Contributions of Industry 4.0 to supply chain resilience

• DOI: https://doi.org/10.1108/IJLM-12-2020-0494
• Published date: 19 August 2021
• Date: 19 August 2021
• Pages: 547-566
• Subject Matter: Management science & operations,Logistics
• Author: Guilherme Tortorella,Flavio S. Fogliatto,Shang Gao,Toong-Khuan Chan

Contributions of Industry 4.0 to

supply chain resilience

Guilherme Tortorella

The University of Melbourne, Melbourne, Australia;

Universidad Austral, Buenos Aires, Argentina and

Universidade Federal de Santa Catarina, Florianopolis, Brazil

Flavio S. Fogliatto

Universidade Federal do rio Grande do Sul, Porto Alegre, Brazil, and

Shang Gao and Toong-Khuan Chan

The University of Melbourne, Melbourne, Australia

Abstract

Purpose –This study aims at identifying the contribution of Industry 4.0 (I4.0) integration into supply chains

(SCs) to the enhancement of SC resilience.

Design/methodology/approach –A scoping review was conducted so that the relevant literature on SC

resilience, and I4.0 integrated into SC management was examined.

Findings –The authors summarize the main findings from existing research and propose three research

directions: (1) empirical validation of the contribution of I4.0 ICTs to SC resilience; (2) explore the role of

processing-actuation technologies in enhancing restorative capacity; and (3) integration between I4.0 ICTs and

omni-channel strategy as a means to resiliencedevelopment at consumer and retail levels. The literature on the

design of resilient smart SCsis far outnumberedby works reporting applications of I4.0 ICTs at different SC tier

levels. However, the authors’scoping review organizes the information available on these themes, setting the

ground for the development of new theoretical propositions.

Originality/value –The integration of digital technologies from I4.0 can fundamentally change the SC

management, acting as enablers of a more effective response to disruptions . However, the digital

transformation of SCs is still incipient, and literature is particularly spa rse when considering the

contribution of I4.0 to the resilience of SCs.

Keywords Supply chain, Resilience, Industry 4.0, Resilient supply chain, Scoping review

Paper type Literature review

1. Introduction

Over the past decades, the globalization of markets has increased the interrelationship between

supplychains (SCs),tightlycoupling theiragents and entities(e.g.suppliers, customers, partners,

distributors, manufacturers and retailers) (Princes, 2020;Gammelgaard et al.,2020). While this

trend has generated significant competitive advantages and prosperity, it has also exposed SCs’

vulnerability to disruptive events, such as natural disasters (Matsuo, 2015), economic crises

(Revilla and Saenz, 2017), geopolitical conflicts (Bueno-Solano and Cedillo-Campos, 2014)and

health crises (Ivanov, 2020). Those disruptions are unanticipated breakdowns that impact the

normal flow of materials, information and money within an SC (Craighead et al., 2007),entailing

operational and financial losses in organizations (Snyder et al., 2016).

Nevertheless, as SCs are increasingly becoming intelligent with more products, processes,

services and equipment embedded with sensors and better information and communication

technologies (ICTs), there are unprecedented opportunities for achieving cost reduction and

enhancingefficiencyimprovement (Wu etal., 2016). The integrationof digital ICTsderived from

the Fourth Industrial Revolution (or Industry 4.0 –I4.0) into the physical world can bring a

Contributions

of Industry 4.0

547

This paper forms part of a special section “Resilient supply chains through innovative logistics

management”, guest edited by Peggy S. Chen and Jiangang Fei.

Received 26 December 2020

Revised 5 May 2021

30 June 2021

Accepted 4 August 2021

The International Journal of

Logistics Management

Vol. 33 No. 2, 2022

pp. 547-566

© Emerald Publishing Limited

0957-4093

DOI 10.1108/IJLM-12-2020-0494

The current issue and full text archive of this journal is available on Emerald Insight at:

https://www.emerald.com/insight/0957-4093.htm

fundamentalchangeto global SCs(Ghadge et al., 2020). Therefore,traditionalSCs will eventually

need to be digitalized to support new production models, transportation modes, customer

experiences and relationships based on real-time information exchange (Queiroz et al., 2019).

More specifically, the advent of I4.0 has raised concerns related to how digitalizationand data

analyticscapabilitiescan underpin the prediction of thefuture and the real-timeidentificationof

events (Ivanov and Dolgui, 2020).

I4.0 has been associated not only with the improvement of SC performance but also with

the enhancement of its resilience (Ralston and Blackhurst, 2020). SC resilience addresses the

SC’s ability to cope with the consequences of unavoidable risk events to return to its original

operations or move to a new, more desirable state after being disturbed (Hosseini et al., 2019).

Ponomarov and Holcomb (2009, p. 131) defined SC resilience as “the adaptive capability of the

SC to prepare for unexpected events, respond to disruptions, and recover from them by

maintaining continuity of operations at the desired level of connectedness and control over

structure and function.”

Resilient performance is an emergent property arising from interactions between elements

that form a complex system (Hollnagel, 2014), such as an SC. Resilient systems are

characterized by four interrelated abilities (Hollnagel, 2017): (1) monitor, i.e. know what to

look for, emphasizing what is critical now or in the short term; (2) anticipate, i.e. know what to

expect, predicting opportunities and threats, likely changes, pressures and disruptions, and

their effects; (3) respond, i.e. know what to do, addressing ordinary and extraordinary

disturbances and disruptions either by implementing preconceived responses or adjusting

normal functioning; and (4) learn, i.e. know what has happened from successes and failures,

analyzing facts to draw the right lessons from the right experience. I4.0 ICTs may act as SC

enablers, allowing SC agents to respond more effectively to disruptions, mitigating their

negative effects (Ivanov et al., 2019). Traditional SC management is too simplistic to address

the intricacies of SC risk interactions (Pettit et al., 2019); the integration of I4.0 can help

achieve superior SC performance in such a scenario (Ivanov and Dolgui, 2020).

Osborn (2020) highlighted that the pandemic has caused a significant change in how

consumers and businesses are now behaving, and the digitalization of companies is likely to

reshape SCs in the upcoming years. For example, Proctor and Gamble developed a cloud-

based platform supported by artificial intelligence and Internet of things to automate supply

chain planning. The platform helped predict which suppliers, plants and distribution centers

would be affected by hurricanes, allowing the company to quickly make decisions and

prevent disruption and financial loss (Cushing, 2020). A report from KPMG stated that

companies from all industries are doubling down on investments in advanced technologies to

reduce complexity and uncertainty in their supply chain, hence, increasing resilience

(Thirion, 2020). In fact, the International Data Corporation (IDC) predicts that, by the end of

2021, 90% of global manufacturing supply chains will invest in the technologies with the

expectation to develop true resiliency in their operations (Burian, 2020). However, the digital

transformation of SCs is still in its period of infancy (Queiroz and Telles, 2018;Shao et al.,

2020). Additionally, when considering the contribution of I4.0 integration to SC resilience, the

literature is even more limited and sparse (Ralston and Blackhurst, 2020), undermining the

establishment of a proper theoretical conceptualization.

This study aims at identifying the contribution of I4.0 integration into SCs to the

enhancement of SC resilience. For that, a scoping review was conducted so that the relevant

literature on SC resilience, SC management, and I4.0 was examined. We summarize the main

findings from existing literature and discuss promising research directions on these topics.

According to Daudt et al. (2013) and Pham et al. (2014), a scoping review is conceptualized as a

type of research synthesis that aims to map the literature on a particular topic or research

area and provide an opportunity to identify key concepts, research gaps and types and

sources of evidence to inform practice, policymaking and research. Such critical literature

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