CHALLENGES AND OPPORTUNITIES OF BUILDING MATERIAL INDUSTRY IN INDONESIA RELATED TO THE INDUSTRIAL REVOLUTION 4.0

• Main Author: Unggul Raharjo, Lilik
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/35802
• Institution: Institut Teknologi Bandung

The coming disruptive technology is a sign that manufacturing business process or industry sector has to face the industrial revolution 4.0—regardless one’s liking. The implication and possible changes must be huge; as the matter of fact, it is imperative for the industry to examine the status. Among the industry of building materials industry in Indonesia, cement industry has the largest required capital, intense involvement of heavy machinery with modern technology, and full usage of automation. PT XYZ is an anonymous cement company in Indonesia, this company is facing a tight competition, considering its supply that is greatly higher than the demand (35%). In the midst of competitiveness, it is essential to have a comprehensive assessment to find out the relevance of the presence of Industry 4.0 disruptive technology in the cement industry: whether it will be a threat or opportunities. The evaluation of PT XYZ was conducted through mapping of current status, knowing challenges, acknowledging the opportunities, and identifying the existing gap. The comparison study was conveyed by taking local competitors and regional competitor as benchmarking, as they are considered to be in the level of advanced. The study is aimed to discern how the competitiveness level of PT XYZ related to industry 4.0. Expectedly, it will be relevant to their productivity and product value proposition; and ultimately be beneficial in facing the tight competition in either the domestic and global market. Furthermore, to be adept in competing with the low-cost player such as China manufacturer. This research was conducted by using a couple of methods: external state analysis (PESTEL & Porter’s Five Forces Analysis), internal state analysis (Industry 4.0 readiness level analysis), benchmarking, SWOT, business risk analysis, prioritization, and mitigation & initiatives plan. The result showed that the readiness level of the existing condition of PT XYZ is in the level of “experienced”. This position is higher than PT ABC's readiness level (as one of local competitor). in the other hand, this position is lower than SCCC Thailand (as one of the regional competitors) whose the readiness level is almost in “advanced”. Based on the SWOT analysis and business risk analysis, four top priority initiatives needed to seize the opportunities and mitigate the risk. Those four priority initiatives are: (1) ensuring the digital trust and data security are in place, (2) administering people development and developing the digital culture, (3) integrating two web sales system, (4) and increasing the usage of product data and customer data, while developing the Smart Factory system. The Capex that required for those initiatives has a short payback that less than one year. Through the suggestions listed, it is expected that PT XYZ can improve the competitiveness by enhancing the productivity and improving product value proposition.