Digitalization of Business Functions under Industry 4.0

Abstract

Despite the literature’s support that the main function to be affected by the Industry 4.0 movement will be the operations function, the rapid incorporation of new technologies under firms promises to affect each departments of the business dramatically. This chapter aims to highlight the role of each function within Industry 4.0. Moreover, the chapter will determine the actualized benefit of transitioning towards Industry 4.0, separate from the recognized benefits under the literature. In order to achieve this a content analysis was conducted on the 2017 annual activity reports of manufacturing firms listed on the Istanbul Stock Exchange (BIST). Out of the 178 listed manufacturing firms under BIST, only 20 were identified as transitioning towards Industry 4.0. Out of these 20 firms, 16 firms’ annual activity reports mentioned transitioning towards Industry 4.0 and addressed the outcome (benefits) of the applications. Items were subjected to a content analysis based on business functions (Theme 1), sub-categories of business functions (Theme 2) and the common actual benefit (Theme 3) by three different researchers. The unit of analysis, the identified benefits, were 232 items in total and spread across the operations (41%), strategic management (Cost and Competitive Advantage) (22%), technology and process development (15%), procurement and distribution (12%), human resources (8%) and marketing (2%) business functions.