Industry 4.0 and Technology Adoption in The Garment Industry

Abstract

Industry 4.0 is a major change that occurs in the manufacturing industry where the application of internet-based technology and information technology is key in forming a value chain network. This study aims to explore the application of industry 4.0 in the perspective of technology adoption theory, with a qualitative approach to five garment companies in Indonesia. Application of Industry 4.0 is seen in two aspects, namely technology for production and management, and Technology-Organization-Environment (TOE) Framework is used as a reference in analysing the factors that influence companies in adopting industry 4.0. The results of this study indicated that Indonesian garment companies have done a considerable technological transformation into more sophisticated direction. Adoption of new production machines, improvement in software systems, and the new and improved construction of factories that lead to the use of more modern technology were conducted at firm level. However, in general there are no companies that completely deploy industry 4.0. Several factors were identified as the determinants to this adoption process; in the technological context it consists of benefits and costs consideration; in the organizational context, it includes management support and workforce competence; while in the environmental context it consists of the product life cycle, global competition, and government support.