Supply Chain Landscape in

ASEAN Region

Nyoman Pujawan, Ph.D, CSCP Professor of Supply Chain Engineering, ITS, Indonesia

President, Indonesian Supply Chain & Logistics Institute (ISLI) E-mail: pujawan@gmail.com

Presented as a Keynote Speech in Warehousing & Cold Chain Summit 2017, Bangkok, 27 – 28 April 2017

Outline

ASEAN as a substantial market and economy power

Connectivity Issues

SC / Logistics Development

Ecommerce and Last Mile Delivery

1

2

3

4

Education and Research 5

ASEAN Facts

• Population is about 630 millions (almost 10% of world population).

• Is an important economic power with significant growth.

• Significant development of supply chain infrastructure.

• Large disparity of economic activity (and prosperity) among ASEAN countries.

• Large disparity in terms of logistics complexity and capability among ASEAN countries.

ASEAN Market Power

EU 509 M

USA 321 M

China 1,371 M

India 1,311 M

ASEAN 630 M

Japan 126 M

The combined population of ASEAN creates the world’s third largest

market with more than 630M people.

M : Million people

Source: 2015 World Bank Data (http://data.worldbank.org)

ASEAN Economic Power

USA $18,036 T

EU $16,314 T

China $11,064 T

Japan $4,383 T

India $2,008 T

ASEAN $2,438 T

T : GDP in Trillion USD Source: 2015 World Bank Data (http://data.worldbank.org)

Average Economic Growth 2012-2015

Trade of ASEAN Countries

with Selected Partners (2013)

37% of trade is with China,

Japan, Korea

31% among ASEAN

1

2

3

There will be major changes especially with the substantial growth of Myanmar

and Vietnam.

Growth in Trade among ASEAN

Countries (2013/2012)

0.417

15

91

7

52 101

69

0.72

30

255

Population Size of ASEAN

Countries (in million)

22 24 24

28 28 29

31

38 40

10

15

20

25

30

35

40

45

1 1.5 2 2.5 3 3.5

S T

L

P C I M M

B

30

V

What implications this will have on supply chain in ASEAN Countries?

Average Age vs Fertility Rate

among ASEAN Countries

CONNECTIVITY ISSUES

2

ASEAN Shipping Lanes and

the Main Sea Ports

Comparison of Throughput among

Biggest Ports in ASEAN Countries

32,240

10,350

7,628

6,590

6,032

5,542

3,770

3,001

1,509

0 5,000 10,000 15,000 20,000 25,000 30,000 35,000

Singapore

Port Klang

Tanjung Pelepas

Tanjung Priok

Laeam Chabang

Ho Chi Minh

Manila

Tanjung Perak

Bangkok

DEA Study on Port Efficiency in SEAsia (Seo et al, 2012)

-

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

Sihan

ou

kville

Be

lawan

Makassar

Tanju

ng P

erak

Tanju

ng P

riok

Mu

ara

Bin

tulu

Joh

or

Ku

antan

Ku

chin

g

Pe

nan

g

Sand

akan

Ko

ta Kin

abalu

Tanju

ng P

elepas

Klan

g

Yango

n+

Thilaw

a

Batan

gas

Cagayan

De O

ro

Ce

bu

Man

ila

Ilolo

Sub

ic Bay

Zamb

oan

ga

Davao

Gen

eral Santo

s

Singap

ore

Laem C

hab

ang

Ban

gkok

Da N

ang

Hai P

ho

ng

Ho

Ch

i Min

h

Current TEUs

Singapore is one of the biggest and most efficient ports. At the same time, it also requires major investment/improvements to handle growth. But many other ports work far below the efficient level

including Klang, Manila, Laem Chabang, Ho Chi Minh, Tanjung Priok and Tanjung Perak.

GOVERNMENT INITIATIVES TO FOSTER SUPPLY CHAIN / LOGISTICS DEVELOPMENT

3

Malaysia: Logistics and Trade Facilitation Master Plan (2015 – 2020)

• Develop Port Klang as maritime center • R & D on SC Innovation • Urban Logistics

21 Key Initiatives including:

Indonesia: National Logistics Systems Blueprint (2012)

Regulations

Transportation Infrastructure

Human Capital ICT LSP

Indonesian Logistics

2015-2025

Major Commodity Drivers

• Development of Kuala Tanjung and Bitung Ports • Sea Toll • Economic incentive packages to foster e-commerce and

simplify regulations related to logistics • Professional Certification

Key Initiatives

Indonesia: Sea Toll Planning

Thailand: Cross-Border Infrastructure Projects THAI – LAOS (8 PROJECTS) 1. Road construction between Huay – Sai – Luang

Naam Tha – Bo Tent. 2. Bridge construction between Khong River, Chiang

Kong across Huay Sai. 3. Road construction between Huay Kon – Pak Bang. 4. Road construction north route number 13 –

Sankhalokin in Luang Phra Bang. 5. Road construction between Nam Hueng Thali

District Loie Province. 6. Road construction link between Ban Wern Tai Pier

– Laos Super Highway route 13. 7. Bridge Construction over Khong River 3rd location

at Nakorn Phanom. 8. Bridge construction over Khong River 2nd location

at Mukhdaharn.

Thailand: Substantial Investment for Rail Transport*

*) including 6 major double track projects

Myanmar: Substantial Infrastructure Improvements

• Development of Dawei Port

• Major infrastructure construction (cement import increases substantially).

• Yangon-Mandalay railroad upgrade (http://www.thaibizmyanmar.com)

http://asia.nikkei.com/Politics-Economy/Economy/Work-to-begin-on-big-Myanmar-industrial-park

Singapore: Roadmap to Reinforcing Singapore's Position as a Global Logistics Hub

• Goal: To be operationally excellent, to be leader in innovation, and to build up a strong core of local logistics talent and firms.

• Key sectors include: food and healthcare logistics, e-commerce fulfillment and aerospace service logistics.

• Additional: Government will launch the Skills Framework for Logistics.

Industry Transformation Map (ITM) for Singapore's logistics, launched Nov. 16, 2016

https://www.futurereadysingapore.com/2017/singapore-to-transform-logistics-sector-with-new-roadmap.html

E-COMMERCE AND LAST MILE DELIVERY

4

E-Commerce

COUNTRY INTERNET USERS

(IN MILLION)

MARKET SIZE (2016, IN BILLION

USD)

MAJOR C2C PLAYERS

B2C PLAYERS

132.7 5.6 Kaskus, Tokobagus, Berniaga, Tokopedia

Bhineka, Lazada, Zalora

60 1.0 OLX, Lamido Lazada, Zalora

50 1.8 OLX, Taobao Lazada, Zalora

46 2.5 OLX, Pantipmarket, Plazathai

Lazada, Tescolotus

22 0.9 Mudah, Taobao Lelong, Lazada, Zalora

4.7 1.8 OLX, Taobao, Rakuten Zalora, Groupon

E-Commerce in Indonesia

E-Commerce in ASEAN Countries

https://ecommerceiq.asia/southeast-asia-ecommerce-potential/

AT Kerney also estimated that Indonesia and Thailand will be the two dominant market of e-commerce in South East Asia in the future.

E-Commerce in ASEAN Countries

Order Fulfillment Process

Order handling

Pick Pack Sort Customers

Last mile delivery Warehousing / DC Long Haul Transport

Delivery Line Haul

Last Miles Delivery Players

The revenue opportunity for courier players should double to USD$7.54bn by 2020, from the current USD$3.69bn in 2015 – a 15% CAGR over 2015-20 (Nomura Research),… EBITDA 5 year CAGR.

18%

23%

26%

28%

EDUCATION AND RESEARCH

5

Early stage in education and research in SC

Few initiatives in SC education and

research, low in quality and international

recognition

Many universities involve in SC education and research, but low – medium in quality and

international recognition (some have

PhD programs)

World class education and research in SC. Research outputs are published in highly reputable outlet.

MISI TLI

Education & Research

on Supply Chain

Sources

1. http://www.straitstimes.com/business/economy/government-launches-roadmap-to-grow-singapores-logistics-sector

2. http://asia.nikkei.com/Politics-Economy/Economy/Work-to-begin-on-big-Myanmar-industrial-park

3. https://aseanup.com/southeast-asia-digital-social-mobile/

4. https://www.dbsinsights.com/wp-content/uploads/2016/07/151103_insights_e_commerce_in_asia_bracing_for_digital_disruption.pdf

5. https://techcrunch.com/2016/07/29/indonesia-will-be-asias-next-biggest-e-commerce-market

6. https://ecommerceiq.asia/southeast-asia-ecommerce-potential

7. Asean logistics: Delivering the last mile, Nomura Global Market Research, 2016