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Digital Technology Innovation in Transportation Logistics of Goods, Who Is the Determination?


Digital Technology Innovation in Transportation Logistics of Goods
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Digital Technology Innovation in Transportation Logistics of Goods, Who Is the Determination?

There were several interesting things when attending the zoom online meeting on Friday, April 17, regarding the Industry Round Table: "Surviving the Covid-19, Preparing the Post (Logistics)" organized by Mark plus. 

At the online meeting, there were two quite striking statements from the logistics observer, Ignasius Jonan, as the former President Director of PT Kereta Api Indonesia (Persero), the former Minister of Transportation, and had served as Minister of Energy and Mineral Resources for the Work Cabinet until October 20, 2019. The first point that he delivered was regarding the implementation of information technology (IT) and digital in the world of logistics which was still minimal, especially in the goods transportation sector.

Particularly in Indonesia, this underdevelopment is felt by comparing the percentage of IT costs to Gross Domestic Product (GDP) in various industrial sectors, especially in the transportation sector, which illustrates the 2015 McKinsey analysis below, Indonesia is still in the bottom position even when compared to other countries. - neighboring countries in Southeast Asia or other developing industrial countries.

The second point emphasized by Ignasius Jonan, regarding the cost or investment in technology implementation should only be a fraction of the cost or a small investment if compared to the benefits in the entire supply chain process. 

As he gave an example, with a few tracking visibility applications for the existence of goods in the transportation process, the convenience and visibility benefits are not only enjoyed by the transportation owner as of the main actor but will also provide overall benefits to all other process actors, especially users of the transportation service.

But the next question is, do business leaders today state the importance of digital transformation in transportation and logistics in their company's strategic agenda? Are there really top-down efforts, especially in the company's short-term goals outlined by the top leaders, to realize and implement real technological transformation in the transportation and logistics sector?

Another interesting thing was mentioned by another speaker in the online meeting, President Director of PT Lookman Djaja, Kyatmaja Lookman, said that truck operator or transportation companies are the most "off-line" companies, where the driver or driver as one of the key actors in the transportation process feels.

There are currently no suitable digital transportation applications or platforms. However, he also added that a need that is no less important and unavoidable today is that more and more transportation service users want not only the completion of the goods delivery process but also visibility in the process of delivering the goods as part of the "customer experience".

A study or survey conducted by Forbes Insights in collaboration with Penske in 2018 of 433 senior executives (C-level and top positions in logistics, supply chain, and transportation) stated that 65% of survey participants were aware of major movements and transformations, especially with impact. 

Technology in the fields of transportation and logistics, but only 62% made changes in these technologies in their companies. Another challenge is that only 55% of these executive leaders believe technology will provide a significant advantage in the overall customer experience.

Furthermore, in the survey it was also stated that when implementing new technology related to outsourcing or collaboration with third parties, 32% of survey participants said they would implement the new technology themselves, while 58% of other executive leaders, 23% of them rely on and 35% rely heavily on third parties. or technology partners and the remaining 10% said they would not make changes to new technologies.

The survey results certainly still imply the reluctance of business people to implement digital technology in their companies. Is it true that there is still market distrust that technological innovation in transportation, logistics, and supply chain can provide victory in market competition? 

Don't we see for ourselves how transportation innovations that touch the customer experience, flexibility, and affordability side by global start-ups such as Uber, Lyft, Grab, and Gojek are the most convincing examples that technological innovation can disrupt the world of conventional passenger transportation?

Studies at McKinsey, Forbes, and S & P500 also confirm that customer-centric experience, carried out by global digital technology leaders such as Google, LinkedIn, Facebook, as well as 40 other leading non-digital companies in the world such as Unilever, Reckitt Benckiser, Marriott Group are a factor. differentiator to win the competition. 

Finally, only these 50 companies were able to provide an average return on investment of more than 180% in 2013 - 2016 compared to other companies in the S&P 500 which only provided a return on investment of 42%.

In recent years, there have been so many start-up companies providing logistics transportation application platforms in Indonesia such as BoksMan Asia, Deliveree, Ritase, Go box, Kargo Tech, On -Trucks, and several other application provider companies that are eager to cooperate, either with truck users or service providers.

This needs to be greeted positively by the collaboration of users and transportation service providers as well as creating a short-term strategic agenda in the next one or three years to transform conventional off-line processes into processes with digital application technology.

source: https: // 

By Davidson Manalu, ST, MBA, ASCM

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