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Curse or Blessing? Exploring risk factors of digital technologies in industrial operations

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  • Kessler, Melanie
  • Arlinghaus, Julia C.
  • Rosca, Eugenia
  • Zimmermann, Manuel

Abstract

Both practitioners and scholars emphasise the benefits of Industry 4.0 (I4.0) technology implementation, such as increased transparency and the availability of real-time data in operations processes. Current literature on I4.0 technologies tends to overemphasise the positive impact and transformational capabilities of digital technologies while there is little focus on evaluating potential risks associated with their adoption in industrial operations. An understanding of how supply chain risks are perceived in digitalisation projects within industrial operations and an understanding of decision-makers' responses to different types of risks has important managerial implications. Current literature, however, lacks systematic empirical evidence on the implementation of I4.0 applications and related risk factors. This study aims to address this research gap by exploring the relationship between I4.0 technologies and supply chain risks based on empirical evidence from 300 case studies of industrial practice in Germany and fifty-three interviews with relevant managers from selected use cases and with general experts in this field. Our findings show that digital technologies are frequently adopted to address certain existing supply chain risks but that their implementation introduces new sources of risks (e.g. cyber risks). Based on qualitative data analysis and drawing on Normal Accident Theory, we propose a framework to explicate the drivers and contingency factors of new sources of supply chain risks in the context of Industry 4.0 technologies. Practical recommendations are provided for supply chain managers to guide the process of managing supply chain risks based on the technological life cycle.

Suggested Citation

  • Kessler, Melanie & Arlinghaus, Julia C. & Rosca, Eugenia & Zimmermann, Manuel, 2022. "Curse or Blessing? Exploring risk factors of digital technologies in industrial operations," International Journal of Production Economics, Elsevier, vol. 243(C).
    • Handle: RePEc:eee:proeco:v:243:y:2022:i:c:s0925527321002991
    DOI: 10.1016/j.ijpe.2021.108323
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    1. Agnieszka A. Tubis & Katarzyna Grzybowska & Bartosz Król, 2023. "Supply Chain in the Digital Age: A Scientometric–Thematic Literature Review," Sustainability, MDPI, vol. 15(14), pages 1-25, July.
    2. Wang, Xinxin & Xu, Zeshui & Qin, Yong & Skare, Marinko, 2022. "Innovation, the knowledge economy, and green growth: Is knowledge-intensive growth really environmentally friendly?," Energy Economics, Elsevier, vol. 115(C).
    3. Uddin, Mohammad Rajib & Akter, Shahriar & Lee, Wai Jin Thomas, 2024. "Developing a data breach protection capability framework in retailing," International Journal of Production Economics, Elsevier, vol. 271(C).
    4. Latifa Benhamou & Samir Lamouri & Patrick Burlat & Vincent Giard, 2023. "Digital Twin: An Added Value for Digital CONWIP in the Context of Industry 4.0," Sustainability, MDPI, vol. 15(13), pages 1-18, June.
    5. Padhi, Sidhartha S. & Mukherjee, Soumyatanu & Edwin Cheng, T.C., 2024. "Optimal investment decision for industry 4.0 under uncertainties of capability and competence building for managing supply chain risks," International Journal of Production Economics, Elsevier, vol. 267(C).
    6. Hamann-Lohmer, Jacob & Bendig, Miriam & Lasch, Rainer, 2023. "Investigating the impact of digital transformation on relationship and collaboration dynamics in supply chains and manufacturing networks – A multi-case study," International Journal of Production Economics, Elsevier, vol. 262(C).
    7. Yang, Yefei & Yee, Rachel W.Y., 2022. "The effect of process digitalization initiative on firm performance: A dynamic capability development perspective," International Journal of Production Economics, Elsevier, vol. 254(C).

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