Operational Research in Engineering Sciences: Theory and Applications
Vol. 4, Issue 3, 2021, pp. 39-58
ISSN: 2620-1607
eISSN: 2620-1747
DOI: https://doi.org/10.31181/oresta20402039w
* Corresponding author.
swidjajanto@gmail.com (S. Widjajanto), erry.rimawan@mercubuana.ac.id (E. Rimawan)
MODIFIED FAILURE MODE AND EFFECT ANALYSIS
APPROACHING TO IMPROVE ORGANIZATION
PERFORMANCE BASED ON BALDRIGE CRITERIA- A CASE
STUDY OF AN ELECTRO-MEDIC INDUSTRY
Sugiri Widjajanto, Erry Rimawan
Industrial Engineering Department, Universitas Mercu Buana, Jakarta, Indonesia
Received: 27 May 2021
Accepted: 06 July 2021
First online: 23 September 2021
Research paper
Abstract: Full attention is paid to quality in manufacturing; however, less effort is
made to develop the organizational performance, which drives overall manufacturing
quality. This research measures performance of one manufacturing company that in
2020 experienced surging in demand and experiencing barriers to social activities due
to the pandemic. The evaluation was carried out using seven variables from the
Malcolm Baldrige Criteria for Performance Excellence (MBCfPE) which were
elaborated into 43 indicators of organizational performance. Weaknesses and
strengths of organizational performance were sharpened through focus group
discussions with experts and ended with a performance improvement solution with a
priority rank based on risk priority numbers (RPN) of the FMEA method. The highest
RPN is 567 and 432, respectively, for national standard implementation in a particular
product and operational scheme during emergency conditions like the Cov-19
pandemic. This study contributes to Indonesian research that combines questionnaires
and FMEA improvement analysis based on the US Baldrige criterion.
Keywords: Performance Excellence, Baldrige Criteria, MBCfPE, FMEA.
1. Introduction
The industrial governance crisis due to COVID-19 has hit almost all countries,
regardless of technological reliability, the sophistication of health services, or
economic independence. (Ranggajati et al., 2020). According to various studies in the
past year, the external aspects of the organization have greatly influenced the
organization's performance, be it business in general or specifically in the industrial
sector throughout 2020. (Yap, 2020), (Ahlstrom et al., 2020). External aspects that
affect organizational performance include socio-economic shocks, political policies,
and the environment (Amarkhil, 2019). According to the 2020 UNDP report on the
actions of Asia Pacific business people, it was stated that in the period of the Cov-19
Widjajanto and Rimawan/Oper. Res. Eng. Sci. Theor. Appl. 4 (3) (2021) 39-58
40
pandemic, 35% of businesses had to lay off staff, 25% postponed orders, 25% had to
delay investment, 24% had to decrease wages, 18% reduce service (United Nations
Development Programme, 2020). The report from Mckinsey released in early 2021
(Zurich et al., 2021) shows that the companies that have managed to survive are the
companies that have succeeded in responding to changes to the challenges of the
pandemic during 2020. For example, operational efficiency has decreased, and the
company has taken action to cut the budget. Likewise, the use of technology has
increased with better technology.
However, those reports did not provide basis of evaluation other than
questionnaire. There is research gap between what had been done by the companies
in respond to pandemic situation and what was background or reason for chosen
actions. This gap requires approaching that put an existing or previous condition as
base-line and find improvement in another way using tools that commonly being
used by industries. Hence, this phenomenon is developed in this research by
conducting studies and evaluating a manufacturing organization's performance
during challenging periods. This research selected one organization as the research
object, PT-EMB, which is a local industry that focuses on the fabrication and
manufacturing of electromedical devices located in the Serpong industrial area,
Banten province of Indonesia. This organization has ISO-13485 as the standard for
the production quality of several types of medical devices. The company produces
Oxygen Generators, which are in high demand during 2020, and the locally made
ventilator.
This research is carried out for all organization sections about production,
including leadership criteria, strategic planning, customer handling, operational
processes, labor factors, knowledge management, and performance measurement.
The method chosen is the Baldrige criteria issued by the United States, which is
commonly called the Malcolm Baldrige Criteria for Performance Excellence
(MBCfPE), containing seven primary variables (NIST, 2020). Large companies
typically recognize Baldrige performance measurement because the criteria or
variables evaluated represent the overall indicators of organizational performance.
Baldrige criteria can be applied to government institutions (H. Anggara & Hasibuan,
2020; Widjajanto et al., 2020), hospitals (Sintari, 2020), education (Thompson &
Blazey, 2017), and industries.
The research question in this paper is how to evaluate local business performance
during the 2020 pandemic period and what to be improved. Thus, this study's
objectives are described as assessing the organization's performance during the 2020
pandemic period using seven Baldrige variables and determining activities that must
be improved to increase organizational performance. The baseline is Baldrige criteria
version 2019-2020, but this research is intended to find performance improvement
instead of performance scoring for award ranking. Data collection, interviews, and
discussions were carried out from November 2020 to January 2021.
Modified Failure Mode and Effect Analysis Approaching to Improve Organization Performance
Based On Baldrige Criteria - A Case Study of an Electro-medic Industry
41
2. Literature Study
2.1 Baldrige Criteria for Performance Measurement
Baldrige method is a quality management application formally enforced in its
home country, i.e., the United States. The US-Congress initiated it in 1987 as a request
to Malcolm Baldrige, Commerce Department Secretary. This system was approved by
the US President and outlined in the "Malcolm Baldrige National Quality Award
Improvement Act of 1987" on August 20, 1987 (Vinyard, 2015). Tens of thousands of
companies have adopted the Baldrige method in more than 70 countries in the world.
Indonesia also adopted MBNQA and made the Indonesian Quality Award (IQA) an
award for corporate performance (Widjajanto et al., 2020). Baldrige criteria consist of
seven variables and are elaborated for this research into forty-three (43) indicators
below Table 1.
Table 1. Baldrige Variable and Indicators
Criteria No. Indicator
C
ri
te
ri
a
1
L
e
a
d
e
rs
h
ip
1 Management must evaluate the company's vision and mission
2 Evaluate consistency in vision and mission
3 Evaluate the organization's code of ethics
4 Improved work environment
5 Dissemination of NEW regulations and policies
6 Evaluate all work according to rules and policies
C
ri
te
ri
a
2
S
tr
a
te
g
ic
P
la
n
n
in
g
7 Quality planning
8 Innovative proposals
9 Evaluation of strategic planning in day-to-day work
10 Evaluation of the success/achievement of strategic planning
11 Flexibility of planning changes
C
ri
te
ri
a
3
C
u
st
o
m
e
r
F
o
cu
s
12 Evaluate the end-user / customer group
13 Identify the needs of the customer
14 Identify customer satisfaction and dissatisfaction
15 Making decisions related to customer satisfaction
16 Staff knowledge of the company's main customers
C
ri
te
ri
a
4
M
e
a
su
re
m
e
n
t,
a
n
a
ly
si
s,
k
n
o
w
le
d
g
e
m
a
n
a
g
e
m
e
n
t
17 Application of performance measurement methods (KPI)
18 Performance results as the basis for improvement or change
19 Alignment of employee and company performance
20 Job information for all employees
21 Monitoring, controlling, and recording in the workplace
22
Use of working procedures and instructions in operating
equipment and tools.
23 All employees know about the company's achievements
C
ri
te
ri
a
5
W
o
rk
fo
rc
e
24 Teamwork
25 Support for employee career advancement
26 Employee performance appreciation
27 Job security
28 Evaluate employee commitment
C
ri
te
ri
a
6
O
p
e
r
a
ti
o
n
a
l
/
P
ro
c
e
ss
29 Availability of materials, spare parts, and tools
30 Evaluate the work process according to instructions
Widjajanto and Rimawan/Oper. Res. Eng. Sci. Theor. Appl. 4 (3) (2021) 39-58
42
Criteria No. Indicator
31 All equipment is operated using approved instructions
32 Equipment operated by authorized personnel
33 Evaluate the use of methods and SOPs
34
Preparation of operational schemes to deal with emergencies
such as the Covid-19 pandemic
C
ri
te
ri
a
7
R
e
su
lt
s
35 Production targets are met
36 Customer satisfaction is met
37 Financial condition is maintained
38 Compatibility of competencies with the final product
39 Efforts to overcome obstacles
40 Compliance with local industry regulations
41 Application of national standard for ventilator production
42 CSR support for the surrounding community
43 Workplace comfort and safety
Many organizational performance appraisals have been carried out using various
methods (Abdollahbeigi & Salehi, 2020). Several countries developed their version of
the way by referring to standards or practices that are already popular
internationally. For example, the Thai government has tools for performance
measurement in their agencies and organizations that adopt ISO and MBNQA
(Pengsuwan & Choonhaklai, 2019). Then there is the SIQ, namely the Swedish
Institute for Quality which was developed by adopting the MBNQA (Raharjo &
Eriksson, 2017). Specifically, in several Asian countries, several articles describe the
performance assessment of public service organizations such as the Batu Pahat City
Government Office, Malaysia (Kaliannan et al., 2014), four government institution
(Custom, Immigration, Land Transport, and Mining) in Malaysia (Ali et al., 2017),
Indonesian Jakarta government licensing services (H. Anggara & Hasibuan, 2020)
and a performance appraisal in the local government of the United Arab Emirates
written by a US researcher (Furst Bowe, 2019) as well as an article on Saudi Arabia
Public Service Organization written by UK researchers (Alhaqbani, 2017).
Another study originating from Europe outlines the performance appraisal of
public services, namely the Lithuanian public sector, using MBNQA, EFQM & BSC.
(Balabonienė & Večerskienė, 2015), Organizations in Sweden (Eriksson et al., 2016),
Public and private organizations in Sweden use SIQ (Raharjo & Eriksson, 2017) and
the Mayor's Office in Greece (Tasiou, 2017). EFQM is the European Foundation for
Quality Management which emerged recently after the popular MBNQA (Balabonienė
& Večerskienė, 2015) and Sweden (Eriksson et al., 2016).
2.2 FMEA Method for Evaluating Organizational Performance
Failure Mode and Effect Analysis (FMEA) was first developed in the aerospace
industry in the 1960s as a systematic methodology for identifying known and
unknown modes of failure, including causes and consequences on the system and
verifying risks associated with priority scales for corrective action. (Liu, 2016). The
FMEA used in this research is classified as modified FMEA, which is developed
according to a particular business organization (Huang et al., 2020). One example is a
modified FMEA approach that combines multiple criteria decision making, adding a
cost component to the Risk Priority Number (RPN) calculation (Lo & Liou, 2018).
Modified Failure Mode and Effect Analysis Approaching to Improve Organization Performance
Based On Baldrige Criteria - A Case Study of an Electro-medic Industry
43
Another example is the management of waste management in health institutions that
also use modified FMEA (Ouyang et al., 2021) and FMEA modifications for health
services (Shi et al., 2019). A study proving the relationship between risk management
and organizational performance found the most important reasons for decreased
performance in administrative implementation items through using the FMEA
method by looking at cost and time losses (Hezla et al., 2020).
The FMEA stages are briefly described:
Describes all operational activities,
Compiling potential problems that could arise,
Give the list of severity, occurrence, and detectability levels.
Calculating the risk priority number (RPN).
RPN = severity (S) x occurrence (O) x detectability (D)
Compile a list of actions or actions to reduce risk according to the RPN.
The FMEA method is commonly used in industry, including electronic and medical
devices. Several previous studies have shown significant results related to the use of
this method. The use of FMEA is commonly used in the industry to identify possible
failures in the production process. It aims to improve product quality and reliability
(Hasbullah et al., 2017). Alternative repairs for each failure are priority
improvements shown in the risk priority number (RPN) values (Budi Puspitasari et
al., 2017). FMEA can also be combined with the Statistical Process Control (SPC)
method, as carried out in a study that analyzed defects in the pulp and paper industry
(Putra et al., 2020). Many practitioners use FMEA in the application of Total
Productive Maintenance (TPM). A study to optimize machine maintenance using
Reliability Centered Maintenance (RCM) and FMEA was conducted to evaluate the
highest failures on a single type of machine with deficient availability & reliability
values and did not meet production standards. The FMEA method is used to find six
engine components with a high failure rate so that improvements can be made that
increase the reliability value of the machine (Nugroho et al., 2020). FMEA in the
electronics industry, as practiced in mobile phone manufacturing, can trace essential
steps in improving the manufacturing process, resulting in reduced failures, reduced
industrial costs and improved quality index, and satisfying customers. (Oliveira et al.,
2019).
3. Research Method
The stages of this research were started from determining the problem, aim and
objectives, develop a methodology, and identifying the organization's profile of the
research object. The collection of the profile information was carried out through
initial interviews. If the information regarding the profile is sufficient, then placing
the performance criteria is carried out through a questionnaire. The questionnaire
results will be tested to see the level of correlation and the level of reliability. In
Figure 1, a research flow diagram is presented that explains the steps of this research.
Widjajanto and Rimawan/Oper. Res. Eng. Sci. Theor. Appl. 4 (3) (2021) 39-58
44
Current Organization Performance
Baldrige Criterias
(43 indicators in 7
variables)
Theory,
Standard,
Previous
Research
Modified FMEA
Severity,
Detectability,
Occurrence
Performance improvement suggestion with risk
priority number (RPN)
Figure 1. Research Framework
This paper's research aims to evaluate the organizational performance of a local
Indonesian electro-medical equipment manufacturing company, which during the
Covid-19 pandemic period received a high demand for ventilator and oxygen
generator products. The challenges faced, such as social restrictions, logistical
difficulties, and other obstacles, will be analyzed in depth. Evaluating the
organization's performance is continued by looking for improvement opportunities
to improve its organizational capabilities that can compete globally based on the
Baldrige criteria used by multinational companies.
This study uses a descriptive exploratory approach using surveys, interviews, and
discussions. Based on the Baldrige criteria, organizational performance appraisal
produces a scoring used as a baseline as a brief description of the organization's
profile. A focus group discussion (FGD) was used with experts selected based on their
capabilities. That was part of the brainstorming with the FMEA approach through
many performance indicators mapping the organization's condition. The empirical
mapping was ranked under the severity, occurrence, and detectability category of the
FMEA. The FMEA method makes it easy to adapt to actual situations and presents
direct interactions between researcher, respondents, and related experts (Mzougui &
El Felsoufi, 2019).
A list of questions was adopted from Baldrige examiner edition 2019/2020 (NIST,
2020) and practical samples (Yusuf, 2017) (Vinyard, 2015). Secondary data is taken
from the company in log data related to fabrication activities during the Cov-19
regulation in the form of records and reports obtained that will be helpful in the
analysis and determination of corrective steps. The stages in the design of
Modified Failure Mode and Effect Analysis Approaching to Improve Organization Performance
Based On Baldrige Criteria - A Case Study of an Electro-medic Industry
45
performance improvement are carried out using a modified FMEA approach with the
following steps:
Using the data obtained from Baldrige indicator list.
Discuss FMEA to find solutions for performance by ranking priorities. The tables
for severity, occurrence, and detectability modified by reference are shown in
the table below.
Evaluate and develop potential problems on severity, occurrence, detectability
and calculate for respective indicators of Baldrige variables.
4. Data Result and Analysis
4.1 Baldrige Scoring Based on Questionaire
The research questionnaire was distributed to all employees, where the
characteristics of the respondents were collected as well age, gender, work
experience, education level, and the job position of the respondent. Item Analysis is
used to check the validity and reliability of items in measuring variables. These
measuring use a Likert scale as the degree of approval of a statement. The questions
in the questionnaire used the Baldrige for examiner edition 2019/2020 reference
(NIST, 2020). Minitab's item analysis yields the Pearson correlation and Cronbach's
alpha values. The Pearson value obtained by Minitab is then compared with the value
from the Pearson R critical value table, with a significance of 0.05 and df = 24; the
figure is 0.388. If the calculated Pearson correlation value shows a value greater than
0.388, the data is declared valid. Item analysis was carried out to all Baldrige
variables and concluded that all survey data is valid and reliable.
Baldrige score on each questionnaire variable, according to H. Anggara &
Hasibuan (2020) obtained through the formula:
x (Standard score for each Baldrige variable) (1)
ni = number of respondent for the answer i
wi = weight of answer i
N = total number of respondents
W = largest answer weight = 5 (Likert scale)
Y = total number of questions for each categorical variable
Calculation and recapitulation of performance scores uses common excel
spreadsheets. Its summary is presented in Table 2 as a summary of total scoring. The
Baldrige score for the company performance is 463.09 shown in the table. That is
equal to 45.86% compared to the ideal Baldrige excellence performance. Obtained a
total score of 463.09 is in the Early improvement achievement according to MBNQA
award criteria. Criteria 1 until 7 description is available in Table 1 including all
relevant question poin.
Widjajanto and Rimawan/Oper. Res. Eng. Sci. Theor. Appl. 4 (3) (2021) 39-58
46
Table 2 Total Score Baldrige Criteria
Criteria Score
Ideal
MBNQA
Comparison
(score/ideal)
Gap Remarks
1 Leadership 58.00 120 48.33% 2.47% Strength
2 Strategic Plan 39.44 85 46.40% 0.54% Strength
3 Customer Focus 39.78 85 46.80% 0.94% Strength
4 MAKM 39.10 90 43.44% -2.41% Weakness
5 Workforce 39.10 85 46.00% 0.14% Strength
6 Operation 36.67 85 43.14% -2.72% Weakness
7 Bussines Result 211.00 450 46.89% 1.03% Strength
Total - 463,09 1000 45,86% - -
The table also states the gap value obtained from subtraction the obtained score
against the average. The negative score on the gap column is classified as weakness,
while the positive as strength. The lowest minus value is in criteria no.6 or the
Baldrige criteria for operations. That has been labeled as weakness and will be the
primary target for corrective action. In that summary, the performance that is
considered weak falls also to criteria no.4 Measurement, Analysis and Knowledge
Management (MAKM). The leadership or criteria no.1 is superior to the most robust
criteria in this company.
4.2 FMEA FGD Result
The next step in finding a performance improvement solution is to quantify the
Baldrige performance items by looking at the potential failures of this company. The
qualitative performance items are evaluated using a modified FMEA by analyzing the
effect of the loss on the schedule, costs, and outputs that impact either major or minor
(Harman, 2020; Hezla et al., 2020). The FMEA working paper produced in this
research can be classified as a preventive risk assessment method. The results are
finding, prioritizing, and removing potential problems as material for improvement
and lessons learned in future company activities. (Hezla et al., 2020).
Table 3 (a). Severity Level
Effect Severity Level Rank
Schedule Huge impact, exceeding tolerable limits
9 ~ 10 Total Cost Additional expenses are very significant
Technical Problem Useless output, discarded
Schedule Impact on schedule 10-20% of the target
7 ~ 8 Total Cost Additional expenses up to 20% of budget
Technical Problem Output is impacted and cannot be used by the client
Schedule Schedule affected up to 10% of target
5 ~ 6 Total Cost Total expenditure costs increased up to 10%
Technical Problem Outputs are impacted and require client approval
Schedule Schedule affected, still within tolerance
3 ~ 4
Total Cost
Total expenses have increased within tolerance
limits
Technical Problem
Minor impact and requires internal company
approval
No effect for all 1~ 2
Modified Failure Mode and Effect Analysis Approaching to Improve Organization Performance
Based On Baldrige Criteria - A Case Study of an Electro-medic Industry
47
Table 3 (b). Occurrence Level
Possible Poor
Performance
Probability
(Occurrence)
Rank
Very high
>1 in 2 10
1 in 3 9
High (repeatedly)
1 in 8 8
1 in 20 7
Table 3 (c). Detectability Level
Detectability Assessment Rank
No detection (of performance measurement) method is available that
can alert enough time for corrective action
9 ~ 10
The detection method (of performance measurement) is unreliable or
untested. The effectiveness of detection methods is not known for
identifying poor performance
7 ~ 8
Performance detection / measurement methods are quite effective in
some units / divisions / departments
5 ~ 6
The performance detection/measurement method has been effectively
implemented in all work units
3 ~ 4
The performance detection method is very effective, and it is almost
certain that poor performance will be detected in a sufficient time
1 ~ 2
In compiling the FMEA, three people were selected as an expert, the first resource
person from government representative (X1 or Expert no.1), the second is an
academic lecturer (X2 or Expert no.2), and the third expert is person-in-charge
General Manager of the company (X3 or Expert no.3). Some references have been
used to determine severity level by looking at the effects of the schedule, total costs
and technical problems (Liu, 2016) (Hezla et al., 2020) elaborated in Table 3 (a). The
level of occurrence and detectability is consecutively in Table 3 (b) and Table 3 (c).
The assessment begins with the information obtained from the Baldrige criteria as
the basis for performance items. The points of failure are developed, which can be
extracted from the situation in the company that is the object of research and
evaluated for possible losses that can reduce the company's organizational
performance. Focus on the three main variables of the FGD results that show weak
performance. Each item in the variable is assessed severity, occurrence, and detection
and calculates risk priority number (RPN). The evaluation results are in Table 4
below and sorted by RPN ranking. Indicator desciprion is available in Table 1 in
previous section.
RPN = SxOxD (2)
RPN: risk priority number
S: severity rank
O: Occurrence rank
D: Detectability rank
Widjajanto and Rimawan/Oper. Res. Eng. Sci. Theor. Appl. 4 (3) (2021) 39-58
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Table 4. FMEA result with RPN ranking
Indicator
ID No.
X1 X2 X3 S X1 X2 X3 O X1 X2 X3 D RPN Rank
41 9 9 9 9.00 9 9 9 9.00 7 7 7 7.00 567.0 1
34 9 9 9 9.00 8 8 8 8.00 6 6 6 6.00 432.0 2
29 8 8 8 8.00 8 9 9 8.67 6 6 6 6.00 416.0 3
22 7 7 8 7.33 7 8 8 7.67 8 7 7 7.33 412.3 4
32 7 7 8 7.33 8 8 8 8.00 5 6 6 5.67 332.4 5
31 7 8 8 7.67 8 8 8 8.00 5 5 6 5.33 327.1 6
20 7 7 8 7.33 7 7 8 7.33 5 5 6 5.33 286.8 7
33 7 8 8 7.67 7 7 8 7.33 5 5 5 5.00 281.1 8
36 7 7 8 7.33 7 8 8 7.67 5 5 5 5.00 281.1 9
35 7 8 8 7.67 7 7 7 7.00 5 5 5 5.00 268.3 10
37 7 8 8 7.67 7 7 7 7.00 5 5 5 5.00 268.3 11
40 7 7 8 7.33 7 7 7 7.00 5 5 5 5.00 256.7 12
The results obtained in the table show that the priority which has the potential to
become a significant problem is the absence of a reference standard, in this case, the
specific Indonesian National Standard (SNI) for ventilator products, getting the
highest RPN score of 567. That is confirmed by other experts who work in
certification bodies that Currently, Indonesia does not have it yet. Hence, the
prototype built during the 2020 pandemic uses open-source references from
research institutions (FKUI, 2020).
The subsequent finding that becomes the second priority is the availability of
material needs, spare parts, and work tools with an RPN score of 416.7. The root of
the problem that was successfully explored was the finding of non-standard
components so that for each unit produced, different tunings and adjustments had to
be done. The company confirmed the failure because the materials and parts they
received were from research institutions without an independent purchasing process
to find a better supply source.
The potential for performance failure, which is ranked third with an RPN score of
396, is related to the readiness of the operational scheme to face the Covid-19
pandemic emergency. The informant confirmed that the challenges faced during the
pandemic were the limitation on the number of workers due to social distancing,
difficulties in mobilizing to testing agencies, and logistical constraints on sensor
components that still have to be imported from abroad. Potential failure in the
subsequent RPN ranking is regarding teamwork cooperation, equipment operated by
authorized personnel, approved work instructions and SOPs, customer satisfaction,
information on work implementation for all employees, sharing information on
production targets, and stable company financial performance condition, and the
comfort of the working place. The availability of work guidelines is emphasized in
Table 6 under several indicators, i.e., all equipment operated using approved
instructions with an RPN score of 327.1 and is ranked sixth. The seventh and eighth
ranks were also related to work instructions, with an RPN score of 299.9. Evaluation
of the use of the method & SOP has an RPN score of 281.1.
Modified Failure Mode and Effect Analysis Approaching to Improve Organization Performance
Based On Baldrige Criteria - A Case Study of an Electro-medic Industry
49
5. Result and Discussion
5.1 Company Performance Evaluation Compare with Other Researches
This study presents two empirical studies, the first on assessing Baldrige variables
in organizations using questionnaire data, which according to the literature, is a self-
assessment. The second is to evaluate Baldrige performance indicators according to
independent reviewers with selected sources. As such, it provides a deeper level of
reliability and validity regarding assessment, perception, and reporting. The second
important aspect of these studies is improving and improving the quality of
performance in organizations that can be developed over time.
This research results obtained the highest Baldrige score on leadership
performance, as shown in Table 5 (a) and (b). The lowest score is received on the
Operational and Process performance variables. That is consistent with the results of
previous research in the application of quality management in industry
(Anastasiadou & Taraza, 2019; Fatima & Mahaboob, 2018; Mellat-Parast, 2015;
Parast & Golmohammadi, 2019; Savov et al., 2017; Thompson & Blazey, 2017). This
research found that the leadership factor is the primary driver of the quality
performance of the organization. These results confirm the Baldrige concept that
organization system is driven by leadership as well as senior staff, and this is the
primary key to improving quality performance (Ahuja et al., 2019; Asif et al., 2019;
Parast & Golmohammadi, 2019; Savov et al., 2017).
Table 5 (a) Performance criteria that needs to be improved
Priority Based on Baldrige scoring
1st Operational (criteria 6)
2nd Measurement, analysis, and knowledge management (criteria 4)
3rd Workforce (criteria 5)
Table 5 (b) Dominant Performance Criteria
Dominant Criteria Actual / Ideal score (%) Gap
The highest score Leadership 58.00 / 120 48.33% 2.47 %
The lowest score Operational 36.67 / 85 43.14% -2.72 %
Table 6 below is compiled from various references related to the development of
organizational performance and its significant factors. These essential factors affect
organizational performance, either directly or indirectly, and positively encourage or
hinder organizational performance improvement. The leadership factor is a
significant factor affecting organizational performance, both positive and negative
(Nandasinghe, 2020), (Parast & Golmohammadi, 2019), (Asif et al., 2019), (Ahuja et
al., 2019), (Anastasiadou & Taraza, 2019), (Savov et al., 2017).
Widjajanto and Rimawan/Oper. Res. Eng. Sci. Theor. Appl. 4 (3) (2021) 39-58
50
Table 6. Significant Factors for Organizational Performance in Previous Research
Description Previous researches
Leadership factor
(Nandasinghe, 2020), (Parast & Golmohammadi, 2019),
(Asif et al., 2019), (Ahuja et al., 2019), (Anastasiadou &
Taraza, 2019), (Savov et al., 2017).
Training and sharing of
knowledge and attention to
employee intellectual property
(Kanapathipillai & Azam, 2020), (Ahmed et al., 2020),
(Muwardi et al., 2020), (Mahmud et al., 2020), (Abdul
Rauf et al., 2020), (Abbas et al., 2018), (Abualoush et al.,
2018), (Chaudhry et al., 2017), (Puška et al., 2018)
Strategic Planning
(Kasushik & Guleria, 2020), (Chioke & Mbamalu, 2020),
(Ahuja et al., 2019), (Anastasiadou & Taraza, 2019),
(Dobrosavljević & Urošević, 2019)
External Organization Factor
(social, politic, environment)
(Yap, 2020), (Ahlstrom et al., 2020), (Amarkhil, 2019)
One literature shows the importance of the causal relationship from the
leadership factor to the information factor. The analysis is quantitatively
demonstrated, proving that leadership has a vital role in information analysis and
knowledge management variables. (Parast & Golmohammadi, 2019). Another study
examined the relationship between leadership, quality of administration, quality of
medical services, and patient satisfaction using the MBNQA criteria. Further research
in hundreds of Pakistan hospitals investigated the effect of interventions on quality of
medical service with relation to patient satisfaction and leadership. It obtained a
positive relationship between leadership, administrative quality, medical quality, and
patient satisfaction. In addition, administrative quality and medical quality were
found as potential mediators in the relationship between leadership and customer
satisfaction (Asif et al., 2019).
The second factor is by improving the internal work system of the organization,
which is manifested by training actions, sharing knowledge between members of the
organization and between departments so that the main objectives of the
organization are achieved with the best collective performance and also job rotation
(Sebt & Ghasemi, 2021), (Kanapathipillai & Azam, 2020), (Ahmed et al., 2020),
(Muwardi et al., 2020), (Mahmud et al., 2020), (Abdul Rauf et al., 2020), (Abbas et al.,
2018), (Abualoush et al., 2018), (Chaudhry et al., 2017), (Puška et al., 2018).
The third significant factor, according to the previous literature, is strategy and
planning (Khan et al., 2021), (Kasushik & Guleria, 2020), (Chioke & Mbamalu, 2020),
(Ahuja et al., 2019), (Anastasiadou & Taraza, 2019), (Dobrosavljević & Urošević,
2019), which in this research, it is included in the Baldrige variable number 2.
However, this study did not find that variable is the dominant performance. However,
strategic planning is still needed, especially the redesign of the roles and functions of
each employee to adapt to the post-pandemic new normal conditions.
According to the literature, the fourth significant factor is the external influence of
the organization, namely the social, environmental, or political policies imposed by
the government. There are challenges in the form of Social Restrictions policies that
limit the industry's movement both organizationally and in employee activities.
Working conditions under pressure, restrictions on job access, and decreased
employee motivation will affect organizational performance (S. A. Anggara et al.,
2019). However, other research shows that managing the risks that may arise will
improve the performance of the company organization (Najib et al., 2019).
Modified Failure Mode and Effect Analysis Approaching to Improve Organization Performance
Based On Baldrige Criteria - A Case Study of an Electro-medic Industry
51
The literature review also shows the importance of customer relationship
management, leadership, communication, and strategic alignment as a very
significant causal in implementing efficient continuous performance improvement.
(Ahuja et al., 2019). As a comparison, researchers also reviewed research on
evaluating organizational performance in education using the Baldrige criteria in
Greece. The results of these studies prove that the main factor in their Tertiary
Education System is leadership. The following variable that must be taken into
account is Strategic Planning, which also has a significant effect on the successful
implementation of quality (Anastasiadou & Taraza, 2019). The last article used as a
reference shows that using a performance measurement system will affect
organizational performance, especially helping organizations monitor performance,
which ultimately leads to target achievement and gathering information and activity
records that are useful for improving its performance. This system will affect various
aspects of the organization, including financial and non-financial performance,
employee behavior, and overall performance (Owais & Kiss, 2020).
5.2 Research Contribution to the Company
This research provides several contributions to the companies related to
evaluating their performance, including leadership, strategic planning, knowledge
management, customer handling, employment, operations, and production. First, this
research evaluates the companies' performance using a Baldrige model, which is
theoretically robust and has been widely applied in the business world. It is the first
empirical performance evaluation to PT-EMB uses this kind of performance
measurement. One of the critical implications of this finding is that the PT-EMB will
use the Baldrige model as a self-assessment tool to improve the quality of
performance further.
Table 7. List of performance indicator to be improved by PT-EMB
No Performance
variable
Performance indicator to be modified/improved Indicator ID
1 Operational
and process
Availability of materials, spare parts, and tools 29
Preparation of operational schemes to deal with
emergencies such as the Covid-19 pandemic
34
Equipment operated by authorized personnel 32
All equipment is operated using approved
instructions
31
Evaluate the use of methods and SOPs 33
2 Measurement,
analysis, and
knowledge
management
Use of working procedures and instructions in
operating tools
22
Information and socialization of job task to all
employees
20
3 Business
results
Implementation of the national standard for
ventilator product
41
Customer satisfaction is met 36
Production targets are met without defect 35
Organizational financial condition is maintained 37
Compliance with local industry regulations 40
4 Workforce Teamwork enhancement 24
Widjajanto and Rimawan/Oper. Res. Eng. Sci. Theor. Appl. 4 (3) (2021) 39-58
52
Previous research has used the Baldrige model to improve performance quality
using cross-sectional surveys (Parast & Golmohammadi, 2019), and it usually follows
up with SWOT analysis. Thus, the second contribution of our research is the novelty
that brings up Baldrige indicator assessment via FMEA to produces suggestions for
performance improvements on a priority scale. This is a contribution to academic
theory as well that combines Baldrige with FMEA approach.
The third contribution of this research is to understand how to carry out
comprehensive organizational performance measurements regardless of the business
model and looking for loopholes to improve the quality of performance using the
Baldrige approach. The improvement suggestions to the company are listed out
relevant with each main criterion in Table 7.
One of the critical points of the discussion above is the absence of a specific
Indonesian national standard (SNI) for the production of ventilators. Although this
SNI is the government's responsibility through the National Standardization Agency
for Indonesia, this does not escape its responsibility in ensuring the quality of its
products. In general, the production process at this company has met the ISO-13485
quality standard (the quality standard for the medical device industry) except for the
local ventilator production line, which specifically mass-produced prototypes made
in Indonesia.
In addition, it is recommended that the PT-EMB involves the quality team from
the planning stage, the purchasing process stage, and the material receiving stage. At
the planning stage, selecting materials and determining specifications that guarantee
quality should be considered. In the purchasing stage, the supplier selection must be
reviewed and the technical quality specifications offered by the supplier. When
receiving goods, the quality team must verify all materials are per the desired quality.
5.3 Research Limitation
This study has limitations related to social and activity restrictions due to the
pandemic in the company, which causes questionnaire data collection, interviews,
and discussions to be carried out in stages repeatedly—some using a paper
questionnaire form and some using an online application. The same thing was done
when FGD discussions with experts were conducted online using the video call
facility and the online google-form application. The time limitation possessed by the
five experts can be overcome by partially discussing several stages until all the
results are collected, which can be made a consensus with the confirmation of the
experts as a resource.
Organizational performance appraisal using the Baldrige variable in this company
has never been carried out other than a performance appraisal for employees as a
requirement for calculating the annual bonus and ISO13485 assessment for
administrative production areas. Thus, the result cannot be compared to the previous
comprehensive company performance evaluation. Other industries in Indonesia that
use the Baldrige variable are only government-owned companies, hospitals, and
educational institutions; hence, benchmarking cannot be carried out.
The performance evaluation was in the Cov-19 pandemic period so that company
activities were only prioritized for the production of equipment for Covid-19
handling, which was carried out urgently, i.e., oxygen generators and local prototype
Modified Failure Mode and Effect Analysis Approaching to Improve Organization Performance
Based On Baldrige Criteria - A Case Study of an Electro-medic Industry
53
ventilators, and might be different from activities in normal conditions either before
or after the pandemic.
6. Conclusion and Suggestion
6.1 Conclusion
The results showed that the performance of this company, when analyzed using
the Baldrige variable, was at the early improvement level of achievement, with the
best value performance in the leadership variable and the lowest value performance
in the operational variable. It is in line with the expert's evaluation that the priority
performance should be improved is the Operational variables. Apart from these
variables, other variables also show weak performance indicator items, namely in the
knowledge management variable, performance analysis, and measurement and
outcome variables. Weak performance in the labor variable is only found in the
indicator of co-worker cooperation.
This study produces solutions to improve company performance in the order of
priority. In practical terms, the performance items that involve the internal company
will be easily corrected. What will be difficult to implement is the availability of
national standards for ventilator products. Until the time this research was compiled
has not been issued by the National Standardization Agency for Indonesia.
6.2 Suggestion for Future Research
Evaluating organizational performance using the Baldrige variable for
manufacturing electro-medical devices can be a role model for similar industries,
particularly in Indonesia and South East Asia. The obstacles encountered can be
used as lessons learned by other researchers.
Organizational evaluation using the Baldrige model combined with FMEA was not
found in previous literature. Thus, further research is expected to be followed that
will strengthen the use of these approaches.
Acknowledgment: The paper is a part of my thesis research report for Industrial
Engineering Master Program in Universitas Mercu Buana Jakarta, Indonesia. I would
like to express my gratitude to my primary supervisor, Dr. Erry Rimawan, who guided
me throughout this research. The authors received no financial support for the study,
authorship, and/or publication of this paper.
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MODIFIED Failure Mode and Effect Analysis Approaching to Improve Organization Performance based on Baldrige Criteria- A Case Study of AN Electro-medic Industry
Sugiri Widjajanto, Erry Rimawan
1. Introduction
2. Literature Study
2.1 Baldrige Criteria for Performance Measurement
2.2 FMEA Method for Evaluating Organizational Performance
3. Research Method
4. Data Result and Analysis
4.1 Baldrige Scoring Based on Questionaire
4.2 FMEA FGD Result
5. Result and Discussion
5.1 Company Performance Evaluation Compare with Other Researches
5.2 Research Contribution to the Company
5.3 Research Limitation
6. Conclusion and Suggestion
6.1 Conclusion
6.2 Suggestion for Future Research
References