Impact of smart factory adoption on manufacturing performance and sustainability: an empirical analysis

Purpose: Previous studies have focused on explaining the developmental paths and the relevant skills necessary for smart factories, based on an extensive review of the literature. Unfortunately, there is a deficit of empirical analyses that present an in-depth overview of smart factory development. Although the literature supports the benefits of smart factories, it remains unclear whether there should be government intervention (GI) to facilitate or regulate such adoption. This study will provide an in-depth empirical analysis of smart factory adoption (SFA) and its role in manufacturing performance (MP) and sustainable manufacturing (SM). Design/methodology/approach: This study used non-probability convenience and referral sampling techniques for data collection. This approach considered production managers from each company that participated in the survey questionnaire; thus, each production manager represented one firm. A total of 240 managers from several manufacturing companies participated in the study. This study employed direct and moderating hypotheses tested using PROCESS Macro, which Andrew Hayes developed for SPSS. Findings: The study identified three fundamental elements of a smart factory: manufacturing big data (MBD), process automation (PA) and supply chain integration (SCI) and analyzed them individually to see how they affect MP. According to the results, building a smart factory has positive and significant impacts on MP and SM. Furthermore, this study explores the role of GI in promoting smart factory deployment for both production performance and sustainable production. The study found that GI did not have a significant moderating effect but did have a positive relationship with SM. Research limitations/implications: This study contributes to the literature on smart factories by examining the impact of SFA on MP and SM. This provides a more comprehensive overview of the potential benefits of smart factories across various aspects, such as the application of big data, adoption of automation technology and integration of the supply chain. This study suggests that managers and decision-makers consider investing in smart factory implementation to improve factory productivity and enhance sustainability. Policymakers and government officials can promote the adoption of smart factories by providing incentives, funding, and resources to manufacturing firms. Originality/value: There is a scarcity of research measuring the actual performance of manufacturing firms that have already adopted smart factories, and this study seeks to address this gap in the literature. This study focuses on the implementation of manufacturing big data, process automation and supply chain integration and how the adoption of these technologies improves MP and provides a SM environment by conducting a real-time study of manufacturing organizations. This study presents an initial effort to explore the role of government involvement in promoting smart factories.