Local companies need to increase awareness of SCM<\/p>\n
Rudijanto, Contributor, Jakarta<\/p>\n
No doubt Supply Chain Management (SCM) is not a new concept
\nfor many decision makers in Indonesian corporations, but
\nentrusting their companies' SCM to the hands of professional
\nlogistics companies has yet to become a way of doing business in
\nthis country.<\/p>\n
While domestic companies may have their own reservations about
\noutsourcing SCM, professional logistics companies also have their
\nreasons to believe that their SCM solutions will help companies
\nto be more efficient.<\/p>\n
PT Repex Wahana (RPX) chief operating officer Abdul Rahim
\nTahir said that outsourcing SCM would give companies a
\ncompetitive advantage over their competitors as they can benefit
\nfrom more productivity at less cost and time.<\/p>\n
\"By outsourcing SCM, companies can concentrate on production.
\nTheir productivity will increase because they do not have to
\nmaintain their own warehouses and inventory, which are usually a
\ncostly investment,\" said Tahir.<\/p>\n
Apart from being costly, DHL business development manager Edi
\nPrayitno said that the problem with many Indonesian companies was
\nthat their SCM was not yet time-responsive in supporting product
\ndistribution to customers.<\/p>\n
Edi believes that with currently fast-developing economic
\nconditions, customers expect faster delivery of products. Thus,
\ncustomer expectations constitute a big challenge for many
\ndomestic companies.<\/p>\n
\"Thus, there is a new value here that says 'fast distribution
\nof products to the market constitutes the main goal of many
\nproducers'. This will give them an edge over their competitors,\"
\nEdi said.<\/p>\n
An oft-quoted success story in SCM is that of Dell computer.
\nThe U.S.-based computer maker has bypassed distributors and other
\nresellers and sells directly to customers. The SCM applied by
\nDell has enabled it to build a customized configuration for every
\nbuyer.<\/p>\n
Another important point in creating Dell's success is that the
\ncompany is able to sell its PCs below retail price. Certainly,
\nDell' success constitutes solid proof that with SCM a company can
\nproduce better product at a more competitive price.<\/p>\n
It is hard to imagine that without the support of a
\nprofessional SCM solution provider Dell would have been able to
\nknow customer's needs, get supplies from its committed suppliers
\nat the exact time, produce the needed PCs and distribute them to
\nbuyers on time.<\/p>\n
While Dell and many other overseas companies have
\nsubcontracted their SCM to professional SCM solution providers,
\nmany Indonesian companies seem to be reluctant to do so.<\/p>\n
These domestic companies may have their own reasons not to
\noutsource their SCM needs but RPX's Tahir warns that if
\nIndonesian companies do not follow the global trend in
\noutsourcing SCM, they will lag behind many other international
\ncompanies.<\/p>\n
\"SCM is a proven thing. It is our task to educate the market
\nabout this need for SCM. We are the ones actively approaching
\nthose in top positions in order to create changes within their
\nrespective organizations,\" says Tahir.<\/p>\n
In spite of the currently low response rate of the market,
\nTahir believes that the market for SCM in Indonesia is very
\npromising. Inquiries are already being made by RPX customers
\nregarding the company's SCM solutions.<\/p>\n
RPX currently has 4,000 to 5,000 customers from its different
\nsubsidiaries. These subsidiaries have alignments with various
\ninternational logistics companies such as Federal Express
\nCorporation, Sumitomo Logistics, Tokyu Air Cargo, Yellow
\nConsolidation Service and Hanshin Air Freight.<\/p>\n
But of these total existing customers, only a very few,
\nincluding HP, Yamaha and Telkomsel, have relied on RPX's SCM
\nsolutions. While this small figure may reflect low awareness
\namong Indonesian companies on SCM, it also shows that the market,
\nif properly developed, is huge.<\/p>\n
Such a huge market has increased RPX's confidence, as
\nreflected in the company's decision to add a new Boeing 737-200
\nto its fleet to boost RPX Airlines' cargo capacity. RPX currently
\noperates two aircraft.<\/p>\n
\"We shall remain focused on developing SCM for our customers.
\nIt takes a long time to develop SCM that really responds to each
\ncustomer's needs. That's why we already feel happy at our current
\nnumber of SCM clients because we only started in October 2001,\"
\nTahir added.<\/p>\n
No less optimistic on the prospects for the Indonesian market,
\nDHL has continuously increased its investment, particularly in
\nstrengthening its information technology. The company has
\nintroduced its Track & Trace system by launching a unique portal,
\nTAS (Trade Automation Service).<\/p>\n
DHL's TAS provides a variety of information to customers,
\nincluding that on customs regulations in 53 countries.
\nInteresting features of TAS include information on product
\ncompliance, comparative landed costs, trade documents,
\ninteractive classification and restricted party screening.<\/p>\n
Since the end of last year, DHL has also equipped its couriers
\nwith personal digital assistants (PDAs). These wireless scanners
\ncombine cellular phone features with GSM\/GPRS (global positioning
\nsystem), bar code scanner and pager, in a single, hand-held unit.
\nThis new equipment assists DHL couriers in picking up and
\ndistributing goods and documents to and from customers.<\/p>\n
DHL Express has been operating in Indonesia since 1973.
\nBeginning in 1982, DHL's operations in this country were carried
\nout by PT Birotika Semesta (BS). Today, the company not only
\ndelivers documents and packages but also provides integrated
\nlogistics solutions.<\/p>\n
\"Because we are good at distribution, we are often asked by
\ncustomers if we can maintain stock for them or do local and
\ninternational distribution and so on. This prompted us to be a
\nlogistics solution provider,\" says senior technical advisor to
\nBS\/DHL Alan Cassels.<\/p>\n
Though less developed than more advance countries, Indonesia
\nconstitutes a growing market for many logistics companies. Apart
\nfrom RPX and BS\/DHL, another world player actively penetrating
\nthe market is Davids Logistics (Davids) through PT Davids
\nDistribusi Indonesia.<\/p>\n
Currently, Davids offers outsourced integrated logistics
\nservices. The company not only handles traditional warehousing
\nand distribution functions, but also provides supply-chain
\nlogistics to its clients.<\/p>\n
Coming from a background of fast-moving goods, Davids has
\ndiversified into a range of sectors from apparel to general
\nmerchandise, as well as banking requisites from warehousing
\nthrough branch delivery.<\/p>\n
The presence of some of the world's major logistics companies
\nwill certainly make market competition tougher. Like all players
\nin this sector, RPX's Tahir also expresses confidence on the
\nexperience and skill of his company to provide the best to the
\nIndonesian market.<\/p>\n
However, as with many other companies, one of Tahir's problems
\nis related not to the competition but more to the slow work rate
\nof Indonesian Customs offices and the poor state of
\ninfrastructure, such as highways.<\/p>\n
\"Of course, there have been some improvements in Indonesian
\nCustoms, but they have been too slow,\" Tahir said.<\/p>\n
It is no secret that Customs has become a major headache, not
\nonly for SCM companies such as RPX but also many others that have
\nto rely on Customs services to facilitate their businesses.<\/p>\n
Since Customs offices are an area beyond any SCM company's
\ncontrol, most can only expect that the government will
\ncontinuously improve the offices. Otherwise, Indonesian Customs
\nwill remain a black spot that has the potential to slow down the
\nSCM process.<\/p>",
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