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1. Impact of Industry 4.0 on Supply chain
Performance
Under Guidance of
Dr. Mohit Tyagi
Assistant Professor
Department of Industrial &
Production Engineering
NIT Jalandhar
Presented By
RAM DAYAL PANDEY
M.Tech (IPE)
20205008
NIT Jalandhar

2. Introduction
 The word “Industry 4.0” is often used to refer the growing
process in the controlling of manufacturing and chain production.
 The term also refers to the fourth industrial revolution (4IR).
 The Founder of “Industry 4.0” concept was “Henning Kagerman”
(Top manager of a software company in Germany).
 The term Industry 4.0 was first introduced in 2011 in Germany as
“Industry 4.0” by a group of conferences from various sectors
(business, politics, and universities) under the German
competitiveness development program.
 Industry 4.0 is also termed as “Shrewd Manufacturing” because
many more of the industries change their form of manufacturing
from traditional to, smart (Hofmann, et al., 2017).

3. Contd…
 According to Google, the number of Google searches contains the
term Industry 4.0 started in 2012 and 2015 and in December 2018
it becomes more popular (Abdirad, et al., 2020).
 In recent years, the rapid development of facts and messaging
tools, blending in with the provision of morning purchases in
Industry 4.0 (Dalenogare, et al., 2018; Frank, et al., 2019).
 From the user opinion, there is an indication of the influence of
“Industry 4.0” on both the technical, internal as well as communal
sectors (Ghadge, et al., 2020).
 Organizations have seen it the importance of technological
development and consider technology as a solid strategy a tool to
ensure sustainable performance (Chavarria-Barrientos, et al., 2017;
Shrivastava, et al., 2016) and future success (Davenport, 2006).

4. Literature review and background
Outline of Industry 4.0
 Industry 4.0 focuses on the assimilation and growth of
communication as well as information technologies in corporate
developments (Dalenogare, et al., 2018; Wagire, et al., 2019).
 The huge apparition of Industry 4.0 calls for agendas and/or
planning for connecting bodily belongings and digital technologies
in a Cyber physical system (Sarvari, et al., 2018).
 Through transforming manipulate systems in enterprise operation
have appreciably stepped forward the nature of products and
services supplied by organisation (Porter and Heppelmann, 2014).
 The role of Internet of things (IoT) in fourth industrial revolution
is very broad in manner (Haddud, et al., 2017; Ghobakhloo, 2018).

5. Contd…
Impact of Industry 4.0 on supply chains
 As discussed above, Industry 4.0 uses many innovative kits and
machineries for helping to redefine conservative industrial method
(Goswami, et al., 2020).
 Impact of Industry 4.0 can be felt in extraordinary degrees of
supply chains and additionally in supply chain management
technologies; for example unique forecasting and making plans via
included glide and accelerated traceability of materials and
products, stepped forward supplier performance due to actual time
statics sharing and synchronisation with supplier and sensible
warehousing and automobile routing structures (Hofmann and
Rusch, 2017; Ghobakhloo, 2018).

6. Problem formulation
 For performing this investigation, a profound reading of various
research papers allied to enlightening the various perspectives
(Hindrances) of supply chains and AHP (Analytics hierarchy
process) methodology has been used.
 AHP is frequently used for project ranking and assortment.
 AHP seizure tactical goal as a set of weighted criteria that is used
to score project.
 AHP method has been used to find out the important ranking of
the hindrances based on the value of their critical weight.

7. Contd…
AHP method has been used on the hindrances given below-
 Fiscal limitations (H1).
 Lack of skill (H2).
 Authorised matters (H3).
 Conflict to modification(H4).
 Absence of administrative support (H5).
 Records confidentiality and safety problem (H6).
 Doubtful monetary welfares (H7).
 Non-existence of examination and expansion (H8).
 Outlining and complication concern (H9).

8. Research methodology
 The objective of this research is to find out the ranking of the
hindrances on the basis of their critical weight, which impacts
more on the supply chain performance.
 The set of hindrances has been explored by designing a survey on
semantic terms.

9. Contd…
Analytic Hierarchy process (AHP)
 AHP approach is the most commonly used multi-criteria decision-
making technique and is used as a standard tool for multi-criteria
decision-making (MCDM) problem because of its simplicity and
flexibility to real-world problems.
 It was introduced by Thomas Saaty in 1980. AHP enables the
decision-makers to make decisions depending upon the priority
weights obtained from pairwise comparison matrix for criteria.
 Comparison between the criteria has been made using “Saaty’s” 1-
9 scale of relative intensity which is given in Table1.
 According to Saaty’s criteria for consistency check, if the value of
consistency ratio (C.R.) is less than or equal to 0.1, then the
consistency exist and the priority weights can be selected for
making the decision. . Stepwise procedure to implement AHP
methodology is given in the following section;


10. Contd.....
Step-1 Construct a pairwise comparison matrix for criteria using a
scale of 1–9 for relative importance.
If there are N criteria, then the comparison of criteria i with respect to
criteria j will result in a square matrix. The comparison matrix for
criteria should satisfy the following criteria.
𝑎𝑖𝑗 = 1, when i = j and 𝑎𝑗𝑖 =
1
𝑎𝑖𝑗
Step-2 Compute the relative normalized weight (wci ) for each
criterion.

11. Contd…..
Table-1 Saaty’s scale for intensity of relative importance
Definition Intensity of relative importance
Equally preferred 1
Weakly preferred 3
Strongly Preferred 5
Very strongly more preferred 7
Absolutely more preferred 9
Intermediate importance between
two adjacent judgements
2,4,6,8

12. Contd…..
n 1 2 3 4 5 6 7 8 9 10
R.I. 0.00 0.00 0.58 0.90 1.12 1.24 1.32 1.41 1.45 1.49
Table-2 Saaty’s table for the number of criterion n
𝐺𝑀𝑖 = 𝑗=1
𝑀
𝑎𝑖𝑗
1/M and
𝑊𝑐𝑖 =
𝐺𝑀𝑖
𝑗=1
𝑛 𝐺𝑀𝑖
Step-3 Structured matrix 𝐴3 and 𝐴4 such that 𝐴3 = 𝐴1 × 𝐴2 and
𝐴4 =
𝐴3
𝐴2
;
Where
𝐴2 = 𝑊1, 𝑊2,𝑊3,……………….𝑊𝑖,𝑊
𝑛
T

13. Contd……
Step-4 Obtain maximum Eigen value (γmax) which is average of
matrix 𝐴4.
Step-5 Calculate the consistency index-
C.I. = (𝛄𝐦𝐚𝐱-n)/(n-1)
Note-Smaller the value of C.I., smaller the deviation from the
consistency.
Step-6 Calculate the consistency ratio-
C.R. = C.I./R.I.
A perfectly consistent decision maker should always obtain C.I. = 0,
but small values of inconsistency may be tolerated. In particular, if
C.R.≤0.1

14. References
 Hofmann, E., Rusch, M. (2017). “Industry 4.0 and the current status as well as future prospects on
logistics”. Computers in Industry, Volume 89 no, pp. 23-34.
 Abdirad, M., Krishnan, K. (2020). “Industry 4.0 in Logistics and Supply Chain Management: A
Systematic Literature Review”. Engineering Management Journal, Volume 33(3) no, pp. 187-201.
 Patil, D.A. (2020). “The study of Industry 4.0 and its impact on supply chain management”.
International Research Journal of Engineering and Technology, Volume 07 no, pp. 2038.
 Porter, M.E., Heppelmann, J.E. (2014), “How smart connected products are transforming
competition”. Harvard Business Review, Volume 92 no, pp. 64-88.
 Ghadge, A., Er Kara, M., Moradlou, H., Goswami, M. (2020). “The impact of Industry 4.0
implementation on supply chains”. Journal of Manufacturing Technology Management, Volume
31(4) no, pp. 669-686.
 Dalenogare, L.S., Benitez, G.B., Ayala, N.F. Frank, A.G. (2018). “ The expected contribution of
Industry 4.0 technology for industrial performance”. International Journal of Production Economy,
Volume 204, pp. 383-394.
 Wagire, A.A., Rathore, A.P.S., Jain, R. (2019). “ Analysis and synthesis of Industry4.0 research
landscape: Using latent semantic analysis approach”. Journal of Manufacturing Technology
Management, volume 23 no, pp. 315-321.
 Sarvari, P.A., Ustundag, A., Cevikcan, E., et al. (2018).” Technology Roadmap for Industry 4.0”.
Managing the Digital Transformation, Volume 36, pp. 95-103.
 Hadduad, A., DeSouza, A., Khare, A., Lee, H. (2017). “Examining potential benefits and
challenges associated with Internet of things integration in supply chains”. Journal of
Manufacturing Technology Management, Volume 28(8) no, pp. 1055-1085.
 Ghobakhloo, M., Fathi, M. (2019). “Corporate survival in Industry 4.0 era: the enabling role of
lean-digitized manufacturing”. Journal of Manufacturing Technology and Management, volume 35
no, pp. 540-565.

15. Thank You