DIGITALIZATION AND INTEGRATION SYSTEM TO REDUCE LEADTIME RECONSILE PROCESS DURING SPARE PARTS VENDOR HELD STOCK (VHS) TRANSACTION TO ACHIEVE EFFECTIVE WORKING CAPITAL

Abstract

The research focuses on improving the efficiency of the VHS reconciliation process at PT ABC, a heavy equipment distributor, and PT XYZ, a mining contractor. The goal is to reduce the lead time for VHS reconciliation to 8-14 days, optimizing working capital. Methodology includes root cause and gap analysis, DMAIC tools, and five why diagrams and Value Stream Mapping tool to identify and address delays. The study emphasizes the importance of digitalization and system integration. Before implementation, the aging of Good Issue Pending (GIP) inventory varied significantly, impacting working capital. Post-implementation, there was a notable reduction in GIP inventory aging beyond 31 days, indicating successful system integration and streamlined operations. Performances varies across regions, with some maintaining high-quality rates and others fluctuating. The integration system effectively improved VHS reconciliation quality and reduced GIP inventory aging, leading to better working capital management. In conclusion, digitalization and system integration significantly improved the VHS reconciliation process, optimizing PT ABC's working capital. Further research is recommended to explore performance fluctuations and ensure sustainability of improvements.