Decision-Based Framework for Retrofitting Legacy Manufacturing Systems in the Context of Industry 4.0

Abstract

ABSTRACT In an era where digital transformation is crucial for organisational competitiveness and sustainability. A comprehensive decision-making framework, presented in this thesis, is designed to provide guidelines for manufacturing companies through digital retrofitting. Addressing the challenge of integrating digital technologies into existing infrastructures, the framework is strategically structured into three successive stages, blending theoretical insights with practical applications to facilitate informed decisions. The first stage, the digital retrofitting stage, establishes a knowledge base by encompassing solution strategies, essential requirements, challenges, applications, and best practices relevant to digital retrofitting. This stage equips owners and managers of SMMEs with a comprehensive understanding of the digital retrofitting landscape, enabling them to identify the most suitable Industry 4.0 technologies for their specific needs. It bridges the knowledge gap and lays the groundwork for effective digital transformation. The second stage, known as the assessment model stage, the readiness level of an organisation is evaluated. This stage involves the development of a crafted assessment tool with 21 questions designed to measure organisational strategies, employee readiness, processes, and infrastructure capabilities. The assessment model provides a customised evaluation with guidelines for SMMEs to make informed decisions about their digital retrofitting investments. This stage ensures practical applicability and relevance by integrating academic research and industry insights, offering specific recommendations aligned with classified maturity levels. The final stage, the solution exploration stage, focuses on evaluating and selecting potential retrofitting solutions. This stage begins with a financial analysis to determine the return on investment (ROI) by calculating the payback period for digital retrofitting investments, providing a clear picture of the economic implications and benefits of the proposed solutions. Following the financial analysis, a multi-criteria decision-making (MCDM) process is conducted to handle conflicting criteria and perform sensitivity analyses. This ensures that financial viability and strategic ii business alignment are integral parts of the decision-making process, systematically evaluating various options beyond financial metrics. To demonstrate the practical applicability and effectiveness of the proposed framework, a case study is conducted, serving as a proof of concept and providing a tangible example on how the framework can provide guidelines for organisations towards making informed decisions on digital retrofitting. A key feature of this framework is its ability to simplify the decision-making process in the context of digital integration within existing organisational structures. A contribution made in this thesis is both to academic and practical understanding of digital retrofitting, with a structured pathway offered for organisations to navigate the complexities of adopting digital technologies.