Small and Medium Industries (IKM) are production activities of various types of daily necessities. Including automotive SMEs, which provide various goods related to two-wheeled and four-wheeled vehicles or more.
Products produced by SMEs are marketed in Small and Medium Enterprises or SME activities with a focus on small businesses. The difference with MSMEs (Micro, Small and Medium Enterprises) is the focus on the scope of micro businesses.
Based on data from the Ministry of Industry or Ministry of Industry, the number of SMEs in 2023 will grow to reach 4.4 million business units or the equivalent of 99.7 percent of the total industrial business units in Indonesia.
Illustration of the automotive industry [Shutterstock/Rainer Plendl] The SME sector has also absorbed a workforce of up to 12.39 million people or 66.25 percent of the total workforce in the industrial sector.
However, for the automotive sector in 2017-2023, the Ministry of Industry stated that there were 84 automotive SMEs.
On a separate occasion, when attended the Friends of FINATRA workshop–part of FIFGROUP–it was explained that only 1 percent (1%) of automotive MSMEs are their consumers compared to other business units such as food & beverages and groceries.
Quoted from the Antara news agency, in the 2023 Kadin Indonesia Closed Loop IKM Program Update in Jakarta this past week, it was stated that automotive IKM partnerships with large industries would continue to be improved.
“The difficulty is because large industries are somewhat closed off from SMEs,” said Dini Hanggandari, Director of Small and Medium Metal Industries, Electronic Machinery and Transport Equipment, Ministry of Industry.
He added that the partnership between IKM and large industry had indeed been hampered, but now large industry is starting to accept the presence of IKM.
It is difficult for SMEs to penetrate large industries because there are requirements from large industries that SMEs cannot fulfill.
“So we also ask that SMEs can meet the standards requested by large industries,” said Dini Hanggandari.
Apindo and the Indonesian Embassy in Tokyo are promoting automotive component SMEs in Japan. [Antara/Indonesian Embassy in Tokyo] Added that there are still many SMEs who have not followed the wishes of the industry, so the Ministry of Industry is trying to continue to improve their abilities so they can accept change.
One of them is through the Indonesian Chamber of Commerce and Industry’s 2023 Closed Loop IKM Program, where IKM players including automotive IKM receive various training and guidance and assistance. These include basic mentality training, 5S training, an acronym for Concise, Neat, Clean, Careful, Diligent.
Apart from that, participants also receive K3L or Health, Safety, Security and Environment training, as well as technical training and marketing training, as well as financial management for SMEs.
Furthermore, a review and monitoring of the realization of the memorandum of understanding or MoU throughout 2023 will also be carried out, as well as an assessment to ensure that SMEs can advance to class as expected.
“So education is the most important thing, after everything meets the requirements then we can supply it to industry,” said Roni Purwantoro, an automotive IKM player when he was a resource person at the Indonesian Chamber of Commerce and Industry’s 2023 Closed Loop IKM Program update event.
He said that after joining “IKM Closed Loop” program initiated by the Indonesian Chamber of Commerce and Industry in collaboration with the Ministry of Industry and PT Astra International Tbk, through the Dharma Bhakti Astra Foundation, Roni Purwantoro stated that he had gained a lot of knowledge.
Businesses in the automotive sector can now partner with large industries, and will continue to be improved, so that they can invite other automotive SMEs to progress further.
“By joining the 2023 Indonesian Chamber of Commerce and Industry’s Closed Loop IKM Program we can learn how to become an efficient, productive and innovative company. Because large industries are very competitive, both price, quality and everything must meet their standards,” said Roni Purwantoro.
Rama Datau, Chair of the Indonesian Chamber of Commerce and Industry’s Small and Medium Transport Equipment Standing Committee, said this collaboration program was an effort to build a more inclusive SME ecosystem.
“We believe that the SME sector can continue to develop, move up in class, and be able to meet the demands of “quality, cost, delivery” from large industries. And by implementing a culture of innovation in SMEs, SMEs will be able to continue to rise to meet future challenges,” he closed.
