PRACTICAL REPORT

INDUSTRIAL ORGANIZATION DESIGN

INTRODUCTION MODULE

Name : Wa Ode Sardiyanti Date Lab : 9 April 2019

Afian Cavin W

NIM : 16522024 Day Lab : Tuesday

16522006
Assistant Code : IPO-60 Due Date : 16 April 2019

Assessment Criteria Yogyakarta, 2019

Format : Assistant
Content :
Analysis :
TOTAL : (Retno Asri Wardani)

INNOVATION AND ORGANIZATION DESIGN

LABORATORY
INDUSTRIAL ENGINEERING DEPARTMENT
FACULTY OF INDUSTRIAL TECHNOLOGY
ISLAMIC UNIVERSITY OF INDONESIA
2019
 CHAPTER II

ORGANIZATION PLANNING AND STANDARD OPERATING

PROCEDURE

2.1 Objective

1. Students are able to design job description for each position in the company.
2. Students are able to design the organizational structure of the company based on
the method of designing the organization systematically, with a more detailed
discussion on the production floor level organizational unit.
3. Students are able to know the management of human resources.
4. Students are able to perform design analysis work.

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 kinds of plactics product
Name
Main Receive Production Delivery
Process order
Activity  Receive  Preparation of  Payment
Process order from raw materials  Delivery
customer  Production
 Order process
confirmation  Finishing
Event  Customer  Order the  Customer
Process order the kinds of send the
product and plastics that payment
give the the criteria  Check
design they have been whether
want agreed before the
 Confirmation  Production payment
of the design process. First has been
and that will is choose the received
be used kinds of
  Making an plastics which  Delivered
order receipt one is most the
populers and product
then assembly to the
the parts customer
according to
the design
wanted by
customer
 Finishing
(sandpapering)

Level 0 Making door

and frame

Level 1 Receive order Production

Product
delivery

Design and
Level 2 material
confirmation
Preparation of
raw material
Production
process
Finishing
Payment
process

Order
Level 3 Make Order
receipt
material
(wood)
Cutting Assembly
Deliver the
product

Figure 1 Organizational Level

 Level 0 Level 1 Level 2 Level 3
Order material
Preparation of
Receive Order (wood)
raw material

Cutting into
some parts
Making door Production
Production
and frame process
Assembly the
parts

Product
Finishing
delivery Sandpapering

Figure 2 Organizational Level

2.5 Interpersonal Work Unit

Table below consists of interpersonal work unit of Sinar Joyo Boyo Plastics enterprise.

Table 1 Interpersonal Work Unit

Activity / Process Work Unit

Owner Employee
Receive order Approval Operational
Preparation of Decision maker Operational
raw materila
Production Information Operational
process
Finishing Information Operational
Payment process Information Operational
Delivery process Information Operational

2.6 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 Task Responsibilities

1 Owner  Decision  Ensuring all the

maker business run
 Making smoothly
work plan  Responsible to
and annual all off the rights
budget of employee
 Receiving
order
 Supervised
the
employee
2 Employee  Doing all  Reporting all
production progress of
process production
such as process to the
cutting, owner
assembly
until
finishing
 Delivered
the
product to
the
customer
2.7 Procurement HR
Procurement process of human resource in Sinar Joyo Boyo Plastics 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 Sinar Joyo Boyo Plastics 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 types of plastics 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

SOP Code
N Assesm
A C E G I
o ent
D D F H R
SOP is
1
easy to
.
understand
2 Easy to
. implement
SOP is
3
used by all
.
employee
SOP
4
help solve the
.
problem
5 Work is
. more effective
The
6 SOP reduce
. complain from
customer
SOP
7
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%20struc
ture.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-organizational-structure-
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.