POLICY EVALUATION OF GOOD MANUFACTURING PRACTICE COMPLIANCE ON FINANCIAL PERFORMANCE OF COSMETIC INDUSTRIES IN INDONESIA

• Main Author: Ayu Kusuma Widjanarko, Rizka
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/63491
• Institution: Institut Teknologi Bandung

The ability of the cosmetic industry to meet the requirements of international standards, including the implementation of good manufacturing practices (GMP), is mandatory, especially since ASEAN harmonization in the field of cosmetic regulations was enacted in 2008. The Indonesian FDA has harmonized all provisions according to the harmonization framework, in particular the obligation to implement GMP compliance by the cosmetic industry. In the implementation of the GMP compliance, there are still inconsistencies, marked by the high number of post-market inspection findings related to GMP non-compliance. The inconsistency can be caused by, among others, human resource competence factors, limited technological mastery, and/or financial constraints. This study aims to evaluate the economic impact from the business perspective related to the implementation of GMP compliance policies by the cosmetic industry in Indonesia, through qualitative and quantitative analysis of the components of costs and benefits, financial performance in the MSME and large-scale cosmetic industry, as well as formulating recommendations for strategies to improve GMP compliance. The results show that the most significant cost groups in implementing GMP compliance include building and facility maintenance, quality control, equipment maintenance, and sanitation and hygiene. Meanwhile, the perceived benefits of implementing GMP compliance are not significantly different in terms of their level of importance. Financial performance calculated based on profitability ratios shows that the company's performance has an increasing trend per year. From the total cost of fulfilling GMP aspects, it can be concluded that financially GMP activities do not burden the financial performance of the industry. Several recommendations that can be proposed as a program to improve the implementation of cosmetic GMP compliance include: short and medium term program on intensification of Indonesian FDA regional officer training program in consultation and evaluation of cosmetic industry building plan approval; training and education program concerning building materials and facilities of cosmetic industry; collaboration and assistance to the cosmetic SMEs concerning capacity building of the in-house laboratories; collaboration and assistance to the cosmetics SMEs concerning marketing and business managerial capabilities; formulation of the concept of reward program for GMP compliance inspection results; the mapping of cosmetic SMEs and large scale industries based on the business development and innovation necessity; long term program: the development program on sustainable cosmetic industry; the development of subsidized small cluster of cosmetic industries.