p–ISSN: 2723 - 6609 e-ISSN: 2745-5254
Vol. 5, No. 10, October 2024 http://jist.publikasiindonesia.id/
Indonesian Journal of Social Technology, Vol. 5, No. 10, October 2024 4580
Improvement of Mro Material Procurement Efficiency
Through the Six Sigma Concept at PT Krakatau Steel
(Persero) TBK
Wahyu Wijanarko
Institut Teknologi Bandung, Jakarta
Email: [email protected]
*Correspondence
ABSTRACT
Keywords: MRO
material, lead time, Six
Sigma, DMAIC, BPA and
consignment contract.
PT Krakatau Steel (Persero) Tbk (PTKS) is a State-Owned
Enterprise engaged in the production of steel and related
services. The MRO Procurement Department is a
procurement function to process MRO Material purchasing
at PTKS. The main problem currently faced is the lead time
for the MRO material procurement process which takes a
long time, the reason is that procurement is often conducted
by spot method and repeatedly for the same material. Too
long lead times pose a risk to the smooth production process
due to the unavailability of MRO materials when needed.
Referring to the MRO Procurement Department's KPI,
>85% of the number of POs (Purchase Orders) issued must
have a lead time of <41 days, however, based on the actual
historical data for 2022, the PO lead time achievement for
the MRO material procurement process does not meet the
target. Department's KPI, >85% of the number of POs
(Purchase Orders) issued must have a lead time of <41 days,
however, based on the actual historical data for 2022, the PO
lead time achievement for the MRO material procurement
process does not reach the target. An alternative solution
used to speed up procurement lead times is implementing a
Blanket Purchase Agreement (BPA) and/or Consignment
Contract for MRO routine/consumable material types. The
results obtained are that the long and complicated MRO
material procurement process for the same type of material
can be eliminated, which means that with the improvements
made, the MRO Procurement Department can implement a
more efficient procurement process.
Introduction
In a discussion forum entitled Prosperous and Connected Thanks to Infrastructure,
President Joko Widodo said infrastructure is the foundation for Indonesia to be able to
compete with other countries (Mollov, 2020). Infrastructure readiness is the foundation
for Indonesia to grow into a developed country, which prevents Indonesia from being
trapped in a developing country or middle-income trap (AKINOLA et al., 2022).
Improvement of Mro Material Procurement Efficiency Through the Six Sigma Concept at PT
Krakatau Steel (Persero) TBK
Indonesian Journal of Social Technology, Vol. 5, No. 10, October 2024 4581
Infrastructure development will certainly have short-term and long-term effects for
a country, in the short term it can create jobs, where human labor is the main factor
supporting development (Bag et al., 2020). Meanwhile, in the long run, evenly distributed
infrastructure will open up new access and facilitate existing access, of course, better
connectivity will support the growth of new economic centers and not be concentrated in
the capital city of Jakarta (Doan, 2020).
Infrastructure development is expected to have a positive impact on the national
steel industry in line with an increase in per capita consumption. However, the growth in
per capita steel consumption in Indonesia is much lower than in other countries in
ASEAN, based on data from the World Steel Association, Indonesia's per capita steel
consumption is around 55.2 kg/capita (Durdyev & Hosseini, 2020). Meanwhile, when
compared to neighboring countries, domestic consumption is still above the consumption
level of Myanmar at 51.9 kg/capita but still below Malaysia, which is around 210.5
kg/capita, Singapore at 273.5 kg/capita, and Vietnam at 239.8 kg. /capita (Fourie &
Malan, 2020). The absorption of steel products in Indonesia is still dominated by the
construction sector, which is 78%. This is a big question, why with the massive
construction development, which is related to steel products and materials, however, the
level of domestic consumption of steel per capita very low?
PTKS is a capital and technology-intensive upstream industry, the biggest factor
that becomes a challenge is the supply chain, starting from the fulfillment of raw materials
and also Maintenance, Repair, and Operation (MRO) materials to the distribution of their
products to consumers (Gitta, 2023). As a state-owned company, it is obliged to carry out
the function of procuring goods/services by referring to the internal Standard Operating
Procedures in operations, by referring to the Regulation of the Minister of State-Owned
Enterprises of the Republic of Indonesia No. PER-08/MBU/12/2019 concerning General
Guidelines for the Implementation of Procurement of goods and services State-Owned
Enterprise (NJOKI, 2023). PT Krakatau Steel issues internal procurement guidelines
called Goods/Services Procurement Procedures which involve all related units, and
regulate procedures for request processing, procurement processes, inspection of goods,
storage of goods, and the process of using goods by requesters. Overall, the procedure
contains guidance starting from the process of planning, implementing, and supervising
the procurement of goods and services (Rane et al., 2020).
MRO Procurement Department organizational position under the Central
Maintenance & Procurement Division, as a function of material procurement MRO plays
an important role in the supply chain to support PT Krakatau Steel's production continuity
(Sönnichsen & Clement, 2020). There is a need for innovation and improvement so that
the availability of MRO materials can be met efficiently, effectively, and competitively,
and must follow the principles of Good Corporate Governance (GCG), the principles that
must be implemented are: Transparency, Accountability, Responsibility, Independence
and Fairness (Wankmüller & Reiner, 2021).
PT Krakatau Steel has human resource assets arranged in an organizational form.
Human resources have the expertise to support all business activities of PT Krakatau
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Steel. Overall, the organization is led by a President Director who is fully responsible for
all activities related to the company. Under the main director, there are five Directors and
several Vice Presidents (VP) under the Director, and several VPs are directly supervised
by the President Director. Under the Vice President, there are departments headed by
managers who have specific responsibilities for their jobs.
The MRO Procurement Department position is under the Central maintenance &
Procurement Division, which has the main duties and functions of controlling and
planning field maintenance activities and workshops in processing factory equipment
repairs, such as mechanical, automation, instrumentation and electrical as well as civil
equipment, by making/modifying equipment factory and perform cost estimation, design
and technical inspection, recalibration and management of plant utilities and energy
management to ensure the smooth operation of the plant and maintain optimal Overall
Plant Effectiveness (OPE), as well as strategic sourcing management and market analysis,
managing the cataloging of non-development goods and services , evaluation of estimated
prices, clearance of imported goods, handling shipments of import material (sea and air)
freight, vendor management, warehousing management and procurement of
Maintenance, Repair and Operation (MRO) materials, the entire activity should be ensure
runs in the right quality, quantity, specification, price and on time according to company
needs, and in accordance with the principles of Good Corporate Governance and the
applicable Standard Operating Procedures.
Maintaining efficient production with few unplanned breakdowns is one way to
reduce production costs. If a breakdown does occur unexpectedly, it must be quickly
resolved so that production can restart as soon as possible to achieve specified production
volume requirements. The ability to correct repairs can be measured by MTTR (Mean
Time to Repair) while the minimum operational delay due to unscheduled breakdowns
can be described by MTBF (Mean Time Between Failures). Referring to the explanation
above, we know that proper and accurate Maintenance Management can optimize Plant
Availability. In general, maintenance is divided into two, namely planned maintenance
and unplanned maintenance. Planned maintenance activity care that is organized and
carried out with forethought, control, and disability according to a predetermined plan.
One of the planned maintenance activities is to plan and organize the availability of spare
parts and consumables for maintenance needs.
Method
The methodology chapter will explain the research flow comprehensively, starting
with identifying the symptoms that led to the research and ending with the expected
results. This chapter will study data collection and analysis methods developed to
overcome MRO material procurement challenges through the Six Sigma concept.
Research Philosophy
This research will use the philosophy of interpretivism. This philosophy was chosen
because this research focuses on an in-depth understanding of the MRO (Maintenance,
Repair, and Operations) material procurement process and how the Six Sigma concept
Improvement of Mro Material Procurement Efficiency Through the Six Sigma Concept at PT
Krakatau Steel (Persero) TBK
Indonesian Journal of Social Technology, Vol. 5, No. 10, October 2024 4583
can be applied to increase efficiency at PT Krakatau Steel. Interpretivism allows
researchers to understand complex social and organizational contexts and capture the
nuances of the experiences of individuals involved in the procurement process.
Research Approach
This research will use an inductive approach. This approach was chosen because
the research aims to develop new understanding and theories based on data collected in
the field. In an inductive approach, researchers begin by collecting empirical data through
qualitative methods, such as semi-structured interviews, to explore the experiences,
views, and practices that exist at PT Krakatau Steel regarding the procurement of MRO
materials and the implementation of Six Sigma. From this data, researchers then identify
emerging patterns, themes, and relationships, which are then used to form conclusions
and new theories regarding increasing procurement efficiency.
Research Design and Strategy
This study employs a qualitative approach to methodology. Through interviews
with relevant stakeholders, qualitative data is used to determine the underlying cause of
the material procurement process. According to Creswell (2010), qualitative research
requires significant efforts, including the formulation of questions and procedures, the
collection of specific data from related subjects, the inductive analysis of data from
specific to general themes, and the interpretation of the data's meaning. This study will
collect data through interviews with managers or superintendents of the Central
Maintenance & Procurement Division and Rolling Mill Division.
Sampling Strategy
This research implements a purposive sampling strategy, where the sample is
selected deliberately based on certain criteria that are relevant to the research objectives.
In the context of research on increasing the efficiency of MRO material procurement
through the Six Sigma concept at PT Krakatau Steel, the selected participants will include
individuals who have in-depth knowledge and direct experience in the procurement
process and implementation of Six Sigma. This includes procurement managers,
operational staff involved in procuring MRO materials, and Six Sigma experts or
practitioners in the company. A purposive sampling approach ensures that the information
collected is relevant and in-depth, providing meaningful insight into how Six Sigma
concepts can improve procurement efficiency.
Data Collection Method
This study employs a qualitative methodology, with data collected from several
sources of data including MRO Procurement history from ERP/SAP, Questionnaires,
discussions, and interviews.
a. MRO Procurement data history
The MRO Procurement data history is already archived in the ERP/SAP System of
PTKS. The data stored in the ERP/SAP system is very complete, it can be traced starting
from the initial request process from the user, the procurement process, and receiving and
storage activities until the item is used by the user. The data source used is the history of
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Indonesian Journal of Social Technology, Vol. 5, No. 10, October 2024 4584
the procurement process from 2020 to the end of 2022. The data obtained from SAP are
Purchase Requests that have been made by the authorized unit which is the Maintenance
Service Department for plant spare or insurance spare items and also MRO Planning for
common spare and consumable material types.
b. Interview
According to (Aprile et al., 2019) in qualitative approaches, the major data
collection technique is the interview. Several employees with positions and
responsibilities related to the material procurement process carried out by the Central
Maintenance & Procurement Division were interviewed. Discussions with experienced
employees who serve as mentors for the researchers in this study were also held. Data
collection by referring to the literature review and then conducting interviews with
sources working in the Central Maintenance & Procurement Division related to the
material procurement process such as buyers, planners, mid-management which means
the Superintendent, the decision maker which means the manager of procurement and
another supporting department, as well as end users who use materials in the work area
and external parties which is some PTKS’s vendors. The following is a list of resource
persons along with their profiles and a description of the work performed.
Data Analysis Method
The following final project research, based on qualitative data analysis, it conducted
to identify problems in the MRO material procurement process by interviewing related
parties, considering historical procurement data, and reviewing literature studies.
According to Sugiyono (2019), data analysis in qualitative research is carried out during
data collection, and after completing data collection within a certain period. By
interviewing, the researcher then compiled an analysis of the answers that had been
described.
Results and Discussion
Identification Lead Time Procurement Process of MRO material
Every material procurement process, especially spare parts procurement, requires
quite a long lead time, starting from the PR preparation process (including the cataloging
process, HPS/OE preparation, and PR release) to PO preparation (including the tender
process, negotiation, and PO approval), coupled with a very large number of items and
variants of spare parts and consumable materials. Following up on user complaints
regarding the long lead time for spare parts procurement, it is necessary to find the best
solution. From the evaluation results of spare parts PO report data on the SAP system
from 2020, 2021, and 2022, procurement performance, especially in procurement lead
time, has decreased, as in the following picture as follows:
Improvement of Mro Material Procurement Efficiency Through the Six Sigma Concept at PT
Krakatau Steel (Persero) TBK
Indonesian Journal of Social Technology, Vol. 5, No. 10, October 2024 4585
Figure 1
Average lead time for PR-PO spare parts in 2020-2022
From the graph above can be seen that there is a trend in the average lead time in
the process of completing MRO material POs during the 2020, 2021, and 2022 time
periods which tends to decrease in achieving lead times below 41 days, when referring to
the standards used, namely Departmental MRO KPIs and Procurement Procedures The
actual PTKS realization of PO lead time with a period of less than 41 days must exceed
85% of the total PO items.
The following are detailed stages of the procurement process so that a time
reference of 41 days is set as stated in the PT Krakatau Steel (Persero) Tbk Goods
Procurement Procedure.
Table 1
PTKS goods procurement procedures
No
Activities
Times
Remark
1.
PR & Document Checking
2
2.
Technical Explanation
0-8
If necessary
3.
Auction setup & send bid requests
2
4.
The process of submitting price
offers
3-10
5.
Bid opening and COQ creation
2
6.
Clarification and Negotiation
1-3
2020 2021 2022
Actual <41
days
78% 74% 72%
Target KPI
85% 85% 85%
78%
74%
72%
85%
60%
65%
70%
75%
80%
85%
90%
95%
100%
Percentage
LEAD TIME % ( <41 DAYS)
Actual <41 days
Target KPI
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Indonesian Journal of Social Technology, Vol. 5, No. 10, October 2024 4586
7.
HPS/OE Evaluation
0-7
In case Final
nego price > OE
8.
PO preparation
2
9.
Release and signing of PO
1-5
It must be admitted that the standard lead time of 41 days does seem very long, this
can happen because PTKS still uses hard copies. From the first stage, the buyer will print
all procurement files and then store them in a special folder where the documents will
flow according to the ongoing process. Apart from that, some processes still require a wet
signature, for example, HPS/OE evaluation approval and PO printed wet signature. This
is a waste of time and requires migration to a digital system so that it can be truly paperless
in the procurement process operations and of course, it will speed up the procurement
process too.
SIPOC Analysis
To find out the factors that influence the procurement process, a tool is needed to
understand the entire process. By using the SIPOC diagram, you can fully describe the
procurement process implemented at PTKS. The following is a SIPOC table for the
procurement process diagram.
Table 2
I
P
O
C
Input
Process
Output
Customer
MWO and
Reservation
Creating &
Approval
Purchase
Request
Purchase
Request
Approved
Planner of
MRO Proc.
Dept
Prepare
documents
and eligible
vendors
Selecting and
Inviting
Request for
Quotation
(RFQ)
Vendors
Quotations
Open all
Quotations
on the
closing date
Comparison
of
Quotation
Buyer of
MRO
Procurement
Dept
Proposed
Quotation
as a
requirement
Bidding
Process
Determined
the lowest
bidder
Vendors
Improvement of Mro Material Procurement Efficiency Through the Six Sigma Concept at PT
Krakatau Steel (Persero) TBK
Indonesian Journal of Social Technology, Vol. 5, No. 10, October 2024 4587
review
technical
specificatio
n
Clarification
& Final
Negotiation
Acceptance
Final Price
&
specificatio
n
Users and
Vendor
Draft and
review PO
PO awarding
and signing
by both
Release PO
Manager
MRO Dept.
and Vendors
GR process
Closed
MWO and
Reservation
The request
has been
fulfilled
User Function
(MS.
Department &
etc.)
The SIPOC Analysis is a tool utilized in the Six Sigma methodology to identify the
essential elements of a process before initiating improvements. In this study, the SIPOC
Analysis aids in detailing each step in the supply chain involving MRO (Maintenance,
Repair, and Operations) material procurement. The SIPOC elements consist of Supplier,
Input, Process, Output, and Customer. Suppliers are identified as vendors or distributors
providing MRO materials, while inputs include material specifications, ordering
requirements, and delivery information. The process involves request receipt, vendor
evaluation, ordering, goods receipt, and quality control. Outputs are MRO materials
received according to specifications, and customers are various departments within PT
Krakatau Steel utilizing the materials for operational and maintenance needs.
As a result of this definition stage, specific objectives are formulated to reduce
procurement cycle times, improve coordination between departments, and improve
supplier management. This clear and detailed definition of the main problem allows Six
Sigma to focus on critical areas that require improvement, as well as set realistic and
measurable targets to improve the efficiency of MRO material procurement at PT
Krakatau Steel.
Measure Phase
The historical of creation Purchase Requests will be displayed based on the
commodity/Material group from 2020 to 2022, sorted from the highest number of PRs,
as follows:
Table 3
Number of PR Material creation based on commodity materials/material groups from
2020 to 2022
No
Commodit
y
Category
2022
202
1
2020
TOTA
L
1
9150
Oils And Greases: Cutting,
Lubricating, And Hydraulic
371
475
358
1204
2
8010
Paints, Dopes, Varnishes And
Related Products
528
367
127
1022
3
3110
Bearings, Antifriction,
Unmounted
474
316
201
991
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Indonesian Journal of Social Technology, Vol. 5, No. 10, October 2024 4588
4
6850
Miscellaneous Chemical
Specialties
344
291
197
832
5
5310
Nuts And Washers.
343
197
216
756
6
5306
Bolts
359
178
134
671
7
5305
Screws.
364
165
121
650
8
4730
Fittings And Specialities, Hose,
Pipe And Tube
356
175
88
619
9
6810
Chemicals
383
120
62
565
10
1365
Chemical, Agent, Stimulant
171
147
112
430
11
3439
Misc. Weldings, Soldering, &
Brazing Supplies And
Accessories
192
156
82
430
12
5330
Packing And Gasket Materials
166
131
68
365
13
4330
Centrifugals, Separators, And
Pressure And Vacuum Filters
126
117
64
307
14
5345
Disks And Stones, Abrasive
126
120
61
307
15
4720
Hose And Tubing, Flexible
143
104
42
289
16
6110
Electrical Control Equipment
73
76
76
225
17
4820
Valves, Nonpowered
71
85
55
211
18
8030
Preservative And Sealing
Compounds
80
87
36
203
19
6145
Wire And Cable, Electrical
111
55
35
201
20
7920
Brooms, Brushes, Mops, And
Sponges
81
67
53
201
21
8020
Paint And Artist's Brushes
95
84
20
199
22
7530
Stationery And Record Forms
71
75
41
187
23
8430
Footwear, Man's
58
59
61
178
24
5930
Switches
96
34
33
163
25
4710
Pipe And Tube
96
34
29
159
26
3010
Torque Converters And Speed
Changers
65
51
31
147
27
3455
Cutting Tools For Machine
Tools
59
42
30
131
28
4810
Valves, Powered
70
32
17
119
29
5350
Abrasive Materials
64
32
23
119
30
4010
Chain And Wire Rope
35
41
41
117
31
9510
Bars And Rods, Iron And Steel
38
46
30
114
32
4320
Power And Hand Pumps
48
33
27
108
33
9520
Structural Shapes, Iron And
Steel.
59
41
8
108
34
8040
Adhesives
56
29
21
106
35
5970
Electrical Insulators And
Insulating Materials
35
34
36
105
36
5920
Fuses, Arresters, Absorbers,
And Protectors
35
35
33
103
37
3422
Rolling Mills And Drawing
Machines
52
24
25
101
38
6685
Pressure, Temperature, And
Humidity Measuring And
Controlling
48
26
24
98
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Indonesian Journal of Social Technology, Vol. 5, No. 10, October 2024 4589
39
3040
Miscellaneous Power
Transmission Equipment
47
34
13
94
40
4940
Miscellaneous Maintenance And
Repair Shop Specialized
Equipment
62
25
3
90
41
7510
Office Supplies
24
32
33
89
42
6640
Laboratory Equipment And
Supplies
57
21
10
88
43
8415
Clothing, Special Purpose
36
23
23
82
44
3910
Conveyors
34
26
20
80
45
9140
Fuel Oils
27
29
22
78
46
3030
Belting, Drive Belts, Fan Belts,
And Accessories
40
21
16
77
47
3433
Gas Welding, Heat Cutting, And
Metalizing Equipment
35
23
19
77
48
5963
Electronic Modules
23
28
25
76
49
3990
Miscellaneous Materials
Handling Equipment
10
2
60
72
50
4240
Safety And Rescue Equipment
39
12
17
68
TOTAL
6376
445
7
2979
13812
The measurement results show that there is a significant imbalance between the
number of requests for a commodity and the number of material codes processed in
procurement. This means that many material requests are not processed properly, causing
a backlog of requests and lengthening procurement cycle times. This situation indicates
that the procurement methods currently implemented are less effective in handling high
volumes of demand, thereby hampering operational efficiency.
The conclusion from this data analysis is the need to review the procurement
methods applied at PTKS. Current methods are not able to accommodate procurement
needs properly, which can be seen from the high number of unfulfilled requests.
Therefore, a strategy is needed to reduce procurement cycle time by optimizing existing
processes. One way is to simplify unnecessary procurement stages and improve existing
work procedures.
Improve Phase (Business Solutions)
After analyzing the core problems, the next stage is to develop improvements as a
solution to the problems faced. The following is a proposed solution to the root of the
problem faced.
Table 4
Proposed solution
No
Root Causes
Proposed Solution
1.
Lead Time procurement too long
Blanket Purchase Agreement
and E-Procurement
2.
Repeated Purchase Request
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3.
Lack of planning
4.
Common Material
The following is an explanation of the solution to the main problem of lead times
that are too long and frequent requests for procurement of the same goods repeatedly
using a Blanket Purchase Agreement.
A Blanket Purchase Agreement (BPA) is a simplified method of addressing
anticipated repetitive needs for supplies or services by establishing “charge accounts”
with qualified sources or supplies. BPA’s promote competition and allow districts to
utilize multiple vendors. It also simplifies the procurement of services. BPA’s are
solicited for one year, with two one-year options. The district has the option whether or
not to renew for an option year. BPA’s promote competition and allow districts to utilize
multiple vendors. It also simplifies the procurement of services. A blanket purchase order
can bring many benefits to the business if you use it correctly.
Reduce costs and increase purchasing power.
The blanket agreement can help organizations group all the good or service
purchases that would otherwise be spread out over a long period and gain volume
discounts. Besides, it also helps reduce administration costs significantly since you don’t
have to involve all departments several times to manage the same purchase and find new
suppliers or renegotiate terms and prices again for each order.
Improve efficiency and shorten purchasing lead time
A blanket PO streamlines the procedure of ordering repeated items. Rather than
creating many individual purchase orders, you can just create one and receive it many
times. On the other hand, when the supplier has all order information for a long period in
advance, they can actively prepare all orders and reduce lead time.
Reduce stock holding
A blanket agreement specifies all of the terms and conditions of purchase, including
the numbers needed and the expected delivery date. Therefore, it eliminates the need to
have extra stock on hand which can help reduce inventory carrying costs and increase
efficiency.
BPA Implementation
The control stage in implementing a Blanket Purchase Agreement (BPA) involves
several key activities to ensure that the blanket purchase agreement is implemented
effectively and efficiently. First, at the Implementation Plan stage, the company must
prepare the implementation team and determine a clear timeline and milestones. After
that, the BPA system is tested to ensure that all processes run smoothly before being fully
implemented. Training of relevant staff is also essential to ensure that all parties involved
understand the new policy. After training, the BPA system is implemented in stages with
initial monitoring to identify and adjust any problems that may arise. Initial evaluation is
Improvement of Mro Material Procurement Efficiency Through the Six Sigma Concept at PT
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Indonesian Journal of Social Technology, Vol. 5, No. 10, October 2024 4591
carried out to assess the success of implementation and make improvements based on
feedback.
Furthermore, in Standardization activities, companies must set standards for the
procurement process, including identification of common materials and suppliers used.
This standard is then documented in the form of a clear and comprehensive SOP
(Standard Operating Procedure). Standard socialization is carried out through training and
dissemination of information to all teams involved in the procurement process.
Implementation of standards is carried out in daily operations by monitoring compliance
with established standards. Regular internal audits are conducted to ensure that all
procedures and standards are properly followed, and adjustments are made, if necessary,
based on audit results. Finally, the Control Plan involves the definition of relevant
performance indicators (KPIs) to monitor the effectiveness of the BPA.
The data collection system must be implemented continuously to obtain accurate
and up-to-date information. Regular monitoring of KPIs is carried out, with monitoring
results reported to management. If areas requiring repair are discovered, corrective action
is taken immediately. Periodic reviews of the control plan are also carried out to ensure
continuous improvement and necessary adjustments.
Conclusion
The procurement problem from 2020 to 2022 is the long lead time process. It can
be seen from the KPI achievement data, especially regarding lead time, that the
achievements do not reach the target. This long lead time is one of the findings of this
research. In general, this research has several findings which can be concluded as follows:
1. Based on the results of interviews with all parties, the long and inefficient lead time
for MRO procurement at PTKS is caused by several factors, namely: poor coordination
between departments, inadequate procurement management, and less integration and
automation of information systems.
2. The slow and inefficient MRO procurement process at PTKS creates various
significant operational and financial challenges.
3. To increase efficiency and reduce the lead time for MRO material procurement at
PTKS, several alternative solutions can be implemented, such as the use of Blanket
Purchase Agreement (BPA) contracts and the implementation of E-Procrement.
4. The Six Sigma concept can create a strategy to increase the efficiency of MRO material
procurement at PTKS. Researchers have developed this strategy through the Define,
Measure, Analyze, Improve, and Control phases, thereby creating a business solution
in the form of a strategy to increase efficiency using BPA and E-Procurement.
5. From a Supply Chain Management (SCM) perspective, these findings underline the
importance of integrated and efficient supply chain management in improving a
company's operational and financial performance.
6. By using Good Corporate Governance (GCG) principles in this research, PT Krakatau
Steel ensures that the procurement process is not only financially efficient but also
meets high ethical and compliance standards.
Wahyu Wijanarko
Indonesian Journal of Social Technology, Vol. 5, No. 10, October 2024 4592
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