the other hand, innovation capabilities both in terms of introducing new products and new services are of outmost importance to gain competitive advantage. Technology adoption and firm innovativeness are often interrelated, but this relation is not well understood, and in particular, the way in which digital technology adoption, product and service innovation, and competitive advantage are related to process industries has not yet been investigated. This paper develops and operationalizes a conceptual framework for product and service innovation, thereby incorporating digital technology adoption. Through an exploratory study, using quantitative data from the European Manufacturing Survey (EMS)-2015, we analyze data from 747 cases in the process industries from D, NL, A, CH, and DK. Our main findings show that companies with higher levels of digital technology implementation (breadth and depth) can introduce more radical product and service innovations. Companies with both radical innovations and service innovation make significantly greater use of their implemented technologies’ potential. Radical product innovation also yields higher returns on sales, but contrary to our assumptions, service innovation in process industries does not. We find that, in the low-tech sectors, digital technologies are used to generate product and services innovations which then translate into higher performance. In contrast, in the high-tech sectors, digital technologies have a direct impact on performance and are thus rather accustomed to realizing the efficiency gains not primarily used for innovation.

The role of prevailing individual absorptive capacity versus absorptive capacity development for different innovation outcomes

ABSTRACT Utilising absorptive capacity theory, this study examines whether organisations should outsource knowledge acquisition of employees, i.e.,, by hiring employees with prevailing relevant knowledge, or whether to invest in the development of employees’ knowledge within the organisation for different types of innovations. Three hundred and thirty-five Danish firms in the European Manufacturing Survey reveal that individual knowledge must be differently organised to achieve different innovative outcomes. For new product development, organisations benefit from investing in employees with the highest possible domain-specific absorptive capacity, whilst for product-related service innovations, employees with more general knowledge should be hired. For the latter, employees’ individual absorptive capacity should be developed internally for best innovation outcomes. Irrespective of the type of innovation, providing flexible work arrangements is beneficial for performance and this effect is further substantiated by firm’s cross-functional capabilities. Important implications emerge for the organisation in terms of outsourcing versus developing individual absorptive capacity for different innovations.