On sustainable production networks for Industry 4.0

Re-industrialization enjoys a renaissance in Western economies due to the role of the industrial sector for innovation, productivity, and job creation. A very promising approach to bring back competitiveness in production seems to be the fusion of the virtual and the real world leading to smart manufacturing and logistics concepts. In Germany, the leading industrial country in the European Union this approach has been called “Industry 4.0” aiming to develop cyber-physical systems (CPS) and dynamic production networks in order to achieve flexible and open value chains in manufacturing of complex mass customization products in small series. Currently, manufacturing companies gaining experiences in production in networks and smart logistics and develop new organisational structures and business models which better benefit from the new technologies and which adapt faster to the rapidly changing network environments. The modern manufacturing models embrace modular and fractal approaches as well as network-orientation, flexibility and responsiveness. The paper investigates the relationship between networking, organizational development, structural frame conditions and sustainability in the context of Industry 4.0. The research is empirically validated by using data samples from a business reengineering project in an internationally operating high-tech manufacturing enterprise located in Estonia. The empiric analysis is based on semi-structured expert interviews and secondary data together with a case study approach.