Competency Based Curriculum Development Model of Operations

Managers in Indonesian Logistics Industry

Khresna Bayu Sangka

Faculty of Teacher Training and Education, Sebelas Maret University, Surakarta, Indonesia

Keywords: Competency development, analytic hierarchy process, economic education.

Abstract: Indonesia’s robust economic growth after struggling from financial crisis during last decade is having a

progressive effect on its logistics industry. But, the deficiency of competency development programs and

training for operations managers in this sector generates a static improvement if compared to the other nations.

Calibrating competencies and skills of operations manager in this industry along its education curriculum is

critical to make a standpoint in Indonesian economy. This study is outlined to fill the gap of competencies’

necessity in this area and try to formulate the adaptive approach and understanding. Engaging an intensive

literature review and collaborated with the analytic hierarchy process (AHP), this study identified several

critical competencies that need to strengthen to establish national competency standard that could be

employed for training and education curriculum development.

1 INTRODUCTION

The rapid growth of Indonesia economy has

impacted on the logistics sector which has continued

to grow in recent years. But this result is not yet

followed by the logistics performance quality as a

whole. As a parameter, Indonesia’s 2014 Logistic

Performance Index (LPI) is in 53rd (Bank, 2014). It

was a big leap, while it was in 43rd in 2007; in 75th

in 2010 and 59th in 2012. However, Indonesia’s

ranking is currently the lowest in the six largest

ASEAN economies, and remains above the average

performance of the group of lower middle income

economies (Bank, 2012). Detailed score for each

criterion in LPI compared with the first rank

(Singapore) and the nearest country (Malaysia).

Over the last decade, the growth of Indonesia

industry and logistics business has not been

supported by the growth of professional human

resources. There is a gap between the availability of

education and training with demands in the logistics

sector and the lack of competency and human

resource development which has not been well

planned (Gaol, 2013; Ministry of Economics, 2010).

As stated by the Chairman of Indonesian Logistics

Association, the infrastructures such as education,

training and policy framework are needed to be

developed to leverage on the emerging opportunities

in the logistics sector in Indonesia (Gopal, 2012).

Since the capability and integrated logistics systems

need the competent human resources, it is critical to

take a consideration to improve the competency of

supply chain operations managers in Indonesia in

order to improve the quality of logistics

performance (Melisa, 2012).

Although many technologies are involved in the

wheel of the organization, the organization still

needs human resources as the driving force of other

resources owned by the organization in any form.

One of the factors driving success in organisations

is the capabilities and competencies of its managers.

They represent a unique discipline responsible for

supporting the global network of delivering products

and services across the entire supply chain, from raw

materials to end customers. It is crucial that all

organisations understand that competency refers to

the demonstrated ability including knowledge,

skills, and attitudes, to perform a task successfully

according to specified standards (Porasmaa &

Kotonen, 2010).

2 LITERATURE REVIEW

2.1 Employed theory

This study adopt the resource-based view (RBV)

theory to provide a better understanding of how the

366

Sangka, K.

Competency Based Curriculum Development Model of Operations Managers in Indonesian Logistics Industry.

In Proceedings of the 2nd International Conference on Economic Education and Entrepreneurship (ICEEE 2017), pages 366-372

ISBN: 978-989-758-308-7

competency model for operations managers could be

utilised to enhance companies’ competitive

advantage. This theory argues that an organisation’s

internal and external resources are a source of

competitive advantage that leads to better

performance (Barney, 1991). Resources can be either

tangible or intangible. Tangible resources are

financial resources, buildings and machinery;

intangible resources are aspects of human capital such

as organisational training, the culture of the

organisation, intelligence, relationship such as

collaboration and quality of employees. Firms’

resources comprise all assets, capabilities,

organisational processes, firm attributes, information,

and knowledge controlled by an enterprise. All of

these resources enable firms to conceive of and

implement strategies aimed at improving their

efficiency and effectiveness (Barney, 1991; Daft,

2010).

2.2 Competency definition

It is necessary to make clear what competence and

competency mean in the discussion of the

professionalization of evaluators. As defined earlier,

competence is an abstract construct. It describes the

quality of being competent. It is the “habitual and

judicious use of communication, knowledge,

technical skills, clinical reasoning, emotions, values

and reflection in daily practice for the benefit of the

individual and community being served” (Epstein &

Hundert, 2002).

In contrast, competency is a more concrete

concept that includes particular knowledge, a single

skill or ability, and attitudes. It refers to the quality

of being adequately or well qualified, physically and

intellectually. There is misuse and/or cross-use of

the terms competence and competency. For

example, competence is used as a synonym for

performance, a skill, or personality trait (Griffin,

2007). Not only is competence treated as

performance, but it is also used indiscriminately to

refer to either the observable performance or the

underlying neural functions that support the

observable behaviour (Trivellasa & Drimoussis,

2013). Furthermore, professional competence is more

to addressing the upcoming task than to identify

competencies (Griffin, 2007). In addition,

professional competence suggested by Gooty et al.

(2010) is more than a demonstration of isolated

competencies.

Although there is no agreed-upon definition of

competence, there are researchers and organisations

that have sought to depict it. A review of literature

finds that competence is often associated with

knowledge, skills, or attitudes that enable one to

effectively perform the activities of a given

occupation or function to the standards expected by

someone (Bartoska, Flegl, & Jarkovska, 2012). A

comprehensive example of definitions of competence

can be found in Chouhan & Srivastava (2014).

In this study, we used the definition given by

Porasmaa and Kotonen (2010) that stated

competency as a demonstrated ability including

knowledge, skills, and attitudes to perform a task

successfully according to the standards. The

definition above show that competencies are a

combination of knowledge, skills and attitudes

required to do a job successfully.

2.3 Competency Model

The development and application of a competency

model is a proven approach to investing in human

resources in order to achieve a more effective and

productive workforce. The functioning of an

organisation largely depends upon several

distinctive components, with the talented employee

occupying the central role in the accomplishment of

organisational goals. In the present economic

scenario, the need for a forward-looking and

proactive approach to competency modelling is

driven by the increasing pace of change in the

business environment (Chouhan & Srivastava,

2014; Thai, Ibrahim, Ramani, & Huang, 2012).

Broader competencies that should be included in

the logistics competency model were broken down

into several competencies and skills. Logistics

competency indicates dimensions within strategic

management skills, business knowledge, and

effective leadership skills. These dimensions

provide outstanding inputs for the Malaysian higher

education sector and also for logistics managers for

integrating competency into logistics programs,

recruitment, and development functions (Daud,

Ahmad, Ling, & Keoy, 2011).

We conducted an extensive literature review on

the determinants of competency for operations

managers in the context of logistics providers. And

found four dimension contained of fifteen

competencies related to the specific domain of

operations managers. Those are: first, Business

dimension (leadership, people management,

teamwork and communication, negotiation and

change management competency); second,

Logistics dimension (transportation and distribution

management, warehouse and inventory

management, and project management

Competency Based Curriculum Development Model of Operations Managers in Indonesian Logistics Industry

367

competency); third, Management dimension

(analytical, managing result, continuous

improvement, creating and managing CSR, and

cultural awareness competency); and the last

dimension is Information and Communication

Technology (hardware and software handling and

information handling).

From the identified competencies above, we

made the hierarchical (conceptual) model as shown

in Figure. 1 below:

Figure 1: Hierarchical competency for operation manager in logistics industry

2.4 Analytic Hierarchy Process

Numerous studies in logistics domain have been

conducted using the analytic hierarchy process

(AHP) approach, as it is a simple but powerful

method used in the decision-making process which

integrates qualitative and quantitative information

simultaneously, and for prioritising alternatives

when facing multi criteria that need to be

considered. As expressed by Radnor and Barnes

(2007), the single decision-making criterion is

oriented with cost minimization (i.e., to produce as

efficiently as possible) in the early days. Later,

consideration is given to several criteria such as

quality, flexibility, timeliness, service delivery and

innovation. Hence, the use of the Multi-Criteria

Decision Making (MCDM) method enables effective

decisions to be made in order to meet all relevant

criteria at various levels and for different purposes.

Several limitations of AHP that need to be

considered for research purposes are: first, its

assumption of independency among various

decision-making criteria which makes it difficult to

assess the correlation between criteria. Secondly,

AHP uses crisp judgements for pair-wise

comparison of criteria, as the traditional AHP

employs a scale with exact whole numbers between

1-9 (Saaty, 1990). Research conducted by Ho (2008)

reviews the application of AHP when integrated

with other techniques. We consider this as a

significant gap in the literature and aim to provide

an updated review of the application of AHP in this

area.

Number of studies have shown the results and

prospective implications for many of the parties

involved in the field of logistics. Logistics

managers, employers, students, educators, and

professional organisations can all benefit from the

perspectives and recommendations of executive

placement specialists. Executive recruiters should

prove insightful for career development in terms of

planning and selecting their continuing education

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368

and executive development activities not only for

managers but also for employers. Furthermore, it is

critical to prove the usefulness of identifying the

educational preparation set that might be expected

and/or required for potential candidates.

3 METHODS

Employed a mixed research method, a three parts of

questionnaire been used for interviews and data

collection. Part 1 contains general questions about the

firm and respondents’ background, while, Part 2

contains fifteen open-ended questions designed to

capture respondents’ opinions on the importance of

fifteen competencies of the proposed competency

model. Part 3 contains pair-wise comparisons

questions between fifteen competencies to

determine the level of importance and the priorities

among individual competencies.

The critical case sampling method has been used

to identify the potential cases for this study. Critical

case sampling is a type of purposive sampling

(Neuman, 1991) that looks for cases that are

‘particularly information rich’ in relationship to the

questions under consideration (Yin, 2003). Then,

respondents compare a pair of competencies in a level

importance respecting to a competency in the level

above in a hierarchical manner, referring to their

importance in terms of a particular measure, and

make a judgement alternative on a scale of 1 to 9.

Score of 1 represents indifference between two

competencies, while score of 9 represents

overwhelming dominance of a row component over a

column component. When scoring is conducted for a

pair, a reciprocal value is automatically assigned to

the reverse comparison within the matrix. For that

result, score of 1/9 represents overwhelming

dominance of a column component over a row

component within the pair-wise comparison matrix

(Saaty, 2004). The set of questionnaires are

distributed to five multinational logistics providers,

and five large local logistics providers operating in

Indonesia. Respondents will be assured that their

answers would be kept confidential. These

questionnaires were distribute to ten high profile third

party logistics companies (5 locals ownership and 5

multinational ownership) whom operate in Indonesia

for more than 20 years. List of the respondent with

their main serviced area is presented in table 1 as

follow:

Table 1: Surveyed serving area

Firm

Industry served area

MNC1

Aerospace, automotive, chemical, consumer,

fashion, industrial and engineering

MNC2

Mail, parcel, chemical, consumer, fashion,

industrial and engineering

MNC3

Electronics, fashions, healthcare, chemical, oil

and gas, minerals.

MNC4

High technology, oil & gas, retail and industrial,

medical equipment, chemical, fashion.

MNC5

Electronics, automotive, chemical, healthcare,

consumer goods, fashion.

LOC1

Documents, printed materials, books, electronics,

telecommunication.

LOC2

Automotive, machinery, chemical, consumer,

fashion, industrial and engineering, life sciences

and healthcare, retail and technology, fashion

LOC3

Pharmaceuticals

LOC4

Fashion, retails, healthcare, consumer goods,

electronics, technology, palm oil, petroleum.

LOC5

Retails, consumer goods, pharmaceutical,

automotive, machinery, fashion, minerals, oils

and

gas.

Collected data were analysed using the

Analytic Hierarchy Process (AHP) approach to

assess the critical determinants for operations

managers’ competency model of logistics

providers. This method is a systematic approach

using comparison concepts in a hierarchical structure

analysis. In this research data will be analysed using

softwares such as Expert Choice ver.12.

4 RESULTS AND DISCUSSION

All respondent from put logistics dimension as the

most important for succeed operations managers in

logistics providers industry. While the transportation

and distribution came in the first priority, that’s

mean this competency have to be maintain and even

improved regarding to company success. We can

say for Indonesian logistics business, an operations

manager has to master the transportation and

distribution knowledge as the first step to achieve

bigger success. Although the operations managers

in each surveyed companies have different

education background, but they’re able to manage

and emphasize their subordinates to find company

excellences.

The warehouse and inventory management and

project management competency can be a leading

factor for company success as well as the

transportation and distribution, since the almost all

of respondents have the specific service such as

Competency Based Curriculum Development Model of Operations Managers in Indonesian Logistics Industry

369

providing warehouse and managing the customers’

inventory.

After 3 highly important competencies, the

priorities are slightly different between MNCs and

local. For MNC, Managing result (business

dimension) combine with Leadership (management

dimension) came to accompany the competencies

under logistics dimension. While in local’s

perspective, continuous improvement, managing

result (business dimension) came after the first

three competencies. Figure 2 shows the detailed

prioritisation result which respect to the goal.

Figure 2. Priorities of competencies respect to goal

Since the various educations’ background of

operations managers, these five competencies have

to upgraded, maintained and improved according to

the industry situation. The most important thing in

this situation is develop a comprehensive logistics

education and training program for the existing

logistics providers’ operations managers and

future’s competent logistics providers' operations

managers.

For MNCs logistics providers, Teamwork

(management dimension), Continuous

improvement, People management, Analytical

(business dimension), Information handling (ICT

dimension) came on the second layer of

prioritization. The combination of these

competencies for logistics providers Operations

Managers suggested as the art of managing

business. Including how to deal with people,

managing and accommodate them into to challenge

the market. Information handling also important

according to the rapid growth of information, the

MNCs realized that the winner of the competition is

not only because of how they run the core business

(logistics) but also in how they manage the

information from others (Figure 3).

Figure 3: Priorities among MNC and Locals

Continuous improvement usually related to the

vision of the company, empowerment the people in

company, sharing learning and knowledge, and

coaching subsidiaries. It’s become very important

while the connected to the next competencies that

an operations managers should have, such as

change management and negotiation.

Even the value of change management is far

below the first important competency, but the

manager should able to achieve personal change to

be more successful by entails thoughtful planning

and sensitive implementation, consultation with,

and involvement of, the people affected by the

changes. Regarding all the respective

competencies, operating supporting software and

hardware is a must. An operations manager has to

show their ability to operate the tools as good as

their subsidiaries.

As negotiation for MNCs might be not as

important as for Locals, since usually they only

receive and process order from the head quarter.

The negotiation for new customers are relatively

hard, since there is a unofficial agreement – to

protect locals providers - MNCs could only deal

with MNCs principals while the locals could deal

with both MNCs and locals’ principal.

Cultural awareness and creating corporate

social responsibility will be a big issue in the future,

company trend to give more attention to their

community and constituents. The cultural

awareness probably can be named as the greatest

complexity, and the challenge is how to reduce the

mistakes. Since the nature of Indonesian which can

be said as “take it for granted” this not become a big

issue (yet). While the CSR regulation is not settled

yet, the logistics providers companies feel that they

don’t need to put a big attention in this area. They

better put attention and underlined the critical areas

that they have to improve most.

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5 CONCLUSIONS

Certification of competencies is needed to recognize

the right man with the right competencies in order to

accomplish their duties and responsibilities. In the

field of employment or certain professions in

accordance with the demands of the company and

the business environment. Certification of

competencies is necessary to face global

competition. In the ASEAN Economic Community

(AEC), for instance, foreign professionals are free

enter Indonesia job market which is very limited of

skilled person in this area.

Job competence certification is the process of

granting a certificate of competence are carried out

systematically and objectively through competency

test standard refers to the work of national and

international competence. Indonesian National

Competence System (SKKNI) is a formulation of

workability covers aspects of knowledge, skills,

expertise, and work attitudes that are relevant to the

duties and terms of office are set in accordance with

the provisions of Law No. 13 of 2003 on Labor and

PP 23 of 2004 on the National Professional

Certification Board (BNSP) and Regulation 31 of

2006 on the National Vocational Training System.

Furthermore there are lack of national and

international networks, and multinational

companies are dominating the logistics industry in

Indonesia. In addition, in terms of human resources

management, local logisticians have poor training

and education in their profession. In terms of

regulatory policy, there is no integrated national

policy for the logistics sector; regulations and

policies are not comprehensive and specific, and

any existing policies and regulations are not

enforced. Coordination between educational

institutions and government or industry

organisations is still poor. The human resources

field of national logistics needs to implement a

national certification system covering all levels of

management. This will reduce the dependence on

international certification; moreover, the relevant

organisations can ensure that such training and

education takes into account Indonesia’s

characteristics.

It imply that educators, professional

organisations and government can use the findings

to enhance their roles in the development of such

programs. More specifically, the results may prove

insightful for planning annual conferences and

educational tracks, regional roundtable/chapter

meetings, Internet seminars, and distance learning

programs.

In addition, it is critical to establish

collaboration and cooperation between

government, academia, entrepreneurs and logistics

associations to develop a comprehensive logistics

curriculum based on the competencies for every

managerial level. Accommodating logistics

associations that are concerned about national

logistics certification in the field of human

resources is a must. Also, companies which already

provide logistics training for their employees can be

motivated to collaborate. Under the supervision of

the Ministry of Education, vocational high schools

and tertiary institutions should devise and deliver

courses specifically for logistics, and offer

qualifications at all levels from diplomas to doctoral

degrees.

It is crucial to establish and implement a

competency-based curriculum tailored specifically

for the needs of the logistics profession. To achieve

a strong competitiveness in logistics, there needs to

be logistics competence, professional and reliable

performance at the operational managerial and

strategic levels, and standards that meet national

needs to achieve efficiency and effectiveness in the

performance of the national logistics system itself.

The certification of competencies ensures that

the right man with the right competencies is given

an appropriate role and can successfully undertake

the tasks and responsibilities associated with certain

professions, in accordance with company demands

and the business environment. Employing different

variations under analytic hierarchy process

approach such as by accommodating fuzzy and also

increase bigger respondent for the future research,

suggested will improve the deeper understanding

and result a crispier policy making process at this

area.

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