Managing Operational Uncertainty in Manufacturing with Industry 4.0 and 5.0 Technologies

Abstract

The manufacturing sector drives industrialisation and contributes substantially to economic growth and employment creation. Despite this, it faces the challenges of diminishing size and lack of competitiveness, mainly due to operational uncertainty. The study developed an approach to managing operational uncertainty using Industry 4.0 and 5.0 technologies. It employed a multimethod quantitative design based on the post-positivist paradigm, with data collected from 22 experts and 262 responses from a manufacturing firms’ survey. The study employed an integrated fuzzy decision-making trial and evaluation laboratory (DEMATEL) with partial least squares structural equation modelling (PLS-SEM) and fuzzy set qualitative comparative analysis (fsQCA). The fuzzy DEMATEL results reveal that growing geopolitical tension, cost-of-living-driven consumer behavioural change, pandemic turbulence, lack of energy stability and security, and the entrenched power of large firms are causal dimensions of operational uncertainty. Industry 4.0 and 5.0 technologies, with capabilities for scenario planning and supply chain integration, flexible production and mass customisation, real-time system and process monitoring and response, root cause analysis, and sustainable solutions, can manage operational uncertainty. These technologies include artificial intelligence (AI), the Internet of Things (IoT), big data analytics, and, to a lesser extent, advanced robotics, blockchain, and augmented and virtual reality (AR/VR). This study advanced configuration theory and a new integrated methodology (fuzzy-DEMATEL-PLS-SEM-fsQCA) to develop solutions for sustained performance during operational uncertainty in manufacturing. This research offers valuable information to advance the subject, make meaningful changes in day-to-day manufacturing operations, and promote practical real-world problem solving.