A CASE STUDY OF IMPLEMENTING RISK MANAGEMENT FOR PIPELINE PROJECT AT PT WIJAYA KARYA

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A CASE STUDY OF IMPLEMENTING RISK MANAGEMENT

FOR PIPELINE PROJECT AT PT WIJAYA KARYA

FINAL PROJECT

by

Nyoman Maha Wirama

ID No: 19007058

Undergraduate Program of Management Study

School of Business and Management

Institut Teknologi Bandung

19 August 2010

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APPROVAL PAGE

A CASE STUDY OF IMPLEMENTING RISK MANAGEMENT FOR

PIPELINE PROJECT AT PT WIJAYA KARYA

by

Nyoman Maha Wirama

ID No: 19007058

Undergraduate Program of Management Study

School of Business and Management

Institut Teknologi Bandung

19 August 2010

Approved by

Togar M. Simatupang

ID No: 132 052 380

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“A Case Study of Implementing Risk Management for Pipeline Project at PT Wijaya Karya” Name: Nyoman Maha Wirama

ID No: 19007058

Examination Date: 19 August 2010 Graduation Date: 24 October 2010 Advisor: Prof. Togar M. Simatupang Undergraduate Program of Management Study

School of Business and Management Institut Teknologi Bandung

ABSTRACT

PT Wijaya Karya is a company that has a business in construction field. In the construction field WIKA has coped with various scale of work through sophisticated technology, ranging from public facilities, architecture, and mechanical, electrical to landscape.

There are lot of project that done successfully by WIKA. For example Pasupati Fly over in Bandung and Suramadu Bridge, etc. Those are the example of PT WIKA’s project that successfully done. Because of that works, PT WIKA usually achieves many awards. The latest award that WIKA get is achieves Nominee of investment award 2009 for local investment companies at Badan Koordinasi Penanaman Modal building, Jakarta. The nominee was awarded by juries, because WIKA still keep growing although world crisis happen in 2008, its mean that WIKA can keep selling growth from year to year which compared by liabilities total from entire recorded assets

As a contractor, WIKA must satisfy the consumer/owner. The one important thing to make the consumers satisfy is the work must be finish on time. But, sometimes WIKA late in finishing the project on time. The newest project that WIKA been finishing late is the Balongan project. The project is pipeline project from depot Balongan to Cikampek. It’s about 122.000 meters long. The effective date was 5 December 2007 and the project takes 20 month and the end of the project date in 4 August 2009. WIKA is the main contractor of this project, and WIKA have mission that the project have to finish 1 month a head in 4 July 2009. From the history, we can see that the main problem of this lateness is there are some leaks in the pipe.

In this case study, the author will see the flowchart of work especially in testing step from WIKA for this Balongan Project. After that the author will analyse project risk management of WIKA in this late project, step-step of risk management for this project. After that, compare with the theoretical view. From the compare, we can see the step-step that WIKA missed in this project, the lack of running the risk management project for Balongan Project.

After that the author give recommendation to risk management team of WIKA to develop the risk which will be identified in other pipeline project by WIKA and develop the method of work in testing step of WIKA for pipeline project.

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“Study Kasus dalam Pelaksanaan Manajemen Risiko untuk Proyek Pipanisasi Balongan II di PT Wijaya Karya”

Nama: Nyoman Maha Wirama NIM: 19007058

Tanggal Sidang: 19 Agustus 2010 Tanggal Wisuda: 24 Oktober 2010 Pembimbing: Prof. Togar M. Simatupang

Program Sarjana Studi Manajemen Sekolah Bisnis dan Manajemen

Institut Teknologi Bandung

ABSTRAK

PT Wijaya Karya adalah sebuah perusahaan yang mempunyai bisnis di bidang konstruksi. Didalam bidang konstruksi WIKA telah banyak mengatasi berbagai skala kerja di berbagai bidang melalui teknologi yang muktakhir, mulai dari fasilitas umum, arsitektur, kemesinan, kelistrikan ke pemandangan.

Sudah banyak sekali proyek yang sudah sukses dilaksanakan oleh WIKA. contoh dari proyek-proyek WIKA yang sudah sukses antara lain Jembatan Layang Pasupati di Bandung dan Jembatan Suramadu. Itu adalah contoh dari proyek-proyek WIKA yang dilaksanakan dengan sukses. Karena kinerja WIKA, PT WIKA sering mendapat penghargaan. Penghargaan terbaru yang WIKA dapat adalah mencapai nominasi penghargaan investasi tahun 2009 untuk perusahaan investasi local yang bertempat di Gedung Badan Koordinasi Penanaman Modal, Jakarta. Penghargaan ini diberikan oleh juri karena WIKA tetap terus berkembang walaupun terjadi krisis dunia pada tahun 2008, yang berarti WIKA tetap menjaga pertumbuhan penjualan dari tahun ke tahun yang dibandingkan dengan total kewajiban dari seluruh aset yang tercatat.

Sebagai kontraktor. WIKA harus memuaskan konsumen/ pemilik proyek. Salah satu hal yang mendukung untuk memberikan kepuasan kepada konsumen yaitu pekerjaan yang WIKA kerjakan harus selesai tepat pada waktu yang ditentukan. Tetapi terkadang WIKA terlambat dalam menyelesaikan proyeknya tepat pada waktu yang ditentukan. Proyek terbaru yang selesai terlambat yaitu Proyek Balongan. Proyek Balongan adalah proyek pipanisasi dari Depot Balongan ke Cikampek. Panjang proyek pipanisasi itu adalah 122.000 meter. Waktu efektif dari proyek tersebut adalah 5 Desember 2007, dan proyek ini memakan waktu 20 bulan untuk selesai dan proyek akan selesai pada tanggal 4 Agustus 2009. WIKA adalah kontraktor utama dalam proyek ini dan WIKA mempunyai misi bahwa proyek akan selesai satu bulan lebih cepat yaitu pada tanggal 4 Juli 2009. Dari sejarah WIKA kita bisa melihat bahwa penyebab utama dari masalah ini karena adanya kebocoran di dalam pipa.

Dalam case study ini, penulis akan melihat diagram kerja terutama dalam bagian test dari WIKA untuk proyek Balongan. Setelah itu penulis akan menganalisis manajemen risiko proyek dari WIKA terhadap proyek yang telat tersebut, serta langkah-langkah dari manajemen risiko WIKA untuk proyek ini. Setelah itu, dibandingkan dengan pandangan teori yang bersangkutan. Dari perbandingan yang ada, kita bisa melihat langkah-langkah yang WIKA lewati di dalam proyek ini, dan kekurangan didalam menjalankan manajemen risiko di dalam proyek Balongan.

Setelah itu, penulis memberikan rekomendasi kepada Tim Manajemen Risiko WIKA untuk mengembangkan risiko yang akan diidentifikasi di proyek jalur pipa lainnya dan mengembangkan metode kerja di bagian testing WIKA di dalam proyek jalur pipa lainnya.

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FOREWORD

Praise and thanksgiving to Almighty God, for the guidance and affection of His,

author can complete this thesis. The author intends to thank all those who have

been instrumental in this final settlement, in particular to:

1. Prof. Togar M Simatupang. As a mentor, for his help, patience and guidance

provided during the completion of my final project. I really appreciate the

way you help me in the completion for this final project.

2. My family, who give their support and prayers in this final project, My

father Nyoman Gede Sarjana who give every info that I need when making

this final project, my mother Made Santhi Ardani who always reminds me

to do this final project and also reminds me to drink vitamin during this

final project. Your patience is useful when doing the final project. Also my

brother Made Mahendra Adyatman giving support to my final project and

also my sister Luh Mahapsari who care to my health during the completion

of my final project.

3. Made Hendra Prasetya H., Sagita Dani, Dian, Kadek Audi, Gede Putra, Adi,

and the other cousins for their support.

4. Adhistya Febriani Dwijayanti, My Girl Friend who is always there when

needed for the concern and support during the completion of my final

project

5. My friends in tutorial 3D who always give support to me.

6. My friends in operations class who always give direction and support for

improvement to my final project.

7. Admin officer who always give information about the final project.

8. Ms. Riska as my mentor in PT WIKA. Who always give information that I

need.

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9. All Geng Gong members, the closest friend who always give support in

doing the final project.

10. Dally Ramdhan, Yulia rifanda, Intan Pradisa, Ifad Ardin, and many others

SBM colleagues in 2010 that could not be mentioned one by one here for the

stories and memories over the years.

11. To all 69 community members, who give pressure to finish the final project

earlier so I can meet up and catch up to all the members again.

12. My boarding house mate at Kanayakan Baru 51: Roy, Nay, Iqbal, Alvin, Arie

for their support.

13. All friends that I cannot mention one by one.

14. ITB. My beloved campus. You give me a whole new world. Thank God for I

could be here.

Hopefully this Final Project is capable of giving benefits to the parties that need

it. The author realizes that there are still shortcomings in this Final Project and

the author is open to suggestions and criticism on this Final Project.

Bandung, 19 August 2010

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LIST OF CONTENTS

APPROVAL PAGE ... i ABSTRACT ... iiii FOREWORD ... viiii LIST OF TABLES ... ix LIST OF FIGURES ... xi

LIST OF APPENDIX ... xii

CHAPTER I ... 1

INTRODUCTION ... 1

1.1. Background ... 1

1.1.1. Definitions of risk and uncertainty. ... 2

1.1.2. Company Profile ... 2

1.2. Problem Identification ... 5

1.3. Scope of work ... 5

1.4. Case study objective... 5

CHAPTER II ... 7

THEORETICAL FOUNDATION ... 7

2.1. Project Risk Management Principles ... 7

2.2. Three Elements of Risk Assessment: ... 10

2.2.1. Identify Uncertainties ... 10

2.2.2. Analyse Risks ... 11

2.2.3. Prioritise Risks ... 13

2.3. Three Elements of Risk Control ... 13

2.3.1. Mitigate Risks. ... 13

2.3.2. Plan for Emergencies. ... 14

2.3.3. Measure and Control. ... 14

2.4 Cost of fixing risk in projects. ... 15

CHAPTER III ... 17

RESEARCH METHODOLOGY ... 17

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3.1.1. Initial study ... 17

3.1.2. Problem identification ... 17

3.1.3. Theoretical foundation ... 17

3.1.4. Data Gathering ... 18

3.1.5. Processing data and analyzing ... 18

3.1.6. Discussion... 18

3.1.7. Conclusion ... 18

CHAPTER IV ... 21

PROBLEM ANALYSIS AND DISCUSSION ... 21

4.1. Data Analysis ... 21

4.1.1. The main caused in the leakage of the pipe... 22

4.1.2. Diagram Flowchart of Work in Balongan Project………25

4.1.3 Flowchart of Risk Management of WIKA:... 30

4.1.4 Problem Summary ... 38

4.2. Discussion ... 39

4.2.1. Design the new method of testing in flow chart of work WIKA. ... 39

4.2.1.1. The explanation of the new design ... 41

4.2.2 Risk identification ... 45

CHAPTER V... 61

CONCLUSION AND RECOMENDATION ... 61

5.1. Conclusion ... 61

5.2. Suggestion ... 61

5.3. Future Research……….64

References……….………..67

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LIST OF TABLES

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LIST OF FIGURES

Figure 1.1 Organizational Structure of WIKA Utility ………..4

Figure 2.1 Illustration plot of uncertainty against constraint ……….8

Figure 2.2 Effective Risk Management ………..9

Figure 2.3 Element of Risk Assessment ………10

Figure 2.4 Illustration in classifying the Risks ………..11

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LIST OF APPENDIX

Appendix A – Action plan and List for Action to the Risk ………..69 Appendix B – Photos of Leakage and Leakage Searching ………...71 Appendix C – WIKA’s Milestone for Balongan Project ………...73