SINERGI Vol.
No.
June 2018: 101-106 DOAJ:doaj.
org/toc/2460-1217 DOI:doi.
org/10.
22441/sinergi.
THE SELECTION OF PRODUCTIVITY KEY PERFORMANCE
INDICATORS FOR CAR MANUFACTURING COMPANIES USING
INTEGRATED PERFORMANCE MEASUREMENT SYSTEM
Uly Amrina.
Alfa Firdaus Industrial Engineering Department.
Faculty of Engineering.
Universitas Mercu Buana Jl.
Raya Meruya Selatan.
Kembangan.
Jakarta 11650 Email: uly.
amrina@mercubuana.
alfa_firdaus@mercubuana.
Abstract -- The increase in car market 17% in 2020, and ASEAN Free Trade policy only 5% for imported products, cause tightened competition in the automotive market.
Car manufacturing companies face problems in selecting their performance indicators related to competitive challenges.
The purpose of this research is to develop productivity key performance indicators in car manufacturing that conform to stakeholder requirements as a strategy to win the market.
The conditions are manifested in a mapping of manufacturing symbols using the Integrated Performance Measurement System (IPMS) method.
That manufacturing productivity indicators will become the focus of the top management to be controlled.
There are four stages to go through, starting with the identification of stakeholder requirement, which produces six criteria and 12 stakeholder requirements and mapped into 16 goals and 24 key performance indicator (KPI).
The second stage is benchmarking, and preparation of KPI hierarchy and the third stage is the description of each KPI in the form of KPI specification table.
The fourth stage is the weighting of the six main criteria that result in 3 priority criteria which must be reported monthly between the manufacturing division .
, finance and administration.
Those are employee safety, manufacturing process effectiveness .
and waste elimination activities.
The priority is obtained based on questionnaires answered by ten stakeholders .
processed with Analytical Hierarchy Process (AHP) approach and has been tested consistency in the number 0.
These three criteria are described in 15 KPIs: performance rate, availability rate, quality rate, trained operator ratio, training value ratio> 80, delay ratio, attendance ratio, downtime losses, setup and adjustment losses, idle time, defect losses, yield losses, manpower efficiency, environmental impact and work accident ratio.
Keywords: Mapping.
Productivity.
Indicators IPMS.
AHP
Received: May 1, 2018
INTRODUCTION
The car market is expected to increase by 17% by 2020 (KPMG's Competence Center Automotive.
LMC Automotiv.
Therefore, car manufacturers in the world are competing to launch new products of excellent quality at very competitive prices.
World trade also plays a role in the automotive industry competition in the form of policies that provide low tariffs on imported products increasingly open tap competition between automotive manufacturing industries (Firdaus and Umrina, 2.
Fig.
1 describe an example of the ASEAN free trade policy for vehicles from India and Korea which are only subject to 5% import duty .
reviously 10% -15%) forcing domestic manufacturers to save production costs by 5-10%.
Manufacturing companies seek to reduce waste, increase productivity, and maximize human and machine use optimally (Hemanand et al.
, 2.
Car manufacturing companies face problems in selecting their performance indicators related to market competition challenges.
At PT.
Revised: May 23, 2018 Accepted: May 24, 2018 X, one of the automakers, realizes that some of its manufacturing KPI they should reach first.
general, companies do not have systematic and planned preparation stages in making their KPIs (Parmenter, 2.
There are five main steps to develop a sustainable KPI (Kibira et al.
, 2.
that is to build KPI goals, identify KPIs, define KPIs, conduct KPI selection, structuring KPIs.
Figure 1.
Import Duties from Asian Countries Destination Indonesia Amrina and A.
Firdaus.
The Selection of Productivity Key Performance Indicators SINERGI Vol.
No.
June 2018: 101-106 In defining KPI, it is worth noting the benefits of productivity measurement for the company (Sumanth, 1.
, namely:
Assess the efficient use of resources in producing goods and services.
For resource planning, both for short and longterm.
Can be used to reorganize the economic and non-economic goals of the company.
Can be used to plan the target level of productivity in the future.
Productivity can be improved through the effectiveness and efficiency of both input and The effectiveness value of equipment that supports productivity can be measured by OEE (Rimawan et al.
, 2.
OEE calculation is the multiplication of the ratio of availability, performance efficiency and rate of a quality While efficiency, as part of productivity, is obtained by reducing seven types of waste (Hines and Taylor, 2.
that is too much production, defect, excess inventory, process mismatch, excessive movement, waiting, and unnecessary Manufacturing efficiency performance can be achieved by increasing utilization creativity of manpower, eliminate inappropriate processing, eliminate machine breakdown time, eliminate excessive scrap, eliminate defect in a product, and eliminate excessive lead time (Susilawati et al.
This research is aimed at helping car manufacturing companies to develop productivity key performance indicators that conform with stakeholder requirements as a strategy to win the market competition, using Integrated Performance Measurement System method, focusing on KPI selection and KPI weighting done by Analytical Hierarchy Process technique.
The AHP method is widely applied in the decision-making process of a complex multicriteria problem by describing the issue to a hierarchy (Santoso dan Besral, 2018.
Kurniawan et al.
, 2.
Researchers observe and collect research data in the painting division, which is prioritized by stakeholders as a pilot.
A Finance director and manufacturing director .
A Head of financial division, administration, and welding process .
A Employees, represented by union leaders .
A Customer, the head of the assembly division as a process after painting .
Questionnaires made in two types.
The first is Open questionnaires, to get the requirements of Researchers look for common requirements stated by most stakeholders.
The second is Closed-ended questionnaires in the form of a scale of interest, to get the priority of interest from every significant indicator required by The pairwise assessment scale is 1 to 9, with a value of 1 explaining both elements having the same effect on the goal and 9 representing the decision that an absolute element is most important than any other element.
(Suryadi and Ramadhani, 1.
Secondary data also obtained from literature study and benchmarking to PT.
located in Thailand.
Methode This research is done by general steps as shown in Fig.
Start Research problem : too many performance Objectives : manufacturing KPI link to operating profit Literature Review :
- KPI & Productivity - IPMS Method
- AHP
Data Collection :
- Organization Structure - Productivity Indicators - Questionnaire to Identify KPI Criteria Data Processing and Analysis :
- Stakeholder requirement Identification - Benchmarking - Define Objectives - Design of KPI - Select KPI (Excel & AHP softwar.
Observation :
- Information Flow of Report - Productivity Indicators in PT.
Is Criteria of KPI
MATERIAL AND METHODE
The design of this KPI uses the IPMS method, which is a performance measurement method created with the aim of describing an integrated, effective and efficient measurement system in the right form.
Figure 2.
Research Flow Process Material The research data were obtained from questionnaires distributed to 10 stakeholders of painting division, namely:
A The president and vice president .
Determining Business Level First of all, manufacturing organization is divided into four business level according to IPMS framework in Fig.
3 and approach criteria of PT.
XAos productivity system in Fig.
Yes Result and Conclusion End Amrina and A.
Firdaus.
The Selection of Productivity Key Performance Indicators ISSN: 1410-2331 Business PT.
X Manufacturing Table 1.
The result of Stakeholder Requirement Identification Sub Business Financial Directorate Manufacturing Directorate Business Unit Finance Div Administration Div Welding Div.
Painting Div.
Req.
Assembly Div.
Business Process Car Painting Activities Figure 3.
Division of Organization Business Unit Division Painting Division at PT.
Achieve Financial Target Process Effectieveness Elimination of Changing in External Policy - material - labor - energy / utilities Result / Impact Assembly satisfaction Employee Safety Stakeholder Requirement Increased corporate profits in line with improved manufacturing processes.
The process runs smoothly without any interruption of the machine or equipment being All resources work by established operating time Zero defect, no claim from a customer.
All operators master their jobs properly according to standard procedures.
High attendance rate.
Materials are used precisely and efficiently.
Minimize the amount of labor employed.
There are no workplace accidents, especially those that are fatal to employees.
Improving supplier capabilities that can long-term manufacturers and suppliers.
Building manufacturing process.
Use of facilities from the government to the maximum, which can support the company's business processes.
Figure 4.
System Overview Organization Business Unit Division of Painting at PT.
Identification of Stakeholder Requirement Based on the results of the survey of stakeholder requirements at the end of the monthly Budget Control Meeting at PT.
X, there are several similarities of answers, so researchers make the selection by writing all the answers and putting together the same answer.
Table 1 shows the results of selection in the form of 12 requirements desired by stakeholders.
Benchmarking Researchers conducted a comparative study to PT.
Y which is a leading automotive manufacturing company in Thailand today, and has been declared as the company with the best management performance by the mother Researchers study stakeholder requirement PT.
Y, and how PT.
Y compile the KPI hierarchy that is used as a means of monitoring the achievement of company productivity.
After comparing stakeholder requirements in both companies, there is only one difference that is for requirement number 12 related to a government facility in the form of easiness of import for export
RESULT AND DISCUSSION
Setting Business Objectives and Defining KPI The next step is to set business goals.
Based on the results of internal research and benchmarking, obtained 16 business purposes as an effort to be done PT.
X to meet the stakeholder The business objectives will then be mapped with key performance indicators that affect their achievement.
The mapping can identify 24 KPIs shown in Table 2.
KPI Validation All identified KPIs are arranged in the form of performance hierarchy of PT.
The top level is Productivity Division Painting PT.
X, then in the next level there are performance criteria, and at the lowest level is the KPI as in Fig.
The validation process is done by way of management evaluation of Division of Painting PT.
Based on the management decision, the compiled KPI is declared as appropriate and can be used as an indicator of productivity performance of the manufacturing division.
Amrina and A.
Firdaus.
The Selection of Productivity Key Performance Indicators SINERGI Vol.
No.
June 2018: 101-106 Table 2.
Stakeholder Requirement Mapping.
Business Objectives, and KPI in Painting Division PT.
Req.
Business Objectives Setting profit indicator targets that can be understood by manufacturer and Management can monitor the achievement of indicators periodically Reduce the stop line caused by machines and equipment that are not properly No increase in cost due to actual production hours> standard production Ability to produce quality products Satisfaction of assembly division .
s a custome.
Each operator gets appropriate training No jobs are delayed due to employee No absent employee Eliminate defect due to material error
Eliminating waste of Reduce the waste of Key Performance Indicators Operating Profit
(OP)
Break Event Point
(BEP)
Percentage of On Time Report
Completion Reported KPI
Machine Performance Rate
(PR)
Downtime Losses (DL) Setup
Adjustment Loses (SAL) Availability Rate
(AR)
Idle Time
KPIAos Formula
OP = Revenue Ae Cost of Goods Ae Selling & General Administration Expenses yaycnycuyceycc yaycuycyc
BEP =
ycIyceycyceycuycyceOeycOycaycycnycaycaycoyce yaycuycyc [On Time Report / Total Repor.
x 100% .
umbers of actual KPI / numbers of ideal KPI] x 100% PR= yaycnycuycnycEayceycc yaycuycuycc ycIyceycyceycayc ycIycycc.
ycIycyyceyceycc ycu .
ycNycnycoyceOeyaycuycycuycNycnycoyc.
ycNycuycycayco yaycuycycuycycnycoyce DL = yaycuycayccycnycuyci ycNycnycoyce QR = yaycuycayccycnycuyci ycNycnycoyce ycoycuycayccycnycuyci ycycnycoyce ycNycuycycayco ycEycycuyccycycoOeyayceyceyceycayc
ycNycuycycayco ycEycycuyccycyco
TOR =
Employee Late Ratio
(LR)
Attendance Ratio
LR = Oc
Oc ycycuycycayco ycuycyyceycycaycycuyc
ycycycaycnycuycnycuyci ycycaycuycyce>80 ST = Oc
ycycuycycayco ycuycyyceycycaycycuyc
Ocyceycoycyycoycuycyceyce ycoycaycyce ycycuycycayco yceycoycyycoycuycyceyce Yield/Scrap Losses (YL) Man Power
Efficiency (MPE) YL = x 100% x 100% ycycuycycayco yceycoycyycoycuycyceyce x 100% yayccyceycayco yaycycaycoyce ycNycnycoyce ycu ycNycuycycayco ycIyceycyceycayc
yaycuycayccycnycuyci ycNycnycoyce yayccyceycayco yaycycaycoyce ycNycnycoyce ycu ycIycaycycaycy yaycuycayccycnycuyci ycNycnycoyce OcycAycE yayccyceycayco
MPE = Oc
ycAycE yaycaycycycayco
x 100% x 100% x 100% Ocdemand
cycle time
Ocaccident Accident Work Ratio
(IR)
IR = Oc
Material Purchase Price Ratio
Alternative Price
Reduce energy usage The ease of import of export destinations in the form of import duty exemption of imported goods and import VAT
on the import of raw
processed/assembled / installed and the results are exported Environment Impact (EI) Get
NIPER
Exemption
Updated NIPER Database Lead Time of import
raw materials and x 100% x 100% Ocyceycoycyycoycuycyceyceyc ycaycuycoycnycuyci RA = Oc
DL=
x 100% ycNycuycycayco ycEycycuyccycycayc yayceycoycnycyceycyceycc Ocycycycaycnycuyceycc ycuycyyceycycaycycuyc Trained Operator Ratio (TOR) Training Score Ratio > Defect Losses (DL) x 100% ycIyceycycycycu ycEycycuyccycycayc .
cIyceycyceycay.
Maintain work safety to increase employee Comparison of material price between x 100% ycuycuycu ycyycycuyccycycaycycnycyce ycycnycoyce OcMP Ideal = Oc x 100% x 100% yaycuycayccycnycuyci ycNycnycoyce ycCycyyceycycaycycnycuyci ycNycnycoyce AR = CR = ycIyceycycycy ycNycnycoyce SAL = Idle = Quality Rate (QR) Claim Rate (CR) ycu 100% Loading Time = total available time Ae planned downtime working hours per year Current Price x 1 million > 1, it will be selected in the supplier changes list Min EI = Electricity Fuel Gas Water A quota of imported raw materials = production capacity listed in Industrial Business License NIPER database = list of imported raw materials that will be processed, assembled, installed and exported products are exported Lead Time Export - Lead Time Import < 12 months Amrina and A.
Firdaus.
The Selection of Productivity Key Performance Indicators ISSN: 1410-2331
Productivity Improvement
Achievemen
of Financial Target
Manufacturing Process
Efectiveness KPI 1
KPI 2
KPI 3
KPI 4
KPI 5
KPI 8
KPI 10
KPI 12
Wate
Elimination KPI 6
KPI 7
KPI 9
KPI 16
External
Custimer Satisfactiorn
Employee Safety KPI 20
KPI 22
KPI 23
KPI 24
KPI 11
KPI 19
KPI 17
KPI 18
KPI 21
KPI 13
KPI 14
KPI 15
Figure 5.
Hierarchy of KPI Productivity Improvement in Painting Division of PT.
KPI Specification This stage is necessary to enable KPI users to have a clear understanding of each KPI, including description, objectives, relevance to objectives, threshold or target interval, a method of measuring, a frequency of measurement, a frequency of review, the responsible person of measurement, data sources and KPI reporting One example specification for KPI 1 .
perating profi.
will be shown in Table 3.
Weighting the KPI After the hierarchy of productivity improvement indicators for the painting division, the next step is to decide which criteria will be prioritized for monthly intensive monitoring.
The method used is the AHP approach, and the tool used to calculate the weights is a questionnaire given to 10 people who are considered experts because they have become representative of Table 4 shows the results of pairwise comparisons of the six criteria of the painting division using criterium decision software.
Table 3.
Examples of KPI Specification KPI Numbers / Name Description Objectives Relevance Target and Threshold Calculation Formula Frequency of Measurement / Measured By Frequency of Review / Reviewed By Data Source Report To Operating profit To ensure that all manufacturing activities have an impact to the operating profit of the Relevance with the main Government Target = 6% Achievement 2015 Ae 2017 = 5 Ae 7% OP = Revenue Ae Cost of Goods Ae Selling & General Administration Expenses Once a month / Accounting Department Once a month / Finance Director Monthly Financial Report, sent to Mother Company Board of Directors.
Division Head of Manufacturing and Administration Table 4.
Calculation Result of Pairs Comparison
Criteria
Financial Financial Effectiveness of Process
Elimination of Waste External Changing Assembly Satisfaction 1,00 1,58 1,58 0,83 0,95 Effectiveness of Process
1,05
1,00
0,95
0,50
1,00
Elimination of Waste 1,05 1,10 1,00 0,80 1,00 External
Changing 1,40 2,00 1,40 1,00 1,15 Assembly Satisfaction 1,10 1,00 1,00 1,03 1,00 Employee Safety 0,71 0,53 0,73 0,75 0,78 Employee Safety 2,20 2,00 1,60 1,50 1,50 1,00 Total
8,15
6,50
6,55
8,45
6,63
4,51
Criteria
Financial Effectiveness of Process
Geometric 1,03 1,11 Relative Weight
0,157
0,169
Elimination of Waste 1,08 0,164 External Changing Assembly Satisfaction Employee Safety Total
0,80
0,97
1,58
6,57
0,121
0,148
0,241
6,54
0,11
0,09
Amrina and A.
Firdaus.
The Selection of Productivity Key Performance Indicators SINERGI Vol.
No.
June 2018: 101-106 Weighting is done at the criterion level, while the KPI under it is a must to be a regular part overall every month if the essential criteria are The weighted sequence is illustrated in Table 5.
Based on the consistent calculation test (CR) it is found that the inconsistency ratio is 0.
since the number is below 0.
10, it is stated that the weighting is consistent.
Table 5.
Weighting Criteria of Painting Division PT.
Criteria
Achieving Financial Target
Process effectiveness Waste elimination External changes Customer Satisfaction Employee Safety Inconsistency Ratio
Conclusion Weight Score
0,157
0,169
0,164
0,121
0,148
0,241
0,09
Consistent Analysis and Discussion The selection of critical criteria by the requirements of the stakeholders will be monitored monthly by top management.
Three main criteria with 15 KPIs will be a compass for top management to measure the extent to which the company is declared productive.
These 15 KPIs can not only be implemented in painting division but also can be used by all divisions in PT.
X, and even car manufacturing companies in general.
Thus, the results of this study can motivate each division to benchmark against the advantages of one another, so that the overall performance of the company will increase in the long run.
CONCLUSION
From the 6 criteria desired by 10 stakeholders, 3 criteria were selected for the top positions to be monitored together every month up to the top management level, namely employee safety with a weight of 0.
241, the effectiveness of the process with a weight of 0.
169, and the elimination of waste with a weight of 0.
Each criterion has a different number and type of KPI, for which the employee's safety has 1 KPI, the effectiveness of the process has 7 KPIs, and the elimination of wastage has 7 KPIs.
The weighting process is stated consistently with the CR = 0.
The three criteria with 15 KPI.
ACKNOWLEDGMENT
The Universitas Mercu Buana Research Center funded the research.
We are grateful for the management of PT.
X and PT.
Y who is willing to be a research partner, with no mention of the company name.
REFERENCES