The Influence of ERP-SAP Implementation and Inventory Management on Production Efficiency through Inventory Control Performance Using Partial Least Square (PLS) Method at PT. XYZ

Abstract

PT XYZ is the largest manufacturing company in Indonesia that produces biscuits with the support of the SAP system, which has integrated data from each division, especially the inventory control division. Due to the accessibility of real-time data, it was observed that there were two late arrivals of raw materials, causing the company to only achieve 75% of the weekly production target. Therefore, this study aims to determine the effect of ERP-SAP implementation and inventory management on smooth production and provide recommendations for improvement through inventory control performance at PT XYZ. The method used is Partial Least Square (PLS), with the first way of working, namely Evaluation of the Measurement Model by means of True test (Convergent Trueity and Discriminant Trueity) and Reliable test (Internal Consistency Measurement and Reliability Measurement of All Indicators in the Model). And then, the next test is Inner Model Test, which involves five steps, including Coefficient of determination test to Model Fit.