Fakultas Ekonomi Universitas Indonesia 1

F11/02/21
Managing operation
and production risks
means managing
these elements of
production

Fakultas Ekonomi Universitas Indonesia 11/02/21 2

Sectors Problems Risks Problems in
market
Solutions

Fakultas Ekonomi Universitas Indonesia 11/02/21 3

A production risk that leads to the recall of products
Examples : - The recall of Xbox 360
- Bali bombs
- Software that is postponed
- Food catering for Haji

Fakultas Ekonomi Universitas Indonesia 11/02/21 4

 Indonesia  UU RI no. 18 tahun 1999 tentang
Perlindungan Konsumen pasal 10
 Europe  Product liability law by the Directive
on General Product Safety
 No undercutting of rogue competitors
 Extended liability

Example : The Adam Air’s planes

Fakultas Ekonomi Universitas Indonesia 11/02/21 5

 By risk assessment and control
Examples : - carry out supplier assessment
- inspect during manufacture
- investigate complaints
- use batch numbers
- inform distributors of the results
- inform customers

Distributors can help the prevention by informing producers

and consumers.

Fakultas Ekonomi Universitas Indonesia 11/02/21 6

 In UK  custodial sentence & fine
 In Indonesia  custodial sentence max. 5 years
or fine max. Rp. 2.000.000.000

Fakultas Ekonomi Universitas Indonesia 11/02/21 7

 Types Businesses Risks

Fakultas Ekonomi Universitas Indonesia 11/02/21 8

Fakultas Ekonomi Universitas Indonesia 11/02/21 9
 ISO 9000 (inspection and control)  TQM
Prompts people to investigate the root cause,
correct the fault & prevent from happening

Fakultas Ekonomi Universitas Indonesia 11/02/21 10

 Elements of Quality Management System
•Understand your main processes
•Have an organizational structure
•Have written procedures
•Keep records
•Do regular checks
•Identify faults and correct them
•Seek continuous improvements
•Communicate well
•Allow an external organizations to regularly access the system

Fakultas Ekonomi Universitas Indonesia 11/02/21 11

 Guidelines
•Level of service to be provided
•The service organizations’ reputation and image
•Objectives for service quality
•Approach to be adopted in pursuit of quality objectives
•Role of the personnel responsible for implementing the quality policy

Fakultas Ekonomi Universitas Indonesia 11/02/21 12

 Bringing together people from
various departments to find
solutions

Give people control over their final

products (Self – managing teams)

Examples : ESOPs, PRP

Help the company to respond

quickly, decentralize decision
making, reduce inertia

Fakultas Ekonomi Universitas Indonesia 11/02/21 13

 Use computer to design
products

Integrate company’s database into single

software (ERP)

Fakultas Ekonomi Universitas Indonesia 11/02/21 14

 Combines design & production departments
into a single department

Learning from competitor’s successes

and failures

Fakultas Ekonomi Universitas Indonesia 11/02/21 15

 PT. Aqua Golden Mississippi
 Established in 1973. The first factory was built in Bekasi.
Throughout 30 years of experience, the company has
expanded into 14 factories throughout Indonesia.
 In 1998 a strategic alliance occurred between AQUA Group
and DANONE Group.
 It has it’s products available in more than 1,000,000 outlets to
ensure its availability to customers.

Fakultas Ekonomi Universitas Indonesia 11/02/21 16

 Mizone was first introduced at
September 27, 2005 in Surabaya. It
offers 2 flavors : orange lime and
passion fruit.

With its content of

HYDROMAXX, Mizone can
replenish the lost body fluid
rapidly.

Fakultas Ekonomi Universitas Indonesia 11/02/21 17

 At the end of 2006, it was discovered that Aqua – Danone
misstated the Mizone label. Then Aqua – Danone recalled
Mizone from market. It leaded to the decrease in Aqua –
Danone sales and it’s brand’s name. It can be defined as a
catastrophic failure.

 Customers thought that the recall of Mizone from market was

caused by it’s contents of Natrium Benzoat and Kalium
Sorbat, which they thought can cause Lupus.

Fakultas Ekonomi Universitas Indonesia 11/02/21 18

 Later, the head of BPOM issued “Surat Edaran no.
KH.00.01.234.2470” which stated that based on “Permenkes
no. 722/Menkes/IX/88”, Natrium Benzoat and Kalium Sorbat
are allowed to be used and safe to be consumed.
 Mizone then inform people via website
www.mizone-indonesia.com regarding this information.

Fakultas Ekonomi Universitas Indonesia 11/02/21 19