International Journal of Engineering Business
and Social Science
Vol. 2 No. 04, March-April 2024, pages: 1152-1163
e-ISSN: 2980-4108, p-ISSN: 2980-4272
https://ijebss.ph/index.php/ijebss
Digital Transformation Formulation AT PT. Rohto Laboratories
Indonesia
Nur Catur Purbaya
1*
, Siska Noviaristanti
2
Universitas Telkom Bandung, Indonesia
E-mail: nur[email protected]omuniversity.ac.id
1*
siskamarhen@telkomuniversity.ac.id
2
Keywords
Abstract
Digital Transformation;
Formulation; Technology;
People; Management or
Process
Accelerating digital transformation has become one of the main focuses for facing
global challenges and competition. Companies must adopt a holistic approach and
build an integrated strategy to succeed in transformation. There are three categories
needed to implement digital transformation, namely involving the use of technology,
competent human resources, and management or process changes. This study aims
to formulate digital transformation at PT. Rohto Laboratories Indonesia. This research
uses a mixed methods case study design, combining qualitative and quantitative
methods. Next, a purposive sampling technique was chosen to determine the data
source sample based on specific considerations and objectives. This research consists
of five stages in formulating digital transformation. These five stages refer to the
development guidelines for digital transformation strategy from Albukhitan (2020).
The final result of this research is a digital transformation roadmap for PT. Rohto
Laboratories Indonesia obtained data from the four previous stages. The roadmap is
divided into two parts: the first part is dominated by the management/process and
people categories, while the second part is dominated by technology. Suggestions for
further research are to conduct a broader exploration by comparing the application
of digital transformation in more than one industrial sector.
© 2023 by the authors. Submitted
for possible open-access publication
under the terms and conditions of the Creative Commons Attribution (CC BY SA)
license (https://creativecommons.org/licenses/by-sa/4.0/).
1 Introduction
Accelerating digital transformation has become one of the government's main focuses to accelerate economic
recovery and growth in Indonesia. This aligns with the government's strategic plan regarding the Digital Indonesia
Roadmap for 2021 - 2024. There are ten priority sectors to accelerate the realisation of Digital Indonesia, one of
which is industrial digitalisation, better known as Industrial Revolution 4.0 (Indonesia.go.id, 2021). Through the
Making Indonesia 4.0 program, which has been running since 2018, the government is trying to revitalise the industry
by encouraging digital technology to increase productivity, efficiency, and effectiveness in various business sectors.
Several industrial sectors in Indonesia are priorities in this program, including the automotive, textile, and clothing
sectors, the chemical industry, electronics, and food and beverages (Kemenperin.go.id, 2018). Then, two sectors
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were added after the COVID-19 pandemic, namely the pharmaceutical industry and medical device sectors
(Tribunnews.com, 2021). In 2019, the Ministry of Industry measured the industrial readiness index using INDI 4.0.
These results show that the industrial readiness index in Indonesia is at the medium readiness stage with an average
score of 2.14 (Katadata.co.id, 2019). In 2022, 31 companies will receive the INDI 4.0 award, two of which are
companies operating in the pharmaceutical industry, namely PT. Bintang Toedjoe and PT. Paragon Technology and
Innovation (Voi. id, 2022). This indicates that the pharmaceutical sector has started to focus on implementing
Industry 4.0 or digital transformation.
PT. Rohto Laboratories Indonesia is a company operating in the pharmaceutical industry that is facing
increasingly competitive business conditions. Companies must involve technology holistically (digitalisation) to
compete in domestic and global markets and improve their business performance. Digitalisation in the
pharmaceutical industry: What should be focused on during the digital implementation process? (Hole, Hole, &
McFalone-Shaw, 2021) (Hole et al., 2021). In the last two decades, the company has shown consistent business
growth and development (Wartaekonomi.co.id, 2022). This is also supported by growth in the number of employees,
with an average increase of 3.76% per year (Figure 1), and business growth, with an average increase in revenue of
13.4% per year (Figure 2) in the last ten years.
Figure 1. Growth in the Number of Employees
PT. Rohto Laboratories Indonesia (Factory) 2013 - 2022
Source: Personal Documentation (2023)
425
480
520
525
538
553
568
580
613
619
0
100
200
300
400
500
600
700
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Number of employees
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Figure 2. Annual Revenue PT. Rohto Laboratories Indonesia 2013 2022
Source: Personal Documentation (2023)
On the other hand, the company is transitioning from a small company to a large one. The current business
model still tends to be conventional. At the same time, the company's need to compete and become an agile
organisation in responding to change has yet to be implemented optimallyan overview of this gap in more detail
in Table 1.
Table 1
Description of the Gap at PT. Rohto Laboratories Indonesia
Problem
Role of Digital
Transformation
PT. Due to its low visibility, Rohto Laboratories
Indonesia faces challenges in forecasting its business's
future. The low visibility is reflected in several conditions:
The company does not yet have a strong
capability in identifying and mapping the talents of its
employees. This has an impact on the company's role in
enhancing employee competencies accurately and
designing career paths that are suitable for them.
The company does not yet possess strong
capabilities in supply chain management. This includes
the management of inventory, vendors, and forecasting.
The company does not yet have strong
capabilities in accurately managing sales data of products
to consumers.
The company does not yet have strong
capabilities in managing data in other functions, such as
data management in quality functions related to product
quality data and R&D functions related to product
development data. Additionally, the engineering and
maintenance function does not have an integrated data
The role of digital
transformation for PT. Rohto
Laboratories Indonesia, in addressing
existing issues, utilises or implements
digital technologies that can support
the company's achievement of good
visibility. This enables the company to
analyse its needs better and
formulate strategies to achieve
business efficiency.
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system that supports the implementation of intelligent
maintenance.
The impact of low visibility is inefficiency in
business management. Therefore, the company must
enhance its visibility capabilities to improve operational
efficiency and responsiveness to market changes.
Source: Research Results (2023)
As a company operating in the pharmaceutical sector, one of the challenges it faces is implementing a business
model that tends to be conventional and conservative (Reinhardt et al., 2021). To overcome the gaps mentioned
above and challenges, it is expected that the company can undertake digital transformation. In this context, digital
transformation is viewed as a means for the company to address its issues. The company has no business strategy
for implementing digital transformation, even though it has implemented and updated technology in its business
processes (Manufacturing & Research Director PT. Rohto Laboratories Indonesia, 2023). Therefore, this study aims
to formulate digital transformation at PT. Rohto Laboratories Indonesia. Through digital transformation, companies
can overcome existing gaps and challenges, compete in an increasingly competitive global market, and succeed.
Therefore, this study aims to (1) understand the company's future vision and goals in implementing digital
transformation, (2) determine the company's ability to carry out digital transformation, (3) find out the end user and
employee experience needed in digital transformation, (4) find out the solutions needed by companies in
implementing digital transformation and (5) design a digital transformation roadmap at PT. Rohto Laboratories
Indonesia.
2 Materials and Methods
This descriptive research study attempts to describe and explain in detail the problems related to digital
transformation formulation. The methodology in this research uses a mixed methods case study design, which
combines qualitative and quantitative methods. The combination method was chosen because researchers must
collect two data types in the research stages. This research was conducted at PT-Rohto Laboratories Indonesia,
which is located on Jl. Raya Cimareme No. 203, Ngamprah, Kabupaten Bandung Barat. Furthermore, data collection
in this research consisted of four stages: (1) The first stage concerns the company's vision and mission (goals). Data
collection uses qualitative methods, such as interviews with three sources determined based on purposive sampling
techniques. (2) In The second and third stages, data collection was carried out by distributing questionnaires online
to 14 respondents. The questionnaire used in the second stage is the Ministry of Industry's questionnaire, namely
INDI 4.0. The variables measured in this questionnaire consist of 5 pillars and 17 areas (Kementrian Perindustrian RI,
2018). Meanwhile, in the third stage, to determine the impact and urgency of the five pillars and seventeen areas of
INDI 4.0, researchers prepared a simple questionnaire with a measurement scale using a Likert scale. (4) The fourth
stage is data collection by re-interviewing three sources to confirm the data obtained in the third stage. (5) The fifth
stage is creating a digital transformation roadmap at PT. Rohto Laboratories Indonesia was carried out based on the
analysis results from the previous four stages.
3 Results and Discussions
This study's primary data was obtained through an interview method involving three sources respectively,
with the Research and Manufacturing Director, the Manufacturing and Production Planning Deputy General
Manager, and the PPIC Manager. Meanwhile, quantitative data was obtained by completing a questionnaire involving
14 sources of various company functions.
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In the early stages of the research, the data obtained from the study of the company's vision and objectives
were: (1) digital transformation was not explicitly stated in the company's vision, (2) the company's vision had not
yet led to the implementation of digital transformation, (3) the role of digital transformation was assessed as tools
to achieve the company's vision, (4) the company needs digital transformation in the future, (5) the company does
not yet have a clear mission that is connected to the vision, (6) the company's mission needs to be evaluated and
updated, and (7) the implementation of digital transformation needs to be implemented immediately carried out by
the company. According to Schwertner (2017), in digital transformation, a company's strategy must be dynamic and
have a clear vision for company growth, supported by the unlimited potential of the technologies related to the
chosen strategy. He says a solid strategy and good leadership influence success in digital business transformation.
The connection to this research is that a harmony of views is essential for PT. Rohto Laboratories Indonesia will
evaluate and update the company's mission and strategy so that the implementation of digital transformation can
run well.
In the second stage, measuring the company's capability to transform using INDI 4.0 obtained an index score
of 1.71. This score shows that the company is currently only in the initial readiness stage, which shows that the
company has started to move towards digital transformation.
Table 2. INDI 4.0 Index Assessment and Weighting
Pillars of INDI 4.0
Weight
Weighting
Results
Pillar 1: Management & Organization
17.5%
0.28
Pillar 2: People and Culture
30%
0.53
Pillar 3: Products & Services
17.5%
0.33
Pillar 4: Technology
17.5%
0.24
Pillar 5: Factory Operations
17.5%
0.33
INDI 4.0 Index Score
1.71
Source: Research Results (2023)
As one of the pharmaceutical industry companies in Indonesia, the index score results are still relatively low.
This is supported by data on Indonesia's average industrial readiness index score in 2019, which reached 2.14. The
comparison results show that the index score of PT. Rohto Laboratories Indonesia is still below the average industrial
score in 2019. Based on these results, the company's capability to implement digital transformation is still relatively
low.
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Figure 4. INDI 4.0 Index Score PT. Rohto Laboratories Indonesia
Source: Research Results (2023)
In other research discussing the industrial readiness model 4.0, it is stated that there are different dimensions
between the manufacturing, service, MSME, and enterprise sectors (Antony, Sony, & McDermott, 2023). Based on
the results of this research, it is known that some of these dimensions have similarities with the dimensions of the
industrial readiness model used in this research, namely INDI 4.0, such as strategy, culture, supply chain, employee
adaptation, and intelligent products and services.
In the third stage, data was obtained regarding end user and employee experience in the form of a series of
priority company needs that were deemed necessary to be improved in implementing digital transformation, either
generally (five pillars) or specifically (seventeen areas) obtained through measuring the 2x2 matrix impact vs urgency.
Figure 5. 2x2 Matrix: Impact vs Urgency (Five Pillar of INDI 4.0)
Source: Research Results (2023)
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Based on the information in Figure 5, there are four quadrants in the 2x2 matrix, namely: (1) Quadrant I: High
impact High urgency, (2) Quadrant II: High Impact Low urgency, (3) Quadrant III: Low Impact High Urgency, (4)
Quadrant IV: Low Impact Low Urgency. From the 2x2 matrix above, it can be seen that four pillars fall into Quadrant
I, and one pillar falls into Quadrant IV. The following pillars are included in Quadrant I: management and organisation,
technology, people and culture, and factory operations. Meanwhile, the product and service pillars are included in
Quadrant IV.
Figure 6. 2x2 Matrix: Impact vs Urgency (seventeen areas of INDI 4.0)
Source: Research Results (2023)
Based on the information in Figure 6, ten areas fall into Quadrant I, four in Quadrant III, and three in Quadrant
IV. The following is an explanation for each quadrant: Quadrant I has a significant impact and is considered urgent
for the company to implement immediately by companies which include [1] data storage and sharing, [2] cyber
security, [3] openness to change, [4] strategy and leadership, [5] connectivity, [6] investment for industry 4.0, [7]
digitalisation, [8] competency development, [9] innovation policy, and [10] intelligent supply chains and logistics.
Quadrant III has a relatively low impact but is considered urgent to be implemented by companies, which includes
[11] culture, [12] data-based services, [13] autonomous processes, and [14] intelligent maintenance systems.
Quadrant IV has a low impact and is considered not urgent for companies to undertake, which includes [15] intelligent
machines, [16] intelligent products, and [17] product customisation.
From the explanation above, it shows that the priority order that is considered necessary by companies
according to 14 sources is [1] data storage and sharing which is part of the factory operations pillar, [2] cyber security
which is part of the technology pillar, [3] openness to change which is part of the people and culture pillar, [4] strategy
and leadership which is part of the management and organization pillar, [5] connectivity which is part of the
technology pillar, [6] investment for Industry 4.0 which is part of the management and organization, [7] digitalization
which is part of the technology pillar, [8] innovation policy which is part of the management and organization pillar,
[9] competency development which is part of the people and culture pillar, [10] intelligent supply chain and logistics
which are part of the factory operations pillar, [11] culture which is part of the people and culture pillar, [12] data-
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driven services which are part of the products and services pillar, [13] autonomous processes and [14] intelligent
maintenance systems which are part of the factory operations pillar, [15] intelligent machines which are part of the
technology pillar, and finally [16] intelligent products and [17] product customization which are part of the product
and service pillar.
In the fourth stage, after obtaining data regarding the end user and employee experience required by the
company. Researchers reviewed and determined solutions for implementing digital transformation in companies by
justifying the results to the three speakers regarding the results obtained from previous data. Based on the
justification results, the company must implement the pillars of management and organisation as the main priority.
According to the three speakers, management and organisation's role is the company's most important. With
direction from management, the company can implement digital transformation. The second priority is the pillar of
people and culture. The three speakers agreed that the readiness of people and culture to carry out digital
transformation would have a significant impact. They believe that human resources which are not ready or, in this
case, need to be more competent and open to change will hinder other processes and cause losses because the
process does not run effectively and efficiently. Therefore, the results of the previous 2x2 matrix, which
recommended technology as the second priority, have been justified by the considerations of the three speakers.
The next priority is the pillar of technology. This pillar was chosen because the role of technology, in general, will help
companies accelerate work processes. Two of the three speakers agreed that technology was the aspect that needed
to be improved after people and culture. However, they all agreed that improvements to both are better carried out
simultaneously. Next, the fourth priority is the factory operations pillar. The first speaker argued that the product
and service were more important than the factory operations because, in her opinion, factory operations should be
designed based on the needs of the products and services made by the company. Meanwhile, according to the second
and third speakers and the results of the 2x2 matrix, factory operations are considered more important than products
and services. The third speaker believes that providing infrastructure that supports companies in running their
business is critical currently in implementing digital transformation. When factory operational activities are
adequate, the company's products will be easier to fulfil. Moreover, the final priority is the pillar of product and
service. This pillar was determined as the last because the comparison showed that two speakers and the results of
the 2x2 matrix chose this pillar as the last priority that needed improvement. The third speaker believes that product
customisation on a mass scale will only be effective if the company's entire infrastructure is adequate and supportive.
Meanwhile, the justification results related to more specific solutions are sorted into the following areas: strategy
and leadership, openness to change, culture, competency development, investment for Industry 4.0, data storage
and sharing, connectivity, cyber security, digitalisation, innovation policy, intelligent supply chain and logistics, data-
driven services, autonomous processes, intelligent maintenance systems, intelligent machines, innovative products
and finally product customisation.
In previous research, Reinhardt et al. (2021) stated that many technologies are still unsuitable for use in the
pharmaceutical sector. This happens because the technology used in the pharmaceutical industry must meet strict
criteria imposed by companies and regulators. The connection with this research is regarding plans for implementing
technology in companies. Based on previous research, pharmaceutical companies will face regulatory challenges in
implementing technology in the future. Therefore, to realise these seventeen areas, companies must pay attention
to the regulatory provisions in force in Indonesia when implementing technology.
In the fifth stage, based on all the data obtained, researchers created a digital transformation roadmap for PT
Rohto Laboratories Indonesia, as shown in Figure 7. The roadmap was prepared by considering the main problems
occurring in the company, namely focusing on increasing the company's visibility. From the seventeen areas that
need to be implemented, researchers have determined twelve areas as priorities that need to be implemented in
realising digital transformation. Researchers determined twelve priority areas to provide more targeted solutions for
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companies in solving their problems. The researcher considers that apart from implementing the areas included in
quadrant I, it is also necessary to add the areas of intelligent supply chains and logistics and data-based services as
solutions for companies.
Figure 7. PT. Rohto Laboratories Indonesia Digital Transformation Roadmap
Source: Research Results (2023)
Digital transformation roadmap at PT. Rohto Laboratories Indonesia is divided into two main parts. The first
part consists of five areas. These five areas are considered fundamental to implementing digital transformation,
including strategy and leadership, openness to change, culture, competency development, and investment in
digitalisation. Realising digital transformation requires a clear strategy, supportive leadership, good human resource
readiness, and investment support. The second part comprises seven areas: data storage and sharing, connectivity,
cyber security, digitalisation, innovation policies, intelligent supply chains and logistics, and data-based services.
These seven areas are advanced parts of implementing digital transformation that focus on solving the problem
currently faced by companies, namely low visibility. Therefore, this section is called the creation of visibility section.
According to the third speaker, good data management is an essential next step in realising digital transformation.
By having integrated, accurate, and real-time data, companies will be greatly helped in making operational and
strategic decisions. Not only that, the company's visibility is also getting better. Verina and Titko (2019) state that
digital transformation comprises three main categories: management/process, people, and technology. Based on the
digital transformation roadmap, grouped into the two parts above, researchers identified that the first part of the
transformation is dominated by the management/process and people categories. Meanwhile, the technology
category dominates the second part of the transformation.
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According to Abdallah et al. (2022), human capital is the foundation for organisational change. According to
him, collaboration and integration of various elements in the company are needed to obtain strong transformation
results. Top management must foster an organisational culture that encourages digital transformation and
encourages employees to participate. Apart from that, the role of leaders is considered very important in determining
the success of digital transformation. Furthermore, digital technology is the backbone of digital transformation in the
manufacturing industry, and it includes artificial intelligence (AI), IoT, cyber security, cloud computing, robots, and
ERP. Companies must choose the right combination of digital technology according to their needs and financial
capabilities. Based on this explanation, the roadmap researchers have prepared will be implemented at PT. Rohto
Laboratories Indonesia has similarities with previous research regarding priority aspects in implementing digital
transformation in the manufacturing industry.
Companies face several challenges when implementing digital transformation (Albukhitan, 2020). PT will face
the main challenges assessed. Rohto Laboratories Indonesia, based on information obtained from three speakers, is
as follows: (1) The first challenge is the absence of relevant knowledge. Low digital literacy is considered one of the
biggest challenges in implementing digital transformation in companies. All three speakers agreed that a relatively
limited understanding of digitalisation could risk company decision-making in starting digital transformation and
planning its implementation appropriately. (2) The second challenge is budget restrictions. Apart from low digital
literacy, the next challenge is the limited budget to realise digital transformation. The first and second speakers
assessed that the challenge for companies to realise digital transformation is how companies must allocate limited
budgets appropriately. (3) The third challenge is resistance to change. Resistance to change is considered the next
challenge in implementing digital transformation in companies. Based on the views of the second and third speakers,
some employees have the potential to show resistance to change. One of the reasons for this is low digital literacy,
which results in employees having difficulty realising the importance of using technology in their work or being unable
to use it.
4 Conclusion
In this research, the implementation of digital transformation is formulated as a digital transformation
roadmap. Based on the results of the research that has been carried out, the following conclusions are obtained: (1)
Currently, the company does not have a clear vision and goals for implementing digital transformation, but the
company views that implementing digital transformation is necessary to achieve the company's vision. The company
also considers that there is a need for connectivity between vision and mission, so it is necessary to evaluate and
update its mission. (2) INDI 4.0 index score results at PT. Rohto Laboratories Indonesia is 1.71, which shows that the
company is still at the initial readiness stage. However, the index score obtained is still relatively low compared to
Indonesia's average industrial readiness index score in 2019, which is at the medium readiness stage. Therefore, it
can be concluded that the ability of PT. Rohto Laboratories Indonesia's in carrying out digital transformation is still
relatively low. (3) The results of the 2x2 matrix: impact vs urgency show that, in general, priorities in implementing
digital transformation need to start from improving the management and organisation pillars, technology pillars,
people and culture pillars, and factory operations pillars, all of which are included in Quadrant I. Meanwhile, the
product and service pillars are not included in the main priority. Furthermore, the specific priorities that need to be
improved are the areas included in Quadrant I, namely data storage and sharing, cyber security, openness to change,
strategy and leadership, connectivity, investment for industry 4.0, digitalisation, innovation policy, competency
development, and intelligent supply chain and logistics. Then, for the cultural, data-based services, autonomous
processes and intelligent maintenance systems are included in Quadrant III. Meanwhile, intelligent machines,
innovative products, and product customisation are included in Quadrant IV. These two quadrants are considered to
be the company's continued priorities. (4) Based on the results of the speaker's justification for the 2x2 matrix, Impact
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vs urgency, the solution obtained the pillars that need to be improved first are management and organisation, people
and culture, technology, factory operations, products and services. Furthermore, the areas that need to be improved
first are strategy and leadership, openness to change, culture, competency development, investment for industry
4.0, data storage and sharing, connectivity, cyber security, digitalisation, innovation policy, intelligent supply chain
and logistics, data-driven services, autonomous processes, intelligent maintenance systems, intelligent machines,
innovative products, and product customisation. (5) Digital transformation roadmap at PT. Rohto Laboratories
Indonesia is divided into two main parts, namely transformation part one, which consists of five areas: strategy and
leadership, openness to change, culture, competency development, and investment for Industry 4.0. Transformation
part two comprises seven areas: data storage and sharing, connectivity, cyber security, digitalisation and innovation
policy, intelligent supply chains and logistics, and data-based services.
The implications of this research are expected to be considered as a reference for PT. Rohto Laboratories
Indonesia in implementing digital transformation and becoming a reference for other companies in the
pharmaceutical sector and other sectors, preparing a digital transformation roadmap. It is hoped that this research
can provide new insights or knowledge for academics regarding digital transformation in a more specific context,
namely in the formulation process and carried out in pharmaceutical industry companies, which in this industry have
cultural characteristics that tend to be conservative. Researchers suggest that further research can explore digital
transformation more widely, namely by comparing the application of digital transformation in more than one
industrial sector. Researchers believe that each sector has unique characteristics, so by carrying out this comparison,
it is hoped that they will learn more about the differences in implementing digital transformation.
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