Dio Chapter 2.docx

PRACTICAL REPORT INDUSTRIAL ORGANIZATION DESIGN ORGANIZATION DESIGN & SOP MODULE

Name

:

NIM

:

1. Dina Farhanah

Date Lab

: 24 May 2018

Day Lab

: Thursday

Assistant Code : IPO59

Due Date

:

Assessment Criteria

Yogyakarta, ............ 2018

2. Rahma Alrosdi 1. 16522123 2. 16522042

Format

:

(max. 10)

Content

:

(max. 50)

Analysis

:

(max. 40)

TOTAL

:

Assistant

(Vicki Ismi Caneca)

INNOVATION AND ORGANIZATION DESIGN LABORATORY INDUSTRIAL ENGINEERING DEPARTMENT FACULTY OF INDUSTRIAL TECHNOLOGY ISLAMIC UNIVERSITY OF INDONESIA 2018

CHAPTER II

ORGANIZATION PLANNING AND STANDARD OPERATING PROCEDURE 2.1

Objective 1. Undestrand job description for each position in the company. 2. Evaluate the organizational structure of the company. 3. Understand the management of human resources. 4. Understand the understanding, purpose, and benefits of Standard Operating Procedure (SOP). 5. Create and apply of Standard Operating Procedure (SOP) format in a business. 6. Understand how to monitor and evaluate the application of of Standard Operating Procedure (SOP) in a business.

2.2

Organizational Structure Organizational structure refers to the way in which a group of people is formed, its lines of communication and its means for channeling authority and making decisions (Barahemah, n.d.). In the 1967 book "Organizations in Action," sociologist James D. Thompson defined three types of interdependence to describe the intensity of interactions and behaviors within an organizational structure. The study of interdependence helps business owners understand how the different departments or units within their organization depend on the performance of others. Every organization has five basic elements as an approach to clasify the organization. It was stated by Henry Mintzberg in his book called Structure in Fives (1983). Those five elements are strategic apex, middle line, operating core, techno structure, and support staff as shown in figure below

The company that researcher observed only have two elements which is strategic apex and operating core. Strategic apex is the section which occupied by people who are responsible for the overall running of the organization, in this company is the owner himself. Operating core consist of employees who do the core job. The employee in this section perform four functions of activities ehich are get the input, transform inputs into outputs, distributes the output and help smooth the process of input, transformation and output.

2.3

Classification of Organizations In Henry Mintzberg books include "The Structuring of Organizations: A Synthesis of the Research," published in 1979, and "Structure in 5's: Designing Effective Organizations," published in 1983 he introduces his five types of organizational structure and how they influence the functioning of organizations. Those structure are the simple structure, machine bureaucracy, professional bureaucracy, divisional structure, adhocracy. The company only have two elements, so that the classification of commercial organization is categorized as the simple structure. This structure also called the entrepreneurial organization, the simple structure is a vertically organized pyramid with vertical lines of authority. Its key characteristics are direct supervision of subordinates, organic organization according to functions and a lack of formal support structures. All the workers will directly report to the strategic apex where the decision-making are centralized.

2.4

Identify Business Processes There are several definitions of “business process”. The most influential ones are presented by Hammer and Champy, they states that a business process is: A collection of activities that takes one or more kinds of input and creates an output that is of value to the customer. A business process has a goal and is affected by events occurring in the external world or in other processes.

Tabel 1 Business Process Process

Making door and window frame

Name Main

Receive order

Production

Delivery

Process Activity



Process



Receive order

from 

customer 

Event



Process

Order



Payment

raw materials



Delivery



Customer

Production process

confirmation



Finishing

Customer



Order

order

the

the

material

send the

product and

(wood) that the

payment

give

criteria

design

the they

been

want 

Preparation of

have agreed



Check whether

before

the

Production

payment

of the design

process. First

has been

and

is cutting the

received

Confirmation

material

the



wood

into

(wood) 

that



some parts and

Delivered

will be used

then assembly

the

Making

the

product

an

parts

according

order receipt

the

to

to

design

wanted

the

customer

by

customer 

Finishing (sandpapering)

Level 0

Making door and frame

Level 1

Receive order

Level 2

Design and material confirmation

Preparation of raw material

Level 3

Make Order receipt

Order material (wood)

Product delivery

Production

Production process

Cutting

Figure 1 Organizational Level

Finishing

Assembly

Payment process

Deliver the product

Level 0 Level 1 Level 2 Level 3 Receive Order

Making door and frame

Production

Product delivery

Preparation of raw material

Order material (wood) Cutting into some parts

Production process

Assembly the parts

Finishing

Sandpapering

Figure 2 Organizational Level

2.5

Interpersonal Work Unit Table below consists of interpersonal work unit of UD Material enterprise.

Table 1 Interpersonal Work Unit Activity / Process

Receive order Preparation

of

Work Unit Owner

Employee

Approval

Operational

raw Decision maker

Operational

materila

2.6

Production process

Information

Operational

Finishing

Information

Operational

Payment process

Information

Operational

Delivery process

Information

Operational

Job Description Job description is an orderly record of the essential activities involved in the performance of a task that is abstracted from a job analysis and used in classifying and evaluating jobs and in the selection and placement of

employees. Job description of the company that researcher observed will be explained in table below.

Table 2 Job Description No

Position

1

Owner

Task

Responsibilities



Decision maker



Making work plan

business

and annual budget

smoothly



Receiving order



Supervised





Employee



cutting,

such

as

assembly

until finishing 

Delivered product

Responsible to all

employee

Doing all production process

run

off the rights of

the

employee

2

Ensuring all the

Reporting

all

progress

of

production process

the to



to

the

owner

the

customer

2.7

Procurement HR Procurement process of human resource in UD Material is done by recuiting people who has a qualification for the task that needed to hire new worker. This enterprise has qualification for hiring new employee which are has a working experience in furniture and has a good skill. The owner prioritize people who has a working experience. The owner placing the new employee to the vacancy

2.8

Human Resources Development In this company, there is no development program to increase the capability of the employee. Since development program is very important for the quality of the

employees, the researcher suggests the enterprise to make some development program, such as: 1. Weekly evaluation to evaluate the worker and sharing each other. This program gives benefit to the 2. Monthly training to improve or add the skill of the worker.

2.9

Compensation In simple terms, compensation is everything that a company offers its employees in return for their talent and time. There are two kind of compensation which are financial compensation and nonfinancial compensation. Financial compensation usually paid in the form of salaries, wages, or bonus. However, nonfinancial compensation are given not in form of money for instance, the worker will be promoted. The company that researcher observed only give their employee financial compensaion. They will give salary to the employee everytime the employee finished their job and will give bonus to them who finished it faster that the due date.

2.10

Human Resources Maintenance Employee benefits and services retain human resources in the organization, foster loyalty and act as a security for the employees. Sound safety policy and health programme prevent accidents and maintain good health of employee. At the same time, in order to properly maintain human resources, an organisation needs to create condition in which employee are willingly to work with zeal, initiative, interest and enthusiasm, with a high personal and group morale satisfaction, with sense of responsibility loyalty and discipline with pride and confidence which requires various motivational techniques. According to Bangun (2012) there are two important points in the maintenance of resources human, namely communication performance and occupational safety and health (K3).

1. Communication Performance It is used to transfer the information to make the work can be understod clearly. In the company that the researcher observed the owner himself will delivered directly to his employee the product that the customer wants. And

the owner will ensure whether the employee understand or not. The owner also will supervised the employee to ensure the employee work properly and to control the quality of the product 2. Occupational Safety and Health (K3) To protect the safety of the employee while doing their work, the company already provide the safety tools such as mask, gloves, and protective glassess. However, the owner state that some of their employee not use the safety tools that have been provided.

2.11

Standard Operatindg Procedure (SOP) Before An SOP is a procedure specific of operation that describes the activities necessary to complete tasks in accordance with industry regulations, provincial laws or even just for own standards in running a business. In a manufacturing environment, the most obvious example of an SOP is the step by step production line procedures used to make products as well train staff. An SOP, in fact, defines expected practices in all businesses where quality standards exist. SOPs play an important role in the small business. SOPs are policies, procedures and standards needed in the operations, marketing and administration disciplines within the business to ensure success. These can create:

1. Efficiencies, and therefore profitability 2. Consistency and reliability in production and service 3. Fewer errors in all areas 4. Way to resolve conflicts between partners 5. A healthy and safe environment 6. Protection of employers in areas of potential liability and personnel matters 7. A roadmap for how to resolve issues – and allowing needed focus on solving the problem 8. A first line of defense in any inspection, whether it be by a regulatory body, a partner or potential partner, a client, or a firm conducting due diligence for a possible purchase 9. Value added to the business whenever wish to sell it

The company that the researcher observed do not have any specific SOP, the owner state that they only run and manage the business and ensure they can gain profit, the employee doing the job well and the customer satisfy with the product.

2.12

Standard Operating Procedure (SOP) After Businesses may carry out SOPs to reduce waste and increase profits. A nonprofit may use an SOP to serve the community better. Some companies use SOPs to ensure adherence to government regulations or to improve safety in the workplace. Although the reasons for seeking improvement may vary somewhat, regardless of the environment in which an SOP is utilized, the main purpose is to improve efficiency in some capacity. Since the company that researcher observed do not have SOP. The researcher recommend the SOP that can be used by the company in table below.

Number

Date

Standard Operating Procedure

Making door and frame

1. Receive order : 

Clarify the desain of product with customer



Clarify the material (wood) that will be used



Make order receipt

2. Production process : 

Every employee who will do the job have to used safety tools such as mask, gloves, and protectic glassess



Check the quality of material before doing the production process



The sequence of production is cutting-assembly-finishing

3. Delivery process : 

The customer have to finish the payment before the product can be delivered



Checking the payment whether already received or not



Deliver the product to the customer. Ensure there is no complaint from the customer



Complete the receipt

Legalized by :

Owner

Figure 3 SOP Recommendation 2.13

Monitoring Monitoring is useful to ensure whether the SOP is well executed or not. Since the enterprise has not a SOP yet, so that there is no monitoring activity in the enterprise. In this case, the researchers give recommendation of the monitoring program for the enterprise:

1. Monitoring will be done by the owner. 2. Creating the report of how the SOP is carried out in the process. 3. Make temporary conclusion.

2.14

Evaluation Evaluation is applied to check whether the use of SOP is already optimal or not.

Besides, the SOP cannot be used for a long period, so there should be an evaluation for SOP. Since the enterprise does not have an evaluation program, the researchers recommend an evaluation form for evaluation as follows:

Table 3 Evaluation Form No

Assesment

1.

SOP is easy to understand

2.

Easy to implement

3.

SOP is used by all employee

4.

SOP help solve the problem

5.

Work is more effective

6. 7.

SOP Code AD

CD

EF

GH

IR

The SOP reduce complain from customer SOP synergize one another

The table above, will ease the enterprise to evaluate the SOP by giving a rate to each SOP code. 2.15

Reward and Punishment The evaluation that conducted in the company is to know whether the business process work properly. Reward and punishment is good to be applied in the system to make the employee doing the job properly. Eventhough the company initially have not had SOP they already used reward and punishment system. When the employee doing their job well, finish their job before the due date, and the customer satisfy with the product. The company will give a reward in form of money for their bonus. However if the employee do not doing their job properly the company will give warning to those employee. This system will make the employee show good performance in order to gain more bonus.

REFERENCES

Barahemah,

M.

(n.d.).

Organizational

structure.

Retrieved

from

https://web2.aabu.edu.jo/tool/course_file/lec_notes/1001446_Organizational%2 0structure.pdf.

Beheshtifar, M. & Safarian, M. (2013). HR maintenance: a vital factor to promote job commitment. International Journal of Academic Research in Business and Social Sciences, 3(2). Retrieved from http://www.hrmars.com/admin/pics/1580.pdf.

Markgraf, B. (n.d.). Mintzberg’s five types of organizational structure. Retrieved from https://yourbusiness.azcentral.com/mintzbergs-five-types-organizationalstructure-2705.html.

Murray, L. T. (2018). Three types of interdependence in an organizational structure. Retrieved

from

http://smallbusiness.chron.com/three-types-interdependence-

organizational-structure-1764.html.