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Whitepaper

Logistics Challenges in the Pharmaceutical and Food & Beverage Industries

Advotics whitepaper on the top 3 logistics challenges in Indonesia's pharma and F&B industries: diverted drug sales, counterfeits, and the speed of fresh product delivery.

Published:
PDF
25 pages
Document language:
Indonesian
Publisher:
Advotics

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Cover of the Advotics whitepaper on logistics challenges in the pharmaceutical and food & beverage industries

Summary

Logistics Challenges in the Pharmaceutical and Food & Beverage Industries (Tantangan Logistik dalam Industri Farmasi & Industri Makanan-Minuman) is an Advotics whitepaper on the three biggest distribution challenges in two industries that kept growing through the pandemic: diverted sales (including drugs sold by unauthorized outlets and cross-channel selling), counterfeit products, and the speed and quality of fresh product delivery. The common answer is visibility: unique codes per product for track & trace, digitally managed warehouses, and optimized delivery routes.

  • Counterfeit drugs are estimated at up to 25% of all drugs in circulation in Indonesia (Ministry of Industry, 2021).
  • About 33% of food is wasted during distribution, and fresh products spend roughly half their shelf life in transit.
  • Unique codes (QR codes, RFID, barcodes) enable authenticity checks and track & trace across the whole distribution path.
  • For fresh products, the keys are an accurate WMS and automated delivery routes matched to vehicle capacity.

Key figures from this whitepaper

pharmaceutical companies in Indonesia, 63.3% of them pharmaceutical wholesalers (PBF)
4,224
Source: BPOM
pharmacies across Indonesia
30,000+
Source: BPOM
share of counterfeit drugs in Indonesia's drug circulation
up to 25%
Source: Ministry of Industry, 2021
violations found in 2020 drug & food cyber patrols; ~90% prescription drugs sold without authority
48,749
Source: BPOM, 2020
of food wasted during distribution
33%
Source: Logistics Bureau
transport costs for fresh food businesses as a share of cost of goods sold
>26%
Source: Cornell University

What's inside

  1. Growth through the pandemic

    Pharma and food & beverage were among the few industries that grew in 2020, when Indonesia's GDP fell 2.07%. In 2020–2021, pharma became the second-largest non-oil & gas contributor to GDP after food & beverage. That growth comes with distinctive distribution challenges.

  2. The pharmaceutical distribution chain

    Prescription (ethical) drugs, about 62% of drug sales, flow from principal to distributor, then to hospitals and pharmacies; over-the-counter drugs (about 38%) go to modern stores, drugstores, pharmacies, and clinics (GlobalData 2015). Animal health products have their own path to veterinary clinics and hospitals. Pharmaceutical wholesalers (PBF) are regulated by Ministry of Health Regulation No. 1148/2011.

  3. The food & beverage and fresh product chain

    The food & beverage industry spans 7,000+ medium-to-large companies and 1.6 million+ micro and small businesses (BPS). Fresh and frozen products need a cold chain, plus attention to temperature, humidity, packing, and stacking so goods aren't damaged in transit.

  4. Mandatory standards: GWP, GDP (CDOB), and GMP (CPPOB)

    Good Warehouse Practices govern warehouses that protect product quality. Pharma applies Good Distribution Practices (CDOB in Indonesia), including special storage for pharmaceutical precursors. Processed food applies Good Manufacturing Practices (CPPOB) to prevent contamination.

  5. Pharma challenges: diverted sales, counterfeits, and cross-channel selling

    Violations are dominated by drugs sold by outlets without the required expertise and authority, and by unregistered drugs. According to the WHO, about 96% of online drug sites worldwide are illegal. The fix: unique codes per product, authenticity checks, recording the whole distribution process in one system, and track & trace to catch counterfeits early.

  6. Fresh F&B challenges: speed, quality, and cost

    Fresh vegetables and fruit last 3–7 days on average, dairy 5–7 days, and meat 3–5 days at 4.4 °C (FDA). Fresh product distribution losses can reach 30–40% of production (FAO). The fix: a WMS for accurate, fast stock movement, picking strategies (zone, pick-to-order, wave), and automated delivery routes matched to vehicle capacity and specifications.

Questions about this whitepaper

What are the biggest logistics challenges in Indonesia's pharmaceutical industry?

According to the Advotics whitepaper, the three biggest are drug sales diverted to unauthorized parties, counterfeit drugs, and cross-channel sales. All three stem from a lack of visibility during distribution.

How can counterfeit drugs and products be kept out of the distribution chain?

By giving every product a unique identifier (QR code, RFID, or barcode), verifying authenticity by scanning, recording the product's whole journey in one system, and using track & trace so counterfeits are caught before they reach consumers.

What are CDOB and CPPOB?

CDOB is Indonesia's Good Distribution Practices — a quality assurance system for procuring, storing, and shipping drugs. CPPOB is Indonesia's Good Manufacturing Practices for processed food — guidelines to prevent biological, chemical, and physical contamination.

Why is fresh food distribution difficult?

Because shelf life is short — 3–7 days on average for fresh produce — while fresh products spend roughly half of it in transit. About 33% of food is wasted during distribution, and transport can exceed 26% of cost of goods sold.

What language is this whitepaper in?

The PDF is in Indonesian (25 pages). A full summary is available on this page in English and Indonesian.

Want to see how these challenges are solved in your business?

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