A Value-Oriented Framework for Return Evaluation of Industry 4.0 Projects

• Type: Article in International Conference Proceedings Book
• Date: 2024

Authors

Alexander Dutra Tostes (Author) Other; Américo Azevedo (Author) FEUP

Conference proceedings International

Title: Lecture Notes in Mechanical Engineering

Pages: 871-878

32nd International Conference on Flexible Automation and Intelligent Manufacturing, FAIM 2023

Porto, 18 June 2023 through 22 June 2023

Indexing

Scopus - 0 Citations

Other information

Authenticus ID: P-00Z-0MW

DOI: 10.1007/978-3-031-38241-3_95

Abstract (EN): Organizations can transform their businesses and create more value by adopting Industry 4.0 initiatives. During evaluating these projects, the decision-maker must assess significant uncertainties (risks) resulting from socio-technical, economic, and financial factors. One of the main objectives of this study was to identify the necessary building blocks to develop a framework for project implementation in high-risk scenarios, as in the case of Industry 4.0. A multi-criteria framework divided into three stages was proposed, integrating knowledge from Front-End-Innovation (FEI), Innovation Decision Process (IDP), Traditional Project Evaluation Methods, and Real Options Valuation (ROV). The first step is to identify an investment opportunity. The second step is the definition of a business model. The third step is the simulation of different implementation strategies to give managerial flexibility to decision-makers to decide the best strategy to mitigate risks. A real case study was used to test the framework. According to the results, managers can use this framework to create different project implementation scenarios and determine the best strategy to mitigate risks. However, we must still understand whether uncertainties behave discretely, dynamically, or both, the interactions between elements, and how to calculate them to improve our model. © 2024, The Author(s), under exclusive license to Springer Nature Switzerland AG.

Language: English

Type (Professor's evaluation): Scientific

No. of pages: 7