See discussions, stats, and author profiles for this publication at: https://www.researchgate.

net/publication/350862058

ANALYSIS OF THE IMPACT OF ELIMINATION EIGHT MAJOR LOSSES IN CO-

GENERATION POWER PLANT TO INCREASE PROFITS IN THE PULP & PAPER
MILLS MANUFACTURING INDUSTRY

Article in Psychology and Education Journal · March 2021

DOI: 10.17762/pae.v57i9.3482

CITATIONS READS

0 51

4 authors, including:

Bambang Setiawan
Universitas Mercu Buana
7 PUBLICATIONS 10 CITATIONS

SEE PROFILE

All content following this page was uploaded by Bambang Setiawan on 12 November 2021.

The user has requested enhancement of the downloaded file.

PSYCHOLOGY AND EDUCATION (2020) 57(9): 6574-6583 ISSN: 00333077

ANALYSIS OF THE IMPACT OF ELIMINATION EIGHT MAJOR

LOSSES IN CO-GENERATION POWER PLANT TO INCREASE
PROFITS IN THE PULP & PAPER MILLS MANUFACTURING
INDUSTRY

Muhammad Ayip Fathani1, Erry Rimawan2, Antonius Setyadi³, Bambang Setiawan4

Mercubuana University, Jakarta, Indonesia

ABSTRACT
In the industrialized world, increasing productivity and profitability is very important for companies as a benchmark of success in
business processes. Some literature has defined the success factor of the successful application of the concept of TPM as a tool to
improve the productivity performance of the company, therefore improving the productivity performance of the company becomes the
main thing in improving long-term sustainable profitability for the company .
In the manufacturing industry pulp and paper mills, the contribution of the highest production costs is in raw materials (Pulp and
chemical raw materials), followed by energy and packaging. The energy sector occupies the top three in the cost contributor to variable
costs, it is triggered because in the pulp paper industry sector, the consumption value for electrical energy and heat is very high.
Therefore, success in eliminating eight major losses is a major success factor in improving the profitability of the company.
To analyze the effects of elimination of eight major losses, reduction of production costs and increase in profitability can be solved by
evaluating the influence of all indicators of eight major losses using PLS-SEM. The data used is operational data co-generation plant
production of PT. XYZ in 2019.
From the research conducted it is known that the variable Overall Plant Effectiveness (OPE) is significantly influenced by 2 (two) of the
3 (three) constituent indicators, namely Availability and Performance, both indicators affect: Productivity Improvement, Decreased
Production Costs and Increased Profitability of the Company. The priority of improvement that must be done by considering the
production cost performance data from the review of variable costs of energy is elimination: Loss Shutdown losses (A1), Loss Production
adjustment loss (A2), Equipment failure (A3), Process failure ( A4), Normal Production (A5), and abnormal production (A6).

Keywords: Eight major losses, TPM in industry process, SEM-PLS, OPE, Profitability.

Article Received: 10 August 2020, Revised: 25 October 2020, Accepted: 18 November 2020

1. Introduction pulp and paper production of 4.55 million tons and 7.98 million
The Directorate General of Agro and Chemicals noted that in tons of paper, respectively. (Ministry of Industry Pusdatin, 2019)
2009, Indonesia's paper consumption is 29Kg per kg / capita /
year, and continues to rise by 32.6 per capita in 2013, and the Bureau of Management Institute, Faculty of Economics,
world's paper needs reach around 394 million tons in that year, University of Indonesia revealed that one of the challenges of
the Director General of the Agro Industry Department predicts pulp & paper industry in industry competitiveness is to have a
that the growth of the world's paper needs will grow by an strategy based on cost efficiency, high productivity, and strategic
average of 2.1 percent per year, so that the world's paper needs in raw material ownership. These three aspects can deliver the
2020 are predicted to reach 490 million tons. This makes the success of the pulp and paper mills industry on an ongoing
government continue to strive to increase the national pulp basis.(ANALYSIS OF THE WORLD PULP AND PAPER
production capacity to 10.53 million tons in 2017, and one of INDUSTRY: Input for SOE Managers at the LM FEUI Research
them is by expanding the construction of pulp mills and Bureau Despite Work Practicesn, 2009)
diversification of derivative products.
The Research & development Agency of the Ministry of Industry Aspects of cost efficiency in the pulp & paper mills industry can
stated that in 2013, Indonesia has had 4 pulp industries and 73 not be separated from the cost of goods manufacturing (COGM)
paper industries, and 5 integrated pulp & paper industries with an components consisting of fixed and variable cost:
installed capacity of 18.96 million tons & amp; realization of

www.psychologyandeducation.net 6574
PSYCHOLOGY AND EDUCATION (2020) 57(9): 6574-6583 ISSN: 00333077

(Mardono et al., 2019), explained that efforts in eliminating six

big losses and evaluating OEE (overall plant effectiveness) in
world class manufacturing standards have been effectively
carried out as an improvement in machine performance and
provide quality product results, low financing, and provide
sustainable profitability impact.

2. Literature Study
Co-Genration system, Energy Cost of COGM, Profitability &
Benefit to industry & TPM.
Figure 1.1 cost of goods manufacturing distribution
Source: PT.XYZ COGM data
2.1 Co-Generation
Co-generation is an energy-efficient technique because it comes
as an efficient way to utilize limited energy resources, and can
utilize the same fuel to produce two different energy outputs,
namely electrical energy and thermal energy. In the process
industry, co-generation can be raised by several sources of energy
generation, such as: gas turbines, steam turbines and combined
cycle cogeneration options to evaluate energy savings and
economic benefits.(Shabbir et al., 2016)

Figure 1.2 variable cost contributorSource: 2.2 Configuration of co-generation steam turbine
PT.XYZ COGM data In the Co-generation system of steam turbines as shown in Figure
2.1, super heated steam is generated directly through the
In the paper industry, the highest contribution of production costs combustion of fueled boilers (coal, rice husks, or gas). Steam
is in raw materials (pulp and chemical raw materials), followed generated by the boiler will be continued to rotate the turbines to
by energy and packaging. The energy sector occupies the top move the generator to generate electrical energy. While the
three in the cost contributor to variable costs, it is triggered saturated steam from the steam turbine, is extracted to become
because in the pulp paper industry the consumption value for medium pressure steam and low pressure steam, the hot steam is
electricity and heat is very high.(Gambini et al., 2019) reused for paper manufacturing needs.(Shabbir et al., 2016)

according to (Sugiyono, 2015), according to (Sugiyono, 2015),

Overall energy consumption in the industrial sector reached 33%
of total national energy consumption or reached 300 million
barrels of oil equivalent (BSM) in 2007. Of these, about 6.5% or
about 19 million BSM is used for the pulp and paper industry.
The process flow in the industry is divided into four groups,
namely: chemical and thermochemical pulp, mechanical pulp,
paper production, and recycled paper, which in each process
requires energy derived from fuel (coal, gas and electricity). Fuel
is used as a steam generator, while electrical energy is used for
electric motors and production machinery equipment. Co- Figure 2.1 schematic diagram of a steam turbine co-generation system
generation technology is one of the energy-efficient technologies (Shabbir et all, 2016)
that can be applied in the pulp and paper industry to produce
energy (steam and electricity) simultaneously. 2.2 Combined configuration of co-generation steam turbines
according to (Nayak et al., 2013), in the modern manufactur & gas turbines
industry, machinery and technology are the driving factors in the In the combined co-generation configuration system between
business whose availability is functioned as one of the company's steam turbines & gas turbines, both are used for energy
strategies in facing market supply, therefore the performance of generation. And if the starting fuel in the turbine gas used is rice
the machine must be considered because it has a role in the husks, then it can be converted into syn gas in the gasifier &
company towards world class manufacturing. Boilers are one of amp; combustion in the chamber to be passed on to the gas
the supporting machines of co-generation combination turbine as an electric energy generation by the generator. Exhaust
technology to produce steam and steam turbine generator drives gas flow in gas turbines, used by Heat Recovery Steam Generator
in order to generate electrical energy, the performance is a (HRSG) for steam generators with additional fuel combustion.
supporter of cost reduction in energy generation in the pulp & the difference in the combined process cycle is, the steam
paper industry, because it can reduce low production costs in produced by HRSG is superheated steam that is reused as a steam
manufacturing. turbine drive to move the generator to generate electrical energy,
according to (Suzuki, 2017) Overall plant effectiveness (OPE) is then saturated steam that leaves the steam turbine in extraction
a measurement indicator of complex engine performance in the into Low &(Shabbir & Mirzaeian, 2016)
industry process that can maximize production effectiveness and
minimize process failure, defects and losses, all of which can be
affected by three factors, namely : availability, performance and
quality.

www.psychologyandeducation.net 6575
PSYCHOLOGY AND EDUCATION (2020) 57(9): 6574-6583 ISSN: 00333077

2.6 Concept of TPM implementation in process industry

According to (Suzuki, 1994), explaining the concept of TPM
implementation in the industry process:
1. Identify and eliminate eight major losses in the
industry process
2. Minimizing equipment failure in the process industry
3. Implementation of autonomous maintenance program
design (AM) in the process industry
4. Perform a planned maintenance program (PM) & build
quality maintenance (QM)
5. Improving work competencies for employees
6. Build a work safety culture to eliminate work accidents

2.7 Overall Plant effectiveness (OPE) Measurement

In the industry process, products produced in the equipment
factory complex because it consists of several interconnected
processes, such as compressors, pumps, tanks, heat exchangers,
Figure 2.2 Schematic diagram of a steam & gas turbine co-generation all of which are connected to pipes and instrumentation systems.
system As a result of integration, it is important to focus on maximizing
(Shabbir et all, 2016) the overall effectiveness of the plant rather than each individually
2.3 Boilers related equipment. (Suzuki, 1994)
Boiler is a vessel / boiler covered containing water, which in the
process the vessel is heated with a furnace / fuel chamber to a 2.8 Losses Structure
certain pressure & degree of temperature using a variety of fuels To distinguish & measure losses that inhibit the effectiveness of
(coal, fuel, gas, nuclear and others) to produce water vapor, the performance of an engine, it can be done calculation
which will be used for heating and power. Boilers became an formulations that help Overall Plant Effectiveness (OPE)
important part of the invention of steam engines, because as a measurement analysis as shown in figure 2.3 follows:
trigger for the birth of the evolution of the industry. The existence
of boilers in the process industry becomes the most important
thing, because disruptions and failure operations caused by
external and internal factors will cause a huge loss of energy cost
increase and affect the production process, because of its end-to-
end user nature in the process cycle of the process industry.(Putra
& Purba, 2018)

2.4 Energy Cost of Goods manufacturing

Energy cost is defined as the cost incurred to produce an energy
per unit of the specified parameter. In energy generation in the
co-generation, there are two energy outputs produced, namely
electrical energy (Kilowatt) which is used to move production Figure 2.4 losses Structure & OPESource:
(Suzuki, 1994)
machines and steam (Ton) as the main energy in the paper drying
process and as a support in chemical processes . 2.9 Eight major losses
According to (Bierer & Götze, 2012), energy costs a lot of costs According to (Suzuki, 1994), suggesting that in every
incurred by the consumption of goods and services for internal performance of an equipment or engine, of course there are
energy supply-demand. Cost of goods manufacturing (COGM) is losses that occur in its operation, especially in the process
defined as the Cost of Production (HPP) consisting of fixed & industry because the system is integrated between the equipment,
variable cost (Raw material cost, Labor & Overhead), Where all it is described into eight main. disadvantages of equipment or
elements have been added and this price will then be the selling machinery in the process industry include:
price.

2.5 Profitability & Benefit to Industry

According to (Singgih, 2006), Profitability is defined as the
ability of a company to make a profit in the context of its
correlation with sales. Whereas according to (Heyzer, 2001),
Profitability can be obtained by improving quality, improving
productivity and cost reduction. reduction.
(Sudana, 2011), revealed Profitability as the ability of the
company to generate profit by using owned resources such as
assets, capital or sales of the company, in this context, cost
reduction improvement can be used as a reference as profitability
generated through low cost advantage in productivity.

www.psychologyandeducation.net 6576
PSYCHOLOGY AND EDUCATION (2020) 57(9): 6574-6583 ISSN: 00333077

Table 2.1 Eight major losses type without assumptions about data distribution. PLS is
Losses Type Definition units Example
useful for modeling structural equations including
1. Shutdown Lost time when production stops days Shutdown work,
Losses for shutdown maintenance as well autonomous inspections, formative indicators in applied research projects,
as planned annual periodic repairs general repair work, especially when participants are limited and the
periodic servicing, dll
2. Production Time lost due to changes in supply days Production-adjustment distribution of data is skewed
adjustment and demand resulting in changes shutdown, PLS-SEM has been widely implemented in various fields of
inventory
loss in production plans reduction shutdown, dll
3. Equipment Loss of production processing Hours Failure of operation science,
on such as behavioral sciences, marketing, organization,
failure loss time, due to sudden malfunction pumps, burning electric information systems management, and business strategy.
motors, damage to
bearings and shafts, etc.
4. Process Loss of time in the shutdown due Hours Leakage, spillage from
failuere to external factors, such as: process media, scattered 3. Methodology
loss chemical changes or changes in dust, corrosive, erosive, Based on the literature studies presented, a research model is
other physical property materials or operating errors
that are still in process, damaged proposed where 3 OPE variables (X1) are Availability
raw materials, operations error indicators (A1234), performance indicators (A56) and
5. Normal Loss of production time at the time Rate Reduction of production
production of factory start up, shutdown and decrease, rate during machine Quality indicators (A78). The three indicators consist of
loss change over. Hous heating period after Eight major Losses, namely: Shut down losses, Production
startup, peridode cooling
down before shutdown, Adjustment, Equipment Failure loss (Breakdown), Process
and product changeover failure loss, Normal Production loss, Abnormal Production
6. Abnormal Losses that occur when the plant Rate Low-load operation,
production performs poorly due to decrease, low-speed operation and
loss, Quality (defect loss), and Re-Processing loss that
loss malfunction and abnormal operation below affects productivity (Y1) with boiler Production Volume
conditions occur production standard
values
(B1), Decrease in production costs / energy costs (Y2) with
7. Quality Losses due to producing defective Hours, Physical loss and time indicators (B2) and (B3) and the performance of
defect loss products, physical loss of rejected tons, due to producing goods profitability of the company in the co-generation Plant (Y3)
products, cost losses due to dollar that do not match the
producing a decrease in product /rupiah quality and quality with Budgeting (B4) and actual achievement indicators
quality standards specified (B5), Decrease in Energy Cost total consumption (Y4) with
8. Re- Recycling losses, due to the Hours, recycle inappropriate
processing processing of product-making tons, products from the final indicators (C1) and (C2), Energy Cost total Pulp &
loss materials re-cycled into the dollar process to the initial shown in figure 3.1. The research hypothesis states that
processing system /rupiah process in order to be
accepted there are important factors that can affect the effectiveness
of production operations, namely the productivity
2.10 Partial Least Square - Structural Equation Modeling performance of the co-generation plant that will affect the
According to (Leguina, 2015), Structural Equation Modeling parameters of each item variable Energy cost and
(SEM) is a multivariate data analysis method used in solving profitability performance of the company. In that view, the
problems for latent variables that cannot be calculated and research hypothesis is as follows:
difficult to measure. • H1: OPE will have a positive impact on boiler plant
productivity performance
2.11 analysis of the effects of the elimination of eight major H2: Boiler plant productivity will have a positive impact on
losses and the wording on the profitability of pulp & co-generation plant productivity performance to reduce
paper mills manufacturing companies energy production costs to energy productivity raw materials
According to (Hair et al., 2014), n SEM, there are two • H3: Productivity will have a positive impact to reduce
approaches: costs.
1. The first approach is broadly applied covariance-based • H4: Plant productivity performance will have a positive
SEM (CB-SEM). in the field of social sciences, and is impact to reduce losses and reduce costs
still a much-preferred method of data analysis in • H5: Lower total costs will have a positive impact on the
confirming or rejecting theory through hypothesis company's profitability
testing, especially when the sample size is large, the performance
data is usually distributed, and most important, the
model is determined correctly . That is, the
B2 B3 D1 D2
corresponding variables are selected and linked A1234 B1
together in the process of turning the theory into a
model of structural equations H1
Y1
H2
Y2
H4 H5
A56 X1 Y4 Y5
PLS handles all types of data, from nonmetric to
metric, with very minimal assumptions about data Overall Plant
Effectiveness
Boiler Production
Energy Cost Total Energy Cost Total Energy Cost Total
A78 Production Consumption
characteristics, reflective and formative constructions H3
Pulp and Paper mills
Manufacturing Production
B4
and all recursive models identified. However, many Eight major losses C1 C2
Y3
industry practitioners and researchers note that, in fact, OPE D3
it is often difficult to find data sets that meet these Co-Gen Performance
B5 Co-Generation
Power Plant
requirements. Furthermore, the purpose of research can Energy Cost Variabel Potential Cost
saving Profitability
Productivity
be explored, where we know very little about the
relationships that exist between variables. In this case, Figure 3.1 SEM PLS modeling framework
researchers may consider PLS.
2. Then the second approach is Partial Least Squares Data collected from the operational performance of Pulp & Paper mills at
PT. XYZ for 1 year throughout 2019, and will be tested using SmartPLS
(PLS) which focuses on variance analysis and can be 3.0 to evaluate the reliability and validity of research models and assess
done using PLS-Graph, Visual PLS, Smart PLS, and research hypotheses.
Warp PLS. PLS is a soft model approach to SEM

www.psychologyandeducation.net 6577
PSYCHOLOGY AND EDUCATION (2020) 57(9): 6574-6583 ISSN: 00333077

Table 4.5 Correlation analysis of VIF multicollinearity validation

4. RESULTS testing
A1234 A78 B1 B3 B5 C2 D1 D3
4.1. Evaluation of Measurement Reflective Model (Outer
A1234 1.000 0.846 0.643 -0.041 -0.638 -0.040 -0.088 0.079
Model)
based on the validity of the discriminant, there are several tests A78 0.846 1.000 0.606 -0.060 -0.514 -0.087 0.089 0.141

that must be done in order for the model to be valid convergently: B1 0.643 0.606 1.000 -0.730 -0.618 -0.731 -0.312 -0.471

• Testing The initial value of outer loading> 0.7 B3 -0.041 -0.060 -0.730 1.000 0.317 0.989 0.378 0.759

Table 4.1 testing of reflective outer loading models B5 -0.638 -0.514 -0.618 0.317 1.000 0.287 0.207 0.270
X1 Y1 Y2 Y3 Y4 Y5 C2 -0.040 -0.087 -0.731 0.989 0.287 1.000 0.347 0.766
A1234 0.963 D1 -0.088 0.089 -0.312 0.378 0.207 0.347 1.000 0.626
A78 0.958 D3 0.079 0.141 -0.471 0.759 0.270 0.766 0.626 1.000
B1 1.000
B3 1.000 there is a correlation between B3 and C2 with a value of 0.989>
B5 1.000 0.9, then the two are strongly correlated with each other which
C2 1.000 causes multicolinearity. the next step that must be done is to
D1 0.811 remove one of the two indicators.
D3 0.964 • The reliability indicator has qualified with outer
loading value> 0.7
stated there are some items or indicators that are not valid Table 4.6 final testing outer loading
X1 Y1 Y2 Y3 Y5
convergent validity, outer loading value <0.7, then the indicator
A1234 0.963
can be removed from the model.
• Testing the validity of discriminants using heteroite A78 0.958
B1 1.000
monotrait values (HTMT) <0.9
Table 4.2 HTMT discriminant validity testing B3 1.000
X1 Y1 Y2 Y3 Y5 B5 1.000
X1 D1 0.822
Y1 0.679 D3 0.959
Y2 0.063 0.734
Y3 0.626 0.618 0.304 4.2. Realibility construct analysis, convergent validity &
Y5 0.136 0.495 0.715 0.301 model undimencial testing
Contruct Reliability is a Test to measure the reliability of
Table 4.3 Correlation analysis of HTMT discriminant validity latent variable constructs. Construct reliability is equal to
testing Chronbach alpha> 0.7.
A1234 A78 B1 B3 B5 C2 D1 D3 • The validity of convergence is determined based on the
A1234 1.000 0.846 0.643 -0.041 -0.638 -0.040 -0.088 0.079 principle that the gauges of a construct should be
A78 0.846 1.000 0.606 -0.060 -0.514 -0.087 0.089 0.141 highly correlated, measured by ave value> 0.5
B1 0.643 0.606 1.000 -0.730 -0.618 -0.731 -0.312 -0.471 • Undimensionality testing of the model is intended to
B3 -0.041 -0.060 -0.730 1.000 0.317 0.989 0.378 0.759 ensure that there are no problems with measurement.
B5 -0.638 -0.514 -0.618 0.317 1.000 0.287 0.207 0.270 With indicator measure CR > 0.7 and Cronbach alpha >
C2 -0.040 -0.087 -0.731 0.989 0.287 1.000 0.347 0.766 0.7
D1 -0.088 0.089 -0.312 0.378 0.207 0.347 1.000 0.626 Based on the table, the construct has been reliable, valid
D3 0.079 0.141 -0.471 0.759 0.270 0.766 0.626 1.000 convergently and all constructs have qualified for the
undimensionality test.
there is an HTMT value between Y2 & Y4 of 0.989> 0.9, then Table 4.7 Analysis of realibility construct testing, convergent
Y2 and Y4 are not valid in discriminant validity. This is usually validity and unidimensional
influenced by a very strong correlation between the two latent model
variables, and the strong correlation is caused by a strong Average
Cronbach's Composite
correlation between indicators of the two latent variables. Then rho_A Variance
Alpha Reliability
both latent variables should be combined into one latent variable. Extracted (AVE)
The multicollinearity validation test uses the Varian inflating X1 0.917 0.919 0.960 0.923
factor (VIF) value <10. Y1 1.000 1.000 1.000 1.000
Table 4.4 VIF multicolinearity validation testing Y2 1.000 1.000 1.000 1.000
VIF
Y3 1.000 1.000 1.000 1.000
A1234 3.524
Y5 0.770 1.047 0.887 0.797
A78 3.524
B1 1.000
B3 47.360 4.3. Analysis of Discriminant Validity Testing using
B5 1.000 Fornell-Larcker Criterion
C2 47.360 A construct is declared valid by comparing the root value of the
D1 1.646 AVE (Fornell-Larcker Criterion) with the correlation value
D3 1.646 between latent variables. AVE root> correlation value between
variables.

www.psychologyandeducation.net 6578
PSYCHOLOGY AND EDUCATION (2020) 57(9): 6574-6583 ISSN: 00333077

Table 4.8 Fornell-Larcker Criterion discriminant validity Standard

Original Sample T Statistics P
testing Deviation
Sample (O) Mean (M) (|O/STDEV|) Values
X1 Y1 Y2 Y3 Y5 (STDEV)
X1 0.961 X1 -> Y1 0.651 0.680 0.133 4.904 0.000
Y1 0.651 1.000 X1 -> Y2 -0.475 -0.496 0.128 3.710 0.000
Y2 -0.053 -0.730 1.000 X1 -> Y3 -0.150 -0.167 0.117 1.288 0.198
Y3 -0.601 -0.618 0.317 1.000 X1 -> Y5 -0.329 -0.345 0.149 2.208 0.028
Y5 0.082 -0.458 0.693 0.273 0.893 Y1 -> Y2 -0.730 -0.741 0.152 4.806 0.000
Y1 -> Y3 -0.231 -0.253 0.170 1.358 0.175
Based on the table 4.8 , the root AVE value> of all correlation Y1 -> Y5 -0.506 -0.518 0.200 2.533 0.012
values between latency variables, it has met the requirements of Y2 -> Y3 0.317 0.322 0.198 1.598 0.111
the discriminant validity test using the Forneel-Larckell criterion. Y2 -> Y5 0.693 0.700 0.223 3.099 0.002

4.4. Discriminant validity test analysis using cross- Overall, the significance of the effect of each item on its
loading value construct and the effect of each independent variable
Cross-loading is another method of finding discriminant validity.
partially on the dependent variable is as follows
The expected cross loading value is> 0.7
Table 4.9 Testing the discriminant validity using the cross :
loading value
X1 Y1 Y2 Y3 Y5
A1234 0.963 0.643 -0.041 -0.638 0.026
A78 0.958 0.606 -0.060 -0.514 0.136
B1 0.651 1.000 -0.730 -0.618 -0.458
B3 -0.053 -0.730 1.000 0.317 0.693
B5 -0.601 -0.618 0.317 1.000 0.273
D1 -0.002 -0.312 0.378 0.207 0.822
D3 0.114 -0.471 0.759 0.270 0.959

From the table above 4.9 it can be seen that all loading
indicators on the construct > cross loading, it can be stated
that this model has met the requirements of discriminant
validity. Figure 4.1 Results Analysis of variable correlation significance

4.5. Multicollinearity test analysis reflective model 4.6.2. Testing analysis using the R-Square value
The formative multicollinearity test has met the requirements, (goodness-fit-model)
based on the VIF value table <5 The values of R2 = 0.75, R2 = 0.50, and R2 = 0.25 indicate that
Table 4.10 Fornell-Larcker Criterion discriminant validity testing the model is strong, moderate, and weak
Table 4.12 Goodness-fit-model test analysis
VIF R R Square
A1234 3.524 Square Adjusted
A78 3.524 Y1 0.423 0.366
B1 1.000 Y2 0.533 0.486
B3 1.000 Y3 0.100 0.010
B5 1.000 Y5 0.480 0.428
D1 1.646
D3 1.646
It can be concluded that, all independent variables on the
dependent variable are weak.
It is concluded that in testing the outer reflective model
carried out in this model, all items or indicators have met 4.6.3. Test analysis using the F-Square (Effect
Size) value
the validity and reliability requirements and there is no
Tests using the F-Square value, are used to assess the magnitude
multicollinearity between the 20 indicators. of the influence between variables using the Effect Size or f-
square, in addition to validating the presence or absence of a
4.6. Interpretation of results (Inner model) significant relationship between variables.
4.6.1. Total effect testing analysis Table 4.13 Analysis of the Effect Size test results
This test is used to see the magnitude of the direct effect of each
independent (exogenous) variable on the dependent variable
(endogenous).
Table 4.11 Total Effect testing analysis

www.psychologyandeducation.net 6579
PSYCHOLOGY AND EDUCATION (2020) 57(9): 6574-6583 ISSN: 00333077

X1 Y1 Y2 Y3 Y5 the limitations or criteria for the fit model include:

X1 0.734 • RMS Theta value or Root Mean Square Theta <0.102,
Y1 1.142 • The value of SRMR or Standardized Root Mean
Y2 0.111 0.922 Square <0.10 or <0.08
Y3 • and NFI Value> 0.9.
Y5 The following are the results of the analysis on the Fit Model
test:
based on the table, the F Square value above can be stated: Table 4.17 Pengujian model fit
• The effect of large size is the effect of X1 on Y1, Y1 on Saturated Estimated
Y2 and Y2 on Y5. Because it has an F-Square value> Model Model
0.35 SRMR 0.065 0.227
• The effect of Y2 on Y3 is one that has a moderate d_ULS 0.120 1.447
effect, because it has an Effect size (F-Square) in the d_G1 0.271 0.914
range 0.15 d_G2 0.157 0.608
Chi-Square 11.165 29.533
4.6.4. Test Analysis using Relevance Prediction NFI 0.834 0.560
(Q-Square)
The relevance of prediction is the analysis test to assess whether rms Theta
the prediction obtained is of relevance or not. Q Square> 0
indicates that the model has an accurate predictive relevance for a
rms Theta 0.418
particular construct, while the value of Q Square <0 indicates that
the model lacks predictive relevance. It can be concluded that the
From the tests carried out the analysis results obtained:
relevance of the predictions for Y1, Y2, Y3 and Y5 is relevant or
accurate. • RMS Theta value or Root Mean Square Theta 0.418>
Table 4.14 Analysis of the results of the Prediction Relevance test 0.102
SSO SSE Q² (=1-SSE/SSO) • and NFI 0.834 <0.9, then the model does not fit the
X1 24.000 24.000 data.
Y1 12.000 8.418 0.299 • However, the SRMR or Standardized Root Mean
Y2 12.000 6.838 0.430 Square value is 0.065 <0.10, so based on the SRMR
Y3 12.000 11.187 0.068 assessment, the model meets the criteria for the fit
Y5 24.000 19.117 0.203 model.
So that in the model testing carried out, it can be concluded that
4.6.5. Inner Model Multicollinearity Testing the model is fit with the data.
The formative multicollinearity test has met the requirements,
based on the VIF value table <5
Table 4.15 Analysis of the multicollinearity inner model test
results 4.7. Evaluation of Measurement formative Model (Outer
X1 Y1 Y2 Y3 Y5 Model)
X1 1.000 In testing, the valid requirement for the outer loading value on
Y1 1.000 each indicator is> 0.7, but the Outer Loading value limit> 0.5 is
Y2 1.000 1.000 still acceptable, provided that the construct validity and reliability
Y3 meet the requirements. While indicators C1, B2 and D1 because
Y5 the outer loading is <0.6.
Table 4.18 testing the formative outer loading model
then the model can be stated that there is no multicollinearity X1 Y1 Y2 Y3 Y4 Y5
A1234 0.646
problem. This fact is supported by the absence of a strong A56 0.680
correlation between independent variables as in the following A78 0.610
table: B1 1.000
B3 1.000
Table 4.16 Correlation between variables in the inner model B5 1.000
multicollinearity C2 1.000
test D3 1.000
X1 Y1 Y2 Y3 Y5
X1 1.000 0.651 -0.053 -0.601 0.082
• The multicollinearity validation test used the variance
Y1 0.651 1.000 -0.730 -0.618 -0.458
value of the inflating factor (VIF) <5
Y2 -0.053 -0.730 1.000 0.317 0.693
Table 4.19 Multicollinearity analysis based on VIF
Y3 -0.601 -0.618 0.317 1.000 0.273
assessment
VIF
Y5 0.082 -0.458 0.693 0.273 1.000 A1234 3.731
A56 1.059
A78 3.678
The table above shows that there is no strong correlation between B1 1.000
independent variables, a strong variable is stated if the correlation B3 1.000
value of each variable is (> 0.9 or <-0.9). B5 1.000
D3 1.000

4.6.6. Model Fit Testing

www.psychologyandeducation.net 6580
PSYCHOLOGY AND EDUCATION (2020) 57(9): 6574-6583 ISSN: 00333077

In testing the VIF value <5, it meets the requirements, but on the Table 4.21 Total Effect test analysis for the inner formative
C2 and B3 indicators there is multicollinearity (VIF)> 5, so the model
Standard
correlation between indicators is strong, so that C2 can be Original Sample
Deviation
T Statistics
P Values
Sample (O) Mean (M) (|O/STDEV|)
removed from the model. (STDEV)
X1 -> Y1 0.995 0.996 0.003 331.822 0.000
X1 -> Y2 -0.726 -0.730 0.162 4.485 0.000
4.7.1. Analysis of significance and relevance of X1 -> Y3 -0.230 -0.253 0.172 1.336 0.182
indicators to latent variables X1 -> Y5 -0.551 -0.552 0.172 3.215 0.001
Based on the table, the P value of all indicators is <0.05, so Y1 -> Y2 -0.730 -0.732 0.162 4.494 0.000
Y1 -> Y3 -0.231 -0.254 0.173 1.340 0.181
accept H1 which means that all X1 indicators significantly affect
Y1 -> Y5 -0.554 -0.554 0.172 3.224 0.001
X1, so the X1 indicator is relevance as an indicator of the latent Y2 -> Y3 0.317 0.323 0.203 1.559 0.120
variable X1. It is concluded that all items or indicators have met Y2 -> Y5 0.759 0.754 0.148 5.146 0.000
the requirements of convergent validity, non-multicollinearity
and there is no multicollinearity between indicators. From the test, all significant total effects or acceptance of H1 are
Table 4.20 Analyze the significance and relevance of indicators those that have p value <0.05, and those that are not significant
to latent variables or accept H0, namely the total effect of X1 on Y3, Y1 on Y3 and
Original Standard T Statistics P Y2 on Y3.
Sample Sample Mean (M) Deviation
(|O/STDEV|) Values
(O) (STDEV)
A1234 -> X1 0.646 0.645 0.183 3.529 0.000 4.8.2. Testing analysis using the R-Square value
A56 -> X1 0.680 0.664 0.266 2.557 0.011
A78 -> X1 0.610 0.575 0.202 3.017 0.003
(goodness-fit-model)
B1 -> Y1 1.000 1.000 0.000 In testing it is concluded that, the effect of the independent
B3 -> Y2 1.000 1.000 0.000 variable X1 on the dependent variable (Y1), and the variable Y3
B5 -> Y3 1.000 1.000 0.000 on Y5 is strong. Meanwhile, all independent variables Y1 to
D3 -> Y5 1.000 1.000 0.000
variable Y2, and Y2 to Y3 are bound to be weak.
Figure 4.22 Goodness-fit-model inner model test analysis
formatif
R Square
R Square
Adjusted
Y1 0.989 0.988
Y2 0.533 0.486
Y3 0.100 0.010
Y5 0.577 0.534

4.8. Interpretation of the results (Inner model)

Formative
The results of the inner model formative analysis with 4.8.3. Test analysis using the F-Square (Effect
Bootstrapping (T Value) are as follows : Size) value
Table 4.12 Analysis of the formative model inner effect size test
X1 Y1 Y2 Y3 Y5
X1 91.497
Y1 1.142
Y2 0.111 1.362
Y3
Y5

based on the table, the F Square value above can be

stated:
• The effect of large size is the effect of X1 on Y1, Y1 on
Y2 and Y2 on Y5. Because it has an F-Square value>
0.35
• Meanwhile, the effect of Y2 on Y3 is moderate.
Because it has an Effect size (F-Square) in the range
0.15

Figure 4.2 Results of the Inner Model Analysis with Bootstrapping (T- 4.8.4. Test Analysis using Relevance Prediction
Value) (Q-Square)
based on the table, the value of Q Square above, it is concluded
4.8.1. Total effect testing analysis that the prediction of Y1, Y2, Y3 and Y5 is relevant or accurate
because it has a value of Q Square> 0.05.
Table 4.23 Analysis of testing the prediction relevance of inner
formative models

www.psychologyandeducation.net 6581
PSYCHOLOGY AND EDUCATION (2020) 57(9): 6574-6583 ISSN: 00333077

SSO SSE Q² (=1-SSE/SSO)

X1 36.000 n/a n/a
Y1 12.000 3.517 0.707
Y2 12.000 6.838 0.430
Y3 12.000 11.187 0.068
Y5 12.000 6.593 0.451

4.8.5. Inner Model Multicollinearity Testing

Based on the table, the VIF value does not have a VIF value <5,
so the model can be stated that there is no multicollinearity
problem.
Tabel 4.24 Multicollinearity inner model test analysis
X1 Y1 Y2 Y3 Y5
X1 1.000
Y1 1.000
Y2 1.000 1.000
Y3
Y5

5. Uji Hipotesa
The hypothesis test in this study was conducted by looking at T-
Statistics values and P-Values values. The research hypothesis Figure 5.1 Final result Analysis of the influence of correlation between
can be accepted if the P-Values value < 0.05. it can be concluded variables
that of the 5 (five) hypotheses proposed in this study, all are
acceptable because each of the influences shown has a P-Values 6. Conclusions
value < 0.05. Except the hypothesis testing H3 ( influence energy To provide potential benefits for pulp and paper mills
cost total production, against potential cost saving profitability manufacturing PT. XYZ, the priority improvement that must be
Co-Generation power plant ). So it can be stated that 4 done to eliminate eight major losses on boiler machines in the co-
independent variables to its dependencies have a significant generation plant is to fix four (6) availability indicators (A1234)
influence, namely: and Performance (A56) namely elimination shutdown loss (A1),
1. The value of OPE (X1) consisting of 3 (Three) production adjustment loss (A2), Equipment failure loss (A3),
components of Eight major losses has a significant Process failure loss (A4), Normal Production loss (A5), and
positive effect on performance (Y1), where: Abnormal Production loss (A6).
Then, to provide potential saving to Pulp &paper mills
manufacturing, Energy Price can be reduced by increasing
2. Productivity boiler production performance (Y1) with
productivity by reducing downtime losses caused by engine
indicator B1, very significantly negative effect on
failure and improving the performance or speed of the production
Energy Cost total production (Y2), where :
process.

3. The amount of production cost of Energy cost total /

Energy cost total consumption (Y2) with indicator B3 Daftar Pustaka
is very significant positive effect on energy cost total
pulp &paper manufacturing production (Y5) with ANALISIS INDUSTRI PULP DAN KERTAS DUNIA: Masukan
indicator D3, where : bagi Pengelola BUMN Biro Riset LM FEUI Kendati praktek
pekerjaan. (2009). 1–15.
4. To increase profitability and performance can be done
by increasing the value of OPE (X1) or lowering Eight Bierer, A., & Götze, U. (2012). Energy Cost Accounting:
Major losses or 8 major losses (A1234, A56 &A78). Conventional and Flow-oriented Approaches. Journal of
And from the results of SEM-PLS in figure 4.25, the Competitiveness, 4(2), 128–144.
influence of each OPE constituent indicator is : https://doi.org/10.7441/joc.2012.02.09
X1 = 0,803 (A1234) + 0,776 (A56) - 0,076 (A78) Gambini, M., Vellini, M., Stilo, T., Manno, M., & Bellocchi, S.
(2019). High-efficiency cogeneration systems: The case of the
paper industry in Italy. Energies, 12(3).
https://doi.org/10.3390/en12030335

Hair, J. F., Sarstedt, M., Hopkins, L., & Kuppelwieser, V. G.

(2014). Partial least squares structural equation modeling (PLS-
SEM): An emerging tool in business research. European Business
Review, 26(2), 106–121. https://doi.org/10.1108/EBR-10-2013-
0128

Leguina, A. (2015). A primer on partial least squares structural

equation modeling (PLS-SEM). International Journal of Research
& Method in Education, 38(2), 220–221.
https://doi.org/10.1080/1743727x.2015.1005806

www.psychologyandeducation.net 6582
 PSYCHOLOGY AND EDUCATION (2020) 57(9): 6574-6583 ISSN: 00333077

Mardono, U., Rimawan, E., Pratondo, T., & Saraswati, I. (2019).

An analysis of the effect of elimination of six big losses on
increasing profitability in steel rolling mill companies.
International Journal of Mechanical and Production Engineering
Research and Development, 9(2), 387–398.
https://doi.org/10.24247/ijmperdapr201937

Nayak, D. M., Naidu, G. S., Shankar, V., Manager, A., &

Manager, A. (2013). Evaluation Of OEE In A Continuous Process
Industry On An Insulation Line In A Cable Manufacturing Unit.
International Journal of Innovative Research in Science,
Engineering and Technology, 2(5), 1629–1634.

Pusdatin Kemenperin. (2019). Analisis perkembangan industri. In

Kementerian Perindustrian RI (pp. 12–13).

Putra, G. P., & Purba, H. H. (2018). Failure mode and effect

aanalysis on power plant boiler. In Journal of Optimization in
Industrial Engineering (Vol. 11, Issue 2, pp. 1–5).
https://doi.org/10.22094/JOIE.2018.555547.1527

Shabbir, I., & Mirzaeian, M. (2016). Feasibility analysis of

different cogeneration systems for a paper mill to improve its
energy efficiency. International Journal of Hydrogen Energy,
41(37), 16535–16548.
https://doi.org/10.1016/j.ijhydene.2016.05.215

Shabbir, I., Mirzaeian, M., Mooney, J., & Anvari, F. (2016).

Energy efficiency improvement potentials of pulp and paper
sector through energy benchmarking and cogeneration. ECOS
2016 - Proceedings of the 29th International Conference on
Efficiency, Cost, Optimisation, Simulation and Environmental
Impact of Energy Systems.

Singgih, S. (2006). Menguasai Statistik Di Era Informasi Dengan

SPSS 15. Elex Media Komputindo.

Sugiyono, A. (2015). Penggunaan Energi di Industri Pulp dan

Kertas : Aspek Teknologi dan Lingkungan. December 2009.
Suzuki, T., Ed. (1994). TPM in Process Industries. Portland, OR,
Productivity Press

www.psychologyandeducation.net 6583

View publication stats