A Study on Financial Implication of Outsourcing Distribution Activities in Coca-Cola Distribution Indonesia to Third Party Logistics Partner (3PL)

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Wahyu, Iman Santoso and Novie, Nichol Hutapea and Hernawati, Dyah and Kusumapatra, Punto (2006) A Study on Financial Implication of Outsourcing Distribution Activities in Coca-Cola Distribution Indonesia to Third Party Logistics Partner (3PL). Project Report. Sekolah Tinggi Manajemen IPMI, Jakarta Selatan. (Unpublished)

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Objective To study the financial implications of the possibility of outsourcing distribution activities in order to convert some fixed costs to varjable costs. This includes determining which function could be transferred to third parties, how much Return on Capital Employed (ROCE) will be improved using an internal simulation model, and additional benefits could be taken into account with selling fixed assets (trucks). To analyze possible risks in implementing third party logistics, especially when considering there are uncertainties in terms of distribution fees requests by contractors and implications on sales volume performance. Scope of Work Data were collected from interviews, company reports and studies about outsourcing. The primary source of information was from Coca Cola Distribution Indonesia. The study has been given an opinion on the Company idea to outsource distribution activity to third party providers. The recommendation may not be justifiable from a total cost-benefit point-of-view, because the costs of future intangible assets are not clearly defined. Recommendation: CCDI recommended to with distribution outsourcing with several action plans have to be considered: • Form a dedicated outsourcing planning team • Develop an outsourcing roll-out plan across Indonesia • Any extra redundancy costs can be funded from the sale of assets (warehouse / truck) at market value • Liaise with Labor Union to determine the best way in transferring the redundant headcount to 3PL • Develop concise contracts between CCDI and 3PL • Define the acceptable 3PL service-level performance • 3PL to fully understand firm policies and business requirements • Maintain an integrated information system with 3PL

Item Type: Monograph (Project Report)
Subjects: H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
H Social Sciences > HF Commerce > HF5601 Accounting
Divisions: Library > GFP (Group Field Project)
Depositing User: Elza Christina Nur Ramadani
Date Deposited: 16 Jan 2020 06:49
Last Modified: 16 Jan 2020 06:55
URI: http://repository.ipmi.ac.id/id/eprint/191

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