Innovation

There are two innovations that was developed by Frisian Flag Indonesia:

1. Milk Collection Point (MCP) Program

In September 25, 2015 FFI launched the First Digital Milk Collection Point (MCP) in Indonesia at Los Cimaung Pangalengan, Bandung. The MCP Program intended to improve the quality of fresh milk production through efforts to minimize Total Plate Count ( TPC) or bacteria contained in fresh milk. The lower the value of TPC contained in fresh milk, the higher the quality. How is the program work? By enhancing the quality of infrastructure and facilities that used by the local dairy farmers. So, by using better infrastructure will lead better quality for the milk product. By implementing the system, farmers could escalate their production level such as increasing productivity and get better price of milk in accordance with improvement in quality of milk produced.

2. Farmer 2 Farmer (F2F) Program

Frisian Flag Indonesia has commitment to improving the welfare of local dairy farmers by improving the quality of farm's management capability. To solve the problems, the FFI team implement the Farmer 2 Farmer (F2F) program. The company also grant some amount of money to be used to enhance farm management such as cage facility to be upgraded to meet the standard, to develop water facility, and feeding areas, and to build cattle separation site. Moreover, the company also fully transfer the tacit knowledge by directly inviting Netherland's local farmer to share their experience and thought to help Indonesian dairy farmer managing their farm effectively and efficiently.

Inspiration

The idea’s emerged when Frisian Flag Indonesia was having problems in milk supply chain. It started by milking the cows, collecting the milk into the collection point until a certain of volume and then finally deliver it to the manufacturing sites. The supply chain was running in traditional ways and almost does not use any advanced technology. The whole process impacted on the quality of the milk product. At that time, the quality of the milk is below the global standard. The Total Plate Count (TPC) or bacteria contained in fresh milk was more than 5 million Colony Forming Unit (CFU) / ml, while after implementing the program, the TPC is below 1 million CFU/ml.

In order to solve the problems, it becomes essential to improve the milk Standard Operational Procedure from the start, from the farmer. Changing the farmers by changing the mindset, giving training, create a system, invite experience and insightful Netherland Farmers to share their experience in Indonesia. For several farmers, bad infrastructure is their main problem. To solve the problem, FFI gives grants to finance them so that they can escalate the quality of infrastructure and manage the farm management properly according to FFI standard.

Moreover, the Research and Development think that the product sold to the customer should be nutritious product. Furthermore, they add fortification to the milk according to customer needs based on Ministry of Health Statistic Data.

Quotes from the interview:

“You can be successful by making others successful, therefore do not hesitate to do the best for the nation”.

"Like in our case, we help our farmers to achieve their maximum potential, in order to gave the best quality milk for Indonesia".

Overall impact

The overall innovation impact is very good for both parties, the Farmers and FFI. Although in the short terms, the company doesn't feel the differenciation and the impact by implementing the program, but the farmers found the program was effective for their business. They can prepare and manage their farm according to the standard that they were never aware of before. By implementing the program, farmers can increase their livestock productivity and also milk quality. Moreover, FFI as the buyer is willing to pay higher price for the better quality milk.

On the long run, both parties even gets more benefit. FFI could have more sustainable supplier for milk production and farmers have a steady buyer an are able to upsize their farm's capacity due to the demand for milk is still growing.

Business benefit

The impact of Frisian Flag Indonesia's Dairy Development Program for the Local Dairy Farmers, is in the form of increase quality and quantity of milk production. This makes the Farmers prosper and give their best to supply the best milk from Bandung to Indonesian People through Frisian Flag Indonesia.

For the business, it created strong vertical integration between supplier and buyer. The effort given by Frisian Flag to the Local Farmers gave them strong support for milk supplier. The farmers also as a suppliers gain benefit by implementing the innovation, which can increase milk quality and also quality.

By implementing the program, the FFI revenues increases.

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Social and environmental benefit

The innovation gave tremendous impact for the society. Because of the milk quality increasing significantly, the milk product produced by Frisian Flag Indonesia also becomes better and healthy for all of the Indonesian Society. Therefore, now the society have the choice to have a better nutritious milk available on the market. As for the environment, the increasing of milk quality will impact to the milk processing, where the processing will need less energy compared to the milk with lesser quality.

Interview

Wiwasan Nurkriswanto, Supervisor Research and Development

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