How does intelligent manufacturing reconcile the conflict between process standards and technological innovation?

Abstract

Understanding whether process standards foster or hinder technological innovation lacks consensus in the literatures. From the process management perspective, this study aimes at exploring the mechanisms underlying this relationship under a specific situation of intelligent manufacturing. By analyzing interview data from four case companies in the environmental instrument industry in China and secondary data at the firm level, we find that (i) process standards have a positive effect on technological innovation and (ii) process standards in companies with relatively high levels of intelligent manufacturing raise technological innovation. In particular, these four companies are differentiated with respect to intelligent manufacturing context: two companies with relatively high levels of intelligent manufacturing; and the other two with relatively low levels of intelligent manufacturing. Based on the case analysis, we find that there is an open logic, tightening both internal and external communication linkages, between process standards and technological innovation, so process standards positively affect technological innovation. Further, we find that for those with a higher level of intelligent manufacturing, firms typically benefit more organizational learning competency, which enhances the impact of process standards on technological innovation. The findings are also confirmed by a post hoc survey. Above all, this study contributes to the literatures on process management and technological innovation as well as the new trend of intelligent manufacturing in Industry 4.0.