Logistics Solutions for Efficient Supply Chain Management in Indonesias Private Sector

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PRIV A TE SEC TO R PLA YERS:

LO G ISTIC S SO LUTIO NS FO R

EFFIC IENT SUPPLY C HA IN

M A NA G EM ENT IN INDO NESIA

By Je ffre y Ba ha r

De puty C hie f Exe c utive O ffic e r

Spire Re se a rc h a nd C o nsulting

(2)

To p ic

1 Lo g istic s Ma rke t a nd Pe rfo rm a nc e in

Indo ne sia

2 Indo ne sia : The Six Se c to rs o f Lo g istic s

3 Me t a nd unm e t ne e ds o f Indo ne sia Lo g istic

Industry

(3)

LOGISTICS MARKET AND

PERFORMANCE IN INDONESIA

(4)

LO G ISTIC S PERFO RM A NC E INDEX ( A SEA N)

2.76 3.44 _3.29 3.14 2.96 4.09 2.94 3.49 _3.43 3.02 3 4.13

3.08

3.59 _3.53

[VA LUE].00

3.15 [VA LUE].00

Indo ne sia Ma la ysia Tha ila nd Philippine s Vie tna m Sing a po re

ASEAN LO G ISTIC S PERFO RMANC E INDEX

2010 2012 2014

So urc e :Wo rld Bank

Se c to rs (2014) Sc o re

C usto m s 2.87

Infra struc ture 2.92

Int. Ship m e nts 2.87

Lo g istic s

C o m pe te nc e 3.21

Tra c king & Tra c ing 3.11

Tim e line ss 3.53

Se c to rs (2014) Sc o re

C usto m s 3.37

Infra struc ture 3.56

Int. Ship m e nts 3.64

Lo g istic s

C o m pe te nc e 3.47

Tra c king & Tra c ing 3.58

Tim e line ss 3.92

Se c to rs (2014) Sc o re

C usto m s 3.21

Infra struc ture 3.40

Int. Ship m e nts 3.30

Lo g istic s

C o m pe te nc e 3.29

Tra c king & Tra c ing 3.45

Tim e line ss 3.96

Se c to rs (2014) Sc o re

C usto m s 3.00

Infra struc ture 2.60

Int. Ship m e nts 3.33

Lo g istic s

C o m pe te nc e 2.93

Tra c king & Tra c ing 3.00

Tim e line ss 3.07

Se c to rs (2014) Sc o re

C usto m s 2.81

Infra struc ture 3.11

Int. Ship m e nts 3.22

Lo g istic s

C o m pe te nc e 3.09

Tra c king & Tra c ing 3.19

Tim e line ss 3.49

Se c to rs (2014) Sc o re

C usto m s 4.01

Infra struc ture 4.28

Int. Ship m e nts 3.70

Lo g istic s

C o m pe te nc e 3.97

Tra c king & Tra c ing 3.90

(5)

4.93

7.04

9.24

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

10.00 2008

2012

2015

Value

(i

n USD Billions)

Year

M A RKET SIZE O F 3

RD

PA RTY LO G ISTIC S BUSINESS IN

INDO NESIA A ND THEIR BREA KDO W N BA SED O N

C USTO M ER SEC TO RS

2008- 2012 C AG R 9.3%

2012- 2015

C AG R 9.5%

39.5%

40.5%

0.5%

19.5%

Ma nufa c turing Re ta il E- C o m m e rc e O the r

38.5%

41.7%

1.1%

18.7%

Ma nufa c turing Re ta il E- C o m m e rc e O the r

Bre a kdo wn o f Ma rke t Size b y C usto m e r Se c to rs (2012 a nd 2015, Va lue )

So urc e : Sp ire ’s p rim ary inte rvie ws, FIC C I.

YEA R

2012

YEA R

2015

(6)

Re ta il

41.7%

USD 3.85 B

Ma nufa c turing

38.5%

USD 3.55 B

O the rs

18.7%

USD 1.73 B

E- C o m m e rc e

1.1%

USD 0.10 B

LO G ISTIC S SPENDING BA SED O N INDUSTRY SEC TO R A ND

THEIR BREA KDO W N BA SED O N THE A C TO RS ( 2 0 1 5 )

So urc e : Sp ire ’s Re se arc h and C o nsulting (2015)

[VALU

E],

60%

In-House

Outsourced

[VALU

E],

20%

In-House

Outsourced

[VALU

E],

30%

In-House

Outsourced

[VALU

E],

20%

(7)

INDONESIA: THE SIX

SECTORS OF LOGISTICS

(8)

So urc e : Maste r Plan fo r the Ac c e le ratio n and Exp ansio n o f Ec o no m ic De ve lo p m e nt o f Indo ne sia (MP3EI)

LPI: INFRA STRUC TURE - 6 INDO NESIA EC O NO M IC

C O RRIDO R

Se c to rs C usto m s Infra struc ture Int. Shipm e nts

Lo g istic s C o m pe te nc e

Tra c king & Tra c ing

Tim e line ss

(9)

C O M PA RISO N BETW EEN INDO NESIA EC O NO M IC C ENTER

IN LO G ISTIC PLA N A ND LO G ISTIC S DELIV ERY RO UTE O F

A N A UTO M O TIV E C O M PA NY

Ja ka rta & Ba nte n

Ba ndung

Se m a ra ng

Ea st Ja va Ba li

Ma ta ra m

Kupa ng A c e h

Me da n

Ba ta m

Ja m b i

Pa le m b a ng

La m pung Be ng kulu

Pa da ng

Po ntia na k

Pa la ng ka ra ya

Sa m a rinda

Ba nja rm a sin

Ma na do G o ro nta lo

Pa lu

Ma m uju

Ma ka ssa r

Ke nda ri

A m b o n

Ja ya pura

Yo g ya ka rta Pe ka nb a ru

Pa ng ka l Pina ng

So titi

So ro ng Ma no kwa ri

Me ra uke

So urc e : Maste r Plan fo r the Ac c e le ratio n and Exp ansio n o f Ec o no m ic De ve lo p m e nt o f Indo ne sia (MP3EI), Sp ire Prim ary Re se arc h Me g a Ec o no m ic C e nte r / The c o m p any ’s he ad o ffic e

Ec o no m ic C e nte r / The c o m p any ’s b ranc h o ffic e Dire c t de live ry fro m he ad o ffic e

(10)

(11)

So urc e : Lo g istic s Pe rfo rm anc e Inde x 2014

C o untry

Po rt o r Airpo rt Supply C ha in

La nd Supply C ha in

Dista nc e * (km )

Le a d Tim e (da ys)

C o st** (USD)

Dista nc e (km )

Le a d Tim e (da ys)

C o st** (USD)

Ind o ne sia 133 3 579 255 2 579

Ma la ysia 512 1 3,000 - -

-Tha ila nd 25 1 250 - 1 1,000

Philip p ine s - 2 572 - 2 1,000

Vie tna m 36 1 237 43 1 274

Sing a po re 30 2 323 - 2 909

Po rt o r Airpo rt Supply C ha in

La nd Supply C ha in

Dista nc e * (km )

Le a d Tim e (da ys)

C o st** (USD)

Dista nc e (km )

Le a d Tim e (da ys)

C o st** (USD)

94 4 568 189 5 1,233

512 1 3,000 - -

-- 1 500 - 1 2,000

- 2 630 - 2 1,000

- 1 281 - 1 354

- 2 266 - 2 783

LPI: INTERNA TIO NA L SHIPM ENTS

Se c to rs C usto m s Infra struc ture Int. Shipm e nts

Lo g istic s C o m pe te nc e

Tra c king & Tra c ing

Tim e line ss

Sc o re 2.87 2.92 2.87 3.21 3.11 3.53

Expo rt Tim e a nd C o st

Im po rt Tim e a nd C o st

*Re fe r to the distanc e indic ato r fo r p o rt and airp o rt

(12)

Se c to rs C usto m s Infra struc ture Int. Shipm e nts

Lo g istic s C o m pe te nc e

Tra c king & Tra c ing

Tim e line ss

Sc o re 2.87 2.92 2.87 3.21 3.11 3.53

70%

97%

83%

71%

76%

92%

IND O NESIA M A LA YSIA THA ILA ND PHILIPPINES V IETNA M SING A PO RE

SHIPM ENTS % M EETING Q UA LITY C RITERIA *

Ship m e nts % Me e ting Q ua lity C rite ria

LPI: LO G ISTIC S C O M PETENC E

So urc e : Lo g istic s Pe rfo rm anc e Inde x 2014

(13)

Se c to rs C usto m s Infra struc ture Int. Shipm e nts

Lo g istic s C o m pe te nc e

Tra c king & Tra c ing

Tim e line ss

Sc o re 2.87 2.92 2.87 3.21 3.11 3.53

LPI: TRA C E A ND TRA C KING

Altho ug h the se nt

pa c ka g e c a n b e

c he c ke d via we b site ,

the da ta a re inputte d

m a nua lly, c a using

so m e de la y b e twe e n

the a c tua l de live ry

a nd the sta tus.

(14)

MET AND UNMET NEEDS

FROM INDONESIA LOGISTIC

(15)

C urre nt Me t Ne e ds

C urre nt Unm e t Ne e ds

Re c o m m e nde d Ac tio ns

G e ne ra l

G o o d wo rking re la tio nship s with 3PL

p ro vid e rs

Expe nsive inte r- isla nd shipping O ffe r disc o unts fo r la rg e r shipm e nt vo lum e s

Ma nufa c turing

3PL p ro vid e rs a re a b le to ha nd le do c um e nta tio n re q uire m e ntsfo r c usto m c le a ra nc e , im po rt/ e xpo rt we ll

Unc le a r a nd va rying p ric e ra te s im p o se d b y d iffe re nt 3PL p ro vid e rs Ba d se rvic e q ua lity in te rm s o f d e la ys in sc he dule sa nd la c k o f

c o m m unic a tio n

Pro vide sim ple m a nua ls/ sc he dule s fo r

d e te rm ining p ric e s ra te s a nd a ve ra g e ind ustry b e nc hm a rk to fa c ilita te c o m pa riso n

Re a l- tim e de live ry tra c king se rvic e whe re a le rts will b e se nt via e m a il/ pho ne c a ll whe n the re is a d e la y

Re ta il

3Pl p ro vid e rs will b e a r c o st fo r d a m a g e d g o o d s

3PL pro vide rs a re we ll- e q uippe d to ha nd le ne c e ssa ry p ro c e d ura l re q uire m e nts fo r im po rt a nd e xpo rt

De la ye d d e live ry sc he d ule s to re ta il sto re s due to slo w c usto m c le a ra nc e

Expe nsive to o utso urc e inve nto ry m a na g e m e nt

La c k o f p ro p e r c o ld - c ha in lo g istic s fa c ilitie s to ke e p g ro c e rie s fre sh Wa re ho using fa c ilitie s a re no t e q uippe d with la te st inve nto ry m a na g e m e nt syste m (IMS) te c hno lo g y

C ho o se lo c a l pa rtne r with g o o d c usto m s re la tio ns

A do pt U.S m o de l o f c ha rg ing inve nto ry m a na g e m e nt fe e b a se d o n to ta l vo lum e o f g o o d s d e live re d

Ensure tha t truc ks a re full- e q uippe d with fre e ze rs a nd o the r c o ld c ha in fa c ilitie s

Ensure tha t wa re ho using fa c ilitie s a re e q uippe d with la te st IMS

E- c o m m e rc e

G e o g ra p hic a l c o ve ra g e o f 3PL se rvic e p ro vid e rs

De la ye d ship p ing tim e s d ue to sub -c o ntra -c ting b y 3PL p ro vid e rs e ng a g e d Da m a g e d va lua b le / fra g ile g o o d s d uring d e live ry

Minim ize d e la ys in d e live ry sc he d ule s b y m a inta ining o wn fle e t ra the r tha n sub -c o ntra -c ting

O ffe r spe c ia l pa c ka g ing se rvic e to m inim ize d a m a g e to fra g ile a nd va lua b le ite m s

Ensure g e o g ra phic a l c o ve ra g e to who le o f ID

C LIENT SIDE: C URRENT M ET A ND UNM ET NEEDS FRO M

SERV IC E PRO V IDERS

(16)

Infra struc ture

Lo g istic s in Ind o ne sia is

he ld b a c k b y

the la c k o f

infra struc ture

. This situa tio n is, ho we ve r,

c urre ntly b e ing im p ro ve d

b y the g o ve rnm e nt.

Lo g istic s C o m p e te nc e

Lo g istic s c o m pe te nc e is a lso a n issue he re , a s c urre ntly

se e n fro m the a m o unt o f

in- ho use lo g istic s a c tivity c o m pa re d to o utso urc e d

(70:30)

Tra c king a nd Tra c ing

Tra c king a nd tra c ing syste m a re a p p lie d to the lo g istic s ind ustry. So m e

im pro ve m e nt to

re a l- tim e b y use o f the

te c hno lo g y will m a ke it m o re e ffe c tive .

(17)

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Ja la n Sudirm a n Ka v. 1, Ja ka rta 10220

INDO NESIA

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(1)

Se c to rs C usto m s Infra struc ture Int. Shipm e nts

Lo g istic s C o m pe te nc e

Tra c king & Tra c ing

Tim e line ss

Sc o re 2.87 2.92 2.87 3.21 3.11 3.53

70%

97%

83%

71%

76%

92%

IND O NESIA M A LA YSIA THA ILA ND PHILIPPINES V IETNA M SING A PO RE

SHIPM ENTS % M EETING Q UA LITY C RITERIA *

Ship m e nts % Me e ting Q ua lity C rite ria

LPI: LO G ISTIC S C O M PETENC E

So urc e : Lo g istic s Pe rfo rm anc e Inde x 2014

(2)

Se c to rs C usto m s Infra struc ture Int. Shipm e nts

Lo g istic s C o m pe te nc e

Tra c king & Tra c ing

Tim e line ss

Sc o re 2.87 2.92 2.87 3.21 3.11 3.53

LPI: TRA C E A ND TRA C KING

Altho ug h the se nt

pa c ka g e c a n b e

c he c ke d via we b site ,

the da ta a re inputte d

m a nua lly, c a using

so m e de la y b e twe e n

the a c tua l de live ry

a nd the sta tus.

(3)

MET AND UNMET NEEDS

FROM INDONESIA LOGISTIC

(4)

C urre nt Me t Ne e ds

C urre nt Unm e t Ne e ds

Re c o m m e nde d Ac tio ns

G e ne ra l

G o o d wo rking re la tio nship s with 3PL p ro vid e rs