Indonesia Needs To Accelerate Manufacturing Technology In Indonesia

Indonesia is a rich country. Lots of resources to support industrial

development. Such as extensive forests and waters, oil and gas, minerals and mines.
Indonesia's geography lies between two continents, namely the continent of Asia and
Australia. In ancient times Indonesia has become a strategic trade route even today
with the existence of the trade channel Indonesia is able to attract entrepreneurs in
other countries to work with Indonesia.

Indonesia which consists of thousands of islands and countries belonging to a

large population. This population can be used as capital for the growth of labor-based
industries. It is possible, the science and technology-based industry and creativity can
develop.

Industry is the process of processing goods using facilities and facilities, such
as machinery. Manufacturing is the process of converting raw materials into goods
that can be used or consumed by humans. The manufacture uses hand or machine. So
that it can be concluded that manufacturing engineering is the process of processing
raw materials using machines so that they are products that are ready for sale. The
company that houses the manufacturing industry is called a manufacturing company.
A manufacturing company is a company that processes raw materials (raw materials)
into finished goods. The operation of a manufacturing company is not the same as a
trading company. Manufacturing companies make their own items to sell.

In producing a product, manufacturing companies usually issue a variety of costs.

These costs can be classified into 3 major, including:
1. Direct Material
Direct materials are materials used and become part of production. Material
costs are directly charged directly to the unit of output produced or to certain
production processes without going through the allocation of costs first. Goods
purchased by companies for use in the production process are called raw
materials
2. Direct Labor
Direct labor is a workforce that has direct performance on the processing of
goods, both using physical capabilities and with the help of machines
3. Factory Overhead
Factory Overhead Costs are costs incurred in processing, which cannot be
classified as raw material costs and direct labor costs. Costs included in
factory overhead costs include:
a. Indirect labor costs, such as wages of supervisors, foremen, mechanics,
repair parts, etc.
b. The cost of auxiliary materials, namely the types of materials used in the
processing, but the quantity is very small and cannot be traced to the
finished goods.
 c. Factory building depreciation costs, machine depreciation costs, etc.

The strategic environment in the last ten years has changed very rapidly and
dynamically. Meanwhile, the performance of the industry in the past five years has
decreased. The economic policies of globalization have taken place so that there are
no more industrial protection policies that can be used. Not quite up there. In the era
of regional autonomy, it also changed the industrial paradigm which was initially
centralized to become decentralization.

Centralization is the union of all things in a place that is considered the center
of the area. While decentralization is a system of government that gives power to
regional governments. Many new laws and regulations that shine industry players
need to be accommodated by industry. The challenge of improving industrial
performance is increasingly difficult not complex.

Problems are also experienced in macro-level industry. In the macro-level

industry, the problem is the first lack of facilities and infrastructure. Facilities and
infrastructure are needed for smooth production. From taking raw materials,
processing materials to marketing products. Second, economic costs are high. The
high economy causes high operational costs to be used. Developmental weakness in
the area. To make the product requires good raw materials to get good results too.
Industry players are willing to travel long distances to get the raw materials they want.

Lagging technology can also cause a decline in the industry. Technology that
has developed is very useful for industrial sustainability. With the new technology,
time efficiency in producing links is faster and easier. So that it can produce a lot of
quality products in a short time. Declining competitiveness also caused the industry to
suffer. Due to the many binding regulations that cause industry to decline. Many
industrial actors have difficulty managing industrial licenses.

Slow industrial growth has also been a factor in the decline of manufacturing
industries in Indonesia. Industries that will export are too pressured by complicated
regulations. So that it is not uncommon for industry players to only sell their products
in their own cities and at most only between provinces. For exports to other countries
there are also other barriers including those and non-tariffs in the destination country.

Besides problems at the macro level, Indonesia also has problems at the meso
level. Industrial-level industry is a mid-level industry. The problem that is often faced
by industry players is the weak role of the IKM. Small and Medium Industries (IKM)
are industries that have small and medium scale industries. According to Ministry of
Industry Regulation No. 6 of 2016, small industries are industries that have a
maximum of 19 employees, have an investment value of less than 1 billion rupiah, not
including land and building of business premises.
 Another problem is the decline in performance in various branches of the
industry, especially industrial branches, especially branches of industry and wood
products. In this sophisticated era, classic wood products are still much sought after
by investors. Because wood can last a long time if cared for well and from time to
time the selling price of wood products is increasing. The selling price of wood that is
increasing is caused by the reduction of wood as raw material for production. So that
a lot of wood furniture is closed because of the low level of sales and the lack of
capital.Technology that has not all developed also causes problems.

The technology is now based on technology from the agricultural, industrial

and even livestock sectors. Technology is needed to accelerate production. With
technology the time used is also shorter. Lack of capital support. This problem is often
uttered by many industrial actors. The capital is a very good item. Many of my
industry players who want to start their careers still think twice because of capital.
Interest rates at banks are also high. This makes capital matters more difficult. Finally,
inadequate infrastructure support. Infrastructure is very much needed to support the
operation of the industry. With good infrastructure, industrial operations can run
smoothly.

There are also problems faced at the industry level including low appreciation
of domestic products. Most people prefer products from abroad. Most good quality
foreign products. But the products inside the counter are no less good. Foreign
products are seen as more special than domestic products. The low supply of raw
materials makes the Indonesian industry become one by one vacuum. Long-term raw
materials are increasingly difficult to obtain. So that causes the price of raw materials
to be high. Energy also affects the industry in Indonesia. Gasoline is now becoming
rare and expensive. Make all prices of basic necessities also rise.

Indonesia also still imports raw materials. Imported raw materials are very
useful for meeting industrial needs. It is expected that the import of raw materials can
increase industrial production in Indonesia. Not yet optimal production capacity.
Indonesia still needs to learn more to optimize a good industry. With good training
and socialization.

Export dependence is only on a number of commodities and several country

destinations. Indonesia is still developing. So Indonesia is still optimizing cooperation
between developed countries so they can take advantage and learn to be better

The problem that is not less severe is that there is still smuggling. Smuggling
is an activity that is against the law. In addition, smuggling can also harm the nation.
Limited number of local brands. Indonesian industries produce many branded
products. But many people prefer to use products from abroad. Not only that. In
Indonesia, it is still difficult to obtain permission to patent products. So that industries
in Indonesia are difficult to develop.
The development of the manufacturing industry in Indonesia is still lacking. To
accelerate the development of manufacturing, Indonesia must be able to overcome
problems. From the smallest problem to the big problem.

Conclusion:
1. Potential economic resources supporting industry:
a. Indonesian natural resources (huata, marine and fisheries, oil and gas,
minerals and coal reserves) have the potential to potentially develop
natural resource-based industries.
b. The location of Indonesia's geography is very strategic to accommodate
the interests of various countries and mutually beneficial cooperation with
the surrounding countries.
c. Indonesia, which consists of thousands of islands and its resident
population, is capital for the growth of a labor-based industry that is an
opportunity for the growth of the industry.
2. Problems faced by industrial companies:
a. The strategic environment for the past 10 years has changed dramatically.
b. Industrial performance over the past 5 years has declined.
c. Globalization in the economic field has taken place so that there is no
d. longer an option for industrial protection policies.
e. The era of regional autonomy led to decentralized changes becoming
decentralized.
f. Many new industrial regulations that bind the industry.
The challenge to improve industrial performance is heavy.
3. Indonesia must be able to solve the problems faced by the macro and meso
industries.