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POS INDONESIA REFORM PROCESS

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... divisions focusing on: Transportation, Philately, IT System, Parcels and Property. ... business: communication, logistics, financial business and philately ... – PowerPoint PPT presentation

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Title: POS INDONESIA REFORM PROCESS


1
POS INDONESIA REFORM PROCESS
  • Presented by
  • Koswara, President of SPPI (Indonesia Postal
    Workers Union)

2
Reform Environment
  • Before economic crisis in 1996 Indonesia GDP
    growth reached as high as 7.8
  • A remarkable economic growth and one of the South
    East Asias best performing economies
  • Income per capita is USD 1,000 ( now
    approximately USD 684)
  • By late 2000, the economic situation had improved
    and the reform environment was strong.

3
Postal Marketplace
  • Total mail volume processed by Pos Indonesia in
    2004
  • Communication 328,8 millions pieces
  • Logistics 5,4 millions pieces
  • Financial postal payment 142,3 millions
    transactions
  • Competitors in the postal industry are more than
    4,000 private courier companies from the biggest
    (Postal MNC) to the smallest (domestic players)
    including cargo, freight forwarders and public
    transportation companies
  • Substitution businesses e-mail from IT, SMS from
    Telecom , ATM from banking sector, etc.

4
Historical background of Legal Status
  • 1961 1964, State/Departmental Agency of Post,
    Telegraph, and Telephone (PTT)
  • 1965 1978, State Enterprise of Post
    Telecommunication
  • 1978 1995, Public Corporation for Posts and
    Giro
  • 1995 up to now, State Company of Pos Indonesia

5
Reform Stages
  • Stage 1 Transform to a Business Culture
    (1995-1999)
  • Pos Indonesia redesigned its internal structure
    along with the business concept to be more
    commercial oriented
  • Divisional organization approach
  • Pos Indonesia was organized into five divisions
    focusing on Transportation, Philately, IT
    System, Parcels and Property.
  • Special emphasis was placed on business
    development and advertising to meet the changing
    needs of a more sophisticated customer base.

6
Result Stage 1
  • Financial Result of
  • 1995 1999
  • (in IDR millions)
  • Note 1 USD IDR 10,000

7
  • Stage 2 Corporate Restructuring and Re-design
    (2000 2002)
  • In the second stage, Pos Indonesia once again
    restructured and redesigned its business
    structure according to corporate business
    communication, logistics, financial business and
    philately
  • In this phase, reform project was emphasized on
    major restructuring and re-design of the
    communication sector.
  • This project is receiving a significant support
    from the World Bank Group

8
Result Stage 2
  • Financial Result of
  • 2000 - 2002
  • (in IDR millions)
  • Note 1 USD IDR 10,000

9
  • Stage 3 Postal Business Transformation
  • (2003 2007)
  • In the third stage, based on assessment result,
    the company was conducting a program what so
    called as Postal Business Transformation
  • The main goal was to increase a longer term
    company profitability
  • Milestone of this program is creating new
    business units Express, Regular, Direct Mail,
    Total Logistics and Financial Business Unit.
  • Transformation was also applied for supporting
    unit in Human Resources Management, Postal
    Network, Organization, Marketing, Corporate
    culture, Finance and Asset management.

10
Result Stage 3
  • Financial Result of
  • 2003 - 2005
  • (in IDR millions)
  • Note 1 USD IDR 10,000
  • Estimated revenue based on monthly historical
    trend

11
  • Note From transformation project
  • (stage 1 stage 3) demonstrated
    dissatisfaction result.
  • Declining achievement condition year by year that
    would eventually lead to a postal CRISIS

12
Failure in managing business
  • After implementing several management change
    program, it showed that there was not a
    significant change for corporate performance
  • Key factor pointed out that the reform strategy
    was not conducting in line with specified
    business concept
  • Lack of communication on management change
    program to all level of employees
  • There was no strong commitment and involvement
    from top management level

13
Current Problem
  • Minus cash flow up to IDR 359.5 billions (Oct
    2005 position)
  • Estimated loss in 2005 IDR 114.7 billions
  • Poor financial performance (1999 -2005)
  • Poor purchasing power postal employees
    immediately after new government policy to
    increase petroleum price.

14
Alternative Solutions
  • Corporate repositioning should be convinced to
    Govt. Post as State Owned Enterprise (SOE) plays
    an important role of economic prime mover.
  • Building up and improving business process
    infrastructure and postal quality of service
  • Government and other institutions involvement to
    assist Pos Indonesia financial problem
  • Inject fresh money amounting at least IDR 2
    trillion to survive.
  • THANK YOU FOR YOUR ATTENTION
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