The performance impact of Industry 4.0 technologies on closed-loop supply chains: insights from an Italy based survey

Closed-Loop Supply Chain (CLSC) and Industry 4.0 (I4.0) are two significant initiatives that have engaged European and global business over the past few years. While direct effects of these initiatives on performance have been found, the nature and performance effects of interactions among these two initiatives remain largely unexamined. This exploratory study theorises and investigates how I4.0 technologies can facilitate CLSC initiatives. Data are collected and analysed from enterprises located in the northeast of Italy. Partial least squares structural equation modelling (PLS-SEM) is deployed to analyse the data. The data suggest a significant and beneficial moderator of I4.0 technologies on the relationship between CLSC practices and firm environmental and social performance. The data fails to find a significant relationship between CLSC practices and financial performance. Data-driven I4.0 technologies are seen to be of greater significance in such moderator roles, comparative to process-driven I4.0 technologies. Our analysis suggests that companies may be advised to adopt a targeted, systems approach for using data-driven I4.0 applications in conjunction with CLSC practices in order to realise performance gains. The findings represent important building blocks in developing theory in this formative area of study. Further implications are discussed from theoretical and practical perspectives.

Automated summary

This study investigates the facilitation of closed-loop supply chain initiatives through industry 4.0 technologies and finds that industry 4.0 technologies have a significant and beneficial moderator effect on the relationship between closed-loop supply chain practices and environmental and social performance, but not on financial performance.