Manufacturing Industry Challenges

The manufacturing industry in Indonesia continues to grow every year. Technological advances have changed the typical supply chain process. The development of the manufacturing industry in Indonesia also has an impact on emerging manufacturing industry challenges. Since the manufacturing industry has changed because of the emerging internet technology, the challenges that come will be different.

Here is a list of manufacturing industry challenges and how to overcome each one:

1. Difficulty in Predicting Product Demand

One of the common manufacturing industries challenges that often occurs is difficulty in predicting future product demand. If the company cannot measure or predict future product demand, the supply chain can be overcome with expensive surplus or lost profit by missing demand.

A variety of software is already available to address the issue of supply forecasting. They easily record a history of sales, generate reports, and predict production needs based on historical or comparative data.

2. Difficulty in Controlling Inventory

Inventory management is another one of the common manufacturing industries challenges. Since e-commerce has made the flow of products faster, inventory management needs to evolve to be as fast as well.

Technology has evolved to solve this problem, with integrated systems available to track the movement of each unit from the production line to the warehouse, until it is sold and shipped out or delivered to brick-and-mortar stores. Here it is best to use a mix of human and automated units to cross-check and manage inventory to minimize errors and maximize audits.

3. Difficulty in Improving Efficiency

Creating an efficient production line is a challenge for the manufacturing industry because there will always be a question of speed and cost vs quality. In the increasingly competitive global market, slashing costs and improving speed is always a quick way to increase profit, but these cut costs have a direct impact on quality control and raw material sourcing as well.

The most effective solution is to modernize the processes and workflow systems to adapt to these changes while retaining quality. Manufacturers can reduce workers and replace them with automated systems. The upfront cost of modernizing may be high but can provide long term cost benefits in keeping the company competitive.

4. Difficulty in Increasing ROI

Increasing ROI (return on investment) is a challenge for the manufacturing industry every year. Every company wants to increase their ROI, which makes the industry increasingly competitive. One quick fix to this is increasing the product price point, but ROI can also be improved by updating marketing strategies with lower cost but high return digital efforts or exploring more cost-effective production, shipping, or packaging options.

5. Difficulty in Talent Recruitment

Finding a good human resource that has high quality and understands the latest technology will be a problem because the company is not only looking for people who understand the technology but also have quality, be able to think creatively, be able to create a solution and have a strong mentality. Companies can make several recruitment processes to find good quality human resources.

After getting qualified employees, companies need to schedule regular training so that each employee can increase their potential.


6. Lack of Understanding of New Technologies

Technology always develops and changes every year. Starting from robots, IoT, and manufacturing software. The presence of some of the latest technology will certainly make the producers confused. Deciding to reject technology is also not a good decision because the company will be left behind by consumers who already use technology. Companies can discuss with all stakeholders to determine whether to use automated systems in stages or all at once because using new technology will certainly cost a lot.

Well, those are 6 manufacturing industry challenges and how to overcome them. If you want to build a manufacturing company, you should look for an industrial area that has complete facilities and a strategic location close to transportation routes.

One industrial area that has a strategic location is Karawang New Industry City (KNIC). Located close to the capital city of Jakarta and with a lot of access, KNIC is a suitable area for building and renting warehouses.

In addition, KNIC has 6 access points to national infrastructure such as the Jakarta-Cikampek toll road, the Jabodetabek LRT, the Trans Java line, the Jakarta-Bandung Railway, the Kertajati International Airport, and the Patimban port. In addition, KNIC is also supported by facilities such as premium electricity, natural gas, and fast internet connections to support the performance of manufacturing companies.

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