Sustainability transition of production systems in the digital era - a systems perspective for building resilient and sustainable production systems

Licentiate thesis, 2021

Locked-in manufacturing industries with highly structured operations and path dependencies are major contributors to the sustainability challenges currently burdening our planet. The effects of the ongoing pandemic, large-scale environmental impacts due to climate change and constant economic and social downturns are just some examples of these sustainability challenges. Increased digitalisation, awareness, global initiatives and regulations are pressuring manufacturing industries to transition towards sustainable development. However, there exists a multitude of interpretations in implementing sustainability in manufacturing industries. This makes proposing tangible actions to translate global initiatives complicated, thus hindering the sustainability transition process.

The purpose of this thesis is to support the advancement of resilient production systems which can overcome sustainability challenges in the Industry 4.0 era. Hence, the thesis aims to investigate: (i) the systemic challenges of manufacturing companies which hinder their sustainability transition process and (ii) the mechanisms by which a systems perspective may be applied to support the transition. A mixed-methods approach was used to carry out the research, using qualitative and quantitative data from three (empirical and theoretical) studies.

Applying a systems perspective helped reveal the challenges which hinder the sustainability transition of production systems. Understanding the production ‘system’ as a whole (and the underlying web of intricate dependencies and challenges in production operations) required this holistic perspective. Regarding the challenges, it was observed that manufacturing industries across different domains face three main types of challenge: internal (such as organisational routines, strategies and cultural mindset), external (such as regulations and collaboration with stakeholders) and technological (such as maturity levels and data).

Three different enabling mechanisms were explored which may help overcome the above sustainability challenges and support the sustainability transition of manufacturing industries: (1) Industry 4.0 technologies, (2) dynamic capabilities and (3) resilience engineering. It was observed that Industry 4.0 technologies (such as artificial intelligence/machine learning, virtual development tools and sensors) are largely implemented to enable sustainable manufacturing in the form of resource efficiency and waste reduction. The results also revealed five microfoundations of dynamic capabilities – communication, organisation, resources, collaboration and technology. Based on Industry 4.0 opportunities to promote sustainability transitions, the results revealed five industrial resilience factors – robustness, agility, resourcefulness, adaptability and flexibility.

This research contributes to theory by studying the convergence of emergent research topics, such as Industry 4.0, dynamic capabilities and resilience engineering in the context of sustainability transitions. In terms of a practical contribution, the sustainability transitions model developed in this thesis may support industrial practitioners in gaining a holistic understanding of the systemic challenges to sustainability, plus corresponding mechanisms to promote the sustainability transition of industries and the building of resilient production systems.