PERFORMANCE IMPROVEMENT FOR PROCUREMENT ACTIVITIES IN REACHING KEY PERFORMANCE INDICATOR (A CASE STUDY OF AIRCRAFT MANUFACTURING COMPANY IN INDONESIA)

• Main Author: Yuldia, Zeno
• Format: Theses
• Language: Indonesia
• Subjects: Manajemen umum
• Online Access: https://digilib.itb.ac.id/gdl/view/75630
• Institution: Institut Teknologi Bandung

Procurement activity in for an aircraft industry in Indonesia has suffered most during pandemic few years ago. The progress of Procurement at certain company is not that different. Moreover, one of the main problems in Procurement Division at the company is KPI On-Time Delivery target has not yet been achieved for aircraft commodities, especially for AEI. During these last 5 years, the procurement progress only achieved 48,5% on time, while the target is above 90% of total procurement activity. So far, mitigations has already been taken in order to reduce the delay rate. It give an impact, but the delay rate is higher than the target. The purposes of this study is to increase the On-Time progress and decrease the delay. This study uses Six Sigma approach to define the main problem and where the problem occurred. The variable which is going to be focused on is Lead Time and it is limited for Avionic Electrical Instrument Commodity. Also, there are several analyses in this research. Internal and External analysis is done by using SWOT analysis method. For finding the root cause, use method 5 Why's Analysis method. Business process analysis is done to pinpoint where the improvement should be done. From the quantitative analysis done by using regression analysis, it is clearly that the rate of delay activity these for past 5 years was decreasing. The root cause of it was PR which could not be converted to PO because of the long-lasting RFQ and EQ process. The second root cause is miscommunication in the preparation of ordering aircraft materials. For the issue of the RFQ and EQ process is solved by developing and using e-RFQ Evaluation Tools to make sure that the quotation process and feedback from the supplier are done faster than using the manual method. The procurement division should make a development team along with IT division For the miscalculation problem with improving teamwork and communication. The recommendation is to conduct research further regarding quality of human resource. The plan's implementation will commence in early August 2023. After implementing the solution, the performance of the procurement business process will be monitored and evaluated, and it is anticipated that the division's ability to complete purchasing activities on time will increase, along with the division's level of success in reaching its KPI. For the recommendation, there are several points to be applied by company as a support for these programs. Despite this research already done, there are still many things that can be explored in future research, especially for human resource aspects.