Supply-chain Planning in Regional Development

One of the weaknesses in public service delivery management is its supply-chain planning. Regional development need more concern to the supply-chain aspect of various commodity related to production and consumption. Traditionally, regional development planners has analyzed network pattern of infrastructure, transportation flow. However only few of them who concern with logistic supply-chain planning.

Some of the problems in regional development are related to "broken chain" of supply systems. We can take examples in the energy supply system. In oil system, in the region who have rich of oil deposit, they don't have any oil refinery in their vicinities. And the practice they (maybe national/ corporate policy) tend to sell them as raw materials.

Need for cash in hand is one of the reason why we tend to raw materials, rather then try to develop processing system, or down-stream of the production. Added value in the production systems are limited, because of this tendency.

Another big irony is the fact that PLN, the state owned electrical power producer, have been suffered by limited and expensive raw materials. While we export our gas, coal with long term trading contract, the PLN, as a backbone of the national energy supply, cannot get gas, coal and other raw materials in reasonable price. It is a case of a broken supply-chain.

Another case is in the palm oil production system. While we know that we have environmental problem with over expansion of oil palm plantation, we also have limitation in the down-stream processing system.

The oposite of those case is limitation in the upstream producers. In the case of ICT, automotive and some others, we have lack of components. Except steel, maybe mny of these components are footlose industry, for example microchips. The extreme one is some of micro components made of wood are imported from the Chine, while their raw materials were from Indonesia.

Once again we should concern about supply chain (logistic) planning in our regional development. It is not just for distribution of consumer goods (it is also important) but logistic system and how to complete the system from up-stream to the end of down-stream. Otherwise we will always live in the peripheral of the world, who sell raw materials and cheap labor.

Integrated supply-chain system will also need for inter-regional relationship. It is also something that still difficult to be arranged, espcially in the current transition of decentralization era.[Risfan Munir]