Kirana Megatara Reduces Procurement Costs by 10 Percent for Raw Rubber with Speedy Reporting on AWS

Kirana Megatara buys more than one thousand metric tons of raw rubber from Indonesian suppliers every day. It ships the material to its 16 processing plants across the country to be processed into Standard Indonesian Rubber (SIR) for companies like Bridgestone, Goodyear, and Pirelli. In 2021, the plants produced 508,000 metric tons of SIR, worth a total of $857 million.

For consistent data on each plant’s raw material usage and production figures, Kirana Megatara deployed SAP on premises in 2012. But after reliability and scalability issues, it migrated the system to Amazon Web Services (AWS) in 2021. Although Kirana Megatara gained better performance with SAP on AWS, the company wanted to improve report extraction. Its analytics team had to present data in Microsoft Excel spreadsheets, which was complex and time consuming. Narendra Adinugraha, head of analytics at Kirana Megatara, says, “We needed more than a day to import figures, process information, and create reports.”

As a result, the analytics team couldn’t deliver daily reports on the changing production targets for each processing plant to its Sourcing Department. Without this data, the department lacked the insight to easily determine exactly how much raw rubber to buy in the market, running the risk of plants being under or over supplied. In addition, the analytics team lacked the capabilities to provide more than 100 new annual reports requested by the business, who is constantly on the search for new insights to improve processes.

Kirana Megatara chose Amazon Quicksight as a business intelligence tool to deliver a range of reports from SAP on AWS in hours and develop custom applications supporting SAP. Data from these applications are also extracted into Amazon Quicksight for further analysis. Adinugraha recalls, “Amazon QuickSight was more cost effective than the other solution we were considering. We could start small and expand usage as the demand for dashboards increased.” 

In addition, Kirana Megatara could securely provide dashboard views of its business-critical data in SAP to employees. Amazon QuickSight included end-to-end data encryption with row and column level security control. Hendrik Iriawan Saputra, general manager of IT at Kirana Megatara, says, “We could ensure that only authorized people had access to the reports.”

Working with AWS Partner Technova, Kirana Megatara integrated Amazon Quicksight with SAP modules running on Amazon Elastic Compute Cloud (Amazon EC2). “We value our relationship with Technova; its AWS engineers are always available on short notice,” says Adinugraha.

With Amazon QuickSight, Kirana Megatara can present the latest data in SAP in close to real time using interactive dashboards. As a result, its Sourcing Department can view the latest production targets per plant and know how much raw rubber to buy at the start of each day. Moreover, the department can identify the suppliers close to each plant that are consistently producing the amount of raw rubber it needs at the right price.

Furthermore, Adinugraha can easily meet the demand from the business for new reports. He says, “We are producing between 8 to 10 reports a month in Amazon QuickSight, so we’re well on top of the requests coming in.” Just one of these reports could take weeks using Excel, but with the speed of Amazon QuickSight, the analytics team can deliver one report every 2.5 days on average, allowing departments better control over their operations.

Adds Adinugraha, “With Amazon QuickSight, we don't lose time with any programing. We just focus on the formulas and the display, and then it’s drag and drop. That's never happened before.”

Using Amazon QuickSight, Kirana Megatara can ensure procurement is more precisely aligned with business needs, lowering the risk of oversupply. As a result, the Sourcing Department, which buys hundreds of thousands of metric tons of raw rubber each year, estimates it has reduced procurement costs by 10 percent using the reports. 

Plus, the department has the data to develop an effective loyalty program with suppliers across Indonesia. Hendrik Iriawan Saputra says, “We can build special relationships with our best suppliers and develop incentives, such as fertilizer funding, equipment for rubber cultivation, and training, so they continue to supply us with the raw rubber we need to drive business growth.”

Looking ahead, Kirana Megatara is planning to use machine learning (ML) to extract more insight from supplier interactions and to predict changes in raw rubber prices and volumes with accuracy. “Our immediate step is to develop our competencies around ML and then see where it can add value to our analytics,” says Adinugraha.