PRODUCTION PLANNING STRATEGY TO INCREASE THE PROFIT AT PT PUPUK KALIMANTAN TIMUR

• Main Author: Hidayat, Maulana
• Format: Theses
• Language: Indonesia
• Subjects: Manajemen umum
• Online Access: https://digilib.itb.ac.id/gdl/view/62439
• Institution: Institut Teknologi Bandung

PT Pupuk Kalimantan Timur (Pupuk Kaltim) is a subsidiary of PT Pupuk Indonesia Holding Company (Persero) which produce nitrogen-based fertilizer such as ammonia, urea, and NPK. Pupuk Kaltim has an obligation to fulfill subsidized fertilizer from the Government. Since April 2021, there has been a reduction in the distribution area for subsidized fertilizers from the original two-third of Indonesia territory to only part of Kalimantan and all Provinces in Sulawesi. On the other hand, Pupuk Kaltim also has performance targets given by the shareholders such as profit, production volume, and energy consumption. Excess production which was originally for subsidized market can be diverted to the nonsubsidized segment both domestic and export which has many uncertainties such as demand fluctuations and product prices. However, from the supply-demand side, it was shown the oversupply condition for the ammonia and urea commodities in the next few years. This final project aims to find the right strategy formulation in dealing with these conditions to help the company continue to increase profits by creating several scenarios that may occur. To find the right strategies, a combination between SWOT analysis and TOWS matrix is addressed. The proposed business solution is the flexible production planning method and the development of an application system to help company optimize profits without neglecting production and energy consumption targets. This new approach will be more flexible by following market demand and market prices to decide which products to produce more to generate maximum profit. An application system or simulator will be developed to provide several benefits such as increased business productivity, product value, and competitiveness due to system automation. Based on the brainstorming results with the production team, two main scenarios were generated, normal and abnormal conditions. Normal condition refer to the initial production planning target from the shareholders without considering any disruption from the market. Abnormal conditions will be divided into internal plant problems and external factors due to global fertilizer price fluctuations, including high ammonia price, low ammonia price, high urea price, and low urea price. Alternative actions for each scenario under abnormal condition are to reschedule the annual plant maintenance (Turn Around), to decrease the production load (cut-rate), and to shutdown the plant by considering several existing constraints. The calculation simulation will be obtained the prognosis of production, energy consumption, and profit for each alternative action chosen which will then be used as the base for management considerations in making production planning decisions. By using a combination of a flexible production planning approach and its simulator development, the company’s performance targets are expected can be achieved. The profit is expected to increase about twelve billion per year.