Determination of Pharmaceutical Industrial Distribution Center Location Using Center of Gravity Method: Case Study at PT Jkt

Distribution center has an important role in an industry's supply chain management to facilitate logistics management requirements so that the product distribution process becomes smooth and fast. The purpose of this study is to determine the best location that can be used in determining the location of the distribution cente in pharmaceutical industry. This research uses the center of gravity method to calculate optimal location that will be considered. From the results of this study, the calculation using the Center of Gravity method found that the location of the selected distribution center was at the coordinates (-6.257108; 106.7315), the settlement area of the village of Jurangmangu Timur. The available area according to warehousing rules does not allow the construction of the distribution center in residential area of Jurangmangu Bintaro village, empty area is available around 4 KM west of T8 Pakulonan Alam Tangerang Selatan, this area provides warehousing by offering a combined trading center, office and integrated food and beverage plaza with shelter have advantages as distribution center. The new proposed distribution center location is located 14 KM south and 13 KM from the north of the available warehouse, the new suggested location is closer to and located between current distribution locations.


Introduction
One of the factors driving the growth of the pharmaceutical industry is the widespread reach of participation in the Jaminan Kesehatan Nasional (JKN) and Badan Penyelenggara Jaminan Sosial (BPJS) Kesehatan (sindonews.com, 2017). This is also supported by the government to make the pharmaceutical industry as one of the priority industries in Indonesia. One of them is by launching the roadmap of the pharmaceutical and medical devices industry at the end of February 2017 (bisnis.com, 2017). According to the International Pharmaceutical Manufacturers Group (IPMG), estimates that growth will continue is predicted to be 10% in 2017. The government is through the Regulation of the Minister of Health of the Republic of Indonesia Number 1148/MENKES/PER/VI/ 2011 concerning Good Drug Distribution or Good Distribution Practice (GDP) and applies to aspects of procurement, storage, and distribution including the return of drugs and or drug ingredients in the distribution chain.
In its development pharmaceutical distribution companies continue to grow, both PMA, BUMN and domestic investment, however, Indonesia has a national logistical problem that can be grouped into seven groups, namely the problem group of commodities, infrastructure, providers of logistics, human resources, information and communication technology, regulation and institutions. Infrastructure groups, in Indonesia have not been managed in an integrated, effective and efficient manner, especially warehousing infrastructure or Distribution Centers (kompas.com, 2010). Distribution center is a place that functions as a main commodity supporter to support the smooth flow of goods between regencies/cities and between provinces for domestic and/or foreign market objectives (Ministry of Trade of the Republic of Indonesia, 2013), or in other words distribution center of a logistics facility which is used to collect various items originating from various regions before distributing places that need it. The benefits of having a distribution center include ensuring the availability of goods, increasing the stability of the price of goods, being able to absorb new workers, and for the central government to become a means of regulating, controlling and distributing commodities. Distribution center facilities have an important role in city logistics and supply chains in general. One of the functions of the distribution center is to facilitate the product distribution process. According to Huang et al. (2011), the distribution process is the main key to the success of logistics and supply chain activities. So that the existence of a distribution center becomes very important. Distribution centers that are in the right location will be able to reduce transportation costs and improve the efficiency of the logistics system (Cui and Li, 2004). Distribution center location selection can reach all customers who are currently served by the parent warehouse. Determination of a strategic location is very important. Location greatly affects costs, both fixed costs and variable costs. Location has a major influence on company profits (Render, 2001).
The current phenomenon of principal pharmaceutical companies is so easy to move one distribution company to another distribution company to partner in a business that is truly suitable and able to meet the targets that have been charged. This condition is certainly a challenge for distribution companies to be able to provide good service so that they can partner forever. Various studies have reported that the use of the Center of Gravity method can provide information on determining the location of a new warehouse that is more optimal that can minimize costs. Previous research, Dedy Oktrianto (2017), the use of the Center of Gravity method can determine the location of waste collection of hazardous and toxic materials on the scale of East Java province with minimal transportation costs. Aldian (2015), the use of the Center of Gravity method can help determine the location of efficient food storage for food distribution based on distance traveled. Similar research was also carried out by Zhao Xue Ying (2014). In his research, the Center of Gravity method provides address recommendations for a good logistics center. In the Center of Gravity method has some limitations in the implementation because it only considers the factor of volume or weight of the goods sent and ploting maps coordinates, so that the need for other methods as a support.  Kotler (2008) One of the keys to success is location, the location begins with choosing a community. This decision is very dependent on the potential for economic growth and stability, competition, political climate, and so on (Quah, 2011).
Determination of location, according to Munawaroh (2013) one of the strategies that need to be considered by the company is the location selection, either the factory location for the manufacturing company or the business location for the service/retail company or office location. Site selection is needed when the company establishes a new business, expands existing business and moves the location of the company to another location. Location determination needs to be done carefully which consists of locations for headquarters, branches and factories. In relation to the business feasibility study, the most complex and complicated thing is determining the location of the factory. The consideration is whether it is close to raw materials or markets or consumers, costs and production area (Henderson & McNamara, 2000;Kasmir, 2014). According to Azizi et al. (2015), selecting the best place for a factory among some proposed locations based on various indices is a decision-making multi-criteria issue.
Site selection is very important because it is related to the size of operating costs, prices and competitiveness. The purpose of the location strategy is to maximize the benefits of the company; (1) For industry, to minimize costs. The right location to close the location of the material storage warehouse with the production location can save transportation costs.
(2) For retailers and service professionals to maximize revenue. Selection of retail locations and service professionals that are easily accessible to consumers allows sales in large numbers, thereby increasing company revenue. (3) For warehouse locations to maximize speed delivery and minimum costs. Warehouse distance with the right factory location will accelerate the delivery of goods while minimizing costs.

Center of Gravity.
In finding the best location to be a distribution center, the location of the market is taken into account, the volume of goods sent to the market, and the transportation costs (Kee-Yin Ng et al., 2013;Heizer & Render, 2013). The center of gravity approach (Center of Gravity Approach) is used to select a location that can minimize distance or cost to existing facilities. For example, it is used to choose a warehouse location or distribution center to supply goods to several agents in a particular area. This approach chooses any coordinate center point. Center of Gravity Techniques Is a mathematical technique used to find the best location for a single distribution point that serves several shops or regions. This method takes into account the distance of the market location, the amount of goods shipped and shipping costs.
Steps to use the Center of Gravity Techniques; (1) Determine the amount of goods sent from the location to the distribution warehouse (which location will be searched for) for each period. (2) Open the map, specify a place as the origin (0.0). (3) Place market locations owned by the company in a coordinate system with the origin as the basis.

Method
The concept of this research is to determine the exact distribution center location to store and distribute the principal products of PT. JKT. These problems can be explained in the research variables in accordance with table 1, as follows:   (2018) The names of customers related to the distribution process during 2017 can be known, based on the customer's address and then taken and determined the coordinate point using the Google Maps application tool. Google maps search data as shown in Figure 1, retrieving the coordinates of PT. JKT, as follows: Table 2, coordinates of the distribution area of PT. JKT in 2017, presented the results of taking coordinates for each distribution area by using the google maps application.   Data processing in this study is divided into two, namely using the Center of Gravity method. The Center of Gravity method of data processing uses POM for Windows Version 3.3 software. The Center of Gravity attribute method used in determining the exact distribution center location is the Total Volume of Metric (Charged Weight) and the coordinate point of each distribution area of PT. JKT in 2017.  Based on the data and steps for using the POM for Windows Version 3.3 software, the location of the recommended coordinates is to determine the location with the Center of Gravity method at -6.257108,106.7315. The put out presented by the POM for Windows Version 3 software can be seen in Figure 3 as follows:  So that the coordinates obtained from the calculation results using the center of gravity method at point X, Y, namely: (-6.257108,106.7315).
The results above when compared with the results obtained with mathematical calculations using the Center of Gravity formula the results are the same, namely: (-6.257108; 106.7315). This reinforces the suggested coordinate points for determining Distribution Center locations. After the coordinate points obtained are then checked using the google maps application, to know for certain the location of the location. In Figure 3 the locations of the Distribution Center locations are suggested, as follows: From the calculation using the Center of Gravity method, the location of the Distribution Center that is selected is the coordinates (-6.257108; 106.7315). When viewed on the Google Maps Coordinate application located in the area of Jl. Panti Asuhan, Jurangmangu Timur, Pondok Aren, South Tangerang City. Based on a direct location review, the proposed warehouse location is calculated using the Center of Gravity method in residential areas. The location of the new suggested Distribution Center is located 14 km south of the location of PT JKT Tangerang and 13 km from the north of PT JKT Jakarta 3, the new recommended location is closer to and located between the locations currently distributed. Nevertheless the results of this study need to be followed up by considering the cost of a new warehouse investment, of course, apart from that this will be a good input for the company so that the start of its own location is good to be able to support a better distribution. The location adjacent to one of the customers who has the largest total shipping volume at this time is an advantage that can be utilized by PT. JKT. The location of the proposed Distribution Center in the city center has its own advantages and disadvantages. By being in the city center, the company can serve the needs of each customer well because the distance that must be taken becomes shorter, but in terms of legislation and urban spatial planning, further study is needed regarding the location. This is needed for provide a broader view of the company to produce good decisions. In addition, the company also must pay attention to the requirements of a good warehouse location, including (Tnunay, 2013), as follows; Paying attention to the type of goods that will be stored and the characteristics of the item. The main thing to note is whether the items to be stored are food (food) or not food (non food items) or both. The characteristics of goods that must be considered are as follows; (1) Volume of goods to be stored.
(2) Frequency and size or number of shipments that will be received in the warehouse.
(3) Frequency and size or number of shipments that will be sent or removed from the warehouse. (4) Warehousing environment and building conditions, this is important to ensure that the goods do not experience damage or deterioration in quality during storage. (5) Temperature sensitivity, whether the item requires a special temperature. (6) Whether the items stored are in the category of dangerous goods or not. Also raw materials from goods include dangerous goods or not.
The number of items to be stored for the calculation of the area needed, as follows: (1) The size and weight of the goods including the packaging.
(3) Needs and special places to install new packaging, installation of labels and so on. In addition to the three things mentioned above, there are other important things that must also be considered before deciding or choosing a warehouse (Tnunay, 2013), as follows; (1)  The Distribution Center (Warehouse) has an important function for the company, especially in distribution companies. The purpose of this study is to determine the optimal location that can be used by PT. JKT in determining the Distribution Center location. This study uses the Center of Gravity method in calculating optimal locations that will be considered by the company. The Center of Gravity method is a quantitative and mathematical technique for finding distribution center locations that will minimize distribution costs. This has a beneficial and detrimental side that needs to be studied more deeply for the company. Because in choosing and determining the location, which is a long-term investment, requires other considerations as well as paying attention to the type of goods to be stored and the characteristics of the item, the number of items to be stored for the calculation of the area needed and the time needed to store the item and policies and desires of the company so that the chosen location can support the company's business objectives. The Center of Gravity method can be used and applied by the company as a tool to assist companies in determining the location of the establishment of a Distribution Center by considering the distance between other units. Although the Center of Gravity method ignores/does not take into account the differences in distribution and production costs for each location where in the formula, the use of the Center of Gravity method assumes that costs are directly proportional to the distance and volume of the goods transported. For that reason, in seeking location optimization it is necessary to include production costs or in the analysis, also comparing the results of the analysis using other location determination methods, so that the decisions taken are ideal and right on target.

Conclusion
Determining the location of the Distribution Center is a solutive solution to improve the distribution system and the efficiency of logistics management. This research was conducted with the aim of determining the location of the Distribution Center using the Center of Gravity method and the Analytical Hierarchy Process to obtain conclusions, as follows: Determination of the location of the Distribution Center by using the Center of Gravity method obtained the location of the Distribution Center selected is the coordinates (-6.257108,106.7315 ) When viewed on the Google Maps Coordinate application located in the area of Jl. Panti Asuhan, Jurangmangu Timur, Pondok Aren, South Tangerang City. Suggestions for further research are expected to be able to collaborate several analytical methods in addition to the Center of Gravity can overcome the existing complications in the Distribution Center location determination criteria.