Industry 4.0‐driven business model innovation for supply chain sustainability: An exploratory case study

Abstract In the rapidly evolving landscape of the automotive industry, firms are increasingly turning to advanced Industry 4.0 (I4.0) technologies to drive innovation and sustainability. While I4.0 technologies hold immense potential for Business Model Innovation (BMI) and supply chain (SC) sustainability, a gap exists in understanding how firms can leverage BMI and SCS effectively. This study addresses this gap and explores the impact of implementing I4.0 on BMI and its effects on SC sustainability. Utilizing an exploratory case study approach, the research investigates an Indian automobile SC and highlights how I4.0 technologies such as IoT, cloud computing, additive manufacturing, analytics, and automation contribute to BMI, enhancing operational efficiency and SC sustainability. Additionally, the study emphasizes the importance of fostering collaboration among SC entities and the need for support from large‐scale manufacturers for the initial adoption of I4.0 technologies at the small‐scale supplier level. Based on these findings, the study develops the ‘I4.0‐enabled BMI for SC Sustainability’ framework, providing a structured approach for integrating I4.0 and BMI to enhance SC sustainability. This research investigates and applies Dynamic Capability (DC) theory to examine I4.0 transformations and contributes to DC theory by demonstrating how I4.0 facilitates BMI across the value chain, leading to improved sustainability performance.