The Importance of Supply Chain Management in the Development of Ibu Kota Negara (IKN)

The Importance of Supply Chain Management in the Development of Ibu Kota Negara (IKN)
By Salma Salsabila Az Zahra

The Draft Law (RUU) regarding the relocation of Ibu Kota Negara (IKN) Indonesia to Penajam Paser Utara, East Kalimantan has been passed since 2022. The new capital city which is named “Nusantara” carries the concept of a green and smart city with leading modern technology, sustainability, and preserves existing conservation areas and animals.

IKN development which started in 2022 consists of three main development stages until the year 2045. The first stage in 2022-2024 is to build the main infrastructure which is government facilities. The second stage of development in 2025-2035 will focus on building a Sustainable Development Goals (SDGs) city as the center of innovation and economy. In the final stage in 2045 onwards, IKN targets to become a city with net zero-carbon emissions and reaches 100% use of renewable energy.

Supply Chain Management (SCM) is certainly inevitable in supporting the IKN development process. SCM itself has a definition of managing the flow of materials and information of a product or service from procurement until distribution to the hands of customers with the aim of optimizing quality, time and cost efficiency. There are five element processes of SCM, which are planning, sourcing, manufacturing, delivery & logistics, and returning.

Careful planning and efficient management of IKN supply chain is needed in fulfilling raw materials, goods, technology, transportation, etc. so that the process can be completed on time. The SCM planning certainly needs to be adjusted to the stages of IKN development. There are many things that must be prepared, starting from procuring raw materials and determining suppliers, then determining the amount, schedule, and equipment of production. Furthermore, determining routes, systems, and transportation for distribution and logistics activities in a safe, environmentally friendly, and efficient in terms of cost and time, as well as storage management of goods. For this large-scale project, IKN supply chain activities certainly involve many parties or stakeholders, such as central government, local government, state-owned companies (BUMNs), private sectors, etc. so that it can run smoothly.

Public Policy Expert from Narasi Institute, Achmad Nur Hidayat said that IKN must be connected to the surrounding cities to make Supply Chain Management (SCM) sustainable. Sustainable SCM is a circular economy and connectivity that prioritizes the effectiveness of resources by maximizing the value of using a product repeatedly so that no resources are wasted. The sustainable SCM goal is to minimize the resulting emissions. IKN development requires support especially from the surrounding cities in supplying development needs. Apart from the distance factor, which is considered close enough to save time, this connectivity is also expected to minimize costs. Local suppliers are also expected to strengthen Indonesia’s balance of payments because it does not need to issue foreign exchange for these goods.

One of the main infrastructures supporting IKN logistics activities is the port. All materials needed for construction are received and distributed from ports around IKN. Adequate infrastructure is needed for loading and unloading activities for materials such as gravel, sand, and iron to speed up the construction process and complete it on time. In supporting IKN logistics activities, the local government has granted permits for 15 new ship berthing points. Utilization of the coastline is to minimize loading and unloading costs. In addition, the government plans to build several port facilities, such as a road to the wharf, and a material storage area at Benuo Taka Port, Kalimantan Timur in 2023.

PT Pelayaran Nasional Indonesia (Pelni), a state-owned company that is engaged in sea transportation services, is ready to support logistics transportation and workers migration for the IKN development project. This company provides three adequate vessels for this project, namely KM Labobar with the largest capacity, KM Lambelu, and KM Bukit Siguntang. Besides that, PT Pelindo Multi Terminal (SPMT), which is the sub holdings of PT Pelabuhan Indonesia (Persero), a state-owned company, is fully committed to overseeing the logistical connectivity of IKN development project.

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