All

Inventory problems have recently affected the Nation. The inventory problems are not only affect cement industry but also electricity, trains, telecommunication, and other sectors of industries. The symptom offers a dilemma, when technology develops quickly, another phenomena occur; in fact it is beyond expectation.

The fundamental weakness of the inventory problems lies in the inaccuracy of management of logistics and transportation for inventory. One of the factors affecting the inaccuracy is the size; the numbers of items in the inventory are too large for the conventional management system to organize the inventory. As a result, one may expect that inaccuracy will happen.

This is happened in the inventory Department of PT. Semen Gresik, Indonesia. The weakness in inventory management has created a situation where the inventory value increases continuously. In 2001 total value of inventory is US$ 41 thousand; it increases in 2002 to reach US$ 47 thousand.

Based on these data, I am motivated to study the system. How should the Management of Logistics and Transportation be applied correctly? Despite the fact that at the beginning 2002 PT Semen Gresik has applied the on line integrated inventory system