Factor Analysis of SME Owner Intention to Join Collaborative Manufacturing Networks Using Structural Equation Modeling

Subject Areas : manufacturing and process planning

Muhammad Shodiq Abdul Khannan ¹ , Muhammad Kusumawan Herliansyah ² , Andi Sudiarso ³

1 - Department of Industrial Engineering, Universitas Pembangunan Nasional Veteran Yogyakarta, 55283, Yogyakarta, Indonesia
2 - Department of Mechanical and Industrial Engineering, Gadjah Mada University, 55281 Yogyakarta, Indonesia
3 - Department of Mechanical and Industrial Engineering, Gadjah Mada University, 55281 Yogyakarta, Indonesia

Received: 2024-06-22 Accepted : 2024-08-15 Published : 2024-08-18

Keywords: structural equation modeling, collaborative manufacturing networks, small and medium enterprise, owner intention to join,

Abstract :

Small and Medium enterprises in Indonesia lack on initiative and knowledge in the field of Collaborative Manufacturing Networks (CMN). SME owner has an important role to establish strong Collaborative Manufacturing Networks. To the author’s knowledge, there are rare studies regarding SME owner intention to join CMN. Therefore, this study investigates the factors influencing SME owner intention to join CMN of Batik SME in Indonesia. The data for this study, including three factors: Resource, Trust, and Design, was gathered from 140 Batik SME owners. The method used in this study is Structural Equation Modeling. This study finds that Trust and Design have a positive influence on the intention to join Collaborative Manufacturing Networks. The main contribution is to assist the policy-maker on establishing Collaborative Manufacturing Networks of Batik SMEs in Indonesia. Small and Medium enterprises in Indonesia lack on initiative and knowledge in the field of Collaborative Manufacturing Networks (CMN). SME owner has an important role to establish strong Collaborative Manufacturing Networks. To the author’s knowledge, there are rare studies regarding SME owner intention to join CMN. Therefore, this study investigates the factors influencing SME owner intention to join CMN of Batik SME in Indonesia. The data for this study, including three factors: Resource, Trust, and Design, was gathered from 140 Batik SME owners. The method used in this study is Structural Equation Modeling. This study finds that Trust and Design have a positive influence on the intention to join Collaborative Manufacturing Networks. The main contribution is to assist the policy-maker on establishing Collaborative Manufacturing Networks of Batik SMEs in Indonesia. The final model found that Resource has a negative influence on willingness to collaborate with an estimated value -0.091; Trust has a positive influence on willingness to collaborate with an estimated value 0.54; Design has a positive influence on willingness to collaborate with an estimated value 0.34, but not significance. The results showed that Trust and Design are the driving factors of SME owners’ Intention to Join the Collaborative Manufacturing Networks.

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