Day 12: “Mover”.

When Pak Farid said, “you will join me for a meeting tomorrow morning”, I didn’t know what to expect. Little did I know that today’s Sunday morning would take up a wholly different form and meaning. Pak Farid gave me the opportunity to join him for a meeting with Pak Rahim Tahir – a Singaporean, former CEO of DHL Indonesia and now JNE Express Group CEO, the largest logistic company in Indonesia.

Throughout the meeting, the discussion between the two of them revolved around evaluating and thinking of current and viable strategies that Pak Farid can use in his operations. I was in awe, and secretly thankful that I brought my notebook to be able to type out minutes. There’s no way I could have captured it on pen and paper (Can’t help it, tech age, more comfortable with keyboards than a pen). One area I never noticed was how Micromart’s approach was vastly different from the way other convenience store tried to set up and it was a better model to be applied to Indonesia, while at the same time learning the strengths that others had going for it. Some others apparently drove itself into a corner due to incurring costs that were too high.

In essence, MM would be best put in a position where it was operating within a “blue ocean” instead of a “red ocean”, one of the points being to reduce cannibalism.

Understanding the strengths that MM has for itself, they then identified areas that MM could seek to improve itself. As per Pak Rahim’s area of expertise, much of it largely covered the way MM would handle its logistical operations.

Much of it was a cost-benefit evaluation when deciding whether to have fixed costs or expense. For my benefit they even put it in terms simple enough for me to understand. This included the idea of making sure that you are not incurring losses with static inventory or even making sure that if you’re handling logistical operations – that it is always operating efficiently and not being redundant. “If there is unutilized capacity, there is loss”. Instead, the money could be better served in using the money to expand your business: execute marketing strategy, drive sales, etc. Get someone else to invest in the logistics on your behalf. This actually challenged what I knew. I always thought to be cost-efficient, you would ideally manage all of your operations rather than outsource parts of it. I always thought it would have been cheaper when the mover works for you rather than outsourced to another company that is also looking for a profit margin. That said Pak Rahim then reiterated that one must be aware of the objective he has in freeing up logistics. Is it to free up capital? Is it a productivity or service issue? If you are no longer efficient doing it yourself that is when you need to outsource. One good model to emulate would be that of Walmart where double handling would be minimized.

They then took a deeper look at the supply chain, particularly when considering the new provinces that Pak Farid will be involved in. This included the necessity of knowing the geographic and cultural realities of the area to open in, the demand points, and ensuring that there is discipline within the logistical operation. There are several things that need to be known: such as working out transit times and the cultures of the locality that you will be setting up in. This will allow you to set up standard operating procedure that maximize efficiency and ensure reliability. On top of that, knowing the culture also gives you a greater sense of control over the human aspects. This would ultimately boost productivity.

Both of them linked it back to the theory by Steve Blank on “Business Canvas”. Use your business canvas to challenge your model; all hypothesis needs to be validated. Look hard at the supply chain. On top of that, they discussed the importance of having a market for your operations to thrive in. This involved an understanding of the need to be aware of one’s own capital gearing and knowing how to create a market for your products.

Business talk aside just sitting there was an overwhelming experience. Pak Farid and Pak Rahim were giants in their own right, and I was sitting next to a window overlooking the whole of Semarang. You can imagine how that feels like. They side-tracked a little bit to let me know of their background. I realized both of them had similar “formulas” to success. It was simply drive, and leveraging on their experience. In my educational environment – there is an assumption that you’re either a scholar or you’re everyone else. The two people I saw before me were definitely not scholars. They had their fair share of failures – but they pressed on, willing to toil at the bottom and prove themselves. This was hunger, this was drive. They were really people who wouldn’t take “no” for an answer, to challenge the odds.

What I liked best however was actually seeing that they were both willing to help people they cared about – be it their staff, or the underprivileged, or even each other. Even to a completely green person like me, they shared information and knowledge. “The importance of always learning, business itself is never static” as Pak Rahim said. “Successful people don’t watch TV, just the news”, affirmed Pak Farid. I guess even for giants, they were very much human at heart.