The Italian automotive supply chain is one of the most relevant in Europe with more than 2,000 firms and cover all product specialization. In the digitalization transition era, industry 4.0 holds potential to reshape and reenforce existing regional supply chains. Industry 4.0 identifies an emerging industrial model, the 'fourth industrial revolution', characterized by a set of enabling technologies interconnected and communicating with each other thanks to the internet. These innovations involve products, processes, organizational and business models and find space in all business functions, from research and development to production, and affect all actors along the value chain: technology interconnection goes beyond the company's boundaries and embraces suppliers and customers by creating a cyber-physical system that connects people and technologies. All phases of value creation can be managed and communicate with each other thanks to new digital technologies (Liao e al. 2017; Wang e al. 2016). Companies are expected to benefit from the introduction of these technologies. In particular, it is expected a greater flexibility of processes and production that will allow to combine the needs of variety (mass customization) and speed of response to the market with those of productivity, without sacrificing the quality of products. The Italian automotive suppliers have the possibility to modernize, to strengthen and to integrate the network of supply to which they belong and to redesign the productive and organizational processes on the base of a paradigm that allows to improve the efficiency and the innovativeness and therefore to stimulate demand and, in the mid-term, maybe favour reshoring. Design: 866 companies replied to a questionnaire in the period 2017-2020 with questions on where, what, why, the impact and if they benefitted of state aids for the adoptions of Industry 4.0. The results are crossed with the structure of the suppliers in terms of size, positioning in the supply chain, specialization and managerial features. We also compared productivity performance between who invested and who did not invest in Industry 4.0 before the pandemic event. The Malmquist productivity index is proposed to evaluate the Total Factor Productivity (TFP) of the Italian automotive suppliers. It is based on efficiency values estimated through the Data Envelopment Analysis (DEA) methodology. The Malmquist productivity indices measure for each firm the shift between the frontiers defined by the DEA methodology between two different years; 2017 and 2019 (Tone, 2004; Lovell, 2003). DEA measures the degree of technical inefficiency calculated as the distance from the efficient production frontier, each for supply specialization (system, components, E&D, sub supplier and so on) and considering nine balance sheet items. Findings: Preliminary results evidence that 72,1% of the Italian automotive suppliers invested in Industry 4.0 and 44,5% of them benefitted of State aids. The main investments regard the departments of production (about 50% of respondents), quality (30.1%) and logistics (21.5%). The most common technologies adopted were the collection and analysis of production data (63.3%), sensors (44.5%) and man-machine interface systems (38.5%). The adoption of Industry 4.0 is only partly positively correlated with the supplier size and the propensity to export, and it is not correlated with the positioning in the supply chain or the concentration in the automotive industry, the strict dependance to Stellantis or the saturation of the production capacity. We expected better performance for whom invested in Industry 4.0. However, in the period 2017-2019 the Malmquist indices highlights that only 36.9% of the Italian Automotive suppliers increased TFP and who invested in Industry 4.0 underperformed and garnered a mere 33.5%. Practical and theoretical implications: The broken down of Malmquist index into the efficiency change index and the technological change index shows up that the simple introduction of the different elements of Industry 4.0 is not enough to get full advantages of these investments but needs structural and managerial reorganizations. The efficiency change index increased in 30.7% suppliers and less in who invested in Industry 4.0 (29.2%). This index refers to the ability of a firm to exploit the resources available at t+1, leaving the other conditions at time t unchanged. As a consequence, a minority of suppliers successes to achieve an output combination on its production and be technically efficient. In the period analyzed, however, the level of output a supplier is capable of producing will increase due to technological changes that represents the shift in technology from the old to the new frontier between t and t+1. In other words, the technology change component affects the ability to optimally combine inputs and outputs, exploiting the technology. The technological change index increased in 66.4% suppliers and only a bit more in who invested in Industry 4.0 (66.9%).
Does Industry 4.0 improve productivity? Evidence from the Italian automotive supply chain
2023
Abstract
The Italian automotive supply chain is one of the most relevant in Europe with more than 2,000 firms and cover all product specialization. In the digitalization transition era, industry 4.0 holds potential to reshape and reenforce existing regional supply chains. Industry 4.0 identifies an emerging industrial model, the 'fourth industrial revolution', characterized by a set of enabling technologies interconnected and communicating with each other thanks to the internet. These innovations involve products, processes, organizational and business models and find space in all business functions, from research and development to production, and affect all actors along the value chain: technology interconnection goes beyond the company's boundaries and embraces suppliers and customers by creating a cyber-physical system that connects people and technologies. All phases of value creation can be managed and communicate with each other thanks to new digital technologies (Liao e al. 2017; Wang e al. 2016). Companies are expected to benefit from the introduction of these technologies. In particular, it is expected a greater flexibility of processes and production that will allow to combine the needs of variety (mass customization) and speed of response to the market with those of productivity, without sacrificing the quality of products. The Italian automotive suppliers have the possibility to modernize, to strengthen and to integrate the network of supply to which they belong and to redesign the productive and organizational processes on the base of a paradigm that allows to improve the efficiency and the innovativeness and therefore to stimulate demand and, in the mid-term, maybe favour reshoring. Design: 866 companies replied to a questionnaire in the period 2017-2020 with questions on where, what, why, the impact and if they benefitted of state aids for the adoptions of Industry 4.0. The results are crossed with the structure of the suppliers in terms of size, positioning in the supply chain, specialization and managerial features. We also compared productivity performance between who invested and who did not invest in Industry 4.0 before the pandemic event. The Malmquist productivity index is proposed to evaluate the Total Factor Productivity (TFP) of the Italian automotive suppliers. It is based on efficiency values estimated through the Data Envelopment Analysis (DEA) methodology. The Malmquist productivity indices measure for each firm the shift between the frontiers defined by the DEA methodology between two different years; 2017 and 2019 (Tone, 2004; Lovell, 2003). DEA measures the degree of technical inefficiency calculated as the distance from the efficient production frontier, each for supply specialization (system, components, E&D, sub supplier and so on) and considering nine balance sheet items. Findings: Preliminary results evidence that 72,1% of the Italian automotive suppliers invested in Industry 4.0 and 44,5% of them benefitted of State aids. The main investments regard the departments of production (about 50% of respondents), quality (30.1%) and logistics (21.5%). The most common technologies adopted were the collection and analysis of production data (63.3%), sensors (44.5%) and man-machine interface systems (38.5%). The adoption of Industry 4.0 is only partly positively correlated with the supplier size and the propensity to export, and it is not correlated with the positioning in the supply chain or the concentration in the automotive industry, the strict dependance to Stellantis or the saturation of the production capacity. We expected better performance for whom invested in Industry 4.0. However, in the period 2017-2019 the Malmquist indices highlights that only 36.9% of the Italian Automotive suppliers increased TFP and who invested in Industry 4.0 underperformed and garnered a mere 33.5%. Practical and theoretical implications: The broken down of Malmquist index into the efficiency change index and the technological change index shows up that the simple introduction of the different elements of Industry 4.0 is not enough to get full advantages of these investments but needs structural and managerial reorganizations. The efficiency change index increased in 30.7% suppliers and less in who invested in Industry 4.0 (29.2%). This index refers to the ability of a firm to exploit the resources available at t+1, leaving the other conditions at time t unchanged. As a consequence, a minority of suppliers successes to achieve an output combination on its production and be technically efficient. In the period analyzed, however, the level of output a supplier is capable of producing will increase due to technological changes that represents the shift in technology from the old to the new frontier between t and t+1. In other words, the technology change component affects the ability to optimally combine inputs and outputs, exploiting the technology. The technological change index increased in 66.4% suppliers and only a bit more in who invested in Industry 4.0 (66.9%).I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
