The Role of Industry 4.0 Technologies in Supply Chain Risk Mitigation: Empirical Evidence from the Food Processing Industry

Imran Ali, Ahmad Arslan, Zaheer Khan, Shlomo Y. Tarbac

Research output: Contribution to journalArticlepeer-review

Abstract

Supply chain disruption refers to a major breakdown, often caused by an unforeseen incident or risk, in a supply chain’s production and distribution processes. Contemporary supply chains are highly globalized, complex, and extended, exhibiting an increased vulnerability to a multitude of risks and disruptions. However, the current trend of real-time data exchange through smart technologies, also known as Industry 4.0, provides significant opportunities to reshape conventional business operations and effectively cope with unanticipated supply chain breakdowns. Yet, limited attention has been paid to the role played by Industry 4.0 technologies in reducing supply chain risks and any resulting disruptions. By bringing together these inter-related yet often separate concepts, we devised a novel model that addresses this knowledge gap. We empirically tested our model on a sample of 302 responses received from senior managers of the Australian food processing industry. We found that supply-demand mismatch, process risks, and transportation risks are currently the major sources of supply chain disruptions. Specifically, supply-demand mismatch appears to be the most severe and deserving of attention among these, followed by process and transportation risks. We also revealed that Industry 4.0 technologies significantly mitigate supply-demand mismatch and process risks and any resulting supply chain disruptions. Contrary to our expectations, however, the impact of Industry 4.0 technologies on transportation risks was found to be positive but non-significant. This is the first empirical paper to assess the extent to which the three critical supply chain risks may undermine firm performance and to explore the moderating effect of Industry 4.0 technologies. We draw managers’ attention to the detrimental impact of supply chain disruptions and to the significance of Industry 4.0 technologies in dealing with adversities.
Original languageEnglish
JournalIEEE Transactions on Engineering Management
Publication statusAccepted/In press - 8 Jun 2021

Keywords

  • Industry 4.0
  • digital technologies
  • supply chain disruption
  • food industry
  • external shocks

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