SELECTION OF AUTOMATION SOLUTIONS IN LUBRICANTS MANUFACTURING PLANT USING ANALYTIC HIERARCHY PROCESS

• Main Author: Andhika Putra, Ray
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/53557
• Institution: Institut Teknologi Bandung

A lubricants manufacturing plant needs to find a way to deal with tight capacity environment in view of increasing demand for producing high quality lubricants. Since its design capacity can no longer fully supply volume aspiration, the management team decided to install automation solutions in the existing facility through capital investment in order to increase the plant’s capacity and mitigate problems that might occur due to the intensity of operations. To get the optimum benefit from this initiative, the decision-making process in selecting the most suitable solutions must be done systematically. With many automation solutions in the market, the challenge lies in how to evaluate the alternatives by considering all the factors that influence the expected result. As the decision analysis requires an in-depth study of many criteria that represent the organization’s needs, multi-criteria decision-making (MCDM) process is applied to help decision makers in making the right decision that align with strategic objectives and business scenario. One of the MCDM tools that can be used is the analytic hierarchy process (AHP). The methodology has the advantage of its ability to measure not only tangible but also non-tangible attributes that extracted from subjective judgements. In achieving the objective, a set of criteria and sub-criteria is defined. There are 4 criteria which are defined based on literature review and experts’ interview: Financial Feasibility, Operational Complexity, Process Integration and Improvement, and Organizational Readiness. Each criterion has its own sub-criteria where Financial Feasibility and Operational Complexity have 3 sub-criteria, Process Integration and Improvement has 4 sub-criteria, and Organizational Readiness has 2. The agreed criteria and sub-criteria are used to derive priorities for 3 alternatives: automated guided vehicle (AGV), automated overall equipment effectiveness (OEE) module, and fully automatic drum filling lines. Each alternative is selected by considering the distinctiveness of the plant’s facility, organization and the challenges that currently being faced. All alternatives also can be installed in the “brownfield” area of existing operations. The degree of relative priorities of each criterion and sub-criterion against the goal are derived through pairwise comparisons by decision makers and experts. Compiled from 5 respondents which consists of various managerial positions in the organization, the most important criterion is Process Integration and Improvement (0.347), while the top three sub-criteria in global priority are Total Capacity Improvement (0.208), Ease of Operation (0.193) and Operating Cost (0.162). The respondents are concern about the ability of the alternatives to increase production capacity in the easiest and most affordable way possible. In the next part, AHP derive the degree of relative priorities of each alternative against each sub-criterion. The final calculation concludes that fully automatic drum filling lines is selected as the alternative with the highest global priority (0.471), where automated OEE module (0.344) and AGV (0.185) are in the second and third position respectively. The selection of fully automatic drum filling lines is perceived by the respondents to be able to meet the expectation. The AHP as MCDM tool is recommended mainly due to its mathematical capability and the simplicity of data entry which allows the decision makers to have a supporting tool in justifying their decision. The structured hierarchy in this research is quite general yet still covers a variety of organizational needs so that it can be used as a systematic guide for decision-making process in other business scenarios that might happen in the future. However, it is important that the decision makers have an adequate understanding of the method and the criteria that affect the decision.