The Role and Prospects of Distribution Companies in Indonesia's Supply Chain

Wed, 08 Mar 2023

Distribution companies have a very important role and function in the supply chain in Indonesia. The supply chain is a series of related and integrated activities that cover all stages of product processing and delivery, from raw materials to the delivery of the final product to the consumer. Broadly speaking, in the supply chain, distribution companies act as a link between producers and consumers, and play an important role in ensuring the success of the supply chain as a whole.

What are the important roles of distribution companies in the supply chain, here are some of the roles of distribution companies in the supply chain in Indonesia:

1.     Maintain Product Availability

Distribution companies are responsible for maintaining product availability in the market. They must ensure that products produced by producers are available in stores and other places that serve as points of sale. By maintaining product availability, distribution companies can help manufacturers to increase sales and improve their profits. Without distribution companies, products produced by producers would not be able to reach end consumers quickly and efficiently.

2.     Improving Supply Chain Efficiency

Distribution companies have a role in improving supply chain efficiency. They must ensure that the distribution process runs smoothly and efficiently. In this case, distribution companies can use information technology to manage inventory and ensure that products produced by manufacturers are always available in the market.

3.     Reduce Distribution Costs

Can reduce distribution costs. By minimizing distribution costs, distribution companies can help manufacturers to lower their production costs and increase their profits. One way to reduce distribution costs is to use information technology so as to optimize product delivery.

4.     Selection and Monitoring of Distribution Agents

It is common to use distribution agents to reach a wider market. Therefore, distribution companies must select distribution agents who are reliable and have a wide network. Distribution companies should also monitor the performance of distribution agents and provide assistance if needed.

5.     Market and Marketing Analysis

Distribution companies can understand the market and consumers to ensure the success of the supply chain. They should monitor market trends and conduct market analysis to understand consumer needs. Distribution companies should also conduct marketing activities to promote products and increase sales.

6.     Product Transportation and Storage by Maintaining Product Quality

Distribution companies also have the responsibility to maintain product quality. They must ensure that the products produced by manufacturers remain in good condition during the distribution process. This is very important so that the products sold in the market are always in good condition and do not harm consumers.

7.     Sales

Selling is always attached to the distribution process. Manufacturers sell to other parties, either directly or through third parties in the distribution channel. This causes the transfer of rights to the product from the producer to the next party who becomes the new owner of the product, until it reaches the consumer.

8.     Risk Management

Distribution companies manage risks associated with the supply chain, such as product safety risks, late delivery risks, and product damage risks. They should have contingency plans in place to address unforeseen situations.

9.     Handle Product Returns

Can handle product returns from end consumers. In this case, the distribution company will perform activities such as receiving the returned product, checking the condition of the product, and sending the product back to the manufacturer or placing the product back in the warehouse.

10.  Providing Customer Service

The distribution company will provide information about the product, the delivery process, and the procedure for returning the product. The distribution company will also provide technical support and customer complaint handling.

In Indonesia, as the economy is growing well, the demand for distributed products and services is increasing. The following are some of the factors that have increased the growth potential of distribution companies in Indonesia.

1.     Indonesia's Economic Growth

Indonesia's economic growth in recent years has continued to increase. Despite the threat of a global recession, the government is optimistic that Indonesia's economic growth in 2023 will continue to grow positively. This increase has a positive impact on the growth of distribution companies, as more products and services are distributed. Indonesia has a large population, so the market demand for distributed products and services is growing.

2.     E-Commerce Development

The development of e-commerce in Indonesia is growing rapidly. In recent years, the use of the internet and smartphones in Indonesia has increased, making e-commerce increasingly popular. This has a positive impact on distribution companies, as more and more products are being distributed through e-commerce.

3.     Government Policy

Government policies in supporting Indonesia's economic growth also have a positive impact on the growth of distribution companies. Several policies enacted by the government such as improving infrastructure, increasing investment, and improving people's welfare have a positive impact on the growth of distribution companies.

4.     Foreign Market Potential

Indonesia has considerable foreign market potential. Several Indonesian products such as agricultural products, fishery products, and tourism products have large foreign market potential. This has a positive impact on the growth of distribution companies, as more products are distributed abroad.

5.     Improved Product Quality

Improving the quality of Indonesian products also has a positive impact on the growth of distribution companies. With the improvement in product quality, market demand is increasing, resulting in more products being distributed.

In order to capitalize on the growth potential of distribution companies in Indonesia, distribution companies need to pay attention to several important factors, such as improving product and service quality, cost efficiency, better use of information technology, and improving customer relations. One distribution company in Indonesia that has done so is PT Dos Ni Roha (DNR Distribution) which is a subsidiary of DNR Corporation, a provider of integrated end-to-end solutions with service coverage throughout Indonesia. DNR Distribution provides quality distribution services to help products or goods from producers be well distributed so that they can be easily reached by the public.

#Distribusi #Rantai Pasok #Indonesia #DNR Corporation