Abstract
. Medium-sized manufacturing industry in Indonesia is overwhelmed by certain challenges: high-cost economy, significant changes in information technology, and dynamic market and demand. All of these challenges affect gradually or directly to the sustainability of the industry. This preliminary study aims to conceptualize the importance of 'digital factory' implementation to dealing with sustainability issues. Previous studies showed that the implementation of digital factory, in the context of large-sized technological-based manufacturing enterprises, has been proved to increase the efficiency of product development process and production process, in term of time and cost. This study tries to identify several key issues to support the implementation of digital factory: data and information completeness, hardware and software availability, and operators' skill and experience in conducting simulation. The relationships of the variables are modelled and analyzed using SmartPLS. This preliminary study found that, concurrently, data and information completeness, hardware and software availability, and operators' skill and experience in conducting simulation have significant effect to digital factory implementation, as well as the enterprise's sustainability (better product design and improvement (innovativeness), more efficient in design and simulation of production process (efficiency), and better capability to deal with dynamic demand (adaptiveness)).
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