REDUCING DEFECT HANDLING FOUND IN HOT ROLLED COILS USING DMAIC PHASES IN FINISHED PRODUCT DISTRIBUTION WAREHOUSE

Abstract

Steel industry directly supports industrialisation, determines the welfare of the people, but also determines the name of Indonesia in a global scale. PT. X as a leading steel manufacturing company in Indonesia is responsible to ensure that the products have high quality, because PT. X acts as a role model for other local steel companies, and also ships the products worldwide—therefore determines the good name of Indonesia. Product quality of PT. X is related to the reputation of the company—how PT. X is in the point of views of the customers—the handling of the products, and the costs incurred for the rework and defect claims—product return—from the customers. The products manufactured by PT. X should have Product Transfer Note document issued for every finished product so that each finished product can be monitored until the finished product is shipped. Hot Rolled Coil is one of the types of product manufactured by PT. X. This product is the most highly requested product of PT. X with expected capacity of 3,1500,000 tons in year 2017. Finished Product Distribution (Hot Rolled Coil) department is one of the departments under Finished Product Distribution division, which is responsible for the state of Hot Rolled Coils before and after the shipment. This department faced an issue of high number of defective products in the warehouse of finished products, where the products should be in a Ready To Ship (RTS) state. Therefore, a study is conducted using the phases of DMAIC (Define, Measure, Analyse, Improve, and Control) to analyse the problem and reduce 50% of the defect percentage. By doing so, the high rework cost reduction can be IDR766,909,000.