Chapter 3: Investigation of Industry 4.0 Implementation Challenges: An Exploratory Case Study of Volkswagen

Industry 4.0 (I4.0), commonly known as the Fourth Industrial Revolution, was officially launched in Germany as a “strategic initiative” to introduce a new era of Internet-driven businesses and society. Since its launch, it has garnered considerable attention; however, it faces numerous challenges and problems during implementation (Kagermann et al., 2013; Rüßmann et al., 2015; Foidl & Felderer, 2015). Therefore, we intend to empirically investigate the challenges that companies face when attempting to implement I4.0. To achieve this purpose, a case study, Volkswagen AG (VW), is investigated. A two-dimensional analytic framework, “ integration engineering feature” and “implementation scope/level”, is developed to examine the 10 challenges that VW faces in its implementation process. The case study data are collected from academic and journal databases. The results reveal that the priority challenge that VW is currently facing is customer/user experience and business management. However, to address these challenges, we suggest that VW focus on the vertical and horizontal integration at the intra- and inter-organisational scope/level. The implications of the findings from this study are presented in the paper.