INCREASING PRODUCT VALUE THROUGH SMARTER PROCUREMENT IN PT SUBUR ASRI INDUSTRI

• Main Author: Febrianty, Indah
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/38743
• Institution: Institut Teknologi Bandung

PT Subur Asri Industri (“SAI”) is a subsidiary of PT Agri Nasional Holding Company (ANHC) located in Bontang, Kalimantan Timur. SAI main business is producing and selling ammonia, urea and NPK fertilizer in domestic (subsidized and non-subsidized) and abroad market segments. Focus on non-subsidize NPK product that SAI face price competition and focus on procurement cost that constitutes the main portion of many organizations’ expenditure, the purpose of this research is to identify, analyze, evaluate and improve the procurement scheme of NPK raw material to reduce the production cost. Higher Cost of Goods Sold compare to another subsidiary of ANHC Group contribute to the lower product competitiveness in selling price. A qualitative approach used as research method to gain an understanding of underlying reason, motivation, and opinion by a discussion with person in charge in supply chain, participation or observation in the bidding process. Primary and secondary data are collected from internal & external resources and used for the purpose of this research. The result of analysis concludes that the main causes of higher material cost are utilizing premium quality and low purchasing quantity that make company do not have opportunity to get a better deal from supplier. Value engineering, targeting cost and international procurement principle are applied to solve the problem. There are alternative ways to increase efficiency in material cost; (i) Substitute lower cost material; (ii) Modify the scope of supply, (iii) Supplier consolidation, (iv) Maximize quantity / minimize purchase minimums and (v) Price formulation in commodities.