Analyzing Process Capability Indices (PCI) and Cost of Poor Quality (COPQ) to Improve Performance of Supply Chain

TitleAnalyzing Process Capability Indices (PCI) and Cost of Poor Quality (COPQ) to Improve Performance of Supply Chain
Publication TypeConference Paper
Year of Publication2014
AuthorsRidwan, A, Noche, B
EditorBlecker, T, Kersten, W, Ringle, CM
Title of ProceedingsInnovative Methods in Logistics and Supply Chain Management
Volume19
Page413
Publisherepubli
Conference LocationHamburg
ISBN Number978-3-8442-9878-9; 978-3-8442-9880-2
ISSN NumberISSN (print) 2365-4430, ISSN (online) 2365-5070
Keywordscapability process indices, cost of poor quality, port, six sigma
Abstract

Many ports have inefficient and ineffective activities in the entire of Supply
Chain. Many methods and tools are used to analyze performance of Supply
Chain. This study based on our practical experience in implementation of Six
Sigma Methodology in port. The main purpose of our research is to analyze
Process Capability Indices (PCI) and Cost of Poor Quality (COPQ) for
improving performance of Supply Chain in port. PCI and COPQ is performance
indicator of Six Sigma Methodology as one of Quality Improvement Method.
Case study has been taken in CDG Port, Indonesia. Three big cargos handling
have been selected to be analyzed PCI and COPQ, as follow: fertilizer, slab
steels, and iron ore. Data were collected by direct observation and interview
with Logistics Service Department of CDG Port. The result of Process
Capability Indices in handling of cargo is 0.06 in average. This result shows that
process capability in cargo handlings have not capable to meet the customer
requirements. Meanwhile, Cost of Poor Quality in cargos handling is about
700,449 USD in average and 39.02 % from the sales in average. This cost is
still high if it is compared with the sales. Many potential improvements to
increase process capability and decrease cost of poor quality. With Six Sigma
Methodology, Process Capability Indices and Cost of Poor Quality can be
analyzed for improving performance of Supply Chain in port.