Optimization is needed in the supply chain process of the company to get the optimum result at a lower cost. Generally, the supply chain consists of three main costs: product, transport, and holding costs.
“The optimization aims to get the optimum point,” mentioned Alim Perdana in his lecture. Alim, a supply chain expert at PT Kaltim Prima Coal, was invited to be a guest lecturer in MBA SBM-ITB.
Through a lecture entitled “Supply Chain and Procurement Strategy in Mining Strategy,” Alim explained the use of the Kraljic Matrix to minimize the risk and optimize supply chains to cut the cost, mainly in the mining industry.
Kraljic matrix is a strategic tool used by procurement and supply chain professionals to identify and minimize supply risks. It consists of four quadrants that allow the company to define the optimal purchasing strategies for each type of purchase or supplier.
The quadrants are leverage quadrant for the components important for the company but sourced from low-risk markets with an abundant supply, strategic quadrant for components important for the company both in terms of economic impact and supply conditions from complex and risky markets.
The bottleneck quadrant for components with a low business impact in economic terms but where supply continuity is at risk, and non-critical quadrant for the components with a low impact on the company.
In the mining industry, Alim revealed that companies should not put a high intention on the non-criticals commodities, such as a lubricant. Alim believed that the company’s strategy for materials in the non-critical quadrant is to regularly float the tendering process, improve business processes with the substitution of materials, and consolidate demands across divisions within the company.
Alim also stated that if there is a commodity that is in the bottleneck quadrant in the process, the strategy to maximize the commodity based on the Klajic matrix is to appoint a reputable and trusted company in maintaining its product quality performance. “Sign a long-term agreement with the most trusted manufacturer,” explained Alim.
To measure if a commodity is critical and risky, the company can use Focus Group Discussion and several risk management tools. ” I use FGD with my team and questionnaire to measure the risk,” said Alim, who is also an alumnus of SBM ITB.
