THE rapid growth of logistics business in Indonesia has also triggered tough competition among its players. However the opportunities in this business are still wide open as can be seen from the fact that many multinational and domestic companies are starting their logistics business here in Indonesia.
One logistics company that is seriously developing its business in Indonesia is CEVA Logistics. Under its previous name, TNT Logistics, it has been here since 1995. In 2006 the company changed its name to CEVA Logistics. “New brand with a new spirit,” said Didier Chenneveau, President Director of CEVA Logistics for the Asia Pacific region.
But Didier Chenneveau is clearly not a new face. Before joining CEVA in January 2010 he held the position of Chief Supply Chain Officer at LG Electronics. He started his career in Europe for Caterpillar in Geneva, Switzerland in the treasury department. After three years he moved to HP where he spent most of his career; about 17 years both in Europe and in the US, but mostly in the US.
He started in the finance division, but moved fairly quickly into operation and supply chain management before moving to LG. As the number one person at CEVA for the Asia Pacific region we asked him where he will take CEVA in the future. “The target in the next three years is for CEVA to be number three globally,” said Didier optimistically.
This target does not seem to be out of reach, because at present CEVA considers itself number four with a network that covers 170 countries and more than 49,000 employees. In Indonesia CEVA has more than 1,500 employees with 20 warehouses totaling over two million square meters.
Didier said that the Asia Pacific region is the right place to help achieve his target as in 2010 the region gave the largest revenue contribution for CEVA while Indonesia is an important market with a rapid growth. Furthermore geographically Indonesia is an archipelago with thousands of islands that pose unique and complex challenges for the logistics business. “Indonesia is one of Asia’s markets that is enjoying a rapid growth and is an important market for CEVA in the Asia Pacific region, which contributed 29 percent of CEVA’s total revenue in 2010. So it is the region that contributes the largest revenue for us,” said Didier who is very familiar with the Asia Pacific region and has visited Indonesia a number of times.
Apart from the large contribution Didier also explained that there is another factor that makes Asia Pacific important for CEVA and that is the GDP growth and the growth of logistics business in the Asia Pacific countries. “China’s GDP is about nine percent, India’s is also growing at a fast speed and so is Indonesia at 6.7 percent. And, certainly the logistics business is growing more rapidly than GDP,” said Didier, who admires Martin Luther King, Mahatma Gandhi and Steve Jobbs.
“I like people like Gandhi, Martin Luther King and all those who fought discrimination, oppression and intolerance. On the business side, I think Steve Jobbs, the CEO of Apple is really cool and a great visionary”.
Of course Didier does not fully imitate the leadership style of these three iconic figures for his management style, but takes inspiration from them in applying his strategies and decisions in a format that does not deviate from the company’s major vision. To achieve the number three target globally Didier has set up four strategies, namely enhancing services to existing customers, developing sea freight business more seriously, taking benefits from China’s conducive economic condition and provide end to end solutions.
At present the services of CEVA cover two main areas: contract logistics and freight management. Contract logistics means warehousing and distribution, while freight management is the coordination of consignment deliveries and movement via plane, land and sea transportation and choosing the best mode of transportation.
At the global level CEVA’s business covers the following sectors: automotive (25 percent), technology (24 percent), consumer and retail (20 percent), industrial (15 percent), energy (6 percent) and others 10 percent. The company’s revenue in simple percentages come from the following modes of transportation: land 40 percent, air freight 40 percent and 20 percent from sea freight. In relation to CEVA’s international corporate culture CEVA has visible performance management that ensures the company works effectively and consistently.
The company’s culture consists of a lean program (efficiency in waste reduction and management), smart solution (a process that identifies a certain area making it possible for customers to standardize the core process of their logistics solution), zero defect start ups (offers services to companies that are just commencing their projects), as well as health, safety and environment management programs.
If the Asia Pacific region is the main revenue base for CEVA then what is the future development plan for CEVA Logistics in Indonesia? “Now we already have a branch office for freight management in East Indonesia located in Balikpapan, East Kalimantan. This office has been operating since May 2011. In the next half of this year we will concentrate on opening further branches in West lndonesia, that is in Batam, Medan, Surabaya, and Semarang. The office in Batam is currently in process,” he said.
“Indonesia is an archipelagic country with thousands of islands, large and small. Compared with Singapore geographically Indonesia is far more challenging and complex for logistics business. According to me Indonesia should strengthen its logistics infrastructure as one of the solutions to enhance Indonesia’s industry in general,” opined Didier. (Tedy Matondang & Burhanuddin Abe)
The Jakarta Post, September 17, 2011