Decision Making in Determining Improve Margin at the PT XYZ Using the Analytic Hierarchy Process

Abstract

PT XYZ is one of 6 largest refineries in Indonesia whose business is engaged in oil and gas which processes crude oil into products with high selling value. By changing the business pattern of PT XYZ from cost oriented to profit oriented so that it encourages every business operation to be able to increase the company's margins by implementing optimization, efficiency and strategies that encourage the avoidance of events that hinder operations so that it has an impact on changes in processing planning. The profitability of refineries is greatly affected by the price spread of crude oil and the products produced which are very unstable in nature, therefore efforts are needed to improve operational reliability, efficiency and optimization which can maintain the stability of the potential increase in the company's margins. This final project is used to determine the best alternative that will be chosen by PT XYZ for improvements that can be carried out by PT XYZ alone without any involvement from the Head Office or third parties so that these improvements can be controlled directly by PT XYZ. This improvement will provide benefits by increasing the company's margins. The decision making used is by combining Value Focused Thinking with the Analytical Hierarchy Process. Value Focused Thinking is used to determine criteria and sub-criteria with the interview pattern with the Subject Matter Expert and followed by determining alternatives with the Focused Group Discussion pattern, followed by AHP to determine the best alternative. Based on the analysis that has been carried out with the help of expert choice software, the best alternative sequence is Reformat Maximizing, Replacement of the Steam Turbine into a Motor, Increasing LPG Production and Utilization of Factory own use.