Are smart manufacturing systems beneficial for all SMEs? Evidence from Korea

Abstract

PurposeThrough the resource-based view (RBV) and contingency theory, this study empirically investigates the impacts of smart manufacturing systems' maturity levels on the performance of small and medium-sized enterprises (SMEs). Moreover, it aims to examine how industry types (i.e. high- and low-tech industries) and human-resource factors (i.e. the proportion of production workers to total workers) as contingency factors influence the effects of smart manufacturing systems.Design/methodology/approachThe study conducted an empirical investigation of a sample of 163 Korean manufacturing SMEs. This study used an ordinary least squares regression to examine the impacts of the maturity levels of smart manufacturing systems on financial performance. Moreover, the impacts on operational efficiency were analysed using data envelopment analysis based on bootstrap methods and Tobit regression.FindingsThe RBV results indicate that the higher the maturity levels of smart manufacturing systems, the higher the financial performance and operational efficiency. Moreover, based on contingency theory, this study reveals that the effect of the maturity levels of smart manufacturing systems on financial performance and operational efficiency depends on firms' industry types and the proportion of production workers.Research limitations/implicationsThis study shows that the introduction of smart manufacturing systems can help SMEs achieve better financial performance and operational efficiency. However, their effectiveness is contingent on firms' industry types and the characteristics of their human resources.Practical implicationsSince the effects of the maturity levels of smart manufacturing systems on SME performance differ depending on their industries and the characteristics of human resources, managers need to consider them when introducing or investing in smart manufacturing systems.Originality/valueBased on the RBV and contingency theory, this is the first empirical study to examine the moderating effects of industry types and the proportion of production workers on the impacts of the maturity levels of smart manufacturing systems on the financial performance and operational efficiency of SMEs.

Critical challenges of integrating OPEX strategies with I4.0 technologies in manufacturing SMEs: a few pieces of evidence from developing economies

“…Various strategies can be drafted based on RBV in the context of SMEs to improve their performance while enabling their resource capabilities (Khin and Hung Kee, 2022;Kraus et al, 2022;Zhang et al, 2022). Jang et al (2022) discussed various critical factors responsible adaptation of digital technologies and smart manufacturing by Korean SMEs. Based on the significance of the IE 4.0 technologies the present study assessed the effect of OPEX strategies on SMEs following RBV theory.…”

“…, 2022). Jang et al. (2022) discussed various critical factors responsible adaptation of digital technologies and smart manufacturing by Korean SMEs.…”

Balancing patent portfolios and R&D efforts: examining firm performance

“…Korea's success is based on technology and manufacturing (Won and Park, 2020). The Korean government has promoted diverse policies on Industry 4.0 by implementing institutional support and R&D investment (Jang et al, 2022). The government has concentrated primarily on ICT, which has contributed to the rapid growth of the economy.…”

“…The government has concentrated primarily on ICT, which has contributed to the rapid growth of the economy. As a result, Korea was ranked first in the ICT Development Index in 2015 and 2016 and its informatisation level is among the highest in the world (Jang et al, 2022;Lee et al, 2019). Korea has world-class capacities in the ICT industry.…”

“…Korea's success is based on technology and manufacturing (Won and Park, 2020). The Korean government has promoted diverse policies on Industry 4.0 by implementing institutional support and R&D investment (Jang et al. , 2022).…”