Saturday, December 2, 2023

The Evolution of Supply Chains In Manufacturing

Sean Fredericks
December 7, 2020 | 3:38 pm
This 2018 file photo shows workers pack merchandise for online sale delivery in a Lazada warehouse in Depok, West Java. (Antara Photo/Sigid Kurniawan)
This 2018 file photo shows workers pack merchandise for online sale delivery in a Lazada warehouse in Depok, West Java. (Antara Photo/Sigid Kurniawan)

The pandemic has led to this digital acceleration, and it is a model that’s here to stay. Using the right technologies across the production process and supply chain empowers local
manufacturers to make strategic decisions that help them become more agile and responsive to customer needs.

Driving Efficiency in Indonesian Manufacturing

The Indonesian Ministry of Industry has introduced the Making Indonesia 4.0 initiative with the goal of joining the world’s top 10 economies by 2030. The roadmap promotes transformation in the manufacturing sector and driving changes in supply chains and logistics ecosystems based on the 4.0 platform, resulting in more transparency, efficiency, and productivity.

The country’s commitment to research, development, design, and innovation will attract leading global manufacturers and distributors, advance manufacturing processes in Indonesia, as well as create additional learning and upskilling opportunities for workers.


Incorporating machine learning, IIOT (Industrial Internet of Things), big data, and AI will make logistics more efficient, sophisticated, and, most importantly, interconnected. For example, the use of sensors will allow components inside machines to self-check their status and reliability. AI and machine learning enable access to real-time data and analytics, giving firms better visibility into their supply chain. These types of technology will inevitably help businesses to minimize errors, maintain smooth operations, and manage assets efficiently.

The integration of these new-age technologies into the supply chain will not replace humans entirely; instead, it will drive better, faster, and smarter decision-making. Providing exposure
and training to the current and future workforce also strengthens the adoption of technologies and, more importantly, paves the way for future innovations.

Commitment from Industry Players

Investing in the right technologies will help businesses sustain this transformation and build an innovative ecosystem in Indonesia. The cooperation of manufacturing firms and global
distributors — working together to identify appropriate technologies and procure parts and tools needed to develop automation solutions and integrate IIOT into the supply chain — will also help accelerate the initiative.

Manufacturers must adopt a digital strategy that leads to flexible ways of working and a procurement strategy that improves the supply chain's reliability. Suppliers and distributors are responsible for ensuring access to a broad range of technologies.

Despite the importance of dependable access to trusted products through eCommerce, the human touch remains a significant factor when doing business. Suppliers and distributors
can play their part by providing expert insight to unlock the benefits of Industry 4.0.

This comes from their expertise in sourcing technologies for different requirements and experience with digital transformation.

Distributors offering value-added services also make it easy for local firms to procure key technologies and diversify their supply chain by having access to multiple product sources. This enables manufacturers to utilize technology more strategically and achieve resilience and growth.

Accelerating Making Indonesia 4.0

The pandemic has shown that global supply chains can be fragile, and businesses' priorities are ever-changing. Digitizing the supply chain will provide businesses visibility into their operations. It will allow them to be more agile by having the ability to decide and respond quickly, especially in uncertain times.

The Indonesian government has taken the lead to roll out avenues and encourage investments to give businesses across all industries the opportunity to digitize supply chains and operations. Active engagement from other industry players - manufacturers, suppliers, and distributors - will further accelerate the transformation envisioned by Making Indonesia 4.0.

Sean Fredericks is the president for the Asia Pacific at RS Components, one of the world’s largest distributors of industrial and electronic products.

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