Optimal Mediation Strategy for Industry 4.0 Integration in Improving Operational Performance

Rinny Ermiyanti Yasin, Heru Sulistyo

Abstract


Digital transformation through Industry 4.0 (I4.0) offers significant potential to enhance efficiency and flexibility in manufacturing processes. However, its implementation often fails due to organizational unpreparedness and the lack of integration with Lean and Agile principles. This study aims to analyze the impact of I4.0 on operational performance (OP) and to examine the mediating role of Leagility Competencies (LC). The research involved 130 manufacturing companies in Indonesia that have adopted I4.0 technologies for at least three years and possess internal digital systems. The technologies implemented include Internet of Things (IoT), big data analytics, cloud manufacturing, and AI-driven control. Despite the widespread adoption of advanced technologies, many companies have not provided adequate training to develop LC among their employees. The study employs Structural Equation Modeling using the Partial Least Squares (SEM-PLS) approach. The results indicate that the direct effect of I4.0 on OP is not statistically significant (β = 0.118; p = 0.159), whereas the indirect effect through LC is significant (β = 0.290; t > 1.96). These findings highlight the critical role of LC in bridging I4.0 adoption with operational performance improvement. The study underscores the importance of organizational readiness, particularly in cultivating internal competencies based on Lean and Agile principles, to fully realize the benefits of I4.0 implementation.

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