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A mixed-method study on the barriers of industry 4.0 adoption in the Indonesian SMEs manufacturing supply chains

Yudi Fernando (Faculty of Industrial Management, Universiti Malaysia Pahang, Kuantan, Malaysia, and Management Department, BINUS Online Learning, Binus University, West Jakarta, Indonesia)
Ika Sari Wahyuni-T.D. (Accounting Department, Faculty of Economics, Universitas Andalas, Padang, Indonesia)
Anderes Gui (Information Systems Department, School of Information Systems, Binus University, West Jakarta, Indonesia)
Ridho Bramulya Ikhsan (Management Department, Binus Online Learning, Binus University, West Jakarta, Indonesia)
Fineke Mergeresa (Faculty of Industrial Management, Universiti Malaysia Pahang, Kuantan, Malaysia)
Yuvaraj Ganesan (Graduate School of Business, Universiti Sains Malaysia, Penang, Malaysia)

Journal of Science and Technology Policy Management

ISSN: 2053-4620

Article publication date: 29 March 2022

Issue publication date: 1 June 2023

1279

Abstract

Purpose

This paper aims to investigate the adoption barriers of Industry 4.0 in the Indonesian manufacturing supply chains.

Design/methodology/approach

The mixed method was deployed to validate the findings. First, the qualitative study was conducted based on the interviews. Then, the companies were approached using filter questions on the involvement in adopting industry 4.0 and its impact on the supply chain.

Findings

Based on the qualitative study, nine main barriers were found in the thematic analysis. Thus, to get a consensus on the barriers in the industry, the barrier indicators were tested using a structural equation model retrieved from 173 small and medium Indonesian manufacturing firms. Results indicate that five main barriers (e.g. unclear Industry 4.0 policy, higher-risk investment, insecure data sharing, lack of expertise and lack of incentive) are confirmed as the adoption barriers.

Practical implications

The successful adoption of supply chain integration with Industry 4.0 technology can strengthen the manufacturing sector and competitiveness. Therefore, this study can be a complimentary assessment to evaluate the Indonesia Industry 4.0 Readiness Index (INDI 4.0) and the effectiveness of the government support program.

Originality/value

The results can be used as the framework to foresee the successful implementation of smart manufacturing supply chain management and its integration. Therefore, the authors proposed the framework to foresee the successful implementation of smart manufacturing, supply chain management and integration.

Keywords

Acknowledgements

The authors convey their appreciation to the Research and Technology Transfer Office, Bina Nusantara University, for the International Research Grant No: 080/VR.RTT/VIII/2020 and contract date: 21 August 2020.

Citation

Fernando, Y., Wahyuni-T.D., I.S., Gui, A., Ikhsan, R.B., Mergeresa, F. and Ganesan, Y. (2023), "A mixed-method study on the barriers of industry 4.0 adoption in the Indonesian SMEs manufacturing supply chains", Journal of Science and Technology Policy Management, Vol. 14 No. 4, pp. 678-695. https://doi.org/10.1108/JSTPM-10-2021-0155

Publisher

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Emerald Publishing Limited

Copyright © 2022, Emerald Publishing Limited

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