Mapping of Digital Transformation Readiness, Benefits, and Barriers in Indonesian Steel Manufacturing

Abstract

Indonesian steel manufacturing sector has proven able to survive and even thrive during the COVID-19 pandemic. Its post-pandemic potential is also very large, considering that Indonesia's steel consumption per capita is the lowest in ASEAN. However, the highly volatile business situation and competition mean that it needs to reduce process costs, reduce processing time, and increase productivity; all of which could potentially be achieved by digital transformation. However, there is very limited research on digital transformation in Indonesian steel manufacturing. This research aims to map the readiness, potential benefit, and barriers to digital transformation in Indonesian steel manufacturing using MICMAC matrix method, with validation and verification carried out directly by experts involved in decision-making process on several steel manufacturing entities in Indonesia. Result of this study shown that to prepare digital transformation readiness, Indonesian steel manufacturing should emphasize its effort on preparing strategy and leadership, investment for industry 4.0, innovation policy, competency development, connectivity, and cyber security. The main benefits that should be pursued first are the capability of monitoring in real time and assisting in communication and data flow; whereas the main barrier that should be taken care of first is preparing its organizational change.