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Digital Transformation of Logistics and World Supply Chain

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Digital Transformation of Logistics and World Supply Chain

Digital Transformation of Logistics and World Supply ChainThe potential of the logistics industry or supply chain in the world is very promising. 

The development of the e-commerce business is one of the factors driving the growth of the logistics industry in this world. However, despite the potential that is owned, there is still a lot of homework that still needs to be done by the players in this industry. One of them is about digital transformation.

"The logistics industry in the world, for example in Asia, is still the category of the logistics industry with the highest cost. An example is in Indonesia, where logistics costs are still the most expensive in the region, "said Setiadji, Chairman Supply Chain Indonesia on webinar Logistic Talks on the topic" Driving Supply Chain and Logistics Performance with Digital Transformation

This is happening because of the logistics and Currently, supply chain in Indonesia still has a centralistic concept. Whereas Indonesia has an archipelago landscape consisting of more than 17 thousand islands and surrounded by oceans. This centralistic concept is what makes logistics costs in Indonesia quite high.

Digital Transformation as a Solution

Digital transformation is a concept that will play an important role in overcoming problems in the logistics industry and supply chain. This is what PowerCommerce.Asia is trying to offer as a pioneer of omnichannel technology services and solutions in Indonesia.

"Omni-channel will be part of supply chain resolution or logistics in the future. Why? Because with 200 million inhabitants and 17 thousand islands, the concept of integrating all channels into one digital technology integration is important, ”said Chief Executive Officer and Founder of PowerCommerce.Asia, Hadi Kuncoro.

Omni-Channel is a cross-channel strategy that integrates all platforms and focuses on providing the best experience for customers. This digital era of transformation enables business management processes, from customer relationship management, order management, to logistics or supply chain to be integrated into one system.

This concept also applies to system integration in the supply chain to the logistics infrastructure. This digitization process must start from the top-down or approach the management level down. Starting from the transformation of the business model process to the culture of your company or business.

"The concept of digital transformation must be able to create a process of business optimization and efficiency, new value in customer experience, and new business valuations," added Hadi Kuncoro.

PowerCommerce.Asia is ready to present the best solution to help the digital transformation process in all your business lines, especially in the logistics and supply chain sectors.

When We Are Forced to "More" Digital

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Digital Transformation of Logistics and World Supply Chain

The spread of the Coronavirus (COVID-19), and the imposition of lockdowns (restrictions on the movement of people, goods, and money) accelerate the use of technology and digital platforms that have not been widely used by the whole world community. 

When consumers are locked in, millions of people are forced to work and move from home, the solutions are digital and technology. What are the changes in e-commerce shopping behavior?

With the implementation of lockdown; Indirectly, humans are required to find solutions with the help of technology to help with daily tasks, such as shopping or working from home.

Not everyone is not used to shopping online. Some people may be shopping for food or medicine for the first time online; but for others, this may mean there will be an increase in the use of online platforms or the addition of new technology, tools, and software to support remote activities, such as the use of Google Conference, Hangouts, Skype, Zoom and others.

Initially, people only used technology to find information and news about the coronavirus issue. But it turns out that this has become a bridge or catalyst for the acceleration of the adoption of digital use and technology more broadly; including how to use and change the shopping behavior of e-commerce or online media.

1. Increased Online Shopping to all product categories.

In general, online shopping transactions are good in the e-commerce marketplace; or website commerce to social media commerce and reseller platforms at PowerCommerce.Asia has increased up to tens of times since February; and jumped tremendously when the President announced the first patient of the coronavirus on March 4, 2020.

Initially, the adoption of e-commerce was indeed started from tertiary category products. Products such as fashion, electronics, travel, and entertainment are commonly purchased by consumers through the e-commerce retail sector, followed by the beauty and personal care categories.

However, since the outbreak of the Coronavirus outbreak; Product sales through e-commerce have changed to products in the categories of self-protection, healthcare, sanitation products, to foodstuffs. After the lockdown policy and restrictions on gathering people, including for worship, products related to worship equipment have increased sharply. 

Products such as prayer mats; both normal or prayer mats for travel, make for travel, to disinfectants for prayer rooms and mosques are some examples of which sales have increased.

The sudden growth based on product categories is divided into 5 groups:

Categories related to health and personal protection: Be it insurance, immune supplement products, to sanitary personal protection products, such as hand sanitizers and also vitamin medicines.

Household and Kitchen Needs Groups: Such as food stocks; be its basic food needs (sugar, rice, instant noodles) to snacks for friends' needs when the work from home policy is enforced, and the FMCG (fast-moving consumer goods) group has experienced an increase in sales on the e-commerce channel.

Entertainment and Fitness Product Group: The enactment of Social distancing and work from home policies have an impact on many families who make decisions to spend family time at home. 

Group products for family entertainment: such as game products (PlayStation consoles) to equipment for independent sports products such as fitness equipment and gyms, more than doubled in March.

Groups related to worship: There are restrictions on people gathering including gathering to carry out the congregational worship process increasing orders for worship equipment.

2. Supply Chain challenges are the main focus

Due to the exponential surge in several product categories, strategy and supply chain planning and execution are new challenges, including in terms of managing logistics disaster management.

At the start of the situation, many consumers are faced with empty shelves when searching for high-demand products in offline stores. This forces some consumers to search for alternative online sources to find the product they need. The direct-to-consumer (DTC) business has been booming in recent weeks.

The biggest challenge when facing this fluctuating situation is how to calculate the forecast number for these products. In some cases, we perform forecast calculations and produce forecasts that show that within hours the product has sold out. So we have to re-allocate stock from the initial forecast made in several sales channels.

PowerCommerce.Asia as an omnichannel solution and services platform must forecast sales calculations; not only in one marketplace channel but also online and offline multi-sales channels. In online multi-channel forecast is divided into marketplaces (several marketplaces), website commerce, social commerce to reseller platform commerce, and offline channels.

3. Changes in E-commerce Shopping Behavior will become a new habit because of Coronavirus!

The Corona outbreak disaster has brought many new users to online shoppers; and of course, in the future, it will make the e-commerce industry a sales channel with much better growth.

However, the condition of Indonesia's archipelago which consists of 17,000 islands will make a logistical aspect; both delivery costs and delivery lead time is one of the main keys in the long term. 

So that the centralized e-commerce logistics concept as it is now will remain an obstacle to growth when the COVID-19 period subsides and market conditions return to normal.

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