Financial performance in Industry 4.0 agile supply chains: evidence from manufacturing companies

Abstract

Purpose

This study aims to examine the implementation of agile practices in Industry 4.0 to assess the financial performance measurements of manufacturing firms. It also investigates the relationship between supply chain performance and financial performance.

Design/methodology/approach

The study is based on an experimental research design by collecting data from 329 responses from key officials of manufacturing firms. The analyses are carried out to explore this modern concept with the help of the SPSS program, which is used to conduct a confirmatory factor and reliability analysis and Smart-partial least square (PLS) version 4.0 with structural equation modeling.

Findings

This research demonstrates the positive effect agile supply chain strategies in Industry 4.0 may have on manufacturing companies' financial performance as a whole. Everything throughout the supply chain in Industry 4.0, from the manufacturers to the end users, is taken into account as a potential performance booster. The values obtained from the model's study show that it is both dependable and effective, surpassing the threshold for such claims. The research is supported by factors like customer involvement (CUS), continuous improvement (CI), integration (INT), modularity (MOD), management style (MS) and supplier involvement (SI) but is undermined by factors including postponement (PPT).

Research limitations/implications

According to the findings of the study, Industry 4.0 firms' financial performance and overall competitiveness are significantly improved when their supply chains are more agile. A more agile supply chain helps businesses to more rapidly adapt to shifts in consumer demand, shorten the amount of time it takes to produce a product, enhance product quality and boost customer happiness. As a consequence of this, there will be an increase in revenue, an improvement in profitability and continued sustainable growth.

Originality/value

There are literary works available on agile practices in various fields, but the current study outlines the need to understand how supply chains perform financially under the mediating effect of agile supply chains in Industry 4.0 which contribute most to the organization's success. The study will aid companies in understanding how agile practices will further the overall performance of the organization financially.

Citation

Gangaraju, P.K., Raj, R., Kumar, V., Akhil, N.S.B., De, T. and Kaswan, M.S. (2025), "Financial performance in Industry 4.0 agile supply chains: evidence from manufacturing companies", The TQM Journal, Vol. 37 No. 1, pp. 222-248. https://doi.org/10.1108/TQM-07-2023-0214