VENDOR HELD STOCK (VHS) STRATEGY FOR LARGE-SCALE MINING SEGMENT CUSTOMERS AT PT. PERTAMINA LUBRICANTS

• Main Author: Adi Nugroho, Irawan
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/53210
• Institution: Institut Teknologi Bandung

PT. Pertamina Lubricants, as one of the lubricants players in Indonesia, faces big challenges in the mining segment, especially for large-scale companies. In fact, the mining segment is one of the largest segments of lubricant sales, with a share of 24%, according to Kline's publication. Currently, many large companies in this segment are requesting a supply scheme using the VHS (Vendor Held Stock) system in their tender process. The essence of the scheme is that products and services will always be available on the site, both in quantity and in type, so that when consumers need these products they are always available on the site. So far, PT. Pertamina Lubricants only uses two schemes, namely the Loco and Franco schemes for services to consumers, which of course is different from the VHS scheme which has a higher level of complexity. From the analysis conducted, it can be seen that the lubricant business in this segment is still growing and promising, however, which is a challenge with the increasing number of competitors, the consumer power is getting bigger compared to suppliers, of course this will have an impact on very tight competition between suppliers, which results in to a decrease in margins. Consumers, currently very smart and connected, have knowledge related to product, price, distribution, promotion, after sales from various suppliers. They became very disloyal and demanding. As is also the case with the tender requirements using the VHS scheme, if the supplier does not comply, it will automatically be eliminated. From in-depth interviews conducted to consumer key persons, all of them stated that this scheme is very good and if there are no problems related to cost, then all sites will use this scheme, even they also voluntarily recommend this scheme to their colleagues, positive things of course for suppliers. The negative thing, of course, is related to the additional cost, where the costs arising from this VHS scheme are three times that of the Franco scheme. The largest cost is related to the facility, bulk handling, human resources or risk. It is a challenge for PT. Pertamina Lubricants to make this VHS scheme an effective tool for consumers compared to competitors and in the end it can be a sustainable competitive advantage. In its implementation, there are three stages of the strategy used, namely the short term, mid term and long term. The short term focuses on competitive parity, the mid term focuses on temporary competitive advantage and the long term focuses on sustainable competitive advantage.