Conference contribution
(Conference Contribution)

Industry 4.0 - Integration strategies for Small and Medium-sized enterprises

Publication Details
Author(s): Müller J, Voigt KI
Publication year: 2017

Event details
Event: International Association for Management of Technology (IAMOT) Conference
Event location: Vienna
Start date of the event: 14/05/2017
End date of the event: 18/05/2017
Language: English


Many industrial countries worldwide are confronted with multiple challenges such as globalization, increased volatility of markets, abbreviated innovation cycles, intensified competition and augmented complexity. As a result, the German government has initiated Industry 4.0, the German program for the introduction of the Industrial Internet of Things to respond to these challenges and maintain future competitiveness for the German industry. It integrates current technological trends into industrial production, assisting to improve complex systems of value creation. Main elements include horizontal and vertical interconnection within value chains of people, products and machines, using intelligent and self-regulating technologies. Alongside with technical challenges, organizational conversions will be undergone. In contrast to research in technical fields, economical sciences have investigated the topic of Industry 4.0 less so far. Especially the interconnection of the entire value-added chain, also across enterprises, has to be considered in this context.

We claim that small and medium-sized enterprises are especially important for investigating the introduction of Industry 4.0 in the industrial value-added chain, as small and medium-sized enterprises represent high importance for the German industry, encompassing 99.6 per cent of enterprises, 59.4 of employees, 54.8 per cent of value added and 35.9 per cent of annual turnover. However, research in the field of small and medium-sized enterprises and Industry 4.0 remains scarce. For the investigation within multiple case studies, small and medium-sized enterprises are especially suitable, as leading personnel has a holistic view on the entire enterprise. Furthermore, small and medium-sized enterprises have distinct characteristics, such as limited resources, that influence the integration of innovations and technologies.

Conclusively, this study addresses the following research question:

Which specific characteristics regarding the introduction of Industry 4.0 exist in small and medium-sized enterprises and how can those be addressed with accordingly designed integration strategies?

In response to rare research in this field, we use an exploratory and qualitative case study research design based on 68 in-depth expert interviews within the three most important German industry sectors, mechanical and plant engineering, electrical engineering and automotive suppliers. Interviews were conducted with leading personnel of the respective enterprises, including 41 CEOs. We find that small and medium-sized enterprises have several limiting factors concerning the integration of Industry 4.0, such as a low degree of standardization, lack of personnel and financial resources and low levels of trust in digitization. We assign these challenges for the respective business models of the regarded enterprises. Here, we find distinct characteristics between suppliers of Industry 4.0-based solutions, generally more affected, and enterprises applying Industry 4.0 in production. Thereupon, we find integration strategies, such as the cooperation with other small and medium-sized enterprises along the value-added chain in order to find economies of scope and turning to services rather than production, to strengthen one core competency of small and medium-sized enterprises, individual solutions and personal contact.

Focus Area of Individual Faculties

How to cite
APA: Müller, J., & Voigt, K.-I. (2017). Industry 4.0 - Integration strategies for Small and Medium-sized enterprises. Vienna.

MLA: Müller, Julian, and Kai-Ingo Voigt. "Industry 4.0 - Integration strategies for Small and Medium-sized enterprises." Proceedings of the International Association for Management of Technology (IAMOT) Conference, Vienna 2017.

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Last updated on 2018-03-17 at 03:57
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