IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v17y2025i3p813-d1572284.html
   My bibliography  Save this article

Harnessing Industry 4.0 for SMEs: Advancing Smart Manufacturing and Logistics for Sustainable Supply Chains

Author

Listed:
  • Majid Alkhodair

    (Department of Business Administration, Faculty of Economics & Administration, King Abdulaziz University, Jeddah 21589, Saudi Arabia)

  • Hanadi Alkhudhayr

    (Department of Information Systems, Faculty of Computing and Information Technology, King Abdulaziz University, Rabigh 21911, Saudi Arabia)

Abstract

The complex integration of Industry 4.0 technologies into SMEs necessitates robust frameworks to address adoption barriers and enhance sustainability. The present study investigates the impact of artificial intelligence (AI), the Internet of Things (IoT), and blockchain on smart manufacturing, logistics, and sustainability in SMEs. Using a cross-sectional design, data were collected from 300 SMEs across manufacturing, logistics, and retail sectors through purposive sampling, focusing on technology adoption, and sustainability performance from 2018 to 2022. Data were analyzed using advanced machine learning models, including XG Boost and Random Forest, alongside Recursive Feature Elimination (RFE) for dimensionality reduction and quantile regression for an inferential analysis. Findings revealed that IoT adoption improved resource utilization efficiency, while blockchain enhanced ethical sourcing—furthermore, AI-driven predictive maintenance reduced operational downtimes. XG Boost achieved a Mean Squared Error (MSE), highlighting its superior predictive capability, while Random Forest achieved perfect fitness but risked overfitting. However, adoption varied significantly across firms due to financial and technical constraints, with SMEs reporting limited access to capital and skilled labor. This study underscores the need for policy interventions and targeted support for SMEs to bridge adoption gaps. The study advances the existing body of knowledge by highlighting the synergistic benefits of integrating Industry 4.0 technologies to enhance SME sustainability. Practical implications include policy recommendations for financial incentives, technical support, and capacity-building programs, empowering SMEs with actionable insights to overcome adoption barriers and achieve sustainable growth. These findings offer industry leaders and policymakers’ actionable insights to drive SME transformation in Industry 4.0, empowering them to make a difference.

Suggested Citation

  • Majid Alkhodair & Hanadi Alkhudhayr, 2025. "Harnessing Industry 4.0 for SMEs: Advancing Smart Manufacturing and Logistics for Sustainable Supply Chains," Sustainability, MDPI, vol. 17(3), pages 1-23, January.
    • Handle: RePEc:gam:jsusta:v:17:y:2025:i:3:p:813-:d:1572284
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/17/3/813/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/17/3/813/
    Download Restriction: no
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:17:y:2025:i:3:p:813-:d:1572284. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.