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Procedia Computer Science 00 (2022) 000–000
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Procedia Computer Science 217 (2023) 614–619

4th International Conference on Industry 4.0 and Smart Manufacturing

Industry 4.0 Maturity and Readiness- A case of a Steel

Manufacturing Organization
Pinosh Kumar Hajoarya*
a*
DoMS,
DoMS, IIT Madras, Madras, Tamil Nadu,600036, India

Abstract

Industry 4.0(I4.0) is changing the manufacturing ecosystem of the world with the integration of digital technologies
in the way companies manufacture, improve, and distribute their products. However, most manufacturing companies
often fail to integrate these technologies within their organizational departments due to a lack of Industry 4.0 readiness
assessment of the existing systems, processes, and practices. On the other hand, using Industry 4.0 readiness measures,
it is possible to assess the current status of the organization to enable them to integrate and help them transition towards
an Industry 4.0 mature and ready organization. Hence, this study presents a case analysis of major departments of a
large integrated steel manufacturing company and identifies gaps and provides recommendations to reach towards
Industry 4.0.
© 2022 The Authors. Published by Elsevier B.V.
© 2022 The Authors. Published by ELSEVIER B.V. This is an open access article under the CC BY-NC-ND license
This is an open access article under the CC BY-NC-ND license (https://creativecommons.org/licenses/by-nc-nd/4.0)
(Peer-review
https://creativecommons.org/licenses/by-nc-nd/4.0)
under responsibility of the scientific committee of the 4th International Conference on Industry 4.0 and Smart
Peer-review
Manufacturing under responsibility of the scientific committee of the 4th International Conference on Industry 4.0 and Smart
Manufacturing
Keywords: Industry 4.0; Maturity and Readiness; Assessment; Steel manufacturing

1. Introduction

Technological advancements have changed the manufacturing industry over the years. It has changed the way
products are produced and distributed to consumers. It has also improved the efficiency and productivity of
industrial manufacturing systems and processes.

*
Corresponding author.
E-mail address: pinoshkrhajoary@gmail.com

1877-0509 © 2022 The Authors. Published by ELSEVIER B.V. This is an open access article under the CC BY-NC-ND license
(https://creativecommons.org/licenses/by-nc-nd/4.0)
Peer-review under responsibility of the scientific committee of the 4th International Conference on Industry 4.0 and Smart Manufacturing

1877-0509 © 2022 The Authors. Published by Elsevier B.V.

This is an open access article under the CC BY-NC-ND license (https://creativecommons.org/licenses/by-nc-nd/4.0)
Peer-review under responsibility of the scientific committee of the 4th International Conference on Industry 4.0 and Smart
Manufacturing
10.1016/j.procs.2022.12.257
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2 pinoshkumarhajoary/ Procedia Computer Science 00 (2019) 000–000

Of late, the concept of Industry 4.0 also came into the picture with the introduction of nine advanced technologies
such as IoT, cloud computing, big data, additive manufacturing, autonomous robots, cybersecurity, augmented reality,
and simulation technologies [1]. Industry 4.0 represents the end-to-end digitalization of existing systems and processes
into the value chain of the organization. It is the basis of the integration of physical objects, machines, systems, and
processes through a connected network [2]. In general, it is also known as smart manufacturing in many countries.
Of late, many practitioners and academic researchers focused on the development of Industry 4.0 maturity and
readiness models to evaluate the current status of the organization. However, most of these models focused on
assessing dimensions without analyzing the company’s internal departments. Hence to close this gap, the main aim of
this study is to evaluate the core department value chain of steel manufacturing readiness both qualitatively and
quantitatively towards Industry 4.0. We adopted the “IMPULSE Industry 4.0 readiness model” framework and
demonstrated it with a case study in a steel manufacturing organization.
This study is organized in the following sections: The first section briefly discusses Industry 4.0 and its maturity
and readiness models. The second section elaborates on the research methodologies, case company profile, and data
collection process. The third section brings out the results, discussion, and overall assessment. Finally, the last section
outlined the conclusion, limitations, and future scope of research.

2. Industry 4.0 Overview in brief

The term Industry 4.0(I4.0) got introduced for the first time at Hannover Fair 2011 by the German government [3].
During this fair, Government officials along with experts from academia and industry practitioners jointly initiated an
ambitious “High Tech Strategy 2020” project [4]. Under this project, the Federal government of Germany aimed to
reinvent the manufacturing ecosystem with the adoption of advanced technologies to improve operational efficiency
and productivity level [5]. I4.0 is defined as the end-to-end digitalization of existing systems and processes into a
digital ecosystem [6]. According to KPMG, it is defined as a “network that brings together the different silos in a
production system via a network, allowing real-time data sharing and facilitating machine-to-machine and human-to-
machine interactions of unprecedented speed and scale”. It is also defined as the vertical and horizontal integration of
physical assets into a digital ecosystem [7]. Meanwhile, some termed it digital manufacturing or cyber-physical
production system. However, there is no standard and well-accepted definition as more and more definitions have led
to more confusion [6,8].
I4.0 is composed of nine key technologies namely- the internet of things, computing, big data, additive
manufacturing, autonomous robots, cybersecurity, augmented reality, and simulation technologies [9]. These
technologies are the key drivers of automation and digitalization. Meanwhile, the adoption of these technologies has
led to the transformation of a dynamic manufacturing environment thus reducing cost and improving operational
efficiency, quality, customization, and productivity [10]. On the other hand, it has six design principles namely-
virtualization, decentralization, interoperability, real-time capability, service orientation, and modularity. These design
principles provide a basis for systematic knowledge on “how to do” phenomena in the transition towards Industry
4.0[3].
Of late, several countries have initiated an ambitious initiative to adopt these technologies as they may bring
significant strategic benefits leading to the improvement in the financial and economic performance of the country
[11]. Counties such as the USA set up the “National Network for Manufacturing Innovation”, China with “Made in
China 2025”, Japan with “Society 5.0” and France with “Industrie du Futur” have taken the lead in creating a
framework for widespread implementation. In India, the government has set up “Make in India” initiative along with
“SAMRATH Udyog Bharat 4.0” to transform and build a healthy ecosystem for the adoption of I4.0 technologies [6].
In this regard, many countries have started assessing I4.0 readiness as it is considered the first step in leapfrogging
towards I4.0. We will discuss in detail I4.0 maturity and readiness in the succeeding sections.

2.1 Industry 4.0 Maturity and Readiness Models

The maturity and readiness models are critical tools for assessing organizational competencies, identifying areas
for improvement, and taking corrective action. The concept of maturity and readiness was derived from the Software
Engineering Institute's (SEI) Software Capability Maturity Model Integration (CMMI) in 1986[12]. Thereafter, many
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practitioners and researchers have used this framework to create I4.0 maturity and readiness models to assess the
organization's current state. The primary goal of I4.0 maturity and readiness is to evaluate the level of preparedness,
attitudes, and resources at all organizational levels [9]. In general, maturity and readiness models serve as a foundation
for improving and benchmarking an organization's internal state. It is made up of a series of stages or levels that lead
from the expected to the desired state [13]. According to [14], I4.0 MR is the first step toward understanding the
current capabilities and technologies for I4.0. It also elucidates the level of abstraction, thereby supporting the
theoretical foundation of evolution from one step to the next concerning the domain of the entity under investigation
or following improvement measures for the same [15,16]. VDMA, in collaboration with RWTH Aachen University,
proposed "IMPULS-Industry 4.0 readiness" while keeping SMEs and MSMEs in mind. The model focused on the
overall five-stage assessment without considering the organization's departmental value chain. Similarly, Schumacher
et al. (2016); Hajoary and Akhilesh (2021) proposed I4.0 MR models to assess the organization's status. Most of the
aforementioned models take into account the dimensions of manufacturing organizations as well as enabling
technologies. The majority of these models lacked empirical validation, the relevance of dimensions, levels, and
assessment of departmental value chains. Overall, we discovered the "IMPULS Industry 4.0 readiness" model to be
the most commonly used model in the literature for assessing I4.0 MR of the organization. The model measures six
dimensions, namely strategy and organization, smart factory, smart operations, smart products, data-driven services
and employees. Keeping the foundations in mind, we adopted six major dimensions from the literature for this study:
strategy and organization, business model, manufacturing and operations, supply chain, products and services, and
production technology, as well as thirty-two indicators (Fig 1,2,3,4,5,6). The mentioned dimensions form the core part
of the steel manufacturing organization. And these dimensions and indicators represent a comprehensive picture of
various aspects of the manufacturing organization.

3. Methodology

This study adopted a case method to find out the status level of a steel manufacturing company in terms of Industry
4.0 maturity and readiness. Our goal is to explore the status of Industry 4.0 maturity and readiness of a steel
manufacturing organization. For this, we adopted a qualitative research strategy to elicit holistic insights into the value
chain of the organization. We identified a large integrated steel manufacturing organization to gain deep insights into
the case organization. Generally, a single case study is more suited to gain a rich understanding of emerging
phenomena.

4. Profile of Case Organization

The case organization is one of the largest integrated steel manufacturing company and has a presence in over a
hundred countries. It is one of the most advanced steel plants in the world and produces various high-end steel products
for automobile companies and other sectors. The company has around senior 200 managers working in various
departments in the organization. Recently, the company has initiated various developmental activities to adopt
Industry 4.0 technologies in the systems and processes of the organization.

5. Data Collection and Analysis

In line with the case study, we designed a structured questionnaire survey and circulated it to all the senior managers
over a period of three months. For this study, we have only considered respondents from the coke oven, raw material
handling section, blast furnace, operations and logistics, technology excellence, and human resource departments. All
of the responders were senior managers with more than five years of experience in a steel production plant. The
questionnaire was distributed to 72 managers, and we received 53 final responses with a response rate of 73.61 percent,
which is above the required percentage. For the final study, the three incomplete responses were eliminated.

We used a simple average method in the analysis to gain insights into the case organization's maturity and readiness
level. A radar chart is being created to determine the current state of Industry 4.0 maturity and readiness levels.
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Employee capability (1.76), skill acquisition (1.84), degree of organizational strategy (1.6), and collaboration (1.9)
are all below level 2 in terms of strategy and organizational dimension (Figure 1). All three indicators in the business
model dimension-as a service business model (2.16), marketing channels (2.34), and data-driven decisions (2.4)-are
above level 2(Figure 2). Meanwhile, except for digital modelling, all nine indicators in the manufacturing and
operations dimension fall below level 2(Figure 3). In terms of the supply chain, the case organization is somewhere
between level 2 and level 3(Figure 4). The indicator of product customization in the products and services dimension
is lower than level 2, and the remaining indicators are between levels 2 and 3(Figure 5).

Figure 1. Strategy and Organization dimension Figure 2. Business model dimension

Figure 3. Manufacturing and Operations dimension Figure 4. Supply Chain dimension

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Figure 5. Products and Services dimension Figure 6. Overall Industry 4.0 MR level

6. Findings and Conclusion

Based on our analysis, we found out that the case organization lacks in terms of strategic initiatives, skill
acquisition, and employee capability. They are still in between 1-2 levels which is low in terms of Industry 4.0 maturity
and readiness level. On the other hand, the organization also has low maturity in terms of the use of digital modeling
techniques for designing products. In terms of the supply chain, the case organization lacks end-to-end visibility of
the supply chain and the amount of time taken to manufacture products. Overall, the organization stands between 2-3
levels in terms of Industry 4.0 maturity and readiness. More importantly, the organization is doing well in terms of
the adoption of automation and production technologies in systems and processes. However, the organization needs
to adopt long-term and short-term strategic initiatives for the widespread implementation of Industry 4.0 technologies
and practices. The organization must use digital modeling techniques such as 3D printing and simulation for designing
prototypes. In addition, the company must provide customization of their products as per the needs of the customers.
For this the organization may use cloud computing techniques to store data. In terms of overall Industry 4.0 maturity
and readiness, the case organization stands in between 2-3 levels (Figure 6). To improve and reach toward Industry
4.0 mature and ready organization, senior managers must focus on upskilling and reskilling their employees with
Industry 4.0 technical skills and bring about a change in the adoption of Industry 4.0 technologies and practices. More
importantly, senior managers must provide measurable results for the identification of gaps in each area of dimensions
of the organization and take corrective steps for improvement.

7. Limitations and Future Research

There are some limitations to this study. This study investigates a single steel manufacturing organization in core
departments. In this regard, our findings are limited to the steel manufacturing setup and do not resemble other
manufacturing organizations. Although the study adopted six main dimensions, in the future we will explore other
dimensions like legal and regulatory in sectors like defence, railways, mining, etc. Future researchers can also explore
multiple case studies and comparative analyses with other manufacturing organizations to bring out a level of
abstraction for generalization.

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