ABSTRACT
Small and medium enterprises (SMEs) have been contributing significantly to the nation’s economy, but their growth has been inconsistent with a high mortality rate. Globally, the manufacturing industry is heading towards the implementation of Industry 4.0. The objective of this chapter is to explore the reasons in Indian SMEs context and prescribe a way forward to achieve Industry 4.0 readiness. A survey of 200 firms shows that the performance of SMEs was inconsistent resulting in defects, scrap, and rework. The chapter introduces a Technology Index, a metric to identify a firm’s production effectiveness. Quality consciousness differed across units, and readiness to implement quality control measures was low. Benchmarking of these factors, namely people, processes, and quality readiness, appears to be a prerequisite for the implementation of Industry 4.0. The methodology adopted includes associations and causality among factors using structured equation modelling (SEM). The chapter concludes that because Indian SMEs are less automated, the processes directly impact employee motivation and, in turn, customer satisfaction. This is a shift from the finding that processes impact customer satisfaction of automated firms. Thus, Industry 4.0 makes Indian SMEs more effective and consistent.
