Strategy formulation to support automation and digitalization initiative: A case study of an aerospace component manufacturer in Indonesia

Abstract

Purpose: Strategy formulation is part of organization design study to evaluate decision thoroughly, then enable organization to achieve company goal. This study aims to formulate strategy of automation and digitalization for PT XYZ, to be ready for welcoming future growth of demand by maintain competitive cost within the same industry. Method: The study collects primary data from focus group discussion with selected participant of PT XYZ, located in Bandung, Indonesia, with participant selection based on information rich person reference. Data collection and analysis utilize qualitative and quantitative approach, and utilize three steps of strategy formulation (input stage, matching stage and decision stage). Results: Strategy formulation steps as per theory, applicable to finalize strategy to support industry 4.0 transformation at PT XYZ. Focus Group Discussion able to collect organization aspiration, to ensure strategy will align to company objective. Combine steps with latest internal and external factor analysis method, such as PESTLE (Political Economy Social Technological Environment), VRIO (Value Rarity InImitable Organize), Porter Value Chain analysis and QSPM (Quantitative Strategic Planning Matrix) help broaden the perspective of the participant during discussion. The study resulted eight strategies, which then simplified by data reduction approach to be four. A decision of sequence implementation also agreed during focus group discussion with participants. Contributions: By conducting this study, author expect it will prove the practical implementation of strategy formulation in industry 4.0 transformation for aerospace industry in Indonesia and Asia.