Quora

How to run a successful distribution business in Indonesia


December 23, 2020
5 MIN READ
Vinculum
Written by:
Vinculum
Distribution Business
  • Share this post

Distribution can be categorized into few of the most essential businesses in Indonesia that conduct activities such as wholesale, import, export, and retail in the entire process. Distribution can be defined as an essential service that makes merchandise available for purchase by allocating it through a given market. Elements such as transportation, packaging, and delivery are included in the procedure of distribution.

During the COVID-19 pandemic, all economic activities including the distribution business took a major hit in every country, especially in Indonesia, since it heavily depends on the human factor rather than pure automation. With the lockdown and social distancing rules introduced, it has been a challenge to adjust to themes such as no contact deliveries, curbside pickups and more modified approaches to distribution where human lives are not risked while adhering to the safety protocol to avoid contamination.

Distribution is mainly a labor intensive sector in Indonesia, which can be done successfully as the markets reopen and get back to the groove. Running a successful distribution business in Indonesia can be a daunting process, but we are here to help by addressing the challenges and solutions respectively.

Without any further delay, let’s get into it!

Challenges of the distribution business in Indonesia

Traffic congestion

One of the main challenges for distribution businesses is the Indonesian traffic congestion, which has become a rather popular image of this country due to the sheer number of vehicles on the streets attributed to population growth. The rate of development has outrun that of facilities. A distributor hence has to shell out extra money to navigate through Jakarta or other highly congested areas in Indonesia to carry out their job.

Government regulation

To deal with the increasing traffic congestion from becoming a nuisance and increasing pollution levels, the Indonesian government came up with a regulation based on the number plate. This method allocated days of allowed travel down prescribed routes to license plates based on odd or even numbers.

Traffic congestion and weak infrastructure are the main reasons why it is expensive for the distributors in Indonesia to deliver their products. It is also challenging to adhere to the even and odd regulation to assign trucks and travel through different roads allocated for such appointed trucks with certain license plate numbers.

Order fulfillment

A distributor has several orders to fulfill and vehicles to keep a track on. They face a difficulty in distributing merchandise effectively from their distribution center to retail stores, cross-docks and to markets. Most often there are too many conditions and constraints in their processes to use an automated system; hence they are forced to make manual plans and strategies without saving time or money. With the sheer volume of inventory they possess, the distributors are constantly challenged to deliver products efficiently and quickly.

Solution

Reducing logistics expenses

The distributor is required to optimize their load capacity to minimize the number of delivery vehicles being used and reduce fuel, driver and maintenance costs. Once the distribution needs are planned, you will notice that the deliveries scheduled using the most convenient route with the least number of vehicles makes is easier and cost effective.

Improve customer satisfaction

The key to consumer satisfaction is to deliver their goods on time and as efficiently as possible. Giving them the choice to schedule and reschedule, no-contact delivery during COVID-19, curbside pickups, multiple payment mentors and even damage protection guarantee are a few of the extensive measures they can take to ensure the growth of their distributorship business in Indonesia.

Upgrading technology

Acquiring customized logistics software to help distributors perform top to bottom solutions such as inventory management, order management, scheduling delivery timings and routes in real time is a handy investment to digitize distribution.

These software are cost effective, reduce any redundancy and overspending. It also can be used for electronic Proof of Delivery (ePOD) alternatives such as Photo Check-in, OTP SMS or an Electronic Signature to ensure that the right retailers receive their merchandise at the right place, at the right time, in the right condition.

Enable real-time visibility of the whole supply chain process

Real time visibility about ongoing deliveries and upcoming ones helps the distribution in-charge control the processes from a bird’s eye view and guarantee timely delivery with automated order fulfillment. This gives the managers more time to complete other tasks without having to manually chart down and process any order at multiple stages.

Once the order is placed, the warehouse staff will receive automated updates and begin to process it while giving real time updates to the manager about progress. This software is also extended to the clients, so that they can see what process their order is at in real time.

To successfully run a distribution business in Indonesia, where the market is so challenging needs a deep insight into the market, law and government regulations. Distributors who want to make it big in this country are required to seek solutions to deliver consistent and excellent performance while keeping the manufacturers and retailers happy with the service.

  • Share this post

Subscribe to our blog and stay updated!

By completing this form, I agree to Vinculum’s privacy policy

guest
0 Comments
Inline Feedbacks
View all comments