Industry 4 - Customer Expereince & Sustianbility 1
Industry 4 - Customer Expereince & Sustianbility 1
Abstract:
Industry 4.0, Customer experience and sustainability initiatives have got a good
traction not only in automobile industry but other industry verticals, not only in india
but around the world. The aim of our research was to understand the status and
preparedness of Indian automobile industry with respect to the abovementioned
three areas in the context of Indian 4-wheeler (passenger car) industry.
We have studied the existing literature and carried out an online survey through
Google form on the topic “ Out of the 180 respondent ,119 responded out of which 9
responses were incomplete so omitted from the study; leaving behind a total of 110
responses for review and analysis
The results of the survey indicates that automobile industry is all set to embrace the
industry 4.0 and sustainability is also one of the strategic agenda point, The
customer experience is another area besides the industry 4.0 and Sustainability ,
which is also getting a high attention from the business, The survey reveals that
government regulations and consumer pressure are the two levers which are driving
this sustainability agenda besides the levers of brand image ,social angle and
competitive edge. Industry 4.0 is in different stage of adoption and it was found that
though there is correlation between Industry 4.0 and sustainability, it is not the sole
reason for adopting industry 4.0. Industry 4.0 is adopted from perspective of large-
scale automation, adaptive manufacturing and overall manufacturing efficiency and
excellence which is achieved through industry 4.0 but it also helps to achieve certain
sustainability goals like energy conservations, health and safety and resource
conservation. Besides industry 4.0, special projects on sustainability which are going
in automobile industry are Green SCM, water conservations, waste recycling to
name a few. The Automobile sector is found to be concentrating on economic and
social angle of sustainability and the initiave are in the form of incremental initiave
rather than “Big bang” or “All at a time”. Another most significant finding was that
“Digital technologies” are used for sustainability in a big way and includes modern
ERP, Big data, social analytics, cloudification, Cyber-physical collaboration to name
a few.
Review of literature:
Mittal et tal (2018) found that the Auto component sector -mainly Medium and small
component manufacturers are still at very preliminary level as per industry 4.0
adoption is concerned. The team found that the status can be best described as
“Level 1-basic level”. They have gone to the extent that for Medium and small sector
current industry 4.0 can be defined as “Level-0-Primitive”. The industry sector lacks
end to end digital processes or even concept like smart factory. They commented
that moving from primitive (“Level 0) to even basic level (“Level1” basic0 will involve
significant amount of awareness, training, preparing roadmap and starting to move in
phases to “Industry 4.0” and “Smart manufacturing”.
Hidayanto et tal (2019) team tried to find out “conceptual relationship” between the
“Industry 4.0” and “Industrial sector sustainable energy.” The study was conducted
for Indonesian industrial sector. Their study was based on “UN sustainability
development” goals namely goal 7 and 9, which prescribes digital interventions
including “Industry 4.0” can lead to enhancement of industrial sustainable energy
consumption in Indonesia. The study found a positive linkage between these two
variables.
47 Main barriers to adopt and implement the “Sustainability “ related aspect for
supply chain (“Green supply chain” are found in the study conducted by Kannan
Govindan et tal (2014).The main barriers included financial position , technology
availability and skills , knowledge within the Supply chain ,outsourcing ,support and
involvement of multiple stakeholders are acting as a barrier for converting supply
chains sustainable or green. The team admitted that overcoming all these barriers
may not be easy, but industry bodies and government help can help for these SCM
companies to break main barriers in their journey to green supply chain.
Henning Kagermann (2015) in his research found that “IOT”, Data and services
elements play significant roles in conservation of resources including energy in
industrial sector. He also found that this also helps to create “Sustainable mobility
and logistics” atleats in Germany, where study was carried out. He pointed out tha
the operations between the various digital technologies and platforms and “Dual
innovation” can create lot of intrinsic value for the manufacturing as well as other
sectors of industry. He is of the opinion that this will give various businesses a
competitive edge in the marketplace.
Aniruddha Anil Wagire, Rohit Joshi, Ajay Pal Singh Rathore & Rakesh Jain. (2020) in
their study of Indian production units to come out with “Industry 4.0” maturity model,
found out seven main dimensions and various 38 maturity elements are important.
They have validated this model in an auto component company. Their study reveals
that the company studies is in “Digital novice” maturity with a score of 2.88 against
the highest score for maturity of 5.
Customers are ready to pay the extra premium or price for cars and automobiles if
green alternatives are offered by the Automobile companies noted Phatak Samir and
Dople Vinod (2018). They also stressed that brand equity and social performance
are important for automobile companies. Their study has identified many barriers
some of them are technology, infrastructure, expertise as well as stakeholder’s
willingness and investment from the company stakeholders and higher-level
management.
Ejsmont Krzysztf et tal (2020) in their bibliometric study on “ Industry 4.0” & “
Sustainability” using dynamic method “ Systematic network analysis” found that there
are ample “ Sustainable industry 4.0” reference and with current knowledge and
proper applications to realize the sustainability with Industry 4.0.However the author
trio found that any of research papers lacks the detailed insights into implementation
or realization of “ Sustainability with industry 4.0” and there are no proven framework
yet available on this.
Ocident Bongomin et tal (2020) in their research paper carried out a survey to
estimate where the developed world and other regions stand as per as the “Industry
4.0” adoption is concerned. Their research finding found Europe leading with almost
37 % of the total initiave, followed by US with 28% Initiave, PAC with 17 %; Latin
America 10% and MEA with 8% initiatives. They have estimated that worldwide
percentage of “Industry 4.0” stands at an average of 25 % and African countries an
uphill task of catching with the rest of the world. This study corroborates with the
finding of Gunjan Yadav et al (2020) in their research paper.
India needs to encourage and offers incentives to the various sector of the industries
for embracing the digital technology, create a digital ecosystem and help to enhance
the competitiveness of Indian industries by adoption of “Industry 4.0” technologies.
T.P. Bhat (2020) in his report further stress that with “Industry 4.0”, Indian industries
needs to enter leagues with the other counterparts in developed countries. The
author further echoes that policies and reforms under “Make in India” can help in
boosting the adoption.
Raffaele Breschi et tal (2017) for McKinsey & company carried out a study on design
to customer experience and they found that the barricades or borders among
product ,services and environments are getting more and more obscure and
integrated view from design to end to end customer experience has become a need
of the time. This is converging various streams enabled by digital technology and
sustainable initiave, making customer experience more and more enhanced and
unique. The reasrch paper stresses on convergence of digital, sustainability and
other new technologies to make customer experience, a rewarding one.
Digital interface alone is not enough for customers, there must be some human
element in the overall processes. In his opinion paper Steven Van Belleghem (2015),
warns that emotional angle needs to be considered even digitizing the processes
and adopting new technologies. The Author feels that the human angle in the end to
end digital process will help to increase the customer experience.
Albert Bollard et tal (2017) in their report cited that a new operating model is required
by the companies. They observed that two major interventions required for creating
this new operating model. First intervention is an end to end operational
improvement program, which is weaved around customer journey. The second
initiatives need using individual digital technologies in an integrated manner for the
entire company. The research paper emphasizes on digital technology and new
operating model with integration across the company.
In their research, Shital Chheda et al (2018) points out that companies need to adopt
new operating model by first knowing and validating first, what customers value in
their product or services. This can be followed up simplifying and streamlining
processes and digitizing them. The operational drivers of the company then need to
be linked to customer value. The Authors feel that digitization alone is not enough,
but it need to be accompanied by new operating model. They believe that such an
evolved operating model will increase customer experience and value.
Antonique Koning and Monique Cohen (2015) in their study found that inspite of
digitization and easy mobile based applications, many of the customers are not
utilizing the digitalized mode for financial services. The authors put up and tested the
hypothesis that empowering, enabling, and listening to customer voice will result in
good customer experience and that can cause customer to use digitalized financial
services on regular basis. We have observed that some of these papers are talking
about digitization and customer experience only, but silent on direct mention of
sustainability.
Supply chains has a very strong influence or impact on sustainability and as such
making supply chain green has become a global priority .Nada R. Sanders et tal
(2019) further commented that green supply chain journey was made easy due to
recent advances in digital technologies including but not limited to “ Industry 4.0” ,
Artificial intelligence and big data , but many more. They however agreed that digital
is important factor in making the supply chain green or sustainable.
Wail El Hilali & Abdellah El Manouar (2019) in their article proposed a framework
regarding use of digitization to reach the sustainability goals. They have tried to
explain the framework by narrating a journey of an electrical company.
Companies need to work on customers, data, and innovation during the digital
transformations as these factors positively impact the sustainability. EI Hilali et tal
(2020) in their research paper further stated that competition do not play any
significant role in increasing companies’ commitment to sustainability.
Firms or companies tha are doing sustainability initiatives or activities are likely to
gain competitive edge in the market place, Dalia Streimikiene et tal (2016) in their
research further states that such firms believes that sustainability actions create
stronger brands ,premium pricing, increase resources conservations and efficiencies
in business processes. They further cited that such firms have ability to introduce
new products or services, new markets, and new revenue streams.
Electronic word of mouth od’s publicity (EWOM) is a good publicity concept. Sven-
Olaf Gerdt et tal (2019) who tried to explore the relationship between the
sustainability and customer satisfaction. They found that there is positive relationship
between sustainability orientation and customer satisfaction which depends on star
classification on electronic media.
Michael Sony (2020) in his reasrch article on “Industry 4.0” benefits and losses
mention that competitive advantage, Innovation, efficiency, effectiveness,
profitability, increase product and safety are main benefits of “Industry 4.0”. while on
negative side he mentions data sharing, unions, investments, and implementation
hurdles including cyber security. However, he is strongly advocating “Industry 4.0”
adoption.
Sample Size
As described above sample size was decided 180 based on 10 Automobile and 8
components industry considering only senior executives and managers. Workers,
support staff, services, subcontractors, entry level engineers were not considered for
this population count. Further the number of executives were selected from
Production, supply chain management, Logistics, general management, and IT and
estimated to be between 1500 to 2000 in numbers,
Out of 180 questionnaires sent, we got inputs from 119 responded out of 180
questionnaires sent. Out of the 119 responses received 9 were found to be
incomplete so they were excluded. So total 110 responses were considered for
analysis. (61%) of the total questionnaire sent.
Designing of questionnaire
Hypothesis:
Likert scale questions were fielded to the respondents to check the following 2
hypotheses.
Chart 1 Chart 2
Education profile respondent in % Expereince of persons responding (Age)
Other Professionals,
13.6 Diploma engineering, in %
13.6
Above 50 38.2
experience
Chart 3 Chart 4
RESPONDENT'S FUNCTIONAL DEPARTMENT
Geographical distribution of comapnies
of respondents
IT& Others ,
16.4
10 10
Manufacturin
30
g , 45.5
SCM , 22.7
50
Sales Marketing
West India South India
, 15.5
Alogwith the questions for hypothesis testing for arriving at co-relation among
Industry 4,0 ,sustainability and customer experience ,we have fielded some more
questions to know about the status of industry 4.0 adoption ,preparedness, internal
talent as well as sustainability initiatives which are in place and which are the top
priority among them.. The analysis of the data collected gives us following insights.
On the question of perceived benefits of adopting industry 4.0 & Digital technology,
there was a mixed response. While 54.5 % said that it increased the efficiency while
8.2% said it reduced the overall manpower (Total 62.7%), while 37.3 % were not so
much sure that it happened due to digital technology and industry 4,0. (Chart 5). Our
analysis revealed that the awareness and benefits may not be either understandable
or visible or they may be affected by this change. However, fact remains that
majority of the respondents accepts that Industry 4.0 and digital technology helped to
increase the efficiency and reduction in manpower.
Eff.incresae 54.5
On the question to “what are the main sustainability initiave going in the company,
the response was on 3 major initiatives namely:
Waste
redutcion ,
32%
,
On internal capability for industry 4,0, sustainability and Customer experience
projects, though the score is relatively high as 57% still 43 % depends is on external
vendors and experts, Barring the bias in the scoring, it appears that , Indian
automobile industry still needs external help on industry 4,o,sustaibility and customer
experience area. (Chart7)
Chart 7: Internal skill/capability for industry 4.0, sustainability & customer experience,
INTERNAL CAPABILITY FOR INDYSTRY 4.0 & SUSTAINABILITY
Very low 10
Partail 20
Capabilityy
Ext.vendor 13
Medium 57
0 10 20 30 40 50 60 70
percentage
Not aware , 7%
The survey results indicate that more than 52 % companies in Indian Automobile and
Auto components sector have /had/is undergoing transformation under Industry 4,0
/Digitization/Technology initiave while remaining 48 % of the companies are probably
in explorations or imitation phase.
Disagree 6.4
Respons
Neutral 21.8
Agree 60.0
The two-null hypothesis for testing under this survey was to ascertain the degree of
correlation between variables as described below. We have carried out Pearson
correlation coefficient analysis and p Test to validate the null hypothesis,
H0 Null Hypothesis: There is no relationship between sustainability initiave and
customer experience.
Based on analysis of the data collected and analyzed with the statical package find
below are the result of analysis.
1. H0 Null Hypothesis: There is no relationship between sustainability
initiave and customer experience.
Based on the data and analysis with Pearson coeffective of corelation the null
hypothesis stands rejected,
The corelation coefficient value of 0.8313 represents a strong and positive
relationship between sustainability initiative and customer experience, Hence the null
hypothesis is rejected.H1 Alternate hypothesis of strong and positive relationship
between sustainability and customer experience is accepted. The statical
calculations are given below.
Based on the Data analysis using Pearson coefficient of correlation and p Value, the
null hypothesis stands rejected
The Coefficient of co-relationship was found to be 0.8413 which shows a significant
positive relationship between the Industry 4.0 and Sustainability. The p Value at 0.05
significance level is 0.002281 and is less than 0.5, further corroborating the
significant relationship.
Conclusions:
• The study was limited to 4-wheeler passenger cars and top 10 Automobile
and 8 major auto component companies only. SME sector was thus not part
of the study.
• The random survey was stratified consisting majority of the Production,
Supply chain, sales, and marketing & IT Professionals. The supporting
functions and workmen were not part of the survey.
Future reasrch:
• Digital world is coming out with newer and newer technology and business
models to adopt it with proper return on investment is another area to be deep
dive into.
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