Structural modeling of Industry 4.0 challenges in SMEs: An integrated TISM–MICMAC approach

The manufacturing industry is undergoing a transition from conventional manufacturing processes to process automation, with particular emphasis on factors contributing to its sustainability. Understanding the complexities of Industry 4.0 is fundamental for devising strategies that effectively address challenges and capitalize on the opportunities present in a competitive business environment. This study aims to identify and analyze the challenges influencing the implementation of Industry 4.0 in SMEs. A total of 10 key challenges were identified through extensive literature review and expert inputs. The challenges identified during implementation of Industry 4.0 in SMEs are: Device compatibility issues, Data security issues, Process-specific technology selection challenges, Data management challenges, Dynamic necessities in production, Unstable connectivity, Random practical issues, Data integration with product life cycle management, Scalability challenges, and Lack of interoperability with existing systems. The identified key challenges in Indian SMEs are analyzed to determine the significance of Industry 4.0 implementation and to explore the relationships among them. This knowledge will be instrumental in assisting practitioners in navigating the complexities of Industry 4.0 implementation in SMEs using the Total Interpretive Structural Modeling (TISM) and Matrice d’Impacts Croisées Multiplication Appliquée à un Classement (MICMAC) methods. The study results revealed that two challenges — namely, device compatibility and interoperability with existing systems — are highly impactful in Indian SMEs. This model was further validated through structural equation modeling, satisfying the criteria of goodness-of-fit indices. This study also offers insights into the significant benefits of Industry 4.0 in addressing contemporary challenges in SMEs and to provide a comprehensive analysis of the challenges that drive its successful implementation within the manufacturing sector, particularly with an emphasis on sustainability including technological, organizational, regulatory, economic, environmental, and social dimensions.