Asean means greater cooperation and new forms of integration in the region around Indonesia

1. Triple EFF Consulting
Asean Update January 2016

2. Contents
 Background
 The Geography
 The Facts
 What to do

3. ASEAN Nations

4. Background
• ASEAN has become a market of over 600 million people
overnight.
• ASEAN is fast tracking plans to implement economic
integration activities.
• ASEAN member countries will form a single trade
market.
• ASEAN will be the 8th
largest economy in the world.
• Each ASEAN nation represents a diversity of cultures,
religions, languages, art, geography and
correspondingly demand signals.
• The explosion in mobile communication and digitisation
is accelerating in ASEAN nations and in many cases
market intelligence is going from 0 to 60 in record time.

5. Background

6. Indonesian Geography

7. The Geography
It Is What It Is
•The world’s largest archipelago, more than 17,000 islands,
spread across three time zones with a distance of 5,000kms
from Aceh to Irian Jaya.
•If you superimpose a map of Indonesia over the top of a map
of Europe it would reach from Ireland to Iran.
•The country straddles the equator and is known for its rugged
terrain, active volcanoes, tropical storms, and mudslides, as
well as congested streets and poor infrastructure.
•Having said that, today’s Logistics sector performs daily
miracles in delivering goods and services.
•The population is heavily concentrated on Java – the most
densely populated island in the world: approximately 150m
people or 57% of the country’s total.

8. The Facts
They Are What They Are
•Indonesian logistics costs are equivalent to around 27%
of GDP.
•Poor service driven by inadequate infrastructure, both
quantitatively and qualitatively.
•A further report published by the Indonesian Chamber
of Commerce and Industry suggested that firms spend
an average of 17% of their total expenditure on
transport.
•ASEAN member countries and regional peers on
average spend less than 10%.

9. More Facts
• According to the World Bank, land transport accounts
for an average 72.21% of all logistics costs.
• The world’s Bank Logistics Performance Index (LPI)
in 2012 ranked Indonesia 75th
out of 155 countries.
• By contrast, Singapore was 2nd
, Malaysia 25th
,
Thailand 35th
, Philippines 44th
, and Vietnam 53rd
.
• Port dwell times are amongst the highest in ASEAN,
with our largest port, Tanjung Priok, averaging around
5.5 - 6 days.

10. What to do?
Taken 2 slices of this:
A) Government Initiatives
•SISLOGNAS
•MP3EI
•SEA TOLL ROAD
•6 ECONOMIC CORRIDORS
B) Business Initiatives
•Conduct a Supply Chain Health Check
•Stick to your knitting
•Drive to WGL2
•Others

11. S/C Health Check
•9 reasons why you should consider it:
1.ASEAN has become a reality.
2.Operating strategies have and will change.
3.You may have contracts or leases up for renewal (3PL).
4.Business is growing (or shrinking) rapidly.
5.Customer base and or product mix is changing.
6.Old ways of working are not the norm.
7.We have new tools in the supply chain toolbox.
8.You have to hit targets – but no real plan of how to.
9.You do it for yourself and your car (or at least you
should).

12. Stick to your knitting & WGL2
• It means: understand what you are currently doing
correctly and ensure you keep doing it.
• Share the results with your teams; it will give them
understanding of why they do what they do.
• Focus on small incremental improvements that you can
manage within your own teams, template review.
• Big consulting firms will tell you about “World’s Best
Practice”; good to know but you cannot get to 99.98%
DIFOTA from where you are today.
• Your operating teams will know What Good Looks Like
for their operation and, by the way, they are the ones
who will drive the outcome.
• It isn’t much more difficult than that.

13. Back to the Daily Grind