Drivers and Challenges of Industry 4.0 Adoption: An Empirical Study on Metal and Metal Products Manufacturing SMEs

Abstract The global industrial sector is witnessing rapid advancements in digital manufacturing and the implementation of Industry 4.0 (I4.0). This transformation presents significant opportunities for manufacturing firms to innovate and enhance productivity. In this context, an empirical survey was conducted to assess the readiness and challenges of I4.0 adoption within Kingdom of Bahrain’s manufacturing sector, which is considered a key component of the national economy. The study focused on Small and Medium-Sized (SME) metal and metal product manufacturing organizations, recognized as leaders in factory digitization within Kingdom of Bahrain. The country hosts 335 manufacturing organizations, out of which 65 are classified as Metal and Metal Product manufacturing (SMEs). The research method used in the study involved a quantitative questionnaire-based survey as the primary data collection tool, covering the following key aspects: (1) organization core activities and size, (2) management awareness of I4.0, (3) adoption of automated and digital technologies, (4) software and information communication technologies used, (5) extent of data sharing and analysis within departments, and (6) motivations and obstacles encountered in pursuing I4.0. The findings revealed that only 25% of respondents are fully aware of the I4.0 concept, while the majority have limited awareness. Conventional automation and primitive information technologies showed a high adoption rate of 70%, indicating a slow progression towards Cyber-Physical Systems (CPS) and the Internet of Things (IoT). The three main drivers identified were enhanced productivity, cost reduction, and quality improvement. On the other hand, the three primary barriers were the high financial investment required, difficulties in upgrading existing machinery, and uncertainty regarding the return on investment. The study’s findings conclude that there is readiness to pursue I4.0 among the metal and metal product manufacturing SMEs; however, significant efforts will be required to keep pace with I4.0. Furthermore, these insights highlight the need for further research to overcome existing challenges and develop frameworks that support manufacturing organizations and policymakers in accelerating the implementation of I4.0