Business Process Reengineering in a Sago Production Process
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2018 4th International Conference on Science and Technology (ICST), Yogyakarta, Indonesia
Business Process Reengineering in a Sago
Production Process
Taufiq Immawan Citra Indah Asmarawati Winda Nur Cahyo
Master of Industrial Engineering Master of Industrial Engineering Master of Industrial Engineering
Faculty of Industrial Technology, Faculty of Industrial Technology, Faculty of Industrial Technology,
Islamic University of Indonesia Islamic University of Indonesia Islamic University of Indonesia
Yogyakarta, Indonesia Yogyakarta, Indonesia Yogyakarta, Indonesia
965220101@uii.ac.id citrainddah93@gmail.com winda.nurcahyo@uii.ac.id
Abstract— Sago is one of main food sources in
Indonesia besides rice, but the farming for this commodity II. LITERATURE REVIEW
is not optimally managed. Also, the nutrition fact of sago Business process reengineering is an approach in order
is similar with rice. It leads to an opportunity that sago to improve the effectiveness and efficiency of a business
might be a good substitution for rice in Indonesia. process (Mochyidin, et al., 2011). To undertake the business
However, the common business processes from harvesting process engineering, the information of the entire process is
to sago flour are still traditional practices. It is predicted required (Opit, 2012). By implementing business process
that about 4.55 million tons of starch is wasted due to engineering (BPR), it’s expected that there will be radical
these practices. The result indicated that the proposed changes and significant improvement of the company
process as the result of the business process reengineering performance (Mochyidin, et al., 2011). According to Habib
has a better performance. and Shah (2013), there is no universal approach to BPR and
Keywords—Business process reengineering, Key the risk associated to the implementation of BPR might be
Performance Indicator, sago industry. significant. In a research by Bibi and Hassan (2014), the
challenges and causes that effecting business process re-
I. INTRODUCTION engineering in the implementation of ERP is identified. Even
the BPR is widely implemented in many industry, its
One source of carbohydrate which is not yet optimally application in the sago flour processing is not yet found.
optimized is sago. Sago is a main food consumed by people in According to Hammer and Champy (1993), bussiness
east Indonesia. Sago has a high starch content so that it can be process reengineering is the process of redesigning business
consumed or used in industry (Rahayu, et al., 2013). The process to improve and expand the existing business process
nutrition fact of 100 grams of flour sago is carbohydrate 94 g, by measuring on cost, service and speed. Petrozzo and
protein 0.2 g, fat 0.2 g, water 14 g, phosphorus 130 mg, Stepper (1997) say that there are several reasons why a
calcium 10 mg, and vitamin B1 0,01 mg (Auliah, 2012). In company needs to do business process reengineering: (i) a
terms of calories content, by sago is similar to rice but the fixed or significant increase in the number of employees
price is cheaper (Sakiynah, et al., 2013). It makes sago could required to carry out activity within the company, (ii) the
be nominated as rice substitution. process is very sensitive to the changes of input, it will be
According to (2009), the sago can be processed problematic if it affects production (decrease), (iii) to produce
traditionally, semi-mechanically and mechanically. In products that involves large numbers of people, (iv)
Indonesia, the production of Sago flour is mostly in customers are disappointed to the product (or service) and it
traditional way. It is predicted that 4.55 million tons of starch may lead to a poor customer experience or image, (v)
is not properly utilized due to this practice (Kurniawan, et al., employees morale decreases and communication with
2012). Therefore, it is urgent to resolve this issue by customers is not as expected, (vi) management allows for
designing and developing an effective and efficient sago flour change.
processing in order to improve the quality and quantity of
sago flour production (Sakiynah, et al., 2013; Kurniawan et
al., 2012). It is indicated that business process re-engineering III. RESEARCH METHOD
is suitable for this purpose.
A. Research Object
The object of this research is a sago flour processing
factory located in Daleman village, Tulung, Klaten, Central
Java, with the subject of data collection consisting of workers
and project leaders involved in this process.
978-1-5386-5813-0/18/$31.00 ©2018 IEEE
2018 4th International Conference on Science and Technology (ICST), Yogyakarta, Indonesia
B. Research Steps separate the starch, water and abangan. This deposition
In business process reengineering, there are several steps process takes about 4-6 hours. Then, the water will be
required for its accomplishment. The first step is to identify removed manually to take the starch in the bottom of the
the previous business process, in this case is to provide a clear settling tub. This wet starch which contains abangan then
picture of the existing business processes used in the mixed with chlorine to bind the abangan and then re-
processing of sago flour. After the business process is deposited for 24 hours. This process can be repeated depends
observed and understood, a fishbone diagram is used to on how much abangan exist in the sago starch. The next
identify the problems that occurred along with its cause. The process is to dry the wet starch in an open field under the sun
next stage is to design proposed improvement and to evaluate for approximately 4-6 hours depending on weather
the proposed design using key performance indicator (KPI). conditions.
This research stage is presented in Fig. 1.
Fig 2. Previous Business Process
B. Problem Identification
A fishbone diagram has been developed to present the
main problem in the process and its cause. The diagram is
Fig. 1. Method of Business Process Reengineering shown in Fig.3.
IV. RESULT AND DISCUSSION MATERIAL MAN
The Color or wet Too Much Labor
The Pith Starch
isn’t fresh starch isn’t white
A. Existing Business Process The Possibility
of Physical
In this research, the existing business process of the sago The Distance is too far Injury Manual
Too much Impurities
flour production is observed. Then, the production process is Vibration of The Process
reviewed based on the process sequence. The business Solvent Engine
Problems That Occur In The Sago
process is presented in Fig.2. Flour Processing
It is explained that the process starts from the supplier Depending of Sun’s Heat
sent invoice of raw material purchase. The received raw Outdated Machine
materials is stored in the warehouse. The purchase data is
then input and stored in the database. Then, this data will be Long Drying Procedure is too long
Process
compared with the availability of the raw material. If the raw
material is available, a PO is made. Otherwise, the production
process is performed. MACHINE/
METHOD
The production process starts from the dissolution of TOOLS
sago pith into sago fibres. Then soaked it for a few hours
before extortion to separate between starch and sago pulp. Fig 3. Fishbone Diagram
The starch dissolved in this water will be deposited to2018 4th International Conference on Science and Technology (ICST), Yogyakarta, Indonesia
It is indicated that the distance between raw material processes are the same using a scar solvent needle machine
source to the location sago processing can affect the quality of with yield yield of 24.34%.
sago pith. It makes the yield of the starch yield is significantly
decreased (Widiyanto, 1984). In some part of Indonesia, the
location of the sago trees is very remote. Also, wet starch
contains high concentration of abangan is another issue. One
of them caused by the inefficient dissolution process.
In this area, sago production process that is a semi-traditional
and requires a considerable amount of labour. The process
highly depends on the presence of the labour. If lack of labour
presence, the process cannot run, even though the raw
material is available. Another concern is the equipment. The
equipment used is traditional and has high risk of work
accident or injury. For example is the use of foot to push the
pith to the solvent engine. If workers are less concentration,
their feet could be exposed to a solvent engine. In addition,
the vibration of the machine is high. It causes the workers to
experience fatigue and eye disorders. The process of
traditional sago flour production takes time although a
shredding machine is used. Another issue is the drying
process. It depends of the weather. In wet season, the
production is very limited.
C. Proposed Design
After the problem is analysed, a new process is designed
and proposed to improve the performance of the production.
It is proposed that the new production process is done
mechanically in a truck. The design of the truck is shown in
Fig. 4. All the machines required to perform the production
process is attached in the truck. The main reason of using Fig. 4. Design of the Truck
truck is to bring the process to the harvesting area. It is
indicated that this new proposed process may reduce the The yield of the old method is approximately
transportation cost. The proposed new process is presented in 21.24%. So, the yield of starch produced at the
Fig. 5. proposed design is higher.
b) Production Capacity
D. Benchmarking
Dissolution is an early stage in the process of sago
To see the advantage of the new process, a comparison is flour processing. Both in the existing and proposed
made. It compares the performance between the old and new production method, only one unit of the solvent engine
business process. To assist this comparison, Key Performance is used. But the new process has a higher capacity. If
Indicator (KPI) is developed. The variables included in the the capacity of this solvent machine is used as the
KPI are yield of sago starch, production capacity, cost of basis to calculate the production capacity of sago flour
good manufactured and selling price. per month, the it can be calculated as follow:
a) Yield of sago starch • Production capacity in Daleman Village, Tulung,
According to Widiyanto (1989) the time required to Klaten, Jawa Tengah
transport sago to the production location may reduce
the yield of starch by 3,10% in 4 days. In the process
of sago flour processing, before sago stems will arrive
on day 3 or 4th day so there is possibility of starch = 416.67 kg/h x 9 h/day x 21.24%
decrease of starch yield. While the process of sago = 796.51 kg/day
flour processing on the proposed design is still fresh
(freshly cut from the tree).
• Production capacity design proposal
The dissolution process also affects the yield of the
resulting starch. A scar that produces the best starch yield is
to use a needle scar (Hermanto, et al., 2011). Both of these
= 649.38 kg/h x 9 h/day x 24.34 %2018 4th International Conference on Science and Technology (ICST), Yogyakarta, Indonesia
= 1,422.53 kg/day
c) Cost of good manufactured (HPP) and Selling Price (5)
In the design of the proposal, the calculation of the
cost of production using variable costing method so In this study, the expected profit is 90% of the total
that the calculated cost is the cost of direct raw production cost. The total production cost is IDR
materials cost, direct labor cost and factory overhead 79,781,494 per month (as shown in Table 1), the
cost. expected profit is IDR 71,803,345 per month, so that:
• Direct raw material cost Selling price = = Rp.4.577/ kg
sago stalk requirement = 39,739.2 kg/month In the existing production method, the selling price of
Price of sago stalk IDR 700/ kg (Cyril, 2017) sago flour per kilogram is IDR 7,500 with IDR
So the cost of direct raw material is IDR 27,817,440 2,000/kg profit earned. So it can be estimated that HPP
per month is IDR 5,500 / kilogram
• Direct labor cost
Total Manpower = 7 people
Salary of workers in 1 day (1 day = 9 working hours)
is IDR 100,000
Then the direct labor cost is IDR 700,000 per day or
IDR 16,800,000 per month
• Factory overhead cost
TABEL 2. FACTORY OVERHEAD COST
Factory Overhead Cost
Indirect labour cost IDR 4,500,000
Energy IDR 7,008,120
Machine maintenance cost IDR 700,000
Miscellaneous expense
Salary of truck driver IDR 12,000,000
Fuel for truck IDR 3,124,505
Truck maintenance cost IDR 833.333
Depreciation IDR 3,798,096 Fig 5. Proposed Business Process
Communication Cost IDR 200,000
Transportation IDR 3,000,000 V. CONCLUSION
Total IDR 79,781,494
A business process reengineering approach is applied at sago
flour processing in Daleman village, Tulungan, Klaten,
Central Java. Some KPI variables is developed to measure the
improvement of the proposed business process.. Based on this
(4) KPI parameter, the proposed improvement design has better
Total cost of production is all costs used in the form of KPI achievement compared to the previous process. For
direct material costs, direct labour costs and factory further research, it is necessary to develop a feasibility study
overhead costs. If the production capacity of sago flour and a more detail design of this mobile production process.
is 33,116 kg/month. So HPP per kg of sago flour = Rp.
2,409.
As for the selling price of sago flour per kilogram is
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