Vika Fransisca
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Asian Journal of Engineering, Social and Health
Volume 3, No. 12 December 2024
Volume 3, No. 12 December 2024 - (2881-2896)
p-ISSN 2980-4868 | e-ISSN 2980-4841
https://ajesh.ph/index.php/gp
Optimization O&M Cost of Coal Handling Port Facility
from 30 – 48 MTPA
Ali Safrani
Institut Teknologi Bandung, Indonesia
Emails: ali_safrani@sbm-itb.ac.id
ABSTRACT
The challenge of O&M cost efficiency in the midst of increasing global demand for coal, which requires
optimal cost management without reducing operational performance. The objective of this study is to
determine the optimal O&M cost by analyzing key cost components such as fuel, heavy equipment, spare
parts, labor, and infrastructure investment, and their impact on production achievement. The research
used a case study approach with a combination of quantitative and qualitative analysis. Primary data was
obtained through interviews and direct observation, while secondary data was analyzed using the Activity-
Based Costing (ABC) method, simulation modeling, and regression to evaluate the impact of cost
variations on production achievement. The results show that the optimal O&M cost for a production
capacity of 30-48 MTPA is in the range of 10,568-11,970 IDR/ton, which is still lower than the market price.
This optimization was achieved by mapping key cost components, including fuel, crusher and conveyor
system maintenance, and labor. The application of the ABC method enabled the identification of areas of
efficiency, resulting in more cost-effective operations without compromising facility performance. The
implications of this research include improved operational efficiency, coal industry competitiveness, as
well as the sustainability of port operations. The findings provide a strategic foundation for more effective
cost management, especially in the face of demand fluctuations and operational challenges due to
external conditions.
Keywords: Coal Port Facility, Operational Cost Optimization, Activity-Based Costing, Production Capacity.
INTRODUCTION
Optimization of operation and maintenance (O&M) costs at coal handling port facilities is
an important issue in improving operational efficiency in the coal industry, especially at ports
with a production capacity of 30-48 MTPA. As global coal demand increases, coal handling ports
are expected to manage larger cargo volumes without significantly increasing costs (Botín &
Vergara, 2015). Therefore, efficient management of O&M activities at port facilities is crucial to
reduce cost wastage, optimize resource usage, and ensure smooth ongoing operations. This is
challenging, given the complexity of operational activities involving various cost components,
such as fuel, equipment maintenance, and labor (Al Zaabi et al., 2023).
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This condition encourages the need to implement O&M cost optimization strategies that
can increase productivity without compromising service quality and work safety. At coal handling
ports, O&M cost components include heavy equipment maintenance, fuel for machinery and
supporting equipment, as well as labor and infrastructure costs (Samaranayake et al., 2024). With
a larger production capacity, managing these costs must be done carefully in order to maintain
cost efficiency, especially amid fluctuations in fuel and equipment prices (Ari et al., 2022).
Optimization of O&M costs will not only affect the reduction of operational expenditure but also
the improvement of port performance and competitiveness, thus becoming an important factor
in maintaining sustainability and competitiveness in the global market (Sullivan et al., 2010).
PT. XYZ Operated with Managing Contract Scheme, included but not limited to the O&M
works for Coal Handling Port Facilities, will growth until 48 MTPA. Production growth has
achieved gradually as planned, from 9 – 30 MTPA at 2017 – 2022, 30 – 42 MTPA at 2023 – 2024
and need to be optimized become 30 – 48 MTPA for 2025 – 2028. The optimal Operating and
Maintenance Costs of Coal Handling Port Facilities from 30 – 48 MTPA are determined by
evaluating and analyzing the existing O&M cost components and examining their impact on
production achievement from 30 MTPA to 48 MTPA (Seifullina et al., 2018).
Another concern, the annual production is the sum of the monthly production achievement
that vary, mostly due to weather condition at PT. XYZ Area, rainy season will make monthly
production low, under the average production target and the deviation must be add to the target
at hot season. As shown on the table production achievement below, PT. XYZ must optimize the
resources, i.e., Heavy Equipment, Man Power, etc. to achieve production target with cost
effective manner (Ramires & Sampaio, 2022).
Based on above condition, based on the milestone from 9 – 30 MTPA in 2017 – 2022, 30 –
42 MTPA in 2023 – 2024, PT. XYZ must optimize the O&M Cost of Coal Handling Port Facilities,
how the cost can accommodate the production range capacity 30 – 48 MTPA for 2025 - 2028 and
still optimum in both low monthly production season and high monthly production season.
With Managing Contract Scheme and Expansion Production Plan, PT. XYZ must optimize
the O&M Cost of Coal Handling Port Facilities, how the cost can accommodate the production
range from 30 – 48 MTPA for next 2025 – 2028 and still optimum in both low and high production
achievement. The O&M Cost covering all major activity at Coal Handling Port Facilities, consist
but not limited to:
a. Fuel consumed, for both Heavy Equipment support and Diesel Generator to generate the
electricity.
b. Heavy equipment support required, i.e. Wheel Loader, Dozer, Excavator, etc.
c. All spare part required (consumable, operational and routable spares) for fix plant equipment,
heavy equipment and diesel generator.
d. Labor cost to perform Operation and Maintenance activities.
e. Investment cost to build Crushing Plant, Warehouse, etc.
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All O&M cost as mentioned above, to be set become variable cost, lump sum price IDR/Ton.
Previous research conducted by (Tian et al., 2024) stated that the proposed method was
able to reduce the average waiting time of ships at the terminal by 15.8% and save total
scheduling and maintenance costs by 10.3%. By optimally utilizing historical data of equipment
breakdowns and integrating the maintenance scheme into the scheduling problem of the ship
loading operation system, the method effectively reduces the impact of equipment breakdowns
on ship loading operations while providing decision support for coal export terminal
management.
In contrast to previous studies, the novelty of this research lies in its approach to optimizing
operation and maintenance (O&M) costs at coal handling port facilities with a capacity of 30-48
MTPA by mapping the main O&M activities that significantly impact costs. This focus addresses
the increasing demand for cost efficiency in the midst of expanding port capacity while ensuring
reliable operational performance. Such optimization is crucial for sustaining port operations,
supporting the competitiveness of the coal industry, and providing strategic solutions for more
efficient export terminal management. The study aims to determine the optimal O&M costs by
identifying and analyzing the impact of each major cost component on production variance,
offering a deeper understanding of the factors driving costs and strategies to enhance
operational efficiency.
The benefits of this research extend to reducing cost wastage, improving resource
utilization, and ensuring smooth and effective operations at coal handling ports. By delivering
actionable insights, the findings not only contribute to enhancing port performance and
competitiveness but also ensure sustainability in the global coal industry. The comprehensive
analysis of cost components and their impacts provides valuable support for decision-making
processes, enabling the achievement of production targets in a cost-effective manner, even
under fluctuating operational conditions. This study, therefore, plays a strategic role in promoting
efficient, resilient, and sustainable port management practices.
RESEARCH METHOD
This research uses a case study approach at PT XYZ to optimize the operation and
maintenance (O&M) costs of coal handling port facilities with a production capacity of 30-48
MTPA over the period 2025-2028. The research subjects include the main O&M activities that
affect costs, such as diesel generator fuel, heavy equipment maintenance, crusher and conveyor
systems, and labor. The object of the study is the port facility of PT XYZ, with the main focus on
cost efficiency to support the larger production capacity target. The research criteria include cost
efficiency within the capacity range and the impact of each cost component on achieving
production variance.
Data collection methods involved primary and secondary data. Primary data was obtained
through in-depth interviews with O&M management and direct observation in the field, while
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secondary data included analysis of historical O&M cost reports, production data, and equipment
breakdown data. The collected data were analyzed using the Activity Based Costing (ABC)
approach to map the main cost components, followed by statistical analysis to measure the
correlation between cost components and production achievement. Optimization modeling was
applied to determine efficient O&M costs based on various production capacity scenarios. The
conceptual framework in this study is as follows.
Figure 1. Conceptual Frameworks
From the conceptual frameworks above, research process to optimize the O&M Cost of
Coal Handling Port Facilities at 30 – 48 MTPA as mentioned below:
Figure 2. Research Process
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RESULT AND DISCUSSION
Result
With DMAIC cycle, the analysis to measure the optimum O&M Cost of Coal Handling Port
Facilities at 30 – 48 MTPA and other research question and objective are based on data collection,
value stream mapping and activity-based costing.
Fuel for Diesel Generator
Cost for Diesel Generator’s fuel to generate the electric power, as power source for Fix
Plant Equipment and Infrastructure at Coal Handling Port Facility, can be calculated:
Table 1. Fuel for Diesel Generator
Description
Value
Fuel Price
8,217
IDR/Liter
Fuel Consumption
0.280
Liter/kWh
Energy Consumption Rate
0.708
kWh/Ton
Fuel Consumption per Ton
[0.708 (kWh/Ton) * 0.280 (Liter/kWh)]
0.198
Liter/Ton
Diesel Fuel Price per Ton
[0.198 Liter/Ton * 8,217 Rupiah/Liter]
1,629.90
IDR/Ton
Based on the available data and calculations, it can be concluded that the energy
consumption rate for each cargo handling volume is relatively constant, which is 0.708 kWh/Ton.
In addition, the fuel cost for the diesel generator used to generate electricity remains constant,
which is 1,629.90 IDR/Ton according to the initial calculation, but after negotiations between PT
XYZ and the O&M Contractor, the fuel cost was agreed to be 1,600 IDR/Ton.
Maintenance for Diesel Generator
Maintenance cost for Diesel Generator to generate the electric power, as power source for
Fix Plant Equipment and Infrastructure at Coal Handling Port Facility, can be calculated:
Table 2. Maintenance for Diesel Generator
Value
78,747
IDR/Hour
640
kWh
0.708
kWh/Ton
903.90
Ton/Hour
87.12
IDR/Ton
Based on the data and calculations above, it can be concluded that the energy consumption
rate remains relatively constant at 0.708 kWh/Ton for any volume of cargo handling. The cost of
maintaining the diesel generator to produce the necessary electric power is also constant at
87.12 IDR/Ton. However, after negotiations between PT. XYZ and the O&M Contractor, it was
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agreed that the cost of diesel fuel for the generator, which is used to generate electricity, will be
fixed at 65 IDR/Ton for any volume of cargo handling.
Heavy Equipment Support
Based on calculations and negotiations between PT XYZ and the O&M Contractor, the cost
for Heavy Equipment Support at the Coal Handling Port Facility experienced an increasing trend
in the 2017-2022 period along with the achievement of production, which was influenced by the
operational mode that mostly used rehandling and heavy equipment working hours allocated
120% of the Crushing Plant simulation working hours. Meanwhile, in the period 2025-2028, costs
will tend to decrease along with the use of Dump Hopper in almost all Crushing Plants, except
CP2, as well as the need for more limited heavy equipment for stockpile management and load
rate optimization through Draw Down Hopper. Cost increases between 2023-2024 and 2025-
2026 and 2027-2028 include inflationary factors.
Fuel for Heavy Equipment Support
Based on Calculation, refer to Appendix 4, Detail Heavy Equipment Cost Calculation, and to
be followed with negotiation between PT. XYZ and O&M Contractor, it is agreed the rates
(IDR/Ton) of Fuel for Heavy Equipment with basis fuel price at 8.217 Rupiah/Liter and to be
adjusted, raise and fall, with actual monthly average fuel price. The cost fuel for heavy equipment
support for 2025 – 2026 and 2027 – 2028 are the same value.
Maintenance Crusher & Conveyor System
Based on record lifetime of critical and/or major component and spending for maintenance
crusher and conveyor system on the previous years. Negotiation between PT. XYZ and O&M
Contractor been conducted and it is agreed the rates (IDR/Ton) of Maintenance Crusher &
Conveyor System with crusher and conveyor system maintenance costs in the 2025-2028 period
are higher than those in the 2023-2024 period due to several factors, namely: a) the number of
crushers and conveyor systems that must be maintained will be higher; and b) an increase in the
price of spare parts influenced by inflation and an increase in the exchange rate of IDR against
USD. In addition, the maintenance cost trend in the 2025-2028 period will also increase as
production exceeds 44 MTPA, due to: a) crusher and conveyor systems operating at maximum
capacity, which reduces the material life of worn parts and consumable components; and b) all
drive systems (motors & gearboxes) operating on average above 95%, which also shortens their
lifespan.
Labor
Compared to the 2023–2024 period, labor costs in 2025–2028 will be higher at 30–39 MTPA
and lower at 40–49 MTPA due to several factors: a) organizational changes, including but not
limited to: the addition of equipment to be operated and maintained at the Coal Handling Port
Facility, the addition of a Mid Management Team to act as thinkers, and the addition of specialist
control system personnel; and b) an increase in labor salaries in line with the regional minimum
wage (UMK) standards. These factors will cause fixed labor costs to be spread across varying
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production levels, resulting in higher labor costs per ton at 30–39 MTPA and lower at 40–49 MTPA
in the 2025–2028 period compared to 2023–2024.
Investment
The investment cost will decrease along with the production achievement, as the fixed
investment value is divided by the production volume. In the 2025-2026 period, investment costs
are higher than in 2023-2024 due to the addition of an investment item (CP9). Meanwhile, in the
2027-2028 period, investment costs will be lower than in 2023-2026, as all investment items have
been completed except CP9.
Improve
By agreement, both PT. XYZ and O&M Contractor acknowledge their commitment to the
principle of continuous improvement to achieve the highest possible standards in all aspects of
this Work. Continuous improvement involves the integration of various factors, such as advanced
technologies, new methods, and organizational changes, that significantly impact work
processes, unit prices, and operational costs. This approach is further supported by advanced
technologies, including robotics, augmented reality, and machine learning (ML), which enhance
efficiency, precision, and productivity. The discipline at the intersection of ML and process
improvement focuses on leveraging data-driven insights to optimize operations, automate
repetitive tasks, and improve decision-making. By continuously advancing technological
capabilities and refining work methods, organizations can achieve significant improvements in
cost-effectiveness, quality, and overall performance, driving long-term sustainability and
competitiveness (Rai et al., 2021). The Parties will in good faith discuss the advantages made that
it is the intention of the Parties to share the benefits or costs of any such changes.
1. Improvement at Power Sources
To optimize fuel and maintenance costs for the Diesel Generator, PT. XYZ began shifting its
power sources from Diesel Generator to PLN starting in mid-July 2019. PLN became the
primary source of power, with the Diesel Generator serving as a backup. The fuel and
maintenance costs for the Diesel Generator under the O&M contract are now allocated
proportionally based on the energy consumption by PLN compared to the Diesel Generator.
On December 1, 2023, PLN implemented a new policy, replacing the Premium Platinum
scheme with the Prioritas scheme. This change will affect the subscription schemes from the
previous Premium Platinum, Premium Silver, and Regular schemes, to the new Regular and
Prioritas schemes. After evaluating the new subscription options, PT. XYZ decided to adopt the
Regular scheme for the 2025–2028 period to support production levels of 30–48 MTPA. Actual
cost savings from PLN utilization are illustrated in the figure below, with the blue bar showing
the savings under the Premium Platinum scheme, and the red bar representing the simulated
savings under the Prioritas scheme. These savings are calculated based on the agreed fuel and
maintenance costs of 1,600 IDR/Ton for Diesel Generator fuel and 65 IDR/Ton for
maintenance. As shown in Table 4.1.4, total energy consumption in July 2022 was 1,804,613
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kWh, with 99.63% sourced from PLN and 0.37% from Diesel Generator. The cargo handled
that month was 2,606,096 tons, yielding an energy consumption ratio of 0.692 kWh/Ton.
Based on the proportional energy consumption, the total cost savings amounted to 8.09 IDR-
Bio. The contract scheme for energy conversion from Diesel Generator to PLN has been
validated, as demonstrated by the sensitivity to fuel prices—such as in May 2020 when the
fuel price reached 4,255 IDR/Liter, resulting in savings of 150 million IDR.
2. Optimize Port Coal Handling Facility Utilization.
PT. XYZ has a demographic opportunity in its area, as there are three other Coal Handling Port
Facilities owned by different companies, which are close to and have the same capabilities as
PT. XYZ's Coal Handling Port Facility (coal crushing and coal conveyance to barges), as shown
in the figure below. PT. XYZ has an agreement with the owners of these other facilities to use
them as a backup in achieving production targets, at a cost of 40,000 - 50,000 IDR/Ton. Given
this situation, the utilization of PT. XYZ's own Coal Handling Port Facility must be optimized
because:
a) The total cost of major O&M activities, as analyzed above, is no more than 12,000 IDR/Ton.
b) The cost of utilizing other Coal Handling Port Facilities is significantly higher, adding an
additional 28 IDR-Bio for every 1 million tons handled by other facilities.
3. O&M Excellence
With a high production target of 30-48 MTPA, operations and maintenance activities must be
carried out with a high level of excellence. PT XYZ and the O&M Contractor have agreed to
introduce an O&M Excellence fee to ensure stable operation and maintenance at the Coal
Handling Port Facility, with the following conditions and justifications: a) The O&M Excellence
fee will cover several things, including: increased customer productivity along with increased
production, such as the provision of key spare parts, fabrication work, increased safe stock for
critical parts, and improved belt conditions; maintenance and fuel costs for support vehicles,
maintenance trucks, mobile cranes, crane trucks, pontoons, offices, and workshops; and
backup teams if needed. b) The O&M Excellence score was determined based on expert
judgment from PT XYZ's Technical Director and Commercial Team, considering: the high costs
of using other Coal Handling Port facilities, as well as trends for 2025-2028 that differ from
2023-2024 to accommodate the higher risks associated with achieving greater production.
Control
By agreement, both PT. XYZ and O&M Contractor has committed to control the works, to
optimize the O&M Cost, consist but not limited to:
1. To control the cost for Fuel & Maintenance Diesel Generator, both PT. XYZ and O&M
Contractor continue monitoring:
a) Actual portion of kWh from both Diesel Generator and PLN.
b) Actual power usage compares to cargo handling (kWh/Ton).
c) Actual cost saving due to PLN utilization.
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2. To control the cost for Heavy Equipment Support, both PT. XYZ and O&M Contractor
continue monitoring the KPI for Heavy Equipment support that stated on the Contract, to be
evaluated in weekly meeting to ensure the performance and utilization to achieve
Production targeted.
3. To control the cost for Maintenance Crusher & Conveyor System, both PT. XYZ and O&M
Contractor continue monitoring, consist but not limited to the:
a) PA, MA, UA and EU.
b) Lifetime of Critical Parts.
c) Actual TPH output.
4. To control the cost for labor, both PT. XYZ and O&M Contractor continue monitoring, consist
but not limited to the:
a) Man Power Quantity and Quality.
b) Man Power Training and Competencies.
5. Both PT. XYZ and O&M Contractor to control the investment cost. Criticality at project phase,
build the Crushing Plant, to meet the project scope, cost, schedule and quality.
Solution and Proposed Implementation Plan
Based on analysis above, the solution and proposed implementation plan are as mentioned
below:
1. The O&M activities that impacted to the cost as mentioned below:
a. Fuel for Diesel Generator.
b. Maintenance for Diesel Generator.
c. Heavy Equipment Support.
d. Fuel for Heavy Equipment Support.
e. Maintenance Crusher & Conveyor System.
f. Labor.
g. Investment.
h. OM Excellence
2. Matrix of O&M Cost of coal handling port facility from 18 – 42 MTPA at 2021 – 2024 and 30 –
48 MTPA that to be implemented at 2025 – 2028 are shown on the table 4.2.1, Matrix of
O&M Cost of Coal Handling Port Facility below.
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Figure 3. Comparison Table of Operating Costs and Production Capacity
at PT XYZ Port Handling Facility (2021-2028)
3. Detail O&M Cost of Coal Handling Port facility from 30 – 48 MTPA for 2025 – 2026 and 2027
– 2028 as per table and figure below:
Figure 4. PT XYZ Port Handling Facility Operation and Maintenance (O&M)
Cost Details per Month (2025-2028)
Figure 5. Trend Chart of Operating Cost per Ton against Production Capacity (MTPA)
of PT XYZ (2017-2028)
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Justification Of Implementation Plan
The O&M Cost of Coal Handling Port facility that will be applied at 2025 – 2026 and 2027 –
2028 is increase compare with 2023 – 2024 with justification as mentioned below:
1. Rate is adjusted from 10.968 IDR/Ton to 11.970 IDR/Ton for 30 MTPA by 1 January 2025, due
to:
a. Additional 1 crusher (CP9) from 10 to 11 and also additional work load and volume, Man
Power & equipment support, etc.
b. In line with PT. XYZ’s high Production, requirement of service of excellences for steady state
Operation and Maintenance that requires additional special tools, double fast-moving
stock and more competent personnel to execute Schedule & Un-schedule Maintenance
faster.
c. Inflation rate affect in increasing of some components such as Spare Part.
d. Market price of Labor and Spare Part.
2. The adjustment rate is still reasonable and comes with more benefit, considering:
a. O&M Contractor adds investment for 1 Crusher, total become 7 Crushers (CP2, CP2A,
CP2B, CP4, CP5, CP8 and CP9) owned by O&M Contractors while 4 Crushers (CP1, CP3, CP6
& CP7) owned by PT. XYZ.
b. The rates are still significantly below other Port’s Rate (40.000 IDR/Ton – 50.000 IDR/Ton),
that potentially saving 28 IDR-Bio for each 1 Mio-Ton absorbed by Coal Handling Port
facility (compared via other Port).
3. The optimum O&M Cost of Coal Handling Port Facilities, from 30 – 48 MTPA, that to be
implemented to the next 2025 – 2026 and 2027 – 2028 is as mentioned below:
a. 2025 – 2026:
Table 3.Optimum O&M Cost Table for 30-48 MTPA Production Capacity (2025-2028)
MTPA
30
31
32
33
34
35
36
37
38
39
IDR/Ton
11,970
11,857
11,730
11,680
11,604
11,530
11,423
11,319
11,247
11,178
MTPA
40
41
42
43
44
45
46
47
48
IDR/Ton
11,117
11,062
11,012
10,967
10,926
10,890
10,857
10,827
10,801
b. 2025 – 2026:
Table 4.Optimum O&M Cost Table for 30-48 MTPA Production Capacity (2025-2028)
MTPA
30
31
32
33
34
35
36
37
38
39
IDR/Ton
11,528
11,395
11,297
11,258
11,202
11,120
11,041
10,965
10,905
10,862
MTPA
40
41
42
43
44
45
46
47
48
IDR/Ton
10,784
10,753
10,716
10,685
10,659
10,631
10,607
10,586
10,568
4. The impact of each major O&M cost component to the production achievement variance is as
table & figure below:
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Table 5. Effect of O&M Cost Components on Variance in Production Achievement
No.
O&M Cost Component
Trend to the Production Achievement
1.
Fuel for Diesel Generator
Constant
2.
Maintenance for Diesel Generator
Constant
3.
Heavy Equipment Support
Decrease in line with higher production
4.
Fuel for Heavy Equipment Support
Decrease in line with higher production
5.
Maintenance Crusher & Conveyor System
Increase in line with higher production
6.
Labor
Decrease in line with higher production
7.
Investment
Decrease in line with higher production
8.
OM Excellence
Constant
Figure 6. Trend Chart of O&M Cost Component against Production Capacity (2025-2028)
Discussion
Optimization of O&M (Operation and Maintenance) costs at the Coal Handling Port Facility
from 30–48 MTPA aims to keep operating costs lower than market prices, with a cost range of
IDR/Ton between 10,568 to 11,970. Although there is an increase in costs compared to the
previous period, this increase is necessary to support higher production capacity and ensure
more stable operations. Optimizing O&M costs for this larger production capacity requires a
balance between cost efficiency and the need to maintain high operational performance, so that
production targets and cost containment can be achieved effectively.
Research by (Seifullina et al., 2018) shows that O&M costs can be controlled by utilizing
Activity-Based Costing (ABC) analysis, which allows companies to allocate costs more accurately
according to the activities that occur, thereby minimizing waste. Another study by (Ramires &
Sampaio, 2022) also emphasizes the importance of optimizing the use of resources, such as heavy
equipment and labor, in the face of production fluctuations due to external factors, such as
weather conditions. They show that by integrating technology and good planning, companies can
mitigate the negative impacts of the rainy season or extreme weather conditions, which often
cause monthly production declines. This approach is in line with the findings presented by (Ma
et al., 2020) which stated that implementing a proactive and data-driven maintenance
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management system can improve operational performance, reduce maintenance costs, and
increase efficiency across facilities. The combination of these studies provides a strong
foundation for a more targeted and data-driven O&M cost optimization strategy, which focuses
not only on reducing immediate costs, but also on increasing long-term operational efficiency
and effectiveness.
To achieve O&M cost optimization, cost components can be analyzed using the Activity-
Based Costing (ABC) method, which divides the overall O&M costs into specific categories. ABC
allows companies to allocate costs more accurately based on the activities consumed by each
unit of product or service (Quesado & Silva, 2021). In the context of a coal handling port facility,
these cost components include fuel costs for diesel generators, diesel generator maintenance
costs, heavy equipment support, heavy equipment fuel costs, crusher and conveyor system
maintenance, labor costs, and investment costs (Martinez-Valencia et al., 2021). Each of these
cost categories has a direct impact on overall operating costs, and understanding how each
category contributes to total O&M costs allows companies to identify areas where greater
efficiency is needed. Research by (Koolmees et al., 2021) also shows that ABC is more effective
than traditional cost allocation methods, as it can provide a clearer picture of the true cost
drivers, as well as assist decision making in terms of cost control and budget planning.
In addition, research conducted by (Ding et al., 2022) on maintenance management shows
that activity-based cost analysis is very important in improving maintenance and operational
efficiency, especially in industries that rely on heavy equipment and complex systems. In this
study, the application of ABC allows companies to monitor and manage maintenance costs per
unit more accurately, as well as identify opportunities to reduce waste and optimize resource
use. Similar findings were also found in a study by (Manalu et al., 2024), which stated that the
application of cost-based maintenance techniques such as ABC can result in significant savings in
maintenance costs, reduce downtime, and extend the operational life of equipment. By applying
this approach to O&M cost analysis, PT. XYZ can be more effective in planning and optimizing
costs associated with each component of operational costs, while improving the efficiency and
performance of port facilities as a whole.
The main challenge in optimizing O&M costs lies in the need to maintain or even improve
operational performance while minimizing the impact of increased production volumes. As
output increases, fuel consumption for diesel generators and heavy equipment will naturally
increase. However, fuel consumption can be optimized through more efficient scheduling, the
use of more fuel-efficient equipment, and the application of fuel-saving technologies. This
approach is supported by the Total Productive Maintenance (TPM) theory, which emphasizes
proactive maintenance to keep equipment optimal so that it can operate more efficiently,
reducing fuel consumption and downtime (Hallioui et al., 2023). In addition, research by Yan et
al., (2021) shows that the use of more efficient equipment in terms of fuel consumption can
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significantly reduce operational costs in the coal handling industry, thereby increasing company
profitability without sacrificing production capacity.
Similarly, maintenance costs for diesel generators and heavy equipment need to be
carefully managed so that increased usage does not cause excessive wear and tear that can
increase maintenance costs over time. In this case, the Condition-Based Maintenance (CBM)
theory can be applied, where maintenance is carried out based on the actual condition of the
equipment, rather than just on a fixed time schedule. CBM allows for more targeted maintenance
and reduces costs associated with unnecessary maintenance (Acernese et al., 2021). Research by
(Yazdi, 2024) also supports the application of CBM, stating that real-time monitoring of
equipment conditions can reduce the occurrence of unexpected breakdowns and increase
maintenance cost efficiency. The application of CBM to diesel generators and heavy equipment
allows for reduced downtime and repair costs, as well as extending the life of the equipment,
which is especially important when production volumes increase significantly.
In addition, the use of data-based technologies, such as energy monitoring systems and
fleet management, can help companies optimize fuel usage and manage maintenance costs more
efficiently. Research by (Ahmad et al., 2021) shows that the application of intelligent monitoring
technology in the logistics and energy industry can improve fuel consumption management and
equipment maintenance, thereby reducing operational costs and improving long-term
performance. By integrating these strategies, PT. XYZ can manage the challenges of O&M costs
in the face of increasing production volumes more effectively, while maintaining high operational
performance and reducing resource waste.
Meanwhile, relatively fixed labor costs can be optimized through workforce training,
operational process improvements, and adoption of automation where possible. Investments in
infrastructure, such as crushing plant expansions or conveyor upgrades, can also be considered
as part of the optimization process. The challenge is to ensure that these investments deliver
long-term cost savings through increased efficiency, rather than creating additional costs that
reduce the benefits. Overall, this study aims to explore all of these factors, analyze how each
contributes to O&M costs, and identify opportunities to improve cost efficiency and operational
performance in support of greater production capacity at the Coal Handling Port Facility.
CONCLUSION
O&M cost optimization of the Coal Handling Port Facility from 30 - 48 MTPA aims to
maintain operating costs lower than market prices, with a cost range of IDR/Ton between 10,568
to 11,970, which is slightly higher than before to accommodate higher production capacity and
more stable operations. Based on Activity Based Costing, O&M cost components can be grouped
to include fuel for diesel generators, diesel generator maintenance, heavy equipment support,
fuel for heavy equipment, crusher and conveyor system maintenance, labor, and investment. The
problem formulation in this study focuses on how to achieve effective cost optimization in
Optimization O&M Cost of Coal Handling Port Facility from 30 – 48 MTPA
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Asian Journal of Engineering, Social and Health
Volume 3, No. 12 December 2024
supporting greater production capacity, taking into account cost efficiency and improved
operational performance of coal port facilities. This study is conducted objectively by analyzing
the factors that affect the cost and operational performance of O&M facilities.
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Ali Safrani (2024)
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