Industry 4.0 Practices Adoption and Supply Chain Performance of Large Tea Exporting Firms in Kenya

Abstract

Industry 4.0 is an emerging and revolutionizing approach, with advanced technologies enabling the digital transformation of supply chains. As its adoption increases, understanding its impacts on key performance metrics is imperative. This study examined how Industry 4.0 practices influence flexibility, costs, agility and responsiveness within Kenyan tea exporters' supply chains. Three objectives were defined. First, to evaluate the transformation levels by assessing the adopted Industry 4.0 practices. Second was determining the impact of the practices on important supply chain metrics like flexibility, costs, and responsiveness, and the third was to identify challenges encountered in set up of these practices. The study was anchored on systems theory as well as resource-based view theory, which scoped individual competitive edges that were then weaved together to create an efficient industry. A cross-sectional research design was employed, targeting tea exporting companies in Kenya. 100 questionnaires were distributed with a return rate of 73 percent hence sufficient for further analysis. Descriptive statistics and regression analysis were conducted using SPSS on the data pertaining to perceived impacts on flexibility, costs, responsiveness, and the overall supply chain performance. Results showed that Industry 4.0 can enhance flexibility through improved adaptability, quality maintenance, and collaboration within processes. Digitalization also reduces costs through efficiencies and waste elimination. Regression analysis revealed a strong positive relationship between Industry 4.0 implementation and overall supply chain performance, with the model explaining over 90 percent of the variance noted. This indicates digital transformation strategies can directly translate to measurable business gains. Robotics, big data analytics, and cloud computing were found to significantly influence performance outcomes when adopted together as an integrated suite of capabilities. However, technologies such as Internet of Things, cybersecurity and AI were not statistically significant. The tea exporting companies also face constraints in the adoption of Industry 4.0 practices. Major obstacles were limited funding for investments and skilled talent shortages, restricting the desired deeper transformation. Resource constraints presented barriers to fully realizing Industry 4.0's benefits, as seen across surveyed exporters. In conclusion, when these barriers are addressed, Industry 4.0 practice adoption is recommended as it empowers competitive advantages for tea exporters through improved supply chain efficiency and performance