AN ASSESMENT OF PERFORMANCE AND STRATEGY OF SUPPLY CHAIN MANAGEMENT DIVISION TO OPTIMIZE SERVICE LEVEL BY USING THE BALANCED SCORECARD METHOD IN PT FREEPORT INDONESIA

• Main Author: EDOWAY 29115262, BEATUS
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/21402
• Institution: Institut Teknologi Bandung

Current Supply Inventory to be most critical issue in entire world wide of PT. Freeport Indonesia. During <br /> <br /> <br /> <br /> March 2016 to February 2017, average of reservation which cannot fulfill by Supply Chain Management is <br /> <br /> <br /> <br /> about 81.22 % with value $ 89, 84 million. In line with that, the Balanced Scorecard method as one of <br /> <br /> <br /> <br /> Performance Measurement System is used to assess current Performance and Strategy of Supply Chain <br /> <br /> <br /> <br /> Management, The Objective is from the results gabs obtained, and can give feedback for future improvement <br /> <br /> <br /> <br /> strategy, in term of get maximum shareholder value. <br /> <br /> <br /> <br /> The last process of supply inventory process is at section warehouse. Service level is used to see how well <br /> <br /> <br /> <br /> Supply Chain Management fulfill user requirement timely manner. Since 2012, average of service level is <br /> <br /> <br /> <br /> below than expected. In this final project taken average of service level starting 1 <br /> <br /> <br /> <br /> st <br /> <br /> <br /> <br /> <br /> January 2017 is about 57, 92% of 86 % as targeted service level. <br /> <br /> <br /> <br /> <br /> Using the Balanced Scorecard measurement, resulted six criteria indicator red and three indicator yellow <br /> <br /> <br /> <br /> taken for further analysis. Those to be gabs between strategy and existing operation. Then finding 24 root <br /> <br /> <br /> <br /> causes after did analysis using Root Causes Analysis three diagram. It then assigned severity index to each <br /> <br /> <br /> <br /> root causes to get rank severity for further prioritization business solution and linkage process. Five top of <br /> <br /> <br /> <br /> root causes identified for the causes are lack of manpower in PT KPI to be first rank, second rank is <br /> <br /> <br /> <br /> overcapacity in warehouse, third rank is high backload plan order, fourth rank is lack of manpower at section <br /> <br /> <br /> <br /> inventory control, fith rank is no restriction order for spesific goods and no vendor hold stock for super fast <br /> <br /> <br /> <br /> and fast moving item. And the lowest /the last rank is reservation cancelled by warehouse supervisor. After <br /> <br /> <br /> <br /> identify some root causes, the solutions for the problems were involving four aspects; communication / <br /> <br /> <br /> <br /> coordination, People /Human Resources, Infrastructure, and Business Process. <br /> <br /> <br /> <br /> <br /> Advantages of the proposed business solutions are get more space for storage goods, in short term period get <br /> <br /> <br /> <br /> outsourcing employee to operate truck in PT KPI, Get two additional manpower at section inventory control, <br /> <br /> <br /> <br /> no quota quantity reservation for ordering, specific item restricted (only dedicated planner can order it), 6314 <br /> <br /> <br /> <br /> superfast item is on review for vendor hold stock program, reengineering of process issuance material can <br /> <br /> <br /> <br /> increase percentage of service level and regular communication/coordination can accommodate all of end <br /> <br /> <br /> <br /> user requirement (for more detail depicted in table 4-3 and 4- 4). On implementation plan, 16 of 21 proposed <br /> <br /> <br /> <br /> solution (figure 4-1) will prioritize as those has low complexity but has high impact or influence to service <br /> <br /> <br /> <br /> level. As Conclusion, inefficiency and ineffectiveness in transformation process can be improved with <br /> <br /> <br /> <br /> <br /> initiatives and result proposed solution was given. In the end will be increasing shareholder value.