Design on improvement of distribution process in logistic service provider companies using business process reengineering approach

Recently, companies have chosen to outsource their logistics services. These practices are carried out to achieve the most efficient distribution system. In the downside, there's a certain drawback. By outsourcing logistics service, the goods delivered are most likely to come late and these could lead to customers' dissatisfaction. In order to guarantee the goods arrive on time with minimal costs, redesigning distribution processes is necessary to improve the efficiency and effectiveness of the logistics system. This study aims to design the distribution process improvement in one of logistics service providers in Indonesia to increase the logistics performance of the company by streamlining the distribution process time of goods. Business Process Reengineering method is used in this study, by conducting observations and interviews with dairy companies and logistics service provider companies, then the current distribution process is modeled and simulated using Igrafx BPMN software. Improvement of the distribution process is designed to generate the most efficient strategy which is a simulation model with a strategy of rearranging orders on Warehouse Management System (WMS) and the application of Radio Frequency Identification (RFID), using more than one shipping vendor, and using information and tracking systems for distributors that achieve time efficiency by 49,6%.