PT. Perusahaan Gas Negara (Persero) Tbk
Final Design Stage Report ‘Logistics Transformation’
12th February 2011

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Diagnostic Summary: Strategy, Organization and Procurement Process are the key areas that should be addressed on a higher priority
High priority areas
1
Logistics strategy: Focuses mainly on execution and cost reduction by meeting its SLAs and KPIs – limited value-add. Need a comprehensive strategy / roadmap

Other areas
4
Supplier management: No established preferred supplier list leading to long lead time. Lack of supplier evaluation leading to lower quality

2

Logistics organization: Decentralized organisation with limited oversight from HO ~20% spend influence. Limited volume pooling and cost savings.

5
Procurement Strategy Procurement Organization Strategic Sourcing Operating process management Supplier Relationship Management

Material management: Formal planning and communication could be improved. Lack of material categorisation to determine category level storage strategy

3
Strategic sourcing / Operating process: High time requirements, leading to suboptimal budget realization (80% PGN source-able(1) spend, compared to ~20% currently

1

Strategic Sourcing & Category Mgmt

1

Strategic Sourcing • Conduct strategic sourcing activity for center led categories

0

Category Management

13

1

Contract Management

1

• Establish sourcing plan and strategy for center led categories

• Establish frame contracts for center led categories
Strategic Sourcing team will progress to become Category Managers

• Monitor price agreements and compliance to frame contracts
• Conduct supply market analysis and benchmarking activities for the respective