Application of industry 4.0 technologies in SMEs for ethical and sustainable operations: Analysis of challenges

In the era of Industry 4.0 and circular economy, small and medium enterprises (SMEs) are under huge pressure to make their manufacturing operations ethical and sustainable. Business with ethical and sustainable operations has become the need of the day in the present environment of Industry 4.0 and circular economy. It has been observed that the application of Industry 4.0 technologies may help in achieving the goal of ethical and sustainable operations. Although a lot of research has been done in context to larger enterprises, limited research is available on the application of Industry 4.0 technologies in SMEs for ethical and sustainable operations. The espousal of Industry 4.0 technologies is a challenging task for SMEs due to various operational and financial constraints. The problem is more acute, specifically in context to developing countries like India. Keeping in mind the role of technologies in ethical business and circular economy, we have identified fifteen challenges, impacting the application of Industry 4.0 technologies in SMEs. A questionnaire was designed for collecting the response from industry and academic experts. On the collected data, the DEMATEL approach has been applied to check the degree of influence and interrelationship among challenges. It has also helped in the categorization of factors as cause and effect. Sensitivity analysis is also performed to validate the results obtained from the DEMATEL approach. Authors have observed that lack of motivation from partners and customers on the application of I4.0 technologies is the leading challenge. Fear of failure of I4.0 technologies is the main effect group challenge. The findings of the study will help SMEs in formulating strategies for implementing Industry 4.0 technologies for ethical and sustainable business processes.