¶ Data-driven Insights and Digital Transformation
The AIBP ASEAN B2B growth podcast is a series of fireside chats with business leaders in Southeast Asia focused on growth in the region. topics discussed include business strategy, sales and marketing, enterprise technology and innovation.
Hello, and welcome to this episode of The AIBP ASEAN B2B Growth Podcast. Today, we are featuring but Ivan Shindunata the Head of IT from Kalbe Nutritionals as Head of IT, Pak Ivan has designed a roadmap for digital transformation at Kobe Nutritionals, seeking to improve business processes and operations, the supply chain. So with regards to customer experience, Kobe Nutritionals is part of the Kobe pharma group, a pharmaceutical company Indonesia and one of the largest in
Southeast Asia. Perhaps, Ivan, would you like to give us an introduction of yourself and your role at Kobe Nutritionals.
Okay. Kalbe Nutritionals is part of Kalbe Farma group like you mentioned earlier, it is a pharmaceutical company in Indonesia, which is focusing on and therefore it's combination of commitment is to give the best nutrition solutions in every stage of human lifecycle. And together, we also help to make Indonesia healthier. My current role as head of IT, I am trusted to be the head of Information
Technology of the company. And my main responsibilities are one is overseeing all technology operations, and also evaluating them, according to the business objectives. And then the second one, establishing IT policies, and also systems to support the implementation of business strategies. And the third one is analyzing the business requirements of all departments to determine their technology needs.
Thank you very much. I saw that, you know, beyond what you've just mentioned, right? You're also in charge of a hot topic that I've been looking at quite a bit in the region cybersecurity, tell us a little bit more about your role in driving the making sure that the foundation of cybersecurity is ensured in Kobe Nutritionals digital transformation.
Okay. Since it is a transformation has been one of the company's strategic intent, since the pandemic, due to challenges in the way we work and then also customer behavior than security is one of our concerns, especially when we work from home and then we are no longer have to go to the office to then security becomes more and more important for us. In terms of the digital transformation itself, we try to make sure that all the connectivity internally or also
externally secure enough. And also the data itself, because we share the data from inside, outside, and then from our internal consumption to our supplier, for example. We have to make sure that all the data are encrypted, and also goes along our own platform, although we have cloud platform to store our data, but we have to make sure that all the data are secure and can be shared among us and also externally securely.
Like a lot of people say the digital transformation can only go as far as your foundation, it is secure. Right? And I believe you have been doing this by Ivan for quite a while now in your mouth multi roles in really driving like process optimization within the various companies that you were in. Can you share with us a bit more about how you got here today leading the team and leading the digital transformation journey at Kalbe Nutritionals.
Okay, so I'm previously as a role as Solution Architect, not specially in digital transformation.
Solution architect is very close to that.
Yes, yeah. But now since I'm also involved in the digital transformation team, I have to enable the digitalization as it fits where ensure the affordability and also readiness of the digitalization resources. So it includes the system, infrastructure, data and also the people itself and I also has to adopt digitalization end to end processes in your in the
organization. And the company itself needs to build end to end digital ecosystem and aims for the data driven organization by combining analytics and also technology. So, the digital transformation in computations should be driven by the business itself. So, it is not about the technology, it has to be a transformation of existing processes, culture, and also customer experience with clear
business objectives. So, it is also aligned with the overall Kalbe Nutritionals objective where we have to manage end to end processes from internal operations and supply chains, and also to the customer in order to create the business value as an IT leader. Again, it's not about the technical aspects that we have to learn, of course, technology changes, but a part of the technology technology itself, we also have to learn about the non technical
part. And it covers the people and then the process, I mean, the business processes and also the data that involved in the technology. And as we know, currently, the data is very, very high, the need of the data analytics is very crucial in the business and in the organization. So, in that case, as an IT person, I think we we cannot just learn about the technology or the it self. But we also has have to expand our knowledge, our scale and competencies to other parts, especially in the data.
Understand, and data changes quite fast. Right. So I think the role of data is one of the areas where we talk about enterprises really driving data driven insight, and how do you go about learning more about data and its applications in your role?
Okay, I learned the data from the company itself, because Kaleb Nutritionals actually has lots of data. And the data itself are stored in silos system or siloed data bases. And that is a challenge when we need the data for our analysis, we cannot just get the data directly, we need to collect the data from multiple sources, and then combine the data and then
process the data. And, and then we can just use the data from the combination or the collection of the data itself after we make sure the quality of the data, data challenges that I face or that we face now. That's why we start to think that we need to create a proper data man, it's similar and also data lifecycle processes properly. And also to make sure that when we need the data for our analysis, we can get the data directly and maybe real time.
That's great. Having real time data, it's it's something of a dream to some organizations, even though it's becoming more and more of a necessity. If we take a step back, looking at the digital transformation roadmap for Kalbe Nutritionals Can you tell us about the different pillars? And how you've mentioned data is everywhere? How do you manage the data silos and achieve the outcomes of the roadmap for Kobe Nutritionals
Okay, so, in the case of the digital
¶ Integrating Ecosystems and Supply Chains
transformation in the organization must leverage the technology to redefine the business objectives in three pillars, operational processes, supply chains, and also customer experience, while also optimizing the use of the data analytics for those three pillars. In operations, we integrate ecosystem and to an ecosystem for our operational system for seamless operation
process. So in this case, we also try to move our data in one single store database or we call it data warehouse and and then also make an automation for the data collection and also data processing. And in the supply chain management, we also integrate our supply chain from the factory and then distribute Mission and then also sub distribution until to our stores or outlets in our branches
across Indonesia. And that there is also to make sure that our data are integrated end to end, from factory until outlets let's, so we, we want to get the feasibility of the data, business to business and also business to customer. And then in the third pillar for the end customer or customer experience, we integrate our CRM system customer relationship management system to make sure that our customer data collected, and then also secured because now we
have customer data privacy. And also make sure the customer the qualified enough so that we can do marketing automation to our customer to improve personalized customer experience.
You talked about how you had to manage the end, both the b2b segments and also the b2c business consumer segment. Give us a sense of how broad and how extensive that scope is. Because at the start, we talked about data silos, right. And for you, it's about integrating all of this multiple sources together, how many? Are we looking at that? How broad was it that you had to work on?
Okay, it is quite broad.
An understatement
Yeah, because in terms of, let's say, b2b business to business means that we have to deal with our suppliers, to supply our raw materials, and also our packaging materials, those are needed for our production. And once the finished goods of the product itself, completed, we need to distribute those products to our distributors.
And under the distributors, we also have sub distributors, it means that we have to integrate the system from the factory and then distributors, and also sub distributors to get the end to end data, transfer, transaction, and also processes. That is our b2b ecosystem.
you give us a sense of what are the numbers we're looking at, before we even go to the B2C, because I am assuming that the B2C is even more complex. So how many different suppliers you have to work with? And how many different channels do you have to work with in the B2B segment?
Yeah, suppliers, we have around more than 50 suppliers, because it covers all the all the raw materials and also getting materials. We also deals with our plant outsourcing because not our products, we are not producing all our products, we also use our outsourcing company to produce our products, and there is around maybe 10 of such companies. Yeah. And then for our distributors, we have single distributor, because it is part of Kalbe Group, sub
business unit. And for the sub distributors, it is around 250 sub distributors across Indonesia.
Those are large numbers and that we are looking at only one segment of the business which is B2B. Can you share with us a similar journey for B2C?
Okay for the B2C, Since we want to reach our end customer. So it means that the customer who uses our products then we need to integrate the data or also the transaction from the distributor or sub distributors to our outlets or stores and then the stores to our end customers who buy our product in the store. Then we are using CRM system to get the data especially the end customer data for the B2C and in terms of how many customers that we maintain now is around two million customer data
The journey you have to go to to make sure that you're really a partner for them at every part of their life, or you've mentioned to provide health products for 2 million customers at every step of their life. That's a pretty extensive journey, which means that your data management must be top notch. We talked about cybersecurity just now, how do you constantly look after this trove, and this depth of data across your different channels?
Yeah, we have a centralized database. In our data centers in Indonesia, in Jakarta, especially, we have two data centers. And we have a high availability data centers, because we have two data centers at different locations that all make sure that data, the data
must be available anytime. And for the security, we implement our security perimeters, and also security systems security tools, in all our servers, our environments, our infrastructure in those two data centers to make sure that the access for the data is very, very limited on the legitimate credentials can access the data. And also if the data will be used by anyone
in the company. There is a data governance that governs the process of the data collection, the data processing until the data utilization and data data itself should be deleted or removed, once it is used, or once it's not required anymore.
Got it? Question, pak Ivan, I think one of the things I'm always very curious about you talked about data centers. The whole discussion about cloud, the whole, you know, total cost of ownership discussion about using cloud is that you're able to have more of an OPEX structure for managing
data than CAPEX structure. But in this case, when Kalbe decides to run your own data centers, it brings to mind the conversation of when do you decide to build your own capability set, or when do you decide to work together with partners in driving either the data journey, the storage journey, or perhaps on a larger basis, that digital innovation journey, when you're deciding what to focus on? And how do you decide when to work with partners?
Okay, I think both have their pros and cons. Some major consideration are timing, and also expertise and costs of resources, we need to understand the business needs at first and then look at the capabilities around our internal teams. So before deciding whether developing internally capabilities or infesting our own environment, or buying solution for our vendor, out of
inertia. So, in that case, we may consider boats depends on the business needs, and also depends on on the criticality or priority.
And this and that, so for you, it's about understanding the priority also assessing the current skills that the entire team has, right? Whether it will make sense to develop the skills internally, which may take time or to work with the external partner that can deliver this at the speed of scale.
Yes, and also expertise here. Because sometimes we, when we engage with a partner, for example, cloud, we can leverage our scale of competency to them, so we don't need to invest our own resources and to update our own scale or competencies, we can just trust them to minutes the services for us, and they already have their own best practices that we do not need to do it by ourself. And I think it is proven that they have done those services, many, many
years. So I think it is proven to trust them to manage our services, because they they have their own expertise, but we also connect our machine because in our production manufacturing or in our plant manufacturing, we have machinery to produce our product. We have to make sure that between machine and also machine and system and data and machine we can collect all of them using the connectivity or IoT internet of things. And also we use robotics in our
production systems. And those help us to automate some processes and to create productivity for our production.
Ivan, any specific numbers you can share with us of like, what was improve? How much operational efficiency did you achieve?
Very curious about that, because I think you are sharing with us the big overview by the way, underplaying how important this transformation is, and the extensiveness of
¶ Achieving Measurable Outcomes and Eficiency
this project that you have led at Kalbe Nutritionals
Yeah, in terms of operational efficiency, or cost efficiency, in machine performance, around five flexible production lines, we can create with Indi 4.0. And then about 10% increase of manufacturing plant or for all effectiveness, and also around 7%, optimize the production lead time. And for the productivity will increase about 48%. And in terms of quality, we have lower customer complaints about our product quality, around 34 percents, and for the cost efficiency for the production
costs. It is around 18%. Efficiency.
Wow, those are big numbers you're talking about here. Which particular metric? are you most proud of? That was the most difficult to achieve?
Ah, I think the productivity,
the productivity. I understand, well, moving forward, where are some of your focus areas for Kalbe Nutritional?
Other focus?
So moving forward, if you look at your journey so far, and you look at the journey five years, right, you've mentioned, what is next.
Okay. The journey itself is maybe five years from now. And like I mentioned earlier, now we are in the step of integrating everything. Yeah, we create connectivity, we create automation, in order to make sure that all the systems are integrated, and also all the data are integrated. So that next we can call we can utilize the data for the analytic
purposes. And next year, and about two years from now, we want to discover more about the data and also improve our IT and OT so that we can make more proper integration for all the whole system, not only in manufacturing, but also in operational process that supports our manufacturing process, as well. And then in about 2025 we want to have like capability to create predictive analytics, and also prescriptive analytics. And we want to utilize more data to create augmented reality, and then
visual reality. And maybe in the long run, we want to have a closer look feedback based on the analysis of the data based on this integrated system. At the end of the day, we want that data can give us actionable insight or feedback for us so that we can do more improvement. So it is like open loop, yeah, that always moving around in circle. Yeah. Because it is like continuous improvement for ourselves
to achieve the coveted flywheel of collecting data, having actionable insights, and then giving the data back into the system again and improving it continuously. But in this case, it has to go beyond it itself, but finding the business users that become the Digital Champions of the projects that perhaps the IT team runs to have a digital transformation day of sorts where individuals or Digital Champions are recognized for their efforts.
Yes, actually, we have like, once a year event. Yeah, we call it Kalbe Nutirtionals innovation event. So it is part of the offense that we make to speed up of booths, digital transformation processes, in every part of the business. And in that event, we encourage all the employees to submit all the innovative ideas. Yeah, related with with the transformation, and then we, we
make competitions. And then we evaluate the progress of the events until we can get the champion who, who the person is and also who the team that can contribute to the business with their transformation in the digital things.
Well, I like that whole idea of Innovation Day. So you get the responses or potential projects from just the business users themselves. Yes. Have you had any entry that surprised you? Or any eventual winners that came from an unlikely group? That turned out to be a great idea?
Oh, yes. A lot.
A lot? Tell us a bit more?
Yeah. Because, yeah, especially in manufacturing, and then also in sales and marketing, because now
¶ Kalbe Nutritional Innovation Event: Digital Transformation Business Case from the Kalbe team
we cannot work with our old habits are our our old way of working. So yeah, for example, in maybe sales and marketing, I can tell more about that. Previously, we collect our customer data manually to our phone calls, and then call centers, something like that. But now in the digital era, we need something more. At funds, if I may say not digital, but advance, because our customer behavior has changed, they don't want to be contacted again by phone. Yeah. They
want to call you, then it's a different story, I'll pick up the phone immediately.
And even text messages, they don't want to read the text messages any longer. But now we have WhatsApp for example. But again, WhatsApp may be a spam for them. So we create something like automation based on the QR codes. So we place the QR codes in our stores, and maybe in the next period, we want to place it in our product packaging. And in that case, customer can scan the QR code, and then they can interact with us from the QR codes, so that it is customer self driven. So we are no longer
contact our customer then. But we reach the customer by themselves, of course, to our marketing campaign or marketing program, there is one of one of the examples that I think that is a great idea, because it saves a lot of resources, and it can embrace more and more customers without having to invest a lot in infrastructure in resources. And other things. Yeah.
Well, I think that leads us very nicely into the last segment, you know, five and you've been in the industry for more than 20 years now. Am I Am
I right? Yes. So, what you've just described about how leaving the contact to the customer, so the customer has the access to contact carbon Nutritionals anytime you want versus like the old method of pushing out messages to the customer, what else has changed and where you think the journey in the future will be like for say Kobe Nutritionals or manufacturing Indonesia?
Okay, I think today we cannot only focus on specific areas, for example, production and also distribution and maybe customer in general, but we have to improve the value
¶ Where Does Industry 4.0 Go from Here
of the product itself or the distribution. So it is not about delivering our surfaces, our product to the customer but we have to create a value to them. And how we can create the value. We need a data so they Data has become an important assets for us, that we can use to provide better insight, in process, maybe forecasting and more to drive value and growth for our customer. I'm personally excited about AI, and also machine
learning. I think those can help us a lot, not only in manufacturing in Indonesia, but also in every part of the business. There are plenty of rooms and opportunities to implement AI and machine learning. service that I mentioned earlier Internet of Things combined with predictive also prescriptive analytics, to support predictive maintenance, for example. And then helping us to prevent unplanned machine
downtime, for example. And also robotics is part of the production process that use AI to take instructions, and it can use humans and also combine humans and works productively, and many more.
Those are great technologies to look into. But one last question to end off today's podcast. Are there any global case studies that you've come across that you hope can be applied to our region in Southeast Asia soon?
Yeah, I think the use of AI and machine learning can be one of the global study, even though in Indonesia, I think there is still not a lot. Yeah, not a lot of company utilize AI. But we can use use it as our study case, to implement the digital transformation, especially in Indonesia.
Thank you very much, Ivan for your time today. I had a very good time understanding a little bit more about how you're driving the digital transmission of Kalbe Nutritionals. And the challenges that you face. I appreciate your time here with us today, Pak Ivan, thank you.
Okay, thank you.
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