Analysis of Steel Coil Inventory Control Using the Continuous Review System at PT XYZ

Abstract

The ship repair service industry faces high operational risks due to inaccuracies in material requirements planning. This problem is experienced by PT XYZ, which faces extreme inventory fluctuations in the form of stockouts and overstock for SS316 2B 1.5 mm × 4 ft steel coil. These conditions are triggered by a procurement system that is still based on visual observation and delays in import lead times. This study aims to determine the optimal order quantity, reorder point, and safety stock, while comparing the total inventory cost efficiency between the periodic review method and the Continuous Review System (CRS). This study employs a quantitative approach with a descriptive-comparative design within the framework of operations research. The results indicate that the optimal order quantity using the CRS method is 8,539 kg, the safety stock is 2,705 kg, and the ideal reorder point is 4,757 kg. Simulations indicate that the CRS method has the potential to reduce the company’s total inventory costs from Rp1,668,771,410 to Rp1,335,672,902, resulting in operational cost savings of Rp333,098,508 (equivalent to an efficiency gain of 19.96%). In practical terms, the implications of this research provide guidance for management to transform material procurement management from a visual approach to a standardized procedure based on quantitative data in order to minimize losses due to production downtime, prevent material damage caused by stockpiling, and maintain the stability of the company’s cash flow.