Application of Internet of Things to Ensure Improved Performance within the Internal Supply Chain Unit of an Organization

Abstract

With the rapidly changing business world, technology adapted for doing business has also undergone rapid transformation leading to use Internet of Things as an advanced technological innovation required to connect production units to internet devices for smooth production and operation, with enhanced ICT systems and infrastructure. Internet of Things is considered to be an advanced information and communication technology, whose applicability is highly needed to ensure smart performance of organizations in Indonesia. Indonesia, being a developing country, adapting to new ways of doing things, including the use of IoT takes time, hence affecting studies regarding the use of IoT in business units, such as the internal supply chain sector. Thus, there is no much studies from a localized perspective, measuring the importance and using IoT as well as supply chain performance of the country. The present paper applied an organizational capacity theory to establish the Internet of Things impact on varying dimensions of Supply Chain, which included supply chain integration process, organizational performance of supply chain and the capacity to the influence production. The research applied a survey of cross-section on several companies within the Greater Jakarta area as the research approach. Data was obtained from over 161 companies from across Jakarta. Finally, the data was analyzed with the help of the structural equation modelling (SEM-AMOS) for the development of an empirical structural model.