Industry 4.0 Implementation at SME Suppliers in Supply Chains: Qualitative Insights from OEMs

Original Equipment Manufacturers (OEMs) expect their suppliers to use digital technologies to enhance supply chain transparency, agility, efficiency, and cost-effectiveness. Implementing Industry 4.0 in the small and medium enterprises (SME) sector is crucial for OEMs as it helps align their strategic goals of digital transformation throughout the supply chain. Though research on Industry 4.0 has exponentially risen in the last decade, there is limited research on SME integration in customer (OEM) supply chains. The present research is novel and exploratory. The study conducts a perception survey of senior executives of OEM to gain insights into the Industry 4.0 implementation at their SME suppliers base. A purposive sampling technique has been adopted to identify the supply chain decision-makers, and through a snowball approach, twenty-one senior-level executives from OEMs across sectors of automotive, tractors, electronics and engineering goods have been interviewed in the survey. A semi-structured open-ended questionnaire was used to collect qualitative information to thoroughly comprehend the intricacies of Industry 4.0 integration in the supply chain. The study revealed critical challenges that SME suppliers encounter in the Industry 4.0 implementation process as well as the internal and external motivating factors driving SME supplier decisions for implementing Industry 4.0. The finding delves into expected outcomes post-implementation. The study results in insights on Industry 4.0 integration in OEM supply chains, and this novel knowledge will assist SME suppliers in identifying critical business areas prioritised by OEMs and finally understanding OEM expectations from their SME suppliers over the next 36 months.