STANDARD OPERATING PROCEDURES:
A CASE STUDY OF PT. CANGGIH PRESISI INDUSTRI
By
Istaseptria Christiawan 13110097
A thesis submitted to the Faculty of
BUSINESS ADMINISTRATION AND HUMANITIES
In Partial Fulfillment of the Requirements for BACHELOR’S DEGREE
IN
INTERNATIONAL BUSINESS ADMINISTRATION
SWISS GERMAN UNIVERSITY EduTown BSD City
Tangerang 15339 Indonesia
July 2014
Revision after the Thesis Defense on 18 July 2014
Istaseptria Christiawan STATEMENT BY THE AUTHOR
I hereby declare that this submission is my own work and to the best of my knowledge, it contains no material previously published or written by another person, nor material which to a substantial extent has been accepted for the award of any other degree or diploma at any educational institution, except where due acknowledgement is made in the thesis.
Istaseptria Christiawan
_____________________________________________
Student Date
Approved by:
Junaidi Sinaga, MBA
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Thesis Advisor Date
Dr. rer. Nat. Linus Pasasa
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Thesis Co-Advisor Date
Prof. Eric Jos Nasution, MBA, MA, PhD
_____________________________________________
Dean Date
Istaseptria Christiawan ABSTRACT
ANALYSIS THE EFFECTIVENESS OF IMPLEMENTATION STANDARD OPERATING PROCEDURES:
A CASE STUDY OF PT. CANGGIH PRESISI INDUSTRI
By
Istaseptria Christiawan Junaidi Sinaga, MBA, Advisor Dr. rer. Nat. Linus Pasasa, Co Advisor
SWISS GERMAN UNIVERSITY
In order to make all operational activities of business, company and organization can be implemented well, it requires a guideline named standard operating procedure as an operational supporting document to ensure that every activities can be operated in a productive way, effective and systematic in order to satisfy their customer. The purpose of this study is to analyze the effectiveness of implementation standard operating procedures in PT. Canggih Presisi Industri. The company already has standard operating procedures as operational guidelines but in fact there are still complaints received from customers regarding the operational activities. Data collection method are collected through in depth interview with the head of product and planning control and questionnaires distributed to 85 employees. Data collected are analyzed using SPSS Software and AMOS.
Based on the result, it can be concluded that the current standard operating procedures in PT. Canggih Presisi Industri have been implemented effectively by employees, while the current standard operating procedure are efficient, standard, systematic but not consistent. The strong factors that cause the current implementation of standard operating procedure is efficient are specific, applicable, changeable, understandable,
Istaseptria Christiawan complete but not auditable and controllable. In purpose to increase the effectiveness of implementation standard operating procedures in PT. Canggih Presisi Industri, consistency, auditable and controllable are three most factors that company should more concern about.
Keywords: standard operating procedure, PT. Canggih Presisi Industri.
Istaseptria Christiawan
© Copyright 2014 by Istaseptria Christiawan
All rights reserved
Istaseptria Christiawan DEDICATION
I dedicate this thesis to my beloved father and mother who have supported me through everything. I thank them for their prayer and endless support. I would be nowhere near where I am today without the love and support of them. I am truly blessed to have such incredible parents.
Istaseptria Christiawan ACKNOWLEDGEMENTS
First and foremost, I have to thank my Jesus Christ for always being there for me.
Thank you for giving me strength and hope. Without You none of this would even be possible. A special feeling of gratitude to my loving parents, brother, grandmother, aunties. Thank you so much for bein
g the most supportive family, for always being there for me and pushing me to be the best person I can be. You have helped me achieve so many dreams and I know you will always be there to help me achieve many more.
Importantly, I would like to thank my thesis advisor, Junaidi Sinaga , my thesis co advisor Linus Pasasa and Michael Early for spending their time during the accomplishment of this thesis. Their encouragement and advice made me feel confident to finish this thesis. Thank you to head of production and planning control of PT. Canggih Presisi Industri, Mister Pujiyono and also Ms. Yen Yen for their time in sharing information and the opportunity that they gave me to collect data for this thesis.
Lastly I would like to thank the wonderful people who made these four years truly unforgettable. To all my friends, I love you all. I cannot list all the names here, but you are always on my mind. Thank you Swiss Germany University.
Istaseptria Christiawan TABLE OF CONTENTS
Page
STATEMENT BY THE AUTHOR………... …2
ABSTRACT………...3
DEDICATION………...6
ACKNOWLEDGEMENTS………...7
TABLE OF CONTENTS………...8
LIST OF FIGURES………...10
LIST OF TABLES………...11
CHAPTER 1 – INTRODUCTION………..………..12
1.1 Background………12
1.2 Research Problem………...14
1.3 Research Questions………15
1.4 Research Purpose………...15
1.5 Significant of Study………15
1.6 Scope of Limitation………15
1.7 Thesis Structure………..…16
CHAPER 2 - LITERATURE REVIEW………...17
2.1 Framework of thinking………...17
2.2 Standard Operating Procedure………18
2.2.1 Definition of Standard Operating Procedure……..……….18
2.3 Characteristic Feature of Standard Operating Procedure………...19
2.3.1 Efficient………...19
2.3.1.1 Criteria of an Efficient Standard Operating Procedure…..………..20
2.3.2 Consistent………22
2.3.3 Standard………...…23
2.3.4 Systematic……….………..23
2.4 The Process of Standard Operating Procedure….……….…….23
2.5 The Purpose of Standard Operating Procedure……….…….24
2.6 Benefits of Standard Operating Procedure……….……25
2.7 Previous of Study………...26
CHAPTER 3 – RESEARCH METHODS………30
3.1 Research Process ………...30
3.2 Type of study………..…31
3.3 Type of data………31
3.3.1 Primary and Secondary Data………...31
3.3.2 Qualitative and Quantitative………32
3.4 Data Collection Method……….32
3.4.1 Qualitative - Primary Data………..…32
3.4.2 Qualitative - Secondary Data………..…32
3.4.3 Quantitative - Primary Data………32
3.5 Research Model………..…33
Istaseptria Christiawan
3.6 Validity and Reliability………..…38
3.6.1 Validity………38
3.6.2 Reliability………39
3.7 Definition of Coefficient Correlation……….…………39
3.8 Data Analysis……….…40
3.8.1 Structural Equation Modelling (SEM)……… ………...……40
3.8.2 Path Diagram………..….42
3.8.3 Goodness of Fit Index (GIF) ………..……42
3.8.4 Root Mean Squared Error of Approximation (RMSEA)…… ………...43
3.8.5 Comparative Fit Index (CFI) ………..43
CHAPTER 4 – RESULTS AND DISCUSSIONS………...44
4.1 Company Profile……….44
4.2 Organization Structure………...…45
4.3 Data Validity and Reliability for Respondents………...…46
4.3.1 Validity Test (Pret-Test) for 10 Respondents………..47
4.3.2 Reliability Test (Pre-Test) for 10 Respondents………...…48
4.4 Respondent Profile……….…50
4.4.1 Gender……….…………50
4.4.2 Education……….…50
4.4.3 Year of Working in PT. Canggih Presisi Industri………...51
4.5 Path Diagram Model………..…51
4.6 Measurement Model Test………...…53
4.7 Path Diagram Interpretation………...…55
4.8 Hypothesis Analysis………...…56
4.8.1 Research Question #1 and Hypothesis #1………...56
4.8.2 Research Question #2 and hypothesis #2, #3, #4, #5………..58
4.8.3 Research Question #3 and Hypothesis #6, #7, #8, #9, #10, #11, #12………….61
CHAPTER 5 – CONCLUSION AND RECCOMENDATIONS………65
5.1 Conclusions……...……….65
5.2 Recommendations…….……….67
GLOSSARY……….75
REFERENCES……….77
APPENDIX 1 Permission Letter for Research……….………81
APPENDIX 2 Interview Report ………..82
APPENDIX 3 Interview Result ………...83
APPENDIX 4 Questionnaire in English………..85
APPENDIX 5 Questionnaire in Indonesian ………88
APPENDIX 6 Questionnaire Result ………91
APPENDIX 7 Table of Critical Value of Pearson Correlation ………...92
APPENDIX 8 Table of Questionnaire Result ……….93
Istaseptria Christiawan LIST OF FIGURES
Figures Page
Figure 2.1 Framework of Thinking ……….17
Figure 2.2 Effectiveness and Efficiency of Standard Operating Procedure in the Organization ………18
Figure 2.3 Under-controlled, Well-controlled, Over-controlled SOP………..21
Figure 2.4 The SOP Process ………23
Figure 3.1 Research Framework ……….33
Figure 4.1 Organization Structure ………..……45
Figure 4.2 Gender ………50
Figure 4.3 Education ……….. 50
Figure 4.4 Work Experience ………...51
Figure 4.5 Path Diagram of AMOS Model ……….53
Figure 4.6 Path Coefficient of SOP in AMOS Model ……… 56
Figure 4.7 Path Coefficients of SOP and Effective ……… 57
Figure 4.8 Respondent’s Answer “The Implementation of SOPs is Effective” ……..58
Figure 5.1 Standard Operating Procedure: purchasing order ………..70
Figure 5.2 Problem Reports ……….73
Figure 5.3 Standard Operating Procedure Reports ………. 74
Istaseptria Christiawan LIST OF TABLES
Table Page
Table 1.2 Table of Assessment Result of Customer Dissatisfaction ………...13
Table 2.1 Previous Research ………...26
Table 3.1 Research Process ……….30
Table 3.2 Likert Scale Design ……….33
Table 3.3 Question Design Section I for Employees ………..34
Table 3.4 Question Design Section II for Employees……….… 34
Table 3.5 Rules of Thumb about Correlation Coefficient Size ………...40
Table 3.6 Goodness of Fit Criteria ………..41
Table 4.1 Summary Description of Pre-Test and Post-Test ………46
Table 4.2 Validity Test of Efficient factor (Pre-Test) for 10 Questionnaires ……….47
Table 4.3 Validity Test of SOP factor (Pre-Test) for 10 Questionnaires ………48
Table 4.4 Reliability Test of Efficient (Pre-Test) for 10 Respondents ………...49
Table 4.5 Reliability Test of SOP (Pre-Test) for 10 Respondents ………..49
Table 4.6 CMIN Table ………54
Table 4.7 RMSEA and GFI Table ………..54
Table 4.8 Coefficient Correlation of SOP on Effective ………. 57
Table 4.9 Hypotheses Testing Summaries ………..60
Table 4.10 Hypotheses Testing Summaries ……….. 62
