Abstract
The steel industry is classified as a strategic industry that supports many industries, due to continuous national development. The steel industry must improve the quality of its production processes in order to increase its competiveness. One factor that supports the stability of the production process is the procurement process. Delays in the procurement process can disrupt the smooth production process. The purpose of this research is to minimize waste in the steel procurement process by using the value stream mapping method. This research begins by making current state mapping of the actual procurement process, then analyzed the activity categories including value added activity and non-value added activity. In the beginning, the total time value added activity is 7488 minutes and total time non value added activity is 12240 minutes. An improvement was made in terms of the negotiation process, document review, and waiting for an offer, the result of the total value added activity is 7488 minutes and non-value added activity is 2160 minutes, so the procurement process initially 41 days became 21 days.
Highlights
The steel industry is a strategic industry that is used as raw material and supporting material for many industries, for infrastructure transportation equipment, automotive, or weaponry [1]
The steel industry is classified as a strategic industry that supports many industries, due to continuous national development
The Ministry of Industry ensures that the full potential of the steel industry can have a maximum role, because it much needed for national development
Summary
The steel industry is a strategic industry that is used as raw material and supporting material for many industries, for infrastructure (road construction, building construction, and bridge construction) transportation equipment, automotive, or weaponry [1]. Based on data from the Ministry of Industry, Indonesia’s steel consumption reached 12.7 million tons in 2017 and its projected to be 21.4 million tons in 2025 [2]. The Ministry of Industry ensures that the full potential of the steel industry can have a maximum role, because it much needed for national development. The development of the national steel industry is needed to support increased infrastructure development in Indonesia, both by the Government and the private sector which requires large amounts of steel [3]. To carry out business activities, the company is supported by many functions, the functions are marketing, production and technology, logistics, finance, human resources, and business development. Procurement department has an important role for supply the material in the company and responsible to get the quantity and quality of material needed. The lead time target for the material procurement process set by the company has not yet been reached
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