Indonesia's Manufacturing Industry Faces Pivotal Moment in Digital Transformation
Jakarta (ANTARA) — Indonesia’s manufacturing industry is currently at an important phase in the transformation process towards a technology-based and value-added production system, in line with the implementation of the national Making Indonesia 4.0 programme. This transformation is seen as key to strengthening the competitiveness of the manufacturing sector while driving national economic growth.
Vice President of Epicor Asia, Vincent Tang, stated that the manufacturing sector remains one of the main engines of Indonesia’s economy and plays a strategic role in the country’s ambition to become one of the world’s largest economies by 2030.
According to Vincent, Indonesia’s manufacturing industry is now at an important inflection point, shifting from a cost-based manufacturing model to smart manufacturing oriented towards value addition.
He explained that there are three main trends expected to shape the future of the manufacturing industry, namely the utilisation of artificial intelligence (AI) in decision-making, the adoption of cloud technology to enhance operational flexibility, and the use of data to strengthen business resilience.
“AI, cloud, and data are no longer future concepts but have become the foundation of modern manufacturing operations,” said Vincent.
Nevertheless, digital transformation in Indonesia’s manufacturing sector still faces several challenges. One of the main obstacles is the fragmented and not yet optimally integrated company data conditions.
Vincent explained that many manufacturing companies have large amounts of data, but it is scattered across various systems, making it difficult to utilise effectively to support decision-making.
In addition to data issues, companies also face challenges in aligning human aspects, business processes, and technology so that digital transformation can have a real impact on company performance.
Based on Epicor research, companies that successfully lead digital transformation are those that not only adopt new technologies but also build a strong digital foundation and prepare human resources capable of utilising them.
To address these various challenges, Vincent emphasised the importance of building an integrated digital foundation by combining data, AI, and cloud in a single platform.
He suggested that companies start the transformation with small steps that have a direct impact on operations, such as implementing predictive maintenance, smarter production scheduling, and automating procurement processes.
“The approach is not to go big all at once, but to start with use cases that provide real impact, then develop them gradually,” he said.
In the digital transformation implementation process, the two most determining factors are data readiness and human resource readiness. Vincent assessed that many companies still underestimate the importance of data quality, whereas the effectiveness of technologies like AI heavily depends on the data used.
“AI will only be as good as the data it uses. Therefore, data must be connected, clean, and easily accessible,” he said.
On the other hand, workforce readiness is also an important factor. Without adequate training and support, technology adoption has the potential to not run optimally even if the company has advanced systems.
Vincent assessed that going forward, the differentiating factor between leading and lagging manufacturing companies will be their ability to turn data into actionable insights.
According to him, companies that can process data into real-time business decisions will have a competitive advantage amid the increasingly fast-paced industry dynamics.
In addition, technological developments will also drive major changes in enterprise resource planning (ERP) systems in the coming years.
Vincent explained that companies are now starting to shift from rigid ERP systems to more flexible and modular platforms.
He predicted that in the next five years, ERP will evolve into a more adaptive and intelligent platform, capable of providing predictions, recommendations, and actions in real-time.
Modern ERP will also become increasingly integrated with AI, cloud, and various automation systems to improve operational efficiency and support business sustainability.
With these various challenges and opportunities, digital transformation is seen as an unavoidable step for Indonesia’s manufacturing industry. Companies that can build a strong digital foundation and optimally utilise technology are expected to be better prepared to face global competition in the future.