06-Smu-Astra - Innovation Asian Style

SMU Classification: Restricted
SMU148
ASTRA INTERNATIONAL: INNOVATION ASIAN STYLE

Sitting at a desk on the first day of August 2015, surrounded by a pile of papers, the team from
Corporate Centre read through the list of nominees once again. The 32nd InnovAstra Convention, an
annual competition meant to showcase and recognise the innovation achievements of individuals,
teams and business units in the Indonesian conglomerate PT Astra International Tbk (Astra), was
just a fortnight away, and much had yet to be done. As they went about their planning for the event,
Ekuslie Goestiandi from the Corporate Centre, reminded his team of the overriding goal: to take
innovation at Astra to the next level, while maintaining the values and strengths of an innovation
process that had been evolving at the group since it first initiated the Quality Control Circle
Suggestion System (QCCSS) Convention in 1982.
Astra’s employees had been inculcated with a spirit of striving towards continuous innovation from
very early on in the company’s development. This culture dated back to the philosophy of Astra’s
founders, brothers Tjia Kian Tie and William Soeryadjaya, who emphasised continual learning, as
well as the influence of its Japanese partners who promoted incremental improvements on the
manufacturing shop-floor. Over the past two decades, Astra had expanded the scope of innovation
across all group companies to encompass all employees, including the top management.
Astra’s emphasis on fostering an innovation culture throughout the group was enabled through a
combination of organisational infrastructure, education and innovation competitions. The annual
InnovAstra convention – a competition among the best innovation projects from across the Group -
was one such initiative. To augment the importance of demonstrating Astra’s values while in the
pursuit of results, projects were evaluated on both their commercial benefits and the extent to which
they demonstrated Astra’s company values.
Despite initiatives such as the InnovAstra convention in place, Astra’s leadership team was aware
that much more needed to be done for the group to successfully manage the challenges of the future.
The business climate in Indonesia was expected to become far more volatile and demanding,
influenced by intensified competition and rapid technological advances. In addition, the younger
generation of employees and consumers would have different sets of needs and preferences that had
to be understood and met. To manage these challenges, Astra had to plan for the next level of
innovation in the company, and that required clear directions from the top.
Moving to the next level of innovation had to start with clear direction setting from the top. Prijono
Sugiarto, CEO and President Director, observed,
Indonesian culture is basically paternalistic. For leadership, this means that authoritative
guidance balanced with complete concern for followers is highly respected and expected. In the
This case was written by Professor Peter Williamson of University of Cambridge and Adina Wong at the Singapore
Management University. The case was prepared solely to provide material for class discussion. The authors do not intend to
illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and
other identifying information to protect confidentiality. The case was prepared solely to provide material for class discussion.
The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The case was
developed in conjunction with the Singapore Human Capital Leadership Institute (HCLI). HCLI is an independent national
institute spearheaded by the Singapore’s Ministry of Manpower and Economic Development Board, with the Singapore
Management University as a strategic partner. The authors may have disguised certain names and other identifying
information to protect confidentiality.
Copyright © 2016, Singapore Management University and Human Capital Leadership Institute Version: 2016-05-26
This document is authorized for use only in Prof. Marcus Pitt's EMBA GL B04/Innovation and Entrepreneurship at S P Jain School of Global Management - Dubai from Aug 2021 to Feb 2022.
SMU-16-0022 Astra International: Innovation Asian Style
case of Astra, where we employ over 226,806 people in over 192 affiliated companies, it is
impossible to manage and achieve business goals without clear direction from the leadership
team.1
A key element of Astra’s future direction was establishing a “synergistic business chain” that enabled
different activities within each business and across businesses to become mutually supportive.2 This
required innovations that brought together different stages of the value chain and different products
and services from across the Astra group. The aim was to enhance ease of access, and product and
service quality for end customers as well as improving internal cost efficiency. The question Ekuslie
was mulling over was: what would it take to bring Astra to this next level of innovative capability?
PT Astra International Tbk
PT Astra International Tbk (Astra) was established in 1957 as a commodities trading company. In
1990, the company was listed on the Indonesia Stock Exchange, and about a quarter century later, in
2015, Astra had a market capitalisation of US$ 24 billion. (refer to Exhibit 1 on key milestones in
Astra’s business expansion). The Astra Group was a diversified conglomerate engaged in six key
business lines: Automotive; Financial Services; Heavy Equipment and Mining; Agribusiness;
Infrastructure, Logistics and Others; Information Technology. In 2014, the group earned net revenues
of Rp 201.7 trillion (US$ 16.9 billion)3 and net income of Rp 19.2 trillion (US$1.6 billion).4 As at
June 2015, Astra employed around 226,800 people in 192 companies, including subsidiaries,
associates and jointly controlled entities.
Astra’s vision was two-fold: first, to be one of the best managed corporations in Asia Pacific, with
emphasis on sustainable growth by building competence through people development, solid financial
structure, customer satisfaction and efficiency, and second, to be a socially responsible and
environmentally friendly corporation.
The company’s mission was to “Prosper with the Nation”, while practicing its core values—Catur
Dharma Astra (To be an asset to the nation; To provide the best service to customers; To respect the
individual and develop teamwork; To continually strive for excellence)—which laid out the spirit
with which Astra employees would perform their work (see Exhibit 2 for details on Catur Dharma
Astra).
The Evolving Nature of Innovation at Astra
Starting on the Shop-floor
The establishment and application of formal innovation practices in Astra had commenced in earnest
in the 1980s. Astra had started out in the business of automobile distribution in the 1960s in
collaboration with Japanese partners, subsequently moving on to automobile manufacturing. These
partners, such as Toyota, believed in applying the practices of Total Quality Management (TQM)
and Total Quality Control (TQC) to their manufacturing ‘shop-floor’ activities. This resulted in
1
Asian Leadership: Conversations with Prijono Sugiarto, HQ Asia, (February 5, 2014).
2
Astra International, 2014 Annual Report, p 9.
3
US$1 = IDR 11,884.5.
4
Indonesia Investments, “Astra International: 2014 Profit of Indonesia’s Largest Firm Slightly Down”, http://www.indonesia-
investments.com/news/todays-headlines/astra-international-2014-profit-of-indonesia-s-largest-firm-slightly-down/item5346, accessed
August 2015.
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continual incremental improvements to the operations, thereby achieving greater process efficiencies
and cost savings.
At that time, Astra’s top management thought that the TQM approach of the Japanese worked very
well, and decided to adopt its practices into the company. Ekuslie described the process,
We started little by little at the shop-floor level, with the Suggestion System (SS) at the individual
level. Then next was the Quality Control Circle (QCC), which comprised innovation practices at
the team level, especially for the shop-floor workers.
Thereafter, in 1982, we started to use a competition as a vehicle to encourage innovation: the

Quality Control Circle Suggestion System Convention, which was the first quality convention in
Astra - to ensure that people were really performing at their best (refer to Exhibit 3 for details
of innovation milestones in Astra).
By 1997, it was decided to scale up the innovation projects beyond the shop-floor level to
management level. Ekuslie explained,
We introduced a new category – Quality Control Projects (QCP), which were team-based within
a division. This was applied not only at the shop-floor, but also at the management level.
Toward Strategic Innovation
In 2000, Astra established a strategic management system, dubbed the Astra Management System
(AMS), which described how Astra managed all the initiatives and business activities that pertained
to the group’s innovation activities.
Ferike Gariny, from Corporate Centre, elaborated on the Astra Management System,
AMS consists of four pillars: basic mentality, strategic management, tools and enablers. These
are what support innovations in Astra. The first, basic mentality, is what enables everyone in the
company to have a similar mindset. In all our group companies and across all level of employees,
we instil in our employees the same basic mentality. We have the same characteristics of thinking
and in providing data. There are five areas of focus in the basic mentality: 1) Focus on the
customer, 2) Plan, do, check and action (PDCA) 3) Facts and data, 4) Teamwork and 5)
Excellence. This is all spread out to employees in the Astra Group (refer to Exhibit 4 for details
on the AMS).
In 2004, along with the new strategic categories, the Quality Control Circle Suggestion System
(QCCSS) convention name was changed to Astra Quality Convention (AQC) to reflect a widening
of range of portfolio projects to include those that could be implemented not only at the individual
and shop-floor level, but also by middle management. By 2009, Astra had introduced several
Business Performance Improvement (BPI)—team-based innovation projects across divisions but
within a company.
Initially, because Astra was essentially a manufacturing company, all its process innovation and
Quality Control projects focused only on manufacturing and engineering. Over time, however, the
group entered new businesses in other sectors, such as financial services and infrastructure. It wanted
its innovation initiatives to extend across those business lines too.
InnovAstra
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A major milestone in Astra’s innovation efforts occurred in 2009, captured in the renaming of the
AQC to “InnovAstra”. Ekuslie shared the impetus driving the InnovAstra movement in the company,
At the time, we realised that product lifespans were becoming shorter, competition was getting
more intense and technology’s influence had become more profound - so incremental
improvement was going to be insufficient going forward, and Astra had to inculcate the new spirit
of innovation, not only for incremental, but strategic or exponential innovations.
InnovAstra was formulated as a business growth engine for Astra. It was envisaged as a company-
wide cultural movement, aimed at institutionalising systematic innovation that would lead to
outstanding performance.5
Organic growth was central to Astra’s long-term plans and a key strategy for fuelling such growth
was the initiation of continuous improvements across all business units. Ferike elaborated how the
company pushed the envelope on the degree of innovation it pursued as a group,
What we call ‘improvement’ is where we are still doing things the same way as our competitors,
but we just walk faster or better. But when we say ‘innovation’, it means that we must create
another way of doing things which is totally different from our competitors... But when we talk
about the new spirit of innovation, it does not mean that we have to do away with the old spirit
of kaizen (continuous improvement) already deeply implanted in the company. In Astra, we try
to accommodate all new practices.
In 2012, Astra introduced yet another category—value-chain innovation (VCI)—which was

innovation across the company, within the Astra group. Ferike elaborated,
VCI competitions were initiated in 2012, although value chain initiatives had been implemented
long before… For instance, Astra Credit Companies (automobile financing company) offers
those customers whose instalment payments on their existing vehicle are almost completed the
opportunity to buy a new Toyota car from Auto2000 (Astra’s automotive company) while
maintaining their instalment at the same level… As part of this upgrade deal, their old car will
be purchased by Mobil88 (Astra’s used car company) at above the price they would be able to
get in the open market.
By creating a business opportunity for all three units in the value chain by means of this VCI, Astra
could both provide improved opportunities and value to the customer while capturing multiple
sources of margin. With the addition of VCI, Astra now had in place a complete range of innovation
categories reaching across all levels of the organisation comprising SS (Suggestion System):
Individual innovation; QCC (Quality Control Circle): Innovation at department level (across sections,
within a department); QCP (Quality Control Project): Innovation at division level (across
departments, within a division); BPI (Business Performance Improvement): Innovation at company
level (across divisions, within a company); VCI (Value Chain Innovation): and Innovation across
companies within Astra Group (see Exhibit 5 for details on each innovation category).
Ferike observed,
While SS and QCC put more focus on driving the innovation culture within Astra, QCP, BPI and
VCI were more focused on driving strategic growth (refer to Exhibit 6 on how the mindset of
innovation evolved over time)… So you can see the layers of our innovation practices have very
gradually moved from the shopfloor to the top level and from the individual level through to
teams—within and across sections, departments, divisions, and companies (at the group level).
5
Of PT Astra International Tbk
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Developing Innovation Capabilities in Astra
Astra had built on the strong innovation culture that had been part of the company since its earliest
days. Ekuslie explained,
Indonesia has a very collective culture. We are sociable and we like to do everything collectively
with others. So our practice of innovation is mostly team-based.
But this company also engrains the culture of innovation through Catur Dharma. Value Four is
‘Strive for Excellence’, which means that you have to do better, and advance. It is the spirit of
Astra. Our founding father (William Soeryadjaya) whom we affectionately call “Uncle William”,
was not only a businessman, but he also built the organisation and its people. And he always
encouraged everyone to keep learning and improving.
Ferike added, “What we have also done to develop the innovation culture involves a combination of
organisational infrastructure, education and competition.”
Organisational Structure
The Corporate Centre included Corporate Human Capital, which was responsible for innovation
culture, and AMDI, which was the division appointed to run the innovation movement operationally
in Astra Group.
Astra had adopted two main approaches to developing innovation practices. Some companies had
innovations embedded in Human Capital functions (refer to Exhibit 7) while other companies had
this function under the corporate planning or strategy functions. Most of the PICs were from the
Managerial level.
Julio Roland Hasiholan, from Corporate Centre, added: “The PICs also help the Corporate Centre
organise innovation initiatives. Each year, the Corporate Centre hosts four gatherings with the PICs
to discuss topics such as concepts and best practices of innovation practices either in Astra or other
Companies.”
Developing People Through Innovation Efforts
Astra had been consistent in its process innovation efforts from the outset. The importance of
innovation projects had increased as these projects started to support strategic initiatives of the Group.
Ekuslie elaborated, “From 1982, we have been carrying out these projects even when business
performance has been fluctuating, even during the downturn in 1998. It’s not easy, but the number
of projects has been trending up from time to time (refer to Exhibit 8 for some statistics on innovation
projects in Astra).”
Ferike explained how projects were aligned with the strategy at a Group level:
We are very clear that the projects have to align with the overall company strategy. Hence, the
projects are aligned with the business or individual key performance indicators (KPIs), These
KPIs consist of two parts – routine tasks and innovation projects. For innovation projects, this
goes under yearly individual or team-based evaluations (refer to Exhibit 9 for how project ideas
are linked to KPIs and categorised).
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The integration of innovation project performance into business KPIs had served as a key enabler
and facilitated the increase in the number of innovation projects being undertaken company-wide
over time.
Roland shared how the culture of innovation had helped Astra develop its employees as well, “Astra
is known for being a great developer of people. And that is partly due to how people can be involved
in innovation projects, besides other development programmes provided by Company.”
The InnovAstra Convention
All the projects being undertaken at Astra were eligible to participate in a yearly competition,
culminating in the InnovAstra Convention that aimed to identify the best projects in each category
of innovation. In 2016, Astra would be holding its 32nd InnovAstra Convention (refer to Exhibit 10
on how the nature of innovation competition has evolved in Astra).
Of the around 1000 people invited to attend the convention, there would be about 350 Astra
executives, 500 finalists, 50 facilitators and 50 PICs.
Facilitators were chosen from among those who had enough experience in managing innovation
projects as well as a strong knowledge of various methodologies. Their role was to facilitate the team
as it worked on an innovation project in order to implement the appropriate methodology according
to the project circumstances. The Corporate Centre managed development programmes for
facilitators to promote InnovAstra’s standards and values in the Company.
In addition to recognising and rewarding individuals of teams with the best innovation projects, the
InnovAstra Convention had three other positive spinoffs: it helped to develop individual and
organisational capabilities, it encouraged improved company performance, and cultivated the culture
of innovation.
Picking the Contenders
Roland described the initial pool of projects that would be eligible to participate in the competition,
Every year, we ask the Astra group companies about the number of innovation projects that have
already been implemented. We evaluate the projects which have been implemented between
October (2013) the previous year, until September (2014) in the current year. Then the following
year’s February (2015) is the convention where we hold the competition and give out awards for
the best project in each category.
Astra’s partners and subsidiaries held similar innovation competitions as well. The best teams from
these competitions would compete in InnovAstra or their own companies’ regional competitions (if
any).
Roland explained how the number of projects needed to be narrowed down to a list that could be
evaluated at the convention:
Almost every subsidiary is involved in the competition. They take their best project in each
category to compete in InnovAstra. These projects are submitted to the Corporate Centre which
chooses the top projects for each category. In InnovAstra, we will pick the best out of the best
projects out of our six business lines.
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Before the competition, the Corporate Centre would set up a Board of Judges who were selected
from across the Astra Group’s business lines. The Judges, who were chosen by their company PICs
and approved by the top management, had to first successfully complete a Judges training course
conducted by the Corporate Centre.
In order to compete, every project team had to submit a project report to the Corporate Centre. The
Board of Judges would select the best project based on both the project report submitted, as well as
a presentation to the Judges at the InnovAstra convention.
Ferike further elaborated,
The PICs are taught the project evaluation criteria by the organising committee early on, so that
participating teams are clear of the expectations from the outset… Before we measure them, we
have classroom sessions with the PICs where we provide ‘socialisation’ 6 —about the
methodology to get the best project, and how we measure a good project. The PICs will share
this with their teams. This is to ensure that everyone has the understanding of the evaluation
criteria in the competition, as well as what is required to be submitted in the project paper.
Each company may have their own measurements, but when judges of InnovAstra evaluate the
projects, they have to have the mindset of InnovAstra, not their own company. The judges have
already been trained on how to evaluate projects in the InnovAstra way.
Selecting the Winners
Ferike explained the scoring criteria,
We apply the same criteria to measure all innovation projects. We evaluate projects in two parts:
process and result. Process is measured based on the 3Ws: ‘winning concept, winning system,
and winning team’. Meanwhile, the result is measured by KPI achievement and something called
net quality income (NQI). That is how we look for the finalists and the top three teams.
Roland chimed in,
When we talk about a ‘winning concept’, it’s about—how comprehensive is the plan? Does it
have a strong business case? Is the concept strategic enough? ‘Winning system’ is about how we
deliver the concept and execute the plan. Are we using the right tools? Are we using the right
processes? For the ‘winning team’, if we have three companies involved in a value chain
innovation project, each company has to be able to prove that they have benefited from the project;
not just one of them. When they present before the judges, participants from each company have
to present.
Ferike emphasised the importance of teamwork to Astra in the process of achievement,
In our company we have a lot of projects that need to be handled by teams. I think it works better
than promoting individual competition and innovation. In Astra we have the jargon that
‘Superman is dead already’ because we believe in ‘Superteam’, not in ‘Superman’. I like the idea
of competing while cooperating – or ‘co-opetition’.
The performance portion of the criteria was evaluated using the concept of net quality income. In
Ferike’s words, this was not a straightforward concept,
6
Here, ‘socialisation’ referred to the dissemination of information throughout the company about Astra innovation practices.
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NQI is about the commercial benefit that can be derived from the efficiency obtained from the
project. It’s not easy to implement. Right now, we are still working on the best way of measuring
it. Each business line may have their own formulae to calculate NQI. It’s not an exact science.
For SS and QCC projects, the weighting for the 3Ws was heavier than the portion for performance,
as these projects emphasised building an innovation culture. For BPI and VCI projects, they were
evaluated more against business performance rather than the 3Ws.
Sharing Best Practices
The number of finalist projects would vary depending on the category. For SS, QCC, and QCP
projects, there would be 16 finalists for each category, then ten finalists for BPI, and six for VCI.
Each project team would consist of eight to ten people. The Board of Judges would choose the three
best teams within each category.
After the InnovAstra Convention, the learning continued. A series of ‘Buzz’ events (which was
started in 2012), would be conducted to enable the team or persons who won the InnovAstra
categories for the year to share the details of their projects with employees within Astra Group. Buzz
was held about three or four times a year. An executive summary series of the finalist participating
teams was also circulated to the PICs to share more widely within their companies (refer to Exhibit
10 for examples of different levels of innovation in Astra).
One-Stop Solutions—Capitalising on Scale
While innovation at all levels contributed to Astra’s success, the company also had to innovate in
ways that could use its scale to advantage. Ekuslie shared his thoughts on how Astra could capitalise
on its scale,
Astra is a big company; this size can be a liability or a benefit. We are like a giant—how do you
make this giant agile, and still be able to dance? Scalability should be capitalised on. In Astra
we try very hard to capitalise on different lines of businesses by providing one-stop solutions to
the customer.
One of the core competencies of Astra is the value chain, which encompasses the spirit of
cooperation across the business. That’s why at the corporate level we have value chain initiatives.
This has already become part of our business agenda—every year we would establish what value
chain initiatives we would undertake the following year. Cross-company projects such as these
are initiated and their direction is set by the Board. And it will be deployed to the group of
companies, including the subsidiaries.
However, Ekuslie was also aware that relying on the benefits gained through scale alone may not be
sufficient for Astra to maintain its lead in an increasingly competitive environment,
Indonesia is an open market and we are very friendly to market entrants from other countries.
Many MNCs come to Indonesia, and many local companies evolve very fast here. In the past five
years, we have enjoyed around 5-6% growth a year. The implication is that businesses are moving
very fast. Our anticipation of future competition is triggering us to innovate better.
We do our strategic planning on a one to three year horizon. But nowadays, we have to start to
rethink the most suitable business model for Astra as a group so that we can really welcome the
future environment of business. Top management has agreed that for the next level, we have to
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expand our innovation portfolios to be more diversified including brand, network, and customer
experience (refer to Exhibit 11). So this is what we plan to do. By introducing the ‘ten types of
innovation’, we want people to think beyond process-based innovation (which is still around 90%
of the existing innovation projects).
Charting the Future
In 2014, the new catchphrase: ‘InnovAstra to the Next Level’ was introduced in the company,
together with the launch of a book with the same title at the February 2015 InnovAstra Convention.
The Corporate Centre team hoped to see more projects based on the ‘next level’ of innovation starting
in 2016 (refer to Exhibit 12 for an example of ‘next level’ innovation in Astra).
New Opportunities and Challenges in a Changing Environment
Astra’s management had also identified other trends in the future business environment that the
company would have to navigate. The pervasiveness of technology and its advancement would
change the way that people carried out tasks. Being connected and online throughout the day would
change customers’ expectations of the companies that they interacted with. Generation Y, which had
a totally different way of thinking and working from the generations before them, would be both
Astra’s future customers and employees.
What else was needed to bring things to the next level for Astra? Ekuslie believed,
Three things – we have to campaign, we have to integrate this new innovation mindset into the
system of learning and competition, and we have to maintain the commitment and endorsement
from top management. We started with a campaign last year that would extend to the coming
years to gain support for the next level of innovation in Astra. And we will try to integrate the
mindset of next level innovation into the system, especially into the system of competition. For
example, providing a new category of recognition for innovations that are non-process-based, or
providing learning opportunities for non-process innovation practices. We would ensure buy-in
from top management. In order to get the buy-in from the top management of our subsidiary
companies, we have to first get the buy-in of top management from corporate, which is Pak
Prijono (CEO and President Director of Astra). Luckily, we have very strong commitment from
him to endorse the development of InnovAstra to the next level.
Over the previous decades Astra had in built up a system to manage innovation that had extended
throughout the company. However, it was clear to Astra’s management that the company needed to
innovate in new ways to stay ahead.
Pak Prijono and his executive team had set a clear strategy to move forward in this direction in order
to address the new opportunities and challenges emerging in the Indonesian market and beyond
ASEAN. The Corporate Centre had to consider how easy it would be to make this shift in the nature
of innovation in the company, and whether the history and established processes in Astra would be
a help or a constraint towards this goal.
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EXHIBIT 1: KEY MILESTONES IN ASTRA’S BUSINESS EXPANSION
Source: Astra internal data
EXHIBIT 2: CATUR DHARMA ASTRA
The Company’s Values (Catur Dharma Astra):

1. To be an asset to the nation
2. To provide the best service to customers
3. To respect the individual and develop teamwork
4. To continually strive for excellence
Catur Dharma is to exist for the Past, Present and Future of the company
1. More than a culture, it’s a credo / belief
2. Inherent with the Astra’s history as well as the future
3. Well-proven for being able to sustain Astra’s business
It consists of:
1. The belief on what’s good, right and desirable
2. The guidelines for what we should behave, think and act
3. The common baseline for the entire organisation’s move and direction
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EXHIBIT 3: INNOVATION MILESTONES IN ASTRA
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EXHIBIT 4: THE ASTRA MANAGEMENT SYSTEM
EXHIBIT 5: ASTRA INNOVATION CATEGORIES
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EXHIBIT 6: EVOLUTION OF THE INNOVATION MINDSET
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EXHIBIT 7: ORGANISATION STRUCTURE FOR INNOVATION IN ASTRA
EXHIBIT 8: NUMBER OF INNOVATION PROJECTS IN ASTRA
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EXHIBIT 9: LINKING PROJECT IDEAS TO KPIS
EXHIBIT 10: EXAMPLES OF DIFFERENT LEVELS OF INNOVATION IN ASTRA
Suggestion System (SS): PT Kayaba Indonesia
Business Case
On the 24th of June 2013, an operator at PT Kayaba Indonesia (one of Astra’s auto-parts
manufacturing subsidiaries) attempted to fix a misalignment between two components on a tapping
process machine within the steering shaft line. While trying to fix this misalignment, the operator
accidentally pushed the clamp button, which resulted in his hand being clasped within the machine.
The operator’s hand was clamped between the V-blocks that were powered by an air cylinder
producing six bars of air pressure with consequent injury.
Solution
To avoid future incidents, the Environment Health Safety Department, Production Department,
Maintenance Department and Engineering Department held a meeting to solve this issue. The
meeting appointed the Maintenance Department to prevent future misalignments and any other safety
issues. Johan Feriyadi, a Maintenance Department employee, was appointed to deal with the issue
and to introduce a process to achieve zero accidents. After observing and analysing the root causes
of the issue, he then started listing innovations that were to be implemented. Johan made several
modifications to some of the components of the machine and also introduced an automated system
to prevent any manual handling in the machine, thus eliminating the scope for human errors or safety
issues.
Result & Benefits

The result achieved was more than the initial goal of a zero incident machine. The innovation resulted
in zero defects, reduced costs from defects and handling errors, faster processing times and increased
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machine productivity. This also increased the confidence of operators handling the machine,
providing them with a greater sense of safety. Johan was successful in transforming this 1976-vintage
machine into an automated one.
Quality Control Circle (QCC): PT Astra Honda Motor (AHM)
Business Case
Many companies have been using contact centres as business contributors who can bring profit to
the Company. But AHM’s Contact Centre wasn’t bringing in profit, rather, it was being another cost
centre. The number of customers who contacted AHM Contact Centre had increased over time and
they were asking about products and services information. The team found that AHM Contact Centre
had an opportunity to sell products directly to the buyer by phone.
Solution
In order to increase the contribution to product sales, the team created Standard Operating Procedures
for telephone sales and explained the procedures to all of the staff. The team also built a new
application programme to record all prospective customer data. They also conducted people
development programmes and gave recognition to the staff who successfully achieved the new
targets.
Result & Benefits

Prospective buyers could get information easily. Contact Centres gave recommendations for where
customers could buy products that fit their needs and specifications. The number of product sales
increased.
Quality Control Project (QCP): PT United Tractors Tbk (UT)
Business Case. Coal production was increasing over time. Companies needed huge investments in
heavy equipment especially in articulated and heavy trucks. At that time, Komatsu, for whom UT
acts as Indonesian distributor, had no market share whatsoever in those two segments because of bad
product image.
Solution. Increasing customer intimacy by providing end-to-end customer solution management and
inventing best-fit products through R&D.
Benefit. Increased articulated and heavy truck market share up to 20% and 45% respectively.
Business Process Improvement (BPI): PT Astra International Tbk – Toyota Sales Operation
(Auto2000)
Business Case. Auto2000 hadn’t been able to handle demands of vehicle repairs due to inadequate
capacity of its workshop.
Solution. The main idea was to arrange for their service personnel to come to the customer. As a
result Toyota Home Service was introduced, so that now customers did not have to visit the workshop
but could have their cars repaired at their home or place of work.
Benefit. Increased revenue and customer engagement.
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Value Chain Innovation (VCI): PT Pamapersada Nusantara, PT United Tractors Tbk, PT

Bank Permata Tbk
Business Case. Coal prices had been declining over time, resulting in companies reducing their
capital expenses. The condition has made PAMA’s revenue decrease.
Solution. PAMA did preventive maintenance, trained their operators, and many other activities to
maximise the equipment’s lifetime. Meanwhile, with UT as heavy equipment supplier and Bank
Permata as financial services provider, they offered a customised financial programme for purchasing
spare parts at the most reasonable price.
Benefit. Cost savings for subcontractor, increased revenue for spare parts, increased revenue for coal
production, better cashflow and collection rate.
EXHIBIT 11: THE TEN TYPES OF INNOVATION
Source: Ten Types of Innovation: The Discipline of Building Breakthroughs, Doblin.com

http://www.doblin.com/tentypes/, accessed August 2015.
17/18
EXHIBIT 12: NEXT LEVEL INNOVATION: ASTRA HONDA’S “ONE HEART”
As at September 2014, Honda led the Indonesian motorcycle market with more than 60% of market
share. Despite Honda’s dominant market position and good profitability, the motorcycle industry
faced slow growth, with fierce market competition and many new motorcycle brands entering the
market.
To cope with the growing competitive challenge, Astra Honda Motor developed a new strategy—it
introduced the “One Heart” brand campaign, which was created based on Astra Honda Motor’s
insight into the local market. The One Heart campaign demonstrated the company’s key value of
focusing on the customer, not only through distribution channels, but also in advertisements,
corporate branding activities and also product branding. It defined and harmonised the link between
marketing and production to win the market.
Astra Honda Motor then institutionalised One Heart, defining operating values such as Focus on the
Customer and Respect Others. These operating values were communicated to employees and
integrated into the key performance indicators. One Heart eventually became such a successful model
of brand innovation that other countries wanted to adopt it.
This brand innovation brought multiple advantages to the Company, including: a larger customer
database, launch of community activities that directly helped to build the brand image, an increase
in the brand’s community loyalty index, reduced sponsorship costs, and, importantly, increase in
market share.
18/18

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SMU Classification: Restricted

ASTRA INTERNATIONAL: INNOVATION ASIAN STYLE

SMU-16-0022 Astra International: Innovation Asian Style

PT Astra International Tbk

The Evolving Nature of Innovation at Astra

Starting on the Shop-floor

SMU-16-0022 Astra International: Innovation Asian Style

Thereafter, in 1982, we started to use a competition as a vehicle to encourage innovation: the

Toward Strategic Innovation

SMU-16-0022 Astra International: Innovation Asian Style

In 2012, Astra introduced yet another category—value-chain innovation (VCI)—which was

SMU-16-0022 Astra International: Innovation Asian Style

Developing Innovation Capabilities in Astra

Developing People Through Innovation Efforts

SMU-16-0022 Astra International: Innovation Asian Style

The InnovAstra Convention

Picking the Contenders

SMU-16-0022 Astra International: Innovation Asian Style

Ferike further elaborated,

Selecting the Winners

Ferike explained the scoring criteria,

Roland chimed in,

Ferike emphasised the importance of teamwork to Astra in the process of achievement,

SMU-16-0022 Astra International: Innovation Asian Style

Sharing Best Practices

One-Stop Solutions—Capitalising on Scale

SMU-16-0022 Astra International: Innovation Asian Style

Charting the Future

New Opportunities and Challenges in a Changing Environment

SMU-16-0022 Astra International: Innovation Asian Style

EXHIBIT 1: KEY MILESTONES IN ASTRA’S BUSINESS EXPANSION

Source: Astra internal data

EXHIBIT 2: CATUR DHARMA ASTRA

The Company’s Values (Catur Dharma Astra):

Source: Astra internal data

SMU-16-0022 Astra International: Innovation Asian Style

EXHIBIT 3: INNOVATION MILESTONES IN ASTRA

Source: Astra internal data

SMU-16-0022 Astra International: Innovation Asian Style

EXHIBIT 4: THE ASTRA MANAGEMENT SYSTEM

Source: Astra internal data

EXHIBIT 5: ASTRA INNOVATION CATEGORIES

Source: Astra internal data

SMU-16-0022 Astra International: Innovation Asian Style

EXHIBIT 6: EVOLUTION OF THE INNOVATION MINDSET

Source: Astra internal data

SMU-16-0022 Astra International: Innovation Asian Style

EXHIBIT 7: ORGANISATION STRUCTURE FOR INNOVATION IN ASTRA

Source: Astra internal data

EXHIBIT 8: NUMBER OF INNOVATION PROJECTS IN ASTRA

Source: Astra internal data

SMU-16-0022 Astra International: Innovation Asian Style

EXHIBIT 9: LINKING PROJECT IDEAS TO KPIS

Source: Astra internal data

EXHIBIT 10: EXAMPLES OF DIFFERENT LEVELS OF INNOVATION IN ASTRA

Suggestion System (SS): PT Kayaba Indonesia

Result & Benefits

SMU-16-0022 Astra International: Innovation Asian Style