Echannel Internship Report by Mirolas Nove Adwas

OPTIMALIZATION OF PREMIUM COST
(CIS & CIT) AND OVERNIGHT RATE CHARGE

INTERNSHIP REPORT
This report made to fulfill the mandatory of Business Immersion

By
Mirolas Nove Adwas
ID: 29113145

Magister of Business Administration
School of Business and Management
INSTITUT TEKNOLOGI BANDUNG
2014
i

ACKNOWLEDGEMENTS

This report can't be done without help and support from the other. This part of paper made to
acknowledge their help and support for all this time:
1. Allah SWT for his grace and guidance
2. My family for loving and caring
3. MBA ITB for my source of knowledge
4. Ms Yani Nurhayanti for helping me finding the company for internship
5. Mr Abi Kustomi as assistant vice president in business development
6. Ms Firdha Bella and Mr Dicky as officer
7. Mr Dania, Mr Dicky, Mr Iwan, Mr Rully, and Mr Tisna as staff
ii

TABLE OF CONTENTS

Acknowledgments ............................................................................................................... i
Table of Contents ................................................................................................................ ii
List of Tables ....................................................................................................................... iv
List of Graphs ...................................................................................................................... v
List of Figures ..................................................................................................................... vi
List of Appendix .................................................................................................................. vii
Executive Summary ............................................................................................................ viii
CHAPTER I : INTRODUCTION ....................................................................................... 1
1.1. Company Profile ........................................................................................................ 1
1.2. Scope of work ............................................................................................................ 5
1.3. Objective of the internship ......................................................................................... 5
CHAPTER II : BUSINESS ANALYSIS ............................................................................ 6
2.1. Theoretical Framework .............................................................................................. 6
2.1.1. Insurance Premium ................................................................................................... 6
2.1.2. Cash In Safe ............................................................................................................... 6
2.1.3. Cash In Transit .......................................................................................................... 6
2.1.4. Over Night Rate ......................................................................................................... 7
2.1.5. Vendor ...................................................................................................................... 7
2.1.6. ATM Capacity ........................................................................................................... 7
2.2. Methodology .............................................................................................................. 8
2.2.1. Methodology used to collect data ............................................................................. 8
2.2.2. Methodology used for data analysis .......................................................................... 8
2.3. Finding & Analysis .................................................................................................... 9
2.3.1. Cash in Safe .............................................................................................................. 9
2.3.2. Cash in Transit ........................................................................................................... 10
2.3.3. Vendor ....................................................................................................................... 13
2.3.4. Over Night Rate ......................................................................................................... 17
2.3.5. ATM Capacity ........................................................................................................... 17
2.3.6. Total Variable Cost For Month X .............................................................................. 20
CHAPTER III : BUSINESS SOLUTION ........................................................................... 21
iii

3.1. Proposed Solution ...................................................................................................... 21
3.1.1. Reducing the need for paper money by using electronic money ............................... 21
3.1.2. Optimize the replenishment cycle by implementing new idle cash regulation ......... 22
3.2. Practical Implication .................................................................................................. 23
3.3. Implementation Plan ................................................................................................. 25
CHAPTER IV : LESSONS LEARNED ............................................................................. 28
4.1. Lesson learned from the Problem Solving ................................................................. 28
4.2. Lesson learned from the internship program ............................................................. 28
REFERENCES .................................................................................................................... 30
APPENDIX ......................................................................................................................... 32
iv

LIST OF TABLE

Table II-1 : CIS in month X
Table II-2 : CIS premium in month X
Table II-3 : CIT in month X
Table II-4 : CIT premium in month X
Table II-5 : Penalty
Table II-6 : Replenishment and idle cash
Table II-7 : Overnight rate for month X
Table II-8 : Overnight charge for month X
Table II-9 : ATM replenishment Limit
Table II-10 : Total variable cost for month X
Table III-1 : Variable cost before implementation
Table III-2 : Variable cost after implementation
v

LIST OF GRAPH

Graph I-1: Organizational Structure That Affect E-Channel
vi

LIST OF FIGURE

Figure III-1 : E-Money and it predecessor
Figure III-2 : Electronic Data Capture
Figure III-3 : List of mandiri partner in E-Money application
vii

LIST OF APPENDIX

Appendix 1: Declaration of cash in safe insurance
Appendix 2: Declaration of cash in transit insurance

viii

EXECUTIVE SUMMARY

As one of the biggest bank in Indonesia, PT Bank Mandiri Tbk has to manage huge number of
ATM machine. This machine, need to be manage properly, unless it will not serve it purpose
as the bank want it. One of the managing process is about cash replenishment. My job in this
internship, mainly around E-Channel, especially ATM area.
After learning and doing several task in the bank, I learn that there's an opportunity to reduce
operational cost for ATM machine in term of replenishment cycle. I found out that the amount
of idle cash for each ATM is still big (more than 20%). This idle cash is what we can call
sleep money. It serve no purpose, no use, but still burden the operational process due to it
variable cost. Variable cost that affect this money is premium cost for cash in safe and cash in
transit. Another cost is overnight charge.
The waste in operational cost might seems small for company as big as PT Bank Mandiri
Tbk, but still, it's a huge cash compare to small/medium enterprise. This amount of money can
be invest in another profitable area rather than wasted in ATM. That's why the manager ask
me to find the solution to save this money.
First of all, I need to collect relevant and reliable data about the ATM. Then I analyze these
collected data with simple forecasting and solver . After that, I manage to find out which part
can be optimize.
After finding which part can be optimized, the next question is how? The answer rely on
looking through company policy. If they already put the policy to manage this kind of
problem, then I just follow the instruction. If they aren't, then a bit of improvisation might do
the magic.

1

1. CHAPTER I
INTRODUCTION

As one of the biggest bank in Indonesia, Bank Mandiri (Tbk) has to deal with a large
amount of money. This include the one delivered from one place into another. This
transported money face some risk, like robbery or damaged over transportation process.
To reduce the risk, Bank Mandiri (Tbk) appoint some insurance company to take the risk,
and Bank Mandiri (Tbk) pay some amount of money (known as insurance premium) for
this service.
My object in this internship, is to find out how to reduce the amount of money Bank
Mandiri (Tbk) has to pay each month for insurance company. Whether by finding
insurance company that offer the lowest premium, or by optimize the amount of money
Bank Mandiry (Tbk) has to transported.

1.1. Company Profile
1

Bank Mandiri was formed on October 2, 1998 as part of the Government of Indonesia's
bank restructuring program. In July 1999, four state-owned banks - Bank Bumi Daya,
Bank Dagang Negara, Bank Ekspor Impor Indonesia and Bank Pembangunan Indonesia
amalgamated to become Bank Mandiri. Each of the four legacy banks played an integral
and essential role in the development of the Indonesian economy. Today, Bank Mandiri
continues the more than 140-year tradition of contributing to the banking industry and the
Indonesian economy.
Immediately following the merger, Bank Mandiri embarked on a comprehensive process
of consolidation. Among the first steps were to close 194 branches that were in proximity
to each other, and to reduce the number of Mandiri employees from 26,600 to 17,620.
The Bank Mandiri brand was rolled out across the entire network through an advertising
and promotional campaign. In addition, Bank Mandiri successfully implemented its new,
integrated core banking system to replace the core banking systems of the four legacy
banks.
From the year 2000 through 2004, Bank Mandiri's performance remained on a
continuously upward trajectory, as shown by an increase in profit from Rp 1.18 trillion in

1
http://www.bankmandiri.co.id/english/corporate01/about_profile.asp
2

2000 to Rp 5.3 trillion in 2004. In addition, Bank Mandiri also marked an important
milestone on July 14, 2003 by successfully conducting an initial public offering of 20%
of its shares (4 billion shares).
In 2005, Bank Mandiri encountered a number of setbacks that resulted in a decline in
profitability. One of these setbacks was a rise in non-performing loans, as shown by an
increase in the net consolidated Non Performing Loan (NPL) ratio from 1.60% in 2004 to
15.34% in 2005. This had a direct and dramatic impact on the bank's profit, which
slumped by 80% from Rp 5.3 trillion in 2004 to Rp 603 billion in 2005. In response, the
bank's share price slid from Rp 2,050 in January 2005 to Rp 1,110 in November 2005.
The year 2005 marked a turning point for Bank Mandiri when it resolved to focus on
becoming a Regional Champion Bank. To do so, the Bank formulated a comprehensive
Transformation Program consisting of four principal strategies, namely:
1. The inculcation of a new corporate culture through performance-based organizational
restructuring, overhaul of the existing performance-based evaluation system,
development of leadership and talent, and training and hiring staff to meet strategic
needs.
2. Aggressive containment of Non-Performing Loans, with emphasis on the resolution
of toxic loans and strengthening of the risk management system.
3. Accelerating business expansion so as to exceed average market growth through
distinctive strategies and value propositions in each segment.
4. Developing alliances between directorates and business units so as to optimize
customer service, and explore all available business opportunities related to existing
customers and their value chains.
In order to achieve its goal of becoming a Regional Champion Bank, Bank Mandiri
conducted its Transformation Program in three phases, namely:
1. Phase One "Back on Track" (2006-2007): During this phase, the focus was placed
on restructuring and laying the foundations for Bank Mandiri's future growth;
2. Phase Two "Outperform the Market" (2008-2009): During this period, the emphasis
was on expanding the Bank's business to ensure significant growth in all segments
and a level of profitability that exceeded the market average;
3. Phase Three "Shaping the End Game" (2010): During this phase, Bank Mandiri
aims to become a Regional Champion Bank, through the consolidation of the
3

financial services business and emphasis on strategic non-organic growth
opportunities. This includes the strengthening of subsidiaries' performance and
acquisition of a bank or other financial company that can create added-value to Bank
Mandiri.
The changes brought about by the Transformation Program between 2005 and 2010 have
resulted in a consistent strengthening of Bank Mandiri's performance, as reflected by
various financial parameters. Non-performing loans fell significantly, as shown by a
decline in the net consolidated NPL ratio from 15.34% in 2005 to 0.62% in 2010, while
the Bank's net profit soared from Rp 0.6 trillion in 2005 to Rp 9.2 trillion in 2010.
In line with the transformation of its business, Bank Mandiri has also undergone a
cultural transformation based on a reformulation and reinvigoration of its key values. In
doing so, the Bank identified five core corporate cultural values, which are conveniently
referred to by the acronym "TIPCE", which stands for Trust, Integrity, Professionalism,
Customer Focus and Excellence.
Bank Mandiri significantly improved its level of quality in providing service to its
customers. For sixconsecutive years (2007, 2008, 2009, 2010, 2011 and 2012), Bank
Mandiri has been named a service leader among domestic banks based on a Marketing
Research Indonesia (MRI) survey. In addition, the Bank's achievements in instituting
good corporate governance have also been widely recognized.
Bank Mandiri's consistently improving performance has elicited a positive response from
investors, as shown by a significant increase in the Bank's share price from a nadir of Rp
1,110 on November 16, 2005 to Rp 7,850 at December 31, 2013. Within a period of less
than nine years, Bank Mandiri's market capitalization soared eight-fold from only Rp
21.8 trillion to Rp 183.2 trillion.
Bank Mandiri is now embarked on the second stage of its transformation process for the
2010-2014 period, during which time the Bank has revitalized its vision "To be
Indonesia's most admired and progressive financial institution." Based on this vision, by
2014 Bank Mandiri intends to achieve a market capitalization of Rp 225 trillion, a market
revenue share of 16%, a ROA of around 2.5%, and an ROE of around 25%, while at the
same time maintaining asset quality as reflected in a gross NPL ratio of under 4%. By the
end of 2014, Bank Mandiri is determined to be among the Top 5 banks in ASEAN, while
4

by 2020 Bank Mandiri expects to be among the Top 3 in ASEAN in terms of market
capitalization, and to be a major regional player.
In order to realize this vision, Bank Mandiri's business transformation during the 2010-
2014 period will focus on the following three business areas:
1. Wholesale Transaction: Bank Mandiri is consolidating its leadership position by
offering comprehensive financial transaction solutions and developing a holistic
relationship approach in serving its corporate and commercial customers in Indonesia.
2. Retail Deposit & Payment: Bank Mandiri is determined to become the consumer's
bank of choice in the retail deposit market by providing a unique and superior
banking experience.
3. Retail Financing: Bank Mandiri's goal is to become the No. 1 or 2 bank in the retail
financing segment by leading in the mortgage, personal loan, and credit card markets,
and by becoming a major player in the micro banking segment.
Besides focusing on these three strategic areas, Bank Mandiri is also strengthening its
organizational structure and infrastructure (branch, IT, operations, risk management) to
provide more integrated service solutions. In seeking to achieve its goals, Bank Mandiri
benefits from the support of its human resources, technology, prudential risk
management, and good corporate governance.
One of the key milestones towards realizing Bank Mandiri's vision during the second
stage of the transformation process was the successful completion of a rights issue in
February 2011 to strengthen our capital base. And as of full year 2013, the Bank's total
equity has reached Rp 88.8 trillion to become the first bank in Indonesia to win the title
of International Bank according to the Indonesian Banking Architecture criteria. Mandiri
is the largest financial institutions in Indonesia with assets of Rp 733.1 trillion, the largest
lender with loans outstanding of Rp 472.4 trillion, and the largest depository with Rp
556.3 trillion in third party funds. Bank Mandiri maintains strong asset quality, as the
gross and net NPL ratio's stand at 1.90% and 0.58% respectively.
As of the full year 2013, Bank Mandiri employed 33,982 employees and operates 2,050
branches across Indonesia and 6 overseas branches/representatives offices/subsidiaries. In
addition, Bank Mandiri has a network of more than 230,000 Electronic Data Capture
units as well as various and comprehensive electronic channels which include Mandiri
Mobile, Internet Banking, SMS Banking and Call Center 14000. Bank Mandiri is well
5

supported by its six subsidiaries operating in shariah banking, capital market, multi
finance, life insurance, general insurance, as well as a niche bank focusing in the micro
lending segment.

1.2. Scope of work
2

Graph I-1: Organizational Structure That Affect E-Channel
The scope of work for this internship is E-Channel, especially in ATM domain.

1.3. Objective of the internship
Goal of this internship is to
1. To learn the business process of PT Bank Mandiri Tbk as a whole and specifically the
ATM cash replenishment process
2. To learn the business ethic and enjoy the atmosphere within the company
3. Help the company to maximize their profit by doing some optimization in cash
replenishment process

2
http://ir.bankmandiri.co.id/phoenix.zhtml?c=146157&p=irol-structure
President Director
Deputy President Director
Institutional
Banking
Corporate
Banking
Commercial &
BUsiness
Banking
Micro & Retail Banking
Distribution Network I
Kanwil VI Bandung
Deputy Regional Manager 1
Business Development Manager
Merchant Business
Head
E-Channel Head
Business
Development /
Marketing Officer
Deputy Regional
Manager 2
Consumer
Finance
6

2. CHAPTER II
BUSINESS ANALYSIS

2.1. Theoretical Framework
As a company, PT Bank Mandiri Tbk burdened by some variable cost. Variable cost
itself meant a corporate expense that varies with production output. Variable costs are
those costs that vary depending on a company's production volume; they rise as
production increases and fall as production decreases.
3

There's a lot of variable cost that the bank has to fulfill each year, month, or even day.
But specifically for ATM operation inside the E-Channel division, they burdened with
these variable cost:
2.1.1. Insurance Premium
The specified amount of payment required periodically by an insurer to provide
coverage under a given insurance plan for a defined period of time. The premium is
paid by the insured party to the insurer, and primarily compensates the insurer for
bearing the risk of a payout should the insurance agreement's coverage be required.
4

2.1.2. Cash In Safe
Cash in Safe is money which already considered secure in a safe, the code to which
only the authorize user know
5

They usually cover the money as long as:
1. The safe must be placed inside the building
2. The safe must be reinforced inside the building
3. The amount of money in the safe shall always correspond to that stated in the
insurance policy.
2.1.3. Cash In Transit
Cash-in-transit (CIT) or Cash/valuables-in-transit (CVIT) is the physical transfer of
banknotes, coins and items of value from one location to another. The locations
include cash centers and bank branches, ATM points, large retailers and other
premises holding large amounts of cash.
6

3
http://www.investopedia.com/terms/v/variablecost.asp
4
http://www.investopedia.com/terms/p/premium.asp
5
http://www.illyriainsurance.com/?page=2,94
6
http://en.wikipedia.org/wiki/Cash-in-transit
7

They usually cover the money as long as:
1. Money must be transported in armored vehicles
2. Money must be placed inside special bags for transit
3. Money should be escorted either by armed guards or by a specialized company
that meet the criteria for cash transit.
2.1.4. Over Night Rate
Over Night rate is the interest rate at which a depository institution lends funds to
another depository institution (short-term), or the interest rate the central bank charges
a financial institution to borrow money overnight. The overnight rate is the lowest
available interest rate, and as such, it is only available to the most creditworthy
institutions.
7

In this report, overnight rate act more like opportunity cost that the bank has to pay for
putting their money in ATM, because I presume that Bank Mandiri has no cash of
their own and need to lend it from central bank. This assumption been made since I
can't get my hand on how much money PT Bank Mandiri Tbk has.
2.1.5. Vendor
Vendor is 3rd party hired by the bank to do several task and get some fee from doing
so. Vendor fee is the amount of money that Bank Mandiri has to pay for their service,
their main service as outsourcer is to do cash replenishment and 1st level maintenance
for each ATM. If they fail to maintain good performance, there'll be some penalty for
them.
2.1.6. ATM Capacity
At their maximum capacity, each ATM machine can consist 4 cassette, and each
cassette can consist 2500 piece of money. But older machine only can consist 2000
piece of money for each cassette. Even though the ATM capacity can consist 8000 to
10000 piece of money, most ATM don't filled at their peak capacity, but only at
Replenishment Limit which already set up by the bank.

7
www.investopedia.com/terms/o/overnightrate.asp
8

2.2. Methodology
2.2.1. Methodology used to collect data
1. Searching information through the internet by using reliable site
Most of my information come from reliable source for business administration
(such as Wikipedia and Investopedia) and government's site (such as Bank
Mandiri and Bank Indonesia).
2. Asking the data directly to people who in charge for each data
I got most of my quantitative data from person in PT Bank Mandiri Tbk and PT
Usaha Gedung Mandiri. Since some data are confidential, the made up on indicate
by underline.
2.2.2. Methodology used for data analysis
1. Causal/econometric forecasting methods
8

Some forecasting methods try to identify the underlying factors that might
influence the variable that is being forecast. For example, including information
about climate patterns might improve the ability of a model to predict umbrella
sales. Forecasting models often take account of regular seasonal variations. In
addition to climate, such variations can also be due to holidays and customs: for
example, one might predict that sales of college football apparel will be higher
during the football season than during the off season.
Several informal methods used in causal forecasting do not employ strict
algorithms, but instead use the judgment of the forecaster. Some forecasts take
account of past relationships between variables: if one variable has, for example,
been approximately linearly related to another for a long period of time, it may be
appropriate to extrapolate such a relationship into the future, without necessarily
understanding the reasons for the relationship.
For this report, I simply add new number and forecast the outcome (whether it'll be
more profitable or not)
2. Solver
9

A solver is a generic term indicating a piece of mathematical software, possibly in
the form of a stand-alone computer program or as a software library, that 'solves' a
mathematical problem. A solver takes problem descriptions in some sort of generic

8
http://en.wikipedia.org/wiki/Forecasting#Causal_.2F_econometric_forecasting_methods
9
http://en.wikipedia.org/wiki/Solver
9

form and calculate their solution. In a solver, the emphasis is on creating a program
or library that can easily be applied to other problems of similar type.
For this report, I use the one which already provided by microsoft excel

2.3. Finding & Analysis
2.3.1. Cash in Safe
The amount of Cash in Safe in month X is:
NO. DATE INSURED (IDR) DESCRIPTION
1 1 IDR 12,437,000,000
2 2 IDR 12,557,750,000
3 3 IDR 12,263,700,000
4 4 IDR 17,162,000,000
5 5 IDR 39,829,050,000
6 6 IDR 27,671,100,000
7 7 IDR 19,830,300,000
8 8 IDR 14,103,050,000
9 9 IDR 10,614,800,000
10 10 IDR 11,611,800,000
11 11 IDR 14,160,300,000
12 12 IDR 35,472,500,000
13 13 IDR 27,868,300,000
14 14 IDR 20,050,250,000
15 15 IDR 15,191,350,000
16 16 IDR 13,062,700,000
17 17 IDR 12,993,650,000
18 18 IDR 13,847,800,000
19 19 IDR 31,941,350,000
20 20 IDR 24,795,400,000
21 21 IDR 17,499,300,000
22 22 IDR 14,316,000,000
23 23 IDR 13,861,800,000
24 24 IDR 13,980,050,000
25 25 IDR 14,868,500,000
26 26 IDR 38,744,650,000
27 27 IDR 28,973,850,000
28 28 IDR 18,947,600,000
29 29 IDR 14,336,700,000
30 30 IDR 13,835,950,000
TOTAL IDR 576,828,550,000
10

NO. DATE INSURED (IDR) DESCRIPTION
Daily average CIS IDR 19,227,618,333
Table II-1 : CIS in month X
Cash In Safe premium for several insurance company. Declaration letter of CIS
insurance can be seen in appendix.
INSURANCE COMPANY PREMIUM
Man-Mountain & Company LTD
10
0.5%
Asuransi.biz
11
0.40%
Asuransi Staco Mandiri 0.45% (made up)
Table II-2 : CIS premium in month X
For month X alone, Bank Mandiri Tbk has to pay IDR 2,595,728,475 as insurance
premium.
2.3.2. Cash in Transit
The amount of Cash in Transit in month X is:
Date No
Transit Amount of Insured (IDR)
From To Delivered money ATM return money
1
1 Bank Mandiri Jl.Asia Afrika CPC PT UGM Jl.Braga 133 IDR 15,350,000,000 IDR 0
2 CPC PT UGM Jl.Braga 133 Bank Mandiri Jl.Asia Afrika IDR 9,170,400,000 IDR 0
3 CPC PT UGM Jl.Braga 133 ATM Bank Mandiri IDR 12,650,000,000 IDR 2,087,000,000
2
3
4
5
6
1 Bank Mandiri Jl.Asia Afrika CPC PT UGM Jl.Braga 133 IDR 0 IDR 0
2 CPC PT UGM Jl.Braga 133 Bank Mandiri Jl.Asia Afrika IDR 0 IDR 0
7

10
manmountainltd.com/insurance.asp?id=2
11
http://asuransi.biz/118/asuransi-cash-in-safe/
11

Date No
8
9
10
11
12
13
14
15
16
17
18
19
20
12

Date No
21
22
23
24
25
26
27
28
29
30
31
3 CPC PT UGM Jl.Braga 133 ATM Bank Mandiri IDR 0 IDR 0

TOTAL

782,766,800,000 81,182,350,000

GRAND TOTAL

863,949,150,000

Daily average CIT

27,869,327,419
Table II-3 : CIT in month X
13

Since PT UGM must do 3 type of transit, total money of CIT must be bigger than
replenishment money. Declaration letter of CIT insurance can be seen in appendix.
Cash In Transit premium for several insurance company
INSURANCE COMPANY PREMIUM
Man-Mountain & Company LTD 1%
Asuransi.biz 0.25%
Berdikari Insurance 0.15%
Asuransi Staco Mandiri 0.20% (made up)
Table II-4 : CIT premium in month X
For month X alone, Bank Mandiri Tbk has to pay IDR 1,727,898,300 as insurance
premium.
2.3.3. Vendor
PT Bank Mandiri Tbk use one of his subsidiary as a 3rd party. The name is PT Usaha
Gedung Mandiri (abbreviate as PT UGM). PT UGM manage 99 ATM for month X,
and their fee rate is
Rp
2.395.455 per ATM per month. Which meant that PT UGM can
receive up to
Rp
237,150,045. This fee valid for 12 month, unless there'is any further
announcement.
For penalty itself, it depends on their performance. The calculation can be seen below:

Table II-5 : Penalty
Note:
1. down time is the amount of time that ATM can't be use
2. up time is the amount of time that ATM can be use
14

Aside from up time and down time, vendor must maintain the idle cash number (left
over cash / cash replenishment) is less than 25%.
Vendor itself obligate to do replenishment about 12 times a month, or 2-3 times per
week. If the number don't match, then:
1. Less than 12 meaning that the ATM maximum capacity must be reduce, or
maybe displace the ATM at that area
2. More than 12 meaning that the ATM capacity must be increase, or maybe add
new ATM at the same area
This is the amount of replenishment been done by PT UGM at month X
NO LOCATION
Cash
Replenishment
Cash Left
Over
Idle Cash
Replenish
Time
1 BDG ID PT POS 3,100,000,000 750,150,000 24.20% 8
2 BDG RS BORROMEUS 2,750,000,000 407,150,000 14.81% 11
3 BDG SM PREMIER 2,650,000,000 796,650,000 30.06% 7
4 BDG MM SETIABUDI 1,900,000,000 452,900,000 23.84% 8
5 BDG TK TOGAMAS I 3,850,000,000 493,700,000 12.82% 10
6 BDG PR RUMDIN CIJAGRA 4,000,000,000 536,500,000 13.41% 10
7 BDG PEGADAIAN PUNGKUR 2,850,000,000 460,800,000 16.17% 11
8 BDG ITB 1,600,000,000 570,750,000 35.67% 4
9 BDG ELECTRONIC CTR3 4,000,000,000 1,082,600,000 27.07% 8
10 BDG ML BIP-1 2,800,000,000 1,106,800,000 39.53% 7
11 BDG ML BIP-2 4,800,000,000 987,200,000 20.57% 12
12 BDG TK GRAMEDIA 2,800,000,000 785,550,000 28.06% 7
13 BDG ELECTRONIC CTR2 3,600,000,000 1,151,750,000 31.99% 9
14 BDG ML BIP-3 3,200,000,000 773,550,000 24.17% 8
15 BDG ML BIP-4 2,800,000,000 767,000,000 27.39% 7
16 BDG SM YOGYA SUNDA 4,000,000,000 985,950,000 24.65% 10
17 BDG SC UNISBA 2,400,000,000 747,600,000 31.15% 6
18 BDG SM SUPERINDO DAGO 3,200,000,000 866,150,000 27.07% 8
19 BDG ML BEC 9,500,000,000 3,362,800,000 35.40% 12
20 BDG RIAU JUNCTION 4,400,000,000 1,152,600,000 26.20% 11
21 BDG HT SAVOY HOMANN 1,950,000,000 387,200,000 19.86% 8
22 BDG DUKOMSEL-1 4,300,000,000 1,115,400,000 25.94% 9
23 BDG DUKOMSEL-2 1,400,000,000 373,500,000 26.68% 6
24 BDG DUKOMSEL-3 500,000,000 199,000,000 39.80% 2
25 BDG PREMIER CIUMBULEUIT 3,200,000,000 1,036,500,000 32.39% 8
26 BDG CB MARTADINATA 7 3,750,000,000 1,181,500,000 31.51% 8
27 BDG PT STBA YAPARI 2,650,000,000 747,050,000 28.19% 7
15

NO LOCATION
Cash
Replenishment
Cash Left
Over
Idle Cash
Replenish
Time
29 BDG PR DINAS MANDIRI 3,200,000,000 741,700,000 23.18% 8
30 BDG INST TEK HARAPAN BANGSA 4,000,000,000 669,450,000 16.74% 10
32 BDG SPBU MARTADINATA 3,200,000,000 729,500,000 22.80% 8
33 BDG AM DIPATI UKUR 4,500,000,000 1,330,900,000 29.58% 8
34 BDG BANDUNG SUPERMAL 5,400,000,000 1,414,600,000 26.20% 10
35 BDG SOEKARNO HATTA-7 400,000,000 695,600,000 173.90% 1
36 BDG SM TOSERBA BUAH BATU 3,600,000,000 808,050,000 22.45% 9
37 BDG PB PRIMKOP SESKO 12,300,000,000 2,825,600,000 22.97% 16
38 BDG GD GEDUNG ABG 4,000,000,000 857,200,000 21.43% 10
39 BDG MMC BUAH BATU 4,000,000,000 1,177,100,000 29.43% 10
40 BDG ITC KEBON KALAPA 5,200,000,000 922,900,000 17.75% 13
41 BDG CB HUB AA UTARA 2,650,000,000 598,700,000 22.59% 7
42 BDG D-THRU AA UTARA 9,600,000,000 3,184,500,000 33.17% 12
43 BDG TK KING CENTRE 6,000,000,000 956,300,000 15.94% 15
44 BDG PT LANGLANG BUANA 3,800,000,000 286,700,000 7.54% 10
45 BDG YOGYA DEPT STR KEPATIHAN 3,600,000,000 1,235,600,000 34.32% 6
46 BDG TK PARIS VAN JAVA-1 3,700,000,000 648,600,000 17.53% 10
49 BDG CIWALK-2 1,950,000,000 361,300,000 18.53% 6
50 SPBU DAGO 7,100,000,000 2,148,900,000 30.27% 12
51 BDG DRIVE THRU SETIABUDI 5,800,000,000 1,216,900,000 20.98% 12
52 BDG D-THRU MARTADINATA 7,900,000,000 1,358,000,000 17.19% 9
53 BDG D-THRU BANDUNG BRAGA 6,700,000,000 1,093,200,000 16.32% 12
54 BDG CIHAMPELAS WALK-4 1,500,000,000 398,600,000 26.57% 6
55 BDG ML CIHAMPELAS WALK 1,950,000,000 421,850,000 21.63% 8
56 BDG SPBU MARANATHA 3,200,000,000 172,650,000 5.40% 8
57 BDG SPBU LASWI 4,300,000,000 1,172,100,000 27.26% 9
58 BDG SPBU A. YANI 2,900,000,000 619,500,000 21.36% 9
59 BDG SPBU GATSU 2,200,000,000 473,600,000 21.53% 9
60 BDG SPBU WASTU KENCANA 3,400,000,000 803,900,000 23.64% 9
61 BDG SPBU RAJAWALI 2,250,000,000 541,450,000 24.06% 9
62 BDG SPBU 34-40237 SUKAT 5,200,000,000 943,100,000 18.14% 13
63 BDG TELKOM SUPRATMAN 2,000,000,000 424,250,000 21.21% 9
64 BDG SUPERINDO RAMDAN 1,500,000,000 327,000,000 21.80% 7
65 BDG RSHS 2,050,000,000 308,600,000 15.05% 9
66 BDG GRIYA JOGYA PASTEUR 1,950,000,000 691,250,000 35.45% 8
67 BDG INDOMART JEND.SUDIRMAN 1,300,000,000 261,300,000 20.10% 6
16

NO LOCATION
Cash
Replenishment
Cash Left
Over
Idle Cash
Replenish
Time
68 BDG INDOMART KARAPITAN 1,700,000,000 258,550,000 15.21% 8
69 BDG INDOMART A.YANI 1,800,000,000 388,600,000 21.59% 8
70 BDG CIPAGANTI RENT CAR 850,000,000 305,750,000 35.97% 4
71 BDG MANDIRI TUNAS FINANCE 3,500,000,000 613,600,000 17.53% 16
72 BDG SPBU COCO KIRCON 3,150,000,000 563,700,000 17.90% 14
73 BDG SB MART CIJAURA 2,750,000,000 399,400,000 14.52% 12
74 BDG INDOMART CISARENTEN 2,800,000,000 414,050,000 14.79% 13
75 BDG IBCC 3,100,000,000 641,900,000 20.71% 14
76 BDG PASAR SEGAR TKI 2,200,000,000 295,400,000 13.43% 10
77 BDG RS LIMIJATI 800,000,000 250,050,000 31.26% 4
78 BDG BORMA LEMBANG 1,500,000,000 229,650,000 15.31% 7
79 BDG GRIYA JOGYA UJUNG BERUNG 2,450,000,000 414,850,000 16.93% 11
80 BDG BORMA TKI 2,950,000,000 547,800,000 18.57% 13
81 BDG KK GATSU 2,250,000,000 599,350,000 26.64% 6
82 BDG KK A. YANI 3,200,000,000 919,650,000 28.74% 8
83 BDG SC ITB 4,000,000,000 934,500,000 23.36% 10
84 BDG RS HASAN SADIKIN-2 5,700,000,000 1,232,600,000 21.62% 11
85 BDG HT ASTON PASTEUR 1,200,000,000 358,650,000 29.89% 5
86 BDG RS HASAN SADIKIN 2,400,000,000 465,300,000 19.39% 10
87 BDG RSHS PARAHYANGAN 2,400,000,000 503,250,000 20.97% 10
88 BDG RS BIOFARMA 3,350,000,000 452,900,000 13.52% 13
89 BDG BD HUSEIN 5,600,000,000 852,100,000 15.22% 14
90 BDG PAJAJARAN 6 1,500,000,000 420,100,000 28.01% 6
91 BDG KCP PAJAJARAN-1 8,900,000,000 1,494,400,000 16.79% 17
92 BDG KCP PAJAJARAN-2 2,450,000,000 654,650,000 26.72% 10
93 BDG OC GEDUNG PTMB 3,450,000,000 504,150,000 14.61% 14
94 BDG SC UNIKOM 1,850,000,000 196,900,000 10.64% 8
95 BDG TK KARTIKA SARI DAGO 2,750,000,000 696,600,000 25.33% 11
96 BDG ML GIANT H POINT PSTR 3,250,000,000 650,150,000 20.00% 13
97 BDG RS CICENDO 3,000,000,000 599,350,000 19.98% 13
98 BDG PASAR BARU 2,150,000,000 236,400,000 11.00% 10
99 BDG INDOMART SRIWIJAYA 2,250,000,000 375,100,000 16.67% 10
Total 342,050,000,000 77,654,200,000

Average 24.23% 9
Table II-6 : Replenishment and idle cash
As we can see, the average number of idle cash is 24.23% and replenish time is 9.
That number is still below the company standard, which indicate that the vendor
already done a good job at month X
17

2.3.4. Over Night Rate
Overnight rate for month X
12
is:
Date Overnight (%) 1 Week (%) 1 Month (%) 3 Months (%) 6 Months (%) 12 Months (%)
1 4.1800 4.2800 4.5986 4.9000 5.1914 5.5000
2 4.1800 4.2800 4.5993 4.9000 5.1950 5.5000
3 4.1800 4.2800 4.5993 4.9000 5.1964 5.5000
4 4.1800 4.2800 4.5986 4.9000 5.1971 5.5000
5 4.1800 4.2800 4.5986 4.9000 5.1979 5.5000
8 4.1800 4.2800 4.5971 4.9000 5.1993 5.5000
9 4.1800 4.2800 4.5971 4.9000 5.1993 5.5000
10 4.1800 4.2800 4.5964 4.9000 5.1993 5.5000
11 4.1800 4.2800 4.5971 4.9000 5.1986 5.5000
12 4.1800 4.2800 4.5907 4.9000 5.1986 5.5000
15 4.1800 4.2800 4.5900 4.9000 5.1993 5.5000
16 4.1800 4.2800 4.5893 4.9000 5.1993 5.5000
17 4.1800 4.2800 4.5893 4.9000 5.1993 5.5000
18 4.1800 4.2800 4.5893 4.9000 5.1993 5.5000
19 4.1800 4.2800 4.5900 4.9000 5.1993 5.5000
22 4.1800 4.2800 4.5893 4.9000 5.2000 5.5000
23 4.1786 4.2800 4.5907 4.9000 5.2000 5.5000
24 4.1786 4.2800 4.5821 4.9000 5.2000 5.5000
25 4.1779 4.2800 4.5786 4.9000 5.2000 5.5000
26 4.1750 4.2786 4.5779 4.9000 5.2000 5.5000
29 4.1757 4.2800 4.5807 4.9000 5.2000 5.5000
30 4.1757 4.2800 4.5779 4.9000 5.2000 5.5000
Table II-7 : Overnight rate for month X
Since the charge vary, I'll just use the average of overnight charge, which is 4.1792%.
That number still must be divide into the number of working day at year 2013, which
is around 243 days.
13
So, Bank Mandiri has to pay as much as:
REPLENISHMENT PER MONTH OVERNIGHT CHARGE (%) OVERNIGHT CHARGE (IDR)
342,050,000,000 0.017198354% 58,826,970
Table II-8 : Overnight charge for month X
2.3.5. ATM Capacity
Capacity for each ATM that PT UGM has to maintain is
NO LOCATION Denom
Replenishment
Limit
Average
Replenishment
Deviation
1 BDG ID PT POS 50,000 400,000,000 387,500,000 12,500,000

12
www.bi.go.id/en/moneter/jibor/data-historis/Default.aspx
13
www.menpan.go.id/berita-terkini/681-tahun-2013-libur-nasional-14-hari-cuti-bersama-5-hari
18

NO LOCATION Denom
Replenishment
Limit
Average
Replenishment
Deviation
2 BDG RS BORROMEUS 50,000 250,000,000 250,000,000 -
3 BDG SM PREMIER 50,000 400,000,000 378,571,429 21,428,571
4 BDG MM SETIABUDI 50,000 250,000,000 237,500,000 12,500,000
5 BDG TK TOGAMAS I 50,000 250,000,000 385,000,000 (135,000,000)
6 BDG PR RUMDIN CIJAGRA 50,000 250,000,000 400,000,000 (150,000,000)
7 BDG PEGADAIAN PUNGKUR 50,000 250,000,000 259,090,909 (9,090,909)
8 BDG ITB 50,000 400,000,000 400,000,000 -
9 BDG ELECTRONIC CTR3 50,000 500,000,000 500,000,000 -
10 BDG ML BIP-1 50,000 400,000,000 400,000,000 -
11 BDG ML BIP-2 100,000 400,000,000 400,000,000 -
12 BDG TK GRAMEDIA 50,000 400,000,000 400,000,000 -
13 BDG ELECTRONIC CTR2 50,000 400,000,000 400,000,000 -
14 BDG ML BIP-3 50,000 400,000,000 400,000,000 -
15 BDG ML BIP-4 50,000 400,000,000 400,000,000 -
16 BDG SM YOGYA SUNDA 50,000 400,000,000 400,000,000 -
17 BDG SC UNISBA 50,000 400,000,000 400,000,000 -
18 BDG SM SUPERINDO DAGO 50,000 400,000,000 400,000,000 -
19 BDG ML BEC 100,000 1,000,000,000 791,666,667 208,333,333
20 BDG RIAU JUNCTION 50,000 400,000,000 400,000,000 -
21 BDG HT SAVOY HOMANN 50,000 250,000,000 243,750,000 6,250,000
22 BDG DUKOMSEL-1 100,000 500,000,000 477,777,778 22,222,222
23 BDG DUKOMSEL-2 50,000 250,000,000 233,333,333 16,666,667
24 BDG DUKOMSEL-3 50,000 250,000,000 250,000,000 -
25 BDG PREMIER CIUMBULEUIT 100,000 400,000,000 400,000,000 -
26 BDG CB MARTADINATA 7 50,000 500,000,000 468,750,000 31,250,000
27 BDG PT STBA YAPARI 50,000 400,000,000 378,571,429 21,428,571
28 BDG CB MARTADINATA 2 50,000 500,000,000 465,000,000 35,000,000
29 BDG PR DINAS MANDIRI 50,000 400,000,000 400,000,000 -
30 BDG INST TEK HARAPAN BANGSA 50,000 400,000,000 400,000,000 -
31 BDG CB MARTADINATA 8 100,000 500,000,000 607,142,857 (107,142,857)
32 BDG SPBU MARTADINATA 50,000 400,000,000 400,000,000 -
33 BDG AM DIPATI UKUR 100,000 1,000,000,000 562,500,000 437,500,000
34 BDG BANDUNG SUPERMAL 50,000 500,000,000 540,000,000 (40,000,000)
35 BDG SOEKARNO HATTA-7 100,000 500,000,000 400,000,000 100,000,000
36 BDG SM TOSERBA BUAH BATU 50,000 400,000,000 400,000,000 -
37 BDG PB PRIMKOP SESKO 100,000 800,000,000 768,750,000 31,250,000
38 BDG GD GEDUNG ABG 50,000 400,000,000 400,000,000 -
39 BDG MMC BUAH BATU 100,000 400,000,000 400,000,000 -
40 BDG ITC KEBON KALAPA 50,000 400,000,000 400,000,000 -
19

NO LOCATION Denom
Replenishment
Limit
Average
Replenishment
Deviation
41 BDG CB HUB AA UTARA 50,000 400,000,000 378,571,429 21,428,571
42 BDG D-THRU AA UTARA 100,000 1,000,000,000 800,000,000 200,000,000
43 BDG TK KING CENTRE 100,000 400,000,000 400,000,000 -
44 BDG PT LANGLANG BUANA 50,000 400,000,000 380,000,000 20,000,000
45
BDG YOGYA DEPT STR
KEPATIHAN
100,000 250,000,000 600,000,000 (350,000,000)
46 BDG TK PARIS VAN JAVA-1 50,000 250,000,000 370,000,000 (120,000,000)
49 BDG CIWALK-2 50,000 250,000,000 325,000,000 (75,000,000)
50 SPBU DAGO 100,000 800,000,000 591,666,667 208,333,333
51 BDG DRIVE THRU SETIABUDI 100,000 500,000,000 483,333,333 16,666,667
52 BDG D-THRU MARTADINATA 100,000 1,000,000,000 877,777,778 122,222,222
53 BDG D-THRU BANDUNG BRAGA 100,000 500,000,000 558,333,333 (58,333,333)
54 BDG CIHAMPELAS WALK-4 50,000 250,000,000 250,000,000 -
55 BDG ML CIHAMPELAS WALK 50,000 250,000,000 243,750,000 6,250,000
56 BDG SPBU MARANATHA 50,000 250,000,000 400,000,000 (150,000,000)
57 BDG SPBU LASWI 100,000 500,000,000 477,777,778 22,222,222
58 BDG SPBU A. YANI 100,000 300,000,000 322,222,222 (22,222,222)
59 BDG SPBU GATSU 50,000 250,000,000 244,444,444 5,555,556
60 BDG SPBU WASTU KENCANA 50,000 250,000,000 377,777,778 (127,777,778)
61 BDG SPBU RAJAWALI 50,000 250,000,000 250,000,000 -
62 BDG SPBU 34-40237 SUKAT 100,000 250,000,000 400,000,000 (150,000,000)
63 BDG TELKOM SUPRATMAN 50,000 250,000,000 222,222,222 27,777,778
64 BDG SUPERINDO RAMDAN 50,000 250,000,000 214,285,714 35,714,286
65 BDG RSHS 50,000 250,000,000 227,777,778 22,222,222
66 BDG GRIYA JOGYA PASTEUR 50,000 250,000,000 243,750,000 6,250,000
67 BDG INDOMART JEND.SUDIRMAN 50,000 250,000,000 216,666,667 33,333,333
68 BDG INDOMART KARAPITAN 50,000 250,000,000 212,500,000 37,500,000
69 BDG INDOMART A.YANI 50,000 250,000,000 225,000,000 25,000,000
70 BDG CIPAGANTI RENT CAR 50,000 250,000,000 212,500,000 37,500,000
71 BDG MANDIRI TUNAS FINANCE 50,000 250,000,000 218,750,000 31,250,000
72 BDG SPBU COCO KIRCON 50,000 250,000,000 225,000,000 25,000,000
73 BDG SB MART CIJAURA 50,000 250,000,000 229,166,667 20,833,333
74 BDG INDOMART CISARENTEN 50,000 250,000,000 215,384,615 34,615,385
75 BDG IBCC 50,000 250,000,000 221,428,571 28,571,429
76 BDG PASAR SEGAR TKI 50,000 250,000,000 220,000,000 30,000,000
77 BDG RS LIMIJATI 50,000 250,000,000 200,000,000 50,000,000
78 BDG BORMA LEMBANG 50,000 250,000,000 214,285,714 35,714,286
20

NO LOCATION Denom
Replenishment
Limit
Average
Replenishment
Deviation
79
BDG GRIYA JOGYA UJUNG
BERUNG
50,000 250,000,000 222,727,273 27,272,727
80 BDG BORMA TKI 50,000 250,000,000 226,923,077 23,076,923
81 BDG KK GATSU 50,000 400,000,000 375,000,000 25,000,000
82 BDG KK A. YANI 50,000 400,000,000 400,000,000 -
83 BDG SC ITB 50,000 400,000,000 400,000,000 -
84 BDG RS HASAN SADIKIN-2 100,000 600,000,000 518,181,818 81,818,182
85 BDG HT ASTON PASTEUR 50,000 250,000,000 240,000,000 10,000,000
86 BDG RS HASAN SADIKIN 50,000 250,000,000 240,000,000 10,000,000
87 BDG RSHS PARAHYANGAN 50,000 250,000,000 240,000,000 10,000,000
88 BDG RS BIOFARMA 50,000 300,000,000 257,692,308 42,307,692
89 BDG BD HUSEIN 50,000 250,000,000 400,000,000 (150,000,000)
90 BDG PAJAJARAN 6 50,000 250,000,000 250,000,000 -
91 BDG KCP PAJAJARAN-1 100,000 600,000,000 523,529,412 76,470,588
92 BDG KCP PAJAJARAN-2 50,000 300,000,000 245,000,000 55,000,000
93 BDG OC GEDUNG PTMB 50,000 250,000,000 246,428,571 3,571,429
94 BDG SC UNIKOM 50,000 250,000,000 231,250,000 18,750,000
95 BDG TK KARTIKA SARI DAGO 50,000 250,000,000 250,000,000 -
96 BDG ML GIANT H POINT PSTR 50,000 300,000,000 250,000,000 50,000,000
97 BDG RS CICENDO 50,000 300,000,000 230,769,231 69,230,769
98 BDG PASAR BARU 50,000 250,000,000 215,000,000 35,000,000
99 BDG INDOMART SRIWIJAYA 50,000 250,000,000 225,000,000 25,000,000
Table II-9 : ATM replenishment Limit
Note:
1. Deviation is Replenishment Limit minus average replenishment
2. If deviation is close (or even) zero, it's a sign that the bank already put the right
limit
3. If deviation is bigger than zero, bank might need to reduce their ATM limit
4. If deviation is smaller than zero, there must be a mistake in administration.
Because I encounter that many ATM already approved to increase it limit, but
vendor (as 3rd party) forget to renew their report.
2.3.6. Total Variable Cost For Month X
Cash in Safe
(premi)
Cash in Transit
(premi)
Overnight Rate
(charge)
Vendor
(fee)
Total cost
2,595,728,475 1,727,898,300 58,826,970 237,150,045 4,619,603,790
Table II-10 : Total variable cost for month X
21

3. CHAPTER III
BUSINESS SOLUTION

3.1. Proposed Solution
At month X alone in 2013, PT Bank Mandiri Tbk has to bear as much as
Rp
4,619,603,790
as their variable cost. This cost is only to maintain 99 ATM in Bandung area. In all over
the country, PT Bank Mandiri Tbk has more than 10,000 ATM
14
. So the overall cost for
operating all ATM in Indonesia can reach half trillion rupiah per month. This number
must be reduced, therefore I propose several solution for it.

3.1.1. Reducing the need for paper money by using electronic money

Figure III-1 : E-Money and it predecessor
We can't reduce the need of money, but transform the money form cash base into
electronic base. This electronic cash is known as electronic money. Electronic money
is understood to be a way of storing conventional money through electronic systems,
as the original currency it was converted from, thus the value stays the same as the
original currency. This differs to digital currency which varies in value and is trade
able as a new currency and the worth of which will change over time. Electronic
money is simply storing money online, without changing it otherwise.
15
This E-Money
can only be used through EDC (Electronic Data Capture) machine
16
.

14
http://www.bankmandiri.co.id/corporate01/news-detail.asp?id=NHBK2703158
15
en.wikipedia.org/wiki/Electronic_money
16
http://en.wikipedia.org/wiki/Electronic_data_capture
22

Figure III-2 : Electronic Data Capture
This solution actually already implemented by PT Bank Mandiri Tbk
17
. But it still
reach small amount of market. Which meant that there are still plenty amount of cash
money out there. My proposed solution is more into socialize the use of E-Money.
3.1.2. Optimize the replenishment cycle by implementing new idle cash regulation
According to month X, in average of 99 ATM that managed by PT UGM, 24.23% of
money considered as idle cash. This number is smaller than the bank regulation
(which is 25%). But remember, this 24.23% idle cash still has to be insurance. So we
can say that 24.23% of our insurance (both CIS and CIT) money can be considered as
a waste.
My proposed solution is to reduce the amount of idle cash by implement new
regulation for vendor. The new regulation is the vendor has to maintain below 10%
idle cash, in exchange for increasing vendor fee.
To reduce the variable cost, both E-Money and Optimization must be implemented
together.

17
http://www.bankmandiri.co.id/article/mandiri-prabayar.asp
23

3.2. Practical Implication
Each solution, even though can be run together at once, has different implication. Their
practical implication are:
Changing from paper money into electronic money might has some implication for
the user. As for the bank itself, they has to do some valuation first. Implication for
both of them are:
1. For the bank itself, this solution will cost them a new investment. For producing
the E-Money, EDC, and marketing. They need to do valuation for this investment,
such valuation is beyond my responsibility as an intern.
Presume that PT Bank Mandiri successfully transform all cash based money into
electronic base, PT Bank Mandiri will not has to bear variable cost for operating
the ATM machine (they'll save around half trillion rupiah a month). PT Bank
Mandiri Tbk only has to bear variable cost to maintain the E-Money and EDC
(which I believe is significantly lower than the cost of ATM)
2. For the money user, this solution will ease them for doing transaction. Since in
conservative way, they must bring several cash for every transaction and
recalculate the return (if there's any) after transaction. With E-Money, they only
need to bring one simple card.
As we know, at month X, PT Bank Mandiri Tbk has to put
Rp
342,050,000,000 to
replenish 99 ATM at a month, and amongst this number, as much as
Rp
77,654,200,000
considered as idle cash. Which meant 22.7% of the replenishment is a waste (24.23%
if we average the waste of each ATM).
If we implement 10% idle cash regulation, total cost will be reduced as much as
31.36%.
Implication for Idle cash
regulation
Before implementation After Implementation
Different (%)
25% 10%

Replenishment 342,050,000,000 293,773,111,111 -14.11%
Idle Cash (IDR) 77,654,200,000 29,377,311,111.11 -62.17%
Idle Cash (%) 22.7% 10% -55.95%
Cash taken from ATM 264,395,800,000 264,395,800,000 0.00%
24

regulation
Different (%)
25% 10%

CIS 576,828,550,000 495,415,049,587 -14.11%
CIT 863,949,150,000 326,840,054,546 -62.17%

CIS premi (%) 0.45% 0.45% 0.00%
CIT premi (%) 0.20% 0.20% 0.00%
Overnight rate (%) 0.017198354% 0.017198354% 0.00%
Vendor fee/ATM 2,395,455 2,395,455 0.00%

CIS premi (IDR) 2,595,728,475 2,229,367,723 -14.11%
CIT premi (IDR) 1,727,898,300 653,680,109 -62.17%
Overnight rate (IDR) 58,826,970 50,524,139 -14.11%
Vendor fee (for 99 ATM) 237,150,045 237,150,045 0.00%

Total Cost 4,619,603,790 3,170,722,017 -31.36%

Save (IDR) - 1,448,881,773
Table III-1 : Variable cost before implementation

Tightening the idle cast (due to new regulation) will not be an easy task for vendor,
because they need to give more effort to maintain the number. Because of this
condition, I believe PT Bank Mandiri Tbk has to give more fee to encourage the
vendor. For example, let say PT Bank Mandiri Tbk increase vendor fee into 100%
(becoming
Rp
4,790,910 per ATM per month)
regulation + Increasing Vendor
Fee (100%)
Different (%)
25% 10%

Replenishment 342,050,000,000 293,773,111,111 -14.11%
Idle Cash (IDR) 77,654,200,000 29,377,311,111.11 -62.17%
Idle Cash (%) 22.7% 10% -55.95%
Cash taken from ATM 264,395,800,000 264,395,800,000 0.00%

CIS 576,828,550,000 495,415,049,587 -14.11%
CIT 863,949,150,000 326,840,054,546 -62.17%

25

regulation + Increasing Vendor
Fee (100%)
Different (%)
25% 10%
CIS premi (%) 0.45% 0.45% 0.00%
CIT premi (%) 0.20% 0.20% 0.00%
Overnight rate (%) 0.017198354% 0.017198354% 0.00%
Vendor fee/ATM 2,395,455 4,790,910 1000.00%

CIS premi (IDR) 2,595,728,475 2,229,367,723 -14.11%
CIT premi (IDR) 1,727,898,300 653,680,109 -62.17%
Overnight rate (IDR) 58,826,970 50,524,139 -14.11%
Vendor fee (for 99 ATM) 237,150,045 474,300,090 100.00%

Total Cost 4,619,603,790 3,407,872,062 -26.23%

Save (IDR) - 1,211,731,728
Table III-2 : Variable cost after implementation
According to these calculation, increasing vendor fee as much as 100% still reduce
total cost for 26.23% or
Rp
1,211,731,728 per 99ATMs per month.

3.3. Implementation Plan
Each proposed solution have their own implementation, which is:
To do this, PT Bank Mandiri Tbk need to promote their E-Money program more
intense (since they already launch it recently). Such promotion can be done through:
1. Brochure
2. Internet
3. Newspaper
4. Radio
5. Television
Other than promotion, PT Bank Mandiri Tbk need to add more partnership with every
business. Until today, PT Bank Mandiri already made partnership (for E-Money) with:
26

Figure III-3 : List of mandiri partner in E-Money application
To add another partnership, PT Bank Mandiri Tbk already made some regulation for
future partner, which is:
1. Business Profile
The business must have return at least
Rp
120 million/month
2. Account
Already has an account in Bank Mandiri or willingly to open and account. This
account must has at least
Rp
30 million/month.
3. Infrastructure
Already has a phone line. If they don't, they may use EDC GPRS and need to pay
another charge for connection.
4. Credibility
Not enlisted in MATCH (The Member Alert to Control High-risk Merchants) and
DAMI (Daftar Alert Merchant Indonesia) from AKKI (Asosiasi Kartu Kredit
Indonesia), and also not blacklisted by Bank Mandiri and Bank Indonesia
27

5. Administration and Payment
Willingly to fulfill any requirement by Bank Mandiri and pay EDC charge
Another marketing strategy such as discount for purchasing with E-Money can be
implemented too. This strategy will encourage new customer to use E-Money instead
of Cash.
To do this optimization, PT Bank Mandiri Tbk need to renew their contract with
vendor. Because this strict regulation will burden the vendor. They might need more
workforce and accommodation unit to fulfill the limit. Increasing their fee is the most
reasonable solution to cover their increasing expense.
28

4. CHAPTER IV
LESSONS LEARNED

4.1. Lesson learned from the Problem Solving
This problem solving activity proven to be beneficial for me. It enrich me with several
valuable lessons, which is:
1. Always come up with several ideas to solve the problem
Sometime when we have a problem, we tend to pick only one solution. This is
good, but actually, it'll be better if we come up with several at once. Because
with several idea, we can make test the idea with pre assumption. This activity
will lead us into getting the best idea for solving the problem..
2. Several solutions can be use at once
Relate to the first lesson, sometime we can practice several solutions at once.
Especially if implementing both at once will hasten the solving process.
3. Always make comparison between before and after implementation of solutions
This is mandatory for every proposed plan, because with this, we can imagine
how much will we gain for implementing the solution.

4.2. Lesson learned from the internship program
This report only consist my lesson about optimizing the variable cost from ATM
operation. But of course that's not the only thing I learnt from internship program.
There're several other things that I gain from the company, which is:
1. It's important to be friendly with everyone. Because when we're being close with
people, they might tell several things that they'll probably not mentioning to us if
we're not close to them.
2. I learnt about ATM design standard. This is important since ATM itself can act as
branding for the company. It must be standardize with good design to ensure the
good image from the user.
3. It's important to make clear boundaries between each responsibilities. For
example, when bank give the money into the vendor. Each party must be realize
that the responsibility already transferred from bank to vendor. So, every risk
within that money, already vendor's.
29

4. Even if we put small money in small basket, if we do it with million basket, we
have million money. This analogy made for base money that held on each card.
5. Workforce can be costly. That's why we need to reduce it from time to time.
Implementing new system or technology is always proven as the best solution to
reduce the workforce.
6. No matter what we will invest, never forget to calculate the breakeven point
(BEP). Especially in term of erecting a new ATM
7. Always refer to standard operating procedure (SOP)
8. It's important to arrange the data, even the old one which probably will never be
use in the future.
30

REFERENCES

asuransi.biz, 2014, Amount of Insurance Premium, cited July, 2014 from
http://asuransi.biz/118/asuransi-cash-in-safe/
bankmandiri.co.id, 2014, Company Profile, cited July, 2014 from
http://www.bankmandiri.co.id/english/corporate01/about_profile.asp
bankmandiri.co.id, 2014, Mandiri E-Money , cited July, 2014 from
http://www.bankmandiri.co.id/article/mandiri-prabayar.asp
bankmandiri.co.id, 2014, Number of ATM in 2013 , cited July, 2014 from
http://www.bankmandiri.co.id/corporate01/news-detail.asp?id=NHBK2703158
bankmandiri.co.id, 2014, Organization Structure , cited July, 2014 from
http://ir.bankmandiri.co.id/phoenix.zhtml?c=146157&p=irol-structure
bi.go.id, 2014, Overnight Charge , cited July, 2014 from www.bi.go.id/en/moneter/jibor/data-
historis/Default.aspx
illyriainsurance.com, 2014, Definition of Cash in Safe , cited July, 2014 from
http://www.illyriainsurance.com/?page=2,94
investopedia.com, 2014, Definition of Overnight Rate , cited July, 2014 from
www.investopedia.com/terms/o/overnightrate.asp
investopedia.com, 2014, Variable Cost , cited July, 2014 from
http://www.investopedia.com/terms/v/variablecost.asp
investopedia.com, 2014,Definition of Premium , cited July, 2014 from
http://www.investopedia.com/terms/p/premium.asp
manmountainltd.com, 2014, Amount of Insurance Premium, cited July, 2014 from
manmountainltd.com/insurance.asp?id=2
menpan.go.id, 2014, Number of Working Days in 2013 , cited July, 2014 from
www.menpan.go.id/berita-terkini/681-tahun-2013-libur-nasional-14-hari-cuti-bersama-
5-hari
wikipedia.org, 2014, Definition of Cash in Transit , cited July, 2014 from
http://en.wikipedia.org/wiki/Cash-in-transit
wikipedia.org, 2014, Definition of Causal or Econometric Forecasting Methods , cited July,
2014 from
http://en.wikipedia.org/wiki/Forecasting#Causal_.2F_econometric_forecasting_methods
31

wikipedia.org, 2014, Definition of Electronic Data Capture , cited July, 2014 from
http://en.wikipedia.org/wiki/Electronic_data_capture
wikipedia.org, 2014, Definition of Electronic Money , cited July, 2014 from
en.wikipedia.org/wiki/Electronic_money
wikipedia.org, 2014, Definition of Solver , cited July, 2014 from
http://en.wikipedia.org/wiki/Solver

32

APPENDIX

Appendix 1: Declaration of cash in safe insurance
33

Appendix 2: Declaration of cash in transit insurance

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