How to cite:

Choiril Firmansyah (2024) Operation and Supply Chain Management, (06) 05,

https://doi.org/10.36418/syntax-idea.v3i6.1227

E-ISSN:

2684-883X

Published by:

Ridwan Institute

OPERATION AND SUPPLY CHAIN MANAGEMENT

Choiril Firmansyah

School of Bussines & Management ITB, Indonesia

Email: [email protected]

Abstract

Productivity is known as the result of comparing output with input. The greater the output

with minimal input, the greater the profit for the company. As a mining service company, PT

GSP must be able to provide equipment in accordance with the production target given by its

customers. After analyzing the design process, the next problems are that the company will

still insist on using all the tools available. The next problem is how to accommodate all the

tools and maximize their performance. From periodic improvement that has been done,

evaluation of the results was performed and it showed a significant development. The results

of the improvement on the front loading area made the delay time of the loading equipment

decrease significantly as a result of the improvement and increased the productivity of the

equipment significantly.

Keywords: opration, supplay chain, management

INTRODUCTION

PT Gelora Sukses Pratama (GSP) is a coal mining contractor operating in Jambi

Province, Indonesia. In 2021 GSP become the primary mining contractor at Batu Hitam

Sukses. In 2022, PT GSP had a good year, achieving its production target of 1,200,000 MT of

coal, exceeding the target of 1,080,000 MT by 111%. This was one of PT GSP's best

achievements during its project with PT BHS as the mining concession owner. However,

some points needed attention, including the lack of effectiveness and efficiency in the work

results, as evidenced by the productivity of the work (Jacobs & Chase, 2018).

Productivity is known as the result of comparing output with input (Copacino, 2019;

Troutt, Ehie, & Brandyberry, 2007). The greater the output with minimal input, the greater the

profit for the company. According to the company's internal calculations, the production

result of 1.2 million MT could have been produced from 3 production units, but the actual

result was 1.2 million MT produced from 4 production units (Posadneva & Malinovskaya,

2017). This was inefficient since 4 production units should have been able to produce a much

larger output. Generally, the business process of PT GSP as a mining service provider is to

provide services to customers, namely assisting in the coal extraction process (coal

production), and the services are carried out in accordance with good mining practices

(GMP).

JOURNAL SYNTAX IDEA

p–ISSN: 2723-4339 e-ISSN: 2548-1398

Vol. 6, No. 05, Mei 2024

Operation and Supply Chain Management

Syntax Idea, Vol. 6, No. 05, Mei 2024 2191

Figure 1 PT GSP Business Process

(Source: PT GSP, 2021)

As a mining service company, PT GSP must be able to provide equipment in

accordance with the production target given by its customers. PT BHS as a customer has

given its trust to PT GSP to be able to provide the best service in providing equipment and

also mining process. PT BHS does not care how many tools will be used by PT GSP to

achieve the targeted production, because PT BHS will pay PT GSP from the amount of coal

produced by PT GSP.

PT GSP looks for quick solutions to resolve production inefficiency by adding more

production equipment. Although this is the simplest solution, it will increase cost per activity.

The main mistake made in 2021 and 2022 was the poor arrangement of equipment, both for

loading and transportation, leading to excessive spending with insufficient revenue, also

known as living beyond one's means. The main issue lies in the productivity of both loading

and transportation equipment.

(Jacobs & Chase, 2013) define efficient as "doing things in a way that uses the least

amount of resources possible". The work done by PT GSP in the form of work given to its

customers is not a problem, because customers still get what they want, which is the coal

extraction service, which is the product of its customers, namely PT BHS. However,

conceptually what is described by Jacob and Chase in their book, which is doing something in

a way that uses the least possible resources, is not applied well by PT GSP, so that the results

obtained are not optimal, making good achievements in terms of production results not

followed by company profits.

Problem Identification

Although PT GSP has achieved well in production, PT GSP hasn't maximized the

capacity of their tools so that the achievement is only a number and not the quality of work,

caused by the un-maximum performance of their tools that made PT GSP used a solution by

increasing the number of tools to reach the targets given by customers (Qi, Huo, Wang, &

Yeung, 2017). Increasing the number of tools is not an appropriate solution because every

production tool has its production capacity so by increasing the tools the production capacity

should increase too (Santos, Wysk, & Torres, 2014). It should be underlined that the

conformity between the usage of loading and transport tools, which this case, PT GSP hasn't

maximized their tools' capacity (Yalcin, Shi, & Rahman, 2020).

Choiril Firmansyah

2192 Syntax Idea, Vol. 6, No. 05, Mei 2024

After the evaluation, several key areas have been identified for GSP to focus on to

enhance performance Fleet Capacity: capacity conformity will give a maximum advantage for

the company. Fleet Productivity: This tools' productivity is the productivity of loading tools

and transport tools per time unit. Production efficiency: After the tools capacity has been

maximized in line with its capability and the tools productivity has been reached, the usage of

the tools will be evaluated.

Problem Relevance

The matter discussed in the previous sub-chapter has significantly discussed that there

is an inconsistency of PT GSP's performance as a mining service contractor company in

providing services to its customers, namely PT BHS. The inconsistency is not in the

achievement and work results in the form of production achievement from the target set by

the customer, but in its implementation which is not optimal, so that in the evaluation, even

though the production target is achieved, the performance of the production equipment is not

in accordance.

(Source: PT GSP, 2023)

The performance of production tools is still far below the target and this causes losses to

the company. PT GSP increases the number of tools to 5 from previously only 4 tools to

pursue the production target given by the customer. The capacity of 4 tools can already reach

the production target of 1.2 million MT per year, but PT GSP with the number of tools,

namely 5, can only reach a production of 1.2 million. This clearly shows the inefficiency of

PT GSP's work results.

RESEARCH METHOD

In general, the business process carried out by PT GSP has been quite good with the

achievement of production targets even exceeding production targets. However, it can be seen

from the optimization of the existing production equipment capabilities that there is still a

need to re-evaluate so that the company can get more benefits for the sustainability of the

company.

Operation and Supply Chain Management

Syntax Idea, Vol. 6, No. 05, Mei 2024 2193

Fleet Capacity Design

The heavy equipment used for production by PT GSP is an excavator with 30-ton class,

a Caterpillar product with the unit type Cat 330 GC. The Cat 330 GC has a standard bucket

size of 2.2 cubic meters, but PT GSP has made an improvisation by increasing it to 2.5 cubic

meters or a weight of 3.25 tons. Increasing the bucket size is a good step which will have a

positive impact on the production results. Then for the transportation equipment, PT GSP uses

a Scania product with the product type being P380. The load is 12 cubic meters or 15 tons in

weight. Looking at the combination of loading and transport equipment, PT GSP has done the

right thing by calculating the vessel load carried below 5 passes and above 3 passes. However,

in the process, there are several obstacles that occur. Such as the lack of equipment and the

number of transportation equipment provided is not appropriate. The impact of this will

trigger the failure to achieve the productivity target of the equipment, which will result in the

failure to achieve the production target and the main goal of mining business, which is to

make a profit.

Figure 4 Design Process of Coal Mining Activity

(Source: Author, 2024)

In the process of removing overburden and extracting coal, many production tools are

involved. So many tools must be managed in such a way that they can produce the main

objective, which is to produce coal according to the target and not to forget the core objective

of the mining process, which is to make a profit and avoid losses.

Fleet Productivity Design

In every activity, planning is carried out in the selection of the equipment and the

process involves calculations based on the equipment capacity so that the equipment selected

for the job is the right equipment (Hassan, Siadat, Dantan, & Martin, 2010). For example, the

equipment for land clearing activities must use a small excavator to facilitate its movement

and can also use a Dozer to clear land that does not have a steep slope. Then in the selection

of equipment for soil handling activities, a small unit loader is used to minimize the sinking of

the unit due to the relatively soft soil. From the soil handling stage to coal hauling, there are

special calculations to determine the compatibility between the number of loading equipment

and the number of hauling equipment. For loading equipment, the company will determine the

productivity target for the equipment so that this productivity target will be a reference for the

suitability of work in the production process so that if there is a failure, the cause of the

problem will be immediately investigated and follow-up will be carried out (Mukherjee,

Mitchell, & Talbot, 2000). The parameters for determining the productivity of loading

equipment include the size of the bucket which will be multiplied by the target cycle time (for

1 passing). The target cycle time depends on:

1. Swing Angle

Choiril Firmansyah

2194 Syntax Idea, Vol. 6, No. 05, Mei 2024

2. Material

3. Operator Capability

The company must determine each of these parameters to be the reference parameter

in determining the target productivity of the equipment. After determining the productivity

figures, the next stage is how to determine the suitability between the loading equipment

and the hauling equipment. The parameter that most influences the determination of the

ratio of the number of loading equipment and hauling equipment is the hauling distance

parameter. The farther the hauling distance, the more hauling equipment is needed.

Fleet Optimization Design

After determining the compatibility between the number of loading and unloading

devices, the next step is to ensure that the number of tools used is in accordance with its

capacity (Slim et al., 2003). Optimization is carried out to achieve the best results from each

of the activities or input. PT GSP management does not cut down the tool because there is

currently no option to transfer it to other site so that the number of the tools used remains as 5.

Given that it is bad for the tool not to be operated in long run, a policy to use all the tools is

made even though the productivity of the tool improves (Radnor, Holweg, & Waring, 2012).

Both in terms of the number of loading and transport equipment or dump trucks and other

heavy equipment (McCann, 2006). It has a risk of swelling in the use of tools so that

companies must take strategic steps to overcome this problem.

Table 1 Matching Fleet Between Exc 30 Ton vs DT

Matching Flat

DIST

RIT/DT

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1.1

1.2

1.3

1.4

(Source: Author, 2023)

Based on the calculation of equipment capacity, it is known that a 30-ton excavator unit

can generate production of up to 300,000 tons per annum with a PA parameter of 90% and a

UA of only 20% with the total available time and a target productivity of 250 tons/hour. With

this target, PT. GSP only needs 4 units to achieve a production of 1.2 million tons per annum,

more than the target set by PT BHS, which is only 1.08 million tons per annum.

Operation and Supply Chain Management

Syntax Idea, Vol. 6, No. 05, Mei 2024 2195

RESULT AND DISCUSSION

After analyzing the design process, the next problems are that the company will still

insist on using all the tools available. The next problem is how to accommodate all the tools

and maximize their performance. The population of the number of dump trucks and

excavators before the improvement was as follows.

Table 2 Unit Population in PT GSP

Dump truck

Excavator 30 TON

Source: PT GSP, 2023

From this combination, it is known that routine checks and repairs will occur

periodically, so the active units for dump trucks are around 27 units by considering the target

PA of 90%. If a comparison is made, 1 excavator will be side by side with 5 dump trucks, but

there are 2 dump trucks that will not be used and the PT GSP management asks for all tools to

be maximized to operate and produce products for the company. Therefore, it was determined

that the most feasible option is to continue using all the tools and for the loading equipment, it

will use a support tool, the 20-ton excavator (Bimha, Hoque, & Munapo, 2020; Tsipoulanidis

& Nanos, 2022).

Another problem arises when there is a long bucket hanging time during the loading

process, a lot of time is wasted when the dump truck unit maneuvers, so the queue is re-

engineered by implementing a two-sided loading system so that every dump truck that has

reached the front loading area can immediately position its equipment for the next loading, so

the loading equipment will continue to move without any delay.

Figure 5 Double Side System

(Source: PT GSP, 2023)

CONCLUSSION

From periodic improvement that has been done, evaluation of the results was performed

and it showed a significant development. The results of the improvement on the front loading

area made the delay time of the loading equipment decrease significantly as a result of the

improvement and increased the productivity of the equipment significantly. From the graph in

Figure 6, it is shown that the results of the improvisations made have a significant impact,

which has led to an increasing productivity of the production equipment that had decreased in

Choiril Firmansyah

2196 Syntax Idea, Vol. 6, No. 05, Mei 2024

2022 and managed to increase in 2023. These positive results were followed by significant

improvements in the company's profits, making the accomplishment a success.

The author recommends that a re-analysis of the need for equipment should be carried

out because forcing the process with the use of supporting equipment to carry out production

activities is not a good solution because supporting equipment also has a vital function in all

existing business processes, so it would be better to optimize the equipment that is already

available and for the excess to be utilized if the production target really increases so that it is

possible to use all of the equipment.

BIBLIOGRAPHY

Bimha, Happyson, Hoque, Muhammad, & Munapo, Elias. (2020). The impact of supply chain

management practices on industry competitiveness: A mixed-methods study on the

Zimbabwean petroleum industry. African Journal of Science, Technology, Innovation

and Development, 12(1), 97–109.

Copacino, William C. (2019). Supply chain management: The basics and beyond. Routledge.

Hassan, Alaa, Siadat, Ali, Dantan, Jean Yves, & Martin, Patrick. (2010). Conceptual process

planning–an improvement approach using QFD, FMEA, and ABC methods. Robotics

and Computer-Integrated Manufacturing, 26(4), 392–401.

Jacobs, F. Robert, & Chase, Richard. (2013). EBOOK: Operations and Supply Chain

Management. McGraw Hill.

Jacobs, F. Robert, & Chase, Richard B. (2018). Operations and supply chain management.

McGraw-Hill.

McCann, Michael. (2006). Heavy equipment and truck-related deaths on excavation work

sites. Journal of Safety Research, 37(5), 511–517.

Mukherjee, Ashok, Mitchell, Will, & Talbot, F. Brian. (2000). The impact of new

manufacturing requirements on production line productivity and quality at a focused

factory. Journal of Operations Management, 18(2), 139–168.

Posadneva, Elena Mikhailovna, & Malinovskaya, Daria Andreevna. (2017). Accounting and

internal cost control and cost calculation (works, services). In Финансовые стратегии

и модели экономического роста России: проблемы и решения (pp. 329–339).

Qi, Yinan, Huo, Baofeng, Wang, Zhiqiang, & Yeung, Hoi Yan Jeff. (2017). The impact of

operations and supply chain strategies on integration and performance. International

Journal of Production Economics, 185, 162–174.

Radnor, Zoe J., Holweg, Matthias, & Waring, Justin. (2012). Lean in healthcare: the unfilled

promise? Social Science & Medicine, 74(3), 364–371.

Santos, Javier, Wysk, Richard A., & Torres, Jose M. (2014). Improving production with lean

thinking. John Wiley & Sons.

Slim, Karem, Nini, Emile, Forestier, Damien, Kwiatkowski, Fabrice, Panis, Yves, &

Chipponi, Jacques. (2003). Methodological index for non‐randomized studies (minors):

development and validation of a new instrument. ANZ Journal of Surgery, 73(9), 712–

716.

Troutt, Marvin D., Ehie, Ike C., & Brandyberry, Alan A. (2007). Maximally productive

input–output units. European Journal of Operational Research, 178(2), 359–373.

Tsipoulanidis, Alexander, & Nanos, Ioannis. (2022). Contemporary potentials and challenges

of digital logistics and supply chain management. International Journal of Innovation

and Technology Management, 19(05), 2241003.

Yalcin, Haydar, Shi, Wanying, & Rahman, Zafrin. (2020). A review and scientometric

Operation and Supply Chain Management

Syntax Idea, Vol. 6, No. 05, Mei 2024 2197

analysis of supply chain management (SCM). Operations and Supply Chain

Management: An International Journal, 13(2), 123–133.

Choiril Firmansyah (2024)

First publication right:

Syntax Idea

This article is licensed under: