A Research Of Implementation Lean System In Indonesia’s Smes Creative Industry

Theory benefit

Contribution of this research to theory development, expected the result could answer the problem statement whether lean system already implemented or not, remind very rare to see any lean system implementation at creative industry specially at handmade products.

Practical benefit

To share the result to the SMEs players where the possibility to implement the lean system to their production line will bring effectivity and efficiency.

The Research

The definition of research (Kothari, 2004) is a scientific and systematic search for pertinent information on specific topic (Sekaran & Bougie, 2016). The methodology could be primary or secondary.

The basic types of research are as follows:

• Descriptive vs. analytical: Descriptive research includes surveys and the fact find enquiries of different kinds. The major purpose of descriptive research is description of the state of affair as it is existing at present.

• Applied vs. Fundamental: Research can either be applied (or action) research or fundamental (to basic or pure) research. Applied research aims at finding a solution for an immediate problem facing a society or an industrial/business organization, whereas fundamental research is mainly concerned with generations and with the formula of theory.

• Quantitative vs. Qualitative: Quantitative research is based on the measurement of quantity or amount. While qualitative is concern with qualitative phenomenon i.e. Phenomena relating to or involving quality or kind.

• Conceptual vs. Empirical: Conceptual research is related to some abstract idea(s) or theory. While empirical research relies on experience or observation alone often without due regard for system and theory.

• Some other types of research: All other types of research are variations of one or more of the above stated approaches.

In refer to how this research collecting data writer followed (Zikmund G., 2003). The further research will be using Primary Research, Secondary Research, and Master Plan. Primary Research itself consists of survey or investigation field, observation, focus group discussion, and depth interview. Secondary Research itself consists of historical data. The Master Plan itself is the whole planning or known also as timeline for the research (see figure 1 ).

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The Operation Management

The operation management Taylor, & Taylor (2009) as shown figure 2 below, is designing, operating, and improving the productive systems-system for getting the work done. Operations are often defined as a transformation process. Inputs (such materials, machines, labor, management and capital) are transformed into outputs (good and services).

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Obviously, “Operation” can take many different forms. The transformation process can be: (1) Physical, such as manufacturing operations; (2) Locational, such as transportation or warehouse operations, (3) Exchange, such as retail operations, (4) Physiological, such as health care, (5) Psychological, such as entertainment, or Informational, such as communication. While the Evolution of operation management covered following areas: Craft production, Division of labor, Interchangeable parts, Scientific management, Mass production and lean production. This research more focus on Lean production system. The definition of lean system is an integrated management system that emphasizes the elimination of waste and continuous improvement of operation. The lean production is the result of the mandate to eliminate the waste. It is composed of ten elements: Flexible resources, Cellular layouts, Pull system, Kanbans, Small lots, Quick setup, Uniform production levels, Quality at the source, Total productive maintenance, Supplier networks. Those elements could be loosely organized into three phases, Increase Flexibility, Smooth the flow and continuously improve.

Methodology/Materials

We’ve colleting samples around Java island for 25 SMEs respondents and use mix methods model to analyze data. They are coming from various creative industry product, from design product until textile. The respondent is participating and selected as per their willingness to do this research. But, the respondents were identified as handmade products. Based on the data we will classify them as SMEs to be as follow:

Medium progress

Workers in between twenty more to fifty or even for some almost hundred, machinery seems working more to their function and they already had implemented system although still simple, but the production process flow already clear. The data sample coming from one Crochet bag maker, it also homemade product, using industry cell system at villages, makers are coming from vary areas locally, in example farmer’s wife will do nothing if they don’t come to field, and they are gathering at one place or just doing it in the house at their spare time. Then the un-finishing product will collect and pool to the factory. Understand from the below chart, Quality control role already became as a dominant player, as every section will go through Quality control department first before going to other process. (1) Raw material preparation, after the material come from suppliers it will go to Quality control to check before spread to the external or internal production, (2) Sampling room also has QC process, as all samples could not go out without any approval from QC and buyer, (3) After the un-finishing good coming from village, they need to check by Quality control also, if rejected then go back to village as return good for fixing up or goes to sampling room if the reject is minor, (4) At assembling level, the un-finishing product goes to sewing line, adding up hardware and accessories, then it goes to Quality control for screening again., (5) Further, it goes to packaging, and here the last QC checking end up before goes to shipping department.

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Observation and depth interview Data

The structure of integrated policies as follow (Simatupang, 2002): (1) Major Policies: Target market segmentation and positioning, (2) Secondary Policies: Aligning customer expectations with logistic capabilities, (3) Operational Policies: Procedures, standard operating procedures and rules. Mostly respondent discussed that they are in the secondary policies where they are trying their best to meet buyer expectations. A good sample coming from Furniture maker, the urgency of using production system not only coming from internal but also external such coming from buyer or association organization. In example FSC is one of association group where the member should follow for their rules, with feedback buyer also more respect to the producer, this organization controlling all their member to always check the raw material in terms of the legality, environment sustainability as current the world more concern for all mother-nature product coming from.

In the depth interview they confirmed the reason of changing habit and system is due many buyer specially whose coming from Europe will set up their quality standard not only for product and market impact but more too society impact. Specifically, if we talk about Furniture Industry it always dealing with country regulation, in issuing global warming of Deforesting effect, many regulators will make their own regulation to prevent illegal process of the product coming to their country. This regulation will make small players difficult to follow on, they prefer not to take Exporting order due this high requirement. PT Kalingga Jati one of the company who become a member of FSC. FSC is the worldwide organization stand for Forest Stewardship Council, their mission is to “Promote environmentally appropriate, socially beneficial and economically viable management of the world’s forests” (FSC). Furthermore, the urgency also coming from Indonesian Government as they decided to apply SVLK (Sistem Informasi Legalitas Kayu) or Wood Legalization Information System, the system expected to prevent from illegal logging and extreme Deforesting. The regulation itself still not strong yet, but many industry players already applied and become the member of it. The system filtering the players itself, and usually should any new regulation it also dealing with some money, therefore only big capital owned companies who could follow this. Many complaints coming from the field, seems it slow down the production as the material coming very slow to the field, as it must be checking and classified first by the government before they could use it to their product also some opinions that SVLK wood still not accept in Europe, so Government still review about this regulation. The other example is coming from Bag crochet in PT Vainaastee and PT Dewi Mahasadu, as they already implemented Lean system also but not really indicate on system selected due the uniqueness of their product, they made their own applicable system to their production line. As they really depend on their village production management. The implement system at first is not really on how to achieve their production effectivity but more to fulfill buyer request. In example QVC is traditional buyer from America but due they are dealing with Europe market where need high standard they need apply for specialty assurance such AZO free product and need to do an independent lab test to their product, also need applying AZO free certificate. It almost slow down them but they still do it rather than loose the potential buyer.

Focus group discussion Data Hypothesis:

Based on the table 3 and 4 researcher could summarize the result to below conclusion table 5 and figure 4 . Where value for the table 5 is ranging from 1-5 which the values are vary from strongly disagree to strongly agree.

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Secondary Data

Some of data coming from personal record such Sasirangan industry in Banjarmasin Kalimantan Barat, the validity of the data also enriching from Journal (Putra & Djazuli, 2011). Various data coming from blogs, company websites and google where bibliography listed at the last page of this journal

Classifications lead into something?

Based on factors as per research objectives the samples classified into three group: small, medium to big. All classification has their own characteristic.

• Small

  • Number of employee less than twenty.

  • No clear job division

  • Limited machinery

  • Limited ICT usage, should are they, it is only for telecommunication, administration and design purpose.

  • No indication of Operation system detection

• Medium

  • Number of employee more than twenty up to hundred.

  • Already had clear job division

  • Significant number of machinery

  • ICT use up not only in regular basis but also operational

  • Operation Management system already detected although for some it still simple system.

• Big

  • Number of employee more than hundred

  • Complete Machinery

  • Maximize ICT usage

  • Indication of Operation System Detection, even some of them already run Lean system

ICT and operation system detection

Based on data collecting as per prediction the concern only at small-to medium size as found some data although we detected it but will not significantly the company also implement system in their production line (see figure 5 ). Usually the ICT tools only to help them to shorten their routine such Computer both administration and design. Machinery still very traditional no need using computer to operate it. Conclude overall, although we detected the ICT tools it doesn’t mean they will implement system soon, the explosive of ICT usage is one of determination to the supply chain integration (Kanabiran & Bhaumik, 2005).

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The shifting of supply chain direction

The number of operation system detection ranging from medium to big classification, if ICT detected automatically the operation system also detected, this research still not classify them to be of what kind of system they implement at, but at least it proven that they had system on their production line, whether Lean system or others. Hence it will need another research to dig the information more on this aspect (see table 6 ).

The shifting where going to positive direction where more from small classification use up more ICT tools than before soon or later they will implement the system too. Increased domestic and global competition, rapidly changing market trends, as mentioned in introduction will make them awake otherwise they will lose their competitiveness. The reaction answered in the medium classification, where they are ready to face the changes, it proven about 60% of them already had operation management system on their line. And surprise on the big classification proven 100% even some of them already had establish Lean system.

The contributions change

The shifting not only made the Indonesia’s SMEs manufacturing condition, but contributes a lot to the stakeholder.

“ Buyer more confident to us, trust us and willing comeback again and again, although currently business is tough, but we are believing that our excellent supply chain will make us sustain in the business ” Mr. Anto, PT Kalingga Pratama Marketing Manager

Customers are the best pusher for changes, if customers happy means all the entire processes specially production chain smoothly running. The practice of the integrated supply chain implementation helps SMEs to be closer to their customers as well (Morissey & Pittaway, 2006).

“More efficient of course, our lead time shorten, we could trace our finishing product from the wood sourcing until the finishing product, should there is an error we could easily found the wrongdoing and fix it fast. And should be no waste as we do zero defect, if we had it, the excess also has more value added due the certified (TFT, SFC, SVLK) raw material source” Mr. Ponco, PT Buana Multi Pratama Manager

Suggestion

Due the limitation of time and resources, this research need to rehearse and conduct more, and collecting more samples, also specially when researcher could not find previous research to back up the contingency of the data. Also, the research subject is something that always changing following the industry dynamic condition. Therefore, researcher probably will conduct further research and welcoming other researcher to continue this research as well.

What’s next?

Seems Indonesia SMEs creative industry coming to the new era for more systematic operation procedure and system, positive reacting for the new shifting is a good contribution to the better amplify. The readiness to face the globalization increased, although they are still classified as SMEs but soon or later some of them could be LE soon proven by Lean system found detection.

Need hardworking and big investment but worth at the end, to whom refused maybe will disappear unless they are blend to the wave also. So, could be all small classification change and implement system soon?