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The Role and Impact of Industry 4.0 and the Internet of Things on the Business Strategy of the Value Chain—The Case of Hungary

Author

Listed:
  • Judit Nagy

    (Department of Logistics and Supply Chain Management, Corvinus Business School, Corvinus University of Budapest, 1093 Budapest, Hungary)

  • Judit Oláh

    (Institute of Applied Informatics and Logistics, Faculty of Economics and Business, University of Debrecen, 4032 Debrecen, Hungary)

  • Edina Erdei

    (Institute of Applied Informatics and Logistics, Faculty of Economics and Business, University of Debrecen, 4032 Debrecen, Hungary)

  • Domicián Máté

    (Institute of Accounting and Finance, Controlling Department, Faculty of Economics and Business, University of Debrecen, 4028 Debrecen, Hungary)

  • József Popp

    (Institute of Sectoral Economics and Methodology, Faculty of Economics and Business, University of Debrecen, 4032 Debrecen, Hungary)

Abstract

In the era of industrial digitalization, companies are increasingly investing in tools and solutions that allow their processes, machines, employees, and even the products themselves, to be integrated into a single integrated network for data collection, data analysis, the evaluation of company development, and performance improvement. To study the impact of Industry 4.0 on the company we used Porter’s (1985) value chain model, which is particularly useful when paying particular attention to corporate areas which have a primary role in customer value creation. Since the primary impact of Industry 4.0 is perceived in value-creating processes, and has so far had the greatest transformative effect in this area, the model can be considered to be appropriate. The objective of our research is to discover how companies operating in Hungary interpret the phenomenon of Industry 4.0, what Internet of Things (IoT) tools they use to support their processes, and what critical issues they face during adaptation. We applied a dual methodology in our investigation: We sent an online questionnaire to manufacturing and logistical service companies to investigate the IoT tools they use, and the problems they face, and received 43 answers we could evaluate. We also conducted four expert interviews with manufacturing firms to get deeper insights into the application, critical issues and development phases of IoT tools. During our research, we found that the spread of real-time data across companies—given the availability of appropriate analytical tools and methods—can have a significant impact on the entire company. In the case of CPS (Cyber Physical System), CPPS and Big Data Technologies, companies using them have been evaluated as having a higher level of logistic service, more efficient processes with their partners, improved cooperation between certain logistic functions, and higher market and financial performance and competitiveness. Applying more efficient production processes, and achieving better productivity and economies of scale, might also result in increased economic sustainability. Furthermore, we have found that companies have started on the path to digital evolution, and investments of this type have already begun.

Suggested Citation

  • Judit Nagy & Judit Oláh & Edina Erdei & Domicián Máté & József Popp, 2018. "The Role and Impact of Industry 4.0 and the Internet of Things on the Business Strategy of the Value Chain—The Case of Hungary," Sustainability, MDPI, vol. 10(10), pages 1-25, September.
    • Handle: RePEc:gam:jsusta:v:10:y:2018:i:10:p:3491-:d:172797
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    References listed on IDEAS

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