Logistic Competitiveness

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Monday, 08 February, 2021

What comes to your mind when you hear or read the word competitiveness in Bahasa Indonesia called “Daya Saing”? is the heart fluttering with excitement for improvement? do you imagine something that is horror or scary because it will make you sweat and will be spending your energy? or perhaps multiple profits for a company? Yes, it all depends on the point of view of evaluating it.

The Indonesian dictionary defines separately in two words, “daya”(Power) & “Saing” (competitiveness). Power is the ability to do something or the ability to act, and competitiveness is the ability of living things to grow (develop) normally among other living things as competitors in one habitat (in one line of business and so on).

Along with the increasing demands of the community, the increasing types and quantities of products are a challenge in the industry, where there is a demand, there is a supplier. This is a huge opportunity business for logistic companies.

24 hours / 7 days distribution of goods is carried out to meet customer needs, the objective is not only that the goods can be received by the customer within the agreed time, but other challenges arise along with the complexity of its distribution, such as: reducing delivery costs, maintaining service quality for customer satisfaction. “What is obtained must be in proportion to the allocated costs, even more”

Fuel is an inseparable element of distribution operations and of course the volume used. The simple calculation as follows:

Truck Capacity                 : 50 ton

Fuel Ratio                         : 1ltr : 3km

Round Trip KM                : 210km

Fuel Consumption          : 210km : 3 = 70 liters

Fuel Price/liter                : IDR 9.500,-

Total/trip                          : IDR 9.500,- x 70liter = IDR 665.000,-

Operating Days               : 26 days x IDR 665.000,-

Cost estimation/month : IDR 17.290.000,- / truck

Simply we can estimate that if a logistic company manage 10 trucks, then a fantastic Rupiah figure will be occurred.

However, are the actual conditions saying the same thing, even not much different from the estimated figures? likely will increase. In fact, fuel is a commodity, it can be said that all areas need it, unfortunately lack of supervision in this area becomes a gap to be exploited by individuals who want to take advantages. Several questions arose, such as:

- are the fuel costs incurred in each shipment in accordance with the ratio of usage?

- Is the quality of the fuel used in accordance with the costs incurred?

- What about the availability of fuel? If available, how long will it take to get it? do not let the delivery be hampered because of stock out.

The domino effect will not be avoided if there is a delay which will undoubtedly disrupt the next delivery schedule, so that:

• Truck underutilization.
• Complaints from customers due to delays that cause production stops, for instance raw materials’ delivery.
• Increased costs
• Lack of planning causes haste, some accidents occur due to haste to reach the customer's location.
• The Company's reputation towards Customers, Business Partners & Society, as well as trust will decrease

Considering the above matters, fuel is a critical part that cannot be underestimated, fuel management is mandatory which includes:

• Fuel Security of Supply
• Fuel Quality
• Valid and Accountable recording of fuel usage and stock movements
• Controllable of the fuel budget
• Digitalization for the entire logistics process, so that all information are open, especially customers.

Start to focus on your main business, increase company competitiveness with proper fuel management.

Easybensin invites you to discuss more about fuel management that appropriate to your business.

"The term of expensive is: if the goods or services obtained are not proportional to the costs incurred”

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