JAKARTA (TheInsiderStories) – In the light of fourth industrial revolution era Ministry of Industry of Indonesia has laid out five sectors in which implementation of Industry 4.0 technology will be enhanced. These sectors are chosen with careful consideration regarding their impact on economy, ease and visibility. Automotive in one of five selected sector.

The automotive industry is increasingly serious about targeting Indonesia as a potential market and car production base, as well as a research and development center to create product innovation. This step can strengthen the national industrial structure as well as encourage entry into global value chain activities.

The development of the automotive industry in Indonesia has been supported by government policies that put the automotive industry as one of the mainstay sectors for its big role to the national gross domestic income (GDP).

From the aspect of economic implications, the growth of automotive industry in 2017 (5.63 per cent) has surpassed the overall growth of Indonesia GDP (5.06 per cent). For non-mineral sector, the automotive industry has contributed 10.11 per cent in 2017 GDP.

This growth is motorized by the workforce of automotive sector that reached 1.5 million in 2016. As a labour intensive industry, the value chain of automotive involving several relevant industry—metal and machine industry—making it possible for them to move forward together. By implementing technology of Industry 4.0 Ministry of Industry hope to boost the growth of the automotive industry.

According to the minister of industry of Indonesia, Industry 4.0 is an attempt to transform manufacturing process into an integrated online system with the internet as the primary supporting component. There are driving factor that ministry of industry try to focus on during the implementation of Industry 4.0 technology, as explained by Haris Munandar the head of Industrial Research and Development Board (BPPI).

Those factors are (1) enhancement of data volume, computation and connectivity; (2) analytical ability and business intelligence; (3) new form of the human-machine interaction, e.g. touch interface and augmented reality; and (4) development of digital instruction transfer into physical form, e.g. 3D painting.

Information and data play an essential role in defining Industry 4.0 flow of information, big data and decentralization of the decision-making process are one of the key things in ensuring effectiveness and efficiency of a manufacturing process.

An expert explains that Industry 4.0 will create an entirely flexible and integrated manufacturing system of automotive industry. Building assembly station that can process different task–e.g coating–other than assembling cars.

Without needing centralized computing machine or handling on technology car body – equipped with monitoring and communication technology – wheeled from one station to another until it reaches the last stage of manufacturing process.

Such decentralized process resulted in a powerful system that also adaptive to modification. In the value chain, information also holds a vital role as the connector of several stages in the value chain.

It is the only component of a value chain that increase both efficiency and responsiveness of value chain by ensuring manufacturer produce goods that customers want and need most efficiently.

With these in mind ministry of Industry attempted to assure readiness of national industry to approached Industry 4.0. Such as giving incentives in a form of manufacturing infrastructure for labor-intensive enterprises and preparing human resources through high skill-focused vocational education.

Indonesia is the second-largest car manufacturing nation in Southeast Asia and the ASEAN region (trailing rather far behind Thailand that controls about half of total car production in the ASEAN region).

However, due to robust growth in recent years, Indonesia is expected to somewhat limit the gap with Thailand’s dominant position over the next decade. To overtake Thailand as the biggest car manufacturer in the ASEAN region will, however, require major efforts and breakthroughs.

Currently, Indonesia is primarily dependent on foreign direct investment, particularly from Japan, for the establishment of onshore car manufacturing facilities. The country also needs to develop car component industries that support the car manufacturing industry.

Written by Elisa Valenta, email: elisa.valenta@theinsiderstories.com