INVENTORY MANAGEMENT ANALYSIS AT CHEVRON INDONESIA COMPANY (CICO)

• Main Author: Nurman (NIM 291 05 007), Heru
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/6231
• Institution: Institut Teknologi Bandung

Abstract : <br /> <br /> <br /> <br /> Chevron Indonesia Company (CICO) is one of the biggest oil companies in the world. With vast range of operational locations and massive amount of materials required, CICO needs an efficient and effective Inventory Management. Accurate forecasting and excellent coordination between users, procurement, inventory control and suppliers is one of the factors to have an effective Inventory Management. <br /> <br /> <br /> <br /> At the present, CICO faces a problem of increasing amount of inventory, however, the quality of service is decreasing. Data during period January 2006 until January 2007 shows that total amount of inventory increase 7% and Stock Available Ratio (SAR) for Critical Items decrease 5%. This may happen because CICO is using an uneffective forecasting method and having no effort in correcting the forecasting method. With low accuracy of forecasting, materials ordered do not match the actual amount needed. Decreasing quality of service happens due to delays in materials delivery. Delays in materials delivery is due to incorrect procurement and insufficient information regarding the amount of materials needed. <br /> <br /> <br /> <br /> Therefore, a coordination mechanism is needed to support a more efficient and effective information exchange. The use of information technology is one of the answers to this problem. Fortunately, CICO already has the technology, however, it has not been used to its maximum capacity due to absence of coordination model. Collaborative Planning, Forecasting and Replenishment (CPFR) is a model of business process proposed by a partner to coordinate plan to reduce variations between supplies and demands. Besides that, applying a correct forecasting method can improve forecasting accuracy level. Applying both CPFR and correct forecasting method can reduce the amount of stocks in warehouse and at the same time improve the quality of supply department.