From West Java to East Java: Advancing digital transformation in Indonesia's dairy farming

PANGALENGAN, West Java, Indonesia (ILO News) - The digital transformation of Indonesia’s dairy sector has reached a significant milestone with the expansion of the Enterprise Resource Planning (ERP) system to three additional cooperatives in East Java. This development builds on the success of the South Bandung Livestock Cooperative (KPBS) in Pangalengan, West Java, which pioneered the use of ERP to modernize dairy operations.

The expansion programme will be implemented in the following cooperatives:

• Koperasi Peternakan Sapi Perah (KPSP) Setia Kawan, located in Nongkojajar, Pasuruan Regency. Established in 1961, it has 11,400 members and operates in several business areas, including fresh milk production, loan programmes, trading activities and other services.
• Koperasi Produsen Agro Niaga Jabung Syariah Jawa Timur (KAN Jabung Syariah), based in Malang. Established in 1979, it has 2,260 members and engages in dairy farming, retail, micro Sharia financial services, manufacturing, transportation, and agriculture.
• Koperasi Produktif Unit Desa (KPUD) Tani Wilis, located in Tulungagung. Established in 1973, it has more than 2,000 members and operates in rice milling, savings and loans, transportation, milk production, and mini-market services.

KPBS implemented the ERP system through a strategic partnership with the ILO Country Office for Indonesia and Timor-Leste, under the Promoting SME Enterprises through Improved Entrepreneurs' Access to Financial Services Phase 2 (Promise II Impact) project, funded by the Swiss State Secretariat for Economic Affairs (SECO). The system has substantially improved operational efficiency and broadened financial access for KPBS’s more than 2,000 active dairy farmers. It has streamlined logistics, membership management and animal health monitoring, while reinforcing the entire dairy value chain.

In March 2024, KPBS introduced a mobile loan approval facility powered by the ERP system, further strengthening its financial infrastructure. So far, 429 farmers have secured loans totaling IDR 11.6 billion, with approvals processed in just one day. This rapid access to financing has boosted productivity and unlocked new business opportunities. In parallel, more than 300 farmers have participated in entrepreneurship and financial literacy training, with many receiving personalized mentoring to enhance their business capabilities.