Conference Committee – IEOM 2019 Bangkok
Conference Chairs
Dr. Wichai Chattinnawat, Chiang Mai University, Thailand
Dr. Ahad Ali, Lawrence Technological University, Southfield, Michigan, USA Honorary Chair
Dr. Abdur Rahim, University of New Brunswick at Fredericton, Canada Global Engineering Education Chairs
Dr. Abu Masud, Boeing Global Engineering Professor, Industrial and Manufacturing Engineering Department, Wichita State University, Kansas, USA
Dr. Hamid Parsaei, Professor of Industrial and Systems Engineering, Texas A&M University (College Station) and Director of Academic Outreach – Texas A&M University, Qatar Industry Solutions Chairs
Edly Ramly, Lean Six Sigma Master Black Belt, EFR Certification, Malaysia Masaru Tezuka, Hitachi Solutions East Japan, Ltd., Japan
Special Track on Industry 4.0 for SMEs Chair
Assoc. Prof. Apichat Sopadang, Department of Industrial Engineering, Chiang Mai University, Thailand
Women in Industry and Academia Chairs Resh Plaha, Crystal Quality, UK
Dr. Ilham Kissani, Al Akhawayn University, Morocco Program Chairs
Dr. Mohammed Khadem, Sultan Qaboos University, Oman Dr. Abdul Talib Bon, UTHM, Malaysia
Dr. Norsyuhada Ab Shukor, Centre for Information and Communication Technology, National Defence University of Malaysia, Kuala Lumpur
Publication Chair
Dr. Mohammed Rahman, Central Connecticut State University, USA Sponsors and Exhibitors Chair
Professor Don Reimer, Lawrence Technological University, Southfield, Michigan, USA
Regional Academic Committee
Dr. Wichai Chattinnawat, Chiang Mai University, Thailand (Co-Chair)
Professor Rene D. Estember, Mapua University, Manila, Philippines
Dr. Abdul Talib Bon, Professor of Technology Management, UTHM, Malaysia
Dr. Rosemary Seva, Dean of Gokongwei College of Engineering, De La Salle University – Manila, Philippines
Dr.Wahyudi Sutopo, Professor and Chair of Industrial Engineering, Sebelas Maret University, Surakarta, Indonesia
Dr. Mohammed Iqbal, Professor of Industrial Engineering, Shahjalal University of Science and Technology (SUST), Sylhet, Bangladesh
Professor Dr. Parames Chutima, Director – Regional Centre for Manufacturing Systems Engineering, Faculty of Engineering, Chulalongkorn University, Bangkok, Thailand
Dr. Paveena Chaovalitwongse, Head of IE Department, Faculty of Engineering, Chulalongkorn University,Phayathai Road, Bangkok, Thailand
Pimprabha Sirito
Tuangyot Supeekit, Industrial Engineering Department, Mahidol University, Bangkok, Thailand
Dr. Ganda Boonsothonsatit, Technopreneurship Program, Institute of FIeld roBOtics, King Mongkut’s University of Technology Thonburi, Thailand
Honorary Committee
Pr. Moulay Larbi Abidi, Director, École Mohammadia d’ingénieurs (EMI), Rabat, Morocco Dr. Hesham Kamal Al-Fares, King Fahd University of Petroleum and Minerals, Saudi Arabia Dr. Hamidi Bashir, Chairperson, Department of Industrial and Engineering Management, University of Sharjah, UAE
Dr. Mohamed Essaaidi, Professor and Director (Dean), ENSIAS College of Engineering – Mohamed V University in Rabat, Morocco
Dr. Devashis Mitra, Dean – Faculty of Business Administration, University of New Brunswick, Fredericton, Canada
Prof. Dr. Mohd Razali Muhamad, Deputy Vice Chancellor (Academic and Internationalization), Universiti Teknikal Malaysia Melaka
Professor Dr. Norazman Mohamad Nor, Deputy Vice Chancellor (Research and Innovation), National Defence University of Malaysia in Kuala Lumpur
Dr. Hamid R. Parsaei, Associate Dean for Academic Affairs, Texas A&M University at Qatar and Professor of Industrial and Systems Engineering, Texas A&M University
Dr. Ismail Tag, SVP & Provost, The Petroleum Institute, Abu Dhabi, United Arab Emirates Dr. Noordin Mohd. Yusof, Dean, Faculty of Mechanical Engineering, Universiti Teknologi Malaysia
Advisory Committee
Pr. Moulay Larbi Abidi, Director, École Mohammadia d’ingénieurs (EMI), Rabat, Morocco
Dr. Muhammad Abid, Ghulam Ishaq Khan Institute of Engineering Sciences & Technology, Pakistan
Dr. Olufemi Adetunji, University of Pretoria, South Africa
Dr. Umar AL-Turki, King Fahd University of Petroleum and Minerals, Saudi Arabia
Dr. Ronald G. Askin, Arizona State University, USA
Dr. Shekar Babu, Founding Head, AMRITA School of Business, Bangalore, India
Dr. Mohammed Ben-Daya, King Fahd University of Petroleum and Minerals, Saudi Arabia
Dr. Abdul Talib Bon, Universiti Tun Hussein Onn Malaysia
Dr. Raj Das, University of Auckland, New Zealand
Dr. Kudret Demirli, Khalifa University, Abu Dhabi, UAE
Dr. Jose Arturo Garza-Reyes, University of Derby, UK
Dr. Alireza Ghasemi, Dalhousie University, Halifax, NS, Canada
Dr. Moncer Abdelhamid Hariga, American University of Sharjah, United Arab Emirates (UAE)
Dr. Mohammad D. Al-Tahat, The University of Jordan, Amman, Jordan
Dr. Arun Kumar, Royal Melbourne Institute of Technology (RMIT) University, Australia
Dr. Jay Lee, University of Cincinnati, USA
Masaru Tezuka, Hitachi Solutions East Japan, Ltd., Sendai, Japan
Dr. Abu Masud, Wichita State University, Kansas, USA
Dr. Charles Mbohwa, University of Johannesburg, South Africa
Dr. Samar Mukhopadhyay, GSB-Sung Kyun Kwan University, Seoul, Korea
Dr. Mustapha Nourelfath, Université Laval, Quebec, Canada
Dr. Nor Hasni Osman, Universiti Utara Malaysia
Dr. Leonard Perry, University of San Diego, USA
Dr. Ho Thanh Phong, International University – VNUHCM, Vietnam
Dr. Yassine Ouazene, University of Technology of Troyes, France
Dr. Abdur Rahim, University of New Brunswick, Canada
Dr. Jafri Mohd Rohani, Universiti Teknologi Malaysia
Dr. Mehmet Savsar, Kuwait University, Safat, Kuwait
Dr. Rapinder Sawhney, University of Tennessee – Knoxville, USA
Dr. Rosemary Seva, De La Salle University – Manila, Philippines
Dr. Devdas Shetty, University of Hartford, Connecticut, USA
Dr. Hamid Seifoddini, University of Wisconsin-Milwaukee, USA
Dr. Alfredo Soeiro, University of Porto, Portugal
Dr. Robert de Souza, The Logistics Institute – Asia Pacific, Singapore
Dr. Masine Md. Tap, Universiti Teknologi Malaysia
Dr. Zulkifli Mohamed Udin, Universiti Utara Malaysia
Dr. Alok Verma, Old Dominion University, Norfolk, Virginia, USA
Dr. Venkata Seshachala Sarma Yadavalli, University of Pretoria, South Africa
Dr. Hari Agung Yuniarto, Universitas Gadjah Mada, Indonesia
Dr. Li Zheng, Tsinghua University, China
Dr. Henk Zijm, Dutch Institute for Advanced Logistics, University of Twente, Netherlands
Prof. K Mpofu, Gibela Research Chair in Manufacturing and Skills Development, Faculty of Engineering and the Built Environment, Tshwane University of Technology, Pretoria, South Africa
Global Engineering Education Committee
Dr. Abu Masud, Wichita State University, Kansas, USA (Chair)
Dr. Hamid Parsaei, Texas A&M University (College Station) and Texas A&M University,
Qatar (Co-Chair)
Dr. Jafri Mohd Rohani, Universiti Teknologi Malaysia
Dr. Grace Kanakana of Tshwane University of Technology, Pretoria, South Africa
Program Committee
Dr. M. Khadem, Sultan Qaboos University, Muscat, Oman (Co-Chair)
Dr. Abdul Talib Bon, Universiti Tun Hussein Onn Malaysia(Co-Chair)
Dr. Rushan Ziatdinov, Department of Industrial & Management Engineering, Keimyung University, Daegu, South Korea
Dr. Lina Aboueljinane, Industrial Engineering Program, École Nationale Supérieure des Mines de Rabat (ENSMR), Morocco
Dr. Bouloiz Hafida, Industrial Engineering Department, National School of Applied Sciences (ENSA), Ibn Zohr University, Agadir, Morocco
Dr. Jaouad Boukachour, Université Le Havre, France
Dr. Tan Chan Sin, School of Manufacturing Engineering, Universiti Malaysia Perlis (UniMAP), Malaysia
Dr. Lina Gozali, Universitas Tarumanagara, Indonesia
Industry Solutions Committee
Dr. Zeki Ayağ, Kadir Has University, Turkey
Amine Belhadi, Industrial Engineering Research Team, Higher School of Technology, Safi, Cadi Ayyad University, Marrakech, Morocco
Navpreet Singh Chandok ,O2i Technologies, India
Dr. Rahul Chougule, Caterpillar India Pvt Ltd, Bangalore, India
Sameh Moh. Nour El-Din A-Razek, Al Ezz Dekheila Steel Co., Alexandria, Egypt Abdullah Y Dhafer, Aramco, Saudi Arabia
Natasha Dzulkarnain, Construction Research Institute of Malaysia (CREAM) Dr. Kenichi Funaki, Hitachi, Yokohama, Japan
Dr. Adel Hejaaji, Engineering Services Management (ESM) Limited, Essex, UK Dr. Anwar Hossain, Daikin Applied, Minneapolis, Minnesota, USA
Ihfasuziella Ibrahim, Construction Research Institute of Malaysia (CREAM) Hwa Kooi Kok, Intel Malaysia
Ali Massaeli, National Iranian Gas Company, Iran
Bob Mathur, Sr. Project Manager, Phillips 66 Refinery (Exxon), Linden, NJ, USA German Moya, President at IEEE Costa Rica Section, Costa Rica
Paul Moore, International Mining, England, UK
Dr. Gerard O’Connor, Adelaide and Meath Hospital, Dublin, Ireland Dr. Banu Ozkeser, Istanbul, Turkey
Dr. Sushil K. Shetty, Wilsonart LLC, Temple, Texas, USA Masaru Tezuka, Hitachi Solutions East Japan, Ltd., Japan
Women in Industry and Academia (WIIA) Committee
Resh Plaha, Crystal Quality, UK
Dr. Chan Chee-Ming, Associate Professor and Deputy Dean (Academic and Research), Universiti Tun Hussein Onn Malaysia
Dr. Mey Goh, Assoc Professor in Product Design, Loughborough University, UK
Dr. Ilham Kissani, Faulty of Engineering & Management Science, Al Akhawayn University, Ifrane, Morocco
Dr. Stefanie Pillai, Dean and Associate Professor, Faculty of Languages & Linguistics, University of Malaya, Kuala Lumpur, Malaysia
Dr. Funda Sivrikaya Şerifoğlu, Bilgi University, Istanbul, Turkey
Dr. Adibah Shuib, Faculty of Computer and Mathematical Sciences, Universiti Teknologi MARA, Malaysia
Dr. Vanajah Siva, Chalmers University, Sweden Vanessa Victoire, University of Mauritius
Prof. Soumaya Yacout, École Polytechnique de Montréal, Canada
Dr. Docki Saraswati, Universitas Trisakti, Jakarta, Indonesia
Dr. Ho Hwi Chie, Bina Nusantara University (Binus), Indonesia
Proceedings – 2019 IEOM Bangkok ISBN: 978-1-5323-5948-4 ISSN: 2169-8767
ID 011 Anaerobic Digestion of Kitchen and Sewage Sludge Bio waste to Biogas using Engineered Bio catalysis
M. M. Manyuchi, BioEnergy and Environmental Technology Centre, Department of Operations and Quality Management, Faculty of Engineering and the Built Environment, University of Johannesburg, South Africa
Department of Chemical and Processing Engineering, Faculty of Engineering, Manicaland State University of Applied Sciences, Zimbabwe
C. Mbohwa, BioEnergy and Environmental Technology Centre, Department of Operations and Quality Management, Faculty of Engineering and the Built Environment, University of Johannesburg, South Africa
M. Mpeta, Department of Environmental Engineering, Faculty of Engineering, Chinhoyi University of Technology, Zimbabwe
E. Muzenda, BioEnergy and Environmental Technology Centre, Faculty of Engineering and the Built Environment, University of Johannesburg, South Africa
Department of Chemical, Materials and Metallurgical Engineering, Faculty of Engineering and Technology, Botswana International University of Science and Technology, P Bag 16, Palapye, Botswana
ID 012 Operations improvement in a manufacturing business of make-to-order special vehicles
Inês Azevedo, Faculty of Engineering, University of Porto, Rua Dr. Roberto Frias, s/n 4200- 465 Porto, Portugal
Vera L. Migueis and Americo Azevedo, Faculty of Engineering, University of Porto, Rua Dr.
Roberto Frias, s/n 4200-465 Porto, Portugal
INESC TEC, Rua Dr. Roberto Frias, Campus da FEUP, 4200-465 Porto, Portugal ID 013 Methane Generation from Landfill Waste as a Resource Recovery Strategy Mercy Manyuchi, Department of Operations and Quality Management, Faculty of Engineering and the Built Environment, University of Johannesburg, South Africa
Department of Chemical and Processing Engineering, Faculty of Engineering, Manicaland State University of Applied Sciences, Zimbabwe
C. Mbohwa, Department of Operations and Quality Management, Faculty of Engineering and the Built Environment, University of Johannesburg, South Africa
M. Mpeta, Department of Environmental Engineering, Faculty of Engineering, Chinhoyi University of Technology, Zimbabwe
E. Muzenda, Department of Chemical Engineering and Technology, Faculty of Engineering and the Built Environment, University of Johannesburg, South Africa
Department of Chemical, Materials and Metallurgical Engineering, Faculty of Engineering and Technology, Botswana International University of Science and Technology, P Bag 16, Palapye, Botswana
ID 014 Environmental Impacts for Setting up a Waste to Energy Landfill Site
M. M. Manyuchi, BioEnergy and Environmental Technology Centre, Department of
Operations and Quality Management, Faculty of Engineering and the Built Environment, University of Johannesburg, South Africa
Department of Chemical and Processing Engineering, Faculty of Engineering, Manicaland State University of Applied Sciences, Zimbabwe
C. Mbohwa, BioEnergy and Environmental Technology Centre, Department of Operations and Quality Management, Faculty of Engineering and the Built Environment, University of Johannesburg, South Africa
M. Mpeta, Department of Environmental Engineering, Faculty of Engineering, Chinhoyi University of Technology, Zimbabwe
E. Muzenda, BioEnergy and Environmental Technology Centre, Faculty of Engineering and the Built Environment, University of Johannesburg, South Africa
Department of Chemical, Materials and Metallurgical Engineering, Faculty of Engineering and Technology, Botswana International University of Science and Technology, P Bag 16, Palapye, Botswana
ID 015 Projector Nonlinear Gamma Effect Reduction for Fringe Projection
Dr. Javier Cruz Salgado, Technology Development Department, Universidad Politécnica del Bicentenario, Silao Guanajuato, 36283, México
ID 020 Integrated Quality Environmental Management Practices and its Impact on Operational and Environmental Performances in Food Processing SMEs
Jamaludin K.R., Hayati Habibah Abdul Talib & Syed Ali Raza Shah, Razak Faculty of Technology and Informatics, Universiti Teknologi Malaysia, Jalan Sultan, Yahya Petra, 54100 Kuala Lumpur, Malaysia
ID 021 Contractors Perception towards Excavation Hazard
Clinton Aigbavbao, Sustainable Human Settlement and Construction Research Centre, Department of Construction Management & Quantity Surveying, University of
Johannesburg, Doornfontein Campus, Johannesburg, 2028, South Africa
Zakari Mustapha, School of Engineering, Department of Building Technology, Cape Coast Technical University, Cape Coast, Ghana
Wellington Didi Thwala, Sustainable Human Settlement and Construction Research Centre, Department of Construction Management & Quantity Surveying, University of
Johannesburg, Doornfontein Campus, Johannesburg, 2028, South Africa ID 022 Major Excavation Hazard in Cape Coast Metropolis
Wellington Didi Thwala, Sustainable Human Settlement and Construction Research Centre, Department of Construction Management & Quantity Surveying, University of
Johannesburg, Doornfontein Campus, Johannesburg, 2028, South Africa
Zakari Mustapha, School of Engineering, Department of Building Technology, Cape Coast Technical University,
Cape Coast, Ghana
Clinton Aigbavbao, Sustainable Human Settlement and Construction Research Centre, Department of Construction Management & Quantity Surveying, University of
Johannesburg, Doornfontein Campus, Johannesburg, 2028, South Africa ID 023 Contractors Perception towards Excavation Hazard
Clinton Aigbavbao and Wellington Didi Thwala, Sustainable Human Settlement and
Construction Research Centre, Department of Construction Management & Quantity
Surveying, University of Johannesburg, Doornfontein Campus, Johannesburg, 2028, South
Africa
Zakari Mustapha, School of Engineering, Department of Building Technology, Cape Coast Technical University, Cape Coast, Ghana
ID 024 Major Excavation Hazard in Cape Coast Metropolis
Clinton Aigbavbao and Wellington Didi Thwala, Sustainable Human Settlement and Construction Research Centre, Department of Construction Management & Quantity Surveying, University of Johannesburg, Doornfontein Campus, Johannesburg, 2028, South Africa
Zakari Mustapha, School of Engineering, Department of Building Technology, Cape Coast Technical University, Cape Coast, Ghana
ID 025 Conceptual Framework to Estimate Continuous Improvement Project Success in Hospitals
Fernando Gonzalez-Aleu, Department of Engineering, Universidad de Monterrey, San Pedro Garza García, NL 66238, Mexico
Eileen M. Van Aken, Grado Department of Industrial and Systems Engineering, Virginia Tech, Blacksburg, VA 24061, USA
Jennifer Cross, Department of Industrial Engineering, Texas Tech University, Lubbock, TX 79409-3061, USA
Wiljeana Glover, Schlesinger Fund for Global Healthcare Entrepreneurship, Babson College, Babson Park, MA 02457-0310, USA
ID 026 Process Standardization: Process Improvement in the Inbound Logistics Department of An Aquaculture Manufacturing Firm
John Paolo Isip, La Consolacion University Philippines, Philippines Hazel Caparas, Bulacan State University, Philippines
ID 027 Ethical Leaderships and Organizational Culture of Student Organization at Indonesian Private University
Mahendra Fakhri, Mahir Pradana and Dita Puri Utami, Telkom University, Jalan Terusan Buah Batu, Bandung, 40257, Indonesia
ID 028 Degradation of Water Hyacinth (Eichhornia Crassipes) to Vermicompost through Application of the Vermicomposting Technology
Mercy M. Manyuchi and Charles. Mbohwa, Department of Operations and Quality Management, Faculty of Engineering and the Built Environment, University of Johannesburg, South Africa
Edison. Muzenda, Department of Chemical Engineering Technology, Faculty of Engineering and the Built Environment, University of Johannesburg, South Africa
Department of Chemical, Materials and Metallurgical Engineering, Faculty of Engineering and Technology, Botswana International University of Science and Technology, P Bag 16, Palapye, Botswana
Trevor. N. Mutusva, Department of Mathematical Sciences, School of Industrial Sciences and Technology, Harare Institute of Technology, Zimbabwe
Miranda Mpeta, Department of Environmental Engineering, Faculty of Engineering, Chinhoyi University of Technology, Zimbabwe
ID 029 The Application of Lean Manufacturing to Reduce Setup Time of a Printing
Process
Kasarin Chivatxaranukul, Aeronautic Engineering, Vincent Mary School of Engineering, Assumption University, Thailand
ID 030 Combination of Tolerances of False Causes of Failure in Neuro psychotics Structures of the prediction for the Reliability of Refurbished Systems
Fereidoun Heidari Takabi, Maintenance and methods Department, South pars gas complex, Asaluye, Iran
ID 821 Predicting Online Search Intention for Validating Product Halalness Status
Ida Giyanti, Industrial Engineering Study Program, Universitas Setia Budi, Surakarta, Indonesia Erni Suparti, Industrial Engineering Study Program, Universitas Setia Budi, Surakarta, Indonesia Wahyudi Sutopo, Research Group of Industrial Engineering and Techno-economics, Department of Industrial Engineering, Universitas Sebelas Maret, Surakarta, Indonesia
ID 822 Framework System of University Technology Based Start-Up Development by University Incubator: Case Study
Wahyudi Sutopo, Research Group of Industrial Engineering and Techno Economy, Industrial Engineering Department, Sebelas Maret University, Indonesia, Surakarta, Indonesia
Yuniaristanto, Laboratory of Logistic and Business System, Industrial Engineering Department, Sebelas Maret University, Indonesia, Surakarta, Indonesia
Danis Eka Prasetya Wicaksana, Laboratory of Logistic and Business System, Agency for Assessment and Application Technology, BPPT, Technology Policy Assessment, Indonesia
Anugerah Widiyanto, Research Group of Industrial Engineering and Techno Economy, Agency for Assessment and Application Technology, BPPT, Technology Policy Assessment, Indonesia
ID 823 Technical Feasibility Battery Lithium to Support Unmanned Aerial Vehicle (UAV): A Technical Review
Nida An Khofiyah, Department of Industrial Engineering, Universitas Sebelas Maret, Surakarta, Indonesia
Wahyudi Sutopo, Research Group of Industrial Engineering and Techno-economics, Universitas Sebelas Maret, Surakarta, Indonesia
Bayu Dwi Apri Nugroho, Department of Agricultural and Biosystems Engineering, Faculty of Agricultural Engineering, Universitas Gadjah Mada, Yogyakarta, Indonesia
ID 824 Influence of Work Safety and Work Stress on Productivity Daswir Lelo, PhD Candidate, Universiti Teknologi Malaysia
Sha’ri Mohd. Yusof, Razak School Engineering and Advanced Technology, Universiti Teknologi Malaysia
Jan Horas V. Purba, Sekolah Tinggi Ilmu Ekonomi Kesatuan, Bogor, Indonesia
ID 825 Internal vs External Green Supply Chain Management at Petrochemical Industry Economic Performance in Indonesia
Yuary Farradia, Faculty of Technology and Management, Universiti Tun Hussein Onn, Batupahat, Johor , Malaysia
Abdul Talib Bin Bon, Faculty of Technology and Management, Universiti Tun Hussein Onn, Batupahat, Johor , Malaysia
Hari Muharam, Faculty of Economics, Pakuan University, Bogor, Indonesia
ID 826 Environment Sustainability in Petrochemical Industry in Indonesia
Yuary Farradia, Faculty of Technology and Management, Universiti Tun Hussein Onn, Batupahat, Johor , Malaysia
Abdul Talib Bin Bon, Faculty of Technology and Management, Universiti Tun Hussein Onn, Batupahat, Johor , Malaysia.
ID 827 Green Marketing Mix Role Toward Sustainability Performance of Petrochemical Industry in Indonesia
Yuary Farradia, Faculty of Technology and Management, Universiti Tun Hussein Onn, Batupahat, Johor , Malaysia
Abdul Talib Bin Bon, Faculty of Technology and Management, Universiti Tun Hussein Onn, Batupahat, Johor , Malaysia
ID 828 User-Entity Behavior Analytics (UEBA) – A Systematic Review of Literatures Revanth Filbert Raj I, Department of Management, Amrita Vishwa Vidyapeetham University Bangalore, India
Shekar Babu PhD, Department of Management, Amrita Vishwa Vidyapeetham University Bangalore, India
ID 829 CSR and Social Media Analytics in India
Arya Sree, Department of Management, Amrita Vishwa Vidyapeetham University, Bangalore, India Shekar Babu PhD Department of Management, Amrita Vishwa Vidyapeetham University, Bangalore, India
ID 830 Vulnerability Management (VM) Analytics – A Systematic Review of Literatures
Rahul C. N, Department of Management, Amrita Vishwa Vidyapeetham University Bangalore, India Shekar Babu PhD, Department of Management, Amrita Vishwa Vidyapeetham University
Bangalore, India
ID 831 Healthcare Social Factors of Companies in India
Amritha M Nair, Department of Management, Amrita Vishwa Vidyapeetham University Bangalore, India
Shekar Babu PhD, Department of Management, Amrita Vishwa Vidyapeetham University Bangalore,
India
Proceedings of the International Conference on Industrial Engineering and Operations Management Bangkok, Thailand, March 5-7, 2019
© IEOM Society International
Internal vs External Green Supply Chain Management at Petrochemical Industry Economic Performance in Indonesia
Yuary Farradia and Abdul Talib Bin Bon Faculty of Technology and Management
Universiti Tun Hussein Onn Batupahat, Johor , Malaysia
[email protected], [email protected] Hari Muharam
Faculty of Economics Pakuan University
Bogor, Indonesia [email protected]
Abstract
Indonesia's petrochemical sector contributes to 3% of Indonesia GDP and its demand should soon grow by 5% per year due to Indonesia's economic expansion. This is correlated with the economic expansion of Indonesia, since petrochemical derivative products are utilized in the production process of plastic products, pharmaceuticals, and textile. The Indonesia government put high effort on the integrated petrochemical industry development toward green industry in order to achieve better economic performance. The overall objective of this study is to draw the relationship between internal green supply chain management (GSCM) and external GSCM practices on economic performance of petrochemical industry in Indonesia. Internal GSCM consist of eco design and internal environment management.
Whilst external GSCM consist of green purchasing and reverse logistic. This study was conducted among petrochemical olefin manufactures based in Banten Province Indonesia. The result showed that Internal GSCM has no direct effect on economic performance, but external GSCM has a positive effect on economic performance. The external GSCM practice implementation not only reduce any cost from waste treatment, environment accidents, and energy consumption toward profit achievement as well as profit growth over the years, but also generate sales and earnings.
Keywords
Internal Green Supply Chain Management, External Green Supply Chain Management, Petrochemical, Economic Performance,
1. Introduction
The petrochemical industry in Indonesia is one of the most important primary industries toward economic growth. It is the foundation of a wide variety of industrial production processes such as plastic and container, textile, rubber, agriculture, cosmetic, pesticide, cleaning agent, pharmaceutical, artificial skin, explosive material up to and fertilizer industries. These industries then create value added to Indonesia GDP as well as for exporting value.
Indeed, the petrochemical industry is the sector experiencing the highest growth in Indonesia. This is correlated with the economic expansion of Indonesia, since petrochemical derivative products are utilized in the production process of plastic products, pharmaceuticals, and textiles, amongst others.
Rambu Energy (2014), stated that Indonesia imported raw material used by petrochemical industry around US$8 billion since 2013. Hence, due to this imported raw material then upstream petrochemical industry offers thin margin and requires huge investment and advanced technology. One of the strategies for being sustainable in the business particularly in the business margin is to have a domestic plant of raw material supply instead of import. There are a number of petrochemical plants have decided to expand their plant capacity or building a new petrochemical plant.
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© IEOM Society International
Despite the effort for expanding domestic petrochemical plants, however, petrochemicals are also among the factors which has a relatively high share of biomass and the rapid growth in energy-intensive industrial activities. Thus this share contributes to the high level of Indonesia emissions. The government’s National Medium Term Development Plan (RPJMN) for 2015–2019 reaffirms Indonesia’s commitments to reduce its greenhouse gas emissions and strengthening its national energy security.
Jakfar et al., (2015) point out from their study about the application of Green Supply Chain, that Indonesia still needs a deeper understanding of both GSCM application and implementation on environmental problems caused by business operations. From the above statements related to the urgency of GSCM, it can be concluded that GSCM plays the main role for the manufacturing industry to reduce the environmental impacts to the business which could reduce the business cost incurred to the business. Moreover, trough implementation of GSCM, it would generate additional profit to the firm.
The study is aimed to understand in what extent of the internal and external GSCM practice within the petrochemical industry in Indonesia. In addition, the study is also aimed to investigate the internal and external green supply chain management practices within the petrochemical industry in Indonesia.
Shibao et al. (2014) understand how to process the relationship between business strategies of GSCM (internal practices, external, green investments, eco-design and reverse logistics), the green profile (proactive and reactive corporate) and performance measures (environmental, economic and operational) in Brazilian chemical industries.
Their results showed that proper management of the green supply chain, implemented by environmental practices, results in superior performance, whether environmental, economic or operational. This alignment of strategy and supply chain is becoming an important trend as supply chain management becomes more and more integrated into company strategies.
2. Conceptual Model
Institutional Theory. The institutional theory provides explanations about the causes of the adoption certain organizational practices by firms (Hirsch, 1975). Specifically, to examine how external pressures coming from the environment in which the firm operates. The Indonesia Development Regulation no 14, 2015, The government’s development plan for the year 2015–2019 and the Presidential Decree No. 5/2006 on national committee economics emphasizes environment sustainability concerns as well as direction to achieve green industry objective for the long run national development. Thus this regulation in line with the coercive pressure mechanisms within institutional theory. Normative pressures cause firms to conform to expectations in order to be perceived as having legitimate organizational activities (Sarkis et al. 2011). Normative pressures include industry standards, best practices and conventional wisdom (Milstein et al. 2002). Mimetic pressures derive from uncertainty. The Environment Management in Indonesia was managed by the Ministry of Environment and Forestry (MOEF) which is principally regulated by Law No. 32 on Environmental Management and Protection and PROPER is one of a government program to review and give a rating on the corporation subject to environmental management system standardization. Thus this practice is part of normative pressures by the government in Indonesia to the Petrochemical Industry as well.
Resource Based View Theory. The RBV is one of the most-adopted theoretical lenses in analyzing supply chain management (Carter et al. 2014). According to the RBV, supply chain collaboration does not only help to build these valuable resources but it also allows firms to focus on their core activities, which increase firm-specific skills and realize economies of scale and learning effects. In this study, the RBV theory is used to explain the relationship between collaborative practices and performance. The dimension of internal green supply chain management practices in this study (eco-design and internal environment management) and external green supply chain management practice (green purchasing and reverse logistics) are the implementations of RBV theory in the industry.
This study then needs to know in what extent the industry implements both internal and external green supply chain management practices.
Stakeholder Theory. From the Stakeholder theory perspective, Externalities often cause stakeholders to increase pressures on companies to reduce the negative impacts and increase the positive ones. Specific stakeholder would have an influence on green purchasing, reverse logistics. The petrochemical industry provides the raw material for other downs stream industry, thus it will contribute the country gross domestic product toward country economic growth. Lo (2014) claims that drivers to go green can be either external such as legislation, customers and competitors, or internal which include: senior management support, firm reputation and cost reduction.
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© IEOM Society International 2.1. Internal green supply chain management practice
Internal GSCM is defined as the environmental management practices conducted within a company (Rao & Holt, 2005; Vachon & Klassen, 2006). Yu et al., (2013) based on their study also confirmed that Internal GSCM affects operational performance in terms of flexibility, delivery, quality, and cost. The internal GSCM practices are internal environmental management, eco-design, and investment recovery (Jabbour & Sousa, 2015); According to Green et al. (2012), companies tend to adopt internal GSCM first, followed by external GSCM. Similarly, Zhu et al.
(2012) affirm that external GSCM can improve firms' performance after the adoption of internal GSCM.
Eco-Design refers to the environmental design of a product and /or a process. It focuses on reducing (preventing) the environmental effects of a product before it is produced, distributed and used. According to Zhang (2017), the most obvious features of green design and traditional chemical product design are embodied in realize efficient utilization of resources means from the point of view of sustainability, renewable resources should be used as far as possible to maximize the utilization of resources. Zhou et al, (2016) on their study about integrated factor analysis model for product eco-design based on full life cycle assessment concluded that there was logical relationships among resource efficiency, economic efficiency, and environmental efficiency, builds a fully comprehensive evaluation analysis model to trace, evaluate and analyze the status of the material and value flow of the product lifecycle process.
Thus enterprises achieve an ideal condition of all three dimensions, namely resource efficiency, economic efficiency, and environmental benefits. Further, Zhang (2017) concluded that in the era of increasing chemical pollution, green chemistry and chemical industry came into being, and in the development of chemistry and chemical engineering, using the idea of "green", adopt green manufacturing methods, and paying attention to the training of talents in the field of expertise will be the main direction and goal of country's future efforts in the field of chemistry and chemical engineering. On the other hand, Singhal (2013) defined the scope of eco-design is Materials, Manufacturing, Packaging, Transport and Distribution, Use and finally End-of-life
International environmental management is defined as the process and procedures that espouse intra- organizational environmental goals in which the significant strategic resource comes from the management support (Green et al., 2012). Internal Environmental Management includes top management commitment, cross-functional cooperation for environmental improvements, total quality environmental management, environmental compliance, environmental management system and ISO14001certification (Bag et al, 2017. p .162; Guerrero-Baena et al., 2015).
2.2 External green supply chain management practice
The external GSCM has direct contact with the external factor of a firm such as with supplier and customer. The External GSCM practices used in this study are referred to Green Purchasing (GP and Reverse Logistics (RL).
Green purchasing (GP) is defined as an environmentally conscious purchasing initiative that tries to ensure that purchased products or materials meet environmental objectives set by the purchasing firm, such as reducing the sources of wastage, promoting recycling, reuse, resource reduction, and substitution of materials (Carter et al., 1998;
Min & Galle, 2001; Zsidisin & Siferd, 2001). GP refers to the procurement of products and services that have a reduced effect on human health and the environment when compared with competing products or services that serve the same purpose (Vishal & Avinash, 2016).
As GSCM not only focuses on environmental issues but also economic aspects too, thus an appropriate reverse logistics system should be designed to achieve efficiency and thereby, achieve economic benefit for the company (Govindan, et al., 2015). Reverse logistics is receiving much attention recently due to growing environmental or legislative concern and economic opportunities for cost savings or revenues from returned products (Roghanian &
Pazhoheshfa, 2014), means that implementation of reverse logistics especially in product returns would allow not only for savings in inventory carrying cost, transportation cost, and waste disposal cost due to returned products but also for the improvement of customer loyalty and futures sales. It refers to all the things that take place ones the product has been sold (Christopher, 2016). The primary objective of reverse logistics is to maximize the activities taking place after selling the product such as customer service, warehousing and inspecting the quality which can act as another source of income, increase the satisfaction of the client as well as conserve the environment (Christopher, 2016).
Reverse logistics is based on the 4Rs i.e. refund, restock, refurbish and recycle (Murray, 2012).
3. Hypotheses Development
Schmidt et al., (2017), confirmed that there is positive relationship between GSCM practice (focus on eco-design and green purchasing) with firm performance (mainly on financial and market share aspect). Rahim et al.,(2016) found
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the green supply chain management practices and its elements can improve organizational performance and help sustain the business. In addition, the available empirical evidence suggests that GSCM practices are associated with sustainable firm performance (environment, economic and social performance), Tritos et al., (2013).
Hence, this study postulates that GSCM practices influence firm economic performance. The research hypotheses framework is illustrated at figure 1 below with hypotheses are developed as follow:
H1: Internal GSCM directly has a positive effect on economic Performance H2: External GSCM directly has a positive effect on economic Performance
Figure 1. Research Model
4. Sample, Data Collection and Measurements
This study focuses only for the Olefin petrochemical group located in Banten province Indonesia. As this survey is a multistage purposive random sampling, thus the position of respondents is various, starting from a senior supervisor, superintendent, assistant manager, manager up to general manager. The total number of employees from superintendent level upward is 704 people and using the Slovin formula to choose the respondent then the total respondents in this study are 296 which in line with the recommended sample size for the requirement SEM( Breckler, (1990) and Shah & Goldstein, (2006) which is above 200. Having data screening form outliers by SPSS then the data ready for measurement analysis is 255.
In this study the concepts related to GSCM practices (internal and external) will be measured by quantitative approach as this approach is considered to be more accurate since it can be conducted on a large scale and gives a lot of information as far as value statistic to describe, explain and predict phenomena (Khalid et al., 2012). Two types of software are employed for data analysis namely SPSS and Smart PLS. SPSS will be used for data screening, and descriptive statistics, whilst smart PLS 3 will be used to test the hypotheses by means of Structural Equation Model (SEM) from Partial Least Square (PLS).
The research model (figure 1) of this study consists a higher order construct. According to Hair et al (2017) instead of modeling the attributes on a single construct layer, higher-order modeling involves summarizing the lower- order components into a single multidimensional higher-order construct. This modeling approach leads to more parsimony and reduces model complexity, whilst in situations characterized by collinearity among constructs, establishing a higher-order structure can reduce collinearity issues and may solve discriminant validity problems.
The measurement validity test is conducted to all the first order construct subject to their reflective model.
These reflective variables within the first order construct are:
i. Representing Internal: Eco Design, Internal Environment Management
Items measured covers environmentally friendly of product design process; design of process for minimization of waste; design of products for reuse, recycle, recovery of material and component parts; design of products for reduce consumption of material/energy; policy statements urging environmental awareness within the company operational; efforts to let employee understand the importance of environmental
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preservation; value level of environment preservation; employee care on the manufacturing environment.
ii Representing External GSCM: Green Purchasing, Reverse Logistic
Items measured covers environmental criteria of supplier selection; cooperation with the suppliers; environmental audit for supplier’s internal management; environmental design specification to the suppliers; remanufacturing; cost savings in return process; revenue contribution by reverse logistics; decreasing inventory holding cost.
On the other side, the items measurement for the endogen variable economic performance covers decreasing fee for waste treatment and discharge; profit growth; market share growth; market need fulfillment; decrease fee for environmental accidents; profit consistently with the past three years; decrease of energy consumption cost; growth on sales and earnings; customer satisfaction; increase customer loyalty.
According to Ramayah, et al., (2018), in the assessment of reflective measurement model, three main assessment criteria are needed at the outset such as the internal consistency reliability, convergent validity (indicator reliability / outer loading and average variance extracted) and discriminant validity. In this study, all the items' loadings for reflective construct have fullfilled all the criteria of the minimum cut-off value such as at 0.70 for the consistency reliability (Hair, et.al., 2013) as well as pass the threshold of minimum 0.70, 0.70 and 0.50 (Fornell & Larker, 1981) for the convergent validity Cronbach's alpha, composite reliability (CR) and average variance extracted (AVE) respectively.
Having measured the eco design, internal environment Management, green purchasing and reverse logistic, then the higher order construct measurement of internal and external green supply chain management will use the two stage approach as the tool for higher order construct measurement. Hence, the Eco-Design and Internal Environment Management are modeled to the second order namely Internal GSCM, whilst the Green Purchasing and Reverse Logistic are modeled to the second order namely External GSCM. In term of two stage approach, Becker, et.al., (2012) stated that the two-stage approach proves more useful than the repeated indicator approach because it can be applied to estimate the higher- level, i.e., the path coefficient to and from the higher-order constructs. The two-stage approach is also can be applied to models with interaction effect among all constructs that are measured by reflective indicators.
Once we have confirmed that the construct measures are reliable and valid, the next step addresses the assessment of the structural model (figure 2) results.
Figure 2. Structural Model
Hair (2018), suggested five indicators for the inner model measurement namely coefficient of determination (R2), Effect size ( f2), predictive relevance (Q2), the goodness of fit (GoF) and path coefficient. The measurement results are presented at table 1 – 6 below.
Table 1. Inner VIF value
ECONOMIC PERFORMANCE
EXTERNAL GSCM 2.127
INTERNAL GSCM 2.695
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Table 3. Confidence interval bias results Table 4. R Square result
Original
Sample (O)
Sample Mean
(M) Bias 5.00
% 95.00
%
Construct R
Square R Square Adjusted
Remarks for R Square EXTERNAL GSCM
-> ECONOMIC
PERFORMANCE 0.259 0.255 -0.004 0.147 0.366 INTERNAL GSCM
-> ECONOMIC
PERFORMANCE -0.159 -0.15 0.009 -0.309 -0.012
ECONOMIC
PERFORMANCE 0.494 0.486
Substantial (Cohen, 1989);
Moderate (Chin, 1998) ; closed to moderate (Hair et al., 2017) Table 5. Effect size result Table 6. Construct cross-validated redundancy
ECONOMIC
PERFORMANCE CONSTRUCT SSO SSE Q²
(=1-SSE/SSO) REMARKS
EXTERNAL
GSCM 0.062 ECONOMIC
PERFORMANCE 2,550.00 1,794.39 0.296
Have Predictive Relevance for Endogenous Construct INTERNAL
GSCM 0.019
Table 7. Hypothesis Hypothesis Relationship Std
Beta Std
Error t -
value p -
value Decision
H1 INTERNAL GSCM ➔
ECONOMIC
PERFORMANCE -0.159 0.091 1.753 0.04 Not
Supported (t value < 1.96
H2 EXTERNAL GSCM ➔
ECONOMIC
PERFORMANCE 0.259 0.067 3.855 0 Supported
RELATIONSHIP
PATH
COEFFICIENT Sample Mean (M)
Standard Deviation (STDEV)
T Statistics (|O/STDEV|) P
Values Original
Sample (O) EXTERNAL GSCM ->
ECONOMIC PERFORMANCE 0.259 0.255 0.067 3.855 0
INTERNAL GSCM ->
ECONOMIC PERFORMANCE -0.159 -0.15 0.091 1.753 0.04
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Based on all criterion of structural model result thus the hypothesis of this study can be concluded. Internal GSCM does not have positive relationship with economic performance. On the other side external GSCM have positive relationship with economic performance.
5. Discussion and Conclusion
5.1
The extent of green supply chain management practice within petrochemical industry in IndonesiaGreen industry standardization has started to be implemented by some of the petrochemical producers in Indonesia. The green industry concept is in line with the effort of driving the organizations to focus on driving excellence through all areas of the organization from supply chain to operations, to channel management, to sales and marketing, research and development and finance, toward better economic performance. GSCM started to run at the petrochemical industry in Indonesia due to various efforts, though other countries have higher extent of GSCM implementation at their petrochemical industry (Younis, 2016). Azari et al., (2018) concluded from their study on GSCM risk identification at local petrochemical company in Indonesia, majoring in fertilizer (PT Petrokimia Gresik) that GSCM implementation at PT Petrokimia Gresik able to identify 70 risks and 78 risk agent based on SCORE model.
5.2
Internal green supply chain managementThe finding results indicate that internal GSCM has no effect on economic performance, although statistically, the first order construct measurement analysis result indicates the industry do the effort of eco design which an internal enforcement on internal environment management. Whilst on the other side green purchasing has implemented in relation to their procurement activities as well as reverse logistic policy for both cost saving and waste minimization.
This finding is related with the fact that though the overall national policy is toward green industry, however the implementation of GSCM still just in beginning stage due to still only a few producers have started to run it. One example is PT Chandra Asri Petrochemical which has ecolabel certification issued by the Ministry of Environment for Developing Degradable plastic green (Chandra Asri Petrochemical Company Profile). This ecolabel certification effort relates to internal GSCM implementation and this effort also runs at the petrochemical organization in India (Khastagir & Roy, 2014).
Eco-design still has some challenges subject to the active ingredient of olefin products. Therefore, manufacturing firms must actively engage in green innovation, including environmentally oriented product designs and manufacturing process in order to meet the requirements of sustainable development (Tseng et., al, 2013). Economic sustainability in this study is measured by market need fulfillment in order to achieve customer satisfaction as well as customer loyalty which finally lead to industry growth on sales and earnings. Thus the internal GSCM improvement effort such as eco design development and the various of industry green certifications need to be more promoted to the customer.
5.3. External green supply chain management
The finding results indicate that external GSCM has a positive effect on economic performance. The dimension of external GSCM in this study is green purchasing and reverse logistic. Green purchasing is less capital intensive as it is an externally oriented green supply chain initiative. In line with the various green certification (i.e. ISO 14001, Eco label, Indonesia PROPER certificates) thus majority of the petrochemical manufacturers have set their product specification to be based on the green basis. Thus it implemented on their purchasing or procurement product specification. This finding was also found to be the case in Malaysia, for example
,
whereEltayeb et al. (2011) found that better economic performance is the main driver for Malaysian firms to adopt green purchasing practice.The relationship between green purchasing and economic performance covers about cost for energy consumption, customer satisfaction and fulfillment of market need. Whilst reverse logistic implementation covers the profit, cost and fee for waste treatment and discharge.
Reverse logistics is the least adopted practice by the petrochemical industry in Indonesia, in particular of inventory cost. Abdulrahman, et al., (2014) described that one of a possible reason that causes reverse logistics to have less attention is due to low commitment to reverse logistics practices and lack of reverse logistics expert at management
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level in the manufacturing firms. Most of the petrochemical manufacturers objective of reverse logistics in line with the prior study by Christopher (2016). According to Christopher (2016), the objective of reverse logistics practice was to maximize the activities taking place after selling the product such as customer service, warehousing and inspecting the quality which can act as another source of income, increase the satisfaction of the client as well as conserve the environment. Thus an appropriate reverse logistics system should be designed to achieve efficiency and thereby, achieve economic benefit for the company (Govindan, et al., 2015).
Comparing all measurement of extent level external GSCM, the green purchasing still be the challenge to be fulfilled by the industry. Green purchasing is about taking social and environmental factors into consideration alongside financial factors in making procurement decisions. Making decisions in this way requires setting procurement into the broader strategic context including value of money, performance management, corporate and community priorities (UN, Procurement Handbook, 2012).
5.4. Conclusion
In summary, petrochemical industry in Indonesia is has a tendency toward fulfillment the green supply chain management application. Although, the petrochemical industry in Indonesia indicates that only the external GSCM practices affect the economic performance. An earlier study of economic performance revealed that out of the four GSCM practices, only green purchasing was found to have a significant impact on economic performance (Younis, 2016). On the other side, eco-design, which failed to impact any of corporate performance dimensions.
Hence, economic performance considerations should be taken into account in the petrochemical industry, considering the scarcity of natural resources and importance of this industry in development in one hand and environmental damage caused by this industry on the other hand.
Some indicators for economic performance might be used for the benchmark based on this study can be started on the successful of any new product launches as the impact of GSCM practices implementation subject to the green product or green production process. The external GSCM practice implementation could generate sales and earning toward profit achievement as well as profit growth over the years. Because, it might impact customer satisfaction toward their loyalty to the firms. In addition, the process production might reduce any cost / fee from waste treatment, environment accidents, and energy consumption due to the effect of external GSCM practices implementation.
Acknowledgement
Thank you for the Faculty of Technology and Management - Universiti Tun Hussein Onn for the literatures access and for the support from the Faculty of Economics – Universitas Pakuan, Bogor, Indonesia.
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Biographies
Abdul Talib Bon is a professor of Production and Operations Management in the Faculty of Technology Management and Business at the Universiti Tun Hussein Onn Malaysia since 1999. He has a PhD in Computer Science, which he obtained from the Universite de La Rochelle, France in the year 2008. His doctoral thesis was on topic Process Quality Improvement on Beltline Moulding Manufacturing. He studied Business Administration in the Universiti Kebangsaan Malaysia for which he was awarded the MBA in the year 1998. He’s bachelor degree and diploma in Mechanical Engineering which his obtained from the Universiti Teknologi Malaysia. He received his postgraduate certificate in Mechatronics and Robotics from Carlisle, United Kingdom in 1997. He had published more 150 International Proceedings and International Journals and 8 books. He is a member of MSORSM, IIF, IEOM, IIE, INFORMS, TAM and MIM.
Yuary Farradia is currently PhD candidate in technology management in the Faculty of Technology Management and Business at the Universiti Tun Hussein Onn Malaysia since October 2018. Her master degree in natural resources economics has been obtained from Universiti Putra Malaysia (UPM) in the year 1993-1995. Her bachelor degree in Agriculture in field of fisheries has been obtained from Universitas Padjadjaran, Bandung Indonesia in 1991.
Currently she is a lecture at various universities in both Jakarta and Bogor, Indonesia where she teaches production and management operation, strategic management operation, global marketing, entrepreneurship, service management, organization behavior, human resource development plan at both undergraduate and postgraduate level.
Hari Muharam is currently a senior lecturer at Universitas Pakuan,Bogor Indonesia in the faculty of both economics and post graduate program. His PhD in marketing and magister management have been obtained from YAI, Jakarta Indonesia. His bachelor degree in management has been obtained from Universitas Pakuan, Bogor Indonesia.
Currently he is a lecture where he teaches in filled of production and management, marketing, human resource, and research methodology at both undergraduate and postgraduate level.
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