SALES STRATEGY ALIGNMENT OF POWER SYSTEMS DIVISON
AND ENGINE DIVISION AT PT TRAKINDO UTAMA
FINAL PROJECT
By
NICKY AZAHARI 19007109
Undergraduate Program of Management Study
School of Business and Management
Institut Teknologi Bandung
2010
APPROVAL PAGE
SALES STRATEGY ALIGNMENT OF POWER SYSTEM DIVISON AND
ENGINE DIVISION AT PT TRAKINDO UTAMA
By
NICKY AZAHARI
ID No: 19007109
Undergraduate Program of Management Study
School of Business and Management
Institut Teknologi Bandung
August 16
th, 2010
Approved By
(Prof. Togar M. Simatupang)
NIP: 132 052 380
ABSTRACT
PT Trakindo Utama is a company that has a business in heavy equipment sector. PT Trakindo Utama is as the supplier and also dealer of Caterpillar products in Indonesia. Caterpillar is one of the world's largest manufacturers of construction and mining equipment, diesel and natural gas engines and industrial gas turbines all over the world. PT Trakindo Utama as the dealer in Indonesia has a long and proud journey of more than 35 years, during which Trakindo has grown to become ‘The Customer Services Company’ and a world-class provider of Caterpillar equipment solutions. Their main products are in Machinery and Engines. PT Trakindo Utama was firstly established in 1970, and it is now located in Jl. Cilandak KKO Raya South Jakarta 12560, Indonesia.
Engine products as one main product of Trakindo have an important role in determining the success of the company. The division that handles their engine products is called Power Systems Division (PSD) which handles their engine business in the Central Expertise Group (CEG) level. Besides Trakindo has also division called Engine Division that also handle their engine product but in the System Business Unit (SBU) level. CEG has responsibility to create strategy and break it down to the SBU level. Meanwhile the SBU responsibility is to execute the strategy that is has been created by the CEG level. Those two division has strategies in doing their engine-product business, those divisions also have to collaborate well to make them able managing their engine products activities. To have a strategy synchronization, alignment between those two levels is needed. The alignment method will make the make the strategies which are composed in the CEG level, well executed by the SBU level which has a role to sell their engine products. However, it is not easy to align the strategy, there are still problems faced by those two divisions. There are three main problems of the alignment: miss sales strategy translation, engine product which is not always ready, and different perception in CEG and SBU about sales events attendance.
To solve problems of missed sales strategy translation, the initiatives are to make two-way cross-check system. The two-way cross check system is expected to improve their sales performance by having two-way communication. The cross-check system will be implemented not only in the SBU level but also until CEG level. By the incentives it will make them able to translate the strategy well and increase the sales performance for their engine products.
To solve problem of the engine product which is not always ready, the additional forecasting from the CEG level will be implemented. The current situation is that the forecasting only happens in the SBU level, so that the fluctuation of the market cannot be predicted well by the SBU. By the contribution of the CEG, it will give additional information of the market fluctuation so that they can prepare for it and have the appropriate engine stock amount.
To solve different perception of the CEG and SBU about sales events, the idea is to add additional job positions in the SBU level. The additional job positions given will handle the communication between SBU and CEG level to talk about sales events activities and also other role for its job description. This will make the communication become effective and will lessen the negotiation needed in talking about sales events attendance.
So PT Trakindo Utama could use the proposed solutions that may improve their sales strategy alignment in the Power Systems Division and Engine Division, and make the strategy execution running well in term of sales target translation, product availability, and sales events attendance.
ABSTRAK
PT Trakindo Utama adalah sebuah perusahaan yang bergerak di bidang alat berat. PT Trakindo Utama berperan sebagai pemasok dan penyalur produk Caterpillar di Indonesia. Caterpillar adalah salah satu perusahaan konstruksi terbesar di dunia di bidang alat pertambangan, disel dan mesin gas alam dan turbin gas industri di seluruh belahan dunia. PT Trakindo Utama sebagai penyalur di Indonesia memiliki perjalanan panjang yang membanggakan lebih dari 35 yahun, dimana Trakindo berkembang menjadi ‘The Customer Service Company’ dan penyedia kelas dunia dari Caterpillar. Produk utama mereka adalah di Alat Berat dan Mesin. PT Trakindo Utama pertama kali didirikan pada tahun 1970 dan sekarang berlokasi di Jl. Cilandak KKO Raya South Jakarta 12560, Indonesia.
Produk Mesin yang menjadi salah satu produk utama Trakindo memiliki peran penting dalam menentukan kesuksesan perusahaan. Divisi yang menangani produk mesin mereka adalah Power Systems Division (PSD) pada level Central Expertise Group (CEG). Selain itu Trakindo juga memiliki sebuah divisi bernama Engine Division yang juga menangani produk mesin namun pada level System Business Unit (SBU). CEG bertanggung jawab untuk membuat strategi dan menurunkan strategi tersebut ke level SBU. Sedangkan tanggung jawab SBU adalah untuk mengeksekusi strategi yang telah diberikan CEG. Kedua divisi tersbut memiliki strategi dalam menjalankan bisnis mesin mereka, kedua divisi tersebut juga harus berkolaborasi dengan baik untuk dapat mengendalikan aktifitas bisnis mesin mereka. Untuk mendapatkan strategi yang berkesinambungan diperlukan penjajaran diantara kedua divisi tersebut. Penjajaran tersebut akan membuat strategi yang telah dibuat di CEG dieksekusi dengan baik di SBU. Namun tidak mudah untuk mambuat penjajaran strategi mereka, masih terdapat beberapa masalah yang dihadapi oleh kedua divisi tersebut. Terdapat tiga masalah utama dari penjajaran tersebut: produk mesin yang tidak selalu tersedia, perbedaan persepsi dari CEG dan SBU tentang berpartisipasi dalam eksibisi penjualan, dan penafsiran strategi penjualan yang salah.
Untuk mengatasi penafsiran strategi penjualan yang salah, inisiatifnya adalah untuk membuat metode pengecekan silang dua arah. Metode tersebut diharapkan dapat meningkatkan kinerja penjualan mereka dengan mengimplementasikan komunikasi dua arah. Metode ini tidak akan hanya diimplementasikan di level SBU, tetapi hingga level CEG. Dengan adanya inisiatif tersebut, maka penafsiran strategi penjualan mereka akan menjadi baik dan meningkatakan pencapaian penjualan produk mesin mereka.
Untuk mengatasi masalah produk mesin yang tidak selalu tersedia, gagasannya adalah untuk melibatkan CEG dalam proses prakira. Kondisi saat ini adalah bahwa kegiatan prakira hanya terjadi di level SBU sehingga fluktuasi pasar tidak bisa terprediksi oleh SBU. Dengan adanya kontribusi dari CEG, maka akan memberikan informasi tambahan tentang fluktuasi pasar sehingga mereka akan siap dengan fluktuasi tersebut dan memiliki persediaan mesin yang pantas.
Untuk mengatasi perbedaan persepsi dari CEG dan SBU tentang partisipasi eksibisi penjualan, gagasannya adalah menambahkan posisi tambahan di SBU. Posisi tersebut akan mengatur komunikasi antara SBU dan CEG dan berbicara tentang aktifitas eksibisi penjualan dan tanggung jawab lain sesuai dengan deskripsi pekerjaan posisi tersebut. Gagasan ini akan membuat komunikasinya menjadi efektif dan akan mengurangi negosiasi yang diperlukan dalam berpartisipasi dalam eksibisi penjualan.
Dengan begitu PT Trakindo Utama dapat menggunakan solusi-solusi tersebut yang sekiranya akan meningkatkan penjajaran strategi penjualan mereka antara Power Systems Division dan Engine Division, dan mambuat eksekusi strategi penjualan berjalan dengan baik dalam konteks penafsiran strategi penjualan, ketersediaan produk, dan partisipasi eksibisi penjualan.
FOREWORD
First of all I want to thank God, Allah SWT, for his blessing that finally this final project can be completed. This final project has given me many knowledge and experiences that teach more about the lesson that I have learned. As a human being, I realize that this project is still not completely perfect. The limitation of my capability makes this final project need more revisions and suggestions from the readers.
The succeeded completion of this final project will not be succeeded if there is no helps from people around me. I would like to thank to:
1. Prof. Togar. M. Simatupang, thanks for the counseling, advices, and guidance during the working process of this final project, so that this project could be finally completed on time.
2. Ibu Fama Flora, Bapak Dawera Taher, and Bapak Stanley E. Wijaya for providing me the observation of the final project in PT Trakindo Utama.
3. My beloved parents Dr.-Ing. Hasrul Laksmana Azahari, M.Met.E and Dra. Edna Diana for supporting me in every step of my study in SBM-ITB and give me so much love. I promise to make you proud.
4. My brothers: Naudy and Nycko. My sisters: Nadya, Nidya, and Nadyn. Thank you for always being ready to share my problems and support me to overtake all problems. 5. My whole big family. Thanks for the prayer and support.
6. My special one, Mutya Wijayanti. Thanks for the support and always being beside me to share problems and giving so many timeless moments.
7. Sigap, Gede, Deru, Beta, Josia, Fajar, Sandy, Reinaldo, William, Tiara, Alma, Uti, Kara, Nasya, and unmentioned friends. Thanks for giving me so many fun moments and experiences, and taught me what friendship is.
8. My senior high friends: Mamat, BS, Apit, Agung, Patrik, Izzan, Dhaly, Arfi, Ajie, Niken, Ririn, and unmentioned names. Thank you for being such a good friend that always shares laughs in my live.
9. All lecturers and tutors of SBM-ITB. Thanks for teaching me brilliant knowledges and being ready to share about the difficulties of courses.
10. Unmentioned SBM 2009, 2010, 2011, and 2012. Thanks for the support.
11. Ibu Ikum, Pak Iwan, and all administration staff and teaching staff of SBM-ITB. Thanks for the assistance.
I hope that this final project can be useful for PT Trakindo Utama and also for everybody that read this final project and make it as references. Thank you.
Bandung, August 16th 2010
LIST OF CONTENTS
APPROVAL PAGE ... ii
ABSTRACT ... iii
ABSTRAK ... iv
FOREWORD ... v
LIST OF CONTENTS ... vii
LIST OF IMAGES ... x
LIST OF TABLES ... xi
LIST OF APPENDICES ... xii
CHAPTER I INTRODUCTION ... 1 1.1 Background ... 1 1.2 Main Problem ... 3 1.3 Research Objective ... 6 1.4 Problem Boundaries ... 6 1.4 Report Outline ... 7
CHAPTER II THEORETICAL FOUNDATION... 9
2.1 Balance Scorecard ... 9
2.2 Alignment ... 11
3.3 Strategy ... 14
3.4 Sales and Marketing ... 16
CHAPTER III METHODOLOGY ... 19
3.1 Initial research ... 20
3.2 Problem identification ... 20
3.3 Theoretical foundation ... 20
3.4 Data Collecting ... 20
3.6 Solution ... 21
3.7 Conclusion and Recommendation ... 22
CHAPTER IV DATA COLLECTION AND ANALYSIS ... 23
4.1 Data Collection ... 23
4.1.1 Company History ... 23
4.1.2 Company’s Vision and Mission ... 25
4.1.2.1 Vision of PT Trakindo Utama ... 25
4.1.2.2 Mission of PT Trakindo Utama ... 25
4.1.3 Company’s Core Values ... 25
4.1.4 Products and Services of PT Trakindo Utama ... 26
4.1.4.1 Products ... 26
4.1.4.2 Services ... 26
4.1.5 Business Strategy of PT Trakindo Utama ... 27
4.1.6 Organization Structure ... 28
4.1.7 Customer Profile ... 28
4.1.8 The Competitors ... 28
4.1.4.1 United Tractor ... 29
4.1.4.1 Hexindo ... 30
4.2 Sales Strategy Break-down Process ... 33
4.3 Data Analysis ... 34
4.3.1 Strategy Translation ... 37
4.3.2 Products of Engine ... 39
4.3.3 Sales Events Participation ... 41
4.4 Root Cause Analysis ... 45
4.5 Solution ... 50
CHAPTER V CONCLUSION AND RECOMMENDATION ... 59
5.1 Conclusion ... 59
5.2.1 Implementation Plan ... 61
5.2.2 Key Performance Indicator ... 63
5.2.3 Topic References for Future Research ... 65
REFERENCES ... 67
APPENDICES ... 68
LIST OF IMAGES
2.1 Four Balanced Scorecard Perspectives ...10
3.1 Research Method ...19
4.1 Komatsu Sales Volumes ...29
1.2 United Tractor Total Revenue ...30
4.3 Hexindo Financial Ratio ...32
4.4 Hexindo Financial Highlight ...32
4.5 PT Trakindo Utama Organization Structure ...33
2.6 Sales Strategy Break-down Process ...35
4.7 Present Sales Process Forecast ...41
4.8 Negotiation System Between SBU and CEG ...43
4.9 Cause-effect Diagram of Identified Problems ...44
4.10 Crucial Activities in Engine Sales Process ...45
4.11 Execution Influencing Factors ...47
4.12 Product Availability Influencing Factors ...48
4.13 Inhibitors in Negotiation Systems ...50
4.14 Sales Forecasting Improvement Process ...55
LIST OF TABLES
4.1 KPI of Identified Problems ...34
4.2 KPI of Engine Products Sales Performance ...37
4.3 Engine Product Sales Performance ...37
4.4 KPI of Sales Forecast ...39
4.5 Engine Product Demand in 2009 ...39
4.6 KPI of Sales Events Attendance ...42
4.7 Sales Events in 2009 ...42
4.8 Additional Job Position in SBU level ...58
5.1 Implementation Steps ...61
LIST OF APPENDICES
APPENDIX 1 POINT-QUESTIONS IN INTERVIEW ...68 APPENDIX 2 KEY PERFORMANCE INDICATOR (KPI) OF MARKETING SUPPORT IN CEG LEVEL ...69 APPENDIX 3 BALANCED SCORECARD STRATEGY-MAP OF POWER SYETEMS