Dealing with logistics problems faced by the ASEAN members require immediate programs of Human Capital Development, namely: (1) recognition of certificates and degrees, (2) free movement of qualified logisticians, (3) ASEAN Consortium for Logistics Education, (4) standardization, (5) broad based community support, (6) Joint training and workshops, (7) open innovation, and (8) code of ethics for logisticians.

1. Human Capital Development
in the ASEAN Logistics
Connectivity
Togar M. Simatupang
Chairman of the Indonesian Society of Logistics (ISL)
ASEAN Plus Logistics Connectivity
The Thailand International Logistics Fair 2011
Bangkok, 22-24 September 2011

2. Overview
• Introduction
• Objectives
• What is logistics?
• Working approach
– National Logistics System of Indonesia (2008)
– The Master Plan for the Acceleration and Expansion of Indonesian Economic
Development (2011)
– Build ASEAN Logistics Capacity (2007)
– Master Plan on ASEAN Connectivity (2010)
• Ten Problems with ASEAN’s logistics connectivity development
• What are root causes of the identified problems?
• Human Capital
• Immediate Requirements for Human Capital Development in Logistics
• Two Initiatives in Indonesia
• Policy Implications
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3. Introduction
• ASEAN Connectivity:
– People to people connectivity
– Physical connectivity
– Institutional connectivity
• The establishment of free economy in the ASEAN
Economic Community in 2015 has driven to increase of
trade and Logistics involved.
• Increased responsibilities on professional logisticians to
participate in the developmental process.
• This need gave rise to human capital development to
help them in enhancing professionalism.
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4. Objectives
1. Provides arguments for why developed human
capital is important in ASEAN Logistics
Connectivity
2. Identifies problems in ASEAN’s human capital
development that should be addressed
3. Suggests human capital development in logistics
should adopt comprehensive programs in
achieving professional competence and
academic standards (how to catch up the
standard level of human capital)
4

5. What is Logistics?
• Logistics is defined as part of the supply chain process that
plans, implements and controls the efficient, effective flow
and storage of goods, services, and related information from
the point of origin to the point of consumption in order to
meet customers’ requirements (the Council of Logistics
Management, 1998)
• A supply chain is logistics network of independent actors
• Logistics connectivity refers to the needed framework,
agreements, action plans and programs and projects to
pursue linkages in the flow of products/services (materials),
information, money, and trade facilitation.
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6. Working Approach
Identification of “National
Logistics System” (2008) and Identification of ASEAN Logistics
“Master Plan for the Roadmap (2007) and Master
Acceleration and Expansion of Plan on ASEAN Connectivity
Indonesian Economic Growth” (2010)
(MP3EI) 2011-2025
Analysis of weak points in
ASEAN Connectivity
Immediate Requirements
for Improvements
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7. National Logistics System of Indonesia
Vision 2025: “Locally Integrated, Globally
Connected”
Source: Blueprint of National Logistics System (2008)
7

8. The Master Plan for the Acceleration and
Expansion of Indonesian Economic Development
Source: MP3EI (2011)
8

9. Six Economic Corridors in Indonesia
Banda Aceh
BIMP-EAGA
Medan
IMT-GT
4
1 3
Manado
Pekanbaru Sofifi
Tj. Pinang Pontianak Samarinda Manokwari
Padang Palu Gorontalo
Jambi Jayapura
Palangkaraya Mamuju Sorong
Palembang 6
Pkl. Pinang Kendari
Ambon
Bengkulu Banjarmasin
Lampung
2 Makassar Wamena
Jakarta Semarang
Surabaya 5
Serang
Mataram
Merauke
Jogjakarta Denpasar
Kupang
Mega Economic Centre Economic Centre Proposed Location Proposed Location SEZ and FTZ
Special Economic Zone (SEZ)
1 EC Sumatra 3 EC Borneo 5 EC Bali–Nusa Tenggara
2 EC Java 4 EC Sulawesi 6 EC Papua – Maluku 9
Source: MP3EI (2011)

10. The Master Plan for the Acceleration and
Expansion of Indonesian Economic Development
• The aim is to make Indonesia, the 17th largest economy in the
world last year, one of the world’s 10 biggest economies by 2025,
taking GDP to $4.5 trillion and increasing the per capita income
from $3000 now to $15,000.
• Strategies:
– Economic Potential Development through Economic Corridors
– Strengthening the National Connectivity
– Strengthening National Human Resources Capability and Science and
Technology
• Obstacles:
– slow bureaucratic processes
– conflicting interests in regional government
– obstructive regulations
– broken promises to investors, and
– “unhealthy” political factors
Source: MP3EI (2011)
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11. Roadmap for the Integration of
Logistics Services
• Create an ASEAN single market by 2015 by
strengthening ASEAN economic integration
through liberalization and facilitation
measures in the area of logistics services; and
• Support the establishment and enhance the
competitiveness of an ASEAN production base
through the creation of an integrated ASEAN
logistics environment.
(Source: Endorsed by 39th AEM, 24 August 2007, Makati City, the Philippines) 11

12. Build ASEAN Logistics Capacity
(by encouraging human resource development in the sector, and an environment
conducive to developing the sector)
• Develop and upgrade skills and capacity building
through joint trainings and workshops.
• Encourage the development of national skills
certification system for logistics service providers.
• Encourage the development of an ASEAN
common core curriculum for logistics
management.
• Encourage the establishment of national/sub-
regional centre of excellence (training centre).
(Source: Endorsed by 39th AEM, 24 August 2007, Makati City, the Philippines) 12

13. Master Plan on ASEAN Connectivity
13
Source: Master Plan on ASEAN Connectivity (2010)

14. Ten Problems with ASEAN’s logistics
connectivity development
1. Lack of logistics literacy: unproductive use of printed and written information about
logistics to develop personal knowledge and potential, to increase productivity, and to
make decisions.
2. Logistics divide: Logistics Performance Index (LPI) in ASEAN is fragmented.
3. Gaps in the stock of human capital in logistics across ASEAN’s countries: years of education,
years of training, gender disparity, level of competence, level of salary, and training access
and affordability.
4. Health, safety, and security problems.
5. Environmental degradation including carbon emissions problems.
6. Hazardous material handling and toxic waste problems.
7. Corruption problems: criminal prosecution for bribing a government contracting officer.
8. Unethical and misconduct behavior of logisticians: fraud and embezzlement and financial
mismanagement.
9. Failure to meet and follow quality standards and procedures.
10. Lack of reliable partners who demonstrate integrity and operate on a transparent basis.
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15. What are root causes of the identified
problems?
Problems
Conduct
Human Governance
Capital System
15

16. Human Capital
• The stock of competencies, knowledge and personality
attributes embodied in the ability to perform labor so as to
produce economic value (en.wikipedia.org)
• The set of skills which an employee acquires on the job,
trough training and experience, and which increase that
employee’s value in the marketplace
(www.investorswords.com)
• The knowledge, skills, competencies, and attributes
embodied in individuals that facilitate the creation of
personal, social, and economic well-being (OECD)
• Human capital is composed of the education, skill levels,
and problem solving abilities that will enable an individual
to be a productive human being
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17. Significance of Human Capital
Development (HCD)
• HCD is a set of programs that have been done to improve human’s
abilities to utilize their potentials for improving their well-being.
• Knowledge intensive industries that demand highly skill levels to carry
out innovation (product, process, technology, business models).
• Characteristics of developed human capital: flexible, adaptable, quick
learners, and problem solvers establishes productivity and
performance
• The education of workforce correlates with their labor productivity and
earnings.
• Investment (equipping individuals with knowledge and skills that
improve their employability and productive capacities) in education
and training with the expectation higher benefits will take place in the
future.
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18. Constraints on Human Capital Strategy
COMMUNITY
GOVERNMENT Social BUSINESS AND
AND REGULATORY Responsibility ENTREPRENEURS
BODIES Legal Productivity and
Compliance Logisticians’ customer value
Interfaces
Health, Safety,
Sustainability Security
ECOLOGY CIVICS
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19. Immediate Requirements for Human
Capital Development (1)
1. Full Recognition of certificates/Degrees Awarded by selected universities/Professional Bodies/Institutes in
logistics:
– Encourage the development of national skills certification system for logistics service providers.
– A framework that will recognize certificates-It will help in standardizing the education pattern all
across the region and increasing the highly skilled professionals availability at any point of time.
2. Opens up free movement of qualified and skilled professional logisticians:
– Work Visas
3. Establishment of the Consortium for ASEAN Logistics Education among ASEAN countries that would
develop and confirm logistics graduates in ASEAN have the same skills.
– Setting the content of the standards and developing the course work or curriculum to meet the
standards
– Implementing mutual recognition agreement amongst selected universities
– Encourage the establishment of national/sub-regional centre of excellence (training centre)
– Encourage the development of an ASEAN common core curriculum for logistics management
– This would enhance the technical and Professional capability of the Region
– Encourage joint review on logistics policies and regulations
4. Recognition of the implementation of quality (ISO), safety (HACCP), environmental standards, and
security measures related to logistics
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20. Immediate Requirements for Human
Capital Development (2)
5. Building broad based community support for academic and professional standards
– Collaborating between business, third party logistics, government agencies, scholars, logisticians, and universities.
– Encouraging investments in logistics
– Sharing best practices
6. Joint training and workshops: Personnel working in Logistics operations need to be trained as well as
advance their skills
– Develop and upgrade skills and capacity building
– Invest in constant training of upper management, middle management, labor force
– Priorities: maritime handling cargo, storage and warehouse service, custom clearance service
7. Open innovation: Competitive funding for logistics innovation
– Decreasing logistics costs
– Increasing customer service levels
– Choosing applications of high technology
– Getting information for recent automations
– Multinational approach, customer orientation, and standardization of product codes
– Establishment of inter-industry commerce standards
– The necessity of standardizing the ASEAN warehouses
– Synchronizing warehousing facilities
8. The implementation of a code of professional ethics for logisticians
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21. A Proposed Framework of ASEAN Human Capital
Development for Logisticians
Product/Service
Relationship Image
Performance
Human Capital Capabilities: (1) Logistics and supply chain processes, (2) Customer
service processes, (3) Innovation processes (R&D, design, optimization), (4)
Regulatory and social processes (environment, safety and health, community)
Human Capital Development: (1) recognition of certificates and degrees, (2) free
movement of qualified logisticians, (3) ASEAN Consortium for logistics education, (4)
standardization, (5) broad based community support, (6) Joint training and
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workshops, (7) open innovation, and (8) code of ethics for logisticians

22. Examples: two initiatives at national
level
1. The Indonesian Society of Logistics (ISL)
2. Indonesia Logistics Community Service (ILCS)
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23. The Indonesian Society of Logistics (ISL) or
Masyarakat Logistik Indonesia (MLI)
3 Mission of ISL
1. Contributing Ideas
EDUCATING AND ADVOCATING
DISCUSSION AND DIALOGUE
Progress of
Logistics
2. Enhancing 3. Promoting
Competence collaboration
PROBLEM
SOLVING AND
INNOVATION
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24. The Indonesian Logistics Community
Services (ILCS)
• Logistics cost in Indonesia is almost 30% of product cost and at the macro
level is 24% of GDP.
• The signing of a memorandum of understanding (MoU) by 16 state-owned
companies on 15 September 2011 to establish a joint venture to operate
the ILCS: PT Pelindo II, PT Telkom Tbk, PT Pelindo I, PT Pelindo III, PT
Pelindo IV, PT KAI, PT ASDP Indonesia Ferry, PT Pupuk Sriwidjaya, PT Pos
Indonesia, PT Kawasan Berikat Indonesia, PT Angkasa Pura I, PT Angkasa
Pura II, PT Semen Gresik, PT Varuna Tirta Prakasya, PT Bhanda Ghara
Reksa, and Perum Bulog.
• The aim is to form an integrated logistics system in the country and to help
improve national connectivity through the use of more reliable
transportation technology - especially ships and the use of the latest ICT to
support cargo traffic management.
• ILCS is expected to be ready to begin operations in June of 2012.
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25. Policy Implications
1. ASEAN should promote the habits of logistics collaboration:
 The collaboration amongst supply chain members (industrial and 3rd party logistics
providers, transport and warehouse companies) is required to apply advanced tools
which lead to less logistics costs and better customer service.
 Information hub to provide new tools and methodologies for performance
improvement and share benchmarking results.
 Awards for best practice companies in logistics and supply chain management.
2. Dealing with logistics problems faced by the ASEAN members require immediate
programs of Human Capital Development, namely: (1) recognition of certificates
and degrees, (2) free movement of qualified logisticians, (3) ASEAN Consortium for
Logistics Education, (4) standardization, (5) broad based community support, (6)
Joint training and workshops, (7) open innovation, and (8) code of ethics for
logisticians.
3. The progress of logistician development in ASEAN is evolving slowly and needs an
acceleration process through a dynamic forum of communication and know how
development amongst representatives to provide guidance on the programs to be
carried out before 2015.
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26. Kob Khun Krap
AKNOWLEDMENTS
The author is also a Professor of Operations and Supply Chain Management at the School
of Business and Management in Bandung Institute of Technology Indonesia. He would
like to thank Khairul Rizal, R. Budi Setiawan, and Setijadi for their invaluable comments.
The author also would like to express his appreciation to Khaekhai Arunee for her advice
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in preparing this presentation.