Manufacture Company in Indonesia – In Indonesia there are several types of companies, one of them is manufacturing companies. In terms of economics, manufacturing companies in Indonesia absorb a lot of labor so they can improve people’s welfare. So, what exactly is meant by a manufacturing company? What are the characteristics and examples of manufacturing companies?

To understand it better, see the complete review of the following manufacturing company!

What is a Manufacturing Company?

Reporting from the Corporate Finance Institute, a manufacturing company is a business entity or company that produces finished goods from raw materials using tools, equipment, production machines, etc. on a large production scale.

The production results are then sold to consumers through a distribution network from wholesale to retail level, so that they reach the hands of consumers. Because it is carried out on a large production scale, manufacturing companies certainly have a large number of workers or workforce.

That is why, in many countries including Indonesia, the existence of manufacturing companies is very important because it can help create very significant job opportunities. All processes and stages are also carried out referring to the Standard Operating Procedures (SOP) that each work unit has.

Characteristics of Manufacturing Companies

Manufacturing companies are different from other types of companies. This can be seen from the characteristics or characteristics of the companies, which in fact have striking differences. The following are the characteristics of a manufacturing company.

Income Come from Sales

Manufacturing companies are companies that produce, produce and sell products in the form of goods. The goods in question can be semi-finished goods and finished goods such as household equipment, to various types of food and drinks. Because they sell goods, the manufacturing company’s main income is obtained from the sale of the goods it produces.

Usually one manufacturing company can also produce more than one type of finished goods or semi-finished goods. The more that is produced, the more income comes in.

Physical Inventory

There are three types of inventory in manufacturing companies, namely raw materials, semi-finished products, and finished products. This characteristic is what differentiates manufacturing companies from trading companies.

Because trading companies are only tasked with marketing products and do not function as providers of product-making materials. If we look at these characteristics, of course a company can be called a manufacturing company if it contains a physical inventory of the materials for making the product and the product itself.

Production Costs and Activities

According to the definition, the main operational activity of a manufacturing company is carrying out production activities, namely processing raw materials or raw goods into semi-finished products or finished products. Without this activity, manufacturing companies cannot run.

The entire process of making raw materials into semi-finished products or finished products certainly requires costs, such as the cost of purchasing material processing machines, and others. These costs are called production costs.

Manufacturing Company Business Process

Just like other types of companies, manufacturing companies also involve several business processes. The following are the business processes that exist in manufacturing companies and their explanations:

1. Procurement Process

The procurement process is a manufacturing company business process related to product procurement. Where this process is needed to help business continuity.

2. In Out Inventory

The second business process is the in-out inventory process. Where in this business process, manufacturing companies carry out activities in the form of processing raw materials into semi-finished products or finished products.

3. Production Process

The production process is a process related to the sale or marketing of a company’s products. Of course, the aim of this production process is to make a profit from the products made.

4. General Administration

The next business process in manufacturing companies is general administration. Where in this case it includes elements of policy, decision making, recording, control, punishment, and others.

5. Accounting and Finance

The last manufacturing company business process is accounting and finance. This business process is carried out solely to keep the company financially healthy. However, the accounting process in manufacturing companies is different from other companies in general. This is because in the manufacturing business there is management of raw materials, calculation of the cost of production, and factory overhead costs (BOP).

Scope and Examples of Manufacturing Companies

What is meant by the scope of a manufacturing company is what business fields are included in this manufacturing sector. The manufacturing industry itself is divided into several types, namely basic and chemical industries, various industries, and various consumer goods.

For more details regarding the scope of manufacturing companies, let’s look at the following explanation and examples!

Basic Industry and Chemistry

Companies that are classified as basic and chemical industries are companies engaged in the production of cement, ceramics, porcelain, clay, chemicals, animal feed, wood and its processing, paper, and so on.

Some examples of manufacturing companies in Indonesia which are included in the basic and chemical industries are:

• Holcim Indonesia Tbk (SMCB)
• Semen Baturaja Persero Tbk (SMBR)
• Betonjaya Manunggal Tbk (BTON)
• Barito Pacific Tbk (BRPT)
• Tjiwi Kimia Paper Factory Tbk (TKIM)

Various Industries

Manufacturing companies that are classified as this type are companies that operate in the fields of machinery and heavy equipment, automotive and components, textiles and garments, footwear, cables and electronics.

Some examples of manufacturing companies in Indonesia that fall into various industries are:

• Astra International Tbk (ASII)
• Astra Otopart Tbk (AUTO)
• Goodyear Indonesia Tbk (GDYR)
• Asia Pacific Fibers Tbk (POLY)
• Sumi Indo Kabel Tbk (IKBI)

Consumer Goods Industry

Included in the consumer goods industry are companies engaged in the production of food and beverages, cigarettes, pharmaceuticals, cosmetics and household appliances. Some examples of manufacturing companies in Indonesia that are included in the consumer goods industry are:

• Indofood CBP Sukses Makmur Tbk (ICP)
• Gudang Garam Tbk (GGRM)
• Kimia Farma Tbk (KAEF)
• Kalbe Farma Tbk (KLBF)
• Mustika Ratu Tbk (MRAT)
• Unilever Indonesia Tbk (UNVR)
• Kedawung Setia Industrial Tbk (KDSI)

Apart from the three types of scope above, there are still several other types included in manufacturing companies, such as building ships, aircraft, machinery businesses, and others. However, looking at the example above, it already illustrates how the lives of Indonesian people today are very dependent on these companies.

Setting Up Manufacturing Company

Setting up and getting involved in a manufacturing business certainly has risks because you are required to understand the target market on a high scale. This is because the activities of this manufacturing company itself are focused on producing large quantities.

There are several keys or tips for success that must be followed if you want to be involved in this manufacturing company business sector, including:

1. Good Financial Management

Business finances are one of the most important factors in influencing the success of a business. Companies must think about how to manage capital, income and production expenses to produce maximum profits.

2. Productivity

A small product stock will make the production costs or capital required even greater. That is the reason why before planning to create a manufacturing business, you must think carefully about the market strategy that must be pursued. The aim is to maximize the profits obtained.

3. Best Design

A company engaged in manufacturing must compete with competitors, so the best design as well as absolute excellence is needed so that the company can win the competition.

4. Quality Control

part from producing the best designs, of course another thing that is no less important is product quality. If a business’s products are not made of quality, then the company will arguably not be able to survive.

Moreover, there are many companies that are able to create products at low prices but are still able to maintain the quality of their goods, as many companies in China have developed.

However, apart from the explanation above, you also need to take care of the legalities of setting up a manufacturing company. Established the company and carries out its business activities in Indonesia, of course it needs to comply with applicable regulations or company’s legal documents. Apart from being a form of legal compliance, legality can also be a means for smooth business activities.

Some of the legal documents required by manufacturing companies include a legal entity (PT), deed of company establishment, NPWP, and risk-based NIB.

If you have difficulty or ignorance in the process of establishing a manufacturing company in Indonesia, the procedures and legal basis applicable in Indonesia.

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