Industry 4.0, internationally known as the Industrial Internet of Things, describes an ongoing digitization of industrial value creation, especially relating to aspects such as vertical and horizontal interconnection across humans, machines, and products [1
]. However, the exact definition of the term Industry 4.0 and its exact implications for different research disciplines need to be clarified in future research [3
]. Comparably to Industry 4.0, similar approaches are emerging worldwide, for instance, the “Industrial Internet Consortium” in the United States (US) or “Made in China 2025” in China [4
]. Industry 4.0 is expected to generate new business models, as well as increase the efficiency of processes [1
]. Hereby, several characteristics, such as the company size, delineate between the targeted benefits of Industry 4.0 [6
Current challenges, especially for small and medium-sized enterprises (SMEs), may be reasons for offering or applying Industry 4.0-based services. In sum, SMEs have less been regarded in current Industry 4.0 research [1
]. For example, offering or applying Industry 4.0-based services can assist to counteract the required cost reductions and increasing competitive pressure encountered by SMEs for developing such Industry 4.0 services. However, SMEs only have limited financing possibilities as compared to large companies [1
]. Further, their access to trained personnel in the context of information technology (IT) is limited [7
] and the integrations of humans into the concept of Industry 4.0 prove to be challenging [8
]. In addition to the challenges, there are also many advantages and opportunities for SMEs that result from Industry 4.0. For example, SMEs can react flexibly to changes and implement concepts through a clear and flat organization [1
In general, for manufacturing companies, industrial services create advantages, such as differentiation from competitors and customer loyalty [10
]. Industry 4.0 now enables completely new business models through the combination of technologically perfected production facilities and extended integration of employees, customers and product users. Which of the new or changed business models will be very popular in the industry, however, is largely unclear [1
]. In order to estimate the potential of the forecasted new service offerings and business opportunities, it is also useful to know the view-point of Industry 4.0 solution providers, since these companies actively participate in innovative business models in Industry 4.0 [1
Hence, this paper investigates the influences of Industry 4.0 on SME solution providers and which potentials those have to increase process efficiency of their customer. In particular, it is to be found out in this context which service offerings based on Industry 4.0 are reasonable for them in order to increase process efficiency of their customers. Thereby, the paper aims to link the two research streams of efficiency orientation and business model orientation regarding Industry 4.0 [5
]. Further, the supply chain integration and the associated partnerships between companies is a core aspect of Industry 4.0 [1
]. Another critical aspect concerns the limited interoperability of the systems, standards, and interfaces across several companies in a supply chain [11
There are a few scientific papers on the topic of business model innovations in connection with IT and in the area of service orientation of manufacturing companies [11
]. When looking at the literature, it is noticeable that the majority of the scientific articles focus on producing companies. The situation of non-producing companies, such as service providers and IT firms, was very little dealt with in the context of Industry 4.0 [15
]. Empirical studies are also rare, since previous studies are often of a theoretical nature or based on specific cases. Therefore, the present paper addresses the following research question in the context of SMEs:
Which kind of services by Industry 4.0 solution providers can help to increase process efficiency of their customers?
The remainder of this paper is organized as follows: Section 2
explains the theoretical background of business model innovation and SMEs. Section 3
gives an overview of the state of research, Section 4
describes the empirical research method. Section 5
presents the results, which are discussed in Section 6
and for which implications are derived in Section 7
4. Materials and Methods
The investigation of the current state of research has shown that Industry 4.0 cannot only be used to make internal optimizations, but it also has a high potential to offer its own services. In the literature, the user perspective with regard to the potentials of Industry 4.0 is often described or not differentiated between users and providers. The following empirical study shall now exclusively shed light on the situation of solution providers and thus create a differentiation from the user perspective of Industry 4.0. This is to be achieved by means of a quantitative survey using a standardized questionnaire.
Based on the literature research that was carried out, several research questions arise regarding Industry 4.0 solution providers. Since a comparison between producing and non-producing Industry 4.0 solution providers is not available in the current literature, the differences are examined.
The aim is to find out what potential the new business models and service offerings presented in Chapter 3.4 have in the context of Industry 4.0, and how those services help to improve process efficiency for their customers.
4.1. Description of the Questionnaire
At the beginning, the questionnaire asks for general information, such as industry sector and number of employees. This is followed by a detailed survey of the individual subject areas that are the focus of this paper. A five-level Likert scale was chosen for this.
The first part of the questionnaire deals with the general potential of services that are based on the components, technologies and business models of Industry 4.0. The scale ranges from “no potential” to “high potential”. Some of the services proposed in the questionnaire, such as intelligent products, open source, availability on demand, and other options, can be traced back to Kaufmann [32
]. Other services, such as needs-based maintenance and traceability, were explained in Kroll et al. [40
] and Aiello et al. [35
]. Further descriptions of service offerings that were used to develop this question can be found in Bischoff et al. [41
] or Schröder [42
In the second part, potentials that Industry 4.0 can offer to solution providers are to be evaluated. The scale again ranges from “no potential” to “high potential”. Part three deals with the customer benefit of the solutions offered. Thus, it is asked, which problem definitions of customers are reduced, which customer characteristic numbers are improved, and which customer goals can be supported. For all three questions, the Likert scale ranges from “no potential” to “high potential”. The customer trials mentioned primarily refer to current problems, which are mentioned by Bergmann and Crespo [43
]. The customer key figures mentioned are based in part on Bauernhansl’s list of savings potentials through Industry 4.0 [44
]. Further improvements in key figures, such as a reduction in personnel costs in production and a shortening of lead times, were derived from Bischoff et al. [41
]. Customer goals that can be supported by Industry 4.0-based solutions are described in, for instance, Björkdahl [26
], stating an increase in capacity utilization or Schröder [42
] describes the optimization of batch sizes.
gives an overview of the three parts of the questionnaire.
The complete questionnaire can be found in the appendix
: Table A1
in the appendix
shows the list of new business model features to offer to the customer, whereas Table A2
shows the potentials of these new business features for the provider. Further, Table A3
lists the potentials for process improvements or process innovations for the customer.
4.2. Selection of the Sample
In order to gain a holistic understanding of the value creation environment of Industry 4.0 solution providers in medium-sized companies, organizations from many different industries were selected as potential participants. Different solution providers were included, i.e., machine and plant construction companies, system integrators, IT service providers, automation technology companies, etc. Employees or managing directors of companies that see themselves as providers of Industry 4.0 specific solutions are to be surveyed. Another criterion for the survey is the sufficient qualification of participants. The person completing the questionnaire should be able to survey the overall situation and the range of services that are offered by the company in order to be able to provide sufficient answers due to the extensive questions posed by the questionnaire.
4.3. Conduct of the Survey
The questionnaire was created as a Portable Document Format (PDF) document, which can be filled in and saved as a form. The advantage of such a form is that it can be filled out, temporarily stored, and forwarded to the respective expert within the company without great effort. Once the questionnaire had been prepared, it was pre-tested by two Industry 4.0 experts for manageability, content relevance, and comprehensibility and minor changes were made to the questionnaire. Subsequently, the survey was started. Potential survey participants could be addressed personally by visiting the industrial fairs “Hannover Fair 2016”, “All About Automation 2016” in Friedrichshafen, and “Automatica 2016” in Munich. The questionnaire could then be sent to the respective persons by e-mail. The websites of the trade fairs mentioned could also serve as a source of information to find further contacts. If the opportunity arose, the company was first contacted by telephone to find out whether the company sees itself as an Industry 4.0 solution provider and, if so, to find out the right contact person for the survey and then to give them an understanding of the survey. Thus, potential survey participants had already been personally informed in advance and the questionnaire was sent by e-mail after the telephone call. Through this approach, which is based on personal conversations, the highest possible response rate should be achieved, since the response rate of written and e-mail surveys is usually rather low. Personal contact can have a motivating effect on the respondent. Further sources for contact acquisition were the Industry 4.0 platform and other clusters or company networks and various industry directories. In this way, solution providers from many different industries were to be contacted in order to be able to comprehensively capture the value-added environment.
4.4. Sample Description
The survey was conducted from April to July 2016. The questionnaire was distributed to 310 potential survey participants. A total of 121 persons took part in the survey, resulting in a response rate of 39%. Of the 121 completed questionnaires, ten were sorted out for evaluation, as these companies are to be classified as multinational corporations and only one questionnaire per company was accepted. Thus, the sample for further evaluation is n = 111.
67 of the 111 respondents (approx. 60%) can be assigned to manufacturing companies and 44 to non-producing companies. There are 33 participants from mechanical and plant engineering, 31 participants from automation, 26 participants from IT and software companies, nine participants from the field of electronics, six participants from service companies, and six further participants. In terms of company size, all companies can be classified as SMEs, i.e., a maximum number of 250 employees and a maximum of 50 million euros in annual turnover [5
]. The mean number of employees in the sample is 135.8, ranging from 7 to 245 employees. The mean annual turnover is 26.98 million euros, ranging from 1.3 to 47.8 million euros.
4.5. Data Evaluation
The results of the survey were further investigated using Pearson correlation values and mean values of the individual response options. Pearson’s correlation is very common for correlation studies and is also applicable to Likert scales, according to several studies [45
]. The correlation studies should show correlations between different response options. Random and fictitious correlations are to be excluded, in which a causal and content wise connection was regarded as absurd.
Overall, only correlations from a value of 0.5 were used for further evaluation, as these indicate a strong effect or strong correlation [47
]. If a correlation only had a value of 0.5 or more within one of the subgroups (manufacturing enterprises and service enterprises), this correlation was also taken into account, since the differences between the responses of these two groupings are part of the investigation. In addition, all of the correlations included fulfill the condition of p
-value < 0.05 and are therefore to be regarded as significant.
An overview of all mean values of the individual questions of the questionnaire and the associated standard deviations can be found in the appendix
The fact that customer benefit is one of the most important topics for Industry 4.0 solution providers from non-manufacturing industries underscores the strong customer focus of these service-driven companies [26
]. For them, from the perspective of solution providers, Industry 4.0 is actually perceived, as a solution to counteract the challenges that are described in 3.2 and in particular the challenges of SMEs.
With regard to the key figures of customers to be improved, it is noticeable, that on the one hand the improvement potentials predicted by Bauernhansl [32
] with regard to inventory costs, production costs, and complexity costs can be confirmed. However, on the other hand, the potential to reduce production costs was rated higher than that of complexity costs and inventory costs. This does not correspond exactly with Bauernhansl’s theory, which, however, does not distinguish between Industry 4.0 suppliers and users and rather estimates general savings potentials [32
]. Further, SMEs have proven to focus on operational and production-related benefits of Industry 4.0 rather than the strategic benefits or such benefits that unfold across the supply chain [10
Further, the results show the difficulty of estimating generally valid savings potentials, which can vary greatly depending on the application or solution [1
]. The finding that solution providers rated the potential for reducing their customers’ production costs the highest is a further indication that a strong production focus of the solutions exists. This explanation is also supported by the fact that those customer goals can be most strongly supported by Industry 4.0-based solutions [10
Perceived benefits of Industry 4.0 are for the most part related to production, but not yet to other disciplines, such as supply chain management [1
]. However, horizontal and vertical interconnection in real-time represent a core characteristic of Industry 4.0 [1
]. The benefits across the supply chain are still less regarded in the sense that Industry 4.0 might also stem from the difficulty to interconnect several systems and interfaces that do not possess unified standards, especially across several supply chain partners [11
The fact that the potential to solve the customer problem of an increasing variety of products was rated as higher by non-producing companies could be due to the fact that certain IT companies in particular can make a direct contribution to this through, e.g., Manufacturing Execution Systems [1
The large number of correlations between new business model elements and customer benefits indicate the strong links between the individual topics. However, this is more the case with non-producing solution providers. The reason for this could be the holistic view of service companies [16
]. In addition, service-oriented IT firms can offer solutions that can address many of the proposed topics, as well as the production, development, sales, and other departments of customers from different industries simultaneously [17
In contrast, solutions from manufacturing companies, for instance, can be very industry-dependent and customer-specific [1
], and therefore not allow for a generalization of the benefits. Hence, those solutions may not cover the entire portfolio of customer benefit options at the same time. However, the mean values, which in most cases have similar characteristics in manufacturing companies as those of nonproducing companies, suggest that the solutions of manufacturing companies were classified as similarly effective in terms of customer benefit. However, since there exist hardly any recognizable correlations, the assumption seems logical that the solutions of different producing enterprises are very individual regarding the customer use and differ correspondingly.
A further reason for correlations within comparable items could be that there are many options that complement each other in terms of content or are very similar. Hence, for instance, the correlation of “Failure analysis” with “Increased quality within processes” can be explained. A further example is that the complexity costs can be reduced by reducing non-value-adding operations.
However, as already mentioned, the correlations primarily reflect the perspective of nonproducing companies, whereas manufacturing companies do not show correlations regarding new business model elements in order to generate benefits for the customers, but for themselves.
7.1. Managerial Implications
From a managerial perspective, the paper has shown a variety of possible business model features that can be offered to the customer, based on Industry 4.0-technolgoies. Moreover, it is shown which own benefits for the solution provider are targeted by introducing new business model features following Industry 4.0-technologies. It is found that these benefits are foremost intended by manufacturing enterprises in contrast to service enterprises. Further, it is shown which business model features are targeting what potentials for process improvements or process innovation for their customers. Hereby, it is shown that mainly service enterprises target their customers’ benefits with new business model features. Therefore, this paper offers both an insight as well as a recommendation to better target both potentials, for the company and for the customer, at the same time when introducing new business model features.
7.2. Theoretical Implications
From a theoretical perspective, the paper adds to the state of research regarding business model innovation in the context of Industry 4.0. Hereby, the delineation of the user and provider perspective represents a well-proven concept [1
]. Exploring the motives for SMEs to introduce new business model features remains a topic that is scarcely investigated, which the paper adds to [5
Further, the differentiation between manufacturing and service enterprises, especially regarding the challenges of integrating the offering of services for manufacturers [16
], is a research stream that is extended in the context of Industry 4.0.
7.3. Limitations and Suggestions for Future Research
However, the paper has several limitations that must be considered. First of all, by only investigating the solution providers, the generation of customer benefits can only be assessed, but not definitely be determined. Hence, a dyadic approach, also including an investigation among the customers and users of such solutions offered, is the logical next step for future research.
Second, the paper is limited to German enterprises. In response, an international comparison would offer interesting insights and opportunities for comparison in future research.
Third, the paper is limited to SMEs, which on the one hand assists to fill a research gap, but on the other hand should be extended in a comparison with larger enterprises in future research.
Fourth, some of the business model features do not definitely or necessarily relate to Industry 4.0-technologies. Those can, at least partly, also be achieved using less advanced technology. Consequently, research regarding the extent to which Industry 4.0-technologies are included in those approaches is required.
Last, the paper can only derive antecedents, i.e., what the solution providers intend, but not what they will achieve by introducing the new business model features. This should also be investigated in future research.