Professor Chair Holder of IPB : Competitiveness of Indonesian Agroindustry Products is Weak
Most economists agree that globalization provides a net benefit to individual economies around the world, by making markets more efficient, increasing competition, limiting military conflicts, and spreading wealth more equally around the world. Economic globalization primarily comprises the globalization of production, finance, markets, technology, organizational regimes, institutions, corporations, and labour. Economic globalization and the competition for global investment is increasingly fierce, they require agroindustry companies to have highly competitive on an ongoing basis. One problem faced by Indonesia in the agricultural industry sector is the lack of access and control of agricultural technology. Currently, the competitiveness of Indonesia's agro-industry products at ASEAN level is still weak.
This was stated the Professor Chair Holder of the Faculty of Agricultural Technology of Bogor Agricultural University (FATETA IPB), Prof. Dr. Ir. Machfud, MS during a pre-scientific press conference at the IPB Campus, Baranangsiang, Bogor, on 26 October 2017. According to him, in the ASEAN market, Indonesia's agro-industry products are still far behind Thailand, Vietnam and Singapore.
"However, not all of our agro-industry commodities are less competitive. According to Harmonize System (HS), agro-industry products are classified into 37 groups. The Harmonized System is an international nomenclature for the classification of products. It allows participating countries to classify traded goods on a common basis for customs purposes. Of the 37 groups, 59 percent of our product groups are in the weak category or very weak compared to Thailand, Vietnam and Singapore products, "he said.
The problem is complex. Firstly because of productivity factor, innovation development, process technology and new product which is not maximized yet. Secondly, efficient and effective logistics system are inefficient and ineffective. Third, consistency, implementation and synergy between inter-institutional policies both at the central government and in areas related to the investment climate. Fourth, the importing country's provisions relating to product quality, packaging, safety and environmental aspects are not fully fulfilled by the Indonesian agro-industry. Fifth, less effective anticipation of macro environment change and strategic business environment. Finally, the structural linkages of agroindustry in its supply chain system and value chain are still weak.
"Productive efficiency is concerned with producing goods and services with the optimal combination of inputs to produce maximum output for the minimum cost. Experts agree that the determinants of competitiveness are productivity and technological innovation. The results have shown that costs of quality significantly influence the profitability. With innovative works we can develop attractive new products for the market, "he explained.
Accordingly we need to develop the Industrial Systems Engineering (TSI), the scientific discipline that concerns on the technical aspects that equally integrate the human aspect in the process of management and decision making on agroindustry as a system. TSI can be applied to the scope of improving the performance of production systems and supply chain systems, risk management and quality, as well as aspects of development policies and strategies. (Wied)
