OPERATIONAL AUDIT TO ASSESS THE EFFECTIVENESS OF NPK RAW MATERIAL INVENTORY MANAGEMENT (A CASE STUDY OF PT. PUPUK KALIMANTAN TIMUR)

Abstract

PT. Pupuk Kalimantan Timur, as one of the biggest fertilizer companies in Indonesia,
also contributes to the government's national food security program by increasing its
NPK fertilizer production from an original capacity of 350 thousand tons per year to 1
million tons per year. The huge increase in production capacity led the researcher to find
out how to manage NPK raw material inventory to meet the targets set by PT. Pupuk
Kalimantan Timur. This study aims to determine and assess the effectiveness of internal
control functions of NPK raw material inventory management in PT. Pupuk Kalimantan
Timur. This research is a qualitative research using the descriptive case study approach
method. The data collection techniques in this study are conducting observations,
conducting interviews, reviewing company procedures, and conducting literature studies
in relation to the research problem. The scope is focused on the function of raw material
inventory management, which includes the selection and planning of needs, procurement,
acceptance, storage, control, distribution, and administration. The results of the study
showed that the implementation of the function of raw material inventory management in
PT. Pupuk Kalimantan Timur has been running effectively, but there are some issues that
still need to be resolved. The researcher recommends improvements that can be
considered by the company to improve the effectiveness of the company's operational
activities, especially in managing NPK raw material supplies.
Keywords: Operational Audit, Effectiveness, Inventory Management, Inventory Function,
Raw Material Inventory