Int J Performability Eng ›› 2024, Vol. 20 ›› Issue (6): 355-366.doi: 10.23940/ijpe.24.06.p3.355366

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Effects of Industry 4.0 Technologies on Lean Manufacturing and Organizational Performances: An Empirical Study using Structural Equation Modelling

Koteswarapavan Chivukula* and Laxmi Narayan Pattanaik   

  1. Department of Production and Industrial Engineering, Birla Institute of Technology, Jharkhand, India
  • Submitted on ; Revised on ; Accepted on
  • Contact: * E-mail address: koteswarapavan@gmail.com

Abstract: Recent studies have opined that the integration of Industry 4.0 (I4.0) technologies positively influences the performance of manufacturing firms. However, research exploring the interaction between these technologies and the well-established Lean Manufacturing (LM) approach and their combined impact on various aspects of organizational performance is limited. This study aims to address this gap by employing structural equation modeling (SEM) to analyze data collected from 202 respondents from the Indian automotive industry. The hypothesized relationships for this study are tested by using IBM® Statistical Packages for the Social Sciences and Analysis of Moment Structure software. The results demonstrated that I4.0 has direct and significant positive effects on LM practices as well as on organizational performances. However, the indirect effect of I4.0 technologies on organizational performances through LM practices is stronger, indicating complementarity. The research findings provide both theoretical and managerial implications on how these combined effects impact organizational performance. These findings also emphasize that LM practices are not obsolete; on the contrary, they are vital for adopting I4.0 technologies in the industry.

Key words: industry 4.0, lean manufacturing, lean 4.0, organization performance, structural equation modeling (SEM)