Industry 4.0 and resilience in the supply chain: a driver of capability enhancement or capability loss?

The purpose of this research is to develop a better understanding of smart systems and autonomous processes of the Industry 4.0 era. Does the implementation of Industry 4.0 processes and systems expose firms to higher levels of risk in the supply chain through capability loss or does Industry 4.0 spur capability enhancement and thereby increase supply chain resilience? Industry 4.0 is centred on the idea that certain tasks and decisions can be automated through smart systems and autonomous processes. However, is there a risk of losing critical capabilities and the ability to be flexible, agile and resilient to unexpected disruptions in the supply chain? In order to address these questions, this research presents results from semi-structured interviews across multiple industries to provide findings on firms’ uses of smart systems and capability development associated with these systems. Results from this exploratory study may be classified into two primary insights. First, although Industry 4.0 systems are new and, in many cases untested, firms are eager regarding the potential of smart systems to positively impact firm performance and to leverage Industry 4.0 processes for a competitive supply chain advantage. Second, companies did not claim any human capability loss associated with Industry 4.0. In fact, these smart systems may lead to increased supply chain resilience because of capability enhancement and new skill development.