IMPLEMENTING COST CONTROL AND COST REDUCTION STRATEGY FOR MAXIMIZE PROFITABILITY TO ACHIEVE ORGANIZATIONONAL PERFORMANCE (CASE STUDY : AT PT XYZ)

Abstract

Profitability is the key to a company's success, which affects company performance and company management. PT XYZ, a heavy equipment distributor and after-sales service provider in Tanah Bumbu, has low profitability performance until May 2023. The low profitability of the company is caused by several factors such as low profit of spare parts, low profit of services, high operational costs, and high working capital, especially inventory. This study used Critical to Quality (CTQ), Quality Function, Performance Driver Tree (PDT), and Focus Group Discussion (FGD) to identify the main causes. The company also used the DMAIC framework, Pareto Analysis, 5W1H, and Cost Driver Analysis to identify the main causes and design an improvement plan. By controlling costs and reducing costs, PT XYZ can increase revenue by 4%, part profit by 7%, reduce opex costs by 3% and reduce inventory by 17% so that profitability increases by 2% and organizational performance also becomes better. So that by doing cost control and cost reduction PT XYZ can increase its profitability.