LAUSR

The increasing use of smart machines and devices is not only changing production principles but also reshaping the value of cocreation logic. The interaction between human and smart machine is the enabler of generating augmented intelligence. A system dynamics model is abstracted from smart manufacturing practices to represent the evolutionary processes of inertia, capability, and reliability induced by human-machine interaction. Human-machine interaction is conceptualized into two dimensions: technical and cognitive interaction. Simulation experiments illustrate how the improvement of human-machine interaction can leverage the dynamic capability and reduce the inertia in enterprises through multiple nonlinear feedbacks. There are two pathways to improve reliability and performance in enterprises by human-machine interaction: (1) to promote initiative innovation (change) from endogenous enabler by improving dynamic capability and (2) to promote transformation of knowledge and variation triggered by exogenous environmental changes to improve the dynamic capability for the flexibility and reliability.