The Role of Industry 4.0 Production Technology in Moderating the Effect of Circular Manufacturing on Financial Performance
Keywords:
Circular Manufacturing, Financial Performance, Industry 4.0.Abstract
The transformation towards a sustainable economy through the implementation of circular manufacturing faces complex challenges in achieving optimal financial performance, while industrial production technology 4.0 has the potential to be a strategic catalyst in the process. This study aims to analyze the role of industrial production technology 4.0 as a moderation variable in the relationship between circular manufacturing and financial performance in the manufacturing industry in Southeast Sulawesi Province. An explanatory quantitative methodology was applied by involving 114 respondents, managers, and owners of manufacturing companies selected through simple random sampling. The research instrument in the form of a structured questionnaire was analyzed using Partial Least Squares Structural Equation Modeling with SmartPLS 4.0 software. The findings show that circular manufacturing has a significant effect on financial performance. Industrial production technology 4.0 has been shown to significantly moderate the relationship (β = 0.178; p = 0.036). The implications of the study indicate that the integration of digital technology in circular manufacturing practices creates optimal synergies that accelerate the achievement of triple bottom line performance, especially through increased transparency, operational efficiency, and sustainable innovation in Indonesia's manufacturing ecosystem.
References
Adesta, E. Y. T., & Prabowo, H. A. (2018). Total Productive Maintenance (TPM) implementation based on lean manufacturing tools in Indonesian manufacturing industries. International Journal of Engineering and Technology(UAE), 7(3.7 Special Issue 7), 156–159.
Ali, T. W., & Ahmed, A. Y. (2024). ICT Adoption and Its Role in Enterprise Innovativeness: The Cases of Medium and Large Manufacturing Industries in Adama City, Ethiopia. Indonesian Journal of Innovation and Applied Sciences (IJIAS), 4(2), 97-112.
Flynn, B. B., Huo, B., & Zhao, X. (2010). The impact of supply chain integration on performance: A contingency and configuration approach. Journal of Operations Management, 28(1), 58–71.
Govindan, Kannan (2020). Supply Chain Sustainability and Performance of Firms : A Meta- Analysis of the Literature. Transportation Research Part E 137(November 2019):101923.
Hassan, S. T. (2023). Impact of Supply Chain Integration on Organizational Performance. South Asian Journal of Operations and Logistics, 2(2), 78–92.
Laskurain-Iturbe, I., Arana-Landín, G., Landeta-Manzano, B., & Uriarte-Gallastegi, N. (2021). Exploring the influence of Industry 4.0 technologies on the circular economy. Journal of Cleaner Production, 321(September 2020).
Manik, D. (2022). Impact of Supply Chain Integration on Business Performance: A Review. Jurnal Sistem Teknik Industri, 24(1), 85–106.
Marquina, M. V. H., Dain, M.-A. Le, Zwolinski, P., & Joly, R. (2024). Sustainable performance of circular supply chains: A literature review. 0–6.
Marthalia, L., Tumuyu, S., & Asteria, D. (2024). Journal of Natural Resources and Environmental Management Economy Circular Adoption toward Sustainable Business (Study case: Agro-industry Company in Indonesia). 58–65.
Muzanenhamo, A., Khazamula, S. D., & Imbayarwo, M. (2023). Towards Achieving Electronic Human Resource Management: Challenges Facing Public Enterprises in Adopting Technology. Indonesian Journal of Innovation and Applied Sciences (IJIAS), 3(2), 111-117.
Nyahuna, T., Doorasamy, M., & Baldavoo, K. (2023). Barriers to Implementation of Environmental Management Accounting in South African Small and Medium Enterprises for Sustainable Performance. Indonesian Journal of Social and Environmental Issues (IJSEI), 4(3), 258–266.
Paper, W. (2025). Sustainability Meets Growth: A Roadmap for SMEs and Mid-Sized Manufacturers. June.
Ramaswamy, S., Kaveri, V., Sutha, V., Selvakumar, D., Geethalakshmi, N., & Mohan, S. (2024). Circular Economy: A Blueprint for Sustainability. 9(12), 482–498.
Santos, L., Brittes, G., Fabián, N., & Germán, A. (2018). International Journal of Production Economics The expected contribution of Industry 4. 0 technologies for industrial performance. Intern. Journal of Production Economics, 204(December 2017), 383–394.
Shaharudin, M. R., Mohamad Mokhtar, A. R., Wararatchai, P., & Legino, R. (2022). Circular Supply Chain Management and Circular Economy: A Conceptual Model. Environment-Behaviour Proceedings Journal, 7(SI7), 31–37.
Sulistyowati, N., Huda, M., & Nursaningsih, I. (2020). How TQM Mediates JIT in Improving Operational Performance of Industrial Companies. International Journal of Innovation, Creativity and Change. Www.Ijicc.Net, 14(8), 2020.
Tortorella, G. L., Giglio, R., & Dun, D. H. Van. (2019). Industry 4 . 0 adoption as a moderator of the impact of lean production practices on operational performance improvement. 860–886.
Upe, A. (2023). Innovation and Technological Adaptation of Business Actors in the Digital Age: A Digital Sociology Perspective. Indonesian Journal of Innovation and Applied Sciences (IJIAS), 3(3), 218-227.
