The Role of Industry 4.0 Technologies in Mitigating Supply Chain Disruption: Empirical Evidence From the Australian Food Processing Industry

Abstract

Supply chain disruption refers to a breakdown, often caused by an unforeseen incident or risk, in a supply chain's production or distribution process. Contemporary supply chains are globalized, complex, and extended, exhibiting an increased vulnerability to a multitude of risks and disruptions. However, the current trend of real-time data exchange through smart technologies, also known as industry 4.0, provides significant opportunities to reshape the conventional business operations and effectively cope with unanticipated supply chain breakdowns. Yet, limited attention has been paid to the role played by industry 4.0 technologies in mitigating supply chain risks and any resulting disruptions. By bringing together these inter-related yet often separate concepts, we devise a novel model that addresses this knowledge gap. In this article, we empirically test our model on a sample of 302 responses received from senior managers of the Australian food processing industry. We found that supply-demand mismatch, process risks, and transportation risks are currently the major sources of supply chain disruptions. Specifically, supply-demand mismatch appears to be the most severe and attention seeking risk, followed by process and transportation risks. We also reveal that industry 4.0 technologies significantly mitigate supply-demand mismatch and process risks and any resulting supply chain disruptions. Contrary to our expectations, however, the impact of industry 4.0 technologies on transportation risks is found to be positive but nonsignificant. This is the first empirical article to assess the extent to which the three critical supply chain risks may undermine firm performance and to explore the moderating effect of industry 4.0 technologies. We draw managers' attention to the detrimental impact of supply chain disruptions and the significance of industry 4.0 technologies in dealing with adversities.

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