PROPOSED CALCULATION MODEL AND BUSINESS PROCESS IMPROVEMENT ON OWNER ESTIMATE TO IMPORTED RAW MATERIALS FOR NPK FERTILIZER THROUGH CENTRALIZED PROCUREMENT

• Main Author: Ibrahim, Yudistira
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/81144
• Institution: Institut Teknologi Bandung

PT Pupuk Kujang (PKC) fulfills the raw materials requirement to produce NPK fertilizer, mostly supplied from the import process (68.28% of the NPK fertilizer cost is contribute from the imported raw materials purchasing). The purchasing of imported raw materials is through by centralized procurement system at PT Pupuk Indonesia (PIHC) as the parent company. Procurement process by PIHC starts from planning until the tendering process completed. On procurement planning process, need to calculate Owner Estimate (OE) which will be used as a reference for evaluating the quotation and price negotiation with the supplier candidate. Based on that OE calculation take the important role, if OE is much lower than the tender result then the tender process must be repeated (retender) or will be adjustments on budgeting (re-budgeting). On the other hand, if the OE is far above the tender result, there will be over budgeting. Centralized procurement system implemented by PIHC, on OE calculation have two stages. First stage is calculating the initial OE by PKC and the second stage is calculating OE for the tender by PIHC. Both of the initial OE calculation and OE for the tender have similar or repeated working process, the repeated activity is searching data for references to created OE and recalculating for OE cost components. This similar or repeated process occurs because there is no standard or agreement between PKC and PIHC in OE calculation, so the planning process takes a long time. The initial OE must be calculated by PKC because PKC is the owner of the purchase budgeting and need to input the budget into the system. Even though PKC has calculated OE following the tender criteria, PIHC still do searching more data for recalculated OE for the tender. This is activity needed for to make sure that OE is still relevant to use on tendering process. The aim of this research is to propose calculation model (develop mathematical model), arrange flow process or the steps for OE and arrange standard formats for OE on imported raw materials for improve the business process of OE calculation. The difference from the previous studies which discussed pricing, the novelty in this research is the proposed model use sea transportation cost (freight), type of incoterm and type of LC used on the calculation. This proposed model is used to find the minimum value from total OE which is close to the market price and can fulfill the tender criteria. And at the end, the proposed model can generate cost savings from the purchasing budget. The proposed development model will be formed a new flow process and standards for the OE calculation which will be used as a basis for improving the OE calculation business process. By using streamlining in the Business Process Improvement (BPI) model by Harrington (1991) and activities that do not have added value will be eliminated, can make work processes simpler and can reduce the working times. The minimum OE value resulting from the development proposed model is to use the delivery in bulk, use LC UPAS as the payment method, use CFR incoterm and determining the discharging port at Tanjung Priok port. The proposed model can save the purchasing budget as much as 56,38% or based on value as much as Rp. 35.674.605.957,- compared by existing model. Next, to measure the accuracy the proposed model with existing model, will be measured using Mean Absolute Percentage Error (MAPE) against the value of the tender results as a reference (data validation). The proposed model has a smaller MAPE compared to the existing model, The proposed model MAPE is 6.91% and the existing model MAPE is 16,11% against the value of the tender results. On the business process improvement will used simulation with Business Process Management Notation (BPMN) to analyze the working time. The result of the simulation on business process improvement is generate the saving of the working times as much as 36.82%. The improvement is done by eliminating data source search activities and recalculations for HPS in raw material planners and PIHC forwarding services.