PROPOSED PRICING ADJUSTMENT POLICY AND PROCUREMENT STRATEGY: A CASE OF FOURTH GENERATION 1 LITER RED PLASTIC BOTTLE PACKAGING IN PT PERTAMINA LUBRICANTS

• Main Author: Rahmadian Fitriandi, Lidya
• Format: Theses
• Language: Indonesia
• Subjects: Manajemen umum
• Online Access: https://digilib.itb.ac.id/gdl/view/62275
• Institution: Institut Teknologi Bandung

In conducting its lubricants, grease, and base oil business, PT Pertamina Lubricants (PTPL) procures its raw materials from its chain of suppliers. This study discusses the case of the fourth-generation-oneliter-red plastic bottle as one of the packaging items the company procured. It was the most purchased plastic bottle from 2015 to 2019, reaching 129.2 million pieces of total items purchased and 209.5 billion Rupiah total cost. Due to being a subsidiary of a state-owned corporation, PTPL must oblige the government's procurement regulation. One of the articles is price adjustment, which regulates that the item's price should be evaluated periodically. According to the existing agreement, the components that could affect the item's price are plastic (HDPE blow molding), labor, electricity, and transportation cost. This study aims to identify the simulated price adjustment mechanism, policy, and schedule for the fourth-generation-one-liter-red-plastic bottle to generate a low cost. It also proposes a schedule to conduct the procurement corresponding to the simulated price adjustment period. The conceptual framework for conducting the study refers to the five steps for achieving the optimal contract in an upmarket presented by Power Advocate (2017). The root cause was determined using the Current Reality Tree (CRT) tool. The root causes fitting the scope and context of this study are the lack of evaluation on indices selection and time parameter setting. What-if analysis and simulation are the chosen method for conducting this study. The method sets four alternative price adjustments schedules, six alternative HDPE blow molding index selections, and three alternatives to convert the index, which results in 40 scenarios. The study analyzes results shown from January 2013 to December 2019. The study finds that the current price adjustment mechanism, policy, and schedule does not generate the lowest potential cost. Instead, the HDPE blow molding index input should use only one index and be converted using the average of USD currencies. Also, the HDPE blow molding rate should only be adjusted if the changes exceed 5% or are lower than -5%. The price adjustment should be executed in January, May, and September. This set of index selection and time parameter variables setting creates a potential cost-saving of -8,66%, which reaches -3.49 billion Rupiah/year. The study also recommends that if the tender method chosen is the open tender, the procurement for the new contract should begin in November 2021. The study is currently focused and limited to one type of packaging. Expansion on the scope of study and evaluation could provide PTPL with more cost savings.