The strategic landscape of industry 4.0

Abstract

We are currently on the marks of Industry 4.0. Characterized by increased digitalization and automation, it is expected to overturn traditional business models and supply chains. Industry 4.0 initiatives have already made significant impact on industry, and will continue to do so in the years to come. While the concept of Industry 4.0 gains a foothold, there is no clear idea of how it should be addressed by companies. The transformation is without a doubt a strategic imperative that requires long-term commitment. Instead of investing in new technologies in an ad hoc manner, companies need to adopt a systematic approach to address technological opportunities throughout the supply chain. There exist many different and, in some cases, conflicting opinions about the scope of such an approach, what it should contain, its point of departure, etc. This paper synthesizes such views into a framework that depicts the strategic landscape manufacturing companies are facing at the outset of their digital journey. The framework can be used to position and discuss companies’ digitalization and automation initiatives with respect to business-, manufacturing-, supply chain-, and digital strategy.