ANALYSIS OF DEVELOPMENT PROJECTS TANK UPRIGHT

PRODUCTS AVTUR IN DPPU PT Pertamina (Persero)

Asked by
Mohamad Khoirul Anam
14/376594 / PEK / 20 361

To the
Economics Faculty and Business

1
 GADJAH MADA
2018

SUMMARY

ANALYSIS OF DEVELOPMENT PROJECTS TANK UPRIGHT PRODUCTS

AVTUR IN DPPU PT Pertamina (Persero)

Submitted by
Mohamad Khoirul Anam
14/376594 / PEK / 20361

Approved by
Supervisor

Henry Yuliando MM, M.Agr, PhD

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1. INTRODUCTION

PT Pertamina is a company that manufactures, distributes and markets avtur fuels

throughout the territory of Indonesia. Due to the increasing population, the growth of
airliners in Indonesia and PT Pertamina as a single player in the business of selling aircraft
fuels in Indonesia is certainly interesting. However, this does not make PT Pertamina
unaware because there is no competition to be able to maintain and meet the needs of
national and international airliners, so PT Pertamina to ensure supply availability in order to
compete with brands from other countries so as not to feel the international airliners coming
to Indonesia but it can also be an option because PT Pertamina's products are of high quality,
availability is maintained and at competitive prices.
The research was conducted on the construction of three Pertamina PT tank deposit
projects with a capacity of 5000 kiloliters located at Medan's Kualanamu DPPU. This study
aims to describe the trajectory of critical activities and identify the supporting and inhibiting
factors of the project and efforts to solve problems. The researcher will plan the critical path
of the project, map non-critical work and use the method earn value to predict the project
can be completed on time, it is expected that by using the method the leader can
immediately take action so that the can be carried out crashing project.
2. THEORETICAL

Stages Analysis Method by the author to be applied in this research is the

2.1. analysis of the activity time using PERT
author uses three estimates of the duration of the time optimistic(optimistic time),a
reasonable time(most likely)and a pessimistic(Pesimistic Time)at 3 this time the author
then looks for the expected value of work completion time or also called expected time
(te). So that there are 4 alternative project times.
2.2. Network(Network Planning)
Analysis of network(network analysis)is presenting planning and control,
particularly the project schedule activities in a systematic and analytical because it is able
to provide an overview and help control which gives an overview of the overall project
completion time estimates of the project schedule.
2.3. Making a critical path method (Critical path method)
Critical path is a path that consists of critical activities that do not haveslackis the
total float and free float is zero. So when viewed from the procedure of calculating
project life, the total activity time critical or critical path time is the same as project life.

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Therefore a critical path can also be defined as a path that has the longest path of all the
paths that have from the initial event to the final event.
2.4. Analysis Method Earn Value
Methods EarnValue is: an assessment of project performance more effective, as it
allows the project manager assess the project in an objective manner. This method can be
used to measure performance and predict future results. There are 3 indicators used in
analyzing project performance based onconcepts earned value is (Sriyani, 2013):
2.4.1 Actual Cost of Work Performance (ACWP)

ACWP is the actual cost of work that has been carried out), or better
known as AC (actual cost). This fee is obtained from the accounting or financial
data of the project at the reporting date, which is a record of all actual
expenditure expenses from work packages or accounting codes
includingcalculations overhead , etc.
2.4.2 Budgeted Cost of Work Performed (BCWP)

BCWP is the value received from completion of work for a certain period
of time, commonly known as EV (earned value). EV is calculated based on the
accumulation of work completed. EV is calculated using the formula:
𝑊𝑒𝑖𝑔ℎ𝑡 𝑜𝑓 𝑚𝑜𝑛𝑡ℎ𝑙𝑦 𝑖𝑚𝑝𝑙𝑒𝑚𝑒𝑛𝑡𝑎𝑡𝑖𝑜𝑛
𝐸𝑉 = 𝑥 𝐵𝑢𝑑𝑔𝑒𝑡𝑃𝑙𝑎𝑛
𝑊𝑒𝑖𝑔ℎ𝑡 𝑜𝑓 𝑜𝑣𝑒𝑟𝑎𝑙𝑙 𝑝𝑙𝑎𝑛

2.4.3 of theBudgeted Cost of Work Scheduled BCWS(BCWS)

is a budget allocated based on work plans that have been prepared for time.
PV is calculated from the accumulated budget planned for work in a certain
period, also known as the PV (planned value). In processing data, PV is
𝑊𝑒𝑖𝑔ℎ𝑡 𝑜𝑓 𝑀𝑜𝑛𝑡ℎ𝑙𝑦 𝑃𝑙𝑎𝑛
obtained by using the formula: 𝑃𝑉 = 𝑊𝑒𝑖𝑔ℎ𝑡 𝑜𝑓 𝑡ℎ𝑒 𝑜𝑣𝑒𝑟𝑎𝑙𝑙 𝑝𝑙𝑎𝑛 𝑥 𝐵𝑢𝑑𝑔𝑒𝑡 𝑃𝑙𝑎𝑛

2.4.4 Analysis Variance Integrated

a) Cost Variance (CV)

Is the difference between the value obtained after completing work
packages with actual costs incurred during project implementation. A cost
variance positive indicates that the value of work packages obtained is greater
than the costs incurred in working on the work packages. Conversely, the
negative value indicates that the value of the work packages completed is lower
than the costs already incurred. The formula for the cost variance is:

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 CV = EV - AC
b) Schedule Variance (SV) The
schedule variance is used to calculate deviations between EV and PV. A
positive value indicates that there are more project work packages implemented
than the plan. Conversely, negative values indicate poor job performance
because the work packages that are carried out are less than the planned
schedule. The formula for schedule variance is:
SV = EV –PV

2.4.5 Analysis of Index Performance

a) Cost Performance Index (CPI)

factor cost efficiency that has been issued can be seen by comparing the
value of work completed (EV) with the actual costs incurred in the same period
(AC). The formula for CPI is:
CPI = EV / AC
This CPI value shows the weight of the value obtained (relative to the overall
project value) to the costs incurred. A CPI of less than 1 indicates a poor cost
performance, because the costs incurred (AC) are greater than the value
obtained (EV) or in other words there is a waste of
b) Schedule Performance Index (SPI)
Performance efficiency factors in completing work can be shown by the
comparison between the value of physically completed work (EV) and the
planned expenditure issued based on the work plan (PV). The formula for
schedule performance index is:
SPI = EV / PV
The SPI value shows how much work is able to be completed (relative to the
overall project) to the planned work unit. The SPI value of less than 1 indicates
that the work performance is not as expected because it is unable to reach the
planned work target. If the index number is >1, then the performance of project
implementation is better than planning, in the sense that expenditure is smaller
than the budget or schedule is faster than the plan. The greater the difference
from number 1, the greater the deviation from basic planning or budget. If you
get a higher number, it means that the work is very good.

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 2.4.6 Estimated Project Completion Costproject

Prediction of completion costs / Estimate at Completion (EAC) is a

prediction used to give a picture of the future, so that if a problem occurs in the
future prevention can be done from now on. EAC calculation formula, namely:
EAC = AC + ETC
Where ETC (Estimate to Complete) is the cost for the remaining work. There
are two ways to calculate ETC, depending on the percentage of completion of
the project.
a) When project completion <50%
ETC = BAC - EV
Where, BAC (Basic of Budgeted Cost at Completion) is all budgeted final costs.
b) When project completion> 50%
ETC = (BAC - EV) / CPI
EAC calculation is the sum of the actual costs that have been spent and the remaining
costs that will be needed to complete the project. From the EAC value, an
estimate of the difference between the cost of the project completion plan
(BAC) and the cost of completion of the project is based on achieved work
performance (EAC) or what is called variance at completion (VAC).
VAC = BAC - EAC
2.4.7 Estimated Project Completion Time Project

completion time needed to complete a job in the project can be estimated by

assuming that the trend of schedule performance figures will continue as when
reporting until the end of the project.
[𝑂𝐷 − (𝐴𝑇𝐸 𝑥 𝑆𝑃𝐼)]
𝑇𝐸 = 𝐴𝑇𝐸 +
𝑆𝑃𝐼

information:
TE = estimated completion time
ATE = time taken
OD = time planned
2.4.8 Achievement Index Estimated Settlement Plan Settlement

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 achievement index or called the to complete performance index (TCPI) is
index number is likely from an estimate. This index is commonly used to
increase trust in reporting valuation on the rest of the work.
𝐵𝐴𝐶 − 𝐵𝐶𝑊𝑃
𝑇𝐶𝑃𝐼 =
𝐸𝐴𝐶 − 𝐴𝐶𝑊𝑃
if:
a. TCPI = 1, means that settlement may occur according to plan
b. TCPI <1, means an increase in performance makes an estimated statistical
plan that is not possible
c. TCPI> 1, means a decrease in performance on the rest of the work
3. METHOD RESEARCH

This research is an exploratory and descriptive case analysis. The steps taken to answer
the research question are conducting library studies, observations and expert discussions to
be able to investigate phenomena that have not been captured clearly in the study. Based on
the results of the library study, observations and interviews can be calculated using the
PERT method (Project evaluation and review technique) then modeled with a bar time scale
using the Microsoft project to see the critical trajectory. After that the collected data is used
to answer research questions and get conclusions from this study.
3.1 Data Collection Method
3.1.1 Steps for Data Collection
Primary data will be obtained through direct observation and direct discussion
with experts and secondary data derived from library studies through both journals
and books, project documents, work procedures of company organization, individual
work procedures, observation during project implementation, daily reports, project
monthly reports. The data obtained is used as material to be analyzed and the results
will be discussed as reference material that the existing data is in accordance with
the actual conditions of the project. Then secondary data obtained by the authors of
journals, books, company documents and project reports also the authors use as a
reference in research in order to be in accordance with the theory and methodology
used as a reference in the implementation of the project.
3.1.2 Time of Data Collection The

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 location of the study was carried out in the field, the time of primary data
collection through direct observation was from June 2018 to October 2018. Whereas
for secondary data was taken when the construction of tank storage was carried out.
3.2 Research Instruments The
following is a brief profile of experts who became the research resource
persons:
No Position Work Experience
1 Manager Project ˃20 years
2 Site Manager Project 15 to th20th
3 Project Control 3 to th5thpath

3.3 Data Analysis

Research analyzes the critical time of the project so project implementation in
order to be effective and efficient. The researcher will implement the start value
analysis to find out the estimated cost of completing the project and the time needed
until the project is completed.
Critical activities that have a 100% critical index with the PERT method
researchers will calculate the time which is optimistic time (a), most likely time (m),
pesimistic time (b) and expected time (te). Then from the analysis results will be
discussed using Microsoft project to be able to better illustrate the critical trajectory of
the construction worker of the aviation fuel tank construction.
Later, after being caught by the phenomenon, why the construction activities of
tank timbun often experience delays, then this is further discussed with experts to get
accelerated efforts so that the completion time of work can produce a good tank with
the most efficient costs possible.
4. RESEARCH RESULTS AND DISCUSSION

4.1 Description of data

To make it easier to understand, the standard explanation and calculation process

will be made into an attachment to this thesis. The researcher hopes that in order to
facilitate the understanding of the results of the study, the results of the research and their
explanations and discussion will be presented.
4.1.1. Activity and Network Time Analysis The

author can explain that there are 5 stages of tank construction as follows:
planning, material procurement, tank plate fabrication, tank erection, testing and

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 painting. Can the author explain in more detail as follows the analysis of time used is
optimistic time (a), most accurate time (m), pesimistic time (b) and expected time (te).
Table 4.1 Duration of Activity Time and Network

N
Activity Details Time (days)
O
a m b te
I Planning
Procedure, technical data and shop drawing 30 35 60 38

II Procurement
1. Plate ASTM A283 Grade C 60 75 90 75
2. Roof structure 45 60 90 63
3. Paint for the bottom of the Base Plate 45 60 90 63
4. Paint Internal Coating 45 60 90 63
5. Paint External Coating 45 60 90 63
6 Material Nozzle Tank 40 60 90 62
7. Free Vent 60 90 100 87
8. Emergency Vent 60 90 120 90
9. Gauge Hatch 60 90 120 90
10. Foam Chamber 80 90 120 93
11.Water Spray Nozzle 80 90 120 93
12 . Pressure Savety Valve (PSV) 80 90 180 103
12 15
13.Floating Suction 0 0 180 150

II Fabrication
1. Cutting, marking, grinding and bevelling 10 15 18 15
2. Manhole fabrication 3 4 8 5

II Erection Tank
15
1. Scafolding installation and dismantling 90 3 170 145
2. Preparation and welding of base plates 25 34 45 34
15
3. Preparation and welding of wall plates 90 3 170 145
4. Installation and welding top angle 3 5 8 5
5. Installation of floating suction 1 3 6 3
6. Annular wall welding 25 31 40 32
7. Installation of roof structures 20 26 35 27
8. Installation and welding of roof plates 9 15 20 15
9. Installation of a nozzle and manhole 12 17 25 18
10. Installation of water and product drain 1 3 5 3
11. Installation of stairs and handrails 5 11 15 11

III Tank Test

1. Radiographic Test (Radiography Test) 5 10 15 10
2. PT test for nozzle and manhole 7 9 12 9

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 3. Vacuum box test 2 4 6 4
4. Test pressure and pressure 1 3 4 3
5. Test PT for annular wall welds 3 5 7 5
6. Hydrostatic test 5 6 15 7

IV Tank Painting
1. Surface preparation 20 33 37 32
2. Painting the structure and roof of inner parts 10 12 15 12
3. Painting the inner wall 4 6 8 6
4. Painting the inner base plate 5 6 7 6
5. Painting the outer walls 9 12 15 12
6. Painting of the outer roof 4 5 7 5
7. Painting of stairs and handrails 4 5 7 5

Source: Interview with Emi Salmah and result documentation monthly report

next step is to determine a logical sequence of activities that form a network to

achieve the right time(ontime),on the budget(onbudget),the right quality(onspect)and
meets the security aspects (OTOBOS comply safety).
4.1.2. Critical Path Analysis

Table 4.2 Predecessor construction activities for storage tanks 3x5000 KL

Predecessor
No Activity Details (Activity
Sequence)
Planning
1 Procedure, technical data, shop drawing

Procurement of
2 Plates ASTM A283 Grade C 1
3 Roof structure 1
4 Paint for the bottom Base Plate 1
5 Internal Paint Coating 1
6 Paint External Coating 1
7 Material Nozzle Tank 1
8 Free Vent 1
9 Emergency Vent 1
10 Gauge Hatch 1
11 Foam Chamber 1
12 Water Spray Nozzle 1
13 Pressure Savety Valve (PSV) 1
14 Floating Suction 1

Fabrication
15 Cutting, marking, grinding and bevelling 2
16 Manhole fabrication 2

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 Erection Tank
17 Scafolding installation and disassembly 19
18 Preparation and welding of base plates 15
19 Preparation and welding of wall plates 18
20 Installation and welding of top angle 19
21 Installation of floating suction 19
22 Welding of walls into annular 19FS + 2days
23 Installation of roof structures 22
24 Installation and welding of roof plates 23
25 Installation of nozzles and manholes 24
26 Installation of water and product drain 25
27 Installation of stairs and handrails 24

Tank Test
28 1. Radiography Test 19
29 2. PT Test for nozzle and manhole 25
30 3. Vacuum box 18
31 testPressure and pressure 27
32 testPT test for annular wall weld 22
33 Hydrostatic test 32

Painting Tank
35 Surface preparation 25
36 Painting structure and roof of the inside 35
37 Painting the inner wall 36
38 Painting the inner base plate 37
39 Painting the exterior walls 40
40 Painting the exterior roof 35
41 Painting the stairs and handrail 39

From the table above, it can be seen that by using the expected time (te), the
critical trajectory of making storage tanks starting from engineering planning to
completion of painting the 3x 5000 [KL] avtur tank has been passed by CPM:
Table 4.3 Activities on critical path

No details ofEvent te
Planning
1 Procedure, technical data, shop drawing 38

Procurement of
2
Plates ASTM A283 Grade C 75

Fabrication
15 Cutting, marking, grinding and bevelling 15

Erection Tank
18 Preparation and welding of base plates 34

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19 Preparation and welding of wall plates 145
20 Installation and welding top angle 5
21 Installation of floating suction 3
22 Wall welding to annular 32
23 Installation of roof structures 27
24 Mounting and welding of roof plates 15
25 Installation of nozzles and manholes 18

Tank Test
29 PT Test for nozzle and manhole 9

Tank Painting
35 Surface preparation 32
36 Painting structure and inner roof 12
37 Painting the inner wall 6
38 Painting the inner base plate 6

Then the time needed to complete the project is 472 calendar days, so if the
project starts on Monday, the sixth of March, two thousand and seventeen (March 6,
2017) the construction project of the storage tank will be completed in the nineteen
June two thousand and eighteen (June 19 2018). When the expected time is made
faster than the time on the contract, it is expected that the project can be completed
faster. Then the critical path can also be described using time scale using microsoft
project as follows:
Table 4.4 Time Scale using Microsoft Project

4.1.3. Analysis of Leisure Time (Slack Time)

Activities that have a small slack time to be considered seriously because these
activities have the potential to become critical. In order not to enter in the critical
trajectory the activity must be completed on time. The author will map the critical

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 level of each activity based on the total slack owned by each activity, so that it can be
used as the priority scale of the supervisor.
4.1.4. Simulation Methods to Earn Value Analysis
Earn value analysis is a way of monitoring projects that analyzes the
relationship between costs that have been used in the project and the time needed to
complete them. Then from the results of observations and checking project reports,
the data are as follows:
Table 4.5 Percentage of S Plan Curves and Physical Actual Progress

APR May- Jun- Jul- Aug.- Sep- Okt- Nov- Des- Jan- FEB-
-17 17 17 17 17 17 17 17 17 18 18
0.4 6.2 14 19.9 25.6 38.5 44.8 54.3
Plan % 2.3% % 11% 3% % % 30.7% % % %
1.2 8.9 17.9 13.0 16.5 21.0 44.8 50.5 58.5
Real % 4.0% % % % % % 26.2% % % %

In the calculation using Earned Value Analysis later the data used is according
to the S curve and the contract time is 540 calendar days with a contract value of Rp.
93,200,000,000 (ninety three billion two hundred million rupiahs).
4.1.4.1 Analysis of Time Performance and Project Costs
Analysis of cost and project time performance can be seen from the analysis
of variance in project implementation. Analysis of variance is an analysis carried out
to determine the time and cost deviations that occur in the execution of the project to
do control of the use of costs from the calculation of ACWP, BCWS and BCWP
obtained as follows:

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 Table 4.6 Calculation Results of ACWP, BCWS and BCWP

Apr May Jul- Augus Sep- Oct- Nov- Dec- Jan- Feb-
-17 -17 -17 17 t-17 17 17 17 17 18 18
ACW
P 2.0 5.9 17 , 17.9 29.9 37.9 39.9 39.9 39.9
(AC) 0 5.99 9 5.99 97 7 5 4 3 3 3
BCWS 0.4 5.8 10.2 18.5 23.8 28.5 35, 41.7 50.5
(EV) 4 2.16 1 5 13.32 6 5 9 88 5 8
BCW 1.1 8.2 16.6 15.3 19.5 24.3 41.7 47.0 54.5
P (PV) 2 3.73 6 9 12.12 7 4 9 5 7 3
Can also be described using a graph as follows:

Figure 4.1Indicators Earn Value Analysis

Based on the analysis that has been done, the DPPU Kualanamu tank
construction project 3x5000 KL can be explained on axis Y today (today) on axis Y
is around November to December 2017 we can see that we can see that the value
received from the completion of work in that period is smaller than the actual cost
incurred by the contractor to work on the project (BCWP <ACWP) or can be said to
be a contractor over budget. Then it can also be seen that the budget allocated based
on the agreed work plan of stakeholders is lower than the value of costs received
from the completion of work during that time period (BCWS <BCWP) or it can be
said that the project is currently experiencing below the schedule (behind schedule).
4.1.4.2 Analysis of Project Performance Index
Analysis of performance index is used to see the efficiency of the use of costs
and time in project implementation. The performance index for time (SPI) is
obtained from a comparison between completion of realized project work (EV) and
completion of planned project work (PV). The cost index (CPI) is obtained from a
comparison between the costs of completed work (EV) and the actual costs incurred

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(AC). The table below represents the SPI and CPI values obtained in the project
evaluation.
Table 4.7 Results of SPI and CPI Calculation

4/17
5/17
6/17
7/17
8/17
9/17
10/17
11/17
0.2 0.3 0.9 1, 1.2
CPI 2 6 7 1.71 0.74 03 0.80 0.75 0.90 1.05 7
0.4 0.5 0.7 0,
SPI 0 8 0 0.61 1.10 1.21 1.22 1.17 0.86 0.89 93
Can also be described using the graph as follows:

Figure 4.2 Project Performance Index

In December 2017 the value of CPI (Cost Peformance Index) <1 which means
the total cost of workmanship in that period exceeds the initial cost planning, then
for the SPI value (Schedule Peformance Index ) <1 states that the project spends
more time than it should, in another sense the project in this period is late.
4.1.4.3 Cost and Time Project
Analysis of EAC Analysis(Estimate at Completion) is the cost needed to
complete the work, from the analysis conducted by researchers obtained the results
of calculations as follows:
Table 4.8 Recapitulation of Costs and Time of Project

Month EAC ECD ECD

April 2017 Rp. 94,074,965,200.00 232

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 May 2017 Rp 95,458,178,800.00 338
in June to Rp 90,934,903,200.00 407
2017
in July to Rp 82,497,880,000.00 379
2017
Aug. 2017 Rp 99,046,569,200.00 578
Sep 2017 Rp 95,798,549,200.00 614
Oct 2017 Rp 103,612,602,400.00 612
Nov 2017 Rp 106,746,237,600.00 591
Des2017 Rp 91,380,170,800.00 503
Jan 2018 Rp 86,060,594,400.00 514
Feb 2018 Rp 78,606,085,600.00 525
If clarified using graphs, it will be obtained as follows:

Figure 4.3 Cost and Time Analysis of Projects

We can see that in February 2018 the required budget is below the contracted value, this
means the contractor will benefit around 14.6 billion from the contract value , due to the
prognostic value of use until the entire scope of work has been completed, it all requires
78.61 billion. As for the estimated project completion time (ECD) when analyzed in February
2018 is for 525 calendar days, in other words the project will run faster than the contract
which is for 540 calendar days or can be concluded 15 calendar days faster.
5. Conclusions and recommendations

5.1 Conclusions
Based on the results of the discussion can be concluded as follows

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 1. From the critical path analysis we have identified kedala projects and conclude the
following:
a. CPM usingvalue te (expected time)There are 16 activities on the critical path and
25 non keritis activities.
b. Constraints faced at the completion of the tank is that work carried out
overlapping means that workers do in series, move according to the sequence
tank.
c. Overtime is not permitted by HSE, the project working hours are 07.00 WIB to
17.00 WIB or 10 hours / day for 6 working days (Monday to Saturday).
2. From the analysis of the progress of the project using the method earn value
analysis (in February 2018), it was obtained:
a. As per the latest billing statement in February 2018, it was found that the project
will run 15 calendar days faster than the agreed time of 540 calendar days.
b. according to the report in February 2018 the estimated budget until the project
was completed 78.61 billion compared to the value of the work contract was 93.2
billion, meaning that the executor or contractor had a profit of 14.6 billion.
5.2 Suggestions
1. The implementing contractor should add project control because so that there is a
back up when the project requires a project control to be able to provide the right
analysis to the company leader to make a project control decision that is expected
to be able to provide input due to a problem.
2. The contractor is to maintain progress performance like in February, but is
expected to make a bill so that later there will be no shortage of funds that can
hinder the development of the project.
3. The company leaders in order to be able to crash the program include adding other
subcontractors outside of the current workers, because in Pertamina DPPU
Kualanamu is not permitted to overtime.
4. Earn Value considered important method to use to be able to control the budget
conformity with the physical progress of the project and can also provide project
completion time prediction if no resource changes
6. REFERENCES

Suharto, Faith. (1995). Project Management from Conceptual to Operational Jakarta:

Erlangga

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Anthony, Robert N. (2003) John Dearden and Vijay Govindarajan Management Control
System. Eleven Edition, McGraw Hill, Illinois

Project Management Institute. (2001) A Guide to the Project Management Body of

Knowledge (PMBOK Guide). Penny sylvania,

Heizer, Jay., & Render, Barry. (2014). Operation Management. New Jersey: Pearson Prentice
Hall,

Dilworth, JB (1996). Operation Management. Second Edition. USA: McGraw Hill.

Schonberger J. Richard. (1981). why projects are "always" late: a rational based on manual
simulation of a PERT / CPM network.Department of Management: University of
Nebraska

UGM Team. (2016). Thesis Writing Guide, FEB UGM