PROPOSED MATERIALS MANAGEMENT IMPROVEMENT FOR NEWLY OPERATED OIL AND GAS COMPANY (CASE: BLACK GOLD EP)

• Main Author: Tasha Febrina, Rahmah
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/65397
• Institution: Institut Teknologi Bandung

In order to remain competitive, oil and gas companies differentiate themselves by being able to efficiently produce their product. With multiple business activities involved in its operation, a comprehensive understanding of this long supply chain of oil and gas is required. Moreover, supply chain of oil and gas is also known to heavily relay on third party materials and services to perform their activities. Therefore, ability to manage supply chain management becomes one of differentiation factors to obtain the competitive advantage in the industry. Materials management is one of components in supply chain management whose objectives are to provide materials of right qualities, in the right quantities, at the right price, from the right source and at the right time and point of usage by establishing uninterrupted flow of materials from the planning stage to distribution. Black Gold EP is a newly established upstream oil and gas company that has been actively developing and exploring its working area. In the last couple of years, the production has been continuously growing. The company has established functional departments however each of them still has disorganised management system including its materials management in supply chain activity. Among supply chain challenges happening in the company, materials availability is the noticeable one that impacts the operation because materials availability is very critical for the operations to avoid costly idle times in sequential oil and gas activities. Therefore, as the company develops, and the intensity of activities also grows, it is getting more important for the company to improve materials management system that is able to provide accuracy in flow of information and manage physical flow of materials which allow uninterrupted activities. This research aimed to improve materials management activities in Black Gold EP. Qualitative approach to find the root cause of existing materials management challenge was incorporated throughout the process which includes the interviews, codification of transcripts, mind mapping, and findings selections as well as literature review to support the arguments in discussion. The study finds there were 6 (six) root causes contributing to materials management challenge in the company. The 6 (six) issues were (i) no standard operating procedures; (ii) lack of quantity control; (iii) incompetent personnel; (iv) insufficient integration of information; (v) no materials preservation; and (vi) no quality inspection. Therefore, the solutions that were built out of these root causes included (i) deployment stocking strategy and incorporation of inventory control based on materials characteristics; (ii) establishment of standards; (iii) performance evaluation for personnel; (iv) implementation of proper tracking and visibility of information about the materials; (v) determination of suitable preservation method and protection technology; (vi) enablement of proper placement of materials storage and creation of zonation/ cluster for same type of materials preservation; and (vii) establishment of quality inspection process that records quality damage or discrepancy. Other than the proposed solutions, this research also suggested some of recommendations for the implementation through (i) prioritisation on standardisation/ simplification in selection of required materials; (ii) contractual strategy creation to adopt comprehensive value chain; (iii) development of supply chain strategy at early stage of project; (iv) application of continuous improvement; (v) stakeholder engagement; and (vi) deployment of technological software application.