ASSESSING THE READINESS OF MANUFACTURING FIRMS FOR THE ADOPTION OF INDUSTRY 4.0 IN PAKISTAN: DRIVERS AND BARRIERS

Abstract

Industry 4.0 is an umbrella term that entails many advanced technologies, procedures, and systems to make business processes more efficient, flexible, autonomous, and dynamic. An exponential growth in advanced technologies indicates that many economies are undergoing a steady digital transformation. Industry 4.0 will impact every manufacturing, supply chain management and logistic sector domain. It has become one of the key strategic management objectives in recent years. To enhance business competitiveness in the future, firms need to make strategic and long-term investments in advanced technologies. The first step towards Industry 4.0 implementation is to know the firm’s current status, i.e., how much a firm is prepared to invest in adopting new technologies. This thesis is divided into two studies. The first study aims to assess the readiness of manufacturing firms for the adoption of Industry 4.0 in Pakistan. The second study aims to identify and evaluate to prioritize/rank Industry 4.0 adoption drivers and barriers by using Analytical Hierarchy Process (AHP) technique. Industry 4.0 implementation has several benefits and drivers (e.g., cost reduction, customer requirement, increased innovation, improved sustainability, increased productivity & efficiency etc.) that motivate firms to adopt it. On the other hand, some Industry 4.0 implementation barriers (organizational, financial, technological, lack of Govt support, lack of clarity regarding economic benefits, and security risk etc.) hinder its adoption. Identifying and evaluating drivers and barriers is important to make effective decisions. The first study's findings show that Pakistani manufacturing firms are not ready to adopt Industry 4.0. The second study's findings indicate that financial incentives, customer requirements, and increased productivity and efficiency are the important driving factors that encourage Industry 4.0 adoption. While organizational, financial, and lack of government support are the most critical barriers impeding Industry 4.0 adoption in Pakistan.