PROPOSED INVENTORY MANAGEMENT SYSTEM TO REDUCE SLOW MOVING AND DEADSTOCK LEVEL AT PT. PERTAMINA JOB TOMORI FINAL PROJECT In partial fulfilment of the requirements for the master’s degree from Institut Teknologi Bandung By ARI WIDYATMOKO PRATAMA PUTRA Student ID: 29122022 Master of Business Administration Program INSTITUT TEKNOLOGI BANDUNG JANUARI 2024 i ABSTRACT PROPOSED INVENTORY MANAGEMENT SYSTEM TO REDUCE SLOW MOVING AND DEADSTOCK LEVEL AT PT. PERTAMINA JOB TOMORI By Ari Widyatmoko Pratama Putra Student ID: 29122022 (Master of Business Administration Program) Indonesia's oil and gas industry has a long history and a well-understood regulatory framework. It contributes to national revenues and economic growth, with a monopoly on the upstream gas producer. The industry has five stages including exploration, production, processing, transportation, and marketing. Upstream activities involve exploration and production, with material management being crucial for supplying material and ensuring uninterrupted productions. This research focuses on JOB Tomori, a prominent gas producer in Indonesia, grappling with inventory management issues, particularly high levels of slow- moving and deadstock materials. The study aims to identify factors contributing to this problem and propose effective strategies for optimization. The root cause analysis reveals two main issues: the "run-to-failure" practice among end-users and the incomplete categorization of Material Criticality Ratings (MCR). To address these challenges, process-based, people-based, and technology-based solutions are proposed. Process-based solutions include the formulation of a standardized process for MCR categorization and an evaluation of the current MCR categorization. People-based solutions involve training and awareness programs for end-users, emphasizing the importance of proactive maintenance and proper inventory management practices. Technology-based solutions encompass the implementation of an early warning system and the installation of banners or signs displaying real-time information about slow- moving and deadstock items. In conclusion, the research recommends a comprehensive approach involving immediate implementation of short-term solutions, such as training and awareness, develop reward and punishments and the evaluation of MCR categorization. Long-term solutions, like integrating an early warning system, should be pursued within the next 1-2 years. These recommendations aim to enhance JOB Tomori's inventory management practices, aligning with industry regulations and ensuring efficient operations while minimizing the risk of slow- moving and deadstock materials. Keywords: Material Management, Inventory, Slow Moving, Deadstock. Oil and Gas ii ABSTRAK USULAN SISTEM MANAJEMEN PERSEDIAAN UNTUK MENGURANGI TINGKAT BARANG LAMBAT DAN BARANG MATI DI PT. PERTAMINA JOB TOMORI Oleh Ari Widyatmoko Pratama Putra 29122022 (Program Studi Magister Administrasi Bisnis) Industri minyak dan gas Indonesia memiliki sejarah panjang dengan peraturan yang dipahami dengan baik. Hal ini memberikan kontribusi terhadap pendapatan nasional dan pertumbuhan ekonomi, dengan monopoli pada produsen gas hulu. Industri ini memiliki lima tahap termasuk eksplorasi, produksi, pemrosesan, transportasi, dan pemasaran. Kegiatan hulu melibatkan eksplorasi dan produksi, dengan pengelolaan material yang sangat penting untuk memasok material dan memastikan produksi tidak terganggu. Penelitian ini berfokus pada JOB Tomori, produsen gas terkemuka di Indonesia, yang bergulat dengan permasalahan manajemen material, khususnya material yang bergerak lambat dan material mati dalam jumlah besar. Penelitian ini bertujuan untuk mengidentifikasi faktor-faktor yang berkontribusi terhadap masalah ini dan mengusulkan strategi optimalisasi yang efektif. Analisis akar permasalahan mengungkapkan dua permasalahan utama yaitu praktik “run-to-failure” di kalangan pengguna akhir dan kategorisasi Material Criticality Ratings (MCR) yang tidak lengkap. Untuk mengatasi tantangan- tantangan ini, diusulkan solusi berbasis proses, berbasis manusia, dan berbasis teknologi. Solusi berbasis proses mencakup perumusan proses standar untuk kategorisasi MCR dan evaluasi kategorisasi MCR saat ini. Solusi berbasis manusia melibatkan program pelatihan dan kesadaran bagi pengguna akhir, yang menekankan pentingnya pemeliharaan proaktif dan praktik manajemen material yang tepat. Solusi berbasis teknologi mencakup penerapan sistem peringatan dini dan pemasangan spanduk atau tanda yang menampilkan informasi real-time tentang barang yang bergerak lambat dan barang mati. Kesimpulan dari, penelitian ini adalah merekomendasikan pendekatan komprehensif yang melibatkan implementasi segera solusi jangka pendek, seperti pelatihan dan kesadaran, pengembangan penghargaan dan hukuman, serta evaluasi kategorisasi MCR. Solusi jangka panjang, seperti mengintegrasikan sistem peringatan dini, harus dilakukan dalam 1-2 tahun ke depan. Rekomendasi ini bertujuan untuk meningkatkan praktik manajemen material JOB Tomori, menyelaraskan dengan peraturan industri dan memastikan operasi yang efisien sekaligus meminimalkan risiko bahan yang bergerak lambat dan stok mati. Keywords: Manajemen Material, Inventaris, Barang Lambat, Barang Mati, Minyak dan Gas. iii VALIDATION PAGE PROPOSED INVENTORY MANAGEMENT SYSTEM TO REDUCE SLOW MOVING AND DEADSTOCK LEVEL AT PT. PERTAMINA JOB TOMORI VALIDATION PAGE By Ari Widyatmoko Pratama Putra Student ID: 29122022 Master of Business Administration Program Institut Teknologi Bandung Approved Date 4 March 2024 (Gatot Yudoko, PhD) iv ACKNOWLEDGEMENTS In the presence of Almighty Allah SWT, the All-Powerful, I offer my heartfelt thankfulness for His mercy and direction, which enabled me to finish the final project report titled "Propose Inventory Management to Reduce Slow Moving and Deadstock Level at PT Pertamina JOB Tomori." The objective of this study is to analyze and suggest solutions to the discovered root causes and concerns, allowing the research findings to be utilized and resulting in positive improvements. Furthermore, I would like to express my sincere gratitude to all parties involved in this research, as it would not have gone as smoothly and successfully without their help. I'd like to offer my sincere gratitude to: 1. The One and Only God, Allah SWT, the All Powerful, for His will and mercy, providing me with strength and health throughout the course of this research. 2. Ayah, Mama, Naufal, and Yasmin, my adored and beloved family. For their encouragement, endless support, and prayers. 3. Ir. Gatot Yudoko, M.A.SC., Ph.D., as the best thesis advisor, who dedicated his time, knowledge, advice, and guidance. Ensuring the research was completed smoothly and successfully. 4. Ibu Nila Armelia Windasari, S.A., M.B.A., Ph.D., as the academic advisor, who guided me from early semester and throughout my academic journey. 5. All lectures and administrators at MBA ITB Bandung for their knowledge and guided me through each of the course. Contributing to the successful completion of the research 6.