PROPOSED IMPROVEMENT OF CRUDE OIL SUPPLY MANAGEMENT IN PT.XYZ USING SIX SIGMA DMAIC

• Main Author: Agustian, Hendri
• Format: Theses
• Language: Indonesia
• Subjects: Manajemen umum
• Online Access: https://digilib.itb.ac.id/gdl/view/63986
• Institution: Institut Teknologi Bandung

Energy is a strategic need of nations, where oil continues to hold the largest share of the energy mix, accounting for 31.2% of total primary energy consumption. Each country is obliged to guarantee its long-term needs. However, this is not a simple matter when it comes to the current condition of world crude oil reserves which is limited while the world energy consumption is continuing to grow, including Indonesia. This condition will cause the hunt for crude oil will be increasingly difficult. The difficulty of providing proper crude oil to each refinery according to their design configuration will affect to refinery margins due to operational consequences such as operating capacity, product yield, hydrocarbon losses, and mechanical issue. This phenomenon has occurred in PT. XYZ where there are often mismatch between the composition of crude oil desired for the refinery as planned with crude oil obtained from the procurement process. This condition affect to the achievement of margins and lead to the emergence of operational consequences. This research aims to determine the factors that causing the mismatch and provide solution based on the root cause. Through Six Sigma DMAIC method, the problem analysis was carried out and found the root cause of the problem was because of the current procurement strategy implemented is no longer in accordance with the current conditions where the world's crude oil sources are very dwindling while the competition for crude oil hunting is getting tighter. This current strategy tends to limit crude oil options, passive and less flexible in the hunt for crude oil, and tend to lose crude oil which provide better value. Therefore, several strategies proposed as solution, namely Value Based Crude Selection+ Scheme (VBCS+) and Crude Value Relative Scheme (CVR). Furthermore, these two alternative solutions were analyzed using Analytic Hierarchy Process (AHP) with conclusion that CVR is more suitable as solution to improve current business processes. In order to ensure this new strategy will be done and controlled effectively, the Implementation Plan must be developed covering 3 (three) dimensions that need to be managed, namely Process, People and Tools. By implementing this new strategy in accordance with the implementation plan, it is believed that improvements as company expected will be achieved.