I.            Introduction[1]

I.1          Company Profile

Badak LNG was founded on November 26th, 1974 as a producer of liquefied natural gas (LNG) and liquefied petroleum gas (LPG). Badak LNG was established as a limited liability company. Badak LNG is headquartered in Jakarta and has a plant site as its sole production facility which is located in the Municipality of Bontang, East Borneo.  All of Badak LNG’s operational area is located within the jurisdiction of the Republic of Indonesia. Badak LNG also maintains a Representative Office which is located in Balikpapan.

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Figure 1 Badak LNG Terminal

Badak LNG is a nonprofit entity, whose assets are fully owned by the Government of the Republic of Indonesia, under the Ministry of Finance. Supervision of the management of assets is carried out by PT Pertamina (Persero), based on the Decree of the Minister of Finance No. 92/KMK/06/2008 dated 2 May 2008 on the Determination of Ex-Pertamina Assets Status as State Property.

The management of production, commercial, and financial planning activities with respect to Badak LNG’s operations is carried out by a separate entity called the Joint Management Group (JMG), a body consisting of PT Pertamina (Persero), Total E&P Indonesie, VICO Indonesia, and Chevron Indonesia.

its date of establishment the composition of shareholder was: Pertamina, Huffco Inc. and JILCO (Japan Indonesia LNG Company) with share composition of 55%, 30% and 15% respectively. And in 1990 there was a change in shareholders’ composition becomes:

Shareholder %
PT. Pertamina (Persero) 55%
Vico Indonesia 20%
Total E&P Indonesie 10%
Japan Indonesia LNG Company 15%

In 1980, expansion project of train C and D construction was executed due to the increase of LNG demand from Japan. Then in 1988, LPG product had been also exported to Japan. To cope with increasing demand for LNG from Japan, Taiwan and Korea, train E was built in 1987 – 1989, and train F was built in 1991 – 1993. The expansion of Badak LNG Plant was still continuing with the completion of Train G in 1997 and Train H in 1999. From its total 8 train, the production capacity of Badak LNG reaches ± 22 ton LNG / year.

Entering 2000s, Badak LNG had been developed to be a capacity of the largest production volume in the world. Until 13 December 2001, Badak LNG had been exporting 4500 cargos. The LNG terminal capable of handling LNG loading to 3 tankers simultaneously after completing its third loading dock by the end of 1999, as a way to increase the service level to the buyers.

The supply chain of the LNG business carried out by Badak LNG starts from the extraction of natural gas from wells by gas producers. Badak LNG acquires its gas from Muara Badak, supplied by TOTAL, VICO, and Chevron Indonesia. The gas subsequently is transported through pipelines to gas processing facilities, of which Badak LNG is one. The liquefied natural gas (LNG) is subsequently transported using ships and ISO tank containers according to the specifications stated in the purchase contract with the buyers, until the cargo reaches the receiving terminal of the buyer’s choosing. The buyer subsequently converts the LNG back to gas prior to further distribution.

Badak LNG has been an LNG Plant which is categorized significant to international society of LNG industry, and become a vital asset for national LNG supply chain. With the experience of more than 34 years, Badak LNG is ready to overcome the challenge of 21st century.

Experiencing the constant growth of demand volume, from 1977 until 1999, the growth strategy seems to be effective to be implemented. However, facing the natural declining phenomenon of gas resources production volume after 2001, Badak LNG had its business to be diversified to LNG Academy and operation & maintenance service provider.

 

 

Figure 2 LNG Supply Chain  (Badak LNG, 2014)

Badak LNG had not defined a special division of Research & Development, however, the innovations are flowing from the commitment to quality and sustainability of its management and employees, making the research and development activity are exercised within each of day-to-day operation.

 

I.2           Vision, Mission, and Values

Vision Mission
To be a world-class energy company that leads innovation.

Badak LNG strives to be a company that is able to meet the energy demands of many countries in the world, by always striving to discover novelties from those existing or previously known, in the form of ideas, methods, and tools, which will bring about an improvement towards a better future

 

To produce clean energy with the best performance standard in order to yield maximum return for stakeholders.

Badak LNG produces clean energy, both during the processes and as the results, based on the internationally-accepted performance standards to be environmentally friendly, while maintaining its product quality to meet customer requirements, so as to provide optimal contribution to stakeholders

 

Values

  1. Professionalism

Delivering the best quality, reliable and competitive results through personal commitment, focus, as well as continuous and sustainable improvement

Expected Behavior:

  • Delivering the best quality performance every time (Best Quality),
  • Acting prudently and avoiding rework (Reliability).
  • Setting the best standards as the rule of thumb (Competitiveness).
  • Being responsible for all tasks (Commitment).
  • Establishing a scale of priority in executing the jobs (Focused).
  • Making continuous improvement to upgrade the work results (Continuous Improvement).
  1. Integrity

Walk the talk through honesty, transparency, and putting corporate above personal interests.

Expected Behavior:

  • Walk the talk.
  • Being Honest.
  • Providing accurate and correct data (Transparency).
  • Putting the company business above personal or working unit interests.
  • Putting the obligations above the rights.

 

  1. Dignity

Building and maintaining positive corporate image and showing equal respects to mankind.

Expected Behavior:

  • Being proud of own job and duties.
  • Showing high self-confidence.
  • Being courteous.
  • Positive thinking and showing equal respects to others.
  1. Innovative

Seeking for superiorities and consistently learning even from failures in order to step ahead.

Expected Behavior:

  • Seeking for opportunities to gain superiorities (strive to be the best).
  • Learning from failures and mistakes (learn from the experience).
  • Proactively responding to the changes.
  • Improving competency to keep up with the job requirements.

 

  1. Safety, Health and Environment (SHE)

Referring to the aspects of safety, health, and environment in performing all work and business activities.

Expected Behavior:

  • Putting safety, health, and environment for workers in the main priority.
  • Performing HIRA (Hazard Identification and Risk Assessment) in any activity.
  • Performing tasks in accordance with the Standard Operating Procedures.

 

 

II.            External and Internal Environment Analysis, and SWOT

II.1        External Environment Analysis

To analyze the external environment, the macro environment is analyzed using PESTEL and the micro environment is analyzed using Porter’s five forces.

II.1.1         PESTEL Analysis


II.1.1.1         Political

  • Government intention to prioritize national energy sufficiency above from export.
  • Price negotiation of old contract prices to LNG buyers by the Government of Indonesia.

II.1.1.2         Economic

Oversupply in worldwide oil production, leading to crude oil price dropping from USD109.45/bbl average price of 2012 to only USD49.49/bbl in 2015 and still decreasing in first quarter of 2016.

II.1.1.3         Social

Indonesia consumers both industry and daily living are still depending greatly to the oil based energy source, compared to other sources such as natural gas, hydro-electric and other renewable sources.

II.1.1.4         Technology

  • To date, LNG is the most efficient and safest method of transporting gas between sites that is separated in huge distance and across the sea. By cooling the substance to -160oC, gas transformed to its liquid phase and it volume compacted to 1/600 times.
  • Other gas producing country is currently developing their gas liquefaction infrastructure, where Badak LNG had been advanced in using the technology for 34 years.

II.1.1.5         Environment

  • Decreasing gas (fossil-based) sources. This natural declining of feed gas has a significant effect for the production volume of Badak LNG, the statistic is shown below. While until 1999, Badak LNG had been expanding its capacity to process more and more quantity, after 2001, the production was declining due to feed gas.
  • Natural gas, although is based on fossil, is more environment friendly energy alternative to oil based energy due to cleaner emission.
  • Gas processing plant like Badak LNG has a devastating radius of 40 km if exploded, therefore the risk mitigation procedure and emergency response plan had been seriously conducted together with external experts and also neighborhood companies.

II.1.1.6         Legal

  • Gas contracts or agreement are made in long term basis because of high investment needed both in producer and consumer premises, and the characteristic of the natural gas source which had to be produced continuously once exploited.

 

Figure 3 LNG Production Statistic from 1977 until 2010 (source: http://www.badaklng.co.id/production.html)

 

II.1.2         Porter’s Five Forces

II.1.2.1         Supplier – medium to high

Gas producers had been tied in by a long term contracts, and Badak LNG is the only gas processing plant there is in the range of their infrastructure, distance must be close to be visible. The switching cost is very high, so, given the options alone, suppliers would hardly switch to another plant. However, the natural declining in gas reserves which are feeding gas to Badak LNG plant had been significant driver for the declining production volume of Badak LNG since 2002.

II.1.2.2         Buyers – low

As with the producers, buyers had also been tied in by long term contracts, besides, for the time being there is deficit in the gas market due to the declining of existing gas reserves.  Badak LNG is a nonprofit processing plant, so, as long as Badak LNG prove that its process is efficient and effective, there is no incentive for the supplier to make extra effort selling the feed gas to another plant. Doing that need high switching cost.

 

II.1.2.3         Rivalry – low to medium

There is no competing LNG Plant in the local scope, however, failure to deliver the cargo on time could make buyer to settle temporary agreement for the replacement cargo.

II.1.2.4         Potential Entrants – low

There is a high entry barrier for a new entrant because LNG business is a capital and technology intensive business. Government also played an important role due to energy is related to national security, therefore highly regulated. High risk

II.1.2.5         Product Substitutes – high

The substitutes for LNG is available in many forms:

  • Oil and coal: because the crude price was decreasing since 2014, oil had been cheaper alternatives taken by some buyers to replace the natural gas consumption.
  • Nuclear: promising, but due to the having serious safety risk to environment, nuclear technology had been denied in some countries.
  • Hydro-electric and renewables: still need further development to make renewable sources be more economic.

II.2        Internal Organization Analysis

In this analysis, Badak LNG position is to be viewed with resource-based model. The resources or capability which are rare, valuable, costly to imitate and non-substitutable would confer an advantage to the firm. Below is the parameter which is believed to make significant contribution to the competitive position of Badak LNG.

II.2.1         Resources

II.2.1.1         Tangible

Financial Resources Badak LNG is a non-profit company, however, it strived to be the best in class LNG producer. In financial term, its operation is recognized by the international LNG benchmarking Program to be:

1.       Lowest operating cost

2.       Lowest maintenance cost

3.       2nd lowest personnel cost

While also achieving the best in Plant Reliability Aspect.

Organizational Resources Badak LNG had exercise the high standard in Safety and Health Management System and also Environmental and Society development (recognized by the Government of Indonesia by Proper and SMK3 Gold, and by International Sustainability Rating System 8 level 8)
Physical Resources Located by the open sea, Badak LNG, was designed for strategically loading the product to LNG tankers and directly ship them to the buyers in Japan, Taiwan, United States, South Korea, India and China. It serves also shipment to domestic destination for national consumption.
Technological Resources Badak LNG had established state-of-the-art maintenance planning and work management which ensure the achievement of these objectives: Good SHEQ (Safety, Health, Environment and Quality) performance, reliable plant performance, customer satisfaction, meet cargo lifting target and cost efficient.

II.2.1.2         Intangible

Human Resources Badak LNG had committed to develop the expertise in LNG production as its core competencies which can be shared and passed on. The expertise includes:

–       Plant operation & maintenance program

–       Plant Commissioning, Start-up and Shut Down service

–       Firefighting and emergency response

–       Project Management

Innovation Resources Badak LNG established a LNG research to Mini LNG, LNG Vehicle.
Reputational Resources Badak LNG had been recognized internationally as the reputable producer of LNG to fulfill overseas gas contract from: Taiwan, Japan, South Korea, India, China and United States.

 

Figure 4 Badak LNG Export Destinations (Badak LNG, 2014)

II.2.2         Capabilities

Through the experience of over 34 years in LNG business, Badak LNG had honed its human resource capabilities to be supervisors, operators, technicians, laboratory analyst, and safety officer who continuously ensuring the plant operating safely, reliably and efficiently. This practice can only be achieved because Badak LNG has consistently implementing operational excellence in its operation and plant maintenance. Continuously updated standard operating procedures had been the internal strength of knowledge management. The standardized procedures keep the activities can be executed in the most efficient manner, even though there is a rotation in worker functions.

People at Badak LNG are not only operating the plant, but they had also been repeatedly accepting the opportunity of knowledge sharing and training. Therefore, both the management and the working level staffs had been used to being mentors or trainers for wide range of participants: starting from the absolute beginners to experienced engineers. The content of the sharing not only about the process of LNG production, but also deeper insights on equipment maintenance, material handling, port management, and facilities management.

Badak LNG expands its business capabilities by also researching new technology in LNG, LPG and their derivatives. The development of smaller LNG station for use on land in suburban area like in Java Island had been interesting topic.

II.2.3         Core Competencies

Core competencies referred to the textbook (Hitt, Ireland, & Hoskisson, 2011) is capabilities that serve as a source of competitive advantage, distinguish the company from the rivals, reflect its personality, and emerge overtime through an organizational process of accumulating and learning how to deploy different resources and capabilities. By this explanation, then, for Badak LNG, the core competencies are its operational excellence and innovation.

II.2.4         Discovering Core Competencies

Each resources and capabilities then are evaluated based on 4 categories: valuable, rare, costly-to-imitate, and non-substitutable. Valuable capabilities allow the firms to exploit opportunities or neutralized threats in its external environment. Rare capabilities are the capabilities that few competitor possess. Costly-to-imitate capabilities are capabilities that other firms cannot easily develop. Non-substitutable capabilities are capabilities that do not have strategic equivalents.

Resources / Capabilities Is Valuable? Is Rare? Is Costly to imitate? Is non-substitutable
Operational Excellence Yes Yes Yes No
Innovation Yes Yes Yes No
Personnel committed to SHEQ Yes Yes Yes No
Location access from sea port Yes No Yes No

II.2.5         Competitive Advantage

According to the above category, it can be derived that Badak LNG would have a sustainable competitive advantage from its operational excellence, innovation, and committed to SHEQ personnel. Those resource and capabilities is the competitive advantage for Badak LNG if the company had put it operational as profit oriented business and there is sustainable gas reserve to be processed also.

However, because Badak LNG had been established as a non-profit organization and the gas feed from the gas source is declining, Badak LNG sought to pass on its legacy through knowledge sharing, services, and innovations.

II.2.6         Strategic Competitive Advantage

Being the operator of the most reliable, safe, and cost effective LNG Plant is the pride of personnel involved in Badak LNG. They successfully transcend the traditional company goal of profit oriented to a search of excellence, not only in plant operation & maintenance and safety, but also in contribution to environment and society. And long before the operation had to be really come to a halt because of the run out gas reserve, the management of Badak LNG had been projecting its sustainability plan of diversifying its product to services. Bringing the experience of operating the best LNG plant is a strategic competitive advantage to its new service products: LNG Academy (training center), Operation and Maintenance (O&M) service, Project Management.

II.3        SWOT Analysis

Strength:

–       Management commitment to quality and safety.

–       Strong brand image and reputation from long standing of operational excellence.

Weakness:

–       Due to geographic limitation, new gas resources cannot be gained.

Opportunity:

–       Market demand for operation and maintenance vendor for similar industry.

–       Demand for training and consultation for operating LNG Plant for newly developed infrastructure.

–       Demand for formalized education in gas industry fields.

Threats:

–       Declining production from gas source as the feed gas for LNG production

II.4        Competitor Analysis

The competitor analysis is supposedly to help the firm prepare an anticipated response profile for competitor. It was done by understanding these dimensions:

  • What drives the competitor, as shown by its future objectives
  • What the competitor is doing and can do, as revealed by its current strategy
  • What the competitor believes about the industry, as shown by its assumptions
  • What the competitor’s capabilities are, as shown by its strengths and weaknesses.

The strategic competitor for Badak LNG is the LNG plants from other countries, such as: Shell which was constructing Prelude floating liquefaction vessel to produce 3.6 mtpa in the Timor Sea, Petronas was constructing Kanowit vessel to produce 1.2 mtpa offshore Sarawak, ExxonMobil in Australia, and also other country.

However, due to the national demand for energy is still growing at a rate greater than the rate of production growth, Badak LNG would still have growing market. The more imminent problem was maintaining the volume of feed gas to be processed.

III.            Business and International Business Strategy

III.1      Business Strategy

III.1.1        Strategy Diamond

The strategy for Badak LNG is analyzed by the Strategy Diamond (Hambrick & Fredrickson, 2001) as a way to craft and articulate its business aspiration.

Figure 5 The Five Elements of Strategy (Hambrick & Fredrickson, 2001)

Below are the five elements for Strategy Diamond:

III.1.1.1       Arenas

  • Worldwide known LNG producer, fulfill overseas gas contract from: Taiwan, Japan, South Korea, India, China and United States.
  • International LNG training center with participants from: Snohvit Norway, Yemen LNG, Angola LNG, LNG Tangguh Papua, Petro China, Total EP France, Pertamina, Donggi-Senoro LNG, and more.
  • LNG Plant and equipment operation & maintenance expertise

 

III.1.1.2       Vehicles

  • In LNG Producing: Shareholders Agreement, Processing Agreement, and Plant Use and Operation Agreement with gas producers in Muara Badak, East Kalimantan.
  • In LNG Academy: Join with formal institution of education PNJ (State Polytechnic of Jakarta)
  • In O&M expertise: Internal development of human resources who committed to HSE, and quality

III.1.1.3       Distinguished Features

  • Referring to a Benchmark from Shell Global Solutions (SGS) in 2009:
    • 1st rank in health and safety aspect (no LTI since Dec 6, 2006)
    • 2nd rank in reliability aspect
    • The lowest operating cost
    • The lowest maintenance cost
    • 2nd lowest personnel cost
  • Achieve level 8 of ISRS 8 (the highest achievement in the industry)
  • Achieve Proper Gold (the highest recognition from the Government of Indonesia for the sustainable contribution to the environment and society)
  • Achieve SMK3 Gold (Recognition from the Government of Indonesia for the implementation of the high standard of Safety & Health Management System)

III.1.1.4       Staging

Adapting to the gas supply declining and quality improvement need, PT Badak LNG shifted the company vision from “to be the largest LNG Plant in the world” to “to be the best LNG Plant in the world”. It was achieved by rolling some steps including:

  1. Organization restructuration. From growing in production volume move to sustain the quality.
  2. Competency profile and gap analysis
  3. Badak Learning Center (LNG Academy)
    1. Operation & Maintenance (Commissioning, Start-up, and Plant Shut Down)
    2. Expertise (HAZOPS and Project Management)
    3. LNG Research (Mini LNG, LNG Vehicle, and cooperation with university)
  4. O&M Service
    1. Ongoing Project (ALNG – CSUA)
    2. Prospective Projects
      1. GMF (Garuda MF) Turbine overhaul (maintenance)
      2. LNGL Papua New Guinea
  • SAIPEM & CHIYODA (FEED of Masela LNG Terminal

 

Figure 6 Milestones of Badak LNG overcoming the gas source declining (source: (Asmadie, 2013))

III.1.1.5       Economic Logic

  • Good Safety and Reliability is a good business: by implementing high standard in safety, reliability and people development programs, PT Badak LNG has become a reference for LNG companies worldwide.
  • In operational, the work procedures are standardized to maintain the uniform quality of product and process in achieving excellence of performance, excellence of safety, excellence of security.

III.1.2        Business-Level Strategies

Each business-level strategy helps the firm to establish and exploit a particular competitive advantage within a particular competitive scope. How firms integrate the activities they perform within each different business-level strategy demonstrates how they differ from one another.

Figure 7 Five Business-Level Strategies (Hitt, Ireland, & Hoskisson, 2011)

Referring to the strategy diamond above, Badak LNG selected to be to be excellence of performance, excellence of safety, excellence of security. It means Badak chose the uniqueness competitive advantage in a broad segment of target market. Therefore, it is the differentiation strategy which was chosen by Badak LNG. In doing so, Badak LNG had been developed the skills in planning, scheduling and processing in standardized manner. Thus, in the prolonged period of perfecting the standards, Badak LNG had achieved also the cost effectiveness for their work procedure. So, in turn, Badak LNG would be proud to declare that their high quality performance (differentiation strategy) was achieved economically (cost leadership).

III.2      International Business-Level Strategy

Figure 8 Michael Porter Model Determinants of National Advantages (Hitt, Ireland, & Hoskisson, 2011)

In analyzing international business-level strategy, the diamond model of competitive determinants from Michael Porter was used. It is claimed that home country of operation is often the most important source of competitive advantage. And then, as the firm continue to grow into multiple location, the firm’s specific advantage (FSA) would play a bigger role.

III.2.1        Factors of production

This dimension refers to the input necessary to compete in any industry, they are: labor, land, natural resources, capital, and infrastructure (such as transportation, postal and communication system). For Badak LNG, the most influencing aspect is the natural resource. In Indonesia, the natural gas reserved had played the important role for Badak LNG to produce for international market.

III.2.2        Demand conditions

This dimension is characterized by the nature and size of buyers’ in the home market for the industry’s goods or services. However, for Badak LNG from the beginning of development, there were already the demand from outside of country. Those outside demand had become the market segment large enough to create scale-efficient facilities.

III.2.3        Related and supporting industries

Not as its oil industries counterparts, gas industries have rigid limitation due to the characteristic of the substance: storing gas needs energy. LNG itself is a method of transportation, not storage, because the LNG has to be maintained in its cryogenic state always. For such a huge facility as Badak LNG to be in operation, there are some industries to be in place and operating at a same time period, they are:

  1. Gas producer (the gas company who operate and maintain the gas wells and also extract the gas from the gas wells)
  2. Gas transmission pipeline from the gas production site to LNG plant
  3. Gas consumers (whether power plants, petrochemical industries, or manufactures)

They are a complete chain of business have to be in operation simultaneously. This condition is secured by long-time-contracts among those parties, because when one of them violated the contract or stopped the operation, the whole chain of business (from gas wells to consumers) will be impacted.

III.2.4        Firm’s strategy, structure and rivalry

Being the player in the gas industry which is very high risk, Badak LNG emphasizes the Safety, Health, Environment and Quality (SHEQ) in its operation. Being in the advantage of abundance natural resources and high demand for gas, Badak LNG was in growth strategy to catch up the demand until 2000s. At same time, people development to create the expertise in gas industry who would be the important asset for the company to expand the lines of business.

IV.            Corporate Strategy

IV.1      Growth Strategy

From the SWOT analysis, Badak LNG has the opportunity to develop new lines of business regarding the opportunity of demand for expertise whether O&M services or education (including training and consultation) services. Those opportunities are well suited by the strengths which are possessed by the Company: strong brand image and reputation of operational excellence.

So, answering the strength and opportunities, Badak LNG employ the diversification strategy instead of concentration strategy. It developed O&M service line of business and LNG Academy for the education services. Depending on the market, Badak LNG handled the training and consulting service in house, while the for more formal education segment Badak LNG form an alliance with Jakarta State Polytechnic as a legal institution in providing formal education for students.

IV.2      Cooperative Strategy

A firm uses a corporate level cooperative strategy to help it diversify in terms of products offered or markets served, or both. (Hitt, Ireland, & Hoskisson, 2011)

By its previous competencies, Badak LNG was the industry which provide LNG processing whose market was companies using the LNG product. Expanding the line of business to formal education means diversifying the service and the market to individual students. To gain the advantage in college administration, Badak’s LNG Academy was operated in cooperation with Jakarta State Polytechnic. While the lecturers were from Badak LNG, the curriculum, education standards and student’s completion certificate was set by Jakarta State Polytechnic.

IV.3      BCG Matrix

LNG Production
LNG Academy
O&M Services

Figure 9 The BCG Matrix of Badak LNG

Using the BCG Matrix, the line of businesses from Badak LNG are analyzed. The matrix has 4 categories:

  • Stars: units with high market share and in the fast-growing industry.
  • Cash cows: units with high market share and in the slow growing industry.
  • Dogs: units with low market share and in a mature, slow-growing industry.
  • Question marks: units with low market share and in a high growth market.

Referring to the BCG Matrix above, LNG Production is categorized in the border of Stars and Cash Cows line of business, due to the declining natural gas reserve for feed gas in the current time. This LNG Production business has been Stars in Badak LNG business for the period of 1977 until 2000, in which Badak LNG used the Growth Strategy by focusing its effort to expand the capacity of production and loading. However, as the natural gas reverse continuously declining, the strategy had been moved to Stability Strategy. Badak LNG was not again expanding the capacity, but move to increasing the quality.

At the same time, there were some other plans put into action by Badak LNG including LNG Academy and O&M service offering. Those plans are still gaining relative market share. They are the ways to keep the company sustainable by passing on the legacy of the best LNG Plant operator.  It is hoped that these new lines of business will someday become the Stars.

IV.4      International Corporate Strategy

Figure 10 International Corporate Level Strategy (Hitt, Ireland, & Hoskisson, 2011)

There are thee strategies international corporate-level strategies: global, multidomestic and transnational. As shown in the figure above, those three strategies vary based on the need of global integration and local responsiveness. Multidomestic strategy allow the strategic business units in each operating country to tailor the product in answer to local demand. Global strategy, on the contrary, dictate the standardized product across the markets, it promotes cost leadership because of its efficiency. Transnational strategy combines both strategies of local responsiveness and efficiency of standardized process.

Badak LNG is only operating in Bontang for the LNG Processing to service the demand from different countries. It provides the standardized production process and operation because the LNG is a common product consist only light hydrocarbon (mostly C1H4). Badak also gain the efficiency advantages in operation, maintenance and personnel cost.

Badak LNG sends its engineers and experts to the customer’s premises for O&M service and consulting, for example: plant commissioning and start-up, firefighting and emergency responses. The plants or facilities operated might differ in slight variation, but still have the same characteristic.

And for training purpose, the subjects of training had been set up in the competencies of the organization. The training can be customized to match the customer needs in term of range of focuses, time period, or depth of discussion. But the competencies are standardized.

With the information above, although the customer of Badak LNG came from various countries, it is obvious that Badak LNG gain the advantages from implementing standardized global strategy.

IV.5      Portfolio and Restructuring Strategy

Restructuring is commonly used as a way to correct problems created by ineffective management. It may include:

  • Downsizing: reducing the number of employees and hierarchical levels of the firms, with target of cost reduction. Downsizing often creates problem in the long-term.
  • Downscoping: reducing the firm’s level of diversification with target of refocus the management to the core business.
  • Leveraged buyout: buying the firm to make it a private entity.

Badak LNG is not in the process of restructuring because even though the production capacity was declining, the Company are developing diversification with the human resource experienced from the day-to-day operation.

V.            Risk Matrix and R-W-W screen[2]

V.1        Risk Matrix

Risk Matrix is used to see the distribution of risk across the company’s new lines of business. Each innovation is positioned on the matrix by comparing the innovation with the familiarity of the intended market and the product/technology. The scoring of the components is displayed in the next page.

After calculating the score from the components of intended market and product/technology above, the total score of each component are plotted to the two dimensional chart of risk matrix. The chart measure the familiarities between the new innovations and the existing line of business.

The chart below shows that the business of O&M service provider has higher risk of failure even though the revenue was estimated higher, meanwhile, the LNG Academy (including the training and consulting) have safer probability but smaller estimated revenue than the O&M service innovation. However, Badak LNG put both of the innovations in progress.

Figure 11 Probability of failure graph of Badak LNG Academy and O&M Service

V.2        R-W-W Screen

R-W-W screen stand for the tool to evaluate the feasibility of innovation by exposing the problems and check whether it can be fixed. It comprises of below simple yes or no questions. Any “no” answer will lead to termination of the innovation. Below is the R-W-W screen for Badak’s LNG Academy.

It can be seen from the Risk Matrix and R-W-W screen, that the LNG Academy line of business still be adjacent to the current business, so the risk of failure was laid on low part: 25%-40%. The R-W-W screen also has a good impression, because the LNG Academy passes the questions. Therefore, it is recommended to continue the innovation of LNG Academy.

 

 

VI.            The Business Model Canvas

VII.            Required Strategic Leadership

Strategic leadership is defined as any individual with responsibility for the performance of human capital and/or a part of the firm. (Hitt, Ireland, & Hoskisson, 2011). Strategic leadership may have several title and organizational function, but it is a complex form of leadership because they have substantial decision making responsibilities that cannot be delegated.

Badak LNG, in its current condition of declining gas resources, needs the leader that encourage and inspire innovation in the Company. It needs the transformational leader to make everyone in the company to contribute their best, and lead with strong motivation, empathy and effective interpersonal skill.

Badak LNG required the innovation to be sustainable in the long run despite of the traditional business which was dependent to the gas resources. Because of that, in term of the top management composition the Company would have advantage with heterogeneous composition. Heterogeneous means the top management are composed of individuals with different background, experience and education. And in term of CEO succession, it is preferable the internal CEO succession.

Figure 12 Top Management composition on strategy

The next is to measure the performance of the both the traditional line of business (LNG Processing) and the new initiatives (LNG Academy and O&M service). For the LNG Processing line of business, because it has been mature in operation, it was evaluated and controlled as a standard cost center, its total standard costs are multiplied by the units produced. The result is the expected cost of production, which is then compared to the actual cost of production. The LNG processing plant still need active operating and maintenance cost, but no significant investment was needed. And then, for the new initiatives, because the LNG Academy and O&M service line of business are the service oriented from the readily available internal human resource expertise, there are no major investment needed. The performance is measure from the revenue generated and the operating cost and some upskilling of the lecturers. So, the new initiative programs are evaluated and controlled as profit centers.

VIII.            Conclusion

Despite of the serious threat of declining supply from gas resources in Muara Badak, the management of Badak LNG could maximize their strength to capture the available opportunities to be sustainable.

Badak LNG as one of the first LNG Plant in Indonesia had experienced a changing era. By the time it was established, the demand for its product increased enormously. The LNG Production had been Star line of business. Thus, the expansion taken by Badak LNG for the period of 1977 until 1999 is an appropriate strategy based on the characteristic of the market growth.

Not only focusing on the quantity, Badak LNG was also improving its way to operate in a world-class standard, in terms of safety, efficiency and effectiveness. These aspect of operational excellence made Badak LNG Plant to be recognized by the international gas business. Not surprisingly in the period 2000 until 2006 was the golden era of Badak LNG as the best LNG Plant in the world. It maintained its rare, valuable and costly to imitate resources which are operation excellence, innovation and committed to SHEQ, which bring the competitive advantage over the other LNG Plant. Badak LNG strive to exercise the differentiation strategy of being the best LNG plant, and overtime it had achieved the standardized global strategy, thus, resulting in the combination of differentiation and cost leadership.

Overcoming the continuously declining feed gas, in 2006-2008 period, Badak LNG entering the sustainable era, in which the previously Star line of business had slightly move to the cash cow line of business. Thus the strategy was stability. With the expertise and experience, Badak LNG had become the respectable and reputable LNG Plant in the word and become the reference for other plants.

In order to make the legacy of expertise be long lived, Badak LNG implement the diversification growth strategy business to embrace sharing and innovation. O&M service and LNG Academy were born to serve that purpose. Still being in the Question Marked line of business (BCG Matrix), this legacy oriented line of business was hoped to grow bigger in market share and soon become the new Star lines of business. The Company is also implementing the Cooperative Strategy with Jakarta State Polytechnic to support its diversification to education services.

Analyzing the Risk Matrix and R-W-W screen, this innovation to implement the LNG Academy had been in the low risk of failure and passed the screening, so, it is recommended that the innovation LNG Academy to be continued. The key partner, activities, resources, values, customer relationship, channels, segments, cost and revenue structures are expressed in the Business Model Canvas.

Because it has to be innovative in order to develop new business idea, transformational leaders are required to take the position in charge in the Company. The composition of the top management is needed to be heterogeneous to catalyst innovation, and the CEO needed to be succeeded from internal to maintain stability.

IX.            References

Asmadie, N. (2013, September). PT Badak NGL Sharing Experience 34 Years of Operational Excellence. Jakarta, DKI Jakarta, Indonesia: PT Badak NGL.

Average annual OPEC crude oil price from 1960 to 2016 (in U.S. dollars per barrel). (2016, June 05). Retrieved from Statista.com: http://www.statista.com/statistics/262858/change-in-opec-crude-oil-prices-since-1960/

Badak LNG. (2014). Sustainability Report. Jakarta: Badak LNG.

Day, G. S. (2007, December). Is It Real? Can We Win? Is It Worth Doing? Managing Risk and Reward in an Innovation Portfolio. Harvard Business Review, 110-120.

Hambrick, D. C., & Fredrickson, J. W. (2001). Are You Sure You Have A Strategy? Academy of Management Executive, 15(4), 51-62.

Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2011). Strategic Management: Competitiveness and Globalization: Concepts, Ninth Edition. South-Western Cengage Learning.

Maskur, F. (2015, February 12). Rochmad Hardadi, CEO Pengusung Transformasi Badak. Bisnis Indonesia.

(2014). Outlook Energi Indonesia 2014. Jakarta: Dewan Energi Nasional Republik Indonesia.

Pramudji. (2014, September 09). Implementasi Work Management Maintenance Planning di PT Badak NGL. Jakarta, Indonesia: PT Badak NGL.

Profil PT Badak LNG. (2011). Retrieved Jun 05, 2016, from http://www.badaklng.co.id/in/profil.html

Wheelen, T. L., & Hunger, J. D. (2012). Strategic Management and Business Policy: Toward Global Sustainability 13th ed. New Jersey: Prentice Hall.

 

[1] Adapted from publicly available sources: Badak LNG Sustainability Report 2014 and http://www.badaklng.co.id/ accessed on 05 Jun 2016

[2] Day, G. S. (2007, December). Is It Real? Can We Win? Is It Worth Doing? Managing Risk and Reward in an Innovation Portfolio. Harvard Business Review, 110-120

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I.            Introduction

I.1          Definition

Starting the discussion about the topic “Ethic Is Important for Every Company to Run its Business“, the Merriam-Webster dictionary (http://www.merriam-webster.com/dictionary)  was consulted to define the words of ethic, company and business:

Ethic: rules of behavior based on ideas about what is morally good and bad

Company: a business organization that makes, buys, or sells goods or provides services in exchange for money.

Business: the activity of making, buying, or selling goods or providing services in exchange for money

From above definition, it is obvious that the word company and business are closely related: that company as a business organization which is making money. However, ethic seems to be an alien concept from money. It is evaluated through an abstract measure: moral.

Morally judgment of good or bad although are sometimes subjective, has a common ground of understanding. It is universally accepted that donating for education or health of others to be good, conversely, cheating from the less knowledgeable side for self-interest to be bad.

In addition to moral, ethic is also rules of behavior, which means ethic is a stricter concept and sometimes related to professional field of work. There are Medical Ethic, Engineering Ethic, Legal Ethic, for example.

However, ethics is different from law which command direct legal consequences. There is different tolerance in the level of morality of the communities which make the gray area of ethical dilemma. “Just because it’s legal, doesn’t meant it’s ethical” is a phrase depicting the above idea. The legality of an issue may not be the right answer as its moral side. One in status of this dilemma had to consult individuals in position of responsibility to help ensure the organization’s needs are being appropriately met.

I.2          Methodology

This writing was developed based on the literature study from several related references and sources with an example from the company which has a good implementation of the business ethics in their operation.

II.            Business Ethic

II.1        The Evolving Idea of Corporate Responsibility

In the 1847, American Medical Association established their first code of conduct. However, the concept of “business ethic” had not become common in the U.S until 1970 (Fountain, 2012). But, long before that, the concept of corporate social responsibility CSR) has been evolving from the impulses of philanthropies until the progressive era of corporate responsibility.

The driving force of the shifting are:

  1. The doctrine of corporate responsibility has evolved over time to require more expansive action by companies. Ethical and legal philosophies had matured to support broader action by managers.
  2. CSR is profoundly durable and successful ideology.

There are 4 big periods of time in which this paradigm shift will be discussed, they are:

II.1.1        The classical economic

This period is strongly dominated by the Adam Smith’s Wealth of Nations ideology: the simplicity and resonance of self-interest. In this classical capitalism, a business is considered to be socially responsible if it maximizes profit while operating within the law, because an “invisible hand” will direct economic activity to serve the good of the whole.

 

II.1.2        The early charitable impulse

This period includes colonial era, in which the businesses were small and the merchants practiced thrift and frugality. Company took a negative view of philanthropy and the use of company funds for charity or social works was the same as to take the money from the pockets of shareholders. those actions invited lawsuit because the business charters granted by states required that profit be disbursed to shareholders.

Despite the profit maximization of the capitalist businesses, charity was still a coexisting virtue. Those philanthropy actions were endowed individually by the business owners or millionaires. Among the first philanthropist was Steven Girard who made the charitable bequest in his will of $6 million for a school to educate orphaned boys from the first grade to high school. At that time, a high school education was still only for children of the wealthy. John D. Rockefeller and Andrew Carnegie were also noted as the most generous in the period.

 

II.1.3        Late nineteenth and early twentieth centuries

During this progressive era, three interrelated themes of broader responsibility emerged:

  1. Managers were trustees, on whom lies the welfare of the stockholders, workers, customers and communities;
  2. Manager had an obligation to balance these multiple interest, be the coordinators who settled competing claims;
  • Many managers subscribed to the service principle, a belief that individual managers served society by making each business successful.

 

II.1.4        1950 to present

This period witnessed the forming of contemporary understanding of corporate social responsibility. An influential statement of the idea was made in 1954 by Howard R. Bowen in his book Social Responsibilities of the businessman: managers felt strong public expectations to act in ways that went beyond profit maximizing. He also laid out he basic arguments for social responsibility:

  1. Managers have an ethical duty to consider the broad social impacts of their decisions;
  2. Businesses are reservoirs of skill and energy for improving civic life;
  • Corporations must use power in keeping with a broad social contract, or lose their legitimacy;
  1. It is in the enlightened self-interest of business to improve society; and
  2. Voluntary action may head off negative public attitudes and unwanted regulations.

II.2        Ethic in Workplace

To be effective the code of ethics must be more than a written document, it must be practiced and evident in the behavior of the organization from top management to employees at the bottom. The initiative of ethic from the top management have to be communicated frequently, openly, honestly and put in to practice by every individual within the organization. Individuals tend to follow their leaders.

Corporate responsibility topics had developed far beyond environmental initiatives or community support. It is owned by each and every employee in individual level, whether it is a dedication to recycling effort, contributing to community causes, providing feedback to staffs and supervisors on business improvement ideas, or even whistleblowing system realization. It is no longer acceptable where best practice “code of conduct” be sit on shelves but not in daily practices. Organizations nowadays have to move further then the policy itself. Knowing how the policy is practiced, enforced, updated and how compliance is measured and reported are the true sign of ethic and corporate responsibility in action.

 

II.3        Business needs Ethic

To be sustainable, business needs people to buy its products and/or services. From this point of view, ethics has relevance to determine a business would be accepted by the market and sustainable. Ethic was basically connected with the manner those are keeping social equilibrium (Rudito, 2016). It was at the common set of knowledge about human judgment to their behavior which a community or people would impose their result of judgment, whether a business when doing their economic function were distracting the equilibrium or maintaining it.

When the purpose of a business is only generating profit, it would easily deal with a breach in ethical limits. As the movie “the new ruler of the world” depicted, that businesses in the search of maximum profit were exploiting the cheap labor from under-developed society. The labor who are exploited were often the ones with no other options due to their skill and family needs; their denying of cheap paychecks would lead to worse conditions.

In term of upskilling, that society are too constrained by the imminent needs which had to be fulfilled by their current time consuming and energy exhausting but low paying job. To the businessmen, the position of the worker is easily replaced due to high number of those equally low-skilled workforces in the area. Government intervention of setting a floor price for those workforce market would unfortunately result in the migration of those business owner to other country which still provide cheaper labor. At this point of view, it is the condition which was cornering the low paying workers.

In ethical point of view, business is not a quest for profit only, but also for value creation and sustainability. As long as the value creation for the stakeholder being the main goal, the company would automatically reject the idea of workforce exploitation, because it violates the value creation to the unfortunate workforce (which is also stakeholder of the company).

Cheap labor actually is not a solution for economic activity. Jobs may be the only income for poor people, so low wages would drive up inequality and undermine social cohesion. The impacts are making the cycle of non-productivity: underpaid worker consume less, so reduce the domestic market, the demand for goods and services decline, impoverished families are unable to spend as much on health and education.

Figure 1 Supply Chain pressures create precarious employment (Oxfam International, 2004)

 

On the other hand, in his book Give and Take: A Revolutionary Approach to Success, Adam Grant introduced three generic types of people: givers, takers and matchers. While givers denote they who are predominantly do favors for the sake of others, takers prioritize their own purpose on the cost of people around them. And then, the matchers lie in between of givers and takers. The matchers embrace fairness, do giving and taking in a balance manner, and tend to pay back the good or bad consequences they received to the person causing it.

After all, most people are matchers: their core values emphasize fairness, equality, and reciprocity. When takers violate these principles, matchers in their networks believe in an eye for an eye, so they want to see justice served. (Grant, 2013)

II.4        The Role of Management

Management is the position who has the role (embedded as their duties and rights) to set the framework of control and manage key processes, organizational risk and continual improvement. The management system is important to the operation of every business because it guides the behavior of the personnel. Corporate values and behavior describe how an organization intends to operate on a day-to-day basis in the pursuit of its purposes. According to the International Sustainability Rating System (ISRS) Book of Knowledge (accessed on 15 March 2015), that the business can grow profitably, balancing the priorities of production, HSEQ and costs, by minimizing the losses to the business and undertaking all activities the “right way.”

Implementing the business ethics is best exercised by including it in strategic approach. This idea is surely in the contrary with the Friedmanism (Friedman, 1970) which claimed that the sole social responsibility for business is to use the resources to maximize profit while obeying the law. However, it is now considered benefits of paying in advance the responsibility of doing the activities the “right way”. Those benefits would consist of:

  1. Improved company reputation and the confidence of stakeholders through strategic communication,
  2. Gained competitive and financial advantage through improved efficiencies and reduced costs,
  3. Increased leadership involvement and engagement of the employee,
  4. Complied to statutory and regulatory requirements,
  5. Encouraged more honest and fairer relationship with suppliers by integrating them into organization’s business system.

 

III.            Case Study: Badak LNG

III.1      Company Profile

Badak LNG was founded on November 26th, 1974 as a producer of liquefied natural gas (LNG) and liquefied petroleum gas (LPG). Badak LNG was established as a limited liability company. Badak LNG is headquartered in Jakarta and has a plant site as its sole production facility which is located in the Municipality of Bontang, East Borneo.  All of Badak LNG’s operational area is located within the jurisdiction of the Republic of Indonesia. Badak LNG also maintains a Representative Office which is located in Balikpapan.

Figure 2 Badak LNG Terminal

Badak LNG is a nonprofit entity, whose assets are fully owned by the Government of the Republic of Indonesia, under the Ministry of Finance. Supervision of the management of assets is carried out by PT Pertamina (Persero), based on the Decree of the Minister of Finance No. 92/KMK/06/2008 dated 2 May 2008 on the Determination of Ex-Pertamina Assets Status as State Property.

The management of production, commercial, and financial planning activities with respect to Badak LNG’s operations is carried out by a separate entity called the Joint Management Group (JMG), a body consisting of PT Pertamina (Persero), Total E&P Indonesie, VICO Indonesia, and Chevron Indonesia.

its date of establishment the composition of shareholder was: Pertamina, Huffco Inc. and JILCO (Japan Indonesia LNG Company) with share composition of 55%, 30% and 15% respectively. And in 1990 there was a change in shareholders’ composition becomes:

Shareholder %
PT. Pertamina (Persero) 55%
Vico Indonesia 20%
Total E&P Indonesie 10%
Japan Indonesia LNG Company 15%

 

In 1980, expansion project of train C and D construction was executed due to the increase of LNG demand from Japan. Then in 1988, LPG product had been also exported to Japan. To cope with increasing demand for LNG from Japan, Taiwan and Korea, train E was built in 1987 – 1989, and train F was built in 1991 – 1993. The expansion of Badak LNG Plant was still continuing with the completion of Train G in 1997 and Train H in 1999. From its total 8 train, the production capacity of Badak LNG reaches ± 22 ton LNG / year.

Entering 2000s, Badak LNG had been developed to be a capacity of the largest production volume in the world. Until 13 December 2001, Badak LNG had been exporting 4500 cargos. The LNG terminal capable of handling LNG loading to 3 tankers simultaneously after completing its third loading dock by the end of 1999, as a way to increase the service level to the buyers.

The supply chain of the LNG business carried out by Badak LNG starts from the extraction of natural gas from wells by gas producers. Badak LNG acquires its gas from Muara Badak, supplied by TOTAL, VICO, and Chevron Indonesia. The gas subsequently is transported through pipelines to gas processing facilities, of which Badak LNG is one. The liquefied natural gas (LNG) is subsequently transported using ships and ISO tank containers according to the specifications stated in the purchase contract with the buyers, until the cargo reaches the receiving terminal of the buyer’s choosing. The buyer subsequently converts the LNG back to gas prior to further distribution.

Figure 3 LNG Supply Chain  (Badak LNG, 2014)

Badak LNG has been an LNG Plant which is categorized significant to international society of LNG industry, and become a vital asset for national LNG supply chain. With the experience of more than 34 years, Badak LNG is ready to overcome the challenge of 21st century.

Experiencing the constant growth of demand volume, from 1977 until 1999, the growth strategy seems to be effective to be implemented. However, facing the natural declining phenomenon of gas resources production volume after 2001, Badak LNG had its business to be diversified to LNG Academy and operation & maintenance service provider.

Long before the declining natural gas resources been issue to its capacity growth, Badak LNG had also invest heavily in building the Operation Excellence, Good Corporate Governance, SHEQ, and Corporate Social Responsibility. Badak LNG conforms to the statutory regulation and beyond proved from the achievement of PROPER Gold award from the Ministry of Environment and Forestry, meaning that a company has been implementing comprehensive, sustainable environmental management. PT Badak NGL also achieved certification of ISO 9001, ISO 14001, ISO 17025 and Level 8 of ISRS8 (DNV’s International Sustainability Rating System).

 

III.2       Vision, Mission, and Values

Vision Mission
To be a world-class energy company that leads innovation.

Badak LNG strives to be a company that is able to meet the energy demands of many countries in the world, by always striving to discover novelties from those existing or previously known, in the form of ideas, methods, and tools, which will bring about an improvement towards a better future

 

To produce clean energy with the best performance standard in order to yield maximum return for stakeholders.

Badak LNG produces clean energy, both during the processes and as the results, based on the internationally-accepted performance standards to be environmentally friendly, while maintaining its product quality to meet customer requirements, so as to provide optimal contribution to stakeholders

 

Values

 

 

  1. Professionalism

Delivering the best quality, reliable and competitive results through personal commitment, focus, as well as continuous and sustainable improvement

Expected Behavior:

  • Delivering the best quality performance every time (Best Quality),
  • Acting prudently and avoiding rework (Reliability).
  • Setting the best standards as the rule of thumb (Competitiveness).
  • Being responsible for all tasks (Commitment).
  • Establishing a scale of priority in executing the jobs (Focused).
  • Making continuous improvement to upgrade the work results (Continuous Improvement).

 

  1. Integrity

Walk the talk through honesty, transparency, and putting corporate above personal interests.

Expected Behavior:

  • Walk the talk.
  • Being Honest.
  • Providing accurate and correct data (Transparency).
  • Putting the company business above personal or working unit interests.
  • Putting the obligations above the rights.

 

  1. Dignity

Building and maintaining positive corporate image and showing equal respects to mankind.

Expected Behavior:

  • Being proud of own job and duties.
  • Showing high self-confidence.
  • Being courteous.
  • Positive thinking and showing equal respects to others.
  1. 4. Innovative

Seeking for superiorities and consistently learning even from failures in order to step ahead.

Expected Behavior:

  • Seeking for opportunities to gain superiorities (strive to be the best).
  • Learning from failures and mistakes (learn from the experience).
  • Proactively responding to the changes.
  • Improving competency to keep up with the job requirements.

 

  1. Safety, Health and Environment (SHE)

Referring to the aspects of safety, health, and environment in performing all work and business activities.

Expected Behavior:

  • Putting safety, health, and environment for workers in the main priority.
  • Performing HIRA (Hazard Identification and Risk Assessment) in any activity.
  • Performing tasks in accordance with the Standard Operating Procedures.

 

 

III.3      Corporate Responsibilities Implementation

As the business entity which operate in the gas industry in Indonesia, Badak LNG is obliged to do the corporate social responsibility and environmental by the Limited Liability Company Law No. 40/2007 and Government Policy 47/2012. Beyond that obligation, Badak LNG actively involves in wide range of corporate responsibilities initiatives, such as:

III.3.1      In environmental:

  • The Company continuously strives to improve the condition of the environment to reduce the causes and mitigate the impacts of climate change. To reduce the sources of climate change in the form of emissions, the Company continued to utilize solar panels and LED (light emitting diode) lights in its office buildings, housing complex, and public facilities within its operational areas. Certain innovations to reduce flare gas emission from plant operation have also been utilized. To mitigate the impacts of climate change in the form of abrasion due to rising seas, the Company has planted mangroves along the coastline of Bontang. The Company also minimizes climate change impact on the destruction of coral reef, a main habitat for marine creatures, by installing bio reef tech (a type of artificial reef technology), for which it involved the participation of the fishermen community.
  • As a company engaged in the natural gas industry, Badak LNG is fully aware that the natural resource that it requires to run its operations is not renewable. Therefore, although it is essentially an energy-generating company, Badak LNG’s operations certainly also require energy, and thus energy consumption within the Company must be properly managed to be as efficient as possible. The Company has therefore run various efficiency measures in terms of the utilization of raw materials, energy, and water, as part of its long-term commitment to continuous improvement, which has been made manifest in numerous process and technological improvements and cost reduction initiatives.
  • The “Green Electricity” program initiated in 2013 was continued in 2014 with the installation of solar panels coupled with the installation of LED lights. The total fund invested in solar panels installed in 2014 was USD 224,721. This is Badak LNG’s commitment to the sustainability of its application of renewable energy utilisation technologies. The details regarding the reduction in electricity consumption and carbon dioxide emission that have been achieved are provided in the table below
Location Installed panel capacity (kW) Est. Reduction in Electricity Usage (kW/year) Est. reduction in CO2 emmission (ton)
Road Ligthing 24.42 71,315 50.32
Office Building 240.00 438,000 309.05
Public Facilities 16.50 59,515 41.99
Total 280.92 568,830 401.36
  • Consulted the BPPT and collaborated with the LNG Academy, the Company developed a mini plant to process some used cooking oil to biodiesel. The research stage of this project has recently been completed, and this will be followed with the preparation of a mechanism to collect raw material (cooking oil) from residential areas, as well as a mechanism to introduce the resulting product to the fishermen community in Bontang, so that they may utilize the product appropriately.
  • Ground water quality is monitored constantly by the Company, among others through sampling conducted in production monitoring wells, which is then analyzed to ascertain the quality and quantity of ground water reserves. To detect the presence of pollutants in the aquifer, the Company conducts sampling at pollutant monitoring wells.
  • Global warming has been largely and squarely attributed to human activities, and has startedto create a host of environmental issues that are complex and not readily resolvable. Badak LNG therefore sees the extreme importance of participating in controlling its operations so as to help reduce the emission of greenhouse gases (GHG), the main culprit of global warming. Badak LNG also has a substantial interest in reducing and even eliminating the use of ozone-depleting substances.
  • Badak LNG manifests its commitment to managing the environment into action through certain environmental management initiatives, which include a series of training for its human resources to be more responsible for environmental management, waste treatment by third parties, as well as research and development to recycle waste.
  • the Company implements the SHEQ Management System, which includes a comprehensive concept regarding safety, health, environment, quality and security. The SHEQ Management System is implemented with the aim to protect the safety of all employees, both permanent and contract ones. Badak LNG has adopted an international system to measure, improve, and exhibit performance in safety, health, environment and quality as well as process safety management, in the form of the International Sustainability Rating System Edition 8 (ISRS8).
  • Badak LNG’s biodiversity protection zone covers a total area of 22.4 hectares, consisting of 7.4 hectares of Natural Forest and 15 hectares of Swamp Area, representing 1.1% of the total area managed by the Company. In addition, Badak LNG also ensures that its housing complex and public facilities remain green and natural. The Company’s green zone covers an area of 1,125 ha, 56% of its total area. In the operational area of Badak LNG and in Bontang, including Kutai National Park, there are at least 25 species considered as vulnerable or endangered based on the data from the International Union for the Conservation of Nature (IUCN) Red List Species.

 

III.3.2      In social:

  • Badak LNG is carrying out initiatives to preserve the company’s knowledge and experience in the field of natural gas processing, such as training and learning facilities, assisted by experts.
  • Badak LNG intensively empowers the community through various programs, such as: coastal communities, mangrove farming groups, cattle business, and etc.
  • CSR activities are devised in the Community Master Plan based on the Social Mapping which has been put into effect, while the implementation and monitoring of CSR programs is reported once a year to the President Director & CEO in the CSR Evaluation Report.
  • Badak LNG built the LNG Academy in coordination with Politeknik Negeri Jakarta (PNJ) to actively contribute in developing the skilled Indonesian labor in gas industry.

 

III.3.3      In local economics:

  • Badak LNG realizes that its presence in Bontang area is one of the most powerful driving factors for the growth of the local economy. Therefore, the Company strives to bring about as much positive contribution as possible to the local economy by purchasing goods and using services it requires from local suppliers. In addition, Badak LNG also conducted many community development programs aimed primarily at improving the well-being of the community surrounding its operational area. In 2014, the number of suppliers of goods and services actively enrolled in the Company’s database was 870 parties. Throughout the reporting period, there were 2.538 contracts for the procurement of goods and services issued by the Company. A total of 1.566 of these contracts (62%) were acquired by local suppliers of goods and services. They are defined as business entities operating in Bontang with appropriate licenses issued by the Municipal Government of Bontang. Total contract value for local suppliers in 2014 was Rp 396 billion, or 31% of the total contract value in 2014, which was Rp 1.274 billion.
  • Badak LNG is a part of the East Kalimantan Pipeline Network Emergency Coordination Plan and the Mutual Agreement of Emergency Preparedness and Response of Industry in Bontang. The company provide firefighting training for external, and allows the use of its firefighting facilities for institutions and companies.
  • Developed the expertise in gas industry so excellent that become the cost leader in the international LNG business. Referring to a Benchmark from Shell Global Solutions (SGS) in 2009:
    • 1st rank in health and safety aspect (no LTI since Dec 6, 2006)
    • 2nd rank in reliability aspect
    • The lowest operating cost
    • The lowest maintenance cost
    • 2nd lowest personnel cost

 

 

III.3.4      In human resource:

  • Badak LNG always controls the contract and outsource employees by implementing a number of policies to ensure employee welfare (minimum wage and yearly general increase) in all agreements made between the Company and its contractors. Interest of local people to work at Badak LNG through some third party contractors has always been in close monitor by th Company to ensure the worker are treated very well in their tenure.
  • Badak LNG believes that in order to recruit and retain the best talents in the field, it must have an excellent and attractive remuneration system. Badak LNG has been long known as an employer that offers highly appealing compensation package, not only on the regional level, but also nationwide. All permanent employees of the Company have been ensured to receive a higher amount of basic salary than the amount stipulated by government regulation.

 

III.3.5      In corporate governance:

  • The Ethics Committee was established with the primary task to raise awareness on the Code of Conduct among employees and business partners, as well as other relevant external parties. In addition, the Ethics Committee also monitors, evaluates and develops the implementation of the Code of Conduct, including providing reports on any violation of the code and conducting follow up in accordance with the prevailing regulations. The Ethics Committee consists of a Chairperson, a Vice Chairperson, a Secretary, and eight members from various departments within the Company.
  • To ensure that the code of conduct is enforced throughout the Company, a whistleblowing system is in place whereby any employee may report any violation of the code of conduct via a number of designated avenues, including intranet and email to komiteetik@badaklng.co.id. The Decree on the Whistleblowing System Management Policy, No. SK-99/BJ00/2013-077 was signed by the President Director & CEO in September 2013. This decree regulates, among others, the scope and purpose of whistleblowing, the procedures for handling reports, as well as confidentiality, reward and punishment for the whistleblower and the reported party.

 

IV.            Conclusion

Businesses challenge is not to be profitable only, but also to be sustainable. It is where the need for doing the business in ethical and sustainable way came into focus. Companies are also faced to the regulations to fulfill its responsibility both to the community and also environment, besides its embedded responsibility to the shareholder. In this example, Badak LNG is non-profit company, but still the performance is evaluated through the cost efficiency. By striving to be operation excellence, the Company has proved its ability to be provide the superior operation but also maintain the cost efficiency.

Badak LNG as one of the first LNG Plant in Indonesia had experienced a changing era. By the time it was established, the demand for its product increased enormously. Besides focusing on the quantity, Badak LNG was also improving its way to operate in a world-class standard, in terms of safety, efficiency and effectiveness. These aspects of operational excellence made Badak LNG Plant to be recognized by the international gas business.

Despite of the serious threat of declining supply from gas resources in Muara Badak, the management of Badak LNG could maximize their strength to capture the available opportunities to be sustainable. Sharing the expertise of operation excellence in gas industry the generation is also the way to ensure the sustainability of the operation.

Economically speaking, Badak LNG only need to fulfill the obligation to environment and corporate social responsibility required by the law of Indonesia of Limited Liability Company Law No. 40/2007 and Government Policy 47/2012. However, exceeding the requirements has set Badak LNG to be an internationally recognized LNG producer, which in turn has also the impact to the business sustainability in the area. Badak LNG actively contributing in social community development in wide range of area, environmental, green initiative. Internally, the company had also improved internally in well controlled human resource management and good corporate governance.

Ethic and corporate responsibility should be implemented as a mean of mutual obligation between the managements and employees. Management, although has the important role to roll the initiative still need to communicate the message well to the stakeholder, especially employees. As we could see from the discussion, employees of Badak LNG are committed to corporate responsibility initiative because the management representatives are periodically doing the walkthrough and emphasizing the commitment of the management.

 

V.            References

Asmadie, N. (2013, 09). PT Badak NGL Sharing Experience 34 Years of Operational Excellence. Jakarta, DKI Jakarta, Indonesia: PT Badak NGL.

Badak LNG. (2014). Sustainability Report. Jakarta: Badak LNG.

Fountain, L. (2012). The Definition of Business Ethics. Fountain GRC LLC. Retrieved June 20, 2016, from https://www.tru.ca/__shared/assets/The_Definition_of_Business_Ethics33706.pdf

Friedman, M. (1970, September 13). The Social Responsibility of Business is to Increase its Profits. The New York Times Magazine.

Grant, A. (2013). Give and Take: A Revolutionary Approach to Success. London: Weidenfeld & Nicolson.

Green, D. (2012). From Poverty to Power: How active citizens and effective states can change the world, 2nd ed. Rugby, UK: Practical Action Publishing Ltd in association with Oxfam GB.

Oxfam International. (2004). Trading Away Our Rights. Oxfam International.

Rudito, B. (2016). Business Ethics. Bandung.

Velasquez, M., Andre, C., Shanks, S.J, T., & Meyer, M. J. (2015, 08 18). What is Ethics? Retrieved from http://www.scu.edu: https://www.scu.edu/ethics/ethics-resources/ethical-decision-making/what-is-ethics/#

       I.            Pendahuluan

Juga dikenal dengan istilah logistik, manajemen rantai suplai (supply chain management) mengelola keterhubungan beberapa instansi bisnis yang terlibat dalam pengadaan barang dan jasa yang dipakai dalam proses produksi sebuah perusahaan. Alur rantai suplai ini mencakup proses-proses dari perencanaan pengadaan barang mentah (raw material), persediaan barang siap produksi (work-in-process inventory), dan pengelolaan barang jadi hasil produksi (finished good), sampai pada titik konsumsi pelanggan (point of consumption).

Manajemen rantai suplai didefinisikan sebagai koordinasi secara sistemik dan strategis dari fungsi-fungsi bisnis dan taktik yang mengintegrasikan fungsi – fungsi bisnis dari sebuah perusahaan dan perusahaan – perusahaan lain yang terlibat dalam rantai suplai perusahaan tersebut, untuk tujuan peningkatan performa jangka panjang dari perusahaan pada khususnya dan rantai suplai pada umumnya (Mentzer et al., 2001)[1]. Di pihak lain, rantai suplai (supply chain) merupakan kumpulan organisasi ataupun perusahaan yang dihubungkan oleh satu atau lebih aliran upstream dan/atau downstream barang, jasa, keuangan, dan informasi dari sumbernya sampai ke konsumen.

Elemen – elemen di dalam suplai chain mencakup: pelanggan (customer), perencanaan (planning), puschasing/procurement, persediaan (inventory), produksi (production), dan transportasi (transportation). Pelanggan memulai rantai kejadian (event) ketika mereka memutuskan membeli sebuah produk. Pelanggan akan menghubungi divisi penjualan, yang akan memasukkan pesanan (order) untuk jumlah tertentu dan diantarkan pada tanggal tertentu. Kemudian pesanan ini akan digabungkan dengan pesanan dari pelanggan lain oleh divisi perencanaan, yang akan membuat rencana produksi untuk memenuhi pesanan pelanggan. Untuk mulai proses produksi, perusahaan akan melakukan pembelian bahan mentah (raw materials). Divisi purchasing akan mengumpulkan daftar bahan mentah yang perlu disediakan, kemudian mengirimkan pesanan kepada pemasok (supplier) untuk dikirimkan pada tanggal yang ditetapkan. Bahan mentah yang sudah dikirimkan akan disimpan sebagai persediaan produksi sampai bahan tersebut dipakai dalam proses produksi. Pemasok sudah bisa mengirimkan tagihan atas bahan-bahan yang sudah mereka kirimkan. Barang jadi hasil produksi akan dikeloia dalam penyimpanan (warehouse) dan dicarikan mekanisme transportasi yang paling efisien untuk mencapai konsumen sebelum tanggal yang telah ditetapkan pada pesanan.

 

 

   II.            Supply Chain Management

Permasalahan-permasalahan yang ditangani SCM

Manajemen rantai suplai (supply chain management) harus mengatasi permasalahan – permasalahan berikut.

  • Konfigurasi Jaringan Distribusi (distribution network configuration): jumlah, lokasi, dan struktur usaha dari pemasok, fasilitas produksi, distribution center, gudang, dan pelanggan.
  • Strategi distribusi: kontrol operasi (sentralisasi atau desentralisasi), skema pengantaran (direct shipment, pool point shipping, cross docking, ataupun direct store deliveries), moda transportasi (darat, laut, atau udara), dan control transportasi (dilakukan oleh perusahaan itu sendiri atau menggunakan jasa pengantaran).
  • Trade off: aktivitas diatas perlu dipertimbangkan secara keseluruhan sehingga perusahaan dapat mengoperasikannya dengan biaya total yang paling rendah.
  • Informasi: berkenaan dengan integrasi proses – proses, informasi yang di-share mencakup: sinyal permintaan (demand signal), prakiraan (forecast), persediaan (inventory), transportasi, kolaborasi potensial, dan sebagainya.
  • Manajemen persediaan: kuantitas dan lokasi dari persediaan, termasuk bahan mentah, work-in-process, dan barang jadi hasil produksi.
  • Arus kas: pengaturan ketentuan dan metode pembayaran, dan peralihan dana atar bagian – bagian dari rantai suplai.

Kegiatan dan fungsi berkaitan dengan SCM

Untuk dapat memastikan bahwa rantai suplai beroperasi seefisien mungkin dan menghasilkan kepuasan pelanggan yang maksimal dengan biaya yang paling rendah, perusahaan perlu mererapkan manajemen rantai suplai dan teknologi yang berkaitan. Manajemen rantai suplai memiliki tiga tingkatan kegiatan dimana masing-masing kegiatan ditangani oleh divisi yang berbeda.

Ø  Strategic level

Pada tingkatan ini, manajemen perusahaan akan mengelola keputusan – keputusan tingkat tinggi berkenaan dengan perusahaan, seperti: ukuran dan lokasi pabrik, distribution center, dan gudang; hubungan kerjasama dengan pemasok bahan mentah; produk yang akan diproduksi dan sasaran pasar. Tingkatan ini diarahkan untuk keperluan jangka panjang dan memerlukan komitmen dari sumber dayanya.

Ø  Tactical level

Keputusan – keputusan yang diambil di level ini focus kepada ukuran – ukuran yang menghasilkan keuntungan dalam segi biaya, misalnya best practice, pengembangan strategi pembelanjaan dari supplier tertentu, bekerja sama dengan perusahaan logistic untuk menghemat biaya transportasi dan gudang guna penyimpanan persediaan. Tingkatan ini diarahkan untuk melihat kepada permintaan konsumen.

Ø  Operational level

Keputusan – keputusan pada tingkatan ini dibuat setiap hari dan mempengaruhi bagaimana produk berpindah antar bagian dari rantai suplai. Contohnya antara lain: perubahan jadwal produksi, perjanjian belanja dengan pemasok, pencatatan pesanan pelanggan.

Integrasi Process Bisnis Rantai Suplai

Menurut Lambert (2004), proses inti dari rantai suplai meliputi:

  • Manajemen relasi pelanggan (customer relationship management)
  • Manajemen layanan pelanggan (customer service management)
  • Management permintaan (demand management)
  • Pemenuhan pesanan (order fulfillment)
  • Manajemen arus manufaktur (manufacturing flow management)
  • Manajemen relasi pemasok (supplier relationship management)
  • Pengembangan dan komersialisasi produk (product development and commercialization)
  • Manajement retur (return management)

Wikipedia.com mengelompokkan proses-proses yang disebut Lambert di atas menjadi:

Ø  Customer Service Management Process

Proses ini berfokus kepada hubungan antara perusahaan dengan pelanggannya. Customer service adalah sumber untuk informasi tentang pelanggan. Beberapa organisasi yang sukses menggunakan langkah-langkah berikut:

  • Penentuan tujuan yang memuaskan kedua belah pihak: perusahaan dan customer
  • Menciptakan dan menjaga kenyamanan customer
  • Menciptakan suasana positif di dalam organisasi dan juga pada customer.

Ø  Procurement Process

Rencana – rencana strategis disusun bersama dengan pemasok untuk mendukung proses alur manufatur dan pengembangan produk – produk baru. Untuk perusahaan yang berskala global, sumber – sumber suplai harus dikelola secara global. Hasil yang diharapkan adalah yang menghasilkan keuntungan win-win solution.

Ø  Pengembangan dan komersialisasi produk

Dalam proses ini, pemasok dan pembeli harus di-integrasikan menjadi sebuah proses pengembangan produk dehingga mempersingkat time to market. Karena life-cycle produk diperpendek, produk tersebut harus dikembangkan dan diluncurkan dengan jadwal yang lebih singkat untuk menjaga agar tetap kompetitif.  Lambert dan Cooper (2000) menjelaskan langkah-langkah yang perlu diambil:

  • Koordinasi dengan CRM untuk mendapatkan gambaran jelas mengenai keinginan spesifik customer terhadap produk
  • Bersama dengan procurement, memilih material dan pemasok
  • Mengembangkan teknologi produksi dalam arus manufaktur untuk menghasilkan produk dan meng-integrasikannya dengan situasi pasar sehingga didapat arus rantai suppli yang terbaik.

Ø  Manajemen arus manufaktur

Proses ini menghasilkan dan memasok  produk ke channel distribusi berdasarkan prakiraan yang telah dibuat sebelumnya. Proses manufaktur ini harus bisa fleksibel dalam menjawab perubahan pasar dan harus mendukung kustomisasi masal. Pesanan-pesanan diproses dalam skema just-in-time (JIT).

Ø  Distribusi fisik

Proses ini berfokus pada perpindahanbarang jadi ke tangan konsumen. Dalam distribusi fisik, konsumen adalah tujuan akhir dari channel pemasaran (marketing channel), dan ketersediaan produk merupakan bagian vital dari setiap usaha pemasaran.

Ø  Outsourcing / partnership

Selain pembelian bahan baku dan komponen, banyak perusahaan belakangan juga melakukan outsource untuk layanan yang sebelumnya dilakukan in-house. Dengan outsourcing ini, perusahaan dapat lebih fokus kepada kegiatan-kegiatan yang lebih penting atau menguntungkan dalam rantai nilai mereka.

Ø  Pengukuran Kinerja

Integrasi antara pemasok dan pembeli berhubungan erat dengan market share dan tingkat keuntungan perusahaan. Kompetensi logistic telah menjadi faktor penting dalam menciptakan dan memelihara tingkat keuntungan kompetitif perusahaan. Karena itu, pengukuran kinerja logistik memegang peranan penting. Unsur-unsur pengukuran kinerja internal diantaranya adalah: biaya (cost), layanan konsumen (customer service), ukuran produktivitas, pengukuran aset, dan kualitas.

 

 

III.            Just-in-time inventory management

Definisi just-in-time menurut about.com adalah metode yang membuat perpindahan bahan baku ke lokasi tertentu pada waktu dibutuhkan, misalnya pada saat bahan baku diperlukan dalam proses produksi.  Teknik ini akan nerjalan lancer jika tiap operasi disinkronisasi dengan operasi berikutnya. Strategi ini tentu saja meningkatkan return on investment (ROI) perusahaan dengan mengurangi biaya penyimpanan bahan baku, dan barang dalam proses industri, juga biaya relokasi bahan baku.

Implementasi JIT bergantung kepada sinyal-sinyal (Kanban) antar point – point dalam proses, yang memberi tanda kepada produksi untuk mulai pengolahan bahan baku. Beberapa aspek yang melingkupi implementasi JIT diantaranya:

Ø  Transaksi biaya

Bahwa secara konsep, dengan mengaplikasikan JIT, perusahaan mengurangi resiko dan biaya penyimpanan bahan baku di gudang mereka. Akan tetapi, secara prakteknya, penyimpanan imventory ini hanya di-outsource ke perusahaan supplier. Terbukti ditemukan Newman (1994) bahwa pemasok rata-rata menagihkan 5% harga premium untuk mendukung JIT.

Ø  Kepedulian lingkungan

Implementasi JIT membuat pemasok melakukan pengiriman rutin yang membuat tambahan waktu di perjalanan, dan pembakaran energi untuk transportasi.

Ø  Kestabilan Harga

JIT mengasumsikan bahwa harga bahan baku sebagai input produksi akan selalu konstan. Dalam kasus akan adanya kenaikan harga, penumpukan inventori akan lebih dipilih ketimbang JIT.

Ø  Kestabilan Kualitas

JIT juga mengasumsikan kualitas bahan baku yang didapat dari supplier akan selalu konstan. Salah satu cara untuk memastikannya adalah memilih beberapa pemasok terbaik dan bekerja sama dengan mereka dalam meningkatkan kualitas dan meminimalisasi variasi kualitas.

Ø  Kestabilan tingkat permintaan dan pasokan

Perencanaan tingkat pasokan yang akan diterima, seharusnya sesuai dengan prakiraan tingkat permintaan yang akan datang. Jika permintaan ternyata sangat berfluktuasi, akan sulit dilakukan perencanaan tingkat pasokan dari pemasok.

Contoh implementasi JIT

Ø  Toyota

Toyota Production System (TPS) adalah salah satu item dimana Toyota Motor Co. menugaskan pemasok. Sistem ini juga dikenal sebagai Kanban system dan telah dikenal secara global untuk jumlah persediaan yang kecil dan rasionalisasi menyeluruh.

TPS memiliki dua fitur penting: “Just-in-time production” dan “Jidoka” (penghentian otomatis jika sesuatu yang tidak beres terjadi).

Kondisi ideal dalam memproduksi barang adalah dimana peralatan, mesin dan pekerja menghasilkan sedikit barang sisa yang pada akhirnya menambah nilai produksi. “Just-in-time production” merupakan mekanisme yang diharapkan merealisasikan kondisi ideal di atas menjadi praktek nyata di seluruh lini operasi dan proses. Dengan istilah lain, dengan “just-in-time production” setiap proses dapat memasok bagian yang dibutuhkan dalam jumlah yang dibutuhkan pada waktu dibutuhkan. Di sisi lain, “Jidoka” membuat mesin, peralatan ataupun pekerja berhenti seketika pada saat terjadi kesalahan  guna dilakukan tindakan-tindakan yang diperlukan.

Untuk membuat “just-in-time production” dan “jidoka” fleksibel untuk sebuah pabrik, beberapa kondisi perlu dipenuhi:

  1. Jumlah produksi pada tiap proses ditentukan pada tingkat dan spesifikasi produk.
  2. Pencegahan terjadinya produksi yang berlebihan
  3. Terjadinya kesalahan dapat dengan mudah dirtandai dengan beberapa indikasi (buzzer atau lampu)

Toyota Production System menggunakan kartu Kanban sebagai perangkat kerja. Sistem Kanban ini menghubungkan pemasok sebagai proses produksi dengan setiap rencana-rencana Toyota dan membuatnya untuk meminimalisasi persediaan pada work in process.

Ø  Xerox

Contoh kasus untuk Xerox sebagai pemasok yang menawarkan fasilitas “Just-in-time product documentation” kepada perusahaan pembuat Truk, Freightliner. “Just-in-time product documentation” yang diajukan oleh Xerox menjawab kebutuhan Freightliner dalam menghasilkan dan mengantarkan dokumentasi teknis tentang truknya dalam jumlah yang sesuai permintaan (tidak berlebihan seperti yang sebelumnya diimplementasikan Frightliner dengan teknologi cetak offset). Dengan jumlah yang tidak berlebihan ini, Freightliner mengatasi masalahnya dalam pemborosan biaya ketika dokumentasi teknisnya perlu direvisi sebagian atau diterjemahkan ke bahasa lain. Keuntungan yang diberikan Xerox dengan “Just-in-time product documentation” antara lain:

  • Biaya produksi per unit yang lebih rendah dalam pencetakan dokumentasi
  • Mengurangi biaya penyimpanan dokumentasi yang belum terpakai dan biaya pemusnahan dokumen yang sudah tidak relevan.
  • Integritas dokumen lebih terjamin
  • Kemudahan untuk melakukan kostumisasi atau personalisasi dokumen untuk konsumen tertentu atau pasar dan jenis produk tertentu.
  • Pencetakkan dalam media, format dan bahasa yang beragam dalalm waktu singkat.

Xerox menggunakan metodologi Lean Six Sigma untuk mendukun produksi publikasi teknis menjadi proses yang measureable dan manageable.

Ø  Perusahaan kecil dan menengah

Dalam studi kasusnya, Gunasekaran dan Lyu (1997) mengajukan beberapa hal yang perlu diperhatikan dalam implementasi Just-in-time di perusahaan kecil dan menengah:

  • Implementasi dari JIT di perusahaan kecil dan menengah perlu dimulai dari perubahan layout, stabilitas penjadwalan, dan pembangunan hubungan jangka panjang dengan pemasok dan pembeli.
  • Mekanisme baru dalam purchasing: pembelian teratur dalam jumlah kecil dapat mendukung terealisasinya JIT.
  • Pelatihan dan pendidikan para pekerja tentang konsep dan keuntungan – keuntungan yang ditawarkan JIT. Dalam rangka implementasi JIT, pekerja harus sangat disiplin dan berkemampuan teknis tinggi.
  • Penentuan dan pemilihan kegiatan – kegiatan yang menambah nilai dan tidak menambah nilai di pabrik adalah sangat penting dalam penerapan JIT.
  • Komitmen dari top management sangat dibutuhkan untuk menjamin efektivitas dan kesuksesan penerapan JIT di perusahaan kecil dan menengah.

 

 

 IV.            Penutup

Kesimpulan

Manajemen Rantai Suplai (Supply Chain Management) mencakup kegiatan-kegiatan dalam perencanaan mendapatkan dan mengelola bahan baku, dan bagian komponen dalam proses, mengelola penyimpanan barang jadi, packaging, sampai pada penghantarannya ke konsumen. Karena sifat kegiatannya di atas, SCM harus mampu mengintegrasikan semua proses dan entitas yang berhubungan dengan pemasok, persediaan (inventory), work in process, penyimpanan (storage) dan transportasi.  Pengelolaan rantai suplai ini bertujuan untuk memaksimalkan kepuasan pelanggan dengan pengelolaan proses-proses yang paling efisien.

Salah satu pendekatan dalam praktek SCM adalah terminologi just-in-time. Dalam terminology ini, pasokan bahan baku di rencanakan secara sistematis sehingga dapat mencapai meja produksi dalam jumlah sesuai kebutuhan pada waktu yang ditentukan dan tidak berlebihan. Produksi dan penghantaran barang jadi ke konsumen juga dikelola sesuai kebutuhan konsumen sehingga tidak terjadi kelebihan produksi dan meminimalisasi biaya penyimpanan dan pemusnahan produk yang tidak laku dan ketinggalan jaman.

 

Saran

Pelaksanaan JIT memerlukan komitmen dari semua lini perusahaan secara total. Material yang cocok, berkualitas, pekerja dan peralatan harus dipastikan selalu tersedia ketika dibutuhkan. Baik dalam perusahaan besar maupun menengah, bahkan kecil, JIT yang dijalankan dengan penuh komitmen telah terbukti meningkatkan produktivitas dan produk yang lebih berkualitas dan kompetitif. Namun demikian, JIT tetap bersifat sebagai tool, kunci suksesnya tetap adalah dedikasi penuh dan berkesinambungan dalam melakukan pekerjaan yang benar (do the right job) dan melakukan pekerjaan dengan benar (do the job right) setiap waktu.

    V.            Referensi

  1. Gunasekaran and J. Lyu. 1997. Implementation ost just-in-time in a small company.

Just-in-time (business), http://en.wikipedia.org/wiki/Just-in-time_%28business%29, diakses 19 Dec 10

Lambert, Douglas M.Supply Chain Management: Processes, Partnerships, Performance, 3rd edition, 2008.

Mentzer, J.T. et. al. (2001): Defining Supply Chain Management, in: Journal of Business Logistics, Vol. 22, No. 2, 2001, pp. 1–25

Supply chain management, http://en.wikipedia.org/wiki/Supply_chain_management, diakses 19 Dec 10

Xerox, 2005. Transportation Case Study: Freightliner, LLC. Just-in-time documentation significantly cuts cost and reduces time to market.

http://logistics.about.com/od/supplychainintroduction/a/into_scm.htm, diakses 19 Dec 10

http://logistics.about.com/od/supplychainglossary/g/JustInTime.htm, diakses 19 Dec 10

[1] Mentzer, J.T. et. al. (2001): Defining Supply Chain Management, in: Journal of Business Logistics, Vol. 22, No. 2, 2001, pp. 1–25

This tutorial is aimed for those who are searching for live data feed connection to PHP like you have from DDE (Dynamic Data Exchange) supporting applications. This tutorial will show you not PHP – DDE connection, but the approach PHP can use to produce such a similar result.

DDE is about inter-process communication within Windows where the DDE client can get notified every time the data at DDE server is changed without the application do any disk operation (i.e. file saving). The problem of using read file extension for PHP is we cannot get the updated data before the file is altered on the disk. The main idea of approaching the solution is: to make a one-time data request to the running process, get a reply, close the connection, and then repeat the process at any particular time we need to see the update. And by using the other, PHP supported, inter-process communication; we could do just that, even beyond!

In PHP, we use COM object to refer to any windows processes. It can be Ms Word, Powerpoint, Lotus Notes or Excel as we will discuss here. We will use this php function:

com_get_active_object("Excel.Application")

But, before we continue, to give you the greater look, let us review the philosophy of this COM object first (for those who prefer to skip, I do not mind). The typical usage of COM object in PHP is to create a new object to refer to a new process, as it is listed below:

<?php
$file = "C:\\test.xls";

// Create new COM object – excel.application
$excel = new COM("Excel.application") or die ("ERROR: Unable to instantiate COM!\n");
echo "Application name: {$excel->Application->value}<br>" ;
echo "Loaded version: {$excel->Application->version}<br>";

// Retrieve data
$Workbook = $excel->Workbooks->Open($file) or die("ERROR: Unable to open " . $file . "!\r\n");
$Worksheet = $Workbook->Worksheets("Sheet1");
$Worksheet->Activate;
$cell = $Worksheet->Range("A1");
$cell->activate();
$value = $cell->value;
echo "<br>>>".$value."<<";

// Close and quit
$Workbook->Close();
unset($Worksheet);
unset($Workbook);
$excel->Workbooks->Close();
$excel->Quit();
unset($excel); 
?> 

Notice the command at line 5, which will create a new process running on Windows that will be controlled by $excel object.  What does this mean? This means:

  1. Just like any objects in our programs, object $excel has methods and properties we can use to manipulate the real process. Line 14 is an example of method usage, and line 15 is an example getting the object’s property.
  2. BUT, the script above is just like any “read file” operation which will not react to any unsaved changes on the real excel process. That is why I marked with bold font the words “new process” above.

That is where the function “com_get_active_object()”  will get in our way. We want those unsaved, rapid changes in data be reported as they are in “real-time”. That is why we are not going to “create new process”, but rather “point to an already running process”. With a little modification to the above script, we get:

<?php
// Create COM object which points to a running process
$excel = com_get_active_object("Excel.application") or die ("ERROR: Unable to instantaniate COM!\n");
echo "Application name: {$excel->Application->value}<br>" ;
echo "Loaded version: {$excel->Application->version}<br>";

// Retrieve data
$Worksheet = $excel->Worksheets("Sheet1");
$Worksheet->Activate;
$cell = $Worksheet->Range("A1");
$cell->activate();
$value = $cell->value;
echo "<br>>>".$value."<<";

// Close connection
unset($Worksheet);
unset($excel); 
?>

Make sure your excel application is running, if not, you will get a fatal error message as the script dies. If more than one workbook is opened, the script will connect to just any one of them, usually the one which is initiated earlier.

Notice that we have replace the “new COM()” function with “com_get_active_object()”. We do not need “open()” , “close()”, and “quit()” function as well because we want the excel application (which is supplying us the live feed) to keep running.

Congratulations! You have the PHP script that update its output according to the value that is given in the excel cell “A1” anytime you refresh the web page.

For your convenience, rather than making the script die each time the exception is born, you might want to use try-catch nest instead. With try-catch nest you can make the script to do any alternative procedures when the exception occurred.

<?php
try{ 
    // Create COM object which points to a running process 
    $excel = com_get_active_object("Excel.application"); 
    if (!$excel) throw new Exception("ERROR: Unable to instantiate COM!"); 
    … 
    … 
} 
catch (Exception $e){ 
    // any alternative procedures 
} 
?>

You can also make auto refresh function in Ajax to be used together with our script above. Here is the example of 2 seconds auto refresh, suppose the above script is saved as “excelcom.php”:

<html>
  <head>
	<title>excelCOM</title>
	<meta name="author" content="Marcel Wijaya">
	<link href="style.css" rel="stylesheet" type="text/css">
	<script type="text/javascript">
		function Ajax(page){
			var xmlHttp;
			try{	
				xmlHttp=new XMLHttpRequest(); // Firefox, Opera 8.0+, Safari
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With the vision so big I have in mind, I need to review my priorities and missions in life. I am aware that I am neither my company, nor my environment. So, wherever I am, the burden of life is on my shoulders always. There is no place better if I could not find happiness in the work I do, the relationship I have, and the responsible I hold. I am the only person responsible for my success.

There is no age too old to learn, however there will be regret when we leave this life without legacies. The way I define success determines whether I am achieving it or not. The way I define failure determines how fast my pace toward my goal. Continuously take the steps closer to your dream. And, do take them boldly.

 

Marcel Wijaya 20110804

 

Of the people seen from the way they do the effort, there are 4 types of them:
The Quitters: They who had the opportunity to act, but too lazy to start.
The Campers: They who act, but satisfy too soon on little achievement, and stop trying
The Climbers: They who focused constantly to achieve to the top and consistent in their efforts.
The Extraordinary: The climbers who always challenge themselves for higher peaks after reaching the top.

Case 1 in Ferrel, Business; A Changing World, 7e: Clothing Industry Goes Green

By: Marcel Wijaya, for: group discussion in IB course.

I.                   Pengertian

Etika bisnis didefinisikan sebagai sebagai prinsip dan standar yang menentukan perilaku-perilaku yang dapat diterima dalam organisasi bisnis. Prinsip dan standar penerimaan tersebut ditentukan oleh pelanggan, pesaing, peraturan pemerintah, kelompok komunitas, dan masyarakat umum, serta juga prinsip dan nilai moral dari setiap individu dalam organisasi tersebut. Sedangkan, tanggung jawab sosial didefinisikan sebagai kewajiban organisasi untuk memaksimalkan dampak positif dan meminimalkan dampak negative pada masyarakat.

Kepedulian terhadap etika dan tanggung jawab dasar telah dituangkan pada hukum dan peraturan yang mendorong bisnis untuk bertindak sesuai dengan standard, nilai dan perilaku masyarakat. Dalam pembahasan kaitan etika dan hukum terdapat daerah abu-abu, dimana kegiatan yang dianggap tidak etis, belum tentu berarti melangar hukum. Ditambah lagi konsern untuk standar etis dan hukum berubah seiring waktu. Seperti dirangkum pada table 1.

Tabel 1 Perubahan standar dan nilai Etika dan Tanggung Jawab Sosial

Terdapat banyak permasalahan dan perselisihan dalam bisnis bisa dihindari jika pemilik, pengelola dan para karyawan mengetahui dan mengamalkan sistem hukum dan legal bisnis. Etika bisnis, tanggung jawab sosial dan hukum bersama betindak sebagai system kepatutan, yang megharuskan organisasi bisnis dan karyawan berlaku secara bertanggung jawab dalam masyarakat.

II.                Tanggung jawab sosial

Tanggung jawab sosial memiliki 4 dimensi: ekonomi, legal, etika dan kegiatan sukarela. Hubungan antara keempat dimensi ini di rangkum dalam piramida tanggung jawab sosial pada Gambar 1. Mencari keuntungan merupakan tanggung jawab mendasar perusahaan , langkah selanjutnya adalah bertindak sesuai dengan hukum yang berlaku. Kemudian, ketika organisasi bisa beroperasi pada tingkatan norma – norma etis (diluar hanya sekedar beroperasi sesuai aturan hukum) maka organisasi tesebut dianggap menjalankan tanggung jawab sosial etis. Kegiatan sukarela menjadi tingkatan tertinggi karena perusahaan yang menerapkannya dinilai lebih berinisiatif melakukan hal bermanfaat diluar keharusan-keharusannya.

Gambar 1 Piramida Tanggung Jawab Sosial

Corporate citizenship adalah perluasan dimana perusahaan melakukan tanggung jawab sosial ekonomi, legal, etik, dan sukarelanya atas kehendak stakeholder nya. Issue dalam corporate citizenship yang paling berkembang saat ini adalah pelestarian lingkungan. Baik pelanggan, pemerintah, dan komunitas pecinta lingkungan sangat peduli akan gas rumah kaca, dan emisi CO2 yang berkontribusi pada pemanasan global.

Sebagian besar masyarakat setuju bahwa perubahan iklim ini merupakan keadaan darurat global. Jawaban atas krisis ini antara lain: energi alternatif (energi matahari, angin, biogas, panas bumi, dan air), inisiatif hijau dengan pemilihah peralatan dan bahan yang menghasilkan lebih sedikit emisi CO2 dalam aktivitas, penghijauan taman kota dan lahan kosong di atap gedung, optimalisasi reuse, reduce dan recycle.

Berkenaan dengan etika dan tanggung jawab sosial bisnis, Ferrel, Hirt dan Ferrel dalam buku Business  in A Changing World menyampaikan beberapa argumen yang menilai perlunya perusahaan turut terlibat aktif, diantaranya: entitas bisnis berperan menciptakan permasalahan sosial sehingga seharusnya juga mengambil bagian dalam penyelesaiannya, perusahaan dinilai memiliki dana dan sumber daya yang berkompeten, entitas bisnis juga adalah bagian dari masyarakat sehingga sangat wajar turut serta membangun masyarakat. Melalui pelaksanaan tanggung jawab sosial, perusahaan berkepentingan untuk menjamin kelangsungan pertumbuhan ekonomi, sehingga secara tidak langsung sebenarnya mempersiapkan calon konsumen dengan daya beli yang memadai untuk masa depan. Strategi bisnis hijau tidak hanya memberikan perusahaan keuntungan komersial di pasar, tetapi juga menciptakan dunia yang lebih lestari.

Hubungan dengan pemilik usaha dan pemegang saham

Perusahaan pertama-tama berkepentingan dan bertanggung jawab terhadap pemilik dan pemegang saham, yang peduli terhadap kinerja dan keuntungan yang dihasilkan dari modal yang mereka tanamkan. Kewajiban perusahaan kepada para investor dan masyarakan finansial secara umum adalah meliputi pengerjaan procedure akuntansi berterima umum, penyediaan informasi terkait mengenai kinerja saat ini dan proyeksinya untuk masa datang dan kepastian hak-hak atas investasi mereka. Singkat kata, perusahaan bertanggung jawab memaksimalkan investasi para pemilik saham.

Hubungan pekerja

Para pekerja berharap perusahaan dapat memfasilitasi mereka dengan tempat kerja yang memadai dan aman, membayar mereka secara adil dan layak untuk kerja mereka, dan informasi tentang apa yang sedang terjadi dalam perusahaan tersebut. Peraturan perundang-undangan yang dikeluarkan oleh Departemen Tenaga Kerja sangat membantu untuk menjadi pedoman terhadap keputusan-keputusan yang diterapkan perusahaan terhadap para pekerjanya. Serikat pekerja juga telah membuat kontribusi yang jelass dapam pencapaian keselamatan kerja dan peningkatan kesejahteraan pekerja. Sebagian besar perusahaan saat ini telah menyadari bahwa keselamatan dan kepuasan pekerja adalah komposisi penting dari berhasilnya perusahaan.

Di tempat lain, kesetaraan derajat untuk para pekerja terlepas dari jenis kelamin, ras, usia dan golongan juga merupakan issue penting dalam tanggung jawab sosial perusahaan. Di masa lalu, sangat banyak kesenjangan antar pekerja terjadi karena perlakuan berbeda yang diberikan perusahaan terhadap golongan atau jenis kelamin tertentu. Namun seiring perkembangan jaman, perusahaan telah banyak melakukan penyesuaian untuk menjalankan kewajiban mereka dalam penyediaan kesempatan yang setara bagi wanita dan kaum minoritas.

Hubungan konsumen

Bisnis juga memiliki tanggung jawab besar terhadap konsumennya, yang memilih perusahaan yang menyediakan produk yang aman, memuaskan dan menghormati hak – hak konsumen. Konsumen dapat memberi feedback bahkan menekan para pengusaha lewat pengacara dan surat kepada perusahaan, laporan kepada lembaga pemerintah misalnya YLKI, publikasi lewat media massa dan surat pembaca, sampai pada tindakan boikot terhadap perusahaan yang dinilai tidak bertanggung jawab.

Konsumen di Amerika sejak tahun 1962 memiliki 4 hak yang dilindungi oleh undang-undang, antara lain: right to safety, right to be informed, right to choose, dan right to be heard. Right to safety melindungi konsumen dari perusahaan yang secara sengaja memasarkan produk yang dapat membahayakan konsumen. Right to be informed memberikan konsumen kebebasan untuk mempelajari informasi yang lengkap dari sebuah produk sebelum melakukan pembelian. Ini mengharuskan komposisi, petunjuk penggunaan dan resiko penggunaan dicetak pada kemasan dan label produk. Right to choose memastikan bahwa konsumen memiliki akses terhadap sejumlah produk dan layanan pada harga yang wajar dan kompetitif. Right to be heard menjamin konsumen bahwa kepentingan konsumen akan diperhitungkan secara penuh dan simpatik pada setiap perumusan undang-undang dan peraturan pemerintah.

Issue lingkungan

Karena kesadarannya akan pentingnya menjaga kelestarian lingkungan, masyarakat saat ini semakin menuntut perusahaan dan organisasi bisnis untuk lebih menunjukkan tanggung jawab terhadap aktivitas mereka dan dampaknya pada lingkungan. Concern yang dimaksud mencakup perlakuan adil bagi hewan, dan polusi.

Perlakuan adil bagi hewan

Praktek bisnis yang disorot dalam issue ini antara lain industri kosmetik dan obat-obatan yang menggunakan hewan sebagai objek percobaan produk mereka, yang mungkin menyakiti atau bahkan sampai membunuh hewan percobaan tersebut. Konsumen dengan kepedulian terhadap issue ini dapat melakukan pem-boikotan terhadap industri yang menggunakan hewan sebagai bahan percobaan dan atau beralih ke produk lain sejenis yang tidak menggunakan hewan percobaan. Kondisi yang hampir serupa juga menyangkut industri pakaian atau fashion yang menggunakan bagian tubuh hewan sebagai bahan baku, contohnya tas kulit, syal kulit rubah, dan lain sebagainya.

Polusi

Kepedulian terhadap lingkungan juga menentang aktivitas yang tidak memperhatikan buangan limbah dan polusi. Air bisa terpolusi dari bahan kimia beracun, buangan limbah ke sungai dan laut tanpa diolah, tumpahan minyak, timbunan limbah industri di tanah dimana bisa merusak kualitas air tanah. Pupuk dan insectisida juga bisa meracuni air tanah. Polusi terhadap tanah berdampak langsung terhadap polusi air, karena bahan-bahan berbahaya yang larut dalam tanah akan terbawa air ke cadangan air tanah. Ini termasuk buangan limbah rumah tangga seperti sabun, plastik dan sisa obat. Polusi tanah lainnya berasal dari kegiatan pertambangan, pembakaran hutan untuk pembukaan lahan, penebangan liar dan konservasi hutan yang kurang baik. Pembukaan hutan (deforestasi) mengurangi suplai oksigen yang tersedia bagi manusia dan hewan.

Kegiatan penanggulangan issue lingkungan

Sebagai bagian dari respons terhadap issue lingkungan, pemerintah Indonesia sebagai contoh menerapkan dan mengharuskan studi AMDAL[1] dalam setiap perencanaan pembukaan hutan dan usaha. Banyak juga perusahaan baik besar maupun kecil, sebut saja Walt Disney dan Chevron, yang membuat posisi eksekutif khusus dalam struktur usahanya – Wakil Presiden Direktur urusan Lingkungan (Vice President of environmental affairs – untuk menjamin perusahaan mereka bisa mencapai tujuan usahanya namun tetap menjaga kegiatan usahanya bertanggung jawab terhadap dampak lingkungan. Bentuk usaha lainnya menuliskan peraturan tentang lingkungan dalam peraturan perusahaannya, meningkatkan usaha-usaha daur ulang dan pemakaian ulang kemasan produk, dan juga investasi dalam sistem pengolahan limbah.

Perusahaan yang mengusahakan kegiatan – kegiatan untuk menjadikan produk mereka lebih ramah lingkungan dapat diberikan lable “bisnis hijau”. Sebagai contoh green business certification (http://www.gbcertified.com/home09.asp diakses 23 Oct 10)

III.             Clothing Industry Goes Green

Kasus yang diangkat oleh Ferrell, Hirt, dan Ferrell dalam pembahasan tanggung jawab sosial adalah industri pakaian yang seharusnya lebih ramah lingkungan.

Permasalahan lingkungan yang disebabkan industri pakaian

Dalam tulisannya, “My battle to green the clothing industry”[2], Katharine Hamnett yang merupakan seorang yang kompeten di industri ini dalam karirnya sebagai desainer menjelaskan bahwa pengamatannya mengenai dampak lingkungan dari industri pakaian sangat menakutkan. Sebagai industri terbesar ke-empat, industri pakaian diperkirakan mempekerjakan total 1 milyar orang pada tahun 1989.

Keseluruhan proses industri ini mengandung dampak negative bagi lingkungan, seperti dirangkum dibawah ini:

–          Pestisida yang digunakan untuk menjaga tanaman kapas (katun) dari hama dapat meracuni kehidupan liar, dan mengkontaminasi air sungai dan kehidupan didalamnya. Sekitar 100 ribu petani meninggal keracunan pestisida setiap tahunnya, dan 200 ribu lainnya menderita penyakit akut karena pestisida.

–          Bahan kimia yang digunakan dalam proses produksi pakaian sebagai pemutih (clorine bleach) menghasilkan limbah pathogen paling berbahaya di dunia: dioxin, proses pewarnaan dan cetak pakaian juga sangat rentan terhadap kebocoran logam berat yang dapat meracuni sungai dan sumber air bersih bagi makhluk hidup.

–          Mesin – mesin yang dipakai dalam industri pakaian sangat berisik, menyebabkan polusi suara dan udara

–          Pemakaian sumberdaya alam seperti air yang berlebihan untuk tanaman kapas mengganggu keseimbangan ekosistem

–          Untuk bahan nylon dan polyester yang merupakan bahan sintetis membuat pakaian yang dihasilkan menjadi non-biodegradeable. Proses produksinya juga menghasilkan gas nitro oxide, gas rumah kaca yang 310 kali lebih berbahaya dari CO2

–          Untuk bahan kulit dan wool selain polusi yang dihasilkan juga bermasalah dengan issue exploitasi terhadap hewan

–          Dari segi pekerja dalam industri ini, sebagian besar merupakan buruh dengan upah sangat rendah, tidak jarang adalah anak-anak yang dibayar sangat murah.

Green Clothing Industry – Eco-fashion

Istilah Eco-fashion mewakili industri pakaian yang memperhatikan kelestarian lingkungan, kesehatan konsumen dan kondisi kerja yang baik bagi para pekerja. Konsep eco-fashion meliputi:

–          Bahan baku yang organic, sebagai contoh kapas yang ditanam tanpa pestisida atau sutra yang didapat dari ulat yang mengkonsumsi tanaman organic

–          Proses produksinya tidak melibatkan bahan-bahan kimia yang berbahaya sebagai pewarna

–          Memanfaatkan bahan daur ulang sebagai bahan baku

–          Dibuat lebih tahan lama, sehingga konsumen dapat memakainya untuk jangka waktu yang lebih panjang

–          Melalui perdagangan yang adil, mencakup upah dan kondisi kerja yang wajar bagi para pekerjanya

–          Bahan baku alternative yang ramah lingkungan sebagai contoh kain dari serat bamboo, singkong ataupun jute.

Beberapa industri pakaian yang telah menerapkan green industri antara lain Patagonia yang didirikan oleh pencinta lingkungan Yvon Chouinard di tahun 1973 telah mengusahakan industrinya seramah mungkin dengan lingkungan. Ditambah lagi sejah tahun 1993 mulai memroses botol soda untuk didaur ulang menjadi bahan baku pakaian. Di tahun 1996, secara eksklusif menggunakan kapas organic sebagai bahan bakunya. Patagonia juga mengimplementasikan program daur ulang bahan, dimana konsumen dapat menukarkan pakaian lama mereka untuk dipakai bahannya dalam pakaian yang baru. Teva sandal and shoes juga memperkenalkan produk meraka yang diproduksi dari bahan-bahan daur ulang karet ban mobil dan botol plastic.

Permasalahan yang dihadapi green clothing

Karena semakin teredukasi, konsumen menjadi lebih kritis dalam pemilihan produk yang diklaim ramah lingkungan, namun tidak sampai di situ. Bahkan untuk perusahaan yang sudah menyebut produknya diproses secara organik, masyarakat masih menuntut pemilik bisnis untuk mengukur sampai tingkat mana produksinya dilakukan secara “hijau”. Hal ini yang dihadapi juga oleh Patagonia sehingga perusahaan ini membentuk tim yang diberi nama Footprint Chronicles. Tim ini akan mendokumentasikan dan membagikan informasi kepada umum, termasuk competitor, efek lingkungan yang disebabkan dalam setiap bagian dari Supply Chain Patagonia.

Terlepas dari meningkatnya kesadaran lingkungan, para konsumen ternyata masih mendasarkan pilihan produk mereka pada harga dan gaya. Ini membatasi perkembangan dari produk-produk pakaian ramah lingkungan seperti dijelaskan diatas. Dengan memastikan didapatkan dari perdagangan yang adil untuk para pelaku industrinya, harga dari pakaian ramah lingkungan sudah tentu lebih tinggi dari rivalnya. Kebanyakan konsumen juga tidak menyangka bahwa pakaian yang diproduksi secara organic bisa bergaya. Beberapa desainer tingkat dunia seperti Stella McCartney, Donna Karan, H&M, dan Rogan telah mengeluarkan mode mereka dalam versi organik. Para selebriti popular juga memanfaatkan ketenaran mereka dalam mengampanyekan pakaian organik.

IV.             Penutup

Kesimpulan

Bahwasannya industri pakaian konvensional sangat banyak berkontribusi pada issue lingkungan dan tenaga kerja, maka sesuai dengan tanggung jawab sosial bisnis di bidang lingkungan dan hubungan pekerja diperlukan inisiatif dari para pemilik dan pengelola industri pakaian untuk beralih ke cara bisnis yang lebih ramah lingkungan dan lebih adil terhadap pekerja. Inisiatif yang dimaksud adalah perilaku bisnis yang ramah lingkugan, adil bagi para pekerja dan menjamin kesehatan dan keselamatan konsumen.

Dengan menganut bisnis hijau, industri pakaian dapat berkontribusi terhadap pelestarian lingkungan dengan meniadakan tingkat kontaminasi tanah dan air dari pestisida dan herbisida pada tahap pertanian, meniadakan limbah racun pathogen dioxin, NO2 dan juga logam berat pada proses produksi dan pewarnaan. Pemanfaatan barang-barang bekas dan daur ulang jelas meningkatkan nilai dari barang-barang yang semula sudah tidak berguna sehingga mengurangi beban lingkungan dari barang-barang buangan. Dengan meniadakan bahan-bahan berbahaya, industri juga berperan pada tanggung jawab sosial terhadap keselamatan dan kesehatan konsumen. Kesejahteraan dan keselamatan para pekerja industri juga lebih terjamin.

Walaupun bertujuan baik, penerapan bisnis hijau dalam industri pakaian tetap saja menemui hambatan diantaranya konsumen yang tetap memilih produk yang lebih gaya dan lebih murah. Sehingga perusahaan banyak menemui dilema disatu sisi bahan baku dan produksi yang ramah lingkungan jelas menimbulkan biaya tambahan dan masih jarang desainer yang terjun di bidang ini, di sisi lain, konsumen menuntut produk yang berkualitas dengan harga kompetitif.

Walaupun tingkat kemajuan perubahan menuju industri pakaian yang ramah lingkungan banyak menemui kendala, namun secara keseluruhan dan global industri ini telah bergerak ke arah yang semestinya.Dari sisi konsumen, peminat produk-produk ramah lingkungan diluar kendaraan dan makanan dinyatakan meningkat 15% di tahun 2007 oleh Marshall Cohen dari riset pasar oleh NDP Group. Di sisi desainer, jika di tahun 2004 Leslie Hofman dari Earth Pledge hanya menemukan 50 sampai 60 material terbarui yang dipakai dalam industri pakaian, di tahun 2010 ada sekitar 700 material terbarui.

Saran

Sebagai bagian dari tanggung jawab sosial dunia bisnis adalah dengan memaksimalkan dampak positif dan meminimalkan dampak negative bagi lingkungan, maka industri pakaian yang ramah lingkungan dan adil bagi para pekerjanya adalah jawaban yang ideal. Industri pakaian sebagai jenis industri terbesar keempat di dunia semestinya lebih memfokuskan diri dalam menjawab tantangan pasar untuk menciptakan produk organik yang lebih baik dengan harga yang lebih terjangkau dan bukan malah memanfaatkan minat konsumen yang masih besar terhadap produk konvensional yang harganya lebih kompetitif. Kampaye yang lebih gencar tentang industi pakaian ramah lingkungan juga merupakan tanggung jawab pemerintah, kelompok masyarakat dan bisnis yang telah memahami kerugian yang ditimbulkan industri konvensional.

Tuntutan konsumen merupakan salah satu faktor pengerak penting bagi industri diluar tekanan peraturan pemerintah. Sehingga, konsumen sebenarnya punya andil yang sangat besar guna menumbuhkan dan menyuburkan industri pakaian yang ramah lingkungan. Dengan memahami konsekuensi dan kerugian tetap memilih produk dari industri konvensional, dan mempertimbangkan keuntungan dari industri hijau, konsumen punya daya yang besar untuk mendorong industri lebih cepat beralih. Jika bukan kita yang memilih untuk menolak produk dengan bahan kimia berbahaya, maka kita dan keturunan kita akan terus menerus menemui bahan pangan yang mengandung logam berat dan bahan kimia beracun sebagai konsekuensinya.

Referensi

Agustin,Lenny. “Baju Ramah Lingkungan dari Singkong dan Kawat”. http://bataviase.co.id/node/191028, diakses 24 Oct 10

Ferrell O.C., Hirt Geoffrey A, Ferrel Linda. “Business in a Changing World 7th edition”. McGraw Hill. 2009

Hamnett, Katharine. “My Battle to Green the Clothing Industry”, http://www.theecologist.org/green_green_living/clothing/268668/my_battle_to_green_the_clothing_industry.html, diakses 23 Oct 10

“Impact of Textiles-and Clothing Industryon Environment”, http://www.fibre2fashion.com/industry-article/textile-industry-articles/impact-of-textiles-and-clothing-industry-on-environment/impact-of-textiles-and-clothing-industry-on-environment2.asp, diakses 23 Oct 10

Walker, Alissa. “Measuring Footprints”, http://www.fastcompany.com/magazine/124/measuring-footprints.html, diakses 23 Oct 10

http://www.dephut.go.id/files/6_07.pdf, diakses 23 Oct 10

http://www.gbcertified.com/home09.asp, diakses 23 Oct 10