Rahmat Septriwan discusses challenges in localizing automotive components in ASEAN markets and actions to consider. Local realities like environmental conditions, customer usage profiles, manufacturing capabilities, and standards can differ from global wants. Vehicle and purchasing teams need to thoroughly understand the local supply landscape and work with suppliers to upgrade systems. Designs may require risk-assessed adaptations to balance cost, quality and meeting customer needs while still achieving profitability. Early engineering involvement is key to balancing global and local requirements.

1. Component Localization,
Cost Reduction, and Adaptation
for Vehicles in ASEAN Market
RAHMAT SEPTRIWAN - DIRECTOR

2. Introduction
Rahmat Septriwan, B.Eng, Grad Cert Bus
Former Director of Engineering & Supplier Quality of a US auto manufacturer
Servicing a Chinese auto manufacturer in vehicle local validation and market analysis
Supporting a local auto group on vehicle localization and manufacturing establishment
Assisting a Korean auto group on leadership development

3. Objective
Good overview on issues in localizing automotive components in ASEAN, and how to complete the
task effectively to provide acceptable level of quality and cost to customers

4. Supply Chain Landscape
High level supply chain landscape in Indonesia
Bekasi
Jakarta
Cikarang
Karawang
Bogor
Tangerang
Cikampek
•- Front & Rear floor Panels
•- Glass,
- Whell
• Pilar Garnish A,B,C,D
• Door Trim
• stamping / press parts
Also Honda &Toyota Assly.
plant
• Front and Rear Floor Panels
• Seat Suppliers
• Whell
• Front/Rear facia (Bumper)/ IP/
• Garnish,Pilar A,B,C,D, Door
trim
• Aluminum Casting
• wiring harness
•Prop. Shat
•Chassis
•Rear Axle
•Disk brake rotor
• Tire
• Plastic Injection / Pillar garnish
• Waser Tank
• Rubber
Tire , rubber suppliers ,
stamping, Wiring harness
• Bekasi to Sea Port (T Priok) = 15 KM
• Bekasi to Jakarta = 30 KM
• Bekasi to Airport = 80 KM
• Cikarang to Bekasi = 35 KM,
• Supplier within Bekasi = 10 KM
• Karawang to Bekasi = 60 KM
• Cikampek to Bekasi = 70 KM
• Bogor to Bekasi = 60 KM
• Head Lining,
• Insulator,
• Garnish
Note :
Some in Surabaya
A few in Semarang
And Bandung

5. Supply Chain Landscape
High level supply chain landscape in Thailand

6. Vehicle Manufacturer’s Perspective
One styling
Common powertrain
Similar features
Global / regional vehicle – One design, one validation
Economies of scale, vehicle development resources, time to market

7. Global Wants vs Local Realities
Vehicle performance requirements
- Environmental conditions – Good roads and infrastructure vs flood, traffic, bad roads
- Customer usage profile – Socio-cultural difference, loading, driving behaviour

8. Sub-system performance requirements and specifications
- Minimum requirements - ASTM vs widely understood ISO
- Test methods – ECE vs JIS
Global Wants vs Local Realities

9. Materials standards
- Material specifications – DIN vs JIS
- Dimensions & thickness – not available in the region’s supply
- Lack of available supply – plastics & sheet metal due to economic of scale
Frt Door Inr RH/LH
OEM Material Spec Thick Coating
Yield Strength
(Mpa)
Tensile Strength
(Mpa)
Elongation in
80 mm (% min)
Sample from a Non-Japanese OEM 0.65 Coated max 180 max 330 40
Japanese OEM 1 MPV-B SPC270 0.55 Uncoated 135 - 255 270 37 - 47
Japanese OEM 2 MPV-C SP783BQ 0.65 Coated max 180 270 50
Global Wants vs Local Realities

10. Manufacturing technology and methods
- Mainly suited to technology that the Principal normally uses and the production volumes the vehicle
is originally forecasted for
- Production / assembly of components – automated vs more manual labor
- Technology – laser etching vs in-mold design, vibration welding vs mechanical fixing
Global Wants vs Local Realities

11. Time and Cost Pressures
Best time to introduce changes and adapt designs
Start
Of
Production
First
Integration
Product
SOP
Engineering Development
Manufacturing Tools & Equipment
Engineering Validation
FIP
Launch

12. Actions to Consider - Activities
Foreign auto principal must have comprehensive understanding of the local situation
Vehicle engineers to stay for sufficient period of time – Observe, learn, clarify local conditions. Adapt and
cost reduce designs
Purchasing to do comprehensive study on supply landscape – Map the supply chain capabilities
Supplier Development to do the dirty work – Upgrade suppliers’ quality and manufacturing system.
Consider technical licensing agreement with global suppliers

13. Actions to Consider - Adaptation
Decide what can be modified, cost reduced or adapted, and what can’t. Do proper risk assessment
- Flash flood. Water wading capability to go through water is non negotiable – Move air intake and add
extra protection against water ingress
- Heavy traffic. Susceptible components like AC compressor and clutch – Consider upgrading them to be
more durable. If not possible, build plan for After Sales to handle in the field like more frequent servicing
and/or parts replacements
- Standards & specifications. Map to make comparison of equivalent specs early during sourcing
- Manufacturing methods. Engage suppliers early and expect their flexibility to modify processes

14. Final Words
Cost vs Quality vs Delivery time
Local adaptation is still needed
Front loading and risk management
Engineering resources early in the program
Meet end customer requirements profitably
Balance of global vs local
Thank you
Phone: 62-21 2279 2013
Email: rahmat.septriwan@rs-servicesglobal.com
Web: www.rs-servicesglobal.com