Human Resource in Indonesia Logistics Development Zaldy Masita Chairman of Asosiasi Logistik Indonesia (ALI) Bandung 19 July 2017

Indonesia Logistics Outlook 2015

6 Logistics Key Drivers Strategic Commodity Infrastructure Regulation Logistics Service Provider Information Technology & Communication Human Resources

Logistics Cost Structure Contribute around 40%-60% of the cost Contribute from 0% - 30% Management Labor Network ICT System Asset Contribute around 0-20% Contribute from 5 -15%

Logistics Service Provider (LSP)

Logistics Service Provider Driver Low 1PL/2PL 3PL 4PL Asset Investment High IT Involvement Low High

Logistics Service Provider Driver Low 1PL/2PL 3PL 4PL Part of Selling Price Risk Total Logistics Cost Part of Logistics Cost High Revenue Low High

Logistics Service Provider Driver 1PL/2PL 3PL 4PL High Business Sustainability Low Barrier to Entry Low High

Logistics Service Provider Driver Low 1PL/2PL 3PL 4PL Operation Execution High Planning Low High

Logistics Service Provider Driver Low 1PL/2PL 3PL 4PL Human Resource Quantity High Human Resource Quality Low High

Logistics Service Provider Capabilities Finished goods warehousing Inbound logistics Production Manuf Materials Mgt Logistics Service Provider (LSP) Customer delivery After sales service Shippers Express couriers 1PL/2PL Freight Forwarders Local transport companies 3PL/4PL Logistics companies Strong capability Medium capability No capability

Logistics Cost vs 3PL Revenue Global Logistics Costs and Third-Party Logistics Revenue (US$ Billions) Region Country 2011 GDP¹ Logistics (GDP %) 2011 Logistics Cost 3PL Revenue % 3PL Revenue North America Canada 1,759.0 9.9% 174.2 8.4% 14.6 Mexico 1,185.0 12.0% 142.2 8.1% 11.5 United States 15,060.0 8.5% 1,282.0 10.4% 133.8 18,004.0 8.9% 1,598.4 10.0% 159.9 Europe France 2,808.0 9.2% 258.3 10.1% 26.1 Germany 3,629.0 8.3% 301.1 30.4 Italy 2,246.0 9.4% 211.2 10.6% 22.4 Netherlands 858.3 69.5 14.2% 9.9 Spain 1,537.0 144.4 13.6 United Kingdom 2,481.0 210.9 21.1 Others 4,130.7 9.0% 371.8 36.9 17,690.0 1,567.2 10.2% 160.4 Asia Pacific Australia 1,507.0 10.5% 158.2 15.6 China 6,989.0 18.1% 1,265.0 7.0% 88.6 Hong Kong 242.4 21.9 11.4% 2.5 India 1,843.0 13.0% 239.5 5.7% 13.7 Japan 5,855.0 8.7% 509.6 8.8% 44.9 Singapore 266.5 23.9 11.7% 2.8 South Korea 1,164.0 104.7 11.1% 11.6 Taiwan 504.6 45.5 11.0% 5.0 836.1 10.7% 89.4 7.2% 6.4 19,207.6 12.8% 2,457.7 7.8% 191.1 South America Argentina 435.2 12.6% 54.9 6.0% 3.3 Brazil 2,518.0 11.6% 292.1 8.2% 24.0 Venezuela 315.0 11.9% 37.5 5.9% 2.2 909.5 129.1 7.7% 10.0 4,177.7 12.3% 513.6 39.5 Remaining Regions/Countries 11,080.7 15.9% 1,761.8 3.7% 65.2 Total 70,160.0 11.3% 7,898.7 616.1 3PL Revenue vs Logistics Cost Logistics Cost vs GDP - efficient Source: Armstrong & Associates 2011

The Challenge of Logistics Human Resources Development in Indonesia Limited Logistics Education Institution (S1,S2, vocational) Scarcity for management level in Logistics and Supply Chain Less than 2% of annual salary for training budget in local logistics company Limited Standarization in Logistics that also cover Safety, Health, Environment Aspect and Multimoda Different Economy & Infrastructure condition in all region in Indonesia, and high uncertainty in Logistics Service Level New Technology in Logistics & SCM

Action that need to take to improve human resource quality in Logistics Government need to boost up education effort in Logistics by Increase budget to support education institution (state & private) to open Logistics Program Overseas scholarship for master degree in Logistics Incentive for private company that provide logistics training for their employee Open more Community College in Logistics in all province SKKNI for Logistics Online Course for Logistics & Supply Chain Internship program for lecture in private company & BUMN in logistics area for 6-12 months Support ICT & innovation in Logistics area

Digital supply chain Logistics Control Tower Cloud Based Application IOT AI & Robotic Big Data

Start Up in Logistics

The Progress of Logistics Profession Development in Indonesia Since 2003 – ALI run workshop/seminar/training in Logistics and Supply Chain every month. ALI establish Sembada Pratama in 2010 as the first School in Logistics and Supply Chain (vocational) www.sembadapratama.com 2011 – ALI and JILS (Japan Institute of Logistics System) establish certification of Kaizen Logistics in Indonesia December 2012 – BNSP appoint ALI as the first organization as Lembaga Sertifikasi Profesi (LSP) for Logistics March 2013 – European Logistics Association (ELA) agree to appoint ALI to establish ELA certification in Indonesia

Education is long term investment and could not be measure with short term approach

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