Industry 4.0 adoption and eco‐product innovation capability—Understanding the role of supply chain integration

Abstract Employing Industry 4.0 technologies has been recognized to facilitate data‐driven decision‐making and real‐time operational insights. While such technologies are poised to streamline supply chains for increased efficiency, the nexus between these technologies and environmental sustainability remains underexplored. This study applies the resource‐based view and network theories to assess the role of Industry 4.0 in fostering eco‐product innovation through supply chain integration. Data from 496 Indian manufacturing firms were analyzed using structural equation modeling to probe the relationships between Industry 4.0 adoption, supply chain integration, and eco‐product innovation capability. Results demonstrate that Industry 4.0 technologies have a positive direct effect on supply chain integration. However, when considering the capability for eco‐product innovation, the role of Industry 4.0 is contingent upon the degree of supply chain integration at upstream, internal, and downstream stages. The findings reveal that supply chain integration acts as a pivotal mediator in harnessing Industry 4.0 for eco‐product innovation. The direct influence of Industry 4.0 on eco‐innovation capability was found to be insignificant, underscoring the integrated approach to supply chain management as critical for environmental advancements. This work contributes a nuanced understanding of how manufacturers can strategically employ Industry 4.0 to bolster their environmental and competitive positioning, providing a comprehensive framework for enhancing eco‐product innovation capability.