Lecture on Industrial Management

Dr. Sri Bramantoro Abdinagoro

Metallurgy and Materials Department

Faculty of Engineering
University of Indonesia

2018
Company Vision & Mission
• Visi : “What we do become?”

• Misi : “what is our business?”

A good mission statement describes an

organization’s purpose, customers, products or
sevices, markets, philosophy, and basic technology
Contoh Visi dan Misi
PT Astra Honda Motor, perusahaan yang menjalankan fungsi produksi,
penjualan dan pelayanan purna jual yang lengkap untuk kepuasan
pelanggan dan memiliki:

Visi
To Be Number One Market Driven Trend-setter motorcycle Company in
Indonesia in term of customer satisfaction the empowered human capital
guided by shared values.
Misi
To provide mobility solution which exceed customer expectation with the
best value motorcycle & Its related products, thru empowered human
capital for the benefit of all stakeholders.
Misi & Visi Apple
“Apple designs Macs, the best personal computers in the world, along
with OS X, iLife, iWork, and professional software. Apple leads the digital
music revolution with its iPods and iTunes online store. Apple reinvented
the mobile phone with its revolutionary iPhone and App Store, and has
recently introduced its magical iPad which is defining the future of mobile
media and computing devices.”
Mission Statement the Body Shop
 Dedicate our business to the pursuit of social and environmental
change.
 Creatively balance the financial and human needs of our stakeholders:
employees, customers, franchisees, suppliers and shareholders.
 Courageously ensure that our business is ecologically sustainable,
meeting the needs of the present without compromising the future.
 Meaningfully contribute to local, national and international
communities in which we trade by adopting a code of conduct that
ensures care, honesty, fairness and respect.
 Passionately campaign for the protection of the environment, human
and civil rights, and against animal testing within the cosmetics
industry.
 Tirelessly work to narrow the gap between principle and practice,
whilst making fun, passion and care, part of our daily lives.
Business Functions
 Human Resources
 Sales and Marketing
 Research and Development
 Production/Operation
 Customer Services
 Financial and Accountant
 Administration and Information Technology
Human Resources
 Recruitment and Retirement
 Job Deskription
 Personal Specification
 Motivation
 Profesional Development and Training
 Work Health and Safety
 Worker Union
Sales and Marketing
 Market Research
 Promotion Strategy
 Price Strategy
 Sales Strategy
 Sales Team
 Product – input for new development product, product
enhancement, market share strategy, target market
Research and Development
 New Product Development
 Product Enhancement
 Competitive advantage
 Value Added
 Product testing
 Efficiency advantage
 Cost reduction
Financial and Accountantcy
 Cash flow
 Revenue monitoring
 Expence monitoring
 Account preparation
 Financing
 Stock
 Loan
 Relate to other functions
Production/Operation
 Finding resources
 Planning outputs – worker, capital, land, etc.
 Cost monitoring
 Cost/Expences projection
 Production Methods
 Batch
 Flow
 Job
 Cell
 Efficiency
Customer Services
 Distribution monitoring
 After-sales service
 Customer Requirement
 Customer input
 Customer complaint
 Publicity and public relation
Administration and IT
• Managing estates – cleaning, health
and safety, maintenance, security
• Reception
• Clerical work – reporting, recording,
record keeping, communication
• Overview of quality control
• Use of IT systems
Type of Business Organisations
 Global businesses – complex organisation
structures
 National – organisation possibly stretches
throughout the country
 Regional – could be through a county or wider
area (North West, South East, etc.)
 Local – small organisations serving local area or
community
Element of Business Organisation
 Authority – the right to make decisions and carry out tasks
 Span of control – the number of people a superior
is responsible for
 Chain of Command – the relationship between different levels of
authority in the business
 Hierarchy – shows the line management
in the business and who has specific responsibilities
 Delegation – authority to carry out actions
passed from superior to subordinate
 Empowerment – giving responsibilities to people
at all levels of the business to make decisions
 Organisation Structure
Pyramidal Structure

MD

Senior
Management

Middle
Management

Workers
Hyrarchi Model
Managing
Director

Product A Personal and Product B

Manager Finance Manager

R&D Marketing Production R&D Marketing Production

(1) A Simplified Product Organizaiton

Managing
Director

Division A Division B Division C

Director Director Director

Marketing Production R&D Finance Personnel

Director Director Director Director Director

(2) Part of A Divisional Structure

Matrix Model
Geographic Area

Director Director Director Director

Country A Country B Country C Country D
Corporate
functions

R&D

Central
Marketing

Corporate
Finance

Supply
Chain

(3) A matrix structure where the country managers have more power than the corporate functions
Entrepreneural Model

Finance

R&D Production

MD

Marketing Sales
Trend on Organisation Structure
 Changes to business structures
 Linked to new thinking on leadership and
management
 Less hierarchical
 Emphasis on communication
and collaboration between sections
 Global businesses – more complex structures
Relationship of Strategy and
Organisation Structure

• What do we want to achieve?

Strategy - cost leadership or new product innovation or global
branding or domination of local country markets etc.

Processes,
• What key business process must we be good at?
Systems, What behaviors must our people exhibit? What
Behavior information do they need to manage these business
processes?

• What structure and organizational linkage will best support

Structure our people, so they can build the contracts and networks
to hel them with their work? And how can we stop the
structure getting in peoples’s way?
Dr. Sri Bramantoro Abdinagoro
Managerial Decision Making
 Its not easy to make a decision

 Have to make it at equally…

 Changing factors
 Not clear information
 Many point of view

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Decision Making Situations
 Will our plant add a new production line or only outsourcing?
 Choosing the best supplier for company…
 To be a public company or still be a private company…
 Choosing an employer to be a manager…
 Using production machine, for example: induction furnace or blast
furnace?
 etc.
Decision and Decision Making
 Decision = choice of available alternatives

 Decision Making = process to identify

problems and opportunities, and solve its.

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Decision Making Definition
 Decision making is the study of identifying and choosing alternatives based
on the values and preferences of the decision maker. Making a decision
implies that there are alternative choices to be considered, and in such a
case we want not only to identify as many of these alternatives as possible
but to choose the one that best fits with our goals, objectives, desires,
values, and so on.. (Harris, 1980)
Decision Making Approach
 Rational (Logical
Approach)
 Intuitive Approach
 Can Not be Decided
(Ambiguous Approach)
 Impulsive Approach)

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Problem Solving Model
 Describe problem (situation,
obstacles) and establish purpose.
 Search the cause, find the facts.
 Definite real problem and establish
goal.
 Developt alternative solutions 
brainstorming
 Decide the best solution
 Implement the decision
 Follow up
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Problem Solving Stages
PROBLEM DEFINTION REQUIREMENT LIST GOAL ESTABLISMENT

DECISION MAKING CRITERIAS ALTERNATIVES

TOOLS SELECTION DEFINITION IDENTIFICATION

SOLUTION
ALTERNATIVES
VALIDATION
EVALUATION
THROUGH PROBLEM
THROUGH CRITERIAS
DEFINITION
Decision Making Methods
 Base of Decision Maker:
 Personal/One person
 Group
 Decision Making Technique
 Simple Weighted
 Cost-Benefit Analysis
 Decision Tree Method
Simple Weighted Method
 Define Criteria
 Define criteria weight

No. Criteria Weight Value Amount

Total 100%
Cost-Benefit Analysis
 Define cost criteria
 Define benefit criteria
 Compare value of cost and value of benefit,
 The ratio =
Cost
Benefit

 This ratio usually used in government and non profit

orientation programs.
Decision Tree Method
 Define decision alternatives
 Consider the probability.
 Example:
 PT. Metal Indonesia Maju, have plan to expanse their company through developing a new plant
regarding the future market prospect. They are three alternatives that the strategic team proposed:
 Develop a Small Scale Plant
 Develop a Large Scale Plant, and
 Do Nothing
 Strategic team also review a market probability:

Alternatives 25% Low 25% Medium 50% High

Do Nothing 0 0 0
Small Scale Plant 50 300 200
Large Scale Plant -500 100 600
Decision Tree Actions:
L (25%) x 0 = 0

DN M (25%) x 0 = 0
0
H (50%) x 0 = 0

L (25%) x 50 = 12,5

M (25%) x 300 = 75
? SSP
187,5
H (50%) x 200 = 100

L (25%) x -500 = -125

M (25%) x 100 = 25
LSP
200
H (50%) x 600 = 300
Your Homework!
 A nickel mining company who have a concession at South Sulawesi,
nowadays in a dilemma situation. Government Regulation said that all
mining company have to processing or converting their bauxite ore before
exporting. All this time, the company only know the mining process, they
didn’t know how to processing or converting their ore.
 As a metallurgist, You are asked to help this company. For the first step,
you would to provide criteria that have to consider before build the ore
processing plant.
 What the criteria that will you provide and explain it?
-End of Session-