CHAPTER 1

INTRODUCTION

1.1 Company Profile

Figure 1.1: Logo of Kimia Farma

Type : Public

Traded as :IDX: KAEF

Industry : Pharmaceuticals

Founded :1971

Headquarters : ,

Products :pharmacy

Number of employees :5,758

Website :www.kimiafarma.co.id

Kimia Farma was the first pharmaceutical industry company in Indonesia established by the Dutch Indies Government in 1817. The original name of this company is NV Chemicalien Handle Rathkamp & Co. Based on the policy of nationalization of ex-Dutch companies at the beginning of the independence period, the Indonesian government in 1958, merged some of the pharmaceutical companies into PNF Bhinneka Kimia Farma. Then, on 16 August 1971, the form of PNF as a legal entity was changed in to Limited Liability Company and the company’s name was changed to PT Kimia Farma Persero. (Source: Kimia Farma, profile, 2015)

On 4 July 2001, PT Kimia Farma Persero changed the status become a public company, PT Kimia Farma Persero, hereinafter referred to as Company. Simultaneously with this change, the Company was listed at Jakarta Stock Exchange and Stock Exchange (currently both stock exchanges had been merged and now named Indonesia Stock Exchange). With tens of years of experience, the Company has developed into a company with an integrated health service in Indonesia. It has been increasingly engaged in the development and building of the nation, particularly the building of health of the Indonesian community. (Source: Kimia Farma, profile, 2015)

The biggest plant is being developed on a 5 Hectare land in Banjaran, West Java to replace its existing plant in . This new plant will have around four times the capacity of its previous plant and is now nearing completion. The plant is expected to commence operations by 2019. In support of Indonesian’s independence in Active Pharmaceutical Ingredient (API), Kimia Farma builds the first plant in Indonesia to produce Active Pharmaceutical Ingredients (API) as the raw materials for several highly-needed medicines. Developed under a joint venture with Sung Wun Pharmacopia Co., Ltd. from South Korea. This Plant is expected to commence operations by 2018. (Source: Kimia Farma, profile, 2015)

Kimia Farma is also developing the Rapid Test Production Facility which is the first industrial plant in Indonesia to produce Rapid Test diagnostic products. The Rapid Test Production Facility Building stands on an area of the Company’s land in Denpasar, Bali. Construction of this production facility is already completed in 2017 and commences production in early 2018. Kimia Farma strives to continuously take part in promoting the health of the Indonesian people by expanding our network to reach 1,000 retail pharmacies, 500 health clinics, and 47 diagnostic laboratories throughout the Country. (Source: Kimia Farma, profile, 2015) 1.1.1 Transforming into a Digital Healthcare Company

Over the past few years, Kimia Farma has made significant progress and important achievements in many areas of its Healthcare business. In respect of the National Active Pharmaceutical Ingredient (API) Independence Program as stipulated in the Ministry of Health’s Roadmap and supported by the Economic Policy Package XI and Presidential Instruction No. 6 Year 2016 on the Acceleration of Pharmaceutical and Medical Devices Industry Development, Kimia Farma is building several new plants aiming at reducing dependence on imports of APIs and eventually enabling Indonesia to produce its own API. (Source: Kimia Farma, corporate news, 2015) Going forward, in line with the rapid development of information and communication technology that requires corporates to continue adapting to build sustainable businesses, in 2017 Kimia Farma strengthened its digital initiative in the Company’s business environment. Kimia Farma starts to implement digitalization from upstream to downstream on Kimia Farma’s business value chains from production to retail (pharmacy outlets.). Application of this technology will simplify business processes and improve customer experience. (Source: Kimia Farma, corporate news, 2015) The theme of Kimia Farma’s 2017 Annual Report, “Transforming into a Digital Healthcare Company” depicts Kimia Farma’s determination to continuously innovating and leveraging the capabilities of digital technology to better serve its consumers. This determination is also a part of Kimia Farma’s efforts to help improve the quality of health services in Indonesia and realize its vision of becoming the main choice of integrated Healthcare Company and generating sustainable value. (Source: Kimia Farma, corporate news, 2015)

1.1.2 Structure Human Capital

Figure 1.2: Human Capital Structure in Kimia Farma

1.1.3 Vision & Mission of Company

Vision

Becoming the main choice of integrated Healthcare Company and generates sustainable value.

Mission

1 Conducting business activities in chemical and pharmaceutical industry, trading and distribution network, retail pharmaceutical and healthcare services as well as assets optimization. 2 Managing the Company in Good Corporate Governance and operational excellence supported with professional Human Resources (HR). 3 Providing added values and benefit for all stakeholders.

1.1.4 Corporate Culture Kimia Farma has established and implemented Corporate Core Values as a reference of behaviors for all employees in the Company, namely:

Figure 1.3: a corporate culture of Kimia Farma

1. Innovative

Think out of the box, smart, and creative to produce leading products.

2. Customer First

Priority on customers as a working partner.

3. Accountable

Strongly uphold the Company’s trust by hold professionalism, integrity, and cooperation.

4. Responsible

Have the personal responsibility to work on time and on target, and continually seek to stand firm and wise in facing any problem.

5. Eco - Friendly

Build environmentally friendly systems and behavior. 1.1.5 Big Three of The Nation Pharmaceutical Industry In 2019

1. Improving reliable and competent human resources. 2. Digitalization. 3. Alliance strategy.

1.2 Background

Based on geographical location, Indonesia is one of the countries with the fastest growing pharmaceutical market in the world. According to GM Quintiles IMS Indonesia, Sasongko (2015), the Indonesian pharmaceutical market has grown by an average of 20.6% per year from 2011-2016 and 2017 there are around 239 pharmaceutical companies operating in Indonesia. The Deputy Secretary General of the Indonesian Pharmaceutical Entrepreneurs Association, Kendrariadi (2017) said another effort to continue to develop the pharmaceutical industry was through the Convention on Pharmaceutical Ingredients South East Asia (CPhI SEA) 2017. Through the event, the pharmaceutical industry could expand opportunities to build networks and cooperation so, able to contribute to improving the pharmaceutical industry in Indonesia and the Southeast Asia region.

Kimia Farma is transforming from a HealthCare company into a HealthCare digital company. And the healthcare company is an aggregation and integration of sectors within the economic system that provides goods and services to treat patients with curative, preventive, rehabilitative, and palliative care. It includes the generation and commercialization of goods and services lending themselves to maintaining and re-establishing health. The modern healthcare industry is divided into many sectors and depends on interdisciplinary teams of trained professionals and paraprofessionals to meet the health needs of individuals and populations. The achievement of the target of Kimia Farma is always increasing every year, from figure 1.4 it can be seen that PT. Kimia Farma every year from 2013-2017 has experienced an increase in total liabilities, total equity, sales, and profit attributable to owners of parent entities. So the workload analysis must be done to measure the workload received by employees.

Figure 1.4: financial achievement

The Human Capital Division is one of the most important divisions in employee development, we can say that the company will treat its employees better. By treating employees better, employees will automatically have a sense of belonging to the company, and the effect of performance will continue to increase. At its peak, the company's finances will be better. Therefore researchers used the Human Capital division in this study.

The number of employees in the human capital division is 34 people which are divided into 4 units. Namely the unit of culture & organization development, units of human capital operations, units of talent management, and units of learning & development. The unit of culture & organization development has the task of Increasing Employee Productivity, Fulfilling the SLA of Making and Reviewing the HC Policy Documents, Achieving the Schedule of Completion of Making and Socializing Job Family Systems, and Reaching the Schedule of Completion of Job Grade System Completion The human capital operation unit has the task of Resolving Industrial Relations Problems, Increasing Employee Productivity, and Increasing the Effectiveness of Employee Cost Budget Management. The talent management unit is tasked with fulfilling the Structural Position Requirements of the Talent Pool, Reaching the Scheduling and Dissemination of Employee Competency Profiles based on the Job Family, Schedule the Operation of the Kimia Farma Assessment Center for the assistant manager level, and Achieving the Talent Pool Program Completion Schedule. And finally, the learning & development unit has the task of Increasing the Effectiveness of Management of Learning / Training Costs. Increasing the Intensity of Employee Training, Implementing all Training Programs that have been approved by the Board of Directors, and Improving the Implementation of Learning Materials for a minimum of 25% learning programs.

Because the development of Kimia Farma became a HealthCare digital company in 2018, the manager of the culture & organization development unit, Indah Suciarti, stated that she must analyze the workload for all employees of Kimia Farma because based on her monitoring to all employee Human Capital Division, she know some of employees has under load workload and some of employees has overload workload. Therefore she must analyze the workload to optimize number of employees Human Capital Division PT Kimia Farma.

In this study, researchers will analyze the Human Capital strategy in optimizing employees using the Full-Time Equivalent method. The researcher chose the Human Capital Division because Human Capital played a very strategic role in supporting the competitiveness of a country or region (Becker, 1975).

1.3 The Statement of Problem

Based on the background, the problem can be formulated, namely: 1. How much workload received by employees of PT Kimia Farma Human Capital division? 2. Has the workforce been optimal with the workload received PT Kimia Farma in Human Capital division? 3. What is the Human Capital strategy of PT Kimia Farma in Human Capital division to optimize the number of employees?

1.4 The objective of The Study

Based on the background and the statement of the problem above, it can be explained the objectives of this study are as follows: 1. To find out how many workloads are received by employees of PT Kimia Farma Human Capital division 2. To analyze whether the workforce is optimal with the workload received in each unit of PT Kimia Farma in Human Capital division. 3. To analyze Human Capital strategy of PT Kimia Farma in Human Capital division to optimize the number of employees.

1.5 Research focus

This research will focus on the Human Capital strategy in optimizing the number of employees in the Human Capital division of PT Kimia Farma by analyzing workload using the Full-Time Equivalent method. With this, researchers are expected to be more focused on analyzing Human Capital strategies.

1.6 Benefits of Research

The usefulness of this research is: 1. For the author: this research is useful to add insight into the problems in human resources in the practice in the field of work. 2. For other researchers: who want to develop ideas and problems related to measuring workload. 3. For the company: can be used as a reference in increasing labor productivity. 4. For readers in general: to be able to add insight and knowledge.

1.7 Time and period of research

The research will be conducted in two months, starting from November to December 2018.