SINGLE STEP TOWARDS OPERATIONAL

EXCELLENCE
FINAL READ-OUT PRESENTATION
14 OCTOBER 2012

October 2012
Agenda
2
Introduction
Introducing the client: Quints Logistic
Operational Excellence project consulting team

Problem identification

Problem Solving

Feedback from clients

Lesson Learned
Agenda
3
Introduction
Introducing the client: Quints Logistic
Operational Excellence project consulting team

Problem identification

Problem Solving

Feedback from clients

Lesson Learned
A glance about our client...
Brief explanation of Quints Logistic...
Quint Logistic is a start-up company specializing in intra- and inter-cities carrier and delivery
service by employing ojek drivers
Founded by Edo Wikar and Hendra Niel, two FE UI alumni, it currently employs 5 carriers and
1 admin as order-taker, based in Tebet
Facing a dynamic Moving & Carrier market in Jakarta, it launches fierce competition with
established companies, such as GoJek and JNE2
Business model...
QL serves in delivering any hand-carried package, such as documents, devices, and
consumer goods, between any places in Jakarta, Tangerang, Depok, & Bogor
Maximum delivery time of 6 hours with 1-day pre-booked order or same-day order
How they serving the customers...
2 types of business: Package Delivery (PD) & Personal Assistant (PA) services
Customer in PD gives the pick-up and destination address for QL to retrieve and deliver the
package
In PA, customer can ask QL to procure the desired package from third party, ranging from
food, electronics, to tickets, and deliver it to predetermined location
4
IYS dedicated its best resources to assist Quints Logistics
reaching operational excellence
5
Stevenlie Satryaputra
Market intelligence
at RUMA
Experienced in
consulting industry
Univ. Indonesia
Astri Wulandari
Dito Krista
Sam Pandhega
Experience in
operational
modeling
Expert in retail
and fashion
ITB Chem.
Engineering

Extensive project
mgmt. experience
Expert in face-
aura aestethic
treatment
Univ. Indonesia

Finance analyst
at RUMA
IYS Expert in
triple bottom line
Univ. Indonesia
Lina Rosita Dewi
Deep expertise on
HR
IYS expert on
South Korean
Market
Univ. Indonesia

Edmond
Nathan
Ester Meliani
Private Equitist, expert in back-end telco industry
IYS expert on religion and cultural study
Deep expertise on East Jakarta Area
IYS
expert
Experienced in
Accounting and
financial modeling
Univ. Indonesia

Source: IYS database
Closely works with QLs management team in defining
project coverage
6
IYS team QL Management
Pre-defined hypothesis
Hypothesis verification
Open-end
communication
Open communication + clear expectation are two main
recipes to client engagement success in IYS
Collaborative
problem solving
with clients
Source: IYS analysis
Agenda
7
Introduction
Introducing the client: Quints Logistic
Operational Excellence project consulting team

Problem identification

Problem Solving

Feedback from clients

Lesson Learned
Joint session with QL management has identified several
issue to solved
8
Main Issue Diagnosis Next steps
Charging QL
customers
Paying QL employees
Marketing
communication
Expansion plan
Questionnaire
Journey plan modelling
Questionnaire & Interview
Salary plan
Questionnaire
Interview the management
Checking consumers willingness to
pay
Defining the most competitive price
Determining couriers salary:
Salary benchmarking & new salary
plan
Finding and understanding what
consumers wants and define KSF
on city courier industry
Projecting number of armada that
will be added during 2012
Source: IYS analysis
Agenda
9
Introduction
Introducing the client: Quints Logistic
Operational Excellence project consulting team

Problem identification

Problem Solving

Feedback from clients

Lesson Learned
Speed is the key as most consumers use city courrier to rely
on its immediate delivery
10
Consumer insight showed several
plus-minus from city courrier services
Research showing customers has 2
key decision factors for city courrier
A
d
v
a
n
t
a
g
e

D
i
s
-
a
d
v
a
n
t
a
g
e

Speed is the main determining factor
on choosing city courrier
Customer tend to use referrall from
friends/ family in choosing city courrier
Speed of Delivery
Easiness to use
Transparent pricing
Time flexibility
Safety issue
No proof of transaction
Relatively costly
Notes: consumer insight survey (n=37)
Source: Customer interview, IYS analysis
?
?
?
What? It is NOT the
PRICE that become the
deciding factors?
11
Recommend price discrimination to optimize revenue
Peak hour and customer willingness to pay (~50k max) as main consideration
Time
Analysis
H-1 Order
Flexible
Time
Idle Hour IDR 30.000
Fixed Time
Idle Hour IDR 30.000
Peak
Hour
IDR 45.000
Sudden
Order
(D-Day)
IDR 50.000
Level of Severity
RESULT * %
Change time order 5.89%
H-1 Order, flexible (shift) 6.55%
Total
12.44%
Cheaper price to skew
order towards
less busy hour
Cheaper price to skew
order towards
less busy hour
Maximizing cash inflow
from busy-hour order
Notes: consumer insight survey (n=37)
Source: Customer interview, IYS analysis
Using IYS-QL proprietary modeling to automatically best
distribute the most efficient courrier allocation
12
Management manually allocate the
courrier to meet demand daily
Auto_Journey_Plan
TM
helps mgmt. to
automatically allocate courrier
Previously owners need to painfully
allocate their courriers in daily basis
Take 2-3 hr of managements
productive time
Opportunity cost for mgmt to think more
strategically
Very prone to error due to its manual
nature
Designing an allocation tools through
alogrithm to best allocate courrier to
meet daily demand:
Decrease managements unproductive
hour by ~90%
Reducing bias in allocating courrier
Source: QL internal data, Management interview, IYS analysis
More competitive salary = reason to stay at QL
Salary is the upmost important welfare factor for rider
Ojek monthly income is the immediate benchmark for QL riders salary
13
Randomly interviewed Ojeks across
Jakarta area to study the avg. salary
More competitive offerings from QL
compared to normal ojek income
Several interesting findings found from the
field:
Income level varies across location
Income is highly fluctuated
Ojek should expense his money for preman
cost apart other operational cost
Working days = ~30 days
~ IDR 2.5 Mn
Ojek
Avg.
Income
~ IDR 2.7 Mn
QL courrier
Avg.
Income
SS:
Please assign the
correct number for QL
average salary

Notes: (n= 10)
Source: Field survey, Expert interview, QL internal data, IYS analysis
Need to deploy a clear marketing communication that
incorporate the output of QLs consumer insight
14
1. The loyal customer are emphasizing on delivery
practibility
2. Low awareness on QLs capability to deliver all
things
3. Package trust and safety Issues
4. Customer rely on Speed of Delivery & Friend /
Family Referral
What customer
says...
IYS recommend 4 aspects to be included in QLs promo/ marketing
comm:
FAST & PRACTICAL
as selling point
Wide service
coverage
Publish
customer
testimonials
Active BTL
through
soc-med
Opportunity for QL to explore
even wider customer base
Source: Consumer insight, IYS analysis
Opportunity to expand to larger customer group is widely
exist thus need to consider operationals expansion
15
Paper based delivery package is
interesting yet easy area to explore
Need to strategically plan its human
capital always meet demand
C
o
m
p
a
n
y

c
l
i
e
n
t

P
e
r
s
o
n
a
l

c
l
i
e
n
t

Expanding to business customers by
serving their logistic needs:
Printing company (i.e. Wedding
invitation, proposal, etc.)
Law firm (doc. Deliver)
Pharmacy delivery
Parcel delivery
Covering the untapped courrier service
area for personal customers:
Concert/ cinema ticket delivery
Gadget service delivery
Should prioritize customer expansion
from the easiest/ simplest new
customers
8
6
0
3
6
9
12
15
...
.
+33%
Mid
2012
# of courrier in service
End
2012
Series
TBD
Source: Expert interview, QL internal data, IYS analysis
The Impact of Strategy Recommendation
16
Sam : there needs
one slide as
conclusion, how
much this overall
recommendation
impacts to profit
margin

27
17
0
5
10
15
20
25
30
% of QLs profit Margin
Expected
Margin
Current
Margin
...
.
Price Discrimination
Journey Plan
Salary Plan
Source: QL internal data, IYS analysis
Marketing plan
Agenda
17
Introduction
Introducing the client: Quints Logistic
Operational Excellence project consulting team

Problem identification

Problem Solving

Feedback from clients

Lesson Learned
Positive overall feedback from our client counterpart
Several recommendation get buy-in from client
After having consultation with IYS for these past months,
were honored to say thank you. IYSare helping us in creating
journey plan, salary plan, pricing strategy, even making
surveys and giving us recommendation for marketing
strategy.
We are really helped on making journey plan, esp.
how to assign people to do all works. Also, for the
pricing strategy and salary plan youve made. We will use it
as consideration on creating best formula in the
futures.
Currently, we are negotiating with some printing
companies as additional services. It all based on
what IYS recommend us on finding new target customers. We
also implement the pricing strategy that IYS creating, but
maybe we will see its results in some next periods.
18
Source: Management interview, IYS analysis
Hendra Director of QL Logistics : Passage indicating clients Buy-in
Agenda
19
Introduction
Introducing the client: Quints Logistic
Operational Excellence project consulting team

Problem identification

Problem Solving

Feedback from clients

Lesson Learned
Several lesson learned for IYS future projects
20
For the improvement, we think IYS should create a balance
scorecard to help us evaluating our works. Moreover, there
should be a person from IYS as PIC (Person-in-charge) in
our operational activities, for controlling our jobs easier.
We will be more glad if representative from IYS always help
us in decision making.

F
r
o
m

c
l
i
e
n
t

F
r
o
m

i
n
t
e
r
n
a
l

INTELLECTUAL
commitment
needed, not just
time
Over-communicate
with client is better
that not
communicate
LEVERAGE IYS
experts
Show
CONFIDENCE/
EXPERTISE in-front
of client
Investment in strong
human capital is
the most important
Engage-client early.
Scoope your project
with them
Source: Management interview, IYS experience
VARIOUS set of
skills needed in a
team to enrich
analysis
21
Back-up Slides
Analysis Covered by IYS-QL team
22
Issue
Tree
Economi
c
modeling
Ops.
modeling
Quant
survey
Interview
Creative
Brain-
storming
Where to
learn:
YLI Factory of
Minister in
Depok
Good
institute in
Bandung
with
elephant
God statue
Your
statistics
book
+
Logic
Harco Business School

Any good schools
IYS stance on which one better, variable vs fixed salary
23
Slides on SALARY PLAN
Dilemma: fix salary vs variable salary in which fix salary scheme would lead to higher
profit margin (currently QL provides IDR 2,000,000) but it gave significant impact to
high employee turnover rate
Advantages of variable pay implementation:
- Incentive for employee to work at optimum capacity
- Strategy to reduce high turnover rate
24
Component Senior Employee J unior
Employee
Fixed Salary (based on 50%
UMR)
IDR 600,000 IDR 600,000
Comission per Order IDR
20,000
Variable Income:
Weekdays (20 days) IDR 1,600,000 IDR 1,200,000
Weekeend (8 days) IDR 480,000 IDR 320,000
Total Salary IDR 2,680,000 IDR 2,120,000
IYS team in overall get a good feedbacks from our client
After having consultation with IYS for these past months, were honored to say
thank you. IYS are helping us in creating journey plan, salary plan, pricing strategy,
even making surveys and giving us recommendation for marketing strategy.
We are really helped on making journey plan, especially how to assign people to do
all works. Also, for the pricing strategy and salary plan youve made. We will use it as
consideration on creating best formula in the futures.
For the improvement, we think IYS should create a balance scorecard to help us
evaluating our works. Moreover, there should be a person from IYS as PIC (Person-
in-charge) in our operational activities, for controlling our jobs easier. We will be more
glad if representative from IYS always help us in decision making.
Currently, we are negotiating with some printing companies as additional services. It
all based on what IYS recommend us on finding new target customers. We also
implement the pricing strategy that IYS creating, but maybe we will see its results in
some next periods.

Hendra Director of QL Logistics
25
Source: Management interview