Proposal Development-I

BAHRIA UNIVERSITY, ISLAMABAD

TOPIC: INFLUENCE OF INDUSTRY 4.0 ON THE PRODUCTION AND

SERVICE SECTORS IN PAKISTAN

SUBMITTED BY
MUHAMMAD WALEED BARYA
01-322191-016

SUBMITTED TO:
MAAM, SHAGUFTA WASEEM

Final Draft

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 Proposal Development-I

Dedication
This humble effort is dedicated to our respected parents who sacrificed most of their
life for giving us a bright future ahead and to our teachers who worked hard and
helped us in this effort.

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 Proposal Development-I

Acknowledgements
We would like to express our gratitude first of all to Allah Almighty and our beloved parents for
making it possible for us to reach where we are today.

We would also like to pay our heartiest thankfulness to our parents and all the well-wishers whose
prayers, pray and encouragement helped us to complete this project. We would highly like to
recognize the inspirational support showed to us by our supervisor, Mrs. Shagufta Waseem for the
help that he extended to us during the course when I approached her, she assists me at any moment.

We are extremely obliged to our other class fellows who helped us out some way or the other in
this project.

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 Proposal Development-I

Abstract
This research aims to investigate the role of Industry 4.0 in the production and service sector in
Pakistan. It therefore considers five Industry 4.0 factors, namely big data, smart factory, cyber
physical systems (CPS), Internet of things (IoT), and interoperability. In order to analyze the role
of Industry 4.0, the textile industry is taken as a production industry, while the logistics industry
is considered as a service industry. Both are facing various challenges in production and services
causing below standard overall performance. To address this issue, a quantitative research
approach with cross-sectional research design was selected. First hand data was collected through
a survey questionnaire from employees of textile and logistics companies. Smart partial least
square-structural equation modeling (PLS-SEM) was preferred to analyze the collected data.
The software used for testing will be SPSS. Findings of the study revealed that Industry 4.0 has a
key role in promoting the production and services sector in Pakistan, as it has a significant impact
on the overall performance of the considered sectors. This research is one of the pioneer studies
that examines the role of Industry 4.0 on the textile and logistics industry of Pakistan. Thus, this
research also contributes in a practical dimension by explaining the implementation of Industry
4.0 for improving the performance of the textile and logistics industries.

Keywords: Industry 4.0; big data; smart factory; cyber physical systems; Internet of things (IoT);
interoperability; logistics; textile; production industry; services industry

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Contents
Chapter 1....................................................................................................................................................... 6
1) Introduction ......................................................................................................................................... 6
1.1) Background of the Study ..................................................................................... 6
1.2) Purpose of Study: ................................................................................................ 7
1.3) Research Problem ............................................................................................... 8
1.4) Research Questions ............................................................................................ 8
1.5) Research Objectives ........................................................................................... 8
1.6) Significance of the Study..................................................................................... 8
1.7) Operational Definitions:..................................................................................... 9
Chapter 2..................................................................................................................................................... 10
2) Literature Review .............................................................................................................................. 10
2.1) Big data & smart factor Vs Production & services industry performance: ..... 10
2.2) Cyber Physical system vs Production & service industry performance: ......... 11
2.3) IoT vs Production & service industry performance: ........................................ 11
2.4) Interoperability vs Production & service industry performance: .................... 11
2.5) Industry 4.0 Applications for the Production and Service Industry ................. 11
Chapter 3..................................................................................................................................................... 14
3) Research Methodology ...................................................................................................................... 14
3.1) Theoretical Framework .................................................................................... 14
3.2) Research Methodology ..................................................................................... 15
3.3) Population and sampling: ................................................................................ 15
3.3.1) Population .................................................................................................. 15
3.3.2) Sampling Size and Sampling Technique .................................................... 15
3.4) Scales and Measures ........................................................................................ 15
3.5) Questionnaire Development ............................................................................. 16
3.6) Data Collection Procedure ............................................................................... 17
References ................................................................................................................................................... 18
Appendix A .................................................................................................................................................. 21
Fact sheet .................................................................................................................................................... 25
Power Point presentation............................................................................................................................ 26

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Chapter 1
1) Introduction
1.1) Background of the Study
Supply Chain Management has become an essential prerequisite to stay in the competitive global
environment for profitability especially for profit government corporations and entities.
Procurement is part of supply chain management activities and has exploded into the business
scene as one of corporate management’s major concerns over the past years. According to
researcher almost 70% of a firm’s sales revenues is spent on supply chain-related activities from
material purchases to the distribution of goods and services of finished products to the end
customers. thus, effective supply chain is a critical factor to achieving high performance which
requires end-to-end visibility into factors that drive performance such as cash-to-cash cycle time,
overall supply chain cost or perfect order fulfillment. In today’s dynamic global competitive
business environment, technology-based service is no longer an afterthought; rather it is a must
for public and private organizations. It has become necessary for companies to provide their
customers with cost-effective total solution and better customer satisfaction with innovative ideas
and methods. Companies have been forced to shift their operation from the traditional style to e-
Business, e-Procurement and e-Supply Chain philosophy in order to sustain themselves.
Nowadays, the fourth industrial revolution—fourth in the sense of its innovative and qualitative
nature—is taking place. On the one hand, the quality of the changes can be seen in the fact that
the whole production process is managed and supervised in an integrated way, and is combined,
yet flexible. In order to remain competitive in a globalized environment, manufacturing companies
need to constantly evolve their production systems and accommodate the changing demands of
markets (Pedersen,M.R.;Nalpantidis,L.;Andersen, R.S.;Schou,C.; Bøgh,S.; Krüger,V.; Madsen,O)
[19]
.
Industry 4.0 is a name given to the recent tendency of automation, as well as data exchange, in
various manufacturing technologies. It comprises of cyber physical systems, cognitive computing,
cloud computing, and the Internet of things. It is generally referred to as the fourth industrial
revolution. The key to every industrial revolution is improvement in productivity (Herˇcko et al.
2015; HuseyniÌ et al. 2017; Stverkova and Pohludka 2018) [1,2,3]. Nowadays, a well-performing
enterprise can be considered as one capable of using many opportunities, being adaptable to
continual changes in the environment, and achieving better performance (Rajnoha and Lesníková
2016) [4]. Organizations have achieved a higher profitability through the use of the steam engine,
power, and the move from simple to computerized innovation. Most of the progressive methods
of modern enterprise performance management share a strong strategic orientation of management
focused on further business development. These progressive methods use highly sophisticated
knowledge resulting from modern enterprise information technology, such as business
intelligence, or the latest big data analytics (Rajnoha and Lorincová 2015) [4]. The effect of
Industry 4.0 is broader, and it influences not only production, but also indirect departments,
particularly engineering procedures.
The fourth industrial revolution is based on data. The way it can be gathered and analyzed, and
used to make the right decisions and develop, has become a competitive factor. The source of
competitive advantage, therefore, will not only be production on a coordinated or completely new
basis (e.g., additive production), but also the embedding of products with digital services (e.g., in

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the event of a failure, the machine itself indicates which replacement part should be brought in),
i.e., how companies filter the relevant information from the generated data in order to support
decision-making (Deloitte: eissbauer, R.; Vedso, J.; Schrauf, S) [5,6].
In recent decades, manufacturing and production systems have been gradually supplemented by
information technology support instruments, because controlling more and more complex
technologies, the demands of multi-site production, and supporting logistic processes have become
even more complex tasks. The inevitable role of IT (Information Technology) at companies has
transformed both working conditions and efficiency, and its importance is unquestionable (Nick,
G.; Pongrácz, F) [7].
The fourth modern transformation, or Industry 4.0, causes extensive fluctuations in industrial
production (Kagermann et al. 2013)[8]. Starting from the German strategic initiative, Industry 4.0
is presently a major frame of a few countries from the U.S., Europe, and Asia (Kagermann et al.
2013; ´Slusarczyk 2018) [8,9]. It has worked quickly in the creation of advanced ideas
(Strandhagen et al.2017) [10] for instance, the Internet of things (IoT), big data, smart factory,
cyber physical systems, and interoperability rely upon a prompt change in the outlook in
mechanical creation. Nowadays, most production and services companies are moving towards
higher technology by introducing Industry 4.0 ideas (Oláh et al. 2018a) [11]. Production and
services industries are the backbone of every country, having significant a contribution to a
nation’s economy (ibid). However, the production and services sector of Pakistan has not achieved
significant growth in current years due to low technological improvements (Khan and Khan
2010)[12]. The textile industry is one of the major production sectors in Pakistan. However, it has
been facing various challenges related to technology. Production has been influenced negatively
due to a decrease in technological advancement, leading to an effect in overall performance. The
Pakistan textile industry contributes approximately more than 60 percent (U.S. $9.6 billion) to the
total exports of the country. Despite this, the industry is facing a extensive decline in its growth
rate (Khan and Khan 2010) [12].

1.2) Purpose of Study:

Pakistan’s textile exports have been on a massive and consistent decline for a long period (Khan
and Khan 2010) [12]. This has caused a drop in Pakistan’s exports to a new six-year low, and a
gross domestic product (GDP) growth reaching only 4.24% in 2015 (Pakistan Bureau of
Statistics 2016) [13]. Pakistan’s GDP growth is significantly lagging behind other frontier markets
in Asia, such as Cambodia, Bangladesh, Vietnam, and Laos.
Apart from the production sector, the services sector of Pakistan is also not performing up to
standard (Shamsi and Syed 2015) [14]. The logistics industry of Pakistan is facing different issues
(Hameed et al. 2018) [15] due to a lack of technological development, as Pakistan’s electronic
commerce market is very volatile and the logistics industry is struggling to cope with various
problems (Shamsi and Syed 2015) [14]. Additionally, the logistics industry is lacking as compared
to other neighboring countries, namely China, India, and Malaysia (Hameed et al. 2018) [15].
However, all the issues in the production and services industries of Pakistan can be resolved
through introduction of Industry 4.0 technologies. It is expected that Industry 4.0 related
technologies, such as big data, smart factory, cyber physical systems (CPS), the Internet of things
(IoT), and interoperability, have the ability to resolve various issues through modern technologies.
According to prior studies (see for instance: Brecher 2015; Schuh et al. 2014) [16,17], four
enablers of productivity growth under Industry 4.0 include IT-globalization, single source of truth,

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automation, and cooperation (Oláh et al. 2018b) [18]. These productivity enablers are important in
both the production as well as the service industry. Industry 4.0 promotes production and services
which automatically increase the overall performance of the production and service industries.

1.3) Research Problem

This research study is performed for addressing the gap that has been identified with the previous
research work performed by other researchers in the past regarding explanation of impact that
factors such as (big data, smart factory, cyber physical systems, Internet of things (IoT),
interoperability, production industry, services industry) play in influencing supply chain
management, Production & service industry performance. This research study will highlight the
significant impact of each factor including big data, smart factory, cyber physical systems, Internet
of things (IoT), interoperability over the Production & service industry performance.
1.4) Research Questions
 What is the effect of big data on Production & service industry performance?
 What is the effect of smart factory on Production & service industry performance?
 What is the effect of cyber physical systems on Production & service industry performance?
 What is the effect of IOT on Production & service industry performance?
 What is the effect of interoperability on Production & service industry performance?

1.5) Research Objectives

Therefore, the objective of this research is to investigate the role of Industry 4.0 in the production
and service sectors of Pakistan. However, the sub-objectives are given below:
1. To examine the role of five Industry 4.0 factors, namely big data, smart factory, cyber
physical Systems (CPS), the Internet of things (IoT), and interoperabilty, in production and
service operations in the textile and logistics industries.
2. To examine the role of production and service operations in the enhancement of the textile
and logistics industries’ performance.

1.6) Significance of the Study

This study is focused on examining the factors affecting supply chain management within
manufacturing, production & service industry. The significance of this study lies for
manufacturing & production companies which are desiring to acquire a sustainable competitive
advantage. Findings of this study will clarify the impact of factors such as big data, smart factory,
cyber physical Systems (CPS), the Internet of things (IoT), and interoperability has over the supply
chain management. This study will also provide a logical evidence for the manufacturing
companies regarding the understanding of factors such as big data, smart factory, cyber physical
Systems (CPS), the Internet of things (IoT), and interoperability and the influence that each factor
has over supply chain management & production & service industry. This study is significantly
important for supply chain students, as it will help in increasing their knowledge regarding the
literature.

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1.7) Operational Definitions:

Cyber physical system:
Cyber-Physical System (CPS), a new generation of digital system, mainly focuses on complex
interdependencies and integration between cyberspace and physical world. A CPS is composed of
highly-integrated computation, communication, control, and physical elements.

Big Data:
Big data is a combination of structured, semi structured and unstructured data collected by
organizations that can be mined for information and used in machine learning projects, predictive
modeling and other advanced analytics applications. Systems that process and store big data have
become a common component of data management architectures in organizations.

Interoperability:
Interoperability contributes to fulfilling the needs for transactional and/or informational
collaboration in modern supply chains. Supply chain management implies transversal
interoperability across several interdependent entities on the legal, institutional and strategic
planes, without these entities establishing any subordination relationship.

Smart Factory:
Smart manufacturing (SM) is a technology-driven approach that utilizes Internet-connected
machinery to monitor the production process. The goal of SM is to identify opportunities for
automating operations and use data analytics to improve manufacturing performance.

Internet of Things (IoT):

The internet of things, or IoT, is a system of interrelated computing devices, mechanical and digital
machines, objects, animals or people that are provided with unique identifiers (UIDs) and the
ability to transfer data over a network without requiring human-to-human or human-to-computer
interaction.

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Chapter 2
2) Literature Review
Industry 4.0 can be defined as an umbrella term, denoting a variety of recent concepts, as well as
numerous linked disciplines within industry (Lasi et al. 2014) [20]. The primary drivers of Industry
4.0 can be separated into two major aspects. In the first case, it is the mixture of quickly progressing
technological expansions with the Internet of things (IoT), big data, cyber physical systems (CPS),
smart factory, and interoperability. Such types of technologies may cause a paradigm shift within
industrial production (Lasi et al. 2014) [20], and this can be further explained as technology push.
The other aspect is the demand from various manufacturing firms, particularly in different
countries having high cost levels, to make oneself autonomous of high labor costs by exploiting
new technology with the help of Industry 4.0 (Strandhagen et al. 2018)[21]. Industrial revolution
takes place and how we reached the current level of Industry 4.0 (Kagermann et al. 2013)[22]. The
first industrial revolution took place in 18th century, the second took place in 19th and 20th
centuries, the third took place in the late 20th century, and finally, the fourth industrial revolution
(Industry 4.0) took place in 21th century
In the context of technological advancement, this study provides vital information on how to boost
productivity in production (textile) and service (logistics) industries based on the various principles
of Industry 4.0. The current study defines the basic factors, as well as mechanisms of increasing
productivity, based on this concept. The major focus of the current study is based on five Industry
4.0 factors: big data, smart factory, cyber physical systems (CPS), the Internet of things (IoT), and
interoperability. This research examines how these factors are helpful in the production and service
sectors.

2.1) Big data & smart factor Vs Production & services industry performance:
Big data is an umbrella term for any technique used to process a huge amount of data or
information, comprising capture, security, transfer, storage, analysis, curation, search, privacy, and
visualization, and including both structured and unstructured data (Xu and Duan 2018) [23]. Big
data is a term used to refer to the rise in the volume of data that is hard to store and process, as
well as analyses with the help of traditional database technologies (Hashem et al. 2015) [24]. The
nature of big data comprises substantial procedures to recognize, as well as translate, the data into
new insights. Numerous researchers have applied big data in prior studies. For instance, (Manyika
et al. (2011) [25] referred to big data as a large volume of scientific data for visualization. (Manyika
et al. (2011) [25] defined big data as “the amount of data just beyond technology’s capability to
store, manage, and process efficiently.” Meanwhile, (Zikopoulos et al. (2013) [26] defined big data
as characterized by three Vs: Volume, variety, and velocity. “Big Data is a collection of data from
traditional and digital sources inside and outside your company that represents a source for ongoing
discovery and analysis.” No doubt big data is supposed to be a new form of capital in today’s
marketplace (Mayer-Schönberger and Cukier 2013; Satell 2014) [27], however several firms
have remained unsuccessful in exploiting its advantages (Mithas et al. 2013) [28]. On the other
hand, the idea of the smart factory is the unified connection of various steps of individual
production, from the initial planning stages to actuators in the field.

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2.2) Cyber Physical system vs Production & service industry performance:

“Cyber-Physical Systems (CPS) refers to a new generation of systems with integrated
computational and physical capabilities that can interact with humans through many new
modalities” (Baheti and Gill 2011) [29]. The capability to interact with and enlarge the abilities of
the physical world with the help of computation and communication, as well as control, is a
significant enabler for future technological developments.

2.3) IoT vs Production & service industry performance:

Moreover, the Internet of things (IoT) is a simple term for a magnificent idea. The Internet of
things (IoT) is the linkage of all devices to the internet as well as each other. There are three
Internet of things (IoT) components, which consist of (a) hardware, (b) middleware, and (c)
presentation (Gubbi et al. 2013) [30]. Definite taxonomies of each component can be found
elsewhere (Buyya et al. 2009; Tilak et al. 2002; Tory and Moller 2004) [31,32,33].

2.4) Interoperability vs Production & service industry performance:

“Interoperability is in essence what happens when we bring the above elements together. It is the
connection of cyber-physical systems, humans and smart factories communicating with each other
through the Internet of Things (IoT).” In this direction, manufacturing partners can efficiently
share various types of information error-free. Basically, interoperability enables error-free
transmission as well as translation. It is one of the basic requirements of a modern technological
system (Sheth 1999) [34].

2.5) Industry 4.0 Applications for the Production and Service Industry
The environment of production can be defined as the environment in which a firm related to
production continues their operations. Therefore, it links with both external as well as internal
factors (Strandhagen et al. 2017; Govorukha and Kuchkova 2018) [35,36]. A significant factor
for explaining the production environment is the customer order decoupling point (CODP). It is
one of the value creation processes in which a product is matched with a real customer order. After
production manufacturing, it is delivered to the customer through logistics companies. Thus, both
production (textile) as well as services (logistics) industries work together and meet the customer’s
needs. However, for smooth operations, both these industries require technological advancement
through Industry 4.0. Table 1 shows Industry 4.0 technologies for logistics.

Source Strandhagen et al. (2018) [37].

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Advanced technological developments empower researchers to classify patterns in big data

(Lycett 2013) [38]. Such scientific investigation needs less reliance on present knowledge and more
focus on what is unknown (Sammut and Sartawi 2012) [39]. With the help of big data, it is quite
possible to see what is missing, and missing data is easily accessible. It is understood that big data
is one of the perfect instruments to attain precise results and increased profit in both the production
and service sectors (Stoicescu 2016) [40]. Big data enables employees to access huge amounts of
information about customers and about any production process that has a significant influence on
performance. It also has the capability to extract meaning and to sort through big volumes of
numbers, as well as find the hidden patterns, unforeseen correlations, and startling connections
that can be utilized in various industries, like the production and services fields (Stoicescu
2016)[40].
The fourth industrial revolution builds upon the applications of cyber physical systems (CPS),
which feature end-to-end information communication technology (ICT)-based integration
(Kagermann et al. 2013) [22]. Information and communication technology-based integration has
significant influence in electronic logistics (Hameed et al. 2018; Gwiazda et al. 2015; Witkowski
et al. 2017; ´Slusarczyk et al. 2016) [41,42,43,44] and communication between employees of
organizations, communication between partners, and communication between a company and it’s
customers. This communication technology increases performance through increases in logistic
services and production in textiles. Lee (2008) [45] explained that cyber physical systems (CPS) are
integrations of computation and physical procedures with embedded computers and networks
monitoring physical procedures. It can be considered as the merger between the physical and
digital world (Lasi et al. 2014) [46]. This merger is most important for production in the textile
industry and services in the logistics industry (Mahmud et al. 2017) [47].
Moreover, smart factory is interrelated with cyber physical systems (CPS) and the Internet of
things (IoT). Smart factories are the important component of Industry 4.0, as according to
Hermann et al. (2016) [48], it is in a factory where cyber physical systems (CPS) communicate
over the Internet of things (IoT), assisting humans and machines in task execution. These tasks
include both production and services.
Smart factories, with the help of cyber physical systems (CPS) and the Internet of things (IoT),
enable the collection, distribution, and availability of manufacturing related information in real-
time (Lucke et al. 2008) [49]. Radziwon et al. (2014) [50] described this more comprehensively: “a
Smart Factory is a manufacturing solution that provides such flexible and adaptive production
processes that will solve problems arising on a production facility with dynamic and rapidly
changing boundary conditions in a world of increasing complexity.”
In addition, this study outlines the importance of interoperability in Industry 4.0 for the production
and services industry. Industry 4.0 is not only an integration of cyber physical systems (CPS), the
Internet of things (IoT), information communication technology (ICT), big data, and smart
factories, it is also an interoperability process (Lu 2017) [51]. Industry 4.0 has two major factors:
Integration and interoperability (Romero and Vernadat 2016) [52]. Integrated with various
applications and software arrangements, Industry 4.0 attains seamless operations across production
and service organizational boundaries, while also realizing networked operations across
production and service organizational boundaries, while also realizing networked organizations
(Ruggaber, 2006) [53]. The framework of interoperability and how it facilitates the production and
services sectors with the integration of other Industry 4.0 factors. Finally, from the literature at
hand, the hypotheses for the study are proposed below:

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Hypothesis 1. Big data has a significant relationship with production and services.
Hypothesis 2. Smart factories have a significant relationship with production and services.
Hypothesis 3. Cyber physical systems (CPS) have a significant relationship with production and
services.
Hypothesis 4. The Internet of things (IoT) has a significant relationship with production and
services.
Hypothesis 5. Interoperability has a significant relationship with production and services.
Hypothesis 6. Production and services have a significant relationship with the performance of
the production

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Chapter 3
3) Research Methodology
3.1) Theoretical Framework
Independent Variables Dependent Variable

Cyber Physical
System
Production &
Service

Big Data

Production &
services Industry
performance

Interoperability

Production &
Smart Factory
Service

Internet of Thing
(IoT)

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3.2) Research Methodology

In this cross-sectional research design, the target sectors were mainly textile (production industry)
and logistics (service industry), because both face similar challenges, such as these sectors account
for over 50% of national exports but share trade worldwide is less than 2% (Wadho and
Chaudhry 2016)[54], selection of the right channel of distribution (Khan and Khan 2010)[55], and
low government support in terms of tax incentives for exports and infrastructural development
(Afzal 2017; Bashar 2016)[56], leading to inadequate technological advancement. Moreover,
despite having a distinctive nature, the trends and variations of both sectors are similar to a larger
extent. Data was collected from the operational managers of the textile and logistics industry
directly involved in Industry 4.0 activities, by using a matrix-based survey questionnaire.

3.3) Population and sampling:

3.3.1) Population
When you are attempting to study a population, you have to collect information from everyone in
that group. This makes it extremely difficult to study populations.

3.3.2) Sampling Size and Sampling Technique

Roscoe (1975)[57] introduced a rule-of-thumb for considering an appropriate sample size,
suggesting that an acceptable sample size should be more than 30 and less than 500 respondents
(cited from Sekaran and Bougie 2012) [58]. On the other hand, Comrey and Comrey and Lee
(1992) [59] argued that over 200 respondents reflects an adequate sample. The same argument is
supported by Haque et al. (2017) [59], who suggest that in order to draw a logical conclusion, any
sample over 200 is acceptable in social science research. Hence, 300 questionnaires were
distributed among the operational level employees (managers) of textile and logistics companies.
The total sample size was 224, which is adequate to draw conclusions. Moreover, the researchers
used purposive sampling by ensuring an equal split in both considered sectors. According to the
strategy of Haque et al. (2018) [60], by considering the equal split between groups or sub-sections
through employing purposive sampling, researchers can have fair representation. This strategy
enables the researchers to target equally by avoiding over-drift towards one set at the expense of
the other. We adopted the same strategy by using purposive sampling to have equal and fair
representation from both sectors. Thus, 112 respondents from each sector were included. Although
purposive sampling is prone to self-selection biases, using the fair representation technique, such
as only targeting managers involved in Industry 4.0 and an equal split, enabled the researchers to
avoid self-biases.

3.4) Scales and Measures

Data was collected using the 5-point Likert scale from strongly disagree to strongly agree
(1—strongly disagree, 2—disagree, 3—neutral, 4—agree, 5—strongly agree). A Likert scale is
most suitable to examine the opinion and views of the respondents (Sekaran and Bougie 2012)[58].
Moreover, a 5-point Likert scale is preferred because it reduces the respondent frustration while
increasing the originality of the data (ibid). We used two types of approach for reliability and
validity. One was to ensure the instruments and models, while the other was to ensure the
respondents. The reliability and validity of the instruments and models were checked through

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statistical tests, while for respondent’s we used the demographic-check approach. In the current
research, the questionnaires were divided into two major parts. The first part of the questionnaire
was based on the profile of respondents, which was comprised of gender, age, marital status, and
income (). The use of socio-demographic questions was used to reach the target audience while
ensuring that our respondents were reliable and valid. We used these socio-demographic questions
as a way to ensure that the characteristics of a population was authentic by re-checking it with their
HR department. As part of the process, we asked the HR departments to confirm with us the
number of managers falling into the age brackets, experience, gender, and so on, of our targeted
departments. On receiving the response sheet from the HR department, we compared it with the
actual respondents’ responses. The idea was to exclude any respondents that had discrepancies in
the two (HR and participants’ given details of socio-demographic information) sets. While seeking
information from the HR departments, we did not disclose the name of any respondents to them
for confidentiality reasons. Thus, the demographic check helped in assessing the reliability and
validity of the respondents.
The second part of questionnaire was comprised of the research items based on the key variables
of the study, namely big data, smart factories, cyber physical systems (CPS), the Internet of things
(IoT), interoperability, production and services, and production and services industry performance.
The second part contained attitudinal and behavioral questions such as “we continuously determine
the innovative opportunities for the strategic use of Big Data Analytics”, “when we make Big Data
Analytic investment decisions we consider about how much these options will help end users make
quicker decisions”, “in our organization business analyst and line people meet frequently to discuss
important issues”, “in our organization the responsibility for Big Data Analytic development is
clear”, and “compare to rivals within our industry our organization has the foremost available
analytic system” (See Appendix A, Supplementary). Thus, the survey questionnaire follows the
DAB (Demographic-Attitudinal-Behavior) strategy.

3.5) Questionnaire Development

The first part of the questionnaire was based on the profile of respondents, which was comprised
of gender, age, marital status, and income. The use of socio-demographic questions was used to
reach the target audience while ensuring that our respondents were reliable and valid. We used
these socio-demographic questions as a way to ensure that the characteristics of a population was
authentic by re-checking it with their HR department. As part of the process, we asked the HR
departments to confirm with us the number of managers falling into the age brackets, experience,
gender, and so on, of our targeted departments. On receiving the response sheet from the HR
department, we compared it with the actual respondents’ responses. The idea was to exclude any
respondents that had discrepancies in the two (HR and participants’ given details of socio-
demographic information) sets. While seeking information from the HR departments, we did not
disclose the name of any respondents to them for confidentiality reasons. Thus, the demographic
check helped in assessing the reliability and validity of the respondents.
The second part of questionnaire was comprised of the research items based on the key variables
of the study, namely big data, smart factories, cyber physical systems (CPS), the Internet of things
(IoT), interoperability, production and services, and production and services industry performance.
The second part contained attitudinal and behavioral questions such as “we continuously determine
the innovative opportunities for the strategic use of Big Data Analytics”, “when we make Big Data
Analytic investment decisions we consider about how much these options will help end users make

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quicker decisions”, “in our organization business analyst and line people meet frequently to discuss
important issues”, “in our organization the responsibility for Big Data Analytic development is
clear”, and “compare to rivals within our industry our organization has the foremost available
analytic system” (See Appendix A, Supplementary). Thus, the survey questionnaire follows the
DAB (Demographic-Attitudinal-Behavior) strategy.

3.6) Data Collection Procedure

Questionnaires were distributed through an e-mail survey using GOOGLEDOC. The questionnaire
was emailed from the lead author’s personal email address, social media, Facebook, LinkedIn,
Instagram. Firstly, the e-mail addresses of both industries’ managers were gathered. Secondly,
respondents were selected randomly from the list. Proper guidelines to fill the questionnaire and
the objective of study were addressed to respondents through e-mail. The respondents not involved
in Industry 4.0 were excluded.
Primary data which will be analyzed using exploratory factor analysis (EFA) and structural
equation modelling (SEM) techniques. It will be followed by confirmatory factor analysis (CFA)
to assess the validity and reliability of the measurement model. Finally, path analysis will be used
to assess the relationships between the variables. All the hypotheses formulated will be tested. The
software used for testing will be SPSS.

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Appendix A
This is a survey questionnaire to investigate the influence of Industry 4.0 on production and
service sectors in Pakistan. The target respondents are managers working in textile and logistics
companies. The survey questionnaire will take approximately 10–15 min, but you can take more
time if you want. The shared information and details will remain confidential. Your personal
information will not be disclosed to the general public at any stage. You can withdraw at any stage
of the research, if you wish to.

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1) Section B: Attitudinal and Behavioral Questions

Please select one of the following options (1 = Strongly Disagree, 2 = Disagree, 3 = Neutral, 4
= Agree, 5 = Strongly Agree)
B Questions 1 2 3 4 5
We continuously examine the
innovative opportunities for the
1 strategic use of big data
analytics.

When we make big data

analytics investment decisions,
we think about and estimate
2 the effect they will have on the
productivity of the employees’
work.

In our organization, business

analysts and line people meet
3 frequently to discuss important
issues.

In our organization, the

4 responsibility for big data
analytics development is clear.

2) (ii) Smart Factory

Please select one of the following options (1 = Strongly Disagree, 2 = Disagree, 3 = Neutral, 4
= Agree, 5 = Strongly Agree)
C Questions 1 2 3 4 5
It offers ways that can
1 successfully address the issues.
It provides the ability to work in
2 real time.
It provides the ability to adjust
3 and learn from data.
It has a significant relationship
with responsive, proactive, and
4 predictive practices which
enhance the accuracy.

It enables the organization to

avoid operational downtime and
5 other productivity challenges.

3) (iii) Cyber Physical System

Please select one of the following options (1 = Strongly Disagree, 2 = Disagree, 3 = Neutral, 4
= Agree, 5 = Strongly Agree)

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D Questions 1 2 3 4 5
It provides significant
computational resources which
1 contributes to operations and
services.

It enhances the processing

2 capability and local storage.
It provides unprecedented
3 opportunities for innovation.
It provides the ability to handle
4 challenges, barriers, and threats.

4) (iv) Internet of Things

Please select one of the following options (1 = Strongly Disagree, 2 = Disagree, 3 = Neutral, 4
= Agree, 5 = Strongly Agree)
E Questions 1 2 3 4 5
It provides lower lead times for
1 customers and lower overall
costs.
It helps to improve the production
2 capacity.
It provides the linkage of all
3 devices to the internet which help
in production processes.
It provides a better
4 communication between
employees.
It provides a link between
customers and company, and
5 increases the customer
satisfaction level.

5) (v) Interoperability
Please select one of the following options (1 = Strongly Disagree, 2 = Disagree, 3 = Neutral, 4
= Agree, 5 = Strongly Agree)
F Questions 1 2 3 4 5
It has the ability to automatically
interpret the information
1 exchanged meaningfully and
accurately.

It implies exchanges between a

range of products, or similar
2 products from several different
vendors.
It provides better technology to
3 boost inter organizational
activities.

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6) (vi) Production/Services
Please select one of the following options (1 = Strongly Disagree, 2 = Disagree, 3 =
Neutral, 4 = Agree, 5 = Strongly Agree)
G Questions 1 2 3 4 5
Effective production inside the
1 company increases the overall
industry performance.
Effective services to the customer
2 increase the overall industry
performance.
Effective production and services
3 increase the customer satisfaction
level.
Effective production and services
4 bring accuracy in the operations
of the company.

7) (vii) Production/Service industry performance

Please select one of the following options (1 = Strongly Disagree, 2 = Disagree, 3 = Neutral, 4
= Agree, 5 = Strongly Agree)
F Questions 1 2 3 4 5
Overall performance of the
1 company last year was far above
average.
Overall performance of the
company relative to major
2 competitors last year was far
above average.

Overall sales growth of the

company relative to major
3 competitors last year was far
above average.

Relative to our largest

4 competitor, during the last year,
we had a larger market share.
Relative to our largest
5 competitor, profitability was
increased.

Thank you for your survey and time.

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Fact sheet
Title Author Public Impact Variables Sample Samp Tool Data
ation Factor le Collection
Size Method
Year

Influence of Muhammad 2018 2.71 big data, smart Industry 4.0 has a key 224 Questionnaire Googledoc,
Industry 4.0 on Imran, factory, role in promoting the Email
the Production Waseem ul cyber physical production and services
and Service Hameed systems (CPS), sector in Pakistan, its
Sectors in and the Internet of impact on the overall
Pakistan: Adnan ul things (IoT), performance of the
Evidence from Haque interoperability considered sectors
Textile and (employees of textile and
Logistics logistics companies)
Industries

Industry 4.0: A Muhammad 2019 2.9 big data, smart Elements of Industry 4.0 280 Questionnaire Googledoc,
Solution towards Haseeb factory, such as big data Internet Email
Technology Kittisak cyber physical of Things and smart
Jermsittipars systems, factory have a positive
Challenges of
ert the Internet of role in promoting
Sustainable things (IoT),
Business Hafezali information technology
interoperability
Iqbal (IT) implementation,
Performance
Hussain which contributes to
Beata ´ sustainable business
Slusarczyk performance
The Role and Judit Nagy, 2018 2.85 CPS, Big data The objective of research 112 Questionnaire Googledoc,
Impact of Judit Oláh, analytics, CPPS is to discover how Email
Industry 4.0 and Edina Erdei, Cloud, Sensors, companies operating in
the Internet of Domicián Robot arms Hungary interpret the
Things on the Máté and RFIDs, Smart phenomenon of
Business József Popp tools, AGV Industry 4.0, what
Strategy of the Smart product Internet of Things (IoT)
Value Chain tools they use to support
their processes, and what
critical issues they face
during adaptation

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