Improve Inventory Management To Support Maintenance...

BACKGROUND Material management is one of the main components in the management of all types of companies. Material management plays an important role in supporting the companys performance, which relates to customer satisfaction, cost of production and financial performance. Ruauw (2011) stated that the raw materials required should be sufficient available so as to ensure smooth production. However, should the quantity of inventory it should not be too large so that capital tied up in inventory and costs. Meanwhile the inventory is not too big and not too small anyway because can slow down the production process. Failure materials inventory control default will cause a failure in obtaining profit. It is important for every company held†¦show more content†¦In the company’s operational, PJB managing several resources, one of them is management of materials. To obtain the company’s goal, in the material management operations, currently PJB uses the ABC Analysis method to co ntrol the inventory that has been conducted since 2007. PROBLEM FORMULATION Abuhilal (2006) stated that the ultimate goal of inventory management is giving satisfaction to the customers need at the lowest price. There are two types of customer, internal customer and external customer. In company’s operation, PJB only has internal customers of inventory management, there is maintenance division. The key performance indicator of customer satisfaction is determined as a number Work Order which delayed which caused by unavailable spare part. According to the CEO decree, now PJB using three classification stock keeping unit to maintain more than 30.000 item of materials. The first classification is the impact of material to power plant operation, then the lead time of delivery and the last classification is about usage value every year (price multiplied by demand value). The stock keeping unit is classified and managed into three criteria. Then, by applying those classification the inventory manager develop policy to keep inventory in optimum level. Based on company statistic on 2008-2012, the cost of material to support a maintenance program show an increasing. Only on 2011, show a decreasing because theShow MoreRelated Riordan Manufacturing MRP Evaluation Project Essay1713 Words   |  7 Pagesexpand by reducing the inventory cost of raw materials and finished goods. Riordan currently has a legacy MRP Information System (IS) in place, and this project provides an excellent opportunity to upgrade the infrastructure to allow for a more cost-efficient way to track inventory. 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