ANALYSIS OF THE IMPACT OF ELIMINATION EIGHT MAJOR LOSSES IN CO-GENERATION POWER PLANT TO INCREASE PROFITS IN THE PULP & PAPER MILLS MANUFACTURING INDUSTRY

Abstract

In the industrialized world, increasing productivity and profitability is very important for companies as a benchmark of success in business processes. Some literature has defined the success factor of the successful application of the concept of TPM as a tool to improve the productivity performance of the company, therefore improving the productivity performance of the company becomes the main thing in improving long-term sustainable profitability for the company .

In the manufacturing industry pulp and paper mills, the contribution of the highest production costs is in raw materials (Pulp and chemical raw materials), followed by energy and packaging. The energy sector occupies the top three in the cost contributor to variable costs, it is triggered because in the pulp paper industry sector, the consumption value for electrical energy and heat is very high. Therefore, success in eliminating eight major losses is a major success factor in improving the profitability of the company.

To analyze the effects of elimination of eight major losses, reduction of production costs and increase in profitability can be solved by evaluating the influence of all indicators of eight major losses using PLS-SEM. The data used is operational data co-generation plant production of PT. XYZ in 2019.

From the research conducted it is known that the variable Overall Plant Effectiveness (OPE) is significantly influenced by 2 (two) of the 3 (three) constituent indicators, namely Availability and Performance, both indicators affect: Productivity Improvement, Decreased Production Costs and Increased Profitability of the Company. The priority of improvement that must be done by considering the production cost performance data from the review of variable costs of energy is elimination: Loss Shutdown losses (A1), Loss Production adjustment loss (A2), Equipment failure (A3), Process failure ( A4), Normal Production (A5), and abnormal production (A6).