BARRIER ANALYSIS AND STRATEGY DEVELOPMENT FOR IMPLEMENTING DIGITAL TRANSFORMATION TO SMART SUPPLY CHAIN IN THE INDONESIAN CRUDE PALM OIL INDUSTRY UNDER INDUSTRY 4.0

• Main Author: Dewi T Pasaribu, K
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/84432
• Institution: Institut Teknologi Bandung

In 2018, Indonesia launched the “Making Indonesia 4.0” program to revitalize its manufacturing industry and aim to become the world’s 10th largest economy by 2030. This initiative focuses on five priority industries: food and beverages, textiles and clothing, automotive, chemicals, and electronics. Within the food and beverage sector, the crude palm oil (CPO) industry is a significant contributor to GDP. However, the CPO industry faces several challenges, including a lower Revealed Comparative Advantage (RCA) compared to Malaysia, inefficient factories, unstable quality, and a lack of visibility and transparency in the supply chain. Given the continued demand for palm oil as a preferred vegetable oil, enhancing the efficiency and productivity of Indonesia’s palm oil industry is crucial. One effective approach is improving the supply chain system. Although various studies have identified barriers to digital transformation in supply chain systems, none have specifically addressed the Indonesian CPO industry. This study fills this gap by conducting a systematic literature review (SLR) to identify preliminary barriers, which are then validated by experts from government, academia, and industry using the Delphi method. The interrelationships among these verified barriers are analysed using Interpretive Structural Modeling (ISM) and the MICMAC technique to categorize these barriers based on their influence and dependence. Through the SLR, 22 barriers were identified and grouped into seven main categories. In the first Delphi round, experts added a new barrier, "incentive measurement." In the second round, the barriers with the highest significance were Lack of Investment in R&D, Time-Consuming Digital Transformation Processes, and Lack of Collaboration and Cooperation. Consequently, 13 barriers were further examined using ISM-MICMAC. The ISM results indicated that the "Time- Consuming Digital Transformation Process" stands alone at the lowest level, while "Incentive Measurement" and "Financial Resources" are at the highest level. The MICMAC analysis revealed that the "Time-Consuming Digital Transformation Process" and "Data Security" are dependent variables, while "Incentive Measures" are autonomous barriers. Independent barriers include Lack of Regulation and iv Standard, Lack of Collaboration and Cooperation, Lack of Investment in R&D, and Lack of Financial Resources. Other barriers were classified as linkage barriers. Both ISM and MICMAC analyses consistently highlight foundational barriers related to financial resources and regulatory frameworks as critical drivers. Securing adequate funding and establishing clear regulations are essential to support digital transformation effectively. The MICMAC analysis also identifies linkage barriers, such as "High Initial Investment in Technology" and "Complexity of the Supply Chain Network," which have high driving and dependence powers. These barriers are central to the system's dynamics and significantly impact the digital transformation process. The ISM model supports this by positioning these barriers at crucial junctions within the hierarchical structure. This study also provides a framework for implementing digital transformation in the CPO supply chain system. The framework offers an advanced depiction of the five stages of the digital transformation strategy, identifying potential barriers at each stage. It outlines the interventions required from government, academia, and industry practitioners to address these barriers, considering their interrelationships, driving power, and dependence power. Despite its contributions, the study has limitations and suggests areas for future research.