Empowering Small Medium Enterprises for Industry 4.0: The Impact of Lean 4.0 on Operational Excellence through Digital Agility

The transition to Industry 4.0 (I4.0) presents significant challenges for small and medium enterprises (SMEs), particularly in integrating Lean 4.0 (L4.0) to enhance operational efficiency. Despite the recognized benefits of lean manufacturing principles, SMEs often struggle with limited financial resources, technological readiness, and workforce digital literacy, impeding their ability to fully leverage advanced digital tools. To address these challenges, this study aims to develop a conceptual framework that links Lean 4.0 with operational efficiency, emphasizing the mediating role of digital agility. A narrative review methodology was utilized to critically analyze and synthesize existing literature on Lean 4.0, digital agility, and operational efficiency, with the theoretical framework grounded in the Dynamic Capabilities Theory (DCT). The findings suggest that need for a conceptual framework that establishes a clear link between Lean 4.0, digital agility, and operational excellence, emphasizing how digital agility acts as a critical enabler for maximizing the impact of Lean 4.0 on SMEs’ performance. The study contributes to theory by reinforcing the role of digital agility in Lean 4.0 transformation and provides practical insights for business leaders, policymakers, and industry practitioners on strategic implementation of Lean 4.0 in resource-constrained SMEs. Future research should focus on empirical validation of the proposed framework, examining sector-specific barriers and exploring long-term sustainability strategies to ensure successful Lean 4.0 adoption in SMEs.