Business Environment

Individuals and companies in Indonesia's response to the corona pandemic


Initiatives to Combat Corona Pandemic in the Japanese Manufacturing Industry in Indonesia

As of August 8, the total number of people infected with the new corona virus in Indonesia exceeded 120,000 and more than 2,000 new cases have been confirmed every day.

We have heard from Japanese manufacturers in Indonesia that they are taking the following measures that can be taken now, even in this time of corona ravages, using the time and man-hours left over from the decline in the operating rate.

  • Inventory Review
    Increase the frequency of monthly stocktaking at the end of each month to improve the accuracy of inventory. Review the optimal number of inventory days to reduce the number of days held in the warehouse and improve cash flow.
  • Personnel and Organizational Review
    Workforce reduction based on downward revision of revenue projections, new HR evaluations and organizational restructuring through the introduction of work from home. Currently, the most frequent topics covered in online seminars in Indonesia are related to organization and labor management.
  • Field Review
    To reduce the number of workers required to effectively utilize human resources by reducing the number of personnel, we have changed the number of workers to multi-skilled and the number of indirect personnel to direct personnel (making fixed costs a variable cost). Formulation of standard operation procedures (SOPs) that avoid physical contact between people and objects as much as possible in accordance with the new lifestyle.
  • Supply Chain Review
    Since it is difficult to change suppliers during busy seasons, we are now reviewing imports from China, where there is a high supply chain risk due to economic friction between the U.S. and China and the impact of the new corona model, in order to procure locally at a time when the utilization rate has fallen.
  • Business Review
    However, it is said that the probability of success for a new business is one in nine, so I think it is more realistic to be patient and wait for the time to turn around, rather than taking a risk hoping for a 10% chance.
  • Cost Review
    If the capacity utilization rate falls, the ratio of fixed costs such as labor costs and manufacturing overhead costs will increase as a percentage of the cost, so the ratio of fixed costs needs to be reduced by directly employing indirect personnel and reducing expenses.

However, we believe that once the above internal efforts are completed, the IT investment for the concrete implementation of the mechanism will be planned, and so we will start to create a mechanism that minimizes the physical work and operation of machines and automates the process of work in order to improve production efficiency and reduce the risk of virus infection.

People surviving Indonesia's corona pandemic with wisdom

One of the things I've always admired about Indonesians is their ability to make a living, and during the recession that followed the currency crisis of 1998 to 1999, I had many opportunities to work at a Japanese bank. The room in the systems department had the appearance of a wartime black market, which even the Indonesian manager tolerated as a matter of course.

It seems that people who were laid off or kept at home during the corona pandemic are selling everything from homemade sponge cakes and roast beef to everyday items to people connected to them by word of mouth, but the big difference this time is that delivery systems such as GoSend and GrabSend are readily available, and the trade sphere for individual side businesses has expanded significantly.

In one case, a group of housewives who had been growing vegetables in their garden to become self-sufficient after their income was reduced due to the Corona pandemic, started selling their fresh vegetables to the outside world.

In another area, it seems that residents of the village tried to systematically grow and sell vegetables, and there have been cases of setbacks due to factors such as lack of cultivation know-how and unsuitable climate, but perhaps the secret to success was that housewives in this area were accustomed to growing vegetables, and the natural flow of vegetables they grew for home consumption was to sell a lot of them.

There is also an example of a person who ran a chicken noodle stall in a rural area who moved to an urban area with a higher income level and lowered his prices to the extreme in order to meet the corona ravages, so that he could do a great deal of business for the low-income population, which is difficult for other restaurants to enter.

Kenichi Ohmae, a famous management consultant, once said that there are only three ways for people to change.

  1. Change the time allotment.
  2. Change your place of residence
  3. Change the people you associate with.

Relocating from your hometown of Solo to Yogyakarta and re-starting your business, it's easy to imagine how hard it is to start from scratch with a new living and business environment, but maybe that's about as much of a change as it takes to take on a new challenge in the corona pandemic that is low-income business.

From my experience in retailing (clothing and accessories) in the past, when you get tired of the daily work of inventory management, display management, and customer service, you will want to raise prices whether you are making a profit or not.

High prices mean fewer customers. This firm micro-business belief is not easy to imitate.

At this time of corona crisis, the environment surrounding our company is very severe, but I can't help but feel that there are hints for business in these cases of overcoming adversity with wisdom.



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1

It's often said in accounting that "profit and depreciation create cash," meaning that there are two sources of cash for a company: profit and depreciation.

2

There are few cases of cost accounting (actual cost) business, which calculates how much cost is spent on monthly production, being systematized in Indonesia.

3

In Jakarta, the first section of the MRT metro (15.7 km in total) was officially opened in April 2019, but in June this year, in the midst of the corona pandemic, the 6.3 km from Bendaran HI station in front of Plaza Indonesia, the current starting station, to Kota in North Jakarta, West Construction has begun on the second phase of the 5.2km total length of 11.5km (10 new stations) to Ancol's train depot in Jakarta.

4

The Jokowi administration, which came to power in 2014, is said to be a staunch supporter of China, and in 2015, China and Japan fought for the Jakarta-Bandung High Speed Rail project, which was expected to be introduced under the Japanese bullet train system, but the Indonesian government rejected the Japanese plan and adopted the Chinese plan.

大統領選挙で考えたギャップにハマるということ 5

Jokowi's image of a simple uncle with no selfishness and his strong leadership skills as a pragmatist have won over the gap-loving Indonesians, who see him as an ordinary person at first glance but are actually amazing, and the public seems to be in a state of collective hypnosis.

情報共有 6

The sharing of visible results leads to a common recognition of the problems, but if there are people who are troubled because the scarcity of information is diminished by the increasing sharing, the political power to increase the position by monopolizing useful information is at work.

7

In "The Garuda Merchant," written by Yusuke Fukada, a bible-like novel for Japanese living in Indonesia, there is an account of a senior official of the Indonesian Ministry of Religious Affairs inviting Japanese and Indonesians to his home, in which he writes on the invitation card for Indonesians that the party should start thirty minutes early, on the assumption that they will be late.

宗教によって異なる「死んだらどうなる」の考え方 8

Both Christianity and Islam are religions derived from Judaism and believe in the one and only God, Jesus Christ (God Himself) or Allah, respectively.

株価操作なんてインドネシア株では当たり前 9

Stock prices fluctuate with sell and buy orders, and if you get a lot of sell orders and a lot of buy orders, the other investors will follow suit with "me too" and the stock will go up.

心臓に毛が生えたインドネシア人のずうずうしい転職活動を応援してみた 10

Since many Indonesians can't maintain mental stability without revealing a secret story to someone else.

日系企業のインドネシアでの存在意義 11

If Japan's population continues to decline at the current rate, domestic demand will continue to shrink, and if this happens, it is inevitable that domestic companies that find it difficult to survive in the Japanese domestic market alone will look for ways to make a living in overseas markets.

チャンスはあるが勝てる分野が 12

After living in Indonesia, talking to people on my own, and gradually understanding the local situation, I realized that starting a business in Indonesia is surprisingly difficult. The reason for the difficulty is the high shipping costs and tariffs, the competition from local companies, and the high running costs of IMTA and DPKK.

インドネシアのシステムインテグレーション業界 13

The other day, I had the opportunity to exchange opinions with JETRO (Japan External Trade Organization) about IT investment by Indonesian SMEs, and they raised an important issue related to the existence value of system integrators, such as "How can we explain the cost benefits of system investment?

肉体と精神と心と魂 14

Speaking of "Body and Soul," it's the debut song of SPEED, a member of the LDP's House of Councillors, Eriko Imai, who was unofficially appointed as parliamentary secretary of the Cabinet Office following yesterday's cabinet reshuffle, and the name of a long-established Indonesian women's fashion brand.

ジャカルタのラーメン市場 15

I came to Indonesia for the first time in October 1997. I didn't understand Indonesian, my job was hard, the people around me were unreasonable, and there was a time when I wanted to go back to Japan for a while.

ブランド力、技術力、資金力の3要素 16

After the Jakarta riots of 1998, when the rupiah plummeted and domestic companies with foreign dollar-denominated debt were struggling to pay interest, I was looking for a new business in Indonesia that would allow me to earn foreign currency.

日本とインドネシアの間でのタイムマシン経営が通じなくなっている件 17

I think that Yoshinoya overcame the frame of Japanese food and became Indonesian soul food. I am happy to see the scene where Japanese food culture is accepted by Indonesian people.

サリナデパートとマクドナルド 18

The first McDonald's in Indonesia, Sarinah Department Store, will close after today, May 10.
While Jakarta's shopping malls continue to be modernized with new concepts, the Sarinah department store and the Pasaraya in Block M, which were the staple meeting places for young people when I first arrived in Indonesia more than 20 years ago, have been completely left behind.

不景気の歴史 19

Since I came to Indonesia, I have seen the economic recession several times, but because of the spread of the new coronavirus this time, the economy will definitely go into recession, and in a few years' time it may be called corona shock or corona recession.

日本のバブル経済崩壊後とインドネシアの通貨危機後 20

When I entered university in 1991, at the end of the bubble economy, land and stock prices were exploding, Mitsubishi Estate had bought the Rockefeller Center Building, a symbol of America, and the women of the one-length body-con (like the Bubbly Dance of Tomigaoka High School's dance club) were dancing at Juliana Tokyo in the waterfront bay area, waving their fans.

内需と外需の自国経済に及ぼす影響 21

The situation in Japan is that even if public works investment is made, the money stays in the savings of companies and individuals, and domestic consumption does not increase, while the situation in Indonesia is that even if domestic consumption increases, the ratio of imported consumer materials is high, and domestic assets are flowing out to foreign countries.

2019年の総選挙を前にインドネシア政治史のおさらい 22

As the campaign (Kampanye) for next year's presidential election (Pemilu Pilpres Pileg Indonesia 2019) is lifted, it has been decided that the order in which the ballot papers will be printed will be No. 1 for the incumbent President Jokowi and Vice President Mahuru candidate pair and No. 2 for President Prabowo and Vice President Sandiagauno candidate pair.

インドネシアの国土と風土が生み出す産地特有のコーヒー 23

Located in the coffee belt between the Tropic of Cancer and the Tropic of Cancer, Indonesia is a country suitable for coffee cultivation, and during the 300 years of Dutch colonial rule that followed the advance of the East India Company in 1602, Arabica coffee was brought to the country and cultivation began in the plateau region with a favorable climate.

インドネシア人の悪魔祓い 24

My cousin, who hadn't heard from me in a while, called me late last year in early December with tears in her eyes.

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