The partial mediating role of supply chain

integration between Industry 4.0 and supply

chain performance
Gizem Erboz
Department of Management and Business Administration Sciences,
Hungarian University of Agriculture and Life Sciences, Gödöllo†, Hungary
ık Özge Yumurtacı Hüseyino
g lu
Is
Department of Logistics Management, Izmir University of Economics, Izmir, Turkey, and
Zoltan Szegedi
Department of Marketing and Management, Széchenyi Istvan University, Gyo†r, Hungary

Abstract
Purpose – Industry 4.0 not only impacts the manufacturing industry but also supply chain practices. Drawing on the resource-based view (RBV), the
purpose of this paper is to examine how Industry 4.0 affects supply chain integration (SCI) and supply chain performance (SCP).
Design/methodology/approach – The data were collected from 212 respondents in manufacturing companies. The partial least square structural
equation modelling (PLS-SEM) was used to test the hypotheses of this study.
Findings – The findings reveal that Industry 4.0 has a positive impact on SCI and SCP, and SCI has a positive impact on SCP. In addition, a partial
mediating role of SCI has been found between Industry 4.0 and SCP.
Practical implications – This study reveals the role of Industry 4.0 on supply chain practices and draws attention to SCI in the linkage between
Industry 4.0 and SCP. The findings emphasise the need for Industry 4.0 and SCI to enhance SCP.
Originality/value – There is limited research on the impacts of Industry 4.0 on SCI and SCP. This research finds empirical evidence for these impacts
and enhances knowledge of Industry 4.0 by using a sample from an emerging country.
Keywords Performance, Integration, Manufacturing
Paper type Research paper

1. Introduction
Industry 4.0 represents the beginning of a new digital era,
which takes a leading role in industries, mainly in the
manufacturing sector (Reischauer, 2018). It is assumed to
bring various opportunities and benefits to supply chains
(Hofmann and Rüsch, 2017), e.g. providing real-time
information to companies (Frank et al., 2019), improving
economic sustainability (Ghobakhloo, 2020), allowing
customised and flexible mass production systems (Sung, 2018)
and continuous improvements (Dombrowski et al., 2017) in
the industrial setting. Industry 4.0 should be designed to build
economic and social systems that increase flexibility on changes
and maximise the effectiveness of operation systems (Sung,
2018). Braccini and Margherita (2019) explore different
economic and social drivers for the manufacturing sector on its
Industry 4.0 adoption. The study found that various economic
improvements for Industry 4.0, such as reducing lead time by
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30% and product defect rates by 21%. Many organisations are
seeking ways to generate value by using Industry 4.0
technologies (Tang and Veelenturf, 2019). With its potential
for smart and connected products and systems, Industry 4.0
provides new digital solutions for suppliers, manufacturers and
customers (Moeuf et al., 2018).
The success of supply chains is mainly dependent on digital
technologies (Ivanov et al., 2019). Despite the variety of
definitions of supply chain management (SCM) put forth in the
literature, it principally refers to the management of
relationships, integrated processes, information sharing
between partners to provide the best value to customers at least
cost (Lockamy and McCormack, 2004; Li et al., 2009).
Furthermore, SCM emphasises competitive advantage by
using performance-increasing techniques (Kache and Seuring,
2017). In this context, Industry 4.0 generates technological
advancement for SCM (Müller et al., 2018a), which draws
attention to its effects on supply chains.
In recent years, scholars have perceived the significance of
Industry 4.0 on supply chains, as proved by the increasing
number of academic papers on this theme. Some prior studies

Received 18 September 2020

Supply Chain Management: An International Journal
Revised 11 February 2021
27/4 (2022) 538–559 1 April 2021
© Emerald Publishing Limited [ISSN 1359-8546] 7 April 2021
[DOI 10.1108/SCM-09-2020-0485] Accepted 8 April 2021

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have considered the impact of Industry 4.0 technologies on
supply risks (Ivanov et al., 2019; Ivanov and Dolgui, 2020),
supply chain sustainability (Luthra and Mangla, 2018;
Manavalan and Jayakrishna, 2019) and supply chain
capabilities (Queiroz et al., 2019; Ralston and Blackhurst,
2020). In addition, a few studies have examined the impact of
Industry 4.0 on supply chain integration (SCI) (Tiwari, 2020;
Gajšek and Sternad, 2020) and on supply chain performance
(SCP) (Dalenogare et al., 2018; Fatorachian and Kazemi,
2020). However, some of these studies are confined to a
systematic literature review (Tiwari, 2020; Fatorachian and
Kazemi, 2020) or developing a conceptual model (Gajšek and
Sternad, 2020) of identifying the relationships between
Industry 4.0, SCI and SCP. For this reason, yet the literature
provides no consensus over the way forward and the possible
solutions to be followed empirically regarding Industry 4.0,
SCI and SCP (Lin et al., 2018; Frank et al., 2019; Ghadge et al.,
2020; Patrucco et al., 2020). Besides, the academic
investigation into Industry 4.0 extensively concentrates on
developed countries, with limited attention to developing
countries (Dalenogare et al., 2018; Raj et al., 2020; Yadav et al.,
2020). Therefore, our study aims to fill these research gaps and
seeks for empirical evidence for the following research question:
RQ1. How does Industry 4.0 impact SCI and SCP in the
manufacturing industry?
Moreover, few studies used the resource-based view (RBV) to
understand the relationship between Industry 4.
0 and supply chain practices (Wang et al., 2020; Bag et al.,
2021). RBV scholars recommend that companies acquire
strategic resources and capabilities that are both valuable and
difficult to imitate (Chae et al., 2014; Huo et al., 2016b).
According to Ghobakhloo (2018), Industry 4.0 involves the use
of the strategic resources that can improve competitive
advantage for organisations. Also, SCI can be viewed as a
capability that improves companies’ performance (Delic et al.,
2019). Hence, this study uses the RBV as a theoretical
framework to explain the relationships among Industry 4.0,
SCI and SCP.
The structure of this research is organised as follows. Firstly,
we discuss the concepts and dimensions of each attribute,
Industry 4.0, SCI and SCP. Secondly, we develop a set of
research hypotheses within a conceptual model of
the relationships among Industry 4.0, SCI and SCP. Later, the
research methodology, the results and practical implications
are discussed. Finally, the concluding remarks and limitations
of the research are presented.
2. Literature review
2.1 Industry 4.0 (I.4.0)
The concept of Industry 4.0 is originated from a venture
launched in Germany to enhance manufacturing industry
competitiveness (Müller et al., 2018a). Later, the different
terms were used to refer to similar strategies in other countries,
such as “Industrial Internet in the USA” and “Internet 1 in
China” (Wang et al., 2016, p.159). Industry 4.0 is defined by
the scholars in the following generic terms: Cyber-Physical
Systems (CPS) (Monostori, 2014; Wang et al., 2016), internet
of things (IoT) (Aazam et al., 2018; Matthyssens, 2019), smart
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factory and systems (Büchi et al., 2020). According to Koh et al.
(2019), Industry 4.0 is an interdisciplinary theme that involves
knowledge domains such as automatic controls, robots, sensors
and computer management and related actors. Ivanov et al.
(2019) describe the development of Industry 4.0 as being
facilitated by individual digital technologies that
create interconnected systems and solutions in practice.
Furthermore, it involves an advanced level of automation with
the applications of self-organised systems, CPS, IoT and Big
Data (Rajput and Singh, 2019).
Although there are recent studies in the academic literature
on Industry 4.0, scholars agree upon neither its definition nor
its dimensions and assessment models (Ghobakhloo, 2018).
There is a lack of consistency in use of terms in the limited
number of studies to conceptualise the Industry 4.0 models;
previous research uses the terms “roadmaps”, “maturity
models”, “frameworks” and “readiness assessments”
interchangeably and as complementary to each other
(Schumacher et al., 2016; Bibby and Dehe, 2018). Mittal et al.
(2018, p. 199) describe these terms as follows: “Roadmaps” are
“short and long-term goals with specific technology solutions to
help to meet those goals”, “Maturity Models”, are the step-by-
step continuous improvement process to achieve an advanced
maturity level of an organisation, “Frameworks” are
combinations of consistent procedures, methods and tools for
structuring a system, and “Readiness Assessments” are
measurement tools to define the extent of preparedness of a
company regarding the conditions, attitudes and resources
needed for reaching its goals.
Sony and Naik (2019, p. 2227) identify the six categories of
Industry 4.0 readiness: “top management involvement, the
readiness of organisational strategy, level of digitalisation, the
extent of digitalisation, smart products and services, and
employee adaptability”. Bibby and Dehe (2018, p. 1036)
provide a conceptual framework related to Industry 4.0
maturity which consists of three dimensions: “factory of the
future, people and culture, and strategy”. Fettermann et al.
(2018, p. 259) use Industry 4.0 maturity model using both
technology oriented (IoT, CPS, cloud, augmented reality,
additive manufacturing) and sociocultural (leadership and
culture) aspects. Ghobakhloo (2018, p. 927) suggests a
strategic Industry 4.0 roadmap by applying functional
dimensions: “strategic management as general, marketing
strategy, human resources strategy, IT maturity strategy, smart
manufacturing strategy, and smart supply chain management
strategy”. For manufacturing companies, Schumacher et al.
(2016, p. 164) identify nine categories for Industry 4.0
readiness: “products, customers, technology, operations,
strategy, leadership, governance, culture, and people”.
In the Industry 4.0 models in the literature, technology
emerges as one of the prominent dimensions. Several scholars
refer to technological trends in the transformation of traditional
production processes into fully integrated smart systems; these
include data analytics, autonomous robots, additive
manufacturing (3D printing), cloud computing, IoT, CPS,
sensors and vertical/horizontal integration (Vaidya et al., 2018;
Bibby and Dehe, 2018; Moeuf et al., 2018; Koh et al., 2019).
Advanced data analytics focus on collecting, processing and
analysing large amounts of data (Tortorella and Fettermann,
2018). Autonomous robots are machines that work
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autonomously and support employees to improve productivity
and efficiency in production (Bibby and Dehe, 2018). Additive
manufacturing provides flexible manufacturing systems and
highly customised products through digital 3D models
(Dalenogare et al., 2018). Cloud Computing refers to web-based
services that provide virtual computing, storage and
communication on external servers (Aceto et al., 2020). IoT
describes the convergence of connected products, people,
machines and parts (Manavalan and Jayakrishna, 2019), while
CPS supports an environment and a platform to connect all of
these (Bibby and Dehe, 2018). Sensors generate useful data to
monitor, control and predict the processes and support
decision-making (Mishra et al., 2018). Vertical and horizontal
integration is a term used to describe holistic digital integration
across the value chain network, as well as networked
manufacturing systems (Vaidya et al., 2018). This integration
also includes application-level modules such as Enterprise
Resource Planning (ERP), Manufacturing Execution Systems
(MES) and interconnections between partners, allowing a high
degree of traceability on business activities.
Rather than technology, other scholars emphasise the critical
role of strategic, cultural and employee factors in achieving
Industry 4.0 (Schumacher et al., 2016; Ghobakhloo, 2018;
Telukdarie et al., 2018). From a strategic perspective, it is vital
for organisations to have an Industry 4.0 roadmap which
visualises every further stage towards digital transformation
(Sarvari et al., 2018). Furthermore, Industry 4.0 needs large
investments in new technologies; therefore, companies should
prioritise their Industry 4.0 investments strategically (Sung,
2018). However, implementation of the accurate Industry 4.0
strategy might be challenging owing to organisations’ limited
understanding of the concept (Akdil et al., 2018). One solution
is to collaborate with external partners such as universities,
institutes, etc. to identify and deploy appropriate Industry 4.0
strategies (Patrucco et al., 2020). From an employee
perspective, Industry 4.0 requires greater expertise and training
for employees (Müller et al., 2018a) because of the greater
importance of their role in organisational development
(Kamble et al., 2020). Finally, organisational culture should
promote openness to innovation, which is a key factor in
technological change in organisations (Santos and Martinho,
2019). Thus, continuous improvement culture within a
company is an antecedent for the implementation of Industry
4.0 (Tortorella et al., 2021).
2.2 Supply chain integration
The concept of SCI is a considerable research flux in operations
and SCM (Ataseven and Nair, 2017). In its basic essence, SCI
is described as linkages of supply chain processes across
companies (Flynn et al., 2016). It highlights the importance of
strategic collaboration, sharing of information, risks and
rewards between partners to offer maximum value to a
customer (Zhu et al., 2018). SCI needs a solid commitment
from all supply chain partners (Bruque-Camara et al., 2016).
Integration approaches effectively connects all stages, from
suppliers to customers so that products are delivered as
specified at the correct time and place (Gunasekaran and Ngai,
2004). Sharing information and collaborative decision-making
between partners are underlined as the key aspects of SCI
(Wong et al., 2017; Jajja et al., 2018). Bagchi et al. (2005)
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pointed out that inter-organisational collaboration with key
suppliers and customers requires transparently shared
information. As Prajogo and Olhager (2012) suggested, the
diffusion of integration in supply chains is complex and
multifaceted and can only be achieved through long-term
orientation along with partners (Stevens and Johnson, 2016).
Various dimensions and aspects of SCI can be determined
(Wiengarten et al., 2016); therefore, the prior studies used the
multidimensional constructs to measure SCI (Gimenez et al.,
2012; Liu et al., 2016; Jacobs et al., 2016). However, there are
three generally accepted dimensions: “supplier integration (SI),
internal integration (II), and customer integration (CI)” (Zhao
et al., 2015; Huo et al., 2016a; Qi et al., 2017; Jajja et al., 2018).
“Supplier integration” refers to develop inter-organisational
strategies, synchronised processes, information sharing and
knowledge and system coupling with suppliers (Chaudhuri
et al., 2018, p. 693). A high degree of supplier integration
improves production plans, on-time delivery and speed of
services, particularly in upstream activities (Chen et al., 2018).
Duhaylongsod and De Giovanni (2019) define supplier
integration as “a state of synergy”, including close cooperation
with suppliers. “Internal Integration” implies that the
departments within a company can facilitate coordination and
collaboration of processes (Chang et al., 2016, p. 283),
synchronised strategies, activities and operations through
information sharing and joint decision-making (Qi et al., 2017,
p. 164). Therefore, the main aim of internal integration is to
harmonise and unify a company’s internal processes, practices
and strategies (Kim and Chai, 2016). Zhang et al. (2018)
explain the ways in which the functional departments, such as
purchasing, production and sales departments are connected
through internal integration. Another concept, “customer
integration” is defined as improving coordinative and
collaborative linkages with customers via information sharing,
system development (Just in Time, Vendor Managed
Inventory, or continuous replenishment) and collaborative
decision-making (Elvers and Song, 2016 p. 491; Jajja et al.,
2018 p. 135). Collecting feedback and building long term
relationship with customers is crucial for organisations (Ayoub
et al., 2017). In this regard, effective customer integration
enhances prediction of changes in customer requirements and
companies’ ability to react to these (Droge et al., 2012).
2.3 Supply chain performance
Performance measurement (PM) literature generally posits
that a performance system is assigned within the boundaries of
a single firm (Maestrini et al., 2017). SCP implies a continuous
improvement process to improve core competitiveness and use
maximum effectiveness and efficiency in supply chains
(Gunasekaran et al., 2004). In PM systems, Hervani et al.
(2005) integrate tangible and intangible metrics used to
quantify the performance of companies. As stated by Fawcett
et al. (2007), the enterprises’ capabilities for optimising SCP
increase their competitive advantage; therefore, PM is an
essential concept and practice in SCM (Akyuz and Erkan,
2010). The concept must be evaluated as a multiple criteria
tool with a global perspective (Chithambaranathan et al., 2015)
PM in supply chains is a well-investigated topic in the
literature; however, there are distorted and contradictory
perspectives on how performance metrics should be classified
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(Maestrini et al., 2017). Gunasekaran and Kobu (2007)
categorised the best-known approaches in the PM literature as
follows:
 Balance score card perspective, a well-known model
presented by Kaplan and Norton (1996, p. 46), based on
five perspectives: “financial, customers, internal
processes, innovation and improvement, and employees”.
The model has been extensively used in SCP literature
(Dweekat et al., 2017; Xia et al., 2017; Tan et al., 2017).
 Components of the performance measure, a model conducted
by Beamon (1999, p.281), derived from three aspects,
“resource utilisation, output, and flexibility”. The model
analyses the key characteristics of supply chains related to
PM (Sezen, 2008; Bititci et al., 2012; Chang et al., 2019).
 Location of measures in SC links focuses on supply chain
phases: “plan, source, make and deliver”, based on
“Supply Chain Operations Reference (SCOR model)”
(Lockamy and McCormack, 2004; Dissanayake and
Cross, 2018).
 Decision-making levels, apply a framework in which the
metrics are grouped as “strategic, tactical and operational
performance” (Montabon et al., 2007; Tolonen et al.,
2015; Elgazzar et al., 2019).
 Nature of measure uses financial and non-financial metrics
to measure performance at the operational level (Skrinjar
et al., 2008; Banomyong and Supatn, 2011).
 The measurement base determines quantitative and
qualitative metrics through companies’ strategic objectives
and key performance indicators (KPIs) (Bai and Sarkis,
2014; Anand and Grover, 2015).
 Traditional and modern measures analyse the measurement
systems as function and value-based (Bailey and Francis,
2008; Dweekat et al., 2017).
As indicated earlier, the wide range of perspectives on
performance assessment in supply chains makes it challenging
to find a universal consensus on evaluating SCP (Akyuz and
Erkan, 2010). The financial metrics such as cost items are
intensively used in PM frameworks, as they are easily measured
(Sezen, 2008). Measuring cost is a composite efficiency, and
costs need to be minimised, which also refers to the optimal
utilisation of company resources (Beamon, 1999; Shepherd
and Günter, 2010). Previous research indicated that the aspects
of “resource utilisation” include total cost, distribution cost,
inventory, manufacturing costs and return on investment
(ROI) (Chang et al., 2019; Wu et al., 2014). However,
currently, because of critical indicators for organisational goals
and efficiency of the supply chain (Beamon, 1999), supply
chains depend on not only resources metrics, but also
operational and customer-related metrics on SCP (Fawcett
et al., 2007; Anand and Grover, 2015). Therefore, “output”
and “flexibility” factors need to be investigated in SCP
evaluation (Sezen, 2008). The metrics of output usually refer to
organisations’ operational activities and customer satisfaction
(Deshpande, 2012). More specifically, the output measures
associated with customer service metrics are customer response
times and satisfaction, on-time deliveries, order fill rate,
shipping performance and manufacturing lead time (Sezen,
2008; Um et al., 2017; Maestrini et al., 2017). Flexibility
emphasises an organisation’s ability to respond to the changes
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in their business activities (Kumar et al., 2017b), offering
customers superior value and reducing uncertainty in
companies’ supply chains (Bernardes and Hanna, 2009).
Hence, there are three categories: demand flexibility, supply
flexibility and manufacturing flexibility including delivery
performance flexibility (Beamon, 1999). Supplier flexibility
covers a company’s ability to respond to supplier side changes
(Delic and Eyers, 2020), while demand flexibility refers to a
company’s ability to respond to demand changes (Han et al.,
2017). Manufacturing and delivery flexibility refer to an
organisation’s ability to respond quickly to periods of lower
performance in manufacturing and delivery (Qamar et al.,
2018). Beamon (1999) suggested a further key measure of
flexibility performance, i.e. new product flexibility, which
represents the company’s ability to respond to new products,
markets and competitors.
3. Theoretical background and hypothesis
development
3.1 Resource-based view
Grounded in the strategic management literature, the RBV
defines how a company could accomplish a sustainable
competitive advantage through its resources and capabilities
(Huo et al., 2016b; Nandi et al., 2020). Firms could increase
their sustained competitive advantage by introducing strategies
that cannot be duplicated by competitors (Wu et al., 2006).
The underlying assumptions of RBV hinge on the
heterogeneity and immobility of a firm’s resources and
capabilities (Guang Shi et al., 2012). Resources are
characterised as either tangible, such as infrastructure,
property, plant and equipment, or intangible, such as
information and knowledge sharing, human capital, or
technology know-how (Nath et al., 2010). In accordance with
the RBV, IT resources are viewed as valuable, rare and non-
substitutable from the strategic management perspective
(Zhang and Dhaliwal, 2009). Chae et al. (2014) state that
organisational knowledge, managerial skills and manufacturing
facilities constitute the resources of manufacturers. On the
other hand, capabilities are regarded as “firm-specific formal or
informal processes developed over time through the complex
allocation and use of resources and are embedded in
organisational routines” (Huo et al., 2016b, p. 665). The
development of IT implementation needs a firm to achieve a
higher order of integrative capability with greater complexity
(Wu et al., 2006). In line with this, the context of Industry 4.0 is
based on advanced information and manufacturing
technologies that improve the integration and performance of
value chains (Zhong et al., 2017). Hence, in previous research,
technologies of Industry 4.0, representing organisations’
intangible and unique assets, were identified as the key to
enabling higher competitive advantage (Salam, 2019;
Sundarakani et al., 2019). Moreover, SCI entails organisations’
capabilities that enhance SCP (Yuen and Thai, 2017). Taking
the RBV as the theoretical underpinning, in this study, we show
how firms’ resources (Industry 4.0) and capabilities (SCI)
influence their performance (SCP). The following sections also
explain how these relationships lead to each hypothesis
development.
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3.2 Relationship between industry 4.0 and SCI
In the vision of Industry 4.0, the integration of companies’
functions and supply chain partners are potentially catalysed by
an integrated ecosystem that enables the chain to become fully
transparent to all members (Ardito et al., 2019). As evidence of
this, some scholars analysed the impacts of the implementation
of information technologies (IT) on SCI (Kim, 2017;
Vanpoucke et al., 2017; Yu et al., 2017), pointing out that IT
usage improves SCI. It is not feasible to attain effective SCM
without sufficient IT (Yu, 2015). Thun (2010) demonstrated
that the flow of information is indispensable between chain
partners; so that, IT enhances the accuracy of information
exchange, which also leads to higher inter-organisational
collaboration.
Recent studies also attempt to identify the relationship between
Industry 4.0 technologies such as additive manufacturing IoT,
cloud and SCI (Bruque-Camara et al., 2016; Novais et al., 2019;
Manuel Maqueira et al., 2019; Delic et al., 2019). Digital
technologies promote the integration of physical and informational
flows in supply chains by offering reliable data access and real-time
interconnection between processes (Bruque-Camara et al., 2016).
Likewise, greater data visibility could be achieved via advanced
technologies, thus improving information sharing between
external partners and for the internal operations (Novais et al.,
2019). Industry 4.0 consists of recent advanced technologies such
as IoT, cloud technology and CPS; therefore, it enhances
information sharing, managing partner relationships and
coordination of processes at supply chain level (Singh et al., 2019).
Frank et al. (2019) argued that Industry 4.0 achieves higher SCI by
synchronising delivery times and reducing information failures
between partners. Moreover, Industry 4.0 represents an intelligent
network which ensures integration of the whole value chain by
supporting the high-level collaborative production process among
logistics, operations, marketing and final distribution (Xie et al.,
2020). Such integration of industry affects the entire chain from
product design across manufacturing and delivery (Luthra and
Mangla, 2018).
In accordance with the arguments stated above, in the
perspective of the RBV, several technological and
organisational activities are deemed to be resources for
obtaining competitive advantage (Chae et al., 2014). Industry
4.0 requires new strategies and organisational inputs such as IT
components, human resources and physical infrastructures to
sustain competitive advantage (Ghobakhloo, 2018).
Furthermore, Industry 4.0 emphasises the importance of real-
time communication among networks (Pereira and Romero,
2017) allowing supply chain system to integrate and compete
globally (Luthra and Mangla, 2018). In the supply chain
context, Industry 4.0 enhances the level of visibility and
transparency; this leads to complete alignment and SCI
(Barreto et al., 2017). Therefore, the following hypothesis is
proposed as follows:
H1. Industry 4.0 has a positive impact on SCI.
3.3 Relationship between supple chain integration and
supply chain performance
Several scholars have stated that well-integrated supply chains
have positive implications for SCP; however, the inconsistency
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of empirical findings raised unacknowledged questions in both
theories and practice (Ataseven and Nair, 2017; Delic et al.,
2019; Rajaguru and Matanda, 2019). Sundram et al. (2016)
have suggested that the managers should consider investments
in SCI to obtain the advantages in SCP. A close relationship
between main suppliers/customers and a focal company
improves the mutual exchange of information about
production plans, on-time delivery, schedules and processes
and improves SCP (Chang et al., 2016; Huo et al., 2016a).
Conversely, the relationship between the dimensions of SCI
and SCP also remains controversial in the literature. Yu (2015)
demonstrates that internal integration has a positive and
significant impact on operational and financial performance,
and this is also supported by Qi et al. (2017). In contrast, no
significant relationship has been found between external
integration and financial performance. Jajja et al. (2018)
showed a strong positive relationship between supplier-
customer integration and agility performance, but only a weak
relationship between internal integration and performance
measures. Some scholars explain that previous studies
neglected the role of internal integration on performance
evaluation (Zhao et al., 2011; Graham, 2018). The more
integrated supply chains do not always lead to improvements in
performance (Fabbe-Costes and Jahre, 2008; Wiengarten et al.,
2019). Because of the contradictory opinions on the effects of
SCI on SCP, there is a need to analyse the possible outcomes of
SCI on performance improvement.
To attain economic value and competitive advantage, a
company needs a variety of capabilities (Yu et al., 2017). Irfan
and Wang (2019) showed that SCI is a capability intended to
organise information, product and process flow along the
supply chain. The RBV argues that SCI contributes to firm
resources that are valuable and difficult to imitate (Gupta et al.,
2018; Delic et al., 2019), eventually benefiting company
performance (Huo et al., 2016b). Kumar et al. (2017a)
suggested that successful integration has a key role in
sustainable competitive advantage and increases performance
in supply chains. Higher levels of integration, such as
collaboration of partners, results in a positive impact on SCP
(Shee et al., 2018). Hence, we hypothesise:
H2. SCI has a positive impact on SCP.
3.4 Relationship between industry 4.0 and supply chain
performance
As an operational outlook, Industry 4.0 is conceptualised by
flexible manufacturing processes and systems operating in real-
time; therefore, it boosts strategic and operational decision-
making (Lu, 2017). Regarding this, Dalenogare et al. (2018)
examined the potential contributions of Industry 4.0
technologies on industrial performance. Embedded Industry
4.0 technologies are anticipated to transform supply chains by
improving levels of connectivity, and such extensive integration
will lead to immense performance developments (Fatorachian
and Kazemi, 2020). Another study on the integration of
Industry 4.0 technologies by Buer et al. (2018) identified
several potential improvements on SCP metrics regarding cost,
flexibility, quality and reliability. Frank et al. (2019) suggest
that the systemic implementation of smart manufacturing
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technologies would accomplish performance improvements in
industry.
The implementation of Industry 4.0 improves SCP by
increasing accuracy of forecasting, improving planning and
developing supplier performance, as well as customer service
and logistics networks (Ghadge et al., 2020). According to
Dalenogare et al. (2018), Industry 4.0 promotes efficiency of
resource utilisation and faster response to market changes;
thus, it enhances overall SCP. Transformational technologies
of Industry 4.0 could assure a higher performance of the
processes of supply chain activities (Frederico et al., 2020).
Besides, the technologies such as CPS, IoT and cloud will
improve cost, service and speed performance in supply chains
through real-time communication between supply chain
partners (Xie et al., 2020).
In line with the discussions earlier, Industry 4.0 could be
considered as an asset for advancements in cost, delivery,
flexibility and quality performance in supply chains from the
RBV perspective (Salam, 2019). Some companies are already
exploiting Industry 4.0 technologies to increase speed,
efficiency and procurement activities, thus responding more
rapidly and flexibly to the needs of their final customers (Xie
et al., 2020). The implementation of Industry 4.0 is essential for
the better performance of companies, because it reduces cost
and improves product quality (Dossou, 2018). Industry experts
affirm that leveraging the proven benefits of Industry 4.0
technologies reinforces continuous improvement and high-
performance standards on supply chains (Tortorella et al.,
2018). Also, Industry 4.0 is closely related to intelligent
manufacturing, i.e. the monitoring of companies’ physical
processes, real-time decision-making and resources
optimisation; hence it enhances overall SCP (Singh et al.,
2019). With increasing reliance on Industry 4.0 technologies,
companies will obtain their competitive advantage by
performing at low cost, offering better innovative services and
promoting customer needs (Barreto et al., 2017). Given the
above considerations, the following hypothesis is proposed:
H3. Industry 4.0 has a positive impact on SCP.
3.5 Mediating role of supple chain integration
Empirical evidence shows that merely implementing
technology is no guarantee of enhanced company performance
(Gimenez et al., 2012; Yu, 2015; Salam, 2017). Hence, it is
necessary to observe the mediating role of integration between
IT and performance (Seo et al., 2014). For example, Delic et al.
(2019) acknowledge that Industry 4.0 technologies alone have
no direct impact on achieving higher performance without
being confederated with integration in supply chain processes.
Technological breakthroughs improve integration in supply
chains, which in turn serves better operational performance
(Yu et al., 2018). By attaining IT-enabled SCI, organisations
can reach greater visibility and enhanced production planning
in the virtual environment (Shee et al., 2018). This allows
uncertainty reduction and a significant increase in the
performance of supply chain operations (Gunasekaran and
Ngai, 2004).
Most empirical studies have investigated how firms improve
SCP by integrating capabilities and resources within and
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beyond companies’ boundaries (Wu et al., 2006; Zhao et al.,
2015; Gunasekaran et al., 2017). Digital technologies and
capabilities can be used to promote business opportunities or to
manage supply chain operations (Huo et al., 2016b). However,
the current study uses the RBV to conceptualise Industry 4.0 as
a strategic resource that affects SCI and SCP. In addition, by
drawing on the RBV, this study suggests that SCI impacts SCP,
because both internal and external integration embolden the
strategic resources significant for SCP (Huo, 2012). Therefore,
we improve a conceptual model to identify the relationships
between companies’ resources (Industry 4.0) and capabilities
(SCI) and performance (SCP). Taking the previously
mentioned argumentations into consideration the following
hypothesis is proposed:
H4. SCI mediates the relationship between Industry 4.0 and
SCP.
Figure 1 indicates the conceptual model in this study.
4. Research method
4.1 Sampling and data collection
Our study uses a questionnaire method to empirically test the
research model. The unit of analysis selected in this paper was
manufacturing enterprises in Turkey, because supply chain
practices are critical for these companies (Kusi-Sarpong et al.,
2019; Yumurtaci Hüseyino
glu et al., 2020). Furthermore, it is
important to investigate adoption patterns of Industry 4.0
technologies in manufacturing companies for understanding
implications for supply chains (Frank et al., 2019). As a target
population of this study, we took the list of Istanbul Chamber
of Industry (ISO) 1000 manufacturing companies of Turkey,
because of their leading role in the Turkish economy and
industry. In addition, as these companies represent almost all
manufacturing sectors in Turkey, the findings can provide
more general inferences. Considering the scarcity of databases
in Turkey, previous research also used the list of ISO as a basis
population for their research in Turkey (Kamasak et al., 2017;
 ahin and Topal, 2019). As an initial step, we randomly
S
approached the target respondents used in production,
operations and supply chain departments as well as selected
managers, executives and department heads of the companies.
The participants were contacted through direct emails and via
LinkedIn. The final questionnaire was sent to the participants
with the URL of the questionnaire. Also, the final letter consists
of further details about the research, such as its purpose,
objectives and method. The researchers requested that
respondents should be familiar with the Industry 4.0
implementation on supply chains, and this condition
eliminated a few respondents. The questionnaire was
conducted between June and August 2019. A week later, the
process was followed up by a reminder letter for unresponsive
respondents. All questions were obligatory; therefore, there
were no incomplete responses. Out of 1,000 companies, a total
of 212 usable responses were collected, showing a 21.2%
response rate in the targeted sample.
Table 1 summarises the sample structure, including the
position of the respondents, number of employees, annual
revenue and sector of the companies.
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Figure 1 Research model
4.2 Research design and measures
We have taken the scales from prior literature for the
measurements of Industry 4.0, SCI and SCP. After an in-depth
review of the literature, Industry 4.0 was conceptualised as a
multi-dimensional construct, which includes both
organisational and technological items. Therefore, we selected
Bibby and Dehe’s (2018) three-dimensional Industry 4.0 scale,
composed of strategy (STR), employee and culture
(EMP&CULT) and technology (TECH). To evaluate each
dimension, a total of 4, 4 and 16 items were selected,
respectively. For the SCI scale, we selected the study of Jajja
et al. (2018), which allows the concept to be operationalised as
the level of information sharing, decision-making and system
coupling with suppliers, customers and internal company
functions. Therefore, SCI was constituted by three aspects;
supplier (SI), internal (II) and customer integration (CI), each
of which had 4 items, making 12 items in total. Finally, for
SCP, we selected Beamon’s (1999) scale, which was used by
several supply chain studies (Sezen, 2008; Khan et al., 2009;
Um et al., 2017). The scale of SCP was measured by three
aspects; resource utilisation (RES), output (OUT) and
flexibility (FLEX) by 17 items in total: 5, 7 and 5 items for each
aspect, respectively. All items were measured by a “five-point
Likert scale” anchored as, 1 = not at all, 5 = extremely for
Industry 4.0; and 1 = very low, 5 = very high for SCI and SCP
constructs. The items of the constructs are shown in
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Appendix 1. Also, as can be seen in Figure 1, the conceptual
model was measured with the second order constructs,
Industry 4.0, SCI and SCP; and the first order constructs,
STR, EMP&CULT and TECH for Industry 4.0; SI, II and CI
for SCI; and RES, OUT and FLEX for SCP.
The questionnaire was developed in English language with
items taken from prior studies; then its translation into Turkish
was carried out by three professors specialised in English-
Turkish translation. A back-translation by an expert translator
ensured the accurate translation of the questionnaire. Later, to
ensure the clarity of instructions and expressions that might
otherwise affect the analysis of the measures, ten industrial
practitioners and five academic experts were invited for a pre-
test, and they requested only minor modifications.
4.3 Data analysis
Partial Least Squares Structural Equation Modelling (PLS-
SEM) was used to validate the measures and test the
hypotheses. This technique is suitable to measure the cause-
effect relationships between latent constructs in operations and
strategic management research (Hair et al., 2011).
Furthermore, PLS-SEM is a robust method for identifying
complex relationships and predicting target constructs. The
method comprises two elements: the measurement model and
structural model analyses (Hair et al., 2011; Sarstedt et al.,
2014). The measurement model explains the relationships
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Table 1 Sample structure

Characteristic Percentage (%) Cumulative (%)
Position of the respondent
CEO 5.7 5.7
General manager 26.4 32.1
Department head 40.1 72.2
Professional expert 27.8 100
Total 100
Number of employees
10–49 14.2 14.2
50–249 20.3 34.5
250–499 16 50.5
>500 49.5 100
Total 100
Revenue (Annually, 1 Turkish Lira= 7.80 Euro, (Source: Bloomberg, Accessed on: 14.07.2020)
<=3M TL 9.0 9.0
3M> <=25 M TL 17.0 26
>25M <=125 M TL 19.8 45.8
>125M TL 54.2 100
Total 100
Sector
Textile (including carpet, leather, clothing, furniture, packing etc.) 22.6 22.6
Automotive-Electronic and Machinery (including metals, household appliances, iron and steel etc.) 51.5 74.1
Food and beverage 13.6 87.7
Chemicals and pharmaceutical 12.3 100
Total 100

between the indicators and constructs, and the structural
model measures the relationships between key constructs (Liu
and Lee, 2018). As explained by scholars (Ringle and Sarstedt,
2016; Hair et al., 2017), a smaller sample size is the most
common reason for choosing PLS-SEM. In this study, PLS-
SEM was considered an acceptable technique because of its
ability to predict the key target constructs, and the small sample
size less than 250. In PLS-SEM, the appropriate sample size is
usually determined by “the 10 Times Rule” (Hair et al, 2011;
Kock, 2018), i.e. sample size should be ten times higher than
the maximum number of indicators used to measure an
individual construct. Considering our model, the maximum
number of indicators for one construct is 16; therefore, the
required threshold for the sample size is 160; in other words,
our sample size (212) is well above the accepted minimum for
the analysis. Recent supply chain studies also used a similar
sample size for PLS-SEM (Pradabwong et al., 2017; Green
et al., 2019; Jimenez-Jimenez et al., 2019).
In accordance with the PLS-SEM guidelines (Hair et al.,
2011), the data analysis was performed in two stages: the
analysis of the measurement model for the reliability and
validity of the indicators, followed by the analysis of the
structural model. SmartPLS 3.0 was used for the measurement
and structural model analysis, while normality of the data and
sample characteristics was measured in IBM-SPSS 25.0.
4.4 Common method bias
Common method bias is a significant concern in quantitative
research, as data gathered from individual respondents could
lead to inflated estimations of the intercorrelations among
constructs (Whitten et al., 2012) and distort the interpretation
of findings. Following the procedures of ‘Harman’s single-
factor test’ recommended by Marodin et al. (2017), we
examined the common method bias in our study. Traditionally,
this technique addresses that the bias occurs when a substantial
common method variance is designated by the one general
factor that explains most of the total variance (Green et al.,
2008). Findings of the factor analysis revealed ten factors with
an eigenvalue above 1, which represented 70% of the total
variance. Also, the first factor accounted for 37% of the total
variance, which is less than most of the variance. These findings
reveal that common method bias is not an issue in this research.
5. Results
5.1 Measurement model
To analyse the measurement model in this study, we followed
the instructions of Hair et al. (2011), underlying the rules of
thumb for model evaluation. Typically, internal consistency
reliability and indicator reliability higher than 0.7 thresholds,
convergent validity (AVE) greater than 0.50 threshold and the
values of discriminant validity higher than its cross-loadings are
acceptable for evaluating the measurement model in PLS-SEM
in many supply chain studies (Queiroz and Wamba, 2019;
Delic et al., 2019; Ni and Sun, 2019).
Table 2 indicates the factor loadings of the items in the
model. The values of Industry 4.0 items were higher than the
threshold level (>0.70) except STR3, TECH6, TECH8,
TECH9, TECH10, TECH11, TECH12, TECH13,
TECH15. Therefore, we removed the items which do not meet
the criteria. This could be appropriate because the concept of
Industry 4.0 is still in the development stage (Schumacher
et al., 2016; Mittal et al., 2018). All items of SCI and SCP have

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Table 2 Factor loadings of the items a value higher than the threshold, value of 0.70 except OUT1,
which, with a value of only 0.57, was deleted from the model.
Factor
Table 3 shows the composite reliability, AVE and Cronbach’s
Latent variable Item loading
alpha values of all constructs. As presented in Table 3, all
STR STR1 0.93 values exceeded the value of 0.70 for Cronbach’s alpha and
STR2 0.93 composite reliability and the value of 0.50 for AVE values.
STR3 0.56 Accordingly, the usage of all constructs in the conceptual
STR4 0.86 model is well verified. Finally, the discriminant validity of the
EMP&CULT EMP&CULT1 0.86 model has been verified (Table 4), as the values of the indicators
EMP&CULT2 0.84 in the diagonal cell for each column are greater than others in
EMP&CULT3 0.76 the same column.
EMP&CULT4 0.76
TECH TECH1 0.74 5.2 Structural model
TECH2 0.77 The validity and reliability of the research model were ensured
TECH3 0.82 in the previous section, where the following step is to test the
TECH4 0.79 hypotheses. As recommended by Hair et al. (2011), we
TECH5 0.76 performed the PLS and bootstrap algorithm with 5,000 samples
TECH6 0.50 to measure the significance of path coefficients. Table 5 shows
TECH7 0.80 the findings regarding the path coefficients ( b ), t-values and
TECH8 0.67 p-values for the structural model. Considering them, I.4.0 had a
TECH9 0.64 significant positive impact on SCI ( b = 0.63, t = 11.226, p <
TECH10 0.43 0.001). Therefore, H1 was supported. The influence of SCI on
TECH11 0.48 SCP was found positive and significant ( b = 0.632, t = 9.941,
TECH12 0.59 p < 0.001); thus, H2 was also confirmed. I.4.0 had a positive
TECH13 0.68 and significant effect on SCP ( b = 0.169, t = 2.525, p < 0.05),
TECH14 0.81 meaning that H3 was supported. The indirect effect of SCI
TECH15 0.68 between I.4.0 and SCP was also tested; and the results were
TECH16 0.78 found statistically significant and positive ( b = 0.398, t = 7.816,
SI SI1 0.85 p < 0.001). However, because there was a direct effect between
SI2 0.88 I.4.0 and SCP previously, the mediating role of SCI was only
SI3 0.87 partially confirmed. Therefore, H4 was partially supported. A
SI4 0.85 summary of the hypotheses is given in Table 6.
II II1 0.87 Table 5 also presents the results of the coefficients of
II2 0.90 determination (R2) to measure the predictivity of the model. The
II3 0.92 variance of SCI was accounted for 0.39%, and the variance of
II4 0.88 SCP, for 0.56%. The cut-off value of 0.1 is accepted for
CI CI1 0.86 substantial path structures (Lew and Sinkovics, 2013; Delic et al.,
CI2 0.91 2019). Ni and Sun (2019, p. 1182) suggested that “R2 values of
CI3 0.90 0.67, 0.33 and 0.19 are regarded as substantial, moderate and
CI4 0.88 weak values, respectively”. Thus, the values of R2 in this study
RES RES1 0.78 can be considered as moderate to substantial. The results of the
RES2 0.85 structural model were shown in Appendix 2. The main findings
RES3 0.84 have provided the importance of Industry 4.0 on SCI and SCP.
RES4 0.84 As suggested by Tiwari (2020), Industry 4.0 promises manifold
RES5 0.72 benefits for supply chain processes and is designed to integrate
OUT OUT1 0.57 them. Moreover, Fatorachian and Kazemi (2020) indicated that
OUT2 0.77 Industry 4.0 is a fundamental paradigm which leads to higher
OUT3 0.83
integration and performance in supply chains. Thus, our research
OUT4 0.78
is consistent with these studies. Keeping the findings of this study
OUT5 0.77
in mind, the further discussions will be made in Section 6.
OUT6 0.79
OUT7 0.71
5.3 Control variables
FLEX FLEX1 0.76
PLS-SEM provides the analysis of control variables’ effects on
FLEX2 0.88
the second order constructs. Some supply chain studies also
FLEX3 0.87
measured the impact of control variables to extend their
FLEX4 0.88
findings (Sreedevi and Saranga, 2017; Zhou et al., 2020; Dubey
FLEX5 0.87
et al., 2021). Thus, we added three control variables; the
number of employees, annual revenue and company sector into
the structural model to check their effects on the constructs.
Following Jabbour et al. (2015), we created four categories for

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Table 3 Reliability and validity of the constructs

Internal consistency reliability Convergent validity Indicator reliability
Constructs Cronbach’s alpha Composite reliability AVE Outer loadings
STR 0.90 0.93 0.83 0.86 to 0.93
EMP&CULT 0.82 0.88 0.65 0.76 to 0.86
TECH 0.91 0.93 0.62 0.74 to 0.82
SI 0.889 0.924 0.751 0.85 to 0.88
II 0.919 0.942 0.804 0.87 to 0.92
CI 0.912 0.938 0.791 0.86 to 0.91
RES 0.870 0.906 0.659 0.72 to 0.85
OUT 0.871 0.903 0.609 0.71 to 0.83
FLEX 0.892 0.921 0.701 0.76 to 0.88

Table 4 Discriminant validity of the constructs

STR EMP&CULT TECH
STR 0.913
EMP&CULT 0.774 0.809
TECH 0.748 0.784 0.789
SI II CI
SI 0.867
II 0.638 0.897
CI 0.699 0.589 0.890
RES OUT FLEX
RES 0.813
OUT 0.631 0.78
FLEX 0.635 0.75 0.837

Table 5 Results of the structural model

Relationship Path coefficients ( b ) t-values p-values
H1: I.4.0 fi SCI 0.630 11.226 p < 0.001
H2: SCIfi SCP 0.632 9.941 p < 0.001
H3: I.4.0 fi SCP 0.169 2.525 p < 0.05
H4: I.4.0 fi SCI fi SCP 0.398 7.816 p < 0.001
Coefficients of determination (R2)
R2 Adjusted R2
SCI 0.397 0.394
SCP 0.563 0.559
Note: p-values: all two-tailed

Table 6 Summary of the hypotheses

Hypotheses
H1: Industry 4.0 has a positive impact on SCI Supported
H2: SCI has a positive impact on SCP Supported
H3: Industry 4.0 has a positive impact on SCP Supported
H4: SCI mediates the relationship between Industry 4.0 and SCP Partially supported

each control variable. The categories for the number of
employees were 10–49; 50–249; 250–499; and more than 500.
The categories for annual revenue were less than 3 M TL,
between 3 M and 25 M TL, between 25 M TL and 125 M TL
and more than 125 M TL. The categories for sector of the
companies were: textile, automotive and electronic, food and
beverage and chemicals/pharmaceuticals. All categories were
added as exogenous variables, whereas three control variables
were endogenous.
Initially, we observed the specific effects of each control
variable on each construct. It has been found that I.4.0 was
significantly influenced by the number of employees ( b = 0.21,

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t = 2.382, p < 0.05) and annual revenue ( b = 0.21, t = 2.669,
p < 0.001). SCI was significantly affected by annual revenue
( b = 0.19, t = 2.479, p < 0.05); SCP was significantly
influenced by the number of employees ( b = 0.12, t = 1.927,
p < 0.05). Interestingly, we observed no effect of sector on any
of the constructs.
6. Discussion and theoretical contributions
Drawing from the RBV, the aim of this study was to propose
and test a research model of the relationships among three
constructs: Industry 4.0, SCI and SCP. According to the RBV
literature (Wu et al., 2006; Zhao et al., 2015; Gunasekaran
et al., 2017), it has been suggested that IT resources and supply
chain capabilities have a positive effect on SCP. Hence,
Industry 4.0 was considered as a resource and SCI as a
capability, which lead to SCP. Consequently, four hypotheses
were formulated: firstly, Industry 4.0 has a positive impact on
SCI (H1). Secondly, SCI has a positive effect on SCP (H2).
Thirdly, Industry 4.0 has a positive impact on SCP (H3).
Fourth, SCI mediates the relationship between Industry 4.0
and SCP (H4). The findings of this study revealed that H1, H2
and H3 were supported, whereas H4 was partially supported.
One of the main contributions of this study is to find empirical
evidence for the impact of Industry 4.0 on SCI and SCP.
Moreover, it shows the direct relationships among Industry 4.0,
SCI and SCP, also the indirect effect of SCI. In addition, our
study is likely to contribute to the conceptualisation of Industry
4.0 by validating it, which is currently under-researched in the
literature.
Our results show interesting similarities and differences with
the previous studies. For instance, Dalenogare et al. (2018)
analysed the influence of Industry 4.0 on business performance
and concluded that the technologies of Industry 4.0 contribute
to both product and operational performance. Likewise, Frank
et al. (2019) found that Industry 4.0 technologies are
complementary to smart manufacturing, smart process and
supply chain solutions. Both studies obtained the results with
manufacturing unit of analysis in the Brazilian context; thus, in
this study in an emerging country context, the implementation
of Industry 4.0 and its effects on supply chain practices could
be justified. On the other hand, in these studies, the
implementation of Industry 4.0 is solely represented by the
technological items, neglecting the dimensions related to
strategic planning such as strategy, employees and culture
towards Industry 4.0. Other studies also use technology
grounded models on Industry 4.0 (Fettermann et al., 2018;
Castelo-Branco et al., 2019). To some extent, these
perspectives might be accurate because the level of utilisation of
technology underpins automation in manufacturing
(Nascimento et al., 2019). However, the transition towards
Industry 4.0 needs a comprehensive understanding,
strategically as well as technologically, to identify all stages in
the evolution of a digital enterprise (Ghobakhloo, 2018). Our
study assumes Industry 4.0 as a multi-dimensional construct,
applying the strategic spheres; in this sense, it is in line with
some other studies (Schumacher et al., 2016; Akdil et al.,
2018). Nevertheless, these studies only concentrate on the
readiness/maturity models of Industry 4.0, rather than
investigating the effects of Industry 4.0 on SCP.
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On the other hand, IT was counted as a precursor
component for business survival and achieving an effective
SCM (Jin, 2006). One of the objectives of Industry 4.0 is to
support mass customisation of manufactured products and
become flexible in the value chain activities (Yu, 2015).
Because IT trends accompanying the forthcoming Industry 4.0
era (Lee et al., 2015), we also consider the findings of the
studies related to IT effects on supply chains to verify our
results. Delic et al. (2019) found that the adoption of additive
manufacturing technologies positively affects SCP, whereas
Manuel Maqueira et al. (2019) showed a positive relationship
between cloud technology and SCI. These findings also
support our results; however, regarding the fact that Industry
4.0 involves the interaction of integrated networks of humans
and technologies, it means more than a single technology for
supply chains (Lu, 2017).
Additionally, this study performs its analysis in an emerging
country context. Compared to developed economies, the
formation of Industry 4.0 in the emerging countries is likely to
be different as they are in institutional, financial and economic
transition (Bogoviz et al., 2019). The deployment of
technological trends in emerging economies is usually slower
and adapted from developed countries (Savvides and
Zachariadis, 2005), and some Industry 4.0 technologies are not
feasible yet in developing countries (Dalenogare et al., 2018).
Moreover, the assessment models related to Industry 4.0 are
still in the development phase (Bibby and Dehe, 2018; Mittal
et al., 2018). These arguments may have influenced our results
and led to the removal of some technological items which do
not fit the proposed model. Furthermore, our framework is
broader; meaning that it does not consider solely individual
technologies; however, other important items, including the
technological capabilities of organisations were also included.
Technologies of Industry 4.0 are still counted as amongst
emerging technologies (Frank et al., 2019).
Our finding that number of employees and annual revenue of
companies significantly and positively influence Industry 4.0
assessment is also supported in some studies (Henning, 2013;
Müller et al., 2018b). However, Lin et al. (2018) argued that
these indicators could not respond to the increased need for
advanced technologies in Industry 4.0. We also conclude that a
company’s sector does not have any significant influence on
Industry 4.0, contradicting the results of prior studies,
including Müller et al. (2018b) and Büchi et al. (2020). These
different statements raise further questions about the influences
of number of employees, annual revenue and company’s sector
on Industry 4.0 implementation.
The practices of Industry 4.0 are also suggested to tackle the
challenges driven by new pandemic (COVID-19) in supply
chains (Galanakis, 2020). Ivanov and Dolgui (2020) point out
that post-pandemic recoveries require digital technologies to
protect against supply chain shocks and disruptions. Paul and
Chowdhury (2020) developed a recovery plan on supply
chains, suggesting that advanced technologies such as IoT,
blockchain, or additive manufacturing improve accuracy of
information, supply chain collaboration and visibility, thus
increasing the recovery capabilities of supply chains. The
companies which develop the digital strategies and
manufacturing networks could be better positioned in crisis
periods (Queiroz et al., 2020). Therefore, we recommend that
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firms address the Industry 4.0 tools and technologies to reduce
losses in their supply chain activities. However, further
empirical research should focus on the utilisation of Industry
4.0 on post-pandemic recoveries in supply chains to ensure its
benefits.
6.1 Managerial implications
This study acknowledges insights into the outline of effective
strategies for Industry 4.0 implementation and SCI to improve
SCP. The key findings reveal that, Industry 4.0 enhances SCI
and SCP, and SCI mediates the relationship between Industry
4.0 and SCP, which have potential implications for
practitioners.
Firstly, the study emphasises the significant role of Industry
4.0 assessment, which streamlines the functioning of supply
chains. Accordingly, the adoption of Industry 4.0 should be
viewed as an antecedent for many organisations. As suggested
by Sony and Naik (2019), the implementation of Industry 4.0
should be analysed typologically; hereby, the essential success
factors should be perceived at supply chain level. Regarding the
impact of Industry 4.0 on SCI and SCP, this study provides
supply chain executives with new directions in innovative
thinking, and the possibilities to involve in Industry 4.0 projects
across entire supply chain processes. For example, Barata et al.
(2018) exemplified the digital transformation of Audi AG to
show the importance of implementing pilot projects. The
company uses short and long-term projects to define demands
of its business units and to improve its predictive abilities
through big data analytics. Implementation of such
projects might be a challenging task for organisations; however,
this is possible with talented project managers able to identify
the necessary tools in Industry 4.0 projects, and if successful,
facilitate firm’s assessment of the requirements of their supply
chains on their Industry 4.0 journey.
Secondly, this study validates the significant role of SCI on
SCP although pioneer studies assume that integration
enhances performance practices and is essential to the success
of supply chains. This study suggests that the implementation
of Industry 4.0 could be supplementary to SCI to the
enhancement of SCP. Therefore, we highly recommend that
organisations should focus on improving their integration
practices, both with their suppliers, and customers, and also
inside the company. For instance, innovative MES and ERP
approaches will promote the vision of real-time organisations,
which will improve full integration in supply chains
(Mantravadi and Møller, 2019).
Finally, we provide a conceptual model for Industry 4.0,
which has been investigated by only a few studies. Because of
the lack of studies on Industry 4.0 practices, organisations
consider that the requirements of Industry 4.0 assessments are
not simple. Hence, we suggest that supply chain professionals
should not only consider technological items on the way of
Industry 4.0 transformation, but also, they should follow
clearly defined Industry 4.0 strategies, such as drawing up a
roadmap, allocation of resources to Industry 4.0 investments
and conducting projects with universities, start-ups and/or
research institutes. Furthermore, the deployment of the
Industry 4.0 needs changes in employee practices and a
culture of continuous improvement for companies. According
to the survey of PwC (2016), lack of digital culture and training
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is the major challenge for organisations on Industry 4.0
transformation. Hence, employees should be encouraged to
develop their hard and soft skills for Industry 4.0. This
potentially involves professional support for employees to
develop in data accessibility, process and security, maintenance
activities, hardware and software usage, as well as creativity and
problem-solving skills.
7. Conclusion and future research directions
This study empirically tested the relationship between Industry
4.0, SCI and SCP using data collected from manufacturing
companies in Turkey. Our model was developed from prior
studies in accordance with the Industry 4.0, SCI and SCP
literature. PLS-SEM technique was used to test our analysis.
The findings revealed that Industry 4.0 has a direct impact both
in SCI and SCP; however, SCI also has a partial mediating role
between Industry 4.0 assessment and SCP. The study also
emphasises a direct relationship between SCI and SCP and
improves our understanding of the influence of Industry 4.0 on
SCM. In line with recent studies regarding Industry 4.0
implementation on supply chains (Dalenogare et al., 2018;
Frank et al., 2019), our findings supported the view that
implementation is still at its initial stage in the emerging
countries. Therefore, we call for further research papers to
examine the relationship between Industry 4.0 and SCM in an
emerging country context and focus on the influences of
number of employees, annual revenue and sector on Industry
4.0 implementation.
Finally, this study investigates the organisational and
technological constructs to measure Industry 4.0. Possible
extensions involve adding more dimensions, such as the role of
government, agile architecture or different competencies of
enterprises to support Industry 4.0 implementation.
7.1 Limitations
There are several limitations to be noted in this study. Firstly,
although Industry 4.0 is at early stage, this study provides a
broad overview of Industry 4.0 rather than concentrating on
any specific technology. The utilisation level of technologies
could be subject to change, depending on requirements, for
example, KPIs are currently the key players in technological
applications and practices (Bendavid et al., 2007; Flipse et al.,
2013; Yoon et al., 2018). This study selected a universal
framework for the selection of performance indicators
(Beamon, 1999); however, KPIs could influence organisations’
decision on the usage of digital technologies. Secondly, the
analysis was in an emerging country context, in which the
utilisation of Industry 4.0 technologies is in their preliminary
stages (Dalenogare et al., 2018). In the light of this, we removed
many technological items from our conceptual model, and this
is presumed to obstruct the generalisability of our findings for
all developing countries. As a final point, the companies were
not equally divided in terms of the number of employees,
annual revenue and sector in this study, meaning that another
shortcoming is to examine the relationship among Industry 4.0,
SCI and SCP as well as the influences of these control variables
on these three constructs. The study predominantly used the
data collected from the larger companies, and those in
 Mediating role of supply chain integration
ık Özge Yumurtacı Hüseyino
g lu and Zoltan Szegedi
Gizem Erboz, Is
the automotive and electronics sectors, which are more likely to
be pioneers on Industry 4.0 implementation.
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Corresponding author
Gizem Erboz can be contacted at: gizemerboz.ge@gmail.
com
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Appendix 1

Table A1 Measurement items of the study

Construct Components Measurement items

Industry 4.0 (Bibby and
Dehe, 2018)
Supply Chain Integration (SCI) Supplier integration SI1: Information sharing with the main suppliers (about production plans, order management,
(Jajja et al., 2018)
Strategy (STR) STR1: Clear availability of Industry 4.0 roadmap
STR2: Investing in Industry 4.0 infrastructure
STR3: Easily customising products to customers’ requests while offering the same service
quality
STR4: Partnering with external organisations to maintain Industry 4.0
Employee & culture EMP&CULT1: Familiarity of employees with Industry 4.0 activities
(EMP&CULT) EMP&CULT2: Investing in training of employees in Industry 4.0 activities
EMP&CULT3: Using ‘zero paper’ to control, display and transport data
EMP&CULT4: Maintaining continuous improvement culture within the organization
Technology (TECH) TECH1: Using advanced connectivity technology between products, equipment and employees
TECH2: The level of technology usage with suppliers to increase connectivity and
collaboration
TECH3: Accessing data quickly and effectively from machines, systems, products
TECH4: Analysing data to make decisions, information sharing and identifying trends
TECH5: Using intelligent sensors in the manufacturing process
TECH6: Storing information within a cloud
TECH7: Ability to see live manufacturing systems and respond to the changes immediately
TECH8: Ability of machines to run autonomously
TECH9: Ability of customers to access manufacturing process and delivery dates
TECH10: Using Computer-Aided Design (CAD) software and metal alloys as the raw
materials of 3 D printing (3DP) machines
TECH11: Using 3DP for the process of tooling, prototypes or spare parts
TECH12: Connectivity of hard and soft resources into the cloud
TECH13: Using digital media to bring information directly to employees
TECH14: Embracing digitalisation for products, parts and machines
TECH15: Using sensors on products and supplied parts
TECH16: The extent of automation within the production
(SI) delivery and inventory information)
SI2: Improving collaborative strategies with the main suppliers (development of supplier,
risk-sharing, long term alliances)
SI3: Improving decision making with the main suppliers (about product design/
development, quality improvement, cost and process design)
SI4: Developing a system with the main suppliers (Vendor Managed Inventory (VMI), Just
in Time (JIT), Kanban, continuous replenishment activities)
Internal integration II1: Information sharing with the purchasing department (about sales, production progress and
(II) inventory level)
II2: Improving decision making with the purchasing department (about sales, production
plans and inventory level)
II3: Information sharing with the sales department (about sales, production progress and
inventory level)
II4: Improving decision making with the sales department (about sales, production plans
and inventory level)
Customer CI1: Information sharing with the main customers (about production plans, order management,
integration (CI) delivery and inventory information)
CI2: Improving collaborative strategies with the main customers (risk sharing, long term
agreements)
CI3: Developing a system with the main customers (VMI, JIT, Kanban, continuous
replenishment activities)
CI4: Improving decision making with the main customers (about product design/
development, quality improvement and process design)
RES1: Total cost of resources used
(continued)

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 Mediating role of supply chain integration Supply Chain Management: An International Journal
ık Özge Yumurtacı Hüseyino
g lu and Zoltan Szegedi
Gizem Erboz, Is Volume 27 · Number 4 · 2022 · 538–559

Construct Components Measurement items

Supply Chain Performance
(SCP) (Beamon, 1999)
Resource utilisation RES2: Total cost of distribution such as transportation and handling costs
(RES) RES3: Total cost of manufacturing including employee, maintenance and re-work costs
RES4: Cost related to inventory
RES5: Return on Investments
Output (OUT) OUT1: Total sales performance
OUT2: Order Fill Rate
OUT3: On-time Deliveries
OUT4: Customer Response Time
OUT5: Shipping Performance
OUT6: Manufacturing Lead Time
OUT7: Customer Satisfaction (low level of complaints, after-sales services)
Flexibility (FLEX) FLEX1: Ability to respond to demand changes such as seasonality
FLEX2: Ability to respond to periods of low manufacturing performance
FLEX3: Ability to respond to periods of low supplier performance
FLEX4: Ability to respond to periods of low delivery performance
FLEX5: Ability to respond to new products, new markets and new competitors

Appendix 2

Figure A1 Results of structural equation model

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