Assessment of Risks for Successful Implementation of Industry 4.0

Purpose: The transformation happening globally, though referred to by different names and nomenclatures, the overall objective to inspire digitalization and smart practices by reducing human intervention and enhancing machine intelligence to take on the global manufacturing and production to another level of excellence is a proven fact now. However, earlier research has been found lacking in the strategic approach to evaluate and analyze the I4.0 adoption-related risks for its implementation. This ultimately deprived organizations of a multitude of the benefits of I4.0 adoption. This research proposes a systematic methodology for understanding and evaluating the most evident risks in the context of I4.0 implementation. Design/Methodology/Approach: The research is mainly based on the inputs from experts/consultants along with robust literature review and researcher’s experience in the area of risk handling. The MCDM methods used for investigation and assessment are Fuzzy AHP and Fuzzy TOPSIS. The outcomes of the study are further validated through sensitivity analysis and real-world scenario. Results: Technical and Information Technology (IT) risks are found to be on the top of the priority list, which needs urgent attention while embarking on I4.0 adoption in the industry, and the most important criteria, which needed urgent attention was Information Security. The paper has also developed the ‘Industry 4.0 Risks Iceberg model’ and systematically categorized the challenges into 5 dimensions for easy assessment and analysis. Practical Implications: This systematic and holistic study of the I4.0 associated risks can be used to find the most critical and crucial risks based on which the strategies and policies may be modified to harness the best of I4.0. This will not only ensure the returns on investment but also will build trust in the system. The research would be very beneficial to managers, academicians, researchers, and technocrats who would be involved in I4.0 implementation.