<p>The Fourth Industrial Revolution presents transformative opportunities alongside substantial implementation challenges. Understanding these challenges on a sector-specific basis is crucial for successful Industry 4.0 adoption. This study assesses the managerial challenges faced by companies in the lighting industry during their transition to Industry 4.0. Through a literature review and expert consultations, 16 challenges were identified across five categories. To systematically prioritize these challenges, the Step-wise Weight Assessment Ratio Analysis (SWARA) method was extended with Pythagorean fuzzy numbers, enabling a more precise evaluation of expert opinions. Based on input from 10 industry experts, the findings highlight that the most critical challenge is the “lack of skilled workers for implementation of Industry 4.0” followed by the “lack of employees with a clear vision of Industry 4.0 practices”, and the “lack of awareness about Industry 4.0 technologies. Among the challenge categories, human resources challenges emerged as the most significant, followed by technological challenges. These findings underscore the pivotal role of workforce preparedness in Industry 4.0 adoption and the necessity of targeted managerial interventions, such as workforce training, strategic vision alignment, and technology awareness programs. The results also provide practical insights for policymakers and industry leaders, emphasizing the need for sector-specific strategies to facilitate a smoother digital transformation. By employing the Pythagorean Fuzzy SWARA method, this study enhances decision-making precision and provides a practical framework for prioritizing Industry 4.0 challenges. As one of the first studies focusing on the lighting sector, this research fills a critical gap in the literature and serves as a foundation for future sector-specific Industry 4.0 studies.</p>