Transforming Agriculture Supply Chain Management

Agriculture and Fourth Industrial Revolution In Indonesia

Aziz Abhimanyu 1, Ratu Hana Sri Indragiri , Devi Marlita3, 4Yahya
Kuncoro4
1,2.3,4
Trisakti Institute of Transportation and Logistic, Jakarta, Indonesia
 corresponding author: azizabhimanyu88@gmail.com ratuhana1620@gmail.com
dev.marlita@gmail.com yahyakuncoroie95@gmail.com
Abstract: Agriculture is one of the economic sectors in Indonesia that contribute to
the national GDP. The agriculture sector's various potentials and diversity are
potential strengths that can be developed sustainably.This circumstance
demonstrates that agriculture is a dependable industry with substantial aim to
facilitate as a catalyst for national economic growth. Smart Supply Chain
management is constantly being implemented for the agricultural sector, which is
considered being more complex and current, such as the advancement the Internet
of Things (IOT) and other innovations. various agricultural technologies utilized in
the production, post-harvest, transport, and marketing processes Production, post-
harvest, and marketing operations must all be integrated in the adoption of this
system. This research was conducted to find out opportunity in agriculture industry
4.0. The study used a qualitative approach, and Data Collection Techniques. The
data were collected by are interviews, document studies and also Focus Group
Discussion (FGD) In this study, researchers conducted data from interviews, field
notes, and documentation. The purpose of this study was to discover how supply
chain management can help agriculture and the industry 4.0.
Keywords: Supply Chain Management, Agriculture, Internet of Things,Smart Supply
Chain, Smart Farming
1. Introduction

In the present of the agricultural growth, despite the fact that the national
economy is in recession. Indeed, what is occurring at the moment is not a
booming in agribusiness; rather, what is occurring is an increase in
production as a result of increased productivity; typically as a result of
increased investment fueled by increased demand. The apparent
improvement in the agricultural sector at the moment is actually a
fluctuation in the nominal income of agricultural actors who own productive
assets as a result of the rupiah's sharp depreciation.

Agriculture is one of the sectors of the economy that contributes to

the country's Gross Domestic Product (GDP). The agricultural sector's
diverse potentials and diversity are potential strengths that can be developed
sustainably. This situation demonstrates that agriculture is a stable sector
with significant potential to act as a catalyst for national economic recovery.
We should make the best possible use of these favorable opportunities

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(windows of opportunity) to assist farmers and boost agricultural
productivity.

Agriculture is the most important sector in developing the country's

economy, both as a contributor to the economy and as a source of raw
materials for certain manufacturing industries. The agricultural sector's
problems and constraints are actually overcome through supply chain
management, which entails a variety of logistics development strategies
aimed at increasing efficiency and effectiveness by focusing on the optimal
production system, at the optimal time, in the optimal location, and at the
optimal price for the ideal conditions and market target. Supply chain
management is more developed in practice for the manufacturing sector
than it is for the agricultural sector.

At the moment, Smart Supply Chain is focusing on the agricultural

sector, which is considered to be more complex and current, through the
development of big data systems, the Internet of Things (IOT). Technology
development must be integrated with production, post-harvest, and
marketing activities. Additionally, for instance, in the agricultural sector's
application of smart supply chains. In developed countries such as Europe
and the United States, the development of the smart supply chain model in
agriculture is accelerating. According to the study's hypothesis, developing a
smart supply chain can help agricultural actors overcome a variety of
challenges. The agricultural sector, which is undergoing rapid technological
advancements across the globe, has the potential to pique the interest of the
younger generation in contributing to the development of an efficient and
effective agricultural sector. (Jarzebowski, Bourlakis, & Bezat-Jarzebowska,
2020).

The government has begun agricultural modernization efforts with

the goal of increasing agricultural production, particularly rice, in the hope
that the Republic of Indonesia can reclaim food independence by promoting
food self-sufficiency, as it did many years ago. This growing technology is

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also being used to develop the concept of smart farming. production of
agriculture.

Literatur Review

Internet of things

Internet of things (IoT) is a term that enables us to utilize

technologies, work together, communicate each other, provide real time data
from sensors wirelessly for processing, and provide more valuable
information for efficient decision making in the corresponding research
field. (Sekaran, Meqdad, Kumar, Rajan, & Kadry, 2020) . The Internet of
Things (IoT), which began as a way to enhance business operations in the
manufacturing industry, has evolved into an integral aspect of a variety of
industries. The perception (sensing) layer, the network layer (data
transmission), and the application layer are the three layers that make up the
Internet of Things (data storage and manipulation).

Supply Chain Management

Supply chain management is the integration of the various materials

and services procurement activities. In addition, the conversion into semi-
fnished goods and fnal products and delivery to customers.Supply chain
management also can be defined as the integration of multiple participants
in business processes to provide products that meet the expectations of
customers. According to the goal of this research, supply chain management
literature has provided a range of logistics development strategies by
concentrating on the right production system, at the right time, in the right
location, at the right price, for the right conditions and market(Perdana,
Handayati, Sadeli, Utomo, & Hermiatin, 2020)

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Agriculture

Agriculture is the foundation of the national economy. Only when

agriculture develops well can the entire national economy move forward
steadily. The history of my country's economic development shows that
only with the great development of agriculture and rural economy can the
entire national economy be prosperous. Our country is a big country of
agricultural production and consumption (Shambulingappa & Pavankumar,
2017). Agriculture is a subfield of biology that focuses on making optimal
use of biological resources. Plant cultivation, livestock raising, and the use
of various microorganisms and bio-enzymes to be converted into other
goods are some of the activities carried out in terms of utilizing these
biological resources.Indonesia is an agrarian country capable of producing
agricultural goods worth 14.43 percent to 15 percent of the overall value of
its gross domestic product, or PDM. As a result, Indonesia's agriculture
industry is one of the country's most important sources of economic
strength.

Smart Supply Chain

The adoption of smart supply chain concepts is, until nowadays,

more common in the manufacturing sector (Wu et al., 2016). The study is
adopting an intelligent supply chain in the agricultural industry, such as the
rice industry, in our case study, which might be more complicated. The use
of big data, the Internet of Things (IoT), cloud computing, nanotechnology,
sensors, mobile computing, and various other technological innovations are
beneficial to assist the rice production process.

Smart Farming

Incorporating information and communication technology into

machinery, equipment, and sensors for use in agricultural production
systems is known as smart farming (SF). More robots and artificial
intelligence are likely to be introduced into farming as a result of new

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technologies such as the internet of things and cloud computing. Smart
farming decreases the environmental impact of agriculture. In precision
agricultural systems, reduced or site-specific use of inputs such as fertilizers
and pesticides will reduce leaching issues and greenhouse gas emissions.

2. Method
a. Research Approach
The method used for this proposal is a qualitative method.
Researchers used qualitative methods because the qualitative data
studied were in the form of sentences, interviews, and field studies
and because of their elaborative nature.
b. Data Collection Techniques
Data collection techniques for this proposal are interviews, document
studies and also Focus Group Discussion (FGD). Researchers use
interview collection techniques because interviews are one of the data
collection techniques by asking questions to sources or informants
related to the research topic directly. Researchers use document study
techniques because document studies are carried out by reviewing
documents related to research topics such as journals, daily news and
books.

INFORMANT 1

IN DEPTH
INFORMANT 2
INTERVIEW

INFORMANT 3

Figure 1.

c. Data Analysis Tools

This proposal uses qualitative research data analysis, data obtained
from various sources, using various data collection techniques

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 (triangulation), and is carried out continuously. Data analysis in this
study systematically searches for and compiles data obtained from
interviews, field notes, and documentation.
3. Discussion and Result

Analysis of the internet of things for agricultural supply chain

Data about farm products information is collected mainly through

manual and bar code in the traditional agricultural product supply chain.
Latency, errors and information gaps for the agricultural supply chain can
easily be caused. And it will distort the transmission process by logistics and
information flow. The information on production, distribution and quality
safety is effectively integrated into the agricultural supply chain by RFID
technologies and cloud computing. It will eventually integrate farmers with
the Internet and make the entire supply chain process transparent. Systems
that monitor and track the quality of agricultural materials are useful. In
order to respond to farmers' needs at the right time, the system can send
agricultural products such as pesticides, fertilizers and seeds in the correct
quantity and quality. The challenges of intelligent supply chain management
are technology selection, data management, network security, cultural
resistance, and structural issues (Pasi, Mahajan, & Rane, 2020).

Production stage

Agricultural products are mainly delivered to farmers through the

stages of production, transportation, storage and sales. To establish a
balanced and stable production of agricultural products, the entire product
line including raw materials, products, semi-finished products and final
products should be identified and monitored. Each agricultural product is
affixed with EPC coded RFID tags. The EPC code provides product
information, such as product name, manufacturer, grade, and country of
origin, as well as net weight, batch number, manufacturing date, and shelf
life.

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Transportation Stage

Installing a GPS positioning system on the agricultural product

transporter allows managers to understand the location and status of the
agricultural product transporter, and adjust the direction of travel in an
emergency. At the same time, installing a wireless data collection system on
the truck can not only obtain the basic information and quantity of items,
but also identify and prevent products that are lost or stolen during
transportation.The Agricultural Value Chain Model

Schematic Diagram of the Agriculture Value Chain Model

The agricultural value chain model utilizes information and

communications technology to connect Components of the supply chain
(such as the "integrated model of supply, research, production and
marketing) (such as mobile Internet, Internet of Things, big data). The goal
is to provide a series of value-added services for agricultural production,
rural life and consumption patterns, thereby improving the efficiency of the
agricultural supply chain.

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 The supply chain can be improved by collecting and analyzing data
about agricultural production, processing, storage, commerce, distribution,
and other activities. This is the fundamental benefit of the agricultural value
chain model, because it can achieve a clearer division of labor and a
smoother connection across the supply chain. In addition, this model helps
maximize production capacity, reduce risks and transaction costs, improve
agricultural production, management and processing efficiency, and
stimulate rural consumption.To implement this approach, it is necessary to
have suitable hardware and software infrastructure in place at all feasible
points along the agricultural production process. The mobile internet, IoT,
and other types of technology are used to gather data from the
manufacturing, processing, transportation, and distribution processes.
(Asian Development Bank, 2018)

Model Agricultural Smart Supply Chain

In order to solve the problems faced by small and medium-sized

agricultural actors, from upstream to downstream, the development of a
model for an intelligent agricultural supply chain should be considered.

- a service system designed to enhance and preserve the value of products

and agricultural actors' capacities. The creation of farmers' clusters,
food basins or food hubs, and a logistic system which includes various
components, can help the consumer to ensure that the product supply is
available and continuous.
- Commodity products, which are the goal of development; each
commodity's production base needs to be detailed Ly structured so that
it can be synchronized with market demand and delivery. Smart supply
chain model development model Agriculture must focus on six key
components: The development of clusters which can achieve
comparative and competitive advantages can make the synchronization
possible.

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 - Infrastructure supporting the implementation and development of
intelligent supply chains in farming. Infrastructure that supports the
development of intelligent supply chain activities in the form of soft
and hard technology.
- E-commerce as an effort to tackle the Industrial Revolution 4.0 with
a view to achieving value for agricultural products by taking account
of consumer development and needs.
- In developing an intelligent food supply chain for the farming sector,
governance is an important aspect. In particular with regard to
institutional governance and applicable rules, which form the initial
basis for the implementation in agricultural institutions of integration
of smart supply models in order to minimize the risks in the
agricultural sector.
- The marketing and development of a smart supply chain in the
agricultural sector includes agricultural products which comprise
quality and continuity, traceability, food safety, supply continuity,
and relatively affordable price for consumers, as well as product
competitiveness.

Implement of Smart Farming in Indonesia

The primary concept is a systems approach that emphasizes Input,

Process, and Output. In essence, smart farming and precision agriculture are
distinguished because the implementation process places a premium on
internet connectivity and data digitization in conjunction with the Internet of
Things. In Indonesia, the simplest way to implement smart farming is
through applications and smartphones, a farmers are now more or less
capable of operating smartphones. Additionally, few farmers have shown an
initial willingness to embrace various agricultural technologies, such as
drones. Numerous inventions that aid farmers in both production and
marketing activities will increase farmer acceptance of technology. Efforts
to encourage farmers and agriculture to compete in the Industrial Revolution

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 4.0 through various technological innovations can also be used to engage
the younger generation in fields of interest, such as the creation of
technological innovations, because farmers have historically been unable to
create technology on their own, either due to a lack of capital or due to a
lack of expertise.(Donald Robert Manik, Reynard Setijadi Lumbantoruan, &
Alfian Aziz Nasution, 2019).

4. Conclusion

The welfare of farmers can be improved by utilizing agricultural

technology. Moreover, the agricultural landscape and the global food system
are now technology-oriented. With technology, the community is able to
improve cultivation starting by improving the food system to land use
towards a sustainable production system.

The creation of an IoT system for agriculture might alleviate a

number of potential difficulties by enhancing quality and production
management and allowing farmers to access large amounts of data from the
agricultural field in real time.

Our country's agriculture, in the face of major global competition,

underlines its lower probability of industrialization, value chain level,
management level, and information level. It is a potential approach to apply
modern technology to solve the aforementioned problem. In attempt to
optimise the operational efficiency of the agricultural products supply chain
and the growth of agriculture in our nation, this article discusses the
applications of Internet of Things technology to the agricultural products
supply chain. Other elements, of course, have an influence on the
development of the Internet of Things' agricultural product supply chain.
Before the internet of things can be used in the agricultural supply chain, it
has a long way to go. The internet of things must also solve a number of
challenges, including cost reduction.

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 Nonetheless, there are various obstacles to overcome. One of the most
important issues to resolve is who owns the data. The use of ICT to record
the input of resources and the production of goods raises issues of property
rights and data usage. Not just for farmers, but also for regulatory
authorities that may utilize the data for surveillance and control, business
models that translate spatially explicit big data into information and
recommendations might add value. Governments must create a legislative
framework that ensures high-quality data while also encouraging confidence
among all stakeholders. The risk of data misuse adds to the legal and ethical
challenges of oversight and regulation.

Therefore,Goverment can Hired Trainer who from same local farmer to

can blend in and train easly due avoid culture shock in the area.Also
encourage Technology to develop the Farm Operation. The Youth
generation also needed to become next generation of farmes industry in
indonesia.The Milenial contribution can also be part of developing farm
industry in Indonesia. In addition, encouraging farmers to have DNA,
namely Device, Network, and Apps or applications. Technology
independence is made so that farmers can play a bigger role, not just
workers but also technopreneurs. High tech agricultural machine tools
(alsintan) such as drones or robotic tractors can become devices. The
collected data becomes a supply chain and then a network, and a market
place or e-commerce then becomes an application

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