Where the Rubber Meets the Road. Industry 4.0 among SMEs in the Automotive Sector

Industry 4.0 technologies play a crucial role in assisting the automotive sector maintain competitiveness. Industry 4.0 often finds uneven application among SME suppliers. As a consequence of the supplier's technological constraints, the digitalization efforts of customers may not achieve their full value creation potential. The aim of this paper is to shed light on strategic decisions that facilitate SME implementation of Industry 4.0 initiatives. We use two case studies of suppliers to a large component manufacturer operating in the automotive sector. Despite several similarities in terms of product range and markets, these firms are polar opposites when it comes to their digitalization status. Evidence points to three key factors for successful implementation of Industry 4.0: A proactive approach to innovation; development of long term partnerships with suppliers of Industry 4.0 technologies; and early involvement of workers in the process of technological change.