Advertisement

Digitalization of Business Functions under Industry 4.0

  • Melissa N. CagleEmail author
  • Kevser Yılmaz
  • Hümeyra Doğru
Chapter
Part of the Contributions to Management Science book series (MANAGEMENT SC.)

Abstract

Despite the literature’s support that the main function to be affected by the Industry 4.0 movement will be the operations function, the rapid incorporation of new technologies under firms promises to affect each departments of the business dramatically. This chapter aims to highlight the role of each function within Industry 4.0. Moreover, the chapter will determine the actualized benefit of transitioning towards Industry 4.0, separate from the recognized benefits under the literature. In order to achieve this a content analysis was conducted on the 2017 annual activity reports of manufacturing firms listed on the Istanbul Stock Exchange (BIST). Out of the 178 listed manufacturing firms under BIST, only 20 were identified as transitioning towards Industry 4.0. Out of these 20 firms, 16 firms’ annual activity reports mentioned transitioning towards Industry 4.0 and addressed the outcome (benefits) of the applications. Items were subjected to a content analysis based on business functions (Theme 1), sub-categories of business functions (Theme 2) and the common actual benefit (Theme 3) by three different researchers. The unit of analysis, the identified benefits, were 232 items in total and spread across the operations (41%), strategic management (Cost and Competitive Advantage) (22%), technology and process development (15%), procurement and distribution (12%), human resources (8%) and marketing (2%) business functions.

Keywords

Annual activity reports BIST Industry 4.0 Business functions Manufacturing firms Digitalization 

References

  1. Abbott, D. (2014). Applied predictive analytics: Principles and techniques for the professional data analyst. Hoboken, NJ: John Wiley & Sons.Google Scholar
  2. Allen, R. C. (2006). The British industrial revolution in global perspective: How commerce created the industrial revolution and modern economic growth (Unpublished). Oxford: Nuffield College.Google Scholar
  3. Atkeson, A., & Kehoe, P. J. (2001). The transition to a new economy after the second industrial revolution (No. w8676). National Bureau of Economic Research.Google Scholar
  4. Baheti, R., & Gill, H. (2011). Cyber-physical systems. The Impact of Control Technology, 12(1), 161–166.Google Scholar
  5. Blanchet, M., Rinn, T., Von Thaden, G., & De Thieulloy, G. (2014). Industry 4.0: The new industrial revolution-How Europe will succeed. Hg. v. Roland Berger Strategy Consultants GmbH. München. Abgerufen am 11.05. 2014, unter http://www.rolandberger.com/media/pdf/Roland_Berger_TAB_Industry_4_0_20140403.pdf.
  6. Blinder, A. S. (2006). Offshoring: The next industrial revolution? Foreign Affairs, 113–128.CrossRefGoogle Scholar
  7. Boyd, D., & Crawford, K. (2012). Critical questions for big data: Provocations for a cultural, technological, and scholarly phenomenon. Information, Communication & Society, 15(5), 662–679.CrossRefGoogle Scholar
  8. Brettel, M., Friederichsen, N., Keller, M., & Rosenberg, M. (2014). How virtualization, decentralization and network building change the manufacturing landscape: An Industry 4.0 perspective. International Journal of Mechanical, Industrial Science and Engineering, 8(1), 37–44.Google Scholar
  9. Brown, S. P. (2008). Business processes and business functions: A new way of looking at employment. Monthly Labor Review, 131, 1–24.Google Scholar
  10. Brynjolfsson, E., Hofmann, P., & Jordan, J. (2010). Cloud computing and electricity: Beyond the utility model. Communications of the ACM, 53(5), 32–34.CrossRefGoogle Scholar
  11. Byres, E., & Lowe, J. (2004, October). The myths and facts behind cyber security risks for industrial control systems. Proceedings of the VDE Kongress, 116, 213–218.Google Scholar
  12. Chen, M., Mao, S., & Liu, Y. (2014). Big data: A survey. Mobile Networks and Applications, 19(2), 171–209.CrossRefGoogle Scholar
  13. Deane, P. M. (1979). The first industrial revolution. Cambridge University Press.Google Scholar
  14. Drath, R., & Horch, A. (2014). Industrie 4.0: Hit or hype? [industry forum]. IEEE Industrial Electronics Magazine, 8(2), 56–58.CrossRefGoogle Scholar
  15. Engelman, R. (2015). The second industrial revolution, 1870–1914. Retrieved December 24, 2018, from http://ushistoryscene.com/article/second-industrial-revolution/.
  16. EU Commission. (2017a). Key lessons from national Industry 4.0 policy initiatives in Europe digital transformation monitor. Retrieved November 10, 2018 from https://ec.europa.eu/growth/tools-databases/dem/monitor/sites/default/files/DTM_Policy%20initiative%20comparison%20v1.pdf.
  17. EU Commission. (2017b). Implementation of an Industry 4.0 strategy—The German Plattform Industrie 4.0. Retrieved November 10, 2018 from https://ec.europa.eu/digital-single-market/en/blog/implementation-industry-40-strategy-german-plattform-industrie-40
  18. Fiorentino, M., de Amicis, R., Monno, G., & Stork, A. (2002, September). Spacedesign: A mixed reality workspace for aesthetic industrial design. In Proceedings of the 1st International Symposium on Mixed and Augmented Reality (p. 86). IEEE Computer Society.Google Scholar
  19. Ganzarain, J., & Errasti, N. (2016). Three stage maturity model in SME’s toward Industry 4.0. Journal of Industrial Engineering and Management, 9(5), 1119–1128.CrossRefGoogle Scholar
  20. Gazetesi, S. (2018). 19 Firmaya Devlet Kuşu. Retrieved November 10, 2018, from http://www.sanayigazetesi.com.tr/tesvik/19-firmaya-devlet-kusu-h16786.html
  21. Gibson, I., Rosen, D., & Stucker, B. (2015). Introduction and basic principles. In Additive manufacturing technologies (pp. 1–18). New York, NY: Springer.CrossRefGoogle Scholar
  22. Industrial Internet Consortium, Fact Sheet. (2013). Retrieved February 13, 2018, from http://www.iiconsortium.org/docs/IIC_FACT_SHEET
  23. Jänicke, M., & Jacob, K. (2009). A third industrial revolution? Solutions to the crisis of resource-intensive growth.Google Scholar
  24. Jazdi, N. (2014, May). Cyber physical systems in the context of Industry 4.0. In 2014 IEEE International Conference on Automation, Quality and Testing, Robotics (pp. 1–4). IEEE.Google Scholar
  25. Jensen, M. C. (1993). The modern industrial revolution, exit, and the failure of internal control systems. The Journal of Finance, 48(3), 831–880.CrossRefGoogle Scholar
  26. Kagermann, H. (2015). Change through digitization—Value creation in the age of Industry 4.0. In Management of permanent change (pp. 23–45). Wiesbaden: Springer Gabler.Google Scholar
  27. Kagermann, H., Helbig, J., Hellinger, A., & Wahlster, W. (2013). Recommendations for implementing the strategic initiative INDUSTRIE 4.0: Securing the future of German manufacturing industry (Final report of the Industrie 4.0 working group. Forschungsunion).Google Scholar
  28. Kagermann, H., Lukas, W. D., & Wahlster, W. (2011). Industrie 4.0: Mit dem Internet der Dinge auf dem Weg zur 4. Industriellen revolution. VDI nachrichten, 13(11).Google Scholar
  29. Kaldor, N. (1957). A model of economic growth. The Economic Journal, 67(268), 591–624.CrossRefGoogle Scholar
  30. Küçükkalay, A. (1997). Endüstri devrimi ve ekonomik sonuçlarının analizi. Süleyman Demirel Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi, 2(2).Google Scholar
  31. Labor, C. (1990). Industrial revolution. Bloomington: Indiana.Google Scholar
  32. Lasi, H., Fettke, P., Kemper, H. G., Feld, T., & Hoffmann, M. (2014). Industry 4.0. Business & Information Systems Engineering, 6(4), 239–242.CrossRefGoogle Scholar
  33. Lee, E. A. (2008). Cyber physical systems: Design challenges. In 11th IEEE Symposium on Object Oriented Real-Time Distributed Computing (ISORC) (pp. 363–369). IEEE.Google Scholar
  34. Liu, S. X. (2016). Innovation design: Made in China 2025. Design Management Review, 27(1), 52–58.Google Scholar
  35. Manyika, J., Chui, M., Brown, B., Bughin, J., Dobbs, R., Roxburgh, C., et al. (2011). Big data: The next frontier for innovation, competition, and productivity. McKinsey Global Institute.Google Scholar
  36. McAfee, A., Brynjolfsson, E., Davenport, T. H., Patil, D. J., & Barton, D. (2012). Big data: The management revolution. Harvard Business Review, 90(10), 60–68.Google Scholar
  37. Mokyr, J. (1998). The second industrial revolution, 1870–1914. In V. Castronovo (Ed.), Storia dell’economia Mondiale (pp. 219–245). Rome: Laterza Publishing.Google Scholar
  38. Paelke, V. (2014, September). Augmented reality in the smart factory: Supporting workers in an industry 4.0 environment. In Emerging Technology and Factory Automation (ETFA), 2014 IEEE (pp. 1–4). IEEE.Google Scholar
  39. Paul, H., & Jonathan, Z. (1991). Flexible specialization versus post-Fordism: Theory, evidence and policy implications. Economy and Society, 20(1), 5–9.CrossRefGoogle Scholar
  40. Raffournier, B. (1995). The determinants of voluntary financial disclosure by Swiss listed companies. European Accounting Review, 4(2), 261–280.CrossRefGoogle Scholar
  41. Rajkumar, R., Lee, I., Sha, L., & Stankovic, J. (2010, June). Cyber-physical systems: The next computing revolution. In Design Automation Conference (DAC), 2010 47th ACM/IEEE (pp. 731–736). IEEE.Google Scholar
  42. Rifkin, J. (2013, July). Energizing the third industrial revolution. Interviewer: J. Gerdes.Google Scholar
  43. Rosenberg, N. (1998). The role of electricity in industrial development. The Energy Journal, 7–24.Google Scholar
  44. Rüßmann, M., Lorenz, M., Gerbert, P., Waldner, M., Justus, J., Engel, P., et al. (2015). Industry 4.0: The future of productivity and growth in manufacturing industries. Boston Consulting Group, 9.Google Scholar
  45. Schmidt, R., Möhring, M., Härting, R. C., Reichstein, C., Neumaier, P., & Jozinović, P. (2015, June). Industry 4.0-potentials for creating smart products: Empirical research results. In International Conference on Business Information Systems (pp. 16–27). Cham: Springer.CrossRefGoogle Scholar
  46. Schuh, G., Potente, T., Wesch-Potente, C., Weber, A. R., & Prote, J. P. (2014). Collaboration mechanisms to increase productivity in the context of Industrie 4.0. Procedia CIRP, 19, 51–56.CrossRefGoogle Scholar
  47. Shrouf, F., Ordieres, J., & Miragliotta, G. (2014, December). Smart factories in Industry 4.0: A review of the concept and of energy management approached in production based on the Internet of Things paradigm. In 2014 IEEE International Conference on Industrial Engineering and Engineering Management (IEEM) (pp. 697–701). IEEE.Google Scholar
  48. Stanton, P., & Stanton, J. (2002). Corporate annual reports: Research perspectives used. Accounting, Auditing & Accountability Journal, 15(4), 478–500.CrossRefGoogle Scholar
  49. Stock, T., & Seliger, G. (2016). Opportunities of sustainable manufacturing in Industry 4.0. Procedia Cirp, 40, 536–541.CrossRefGoogle Scholar
  50. Strandhagen, J. W., Alfnes, E., Strandhagen, J. O., & Vallandingham, L. R. (2017). The fit of Industry 4.0 applications in manufacturing logistics: A multiple case study. Advances in Manufacturing, 5(4), 344–358.CrossRefGoogle Scholar
  51. Strauss, A., & Corbin, J. M. (1990). Basics of qualitative research: Grounded theory procedures and techniques. Thousand Oaks, CA: Sage.Google Scholar
  52. Tezge, O. (2010). Çağdaş Fabrika Sisteminin Doğuşu Ve Günümüze Kadar Geçirdiği Evreler. Ankara: Doktora Tezi, Siyasal Bilgiler Fakültesi, Ankara Üniversitesi.Google Scholar
  53. Tranfield, D., Denyer, D., & Smart, P. (2003). Towards a methodology for developing evidence-informed management knowledge by means of systematic review. British Journal of Management, 14(3), 207–222.CrossRefGoogle Scholar
  54. Turkish Commercial Law: item 397. (2011). 6102 sayılı Türk Ticaret Kanunu. Retrieved November 10, 2018, from http://www.ticaretkanunu.net/ttk-madde-397/
  55. Tüsiad, B. C. (2016, 03). Türkiye’nin Küresel Rekabetçiliği İçin Bir Gereklilik Olarak Sanayi 4.0 – Gelişmekte Olan Ekonomi. Retrieved from December 28, 2018, http://tusiad.org/tr/tum/item/8671-turkiyenin-sanayi-40-donusumu
  56. Varghese, A., & Tandur, D. (2014, November). Wireless requirements and challenges in Industry 4.0. In 2014 International Conference on Contemporary Computing and Informatics (IC3I) (pp. 634–638). IEEE.Google Scholar
  57. Voigtländer, N., & Voth, H. J. (2006). Why England? Demographic factors, structural change and physical capital accumulation during the industrial revolution. Journal of Economic Growth, 11(4), 319–361.CrossRefGoogle Scholar
  58. Wang, X., Li, L., Yuan, Y., Ye, P., & Wang, F. Y. (2016). ACP-based social computing and parallel intelligence: Societies 5.0 and beyond. CAAI Transactions on Intelligence Technology, 1(4), 377–393.CrossRefGoogle Scholar
  59. Wu, X., Zhu, X., Wu, G. Q., & Ding, W. (2014). Data mining with big data. IEEE Transactions on Knowledge and Data Engineering, 26(1), 97–107.CrossRefGoogle Scholar
  60. Zhong, R. Y., Xu, X., Klotz, E., & Newman, S. T. (2017). Intelligent manufacturing in the context of Industry 4.0: A review. Engineering, 3(5), 616–630.CrossRefGoogle Scholar
  61. Zhou, K., Liu, T., & Zhou, L. (2015, August). Industry 4.0: Towards future industrial opportunities and challenges. In 2015 12th International Conference on Fuzzy Systems and Knowledge Discovery (FSKD) (pp. 2147–2152). IEEE.Google Scholar

Copyright information

© Springer Nature Switzerland AG 2020

Authors and Affiliations

  • Melissa N. Cagle
    • 1
    Email author
  • Kevser Yılmaz
    • 1
  • Hümeyra Doğru
    • 2
  1. 1.Department of Business, Faculty of Business AdministrationDokuz Eylül UniversityBucaTurkey
  2. 2.Department of Tourism Management, Faculty of Business AdministrationDokuz Eylül UniversityBucaTurkey

Personalised recommendations