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The Product Customization Process in Relation to Industry 4.0 and

Digitalization

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DOI: 10.3390/pr10030539

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 processes
Article
The Product Customization Process in Relation to Industry 4.0
and Digitalization
Martin Pech and Jaroslav Vrchota *

Department of Management, Faculty of Economics, The University of South Bohemia in Ceske Budejovice,
Studentska 13, 370 05 Ceske Budejovice, Czech Republic; [email protected]
* Correspondence: [email protected]

Abstract: Today’s customer no longer wants one-size-fits-all products but expects products and
services to be as tailored as possible. Mass customization and personalization are becoming a trend in
the digitalization strategy of enterprises and manufacturing in Industry 4.0. The purpose of the paper
is to develop and validate a conceptual model for leveraging Industry 4.0 and digitalization to support
product customization. We explored the implications and impacts of Industry 4.0 and digitalization
on product customization processes and determine the importance of variables. We applied structural
equation modeling (SEM) to test our hypotheses regarding the antecedents and consequences of
digitalization and Industry 4.0. We estimated the process model using the partial least squares
(PLS) method, and goodness of fit measures show acceptable values. The proposed model considers
relationships between technology readiness, digitalization, internal and external integration, internal
value chain, and customization. The results show the importance of digitalization and technology
readiness for product customization. The results reveal that the variable of internal integration plays
a crucial mediating role in applying new technologies and digitalization for customization. The
paper’s main contribution is the conclusion that, for successful implementation of the customization
process, models are required to focus on the internal and external factors of the business environment.





 Our findings are supported by various practical applications of possible product customization.
Citation: Pech, M.; Vrchota, J. The
Product Customization Process in Keywords: process; digitalization; Industry 4.0; customization; personalization; e-commerce
Relation to Industry 4.0 and
Digitalization. Processes 2022, 10, 539.
https://doi.org/10.3390/pr10030539
1. Introduction
Academic Editors: Nadhir Messai
and Bernard Riera The business environment has become shaped by the emergence of modern digital
infrastructures, platforms, and technologies that have changed the way people live and
Received: 22 February 2022 work [1]. Self-realization and the tendency to individualize consumers are gaining impor-
Accepted: 8 March 2022
tance as living standards rise. Individual customer desires can no longer be satisfied by
Published: 9 March 2022
traditional mass production and require innovative process approaches in manufacturing.
Publisher’s Note: MDPI stays neutral Enterprises in the digital and physical worlds are under enormous pressure to speed up
with regard to jurisdictional claims in the roll-out and marketing of their products [2]. The COVID-19 pandemic accelerated the
published maps and institutional affil- development of e-commerce and forced enterprises to sell online, even though they had
iations. not originally planned to do so. As a result, competition is sharper, and companies need to
focus on consumer experience and personalization as a factor of differentiation [3]. Cus-
tomer satisfaction declined across the retail sector in 2020, and up to now, enterprises such
as Amazon have seen a decline in the American Customer Satisfaction Index (ACSI) [4].
Copyright: © 2022 by the authors.
Moreover, to meet individual customer wishes while keeping costs within reasonable limits,
Licensee MDPI, Basel, Switzerland.
they need to develop new customer-centric business models [5] and deploy intelligent,
This article is an open access article
flexible manufacturing technologies—known as Industry 4.0.
distributed under the terms and
The customization process has evolved—from tailored production across mass pro-
conditions of the Creative Commons
Attribution (CC BY) license (https://
duction and mass customization to mass personification production [6]. In his memoirs,
creativecommons.org/licenses/by/
Henry Ford [7] describes the market situation with the famous quote, “Any customer can
4.0/).
have a car painted any colour that he wants so long as it is black”. It meant producing

Processes 2022, 10, 539. https://doi.org/10.3390/pr10030539 https://www.mdpi.com/journal/processes

Processes 2022, 10, 539 2 of 30

only one car model on a large scale with perfect design. Nowadays, enterprises offer
many product variants, whose appearance or customers can often influence the function
before or after production. In some categories (holidays, clothing, furniture, homeware and
DIY, fashion accessories, jewelry, and footwear), more than 50% of consumers expressed
interest in purchasing customized products or services [8]. Industry 4.0 is changing the
paradigm of the Ford age. Today, new technologies allow us to meet customer demands
and customize products, all on the same production line, through flexible processes, au-
tomation, robotics and artificial intelligence, the development of e-commerce, 3D printing,
and flexible manufacturing.
The new trends in manufacturing in Industry 4.0 recently are mass personification
production and smart customization. Mass personification considers each customer in-
dividually and allows them to customize the product through digital technologies and
e-commerce [6]. The key to a workable solution is a high degree of standardization and
automation of processes, allowing room for variations in product features required by
individual customers. Smart customization means equipping consumer products with
clever user toolkits for co-design to make them customizable items [9]. Enterprises have
comprehensible sources of value. They evolve towards virtuous variety and offer worth at
least equal to the cost [10]. Thus, according to Resco et al. [11], more and more products are
characterized by the presence of digital components. Therefore, the customer can influence
the development of the product before and after the purchase.
User-driven product or service customization is strongly influenced by recent trends
and risks of automation, data management, and fourth-generation digitalization [12]. Build-
ing digital environments and managing their resources requires a unique understanding
of how digitalization and customization create benefits and added value for different
customers [13]. It is essential to integrate at the supply chain level, including internal
integration, supplier integration, and customer integration [14]. The rapid development
of information technology and data science opens the way to intelligent manufacturing
based on big data [15]. Digitalization enables the interconnection and integration of all
information systems [16]. This is the information flow of data in the enterprise for product
design, modification, and innovation. Meanwhile, intelligent sensors in end products [17]
are the key to transforming production flexibility and mass customization.
Most publications focus more on technical customization solutions [15,18–20]. These
publications usually have a limited level of generalization due to the limited number of
applied case studies. Validating these solutions for wider use would require empirical
research in more enterprises. Another issue is the lack of direct research focused on the rela-
tionship between customization and digitalization or Industry 4.0 technologies [12,14,21,22].
A review [12] employs a mixed methodology of qualitative and quantitative research com-
paring online customization frameworks and solutions. A comparison between theoretical
and practical levels is also addressed in Nwaiwu’s study [21]. It provides an overview and
comparison of several conceptual and theoretical frameworks that have been identified as
relevant to digital business transformation. However, these studies only use secondary
data on digitization and customization in enterprises.
In contrast, research [22] focuses on external integration with customers and suppliers
and internal integration. The research concludes that before external integration can be
successfully implemented, organizations must be willing to integrate with external supply
chain partners, which is manifested in their relational commitment. Similarly, a study [14]
on 244 manufacturing enterprises focuses on the relationship between internal and external
integration and firms’ competitive capabilities. The importance of integration positively
affects innovation, product quality, and ultimately profitability. However, in both cases, the
link to product customization, digitalization, and new technologies is missing. We try to
address these research gaps by joining modern customization’s theoretical and practical
concepts with digitalization and Industry 4.0 technologies.
We aim to develop and verify a conceptual model that investigates the importance
of enterprise variables for digitalization, Industry 4.0 technology, and the customization
Processes 2022, 10, 539 3 of 30

of products. Furthermore, this model should generalize the relationships between the
main variables affecting the business environment that supports the implementation of
changes induced by digital transformation and new technologies. The purpose of the paper
is to show how Industry 4.0 and digitalization can help product customization. The paper
does not concentrate on a specific technical solution for product customization but instead
describes the system’s features and characteristics that accompany successful organizations.
The paper is structured as follows: 1. Introduction and presentation of the topic;
2. Theoretical background, including the definition of main terms and description of the
conceptual research model and hypotheses; 3. Data and methods with data sample, con-
struct of variables and indicators, and used methods; 4. Results divided into the evaluation
of measurement and structural model; 5. Discussion of results, including theoretical and
practical implications, contributions, limitations, and future research; 6. Conclusions.

2. Theoretical Background
We present an overview of the literature relevant to the given work. We review the
available definitions of the main concepts in the developed conceptual model. Then, we
describe the research model and explain the associated hypotheses.

2.1. Definition of Terms

2.1.1. Industry 4.0 and Technology Readiness
Industry 4.0 is the digital transformation of manufacturing and related industries and
value creation processes. Industry 4.0 is widely seen as the forthcoming fourth industrial
revolution driven by the digitalization and automation of production and value chain
processes [23]. The application of intelligent manufacturing, commonly referred to as
Industry 4.0, is the most crucial application of digitalization in the industry [24]. The
idea of Industry 4.0 encompasses the digital transformation of the entire manufacturing,
service, and consumer markets, from the emergence of intelligent manufacturing to the
digitalization of all channels necessary for the flow of all resources and values [25–27].
Increasingly, better management of energy and resources and avoiding waste is highlighted
as the main benefit of Industry 4.0 in economic savings, which is provided by big data
analysis and optimization based on customer-specific products [28]. However, the concept
of Industry 4.0 is ubiquitous and affects the product, the process, and the entire production
system in enterprises [29].
Key technological enablers of Industry 4.0 are industrial robots, wireless sensors and
actuators (WSAN) for novel assembly lines, and machine-to-machine (M2M) communica-
tion, followed by networked control systems infrastructure and industrial cyber–physical
systems [30]. Authors [31–34] generally agree on nine fundamental technological pillars
that significantly impact industrial and service activities. These pillars include big data
analytics, optimization and simulation, cloud technologies, virtual and augmented reality
(VR/AR), horizontal and vertical system integration, Industrial Internet of Things (IIoT),
incremental technologies (3D printing), autonomous robots, and cybersecurity. Similarly,
Mavropoulos and Nilsen [35] selected ten general technologies driving the shift towards
Industry 4.0: artificial intelligence (AI), Internet of Things (IoT), cyber security, simula-
tion, blockchain, cloud computing, human–machine interaction (HMI), machine learning,
autonomous robots, and additive manufacturing.
The level of Industry 4.0 in our concept is determined by the degree to which informa-
tion technology (IT) and information systems (IS) infrastructure and linked data connected
to sensors, robots, and mobile terminals are built. Vaidya et al. [36] and Wang et al. [37]
present three basic integration concepts in the Industry 4.0 paradigm: (a) horizontal inte-
gration throughout the value network (we call this construct external integration in our
research model), (b) vertical integration of management and manufacturing information
systems (we examined it as a part of digitalization construct in the research model), (c) in-
depth, end-to-end, complex engineering throughout the whole product lifecycle (we refer
to this component as internal value chain in the model).
Processes 2022, 10, 539 4 of 30

2.1.2. Digitalization
Digitalization integrates digital technologies into everyday life by digitizing every-
thing that can be computerized to modify the business model [38]. In the literature,
digitization and digitization concepts are perceived in different terms. According to the
Oxford English Dictionary [39], digitization is the conversion of analog data (e.g., images,
sounds, video, and text) into a digital form that can be easily read and processed by a com-
puter. Brennen and Kreiss [40] define digitalization as the material process of converting
individual analog streams of information into digital bits. Enterprises’ internal processes,
product components, communication channels, and other key aspects of the supply chain
are undergoing an accelerated digitalization process [41]. Digitalization, therefore, means
the transformation of enterprise business processes into digital form.
Digital transformation is an ongoing process and journey [38]. According to Nwaiwu [21],
digital transformation impacts various dimensions of enterprises and enables new business
models triggered by changes through digital technologies. Digital transformation focuses
on creating added value to the customer (servitization) through new technologies [18].
A digital transformation strategy is a plan that supports enterprises in managing the
transformations that arise from the integration of digital technologies, changes in value
creation, structural changes, and related financial aspects [42]. The digital transformation
brings businesses the ability to control and manage machines, robots, and equipment by
integrating information systems. It also enables devices to communicate with (M2M) or
via the Internet in real time [43]. Digital transformation refers to the changes that digital
technologies can bring to a company’s business model, leading to changes in products or
organizational structures or the automation of processes [44].
Increasing industrial automation requires more IT systems to cope with the challenges
arising from the complex processes of manufacturing systems. The automation pyramid has
been developed as a reference model to structure the different applications functionally and
hierarchically to reduce complexity [16]. The automation pyramid connects information
systems in hierarchical levels [19]: sensors and actuators, control systems (PLC), monitoring
and supervisory control (SCADA), manufacturing operations and execution systems (MES),
management support systems (ERP). Vertical integration of systems is the term for the state
where all information systems are integrated across hierarchical levels.

2.1.3. Internal Integration

Internal integration comprises the internal sharing of information and strategy coor-
dination between departments [45]. Basnet [46] states that integration in organizations is
seen as interaction and information exchange, coordination of activities across departments,
and finally, a collaboration between departments. We consider an essential requirement
for a functioning internal integration to ensure that independent functions (e.g., mar-
keting, human resource management, finance, production, etc.) work together due to
communication, interaction, integration, and cooperation between different departments.
Different functions in a company should not work as separate units but as part of an
integrated process [22]. Enterprises with well-developed interdepartmental communica-
tion and collaboration achieve greater operational efficiency. It means solving supplier
quality problems through multi-functional teams [47]. Basnet [48] refers to the internal
integration of activities across departmental boundaries to offer higher customer service
and performance metrics.
In an enterprise, activities often require the coordination of many functions. We
see the role of internal integration in coordinating the interconnection of organizational
departments and processes, which supports the automatic execution of processes through
IT. Furthermore, coordination enables information sharing between internal functions,
strategic collaboration across parts, and departmental collaboration [22]. The purpose of
internal coordination is to harmonize the communication of information flows, exchange
and share strategic information, along with the integration and cooperation of different
functional units to create value for customers [49]. Hillebrand et al. [50] discuss coordination
Processes 2022, 10, 539 5 of 30

as an internal interface for collaboration between other business functions, especially

marketing and research and development, and marketing and production.
Without cross-functional integration, company processes are fragmented, discon-
nected, and closed in functional specializations [22]. Unfortunately, managers across
functions often have divergent interests and fail to achieve corporate goals [51]. Manage-
ment’s lack of coordination hinders cooperation between units and may even encourage
competition between functional teams for scarce resources [52]. In addition, Wynstra, Axels-
son, and Van Weele [53] show that many of the issues stem from a lack of enabling factors:
functionally orientated, fragmented internal organizations; lack of access to information;
lack of competence; and differences in personal attitudes between departments.

2.1.4. External Integration

External integration consists of strategic alliances with suppliers and customers [45],
in which the enterprise forms strategic partnerships and jointly develops market-facing
strategies [54]. The integration with suppliers and customers upstream and downstream
of the production process has become an essential element of the manufacturing strategy
in the new millennium [55]. Such a type of integration is only possible with long-term
collaboration between enterprises. Externally, integration promotes efficient coordination
between an enterprise and its suppliers and customers to efficiently support product design
and development. There are three activities of external integration: supplier development,
partnerships with suppliers, and closer relationships with customers [56]. Moreover,
companies can take advantage of market data from third-party providers to provide
manufacturers with valuable customer data in addition to this integration [57].
The external integration allows enterprises to cooperate with business partners and
leverage their core competencies [58]. This collaboration is mainly manifested by the
cooperation between the enterprise and its suppliers. Successful supplier management
requires supply chain collaboration with a strategic focus on sourcing and technology in the
management process [59]. Long-term collaboration gradually leads to supplier relationship
management process integration to achieve higher performance [60]. Supplier relationship
management’s core purpose is to manage suppliers’ relationships. The main goal is to
enable enterprises to coordinate them across different enterprise systems [61]. Enterprise
supplier integration is when two or more enterprises realize activities within a supply
chain [62]. Supply chain management requires higher coordination of activities to achieve
mutual benefits from business relationships through the strategic management of supplier
relationships [63]. Supplier integration focuses on strategic collaboration between manu-
facturers and suppliers in managing internal business processes, including information
sharing, strategic partnerships, project collaboration, and joint product development [64].
The integration of customers entails strategic information sharing and the cooperation
between manufacturers and their customers to improve customer service. Customer
integration refers to the process where enterprises collaborate and communicate with their
customers to ensure the efficiency of the supply process [45]. However, since the 2000s,
researchers have begun to embrace the concept of integrating customers into supply chains
consciously. Hence, it is appropriate to think of integration as a process beyond a single
enterprise. Thus, theories focusing on the servitization process [65] or demand chain [66]
related to collaboration on the co-creation process of products [67] have come to the fore.
Consequently, customer integration can be seen in two perspectives: customer-oriented
(dyadic relationships between customer and manufacturer as resources and possibilities
for customization) and customer-oriented integration (co-creation of products in network
relationships focused on product design) [68]. Integration concerns customer experience.
It means how the customer perceives and evaluates the experience of working with an
IT-based platform [69]. Furthermore, to attract customers to participate and integrate,
organizations must ensure that customers have a positive experience of creating a product
or service [70]. Supply chains need to develop specific capabilities and resources to be-
come customer-centric integration: customization, product and service adaptation, shared
Processes 2022, 10, 539 6 of 30

information, flexibility, and alignment [68]. Customer relationship management is a tool

and strategy developed to manage customer interactions using technology to automate
business processes [71].

2.1.5. Internal Value Chain

The internal value chain relies on product lifecycle theory and value stream mapping
(VSM). The product lifecycle was suggested in classical work by Dean [72] as a process
beginning with market acceptance to market abandonment (i.e., phases before birth, at
birth, in childhood, in adulthood, or senescence). Within the manufacturer’s perspective,
the product lifecycle comprises the new product idea, design, procurement, development,
manufacturing, utilization, and disposal [73]. Product lifecycle management is the business
activity of managing a company’s products as efficiently as possible throughout its entire
lifecycle, from the first idea for a product to its scrapping and disposal [20].
Porter [74] created the value chain as the primary tool to identify opportunities to
create more value for the customer. The value chain reflects the total value and consists
of value-creating activities: inbound logistics, operations, distribution, marketing and
sales, service. Basnet [48] refers to the internal value chain-creating production, sales,
and distribution activities. The internal value chain encompasses product and process
integration capabilities through design for manufacturability. It means simplification and
minimization), standardization, and computer-aided engineering practices [56].
We elaborated the value chain from three significant aspects of the internal product
lifecycle: new product design [20] and development [75], production planning process [76],
manufacturing and production control [77]. These processes build on each other, constitute
the main stages of the product lifecycle within companies, and represent critical processes
that add value to the customer. In contrast to the construct of internal integration unit-
ing different business functions, we consider these processes as sequentially dependent
processes. Product realization should meet various product lifecycle requirements. These
include functionality, cost, schedule, reliability, manufacturability, marketability, and usabil-
ity [78]. Creating new value is built on identifying customer needs by identifying business
and internal processes in the existing company to determine whether or not the current
system can meet the customer’s expectations. A critical activity in this phase is identifying
one of the unfulfilled needs or those that have been better satisfied [79].

2.1.6. Customization
The production of products tailored to individual customer needs is known as product
customization [80]. The purpose is to provide customers with products that meet their
needs at a price they are willing to pay. The importance of the customer in this concept
is emphasized in enterprises through customer orientation, segmentation [81], customer
relationship management [71], and an emphasis on value added from the customer’s per-
spective [82]. From a customer value perspective, servitization is seen as a process in which
customers are offered smoothing services facilitating the product sale (maintenance, financ-
ing), adapting services (customization of the product based on sharing knowledge), and
substituting services [83]. Customization can be viewed from two perspectives. Customer
to business (C2B) is primarily designed to meet the individual needs of the specific groups
that constitute the model, with a robust target market orientation; typically, the success
rate of marketing will be relatively high [84]. In contrast to C2B, business-to-business (B2B)
customization is evolving based on emerging industry standards.
Wang et al. [6] distinguish four evolutionary stages of customization associated with
each industrial revolution: craft (tailored, bespoke) production, mass production, mass
customization, and mass personalization production. The first stage is transitioning from
manual craft and manufactory production to factory production. It is powered by steam
engines, where mechanized machines change production processes [35]. The second stage
is characterized by mass production. It started with the emergence of electricity and the
beginning of scientific management. Mass production was established in Ford’s factories
Processes 2022, 10, 539 7 of 30

due to standardization, rationalization principles, and the division of labor on production

lines [7]. In the third stage, mass customization changed the view of the customer, and
enterprises began to customize products using computers, automation, computer numerical
control (CNC) machines, and robots. Increased flexibility created modern production
systems allowing low to medium production volumes to fulfil customer needs [78]. Mass
customization brings lean manufacturing, micromarketing (niche marketing), time-based
competition, and a significant reduction in product lifecycle [85]. Wireless and Internet
technology is beginning to be used nowadays to help with increased production volume
and productivity [15].
Mass personification production is associated with intelligent operations in the context
of Industry 4.0. Personalization is not new—it started as relationship marketing, which
was considered an old idea in the 1990s [86]. For a long time, personalization was not
very personal. Enterprises used technology to segment their customers and targeted each
segment differently. The current personalization practice in sales and marketing aims to
customize the buyer experience for each prospect or customer using artificial intelligence
(AI). Mass personalization addresses the market of only one customer. Therefore, customers
need to be actively involved in the product design process [6]. Customer-specific product
profiling becomes vital for enterprises to ensure that the entire lifecycle offers personalized
and customized services. Each customer will have a different experience according to
their needs and interests [71]. These services are then provided online. Social networks
are essential and have become an important communication channel between enterprises
and their customers [87]. New directions in marketing facilitate personalization by email
and social media personalization, campaign and custom homepage design, geographic
location, Internet protocol address sharing, account and cookie usage, and related content
offering [8].
Smart customization means that innovative user toolkits for co-design can be directly
embedded into products via computer components or platforms [88]. Intelligent control
enables intelligence of control rules that are adaptive, contingent, dynamic, and personal-
ized through new technologies, digitalization, and artificial intelligence. However, with the
emergence of big data, the Internet of Things, and cloud computing, information systems
are moving to the cloud, which bridges the information gap between departments and
organizations [15]. It consequently leads to customers having unique opportunities to
customize their product for a specific situation [89]. Smart products reflect the emotional
elements of users as they use them with storytelling for qualitative evaluation [90]. As
products become more intelligent and more innovative over time in the context of the IoT,
this requires solutions to realize smartness through additive manufacturing [91]. Emphasis
must be placed on the importance of design, performance reliability, and practicality during
the manufacturing process to produce smart products that users want [92].

2.2. Practical Applications of the Customization Process

Our conceptual model builds on the application of Industry 4.0 and digitalization for
product customization. We found support for the proposed model in various case studies
and research focused on product customization’s possibilities in its practical application. In
different examples of best customization practices, we concentrate on how customization
is offered to customers. Then, we organize these practical examples into two areas of
customization: mass customization and mass personalization.
Mass customization. E-commerce linked with customization is a new business model
built on the Internet as a business platform. Since its inception in the 1990s, customization
and e-commerce have developed rapidly. E-commerce has incomparable advantages over
the traditional business model [93]. Wang et al. [6] describe examples of Industry 4.0 for
mass personification in Dell, Red Collar Group (RCG), Madshus, and Harley-Davidson.
Interflora developed an online service where customers can build their bouquets by drag-
ging and dropping more than 70 flowers and foliage options [8]. Nissan introduced the
ability to choose the engine model and interior and exterior color, with connectivity, acces-
Processes 2022, 10, 539 8 of 30

sories, and personalization providing 25% of the company’s aftermarket sales by 2022 [94].
Nike leveraged a famous brand to customize (tailor) a pair of trainers to the customer’s
design [8]. Susan Lanci Designs is a luxury online dog boutique that offers dog accessories
featuring the perfect fit, highest quality, ultimate comfort, superior safety, and style. After
customization, customers can choose every detail from the collar to the hook [94]. Product
customization has also been used by household goods retailers such as Nutella. They
have added customization to their marketing strategy and allowed their customers to add
their names to the jar [94]. Similarly, it is possible to design and name your mix of muesli,
crunchy and dried fruits, nuts, chocolate, etc., for Mixit brand products. Deloitte [8] de-
scribe the personalized packaging of the brand Absolut Vodka, where each of four million
bottles has a slightly different design. Re-engineering in the production plant allows for
various combinations of design to make each bottle unique.
Personalization. E-commerce is cheap and straightforward and therefore an excellent
starting point for developing Industry 4.0 in developing countries and globally. A Japanese
eyewear retailer uses a unique Eye Tailor system that automatically recommends a distinc-
tive lens size and shape based on the customer’s face. The customer can further choose
from a large number of nose bridge, hinges, and arms that make up the resulting glasses
displayed on a digital image of the customer’s face [95]. The great potential of customiza-
tion associated with AI was mentioned by Enext CEO Gabriel Lima [96], who pointed to
the application of AI on the iFood platform. It provides customers with tailored restaurant
recommendations and increases order approval efficiency. According to PSFK [97], the
made-to-order building of Kennedy City Bicycles in their London workshop is possible
thanks to the online personalization of purchases. The enterprise’s website allows con-
sumers to create an entire product from the decision tree without visiting a brick-and-mortar
store. Zhang et al. [15] give an example of digitalization, big data, and 3D printers through
IoT and cyber–physical systems in the footwear industry. A unique interface based on
customer data and the extraction process offers personalized configurations for customized
design. Amazon provides customers with related content personalization, which refers to
content recommendations and offers based on previous visits to the website [8]. Similarly,
the Lutron Electronics Company of Coopersburg offers the creation of light switches in a
home system for different desires and customer moods [95]. Moonpig has created a success-
ful business model around an online greeting card business that allows the creation of more
attractive products through personalized templates [8]. Stanford University [98] developed
bottom-up software that extends industrial machines with Semantic Web technology to
enable customization and automatic service discovery.

2.3. Conceptual Research Model and Hypotheses

Following the previous arguments, practical applications, and literature sources, the
conceptual framework is presented in Figure 1. Nadkarmi and Prugl [2] consider two
directions of digital transformation research: technology-centric and actor-centric aspects.
We focused on both parts of the phenomenon. The technological part lies in digitalization
and Industry 4.0 technologies variables, while the actor-centric side concerns managerial
and organizational capabilities as variables for integrating internal and external processes.
The considered model contains six latent variables (constructs), and relationships between
them are drawn as arrows. We modeled the relationships between the variables through a
structural equation model, and they are presented in the form of hypotheses. The individual
hypotheses are further explained and described.
 We focused on both parts of the phenomenon. The technological part lies in digitalization
and Industry 4.0 technologies variables, while the actor-centric side concerns managerial
and organizational capabilities as variables for integrating internal and external processes.
The considered model contains six latent variables (constructs), and relationships between
them are drawn as arrows. We modeled the relationships between the variables through
Processes 2022, 10, 539 a structural equation model, and they are presented in the form of hypotheses. The 9indi-of 30

vidual hypotheses are further explained and described.

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digital transformation
transformation [100]. This This approach
approach concentrates
concentrates mainly
mainly on on technology
technology
capability
capability and
and integration,
integration, customer
customer and other stakeholder interfaces, distributed value
consequences of
creation, market, time, and change consequences of digital
digital transformation
transformation [2]. [2]. Therefore,
Therefore,
we assume
assume that
thatenterprises
enterpriseswith
witha higher
a higherlevel of technology
level of technology (physically) implemented
(physically) implemented will
gravitate
will towards
gravitate a higher
towards level level
a higher of digitalization. It is mainly
of digitalization. due todue
It is mainly the to
philosophy of the
the philosophy
fourth
of industrial
the fourth revolution.
industrial As such,
revolution. As we propose
such, the following
we propose Hypothesis
the following 1:
Hypothesis 1:

Hypothesis 1 (H1). Industry 4.0 technology readiness has a positive impact on digitalization.

Second, digital
Second, digital technologies
technologies generate
generate more
more and
and more opportunities
opportunities to
to support
support the
lifecycle [75],
product lifecycle [75],particularly
particularlydata
dataanalysis
analysisand
and visualization
visualization (augmented/virtual
(augmented/virtual re-
reality).
ality). Industry
Industry 4.04.0
is ispermeating
permeatingthetheentire
entireenterprise
enterprisevalue
valuechain—although
chain—although most
most value
value
chains are
chains are interpreted
interpreted through
through the
the lens
lens of
of the
the manufacturing
manufacturing function,
function, possibly
possibly supple-
supple-
mented by logistics operations [101]. The degree of autonomy of processes
mented by logistics operations [101]. The degree of autonomy of processes and decision-and decision-
making in an organization is one of the fundamental characteristics of Industry 4.0 [102].
Available Industry 4.0 technologies increase the entire value creation process [103]. Big
data drive smart manufacturing through association, prediction, and control [104]. Based
on these findings and sources, we conclude Hypothesis 2:

Hypothesis 2 (H2). Industry 4.0 technology readiness positively impacts the internal value chain.

Third, Industry 4.0 technologies and concepts allow machines and enterprise algo-
rithms to make autonomous decisions and perform learning activities [105]. In this sense,
internal integration and coordination drive independent communication between func-
tional departments and process execution. Communication between departments takes
place across management levels too. Thus, the implemented Industry 4.0 technologies can
Processes 2022, 10, 539 10 of 30

positively influence internal coordination within the enterprise [106]. Their role lies in facil-
itating communication between departments across the enterprise. It implies Hypothesis 3:

Hypothesis 3 (H3). Industry 4.0 technology readiness positively impacts internal integration.

Fourth, we argue that digitalization should positively influence internal integra-

tion. Digitalization and technology are considered the main drivers of developing inter-
functional coordination [106]. Leveraging digital operations suggests that the internal
workflow is digitally supported [107]. Digitalization is a tool for developing customer
relationships, work performance evaluation, and exploiting market opportunities. Cross-
boundary digital technologies such as IoT devices [108] drive transformations of internal
process optimization to changes in business strategy [109]. Digital interconnection im-
proves the internal coordination of organizational units and processes [49] and provides
data for automated process execution. A fully digitized and integrated approach in the
horizontal (external integration) and vertical (integration of information systems in the
sense of an automation pyramid) dimensions brings automation to the manufacturing
process [110]. From the above, we derive Hypothesis 4:

Hypothesis 4 (H4). Digitalization positively impacts internal integration.

Fifth, the internal value chain (i.e., a sequence of activities) is facilitated by new In-
dustry 4.0 technologies, digitalization, and automatically managed, internally coordinated
electronic processes [101]. The product development cycle is increasingly becoming stan-
dardized and automated due to the rise of Industry 4.0, which influences how organizations
and humans could act as major industrial drivers in the future [75]. Digitalization assists in
designing processes and services to support the dynamic capabilities of enterprises [111].
It includes product and service development, resource allocation practices, and knowledge
creation processes. Digital twin technology improves the capacity for the real-time evalua-
tion of production plans and schedules, more accurate forecasting, and faster exception
handling during the production process, leading to more realistic production planning [76].
For these reasons, we support Hypothesis 5:

Hypothesis 5 (H5). Digitalization positively impacts the internal value chain.

Sixth, digitalization provides a mechanism for electronically integrating suppliers [112]

and customers [113] and external processes to manage the internal value chain. Instant
access to data deduces information asymmetries between sellers and buyers [114]. Digital-
ization, mass customization, and flexible production strategies will bring companies closer
to customers. It enables enterprises to establish a stronger direct connection with customers,
strengthen their brand, build customer loyalty, improve customer and market knowledge,
and ensure that they stay ahead of new trends, changing values, and evolving expectations.
Digitalization creates new forms of interaction between enterprises and customers through
new channels [115]. Multi-sided digital platforms and networks replace intermediaries
to match sellers and buyers [116]. The real-time availability of information is a signifi-
cant factor for supplier flexibility in the value chain [117]. Capturing the digitalization of
processes and products is a major key factor for the availability of real-time information
throughout the supply chain [118]. Ward and Zhou [119] found that information technology
(IT) integration and inter-firm IT integration are positively correlated. For these reasons,
we propose Hypothesis 6:

Hypothesis 6 (H6). Digitalization positively impacts external integration.

Seventh, manufacturing flexibility and product customization are changing and trans-
forming how businesses approach the customer. Through Industry 4.0 technologies and
digitalization, the customer can influence the final form of products. Such operations are
Processes 2022, 10, 539 11 of 30

intelligent and allow for the mass personalization of products [6]. Manufacturing cus-
tomization is predicated on integrated digital support of the entire product lifecycle from
the development phase to the production and recycling processes and related customer
services [23]. Digital technologies provide customers with the opportunity to co-create
products with the manufacturer, e.g., through digital platforms [108]. The application of
digital models and additive manufacturing for the internal value chain allows the tailoring
of products whilst using the same resources to produce different goods [120]. We argue
with Hypothesis 7 that the internal value chain has a

Hypothesis 7 (H7). Total positive impact on production customization.

Eighth, integration with suppliers in supply chain and supply chain management
(SCM) systems and customer relationship management (CRM) systems supports product
customization. Christopher and Ryals [66] highlight the importance of the customer as a
critical element in managing future supply chain networks through modern technology.
In this concept, the customer is both the creator and the user of the personalized prod-
uct. Business-to-business value is increasingly co-created and captured in many value
network partnerships [121]. Digital technology’s substantial impact on the value chains of
established companies implies a degree of diversion from core business [2]. We support
Hypothesis 8 that:

Hypothesis 8 (H8). External integration has a total positive impact on production customization.

Ninth, enterprises that already have well-established internal systems and capabilities
for data integration and information sharing among their internal functional units can share
information and data with external business partners [22]. Stank et al. [122] found that
cross-departmental internal information sharing is related to external partner collaboration.
Internal integration has a positive influence on both supplier integration [22] and customer
integration [45]. Therefore, companies with higher levels of internal integration may
potentially have an extraordinary ability to integrate with external partners [22]. In addition,
internal departments seek to integrate with external actors who can provide important
information necessary to reduce uncertainty. These internal departments can benefit from
close collaboration with customers and suppliers [14]. In our view, Hypothesis 9 can be
supported: Internal integration has a

Hypothesis 9 (H9). Total positive impact on external integration.

Tenth, internal integration between functions and departments in the enterprise sup-
ports the internal value chain. When communication and collaboration between depart-
ments work well, enterprises can use their benefits to improve their internal processes
related to value creation in design, development, planning, and production. Pagell [123]
studied the integration of manufacturing, logistics, and purchasing functions within the
value chain. The internal client, who initiates the demand, is a crucial player in general
and financial matters, management, technical and operational, and cross-cutting depart-
ments [124]. The main factors are structure, culture, facility layout, job rotation, and
cross-functional teams. It means variables related to the internal integration and coor-
dination of firms. Internal coordination between marketing [125] and production [126]
functions uses knowledge to achieve innovation goals. Coordination between market-
ing and production increases market knowledge, enabling firms to manage complex and
customer preferences [127]. From an intro-organizational point of view, the purchasing
department is a bridge to internal customers. A particular type of coordination is expressed
in the area of multi-corporate companies with strategic business units [128]. We propose
Hypothesis 10 that:

Hypothesis 10 (H10). Internal integration has a total positive impact on the internal value chain.
Processes 2022, 10, 539 12 of 30

3. Materials and Methods

The aim of the paper is to specify the importance of Industry 4.0 and digitalization for
the product customization process. The model is designed and evaluated to explore the
effects of Industry 4.0 technologies and digitalization in organizations. Our study points
out the theoretical conceptualization of digitalization for product customization processes.
We want to demonstrate the advantages and characteristics of the enterprise environment.

3.1. Data Sample

We conducted our research through a questionnaire survey from May 2019 to January
2021 in predominantly industrial enterprises. The planned number of enterprises surveyed
stems from the total number of 180,520 enterprises in the manufacturing industry in the
Czech Republic [129]. We contacted a total of 3000 industrial enterprises. The survey
resulted in the removal of seven of the 320 questionnaires received due to incompleteness,
duplicate responses, and inaccuracies in identifying subjects. The overall return rate of
the questionnaires was around 9.38%. The calculations show that the estimated margin
of error of the research sample is 5.54%. Thus, the research sample consists of a total of
313 enterprises, which were further processed for analysis and statistical processing.
Sample distribution is based on stratified random sampling related to the enterprise
size according to Act No. 563/1991 Coll criteria, “On Accounting” and technological inten-
sity based on the Czech Statistical Office methodology [130]. We aimed for an equal propor-
tional representation of each category to ensure that the research sample is representative.
The technology intensity of the enterprise sector is represented in 54.95% of enterprises
operating in the higher technology intensity sector (n = 172) and 45.05% of enterprises
(n = 141) in the lower technology intensity sector. Enterprises are further characterized
by size in 35.46% (x = 111) of cases from large enterprises (250+ employees, assets > CZK
500 million, turnover > CZK 1000 million), in 29.07% (n = 91) of cases from medium-sized
enterprises (50–249 employees, assets < CZK 500 million; turnover < CZK 1000 million), in
35.46% (n = 111) of cases from small enterprises (10–49 employees, assets < CZK 100 million;
turnover < CZK 200 million).
We surveyed online or by visiting the enterprises in person. The research team
included researchers and students of the University of South Bohemia in Ceske Budejovice.
The structured questionnaire was developed with university researchers and 15 business
managers using the Delphi method. The questionnaire was aimed at business managers,
especially from production and management. The questionnaire contained partly questions
related to calculating the VPi4 index of Industry 4.0 level in enterprises. The questionnaire
also included 35 inquiries related to digitalization, but only those relevant to the study
are described. The questions from the questionnaires were formulated based on the
respondents’ experiences of digitalization in enterprises. They included a set of questions
concerning the conceptual research model.

3.2. Construct of Variables and Indicators

All variables in the conceptual model are based on multi-item scales (see Appendix B;
Tables A2 and A3) and are described in the theoretical background.
Technology readiness. The technology level of Industry 4.0 is the input variable of the
conceptual model. The chosen indicator that measures the level of technological readiness
is derived from the VPi4 index founded on the results of exploratory factor analysis [131].
For technological readiness, only the second level of the VPi4 index was chosen, which links
production with new technologies and enables the implementation of smart manufacturing.
The resulting index value is determined by the extent to which information technology
(weights = 0.5251) and systems infrastructure (weights = 0.7577), and linked data connected
(weights = 0.5750) to sensors (weights = 0.5844), robots (weights = 0.5449), and mobile ter-
minals (weights = 0.5448) are implemented. Cronbach’s alpha for the technology readiness
construct was 0.7483. For simplicity, we expressed the model variable as a single-factor
measurement and converted the index value based on the % rank to a five-point scale:
Processes 2022, 10, 539 13 of 30

0–20%—1, 21–40%—2, 40–60%—3, 60–80%—4, 80–100%—5. This procedure simplifies the

model and allows easy comparison of Industry 4.0 in enterprises using the VPi4 index.
Other variables such as digitalization, internal integration, external integration, and
internal value chain were constructed through exploratory factor analysis. After eliminating
indicators with lower factor loadings, the resulting factor analysis expresses 78% of the
explained variance (Appendix A, Table A1).
Digitalization. The construct of digitalization is compiled based on a measured model
by Yáñez [132] and includes the main parts of electronic communication between machines,
robots, equipment via electronic connection, wireless, IoT, cloud [43], and vertical inte-
gration of information systems [19]. All indicators are measured on a 5-level scale, where
1 represents the lowest level (‘I totally disagree’) and 5 is the highest level (‘I totally agree’).
External integration. Similarly to the study [45], external integration consists of indica-
tors of cooperation with suppliers and customers. However, we do not consider supplier
development as an indicator of external integration because providing feedback is usually
part of supplier partnering. As mentioned in Droge et al. [56], supplier partnering means
supplier development activities on a strategic level and partnership can be viewed as a
strategic collaboration. We used 5-point scales (‘1—totally disagree’, ‘5—totally agree’ with
question claim).
Internal value chain. The internal value chain reflects three aspects of the inner product
lifecycle: product design, planning process, and manufacturing. It is similar to the view
described by Cao and Folan [73], i.e., product conception, design, production in the manu-
facturing phase. We did not include use and support/maintenance, reuse/recycling phases
because they are not part of product customization and are related mainly to other services.
Responses were recorded on 5-point scale, ‘1—totally disagree’ to ‘5—totally agree’.
Internal integration. Construct internal integration is the interconnection of business
units and processes [22]. Such interconnection positively influences teamwork, information
sharing, and strategic cooperation. We added to this construct the automatic execution of
operations, which puts the collaboration between departments on a higher level due to
the potential standardization of processes. A 5-point scale was used: ‘1—totally disagree’,
‘5—totally agree’.
Customization. Finally, customization is seen as the degree to which customers can
flexibly modify products to meet the exact needs and interests of the customer [71]. The level
of customization was measured on a 5-point scale: ‘1—totally disagree’, ‘5—totally agree’
with question sentence. This variable is taken as the output of the whole conceptual model.
Here, we used only the single-indicator measurement variable, where the construct scores
are identical to the standardized indicator values. We increase the validity of the responses
by adding question explanations to the respondents through an additional description.
Preliminary face validity of the construct variables was obtained through expert review
by the research team. Other forms of validity in the measurement model are further con-
sidered in Section 4 (Results). We used internal consistency (Cronbach’s alpha), construct
validity, convergent validity, indicator multicollinearity, and discriminant validity (HTMT)
measures. Reliability/consistency of construct variables was tested using Cronbach’s alpha.
Dijkstra–Henseler rho (ρA ), as a predictor of construct validity, should be greater than
0.7070 to be considered adequate [133]. Convergent validity is measured by the average
variance extracted (AVE), and it is suggested to provide good empirical evidence when
it is more significant than 0.5 [134]. We used the Heterotrait–Monotrait Ratio of Correla-
tions (MTMT) for the discriminant validity of construct variables. Recommended values
should be significantly lower than 0.8500 [135]. Indicator multicollinearity is calculated
through the variance inflation factor (VIF) per set of indicators. However, the VIF values
should not exceed 5.00 [136]. The coefficient of determination (R2 ) is used to measure
explained variance in research and the originality of exogenous indicators in influencing
each construct variable.
Processes 2022, 10, 539 14 of 30

3.3. Methods
We used structural equation modeling (SEM) to test hypotheses related to the an-
tecedents and consequences of digitalization and Industry 4.0. We estimated the model
using partial least squares (PLS), which belongs to variance-based methods. The estima-
tion of the PLS path model includes an iterative algorithm for determining the composite
scores of each construct variable, a correction of factorial variables, parameter estimation,
and bootstrapping for inference statistics [137]. We used a common factor-based model
that hypothesizes about latent variables explained by a set of indicators [138]. Structural
equation models are formally defined by two sets of linear equations: the measurement
and the structural model. The measurement model specifies the relationships between a
construct and its observed indicators (also called manifest variables), while the structural
model specifies the relationships between observed variables [137].
We performed the calculations in the ADANCO software to estimate the measurement
model based on latent variables that compose the common factor by a set of indicators [139].
We choose ‘the mode A consistent’ setting for the weighting scheme, which obtains consis-
tent inter-construct correlations, path coefficients, and factor loadings. We chose this setting
because the variables were obtained from exploratory factor analysis. This procedure and
settings are typical for behavioral sciences, where latent variables are traditionally modeled
using reflective measurement by a set of indicators. The advantage of this setting is that it
can be applied to variables with an unknown frequency distribution. For PLS, the preferred
option is using maximum likelihood methods [140].
The model’s goodness of fit relies on bootstrapping to determine the likelihood of
obtaining a discrepancy between the empirical and the model-implied correlation ma-
trix [141]. The ADANCO software provides the unweighted least squares discrepancy
(dULS ), geodesic discrepancy (dG ), and standardized root mean squared residual (SRMR)
for the determination of the goodness of fit. Traditional SRMR is based on the Euclidean
distance between the two correlation matrices. In the literature, usually, recommended
values are lower than 0.0500. However, Henseler and Sarstedt [142] pointed out that recent
studies show correct models with a cut-off value of 0.06. Therefore, it is preferable for all
measures of model fit to use the 95% and the 99% percentiles that prove that the theoretical
model was true. If estimates exceed these values, the model is unlikely to be accurate [139].
The model evaluation further provides coefficient estimates for the structural paths.
The results include direct, indirect, and total effects and several model evaluation measures.
Indirect effects are elements of the mediation analysis and can explain the significance of the
structural composition of the model. Cohen’s f 2 indicates the effect size of these pathways,
where higher values are attributed to direct effects and lower values to substantial effects.
Cohen [143] states that a strong effect size f 2 ≥ 0.35, a moderate effect size 0.15 ≤ f 2 < 0.35, a
weak effect size 0.02 ≤ f 2 < 0.15, and f 2 < 0.02 is an insignificant effect. Path coefficients (β)
are evaluated for significance via inference statistics, which provide one-sided or two-sided
tests [139].

4. Results
We divided the results into two parts: evaluation of the measurement model and
assessment of the structural model.

4.1. Evaluation of Measurement Model

The measurement model specifies the relationships between construct variables and
their indicators. The measurement model consists of a set of indicators that form latent
variables. These common factor models are expected among indicators with high corre-
lation patterns. The evaluation of the reflection measurement model includes reliability,
validity, weights, loadings (Table 1), and overall model fit (Table 2).
Processes 2022, 10, 539 15 of 30

Table 1. Measurement model evaluation of validity, reliability, weights, and loadings.

Construct/Indicator ρA α AVE VIF Weights Loadings

External integration 0.8822 0.8892 0.7892
→ EXI1 (customers) 2.6513 0.5300 0.8906
→ EXI2 (suppliers) 2.6513 0.5273 0.8861
Internal integration 0.8091 0.8066 0.6774
→ ICO1 (department) 1.8410 0.5642 0.8498
→ ICO2 (processes) 1.8410 0.5281 0.7954
Internal value chain 0.8569 0.8398 0.6497
→ PLC1 (development) 1.5591 0.3260 0.6864
→ PLC2 (planning) 2.8848 0.4034 0.8493
→ PLC3 (manufacturing) 2.6685 0.4131 0.8698
Digitalization 0.8579 0.8507 0.5921
→ DIG1 (IS) 2.2181 0.3346 0.8556
→ DIG (connection) 2.3323 0.3102 0.7932
→ DIG3 (IoT) 1.8052 0.2778 0.7103
→ DIG4 (systems) 1.6441 0.2772 0.7090
Note: Dijkstra–Henseler’s rho (ρA ), Cronbach’s alpha (α), average variance extracted (AVE), variance inflation
factor (VIF).

Table 2. Results of the overall saturated model goodness of fit.

Discrepancy Value HI95 HI99 Conclusion

SRMR 0.0278 0.0286 0.0314 Supported
dULS 0.0701 0.0745 0.0895 Supported
dG 0.0578 0.0611 0.0700 Supported
Note: standardized root mean squared residual (SRMR), the LS discrepancy (dULS ), and the geodesic discrep-
ancy (dG ).

4.1.1. Reliability and Validity

Reliability. The construct reliability is assessed based on the value of Dijkstra–Henseler’s
rho (ρA ), which should be larger than 0.7070. This condition is fulfilled for all constructs
under study. The results show that Cronbach’s alpha (α) values for the defined variable
constructs are satisfactory (digitalization = 0.8507, external integration = 0.8892, internal
value chain = 0.8398, internal integration = 0.8066). As a single-factor variable, customiza-
tion is not part of this evaluation, and technological readiness reliability is based on the
results of related research of the VPi4 index.
Validity. The results show that AVE as the average indicator of convergent validity for
all constructs exceeds the 0.5000 cut-off. It means that reflective constructs exhibit sufficient
unidimensionality. The discriminant validity of variables based on Heterotrait–Monotrait
Ratio of Correlations (HTMT) values varies between 0.2079 and 0.7350. It implies that these
values are at acceptable levels below 0.8500.

4.1.2. Multicollinearity, Loadings, and Weights

Multicollinearity. The variance inflation factor (VIF) can affect the results due to
questionable multicollinearity. The recommended values below five were observed for the
indicators examined. Results suggest that multicollinearity is not a problem in the data.
Loadings and weights. Weights determine the construct scores as a weighted sum of
their indicators. The results show that the highest values of weights are for internal and
external integration. Standardized loadings reflect the correlation between an indicator and
its construct, ranging from 0.6864 to 0.8906. These values reflect the degree of saturation of
the latent variable by the individual factor loadings.
Processes 2022, 10, 539 16 of 30

4.1.3. Overall Fit of the Saturated Measurement Model

The evaluation of the model’s overall fit evaluates the total validity of the measurement
model. A saturated model corresponds to a model in which all constructs are loosely
correlated [133], while a concept operationalization corresponds to a conceptual model.
We used a factor weighting scheme for internal weighting. The statistical inferences for
confirmatory factor analysis are based on a bootstrap procedure (5000 bootstraps). The
overall fit results are captured in Table 2 through three measures: SRMR, dULS , dG . The
value of the SRMR is very low and meets the cut-off condition of 0.0800 [144] and the
more rigorous assessment with cut-off of 0.0500. The discrepancy measures show that
the SRMR value of 0.0278 is below the 95% and 99% quantile of reference distribution
(HI95, HI99). Therefore, we can conclude that the latent variables are incorporated in the
model. Similar conclusions can be drawn for the dULS and dG measures, whose values are
below the recommended reference distribution quantiles. Thus, the proposed conceptual
measurement model should be consistent with the empirical one and evaluate its structure.

4.2. Evaluation of the Structural Model

We assessed the structural model for correlations between construct variables, path
coefficient, direct/indirect/total effects, effect size (Cohen’s f 2 ), coefficient of determination
(R2 ), and goodness of model fit.

4.2.1. Overall Fit of the Saturated Measurement Model

The correlation matrix contains the estimated correlations between constructs. Table 3
shows that the highest level of correlation is between digitalization and technology readi-
ness. Similarly, internal integration has a very close relationship with the internal value
chain too. Higher correlation coefficients between constructs may be indicative of possible
influences between them.

Table 3. Inter-construct correlations.

Construct 1 2 3 4 5 6
Digitalization 1.0000
Technology readiness 0.7055 1.0000
Internal value chain 0.6859 0.6139 1.0000
Customization 0.3343 0.2079 0.3885 1.0000
External integration 0.4739 0.3703 0.4142 0.2819 1.0000
Internal integration 0.6557 0.6218 0.7332 0.2229 0.6741 1.0000

4.2.2. Evaluation of the Overall Fit of the Estimated Model

We evaluated the primary measures of the goodness of model fit of the estimated
model through the bootstrap-based test of overall model fit. Our bootstrap sample had
5000 attempts, and the iterative algorithm converged after five iterations. Table 4 shows
that all values of discrepancy measures were below the 95% and 99% quantile of their
reference distribution. It means that the estimated model was not rejected at a 5% and 1%
significance level. Moreover, the SRMR was lower than the recommended cut-off, reflecting
a good model fit. The results conclude that the proposed model adequately fits the collected
data. We can therefore conclude that the proposed conceptual model has been confirmed.
We have further analyzed its structure in depth.
Processes 2022, 10, 539 17 of 30

Table 4. Results of the estimated model goodness of fit.

Discrepancy Value HI95 HI99 Conclusion

SRMR 0.0378 0.0342 0.0382 Supported
dULS 0.1297 0.1066 0.1325 Supported
dG 0.0690 0.0658 0.0751 Supported
Note: standardized root mean squared residual (SRMR), the LS discrepancy (dULS ), and the geodesic discrep-
ancy (dG ).

4.2.3. Results of the Structural Model Effects

The path coefficient (β) represents the direct relationship (effect) between the indepen-
dent (exogenous) and dependent (non-exogenous) latent variable. The significance of this
relationship is expressed through the empirical t value by bootstrapping and indicates the
relevance of path relationships between variable constructs. Indirect effects describe the
situation where variable A affects variable C through the other variable B (i.e., represented
graphically as the path A → B → C). The total effect is the sum of all direct and indirect
effects on one variable. The significance of the direct effect is then reflected by a measure
of effect size (Cohen’s f 2 ), which expresses the substantiality of the direct effect between
variables. Table 5 provides an overview of all effects in the structural model, including an
indication of their statistical significance.

Table 5. The structural model effects overview.

Path Direction Direct Effect Indirect Effect Total Effect Cohen’s f 2

Technology readiness →
0.7055 *** 0.7055 *** 0.9911
Digitalization
Technology readiness →
0.3169 *** 0.3048 *** 0.6218 *** 0.0971
Internal integration
Technology readiness →
0.4358 *** 0.4358 ***
External integration
Technology readiness →
0.1109 0.5030 *** 0.6139 *** 0.0147
Internal value chain
Technology readiness →
0.2650 *** 0.2650 ***
Customization
Digitalization →
0.4321 *** 0.4321 *** 0.1804
Internal integration
Digitalization →
0.0560 0.2754 *** 0.3314 *** 0.0033
External integration
Digitalization →
0.3020 *** 0.2014 *** 0.5035 *** 0.1014
Internal value chain
Digitalization →
0.2135 *** 0.2135 ***
Customization
External integration →
0.1460 * 0.1460 * 0.0212
Customization
Internal integration →
0.6373 *** 0.6373 *** 0.4258
External integration
Internal integration →
0.4662 *** 0.4662 *** 0.2949
Internal value chain
Internal integration →
0.2460 *** 0.2460 ***
Customization
Internal value chain →
0.3280 *** 0.3280 *** 0.1072
Customization
Note: significance is measured by one-tailed t test (* p-value < 0.05, *** p-value < 0.001).

Table 5 shows that the most significant direct effect is the relationship between tech-
nology readiness and digitalization variables. This strength of the effect is supported
by taking the very high Cohen’s measure (f 2 = 0.9911). The direct relationship between
Processes 2022, 10, 539 18 of 30

internal and external integration (f 2 = 0.4258) can be considered highly significant. These
two relationships both exceed the 0.3500 thresholds, indicating a strong effect. On the other
hand, the relationship between the variable technology readiness and external, internal
integration, and internal value chain can be described as a significant indirect effect. We
can identify the most significant relationships between the variables technology readiness
and internal integration, and technology readiness and internal value chain, regarding the
overall effect.
Figure 2 captures the whole structure of the model, including the statistically signifi-
cant paths indicated by the p-values. The coefficient of determination (R2 ) values provide
insights into the model’s predictive relevance. These values correspond to the goodness of
fit in regression analysis and denote the explained variance of the latent variable. Figure 2
reports the relationship between the indicators and their latent variable construct.
Processes 2022, 10, x FOR PEER REVIEW 19 Each
of 31
indicator includes a high value of factor loading. This finding implies the excellent general-
izability of the findings.

Figure 2.2. Results

Resultsofof
thethe
structural model.
structural Note:Note:
model. significance is measured
significance by one-tailed
is measured t test (* tp-test
by one-tailed
value < 0.05,
(* p-value *** p-value
< 0.05, < 0.001).
*** p-value < 0.001).

4.2.4. Results
4.2.4. Results of of Hypotheses
Hypotheses Evaluation
Evaluation
We evaluated
We evaluated ten ten hypotheses
hypotheses as as to
to the
the significance
significance of ofpath
pathcoefficients
coefficients through
through aaone- one-
tailed t test based on the results of the standard bootstrap. The hypotheses
tailed t test based on the results of the standard bootstrap. The hypotheses dealt with ef- dealt with effects
among
fects latentlatent
among variables. Thus,
variables. confirmation
Thus, confirmationof the
of hypothesis
the hypothesis means thatthat
means the the
relationship
relation-
between
ship latentlatent
between variables is statistically
variables significant,
is statistically i.e., one
significant, i.e., variable affects
one variable the other.
affects The
the other.
results presented in Table 6 show that all hypotheses except H2
The results presented in Table 6 show that all hypotheses except H2 and H6 were con- and H6 were confirmed.
Thus, the
firmed. model
Thus, theessentially ensures ensures
model essentially the predicted relationships
the predicted betweenbetween
relationships the variables.
the vari-
ables.However, if we include indirect effects in the relationships between variables (Table 5),
the overall effect would be statistically significant for hypotheses H2 and
However, if we include indirect effects in the relationships between variables (Table H6. It is an exciting
5),
result as it introduces the importance of mediation between variables into
the overall effect would be statistically significant for hypotheses H2 and H6. It is an ex- the model.
citingInresult
the case as ofit H2, the direct
introduces theeffect of technology
importance readinessbetween
of mediation on the internal
variables value
intochain
the
was not confirmed, but the mediator of the indirect effect may be the variable internal
model.
integration. Here, then, both the indirect effect (p-value = 0.0001) and the overall effect
are statistically
Table significant
6. The evaluation (p-value < 0.0001). It means that technology readiness influ-
of hypotheses.
ences the internal value chain through internal integration. Therefore, interdepartmental
Direct Effectshelps to leverage technology for the internal
collaboration Pathvalue
Coef.chain.
(β) t-Value p-Value
Technology readiness → Digitalization (H1) 0.7055 21.9613 0.0000 ***
Technology readiness → Internal value chain (H2) 0.1109 1.4416 0.0747
Technology readiness → Internal integration (H3) 0.3169 4.2819 0.0000 ***
Digitalization → Internal integration (H4) 0.4321 5.6126 0.0000 ***
Digitalization → Internal value chain (H5) 0.3020 3.2075 0.0007 ***
Processes 2022, 10, 539 19 of 30

Table 6. The evaluation of hypotheses.

Direct Effects Path Coef. (β) t-Value p-Value

Technology readiness → Digitalization (H1) 0.7055 21.9613 0.0000 ***
Technology readiness → Internal value chain (H2) 0.1109 1.4416 0.0747
Technology readiness → Internal integration (H3) 0.3169 4.2819 0.0000 ***
Digitalization → Internal integration (H4) 0.4321 5.6126 0.0000 ***
Digitalization → Internal value chain (H5) 0.3020 3.2075 0.0007 ***
Digitalization → External integration (H6) 0.0560 0.6531 0.2568
Internal value chain → Customization (H7) 0.3280 4.9757 0.0000 ***
External integration → Customization (H8) 0.1460 2.1832 0.0145 *
Internal integration → External integration (H9) 0.6373 7.3406 0.0000 ***
Internal integration → Internal value chain (H10) 0.4662 5.0435 0.0000 ***
Note: significance is measured by one-tailed t test (* p-value < 0.05, *** p-value < 0.001); results for direct effect
significance are presented based on the standard bootstrap results.

Similarly, for H6, there was no statistically significant effect of digitalization on external
integration in firms. However, taking into account indirect effects, the situation is different.
The overall effect of digitalization on external integration will be statistically significant
(p-value < 0.0001). Once again, the variable internal integration is the mediator, support-
ing cooperation with suppliers and customers through functioning interdepartmental
collaboration and process automation.
Thus, in the model, we found a highly significant role for internal integration, which
facilitates the use of technology and digitalization to manage the internal value chain and
external collaboration with enterprises and customers. Accordingly, enterprises need to
integrate their business processes and functions before implementing new technologies
and digital transformation. Without these initiatives, the impact of transformation and
change may not be successful.

5. Discussion
This section summarizes and discusses the main findings of the work, theoretical and
practical implications, the contribution of the proposed model, and research limitations.

5.1. Conceptual Model and Theoretical Implications

Customization of the product design process has become one of the manufacturing
Industry 4.0 trends. We developed a conceptual process model based on the studied
literature, which was subsequently verified through the structural equation modeling
method. The model relies on the use of Industry 4.0 technologies and digitalization to
customize products. Parts of the model include variables characterizing firms’ internal
and external linkages and their environment. We can also understand them as necessary
characteristics of the enterprise environment that influence the implementation of modern
technologies and digital transformation success. Technology and digitalization are changing
the enterprise environment. They allow enterprises to exploit advantages for customization
on customer demand. The individual relationships in the model were converted into
research hypotheses and verified through statistical tests.
The first three hypotheses (H1–H3) dealt with the impact of technology readiness
on digitalization, internal value chain, and internal integration in enterprises. The re-
sults showed that technology readiness directly affects digitalization (H1). It is in line
with the definition of Industry 4.0. Digitalization is a tool or means to transform busi-
nesses into smart factories. [99,100]. Thus, higher levels of technology positively impact
the adoption of digitalization in enterprises. The second hypothesis (H2) examined the
impact of technology readiness on the internal value chain. In this case, we could not
confirm a direct relationship between the variables studied. It contrasts with the findings of
research [101,103], which concluded that Industry 4.0 technologies influence the value cre-
ation process and manufacturing and logistics operations. However, technology readiness
can influence the internal value chain through internal integration. In practice, it means
Processes 2022, 10, 539 20 of 30

that technology impacts the value chain if the right internal conditions are created for this
purpose, including functioning interdepartmental collaboration and automatic process
execution. Although this influence of the internal environment has not been investigated in
the studies mentioned above, it may be an important determinant of the implementation of
new technologies. The third hypothesis (H3) directly addressed the impact of technology
on internal integration. It was statistically confirmed. It implies that technology contributes
to better departmental integration and communication. Therefore, this result is congru-
ent with the study results [103] and confirms one of the requirements of Industry 4.0 in
enterprises, which is the need for horizontal and vertical integration and integration of
engineering processes [37].
The other three hypotheses (H4–H6) focused on the impact of digitalization on internal
and external integration and the internal value chain. Our confirmation of the fourth
hypothesis (H4) showed that digitalization positively affects internal integration. This
finding is in agreement with the literature, in which positive effects of digitalization have
been found for internal workflow [107], internal coordination of organizational units and
processes [49], or inter-functional coordination [106]. Further, the fifth hypothesis (H5)
was also able to confirm that digitalization also has a positive impact on the internal value
chain. The sequence of internal activities of the value chain, such as product development
or production, is supported by digitalization [101]. More accurate planning of production
processes can also occur [76]. In contrast to the internal organizational variables, the sixth
hypothesis (H6) failed to confirm the effect of digitalization on external integration. We
interpret this result by arguing that enterprises first need to monitor internal processes
and departments for successful digital connectivity and integration with suppliers and
customers. We agree that digitalization can provide real-time integration and availability
of information in the supply chain [118]. However, non-functioning back-end and non-
transparent communication can be a barrier to the better use of data shared with customers
and suppliers.
The model includes hypotheses (H7 and H8) examining the impact of the internal value
chain and external integration on customization. Both of these hypotheses were statistically
confirmed. For the internal value chain, we find that adjusting internal processes to be
flexible in production, planning, and development greatly influences the possibilities
of customizing products for customers. The design and functionality of products can be
exploited when production customization stems from integrated digital support throughout
the product lifecycle [23]. Similarly, modern digital models and additive manufacturing
capabilities can support the internal value chain [120]. In addition, the connection with
suppliers and customers via modern information systems is also essential for customization.
According to other research, customers can be integrated to create new products [67] by
using platforms for interaction [69] or co-creating products and services [70]. Suppliers are
then the engine for integrating the entire supply chain, with the possibility of coordinating
it [61] across different business systems through the integration of modern technologies.
Finally, we assessed the impact of internal integration on external integration and the
internal value chain through hypotheses (H9 and H10). These hypotheses were statistically
confirmed. The relationship between internal integration and external integration has
been investigated quite frequently in the literature [22,45]. Thus, our research supports the
premise that an internally integrated environment positively influences successful integra-
tion with external stakeholders, customers, and suppliers. Indeed, enterprises can usually
benefit from the experience and functioning communication between departments, which
is reflected in the relationships with the external environment. We found that internal inte-
gration related to the internal value chain and the functioning and communication between
departments positively influence the product’s lifecycle. This conclusion is supported by
research on the integration of production or logistics functions [123] or the relationship
between marketing [125] and production functions [126]. The coordination and internal
integration of these functions assist in implementing individual lifecycle processes.
Processes 2022, 10, 539 21 of 30

5.2. Barriers and Limitations

Although digitalization and new technologies are considered drivers of customization
and change management when combining customization and technology, it is necessary
to mention some barriers to their implementation. Industrial enterprises cannot afford
to remove and replace all old technologies with new tools, and it must be stressed that
employee training takes time and effort. Empirical research [145] shows that implementing
and using Industry 4.0 requires a change in corporate culture. As Murphy [146] argues, AI
technologies are not mature enough to prove their effectiveness. For example, Walmart
recently decided to stop using robots to scan shelves in its stores and employ 20,000 people
to keep up with the 74% increase in online sales. The complexity of customization and
e-commerce is still an issue, as Industry 4.0 requires a combination of software, hardware,
sensors, and devices provided by multiple companies, which are not always compatible
with each other. Customization does not play a crucial role in profits, but it always
plays a positive role, as Wang [147] also found in his study. Through data collected from
308 Chinese customers who participated in social network service personalization, it
showed that customization toolkits have a marginal but positive effect on client purchases.
According to Chen et al. [86], barriers to such processes can include overestimation of
internal ERP systems, the robustness of Swan Cosmetics systems currently having 170 tribal
programmers, slow information flow, and last but not least, the employees themselves.
A study of 195 German companies [148] shows that managers are concerned about a
wide range of possible technologies, which differ in their high diversity of functions and
possible solutions due to different providers. These concerns can also be a barrier to further
development and new technologies.
The research limitation is related to SEM method shortcomings, the data sample, and
the generalization of the results. The main drawback of the proposed model could be the
lack of indicators for individual latent constructs. According to Henseler [139], the SEM
requires at least one available indicator. However, Marsh et al. [149] recommend using
more indicators (a minimum of four items) per factor (latent construct) to provide greater
interpretability, reliability, and accuracy, fewer non-converged and incorrect solutions,
and stable estimates. We chose the single-indicator measurement solution for this study’s
technology readiness and customization variables. Rossiter [150] states that if the construct
is specific, there is no need for more than one indicator, and the validity will be adequate.
According to Sackett and Larson [151], if the construct is narrow in scope, unidimensional,
and unambiguous to the respondent, it is a good approach. The notion of customization
in the model is defined in general terms. Customization is meant as the ability of the
customer to customize the product flexibly. Thus, it is not addressed how the customer
could make this modification. Therefore, we consider the construct of customization as
sufficiently specific. For technology readiness, we rely on the value of the Industry 4.0
level indicator VPi4, where reliability and research validity are clearly defined [131]. It
is due to the possibility of linking the model to the assessment of the Industry 4.0 level
in enterprises. Otherwise, the construct can be described by a set of indicators listed in
Appendix B. The estimation of this solution with individual indicators of the technology
readiness variable has promising results. Another problem concerns the uniqueness of
factor loadings under certain rotations or transformations [152]. Other drawbacks may be
the issue of path directionality, which is not statistical but rather theoretical. It is important
to acknowledge that an over-identified model may not provide a unique solution, as SEM
works with iterative estimation processes and models may converge at local minima or
suboptimal quasi-solutions [153]. Another issue may relate to the model structure, given
that, if there are redundant paths in the model, this will be reflected in a worse SRMR
score [139]. However, these paths may have a theoretical basis. In addition to the mentioned
limitations related to the SEM method, the sample structure may limit the generalization
of the research results as the research was conducted in the Czech Republic. Enterprises
in the Czech Republic have a certain level of product customization and use technology
to a degree that may be different from other countries. However, most of the enterprises
Processes 2022, 10, 539 22 of 30

surveyed (44.73%) have foreign owners or are part of a foreign enterprise. Multi-national
enterprises may obviously have locally tailored product customization strategies, although,
more commonly, the tools, technologies, and capabilities will be similar across countries.
This is noticeable with respect to e-commerce, as websites and applications are in most
cases identical and only the choices for the end customer differ.

6. Conclusions
Over the last decade, digitalization has become a recognized prerequisite for suc-
cessfully implementing product customization projects. It is acknowledged that nearly a
quarter of customers are willing to pay more to receive a personalized product or service
and 22% of consumers are happy to share some data in return for a more personalized
customer product or service [8]. For the e-commerce segment, the customization process
associated with Industry 4.0 technologies is a massive opportunity for further development.
E-commerce has fostered the digitalization of businesses and consumers and led to efficient
and effective digital processes [154]. It can be expected that enterprises will invest heavily
to ensure that the winner is the customer who receives a better, faster, more convenient,
cheaper, and safer service. The customers can input designs for companies to customize
products quickly and with lower prices than those who carry out the standardization.
Producers and customers are both in a position to create new value. It is the purpose of
filling the gaps between mass customization and personalization processes, which can be
achieved with industry 4.0 technology [6].
The paper examines the importance of process modification for product customization
in the sense of manufacturing in Industry 4.0. We developed a conceptual process model
that includes the relationships between technological readiness, digitalization, internal and
external integration, internal value chain, and customization. We used the SEM method for
model confirmation, and goodness of fit measures show acceptable values. The proposed
process model can be generalized to any form of product customization because it uses
significant organizational variables that influence it. However, caution should be taken in
applying the findings to specific technical product customization solutions. In this case, it
is more appropriate to separate the technical side of customization from the organizational
side, which includes factors that influence the implementation of these projects.
We confirm the relationships between the model variables, especially the effect of
technological readiness on digitalization, internal integration on external integration, tech-
nology readiness on internal integration, and technology readiness on the internal value
chain in terms of product customization. We confirm that internal processes and external
integration significantly influence product modification capabilities. The relationships
between the variable technology readiness on the internal processes and digitalization
on external integration yielded exciting results. In both cases, the relationship between
the variables was significant only when indirect effects were taken into account. The vari-
able internal integration played a mediating role in the relationship. We can see that the
internal environment plays an essential role in successfully implementing digitalization
and technologies.
The results showed that Industry 4.0 technologies and digitalization positively affect
product customization if they support enterprises’ internal and external integration and
value chain. We demonstrate that internal and external factors undeniably impact the
enterprise environment. New opportunities for customers are triggered by the new tech-
nologies of Industry 4.0 and digitalization. They allow the creation of entirely new business
models in enterprises [21]. The shift from mass customization to electronic, customer-,
and data-driven personalization is evidenced by the growing practical need for flexible
online customization frameworks and solutions [12]. It makes the supply chain integration
capable of producing personalized products of good quality, at a reasonable price, on time,
and in the required quantity [155].
In future research, we plan to determine the impact of enterprise size and industry
in the proposed model. We can expect that there will be differences between enterprises.
Processes 2022, 10, 539 23 of 30

Mainly, there are differences between small and large enterprises or some sectors with
higher technology intensity and industries with lower technology intensity. Another direc-
tion for future research is extending the model to include different forms of customization.
It may be interesting to see how mass customization and modern personalization results
will differ here. Our research can be further extended by analyzing the relationship of
specific Industry 4.0 technologies with different types of customization. It means discov-
ering the technologies with practical applications for personalization (cloud computing)
and those more readily applicable for mass customization (e.g., 3D printing). Finally, the
research can focus on actor-centric aspects of digital transformation as viewed by Nadkarmi
and Prugl [2]. This focus of research may address the effects of corporate culture, leadership,
or customer personality on the components of the proposed model.

Author Contributions: Conceptualization, M.P.; methodology, M.P.; software, M.P.; validation, M.P.;
formal analysis, M.P.; investigation, M.P. and J.V.; resources, J.V.; data curation, M.P.; writing—original
draft preparation, M.P.; writing—review and editing, M.P. and J.V.; visualization, M.P.; supervision,
M.P.; project administration, J.V.; funding acquisition, J.V. All authors have read and agreed to the
published version of the manuscript.
Funding: This research was funded by “EF-150-GAJU 047/2019/S”, supported by the University of
South Bohemia in Ceske Budejovice.
Institutional Review Board Statement: Not applicable.
Informed Consent Statement: Not applicable.
Data Availability Statement: Data available in a publicly accessible repository.
Acknowledgments: The authors thank the enterprises for taking part in the research.
Conflicts of Interest: The authors declare no conflict of interest.

Appendix A
Appendix A includes the results of exploratory factor analysis in Table A1.

Table A1. Exploratory factor analysis results (Varimax rotation).

F1 F2 F3 F4 Indicator
Factor Description
Digitalization External Integration Internal Value Chain Internal Integration Abbreviation

Customers 0.1610 0.8940 0.0991 0.2201 EXI1

Suppliers 0.1434 0.9111 0.1252 0.1652 EXI2
Departments 0.1785 0.4137 0.2613 0.7323 ICO1
Processes 0.2570 0.2455 0.2076 0.8070 ICO2
Development 0.1867 0.1613 0.8574 0.0146 PLC1
Planning 0.2235 0.1054 0.7617 0.4189 PLC2
Manufacturing 0.2862 0.1054 0.7018 0.4304 PLC3
Information systems 0.7395 0.1640 0.3612 0.1767 DIG1
Communication 0.7940 0.2003 0.2157 0.1880 DIG2
IoT and cloud 0.7586 0.1604 0.1581 0.2094 DIG3
Integration 0.7542 0.1335 0.1558 0.1592 DIG4
Eigenvalues 2.6325 2.0196 2.1710 1.7599 Total = 8.5830
Explained variance 0.2393 0.1836 0.1974 0.1600 Total = 0.7803
Processes 2022, 10, 539 24 of 30

Appendix B
Appendix B includes a description of all variables in the conceptual model.

Table A2. The measurement items and indicators.

External Integration Indicator Mean Std. Dev.

→ EXI1 We are connected to customers and processes are electronic 3.6198 1.7236
→ EXI2 We are connected with suppliers and processes are electronic 3.5335 1.7817
Internal integration Indicator Mean Std. dev.
Organizational departments are connected and processes are carried
→ ICO1 3.5240 1.7182
out electronically
→ ICO2 Computer technology (IT) supports the automatic execution of processes 3.2492 1.9313
Internal value chain Indicator Mean Std. dev.
→ PLC1 New product design and the development process is digitized 2.9361 2.2651
→ PLC2 The production planning process is digitized 3.2013 1.8920
→ PLC3 The manufacturing and production control is digitized 3.0064 1.7820
Digitalization Indicator Mean Std. dev.
Machines, robots, and equipment are controlled and managed by information
→ DIG1 2.7444 2.1332
systems
→ DIG2 Machines and devices communicate with each other 2.2716 1.8010
→ DIG3 Machines and devices communicate via the Internet (using IoT, cloud) 2.0735 1.6004
All systems, devices, machines are integrated into information systems across
→ DIG4 2.0863 1.5342
hierarchical levels
Customization Indicator Mean Std. dev.
To what extent can the customer flexibly customize the product?
→ CUST (5-point Likert scale with anchors: 1 totally disagree . . . 5 totally agree; where 2.7604 2.3495
1 means craft/tailored production and 5 is possibility of mass personification)
Note: the indicators are evaluated on the 5-point Likert scale with anchors: 1 totally disagree . . . 5 totally agree.

Table A3. The measurement items and indicators of VPi4.

Index VPi4 Indicator Mean Std. Dev.

What is the level of the Industry 4.0 technology readiness in your company according
→ VPI to the second level of VPi4 index? * (based on the % rank, readiness is evaluated as 3.1693 1.4488
five levels: 0–20%—1, 21–40%—2, 40–60%—3, 60–80%—4, 80–100%—5
* Note: VPi4 index (Vrchota, Pech, 2019) at second level include necessary Industry 4.0 technology: IT infrastructure
(weights = 0.5251), information systems architecture (weights = 0.7577), using linked big data (weights = 0.5750),
use of robots and robotic arms (weights = 0.5449), using mobile terminals (weights = 0.5448), and use of sensors
(weights = 0.5844).

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