The Effect of TQM & SOP (Total Quality Management
and Standard Operating Procedure) to Build Core
Management Framework for Optimization: A Literature
Research Study
Bahrul Fauzi Rosyidi1, Muhammad Halimi2, Sufitri3
1 Universitas Gadjah Mada (UGM) – Applied Financial Management Department; Universitas Gadjah Mada (UGM) – Centre
of Economic and Public Policy Study (CEPPS)
2 Universitas Gadjah Mada (UGM) – Applied Marketing Management Department
3 Universitas Gadjah Mada (UGM) – Applied Financial Management Department
 put forward today.
Abstract—Optimization problem is not an easy task. To
achieve an optimal performance, organization or company
must strive to empower intrapreneurs optimal power (potential
resources from internal sources) and entrepreneur optimal
power (potential resources from external sources) optimally
and maximally for company and organization. Mathematically,
we have to achieve optimal value of the company by following
the total value of the = total revenue – total cost. Strategically,
to attain optimal value for the company we have to involve
different strategies which do not only rely on product and price
under Marketing Department but also require a combination
of a number of strategic issues in Operating and Production
Department, Human Resources Department, and Financial
Department. Total Quality Management and Standard
Operating Procedure Approach (TQM & SOP Approach) is
the efforts to achieve the optimal value by involving entire
compounds of a companyunder one common mission and
vision. Realization of effective and efficient work processes can
be delivered by competent human resource with high
discipline, high loyalty, high intelligent work, and high value
orientation which hopefully altogether will increase
productivity performance to lead for optimal satisfactory
organizational motives. Organizational productivity formula is
= Effectiveness + Efficiency + Stakeholder Satisfaction.
Keywords: Total Quality Management, Standard Operating
Procedure, Optimization, Satisfaction, Sustainability Progress.
I. INTRODUCTION
Excellence management is a form of short term and long term
investment of the company. Investment is the commitment of a
number of funds or other resources (Intrapreneur; potential
resources from internal sources and Entrepreneur; potential
resources from external sources), performing in present with
objective to earn some profits in the future time (Tandelilin,
2001:1). A good stakeholder gives more interest their company
managerial. Paying more attention to their managerial means that
stakeholders have invested in buying the company’s prospects. If
the company’s prospects improve, the price visualizes support that
will increase the price level of the stock or value of the firm in an
effective wayand an efficient method.
Excellence management is outstanding practices in managing
the organization and achieving results, all are based on a set of
eight fundamental concepts, these being: a). result orientation; b).
customer focus; c). leadership and constancy of purpose; d).
management by processes and facts; e). people development and
involvement; f). continuous learning; g). innovation and
improvement; h). partnership development; and i). public
responsibility”. This definition serves as a typical example of those
1
Total Quality Management (TQM) is a management
philosophy, diffused all over the world with the objective of
improving the operative and business performance of the
organizations by offering a systemic approach to continually
improve the operative activities to continually fulfill customer’s
requirements (Agus, 2005; Powell, 1995). The TQMs philosophy
is particularly attractive because of the focus on quality, which
offers the promise of improvement of an organization’s
performance. However, until 1993, only one third of the 500
largest companies in the United States declared having perceived
benefits of TQM implementation (Ahire, Waller, & Golhar, 1996).
The poor results could be related to a bad design or to not taking
into account certain variables that could be relevant for the success
of this implementation (Tata & Prasad, 1998).
Standard Operating Procedure (SOP) is supporting features
that becomes the origin of business excellence models which is
used to categorize and present business improvement. SOP is
"process driven", rather than "founder driven" that document
processes to ensure services and/or products are delivered
consistently every time so as standard processes. SOPs can indicate
compliance with organizational policies and it is can be used as a
part of a personnel training program, since they should provide
detailed work instructions. SOPs will minimize opportunities for
miscommunication and can address safety concerns. When
historical data are being evaluated for current use, SOPs can also
be valuable for reconstructing project activities when no other
references are available. Basically, processes and procedures
described in the SOPs will ensure that policy is followed.
The SOPs also provides standardization and control over
business processes and operations. However, the SOP allows
employees to function with little supervision and increases
accountability since all employees have access to the SOPs and
should be similarly well-informed. The SOPs is generally wider in
scope to provide direction, influence behavior and ensure that
standard tasks are completed in alignment with policy. The SOPs,
in combination with policy, defines the organization. The SOPs
will work to ensure that policy concerning processes and
procedures is followed.
In this study, we argue that element values of TQMs (context
of the organization, leadership, planning, support, competence,
operation, performance evaluation, and improvement) is effective
when supported by SOPs element (design task appropriate,
placement of the right people, appropriate performance
measurement, and suggestion appropriate work) for achieving high
optimization (achieving value of the firm = maximally profit and
satisfaction achieving). And I think, this scenario is very critical for
organization.
Existing research provides only TQMs element evidence for
quality. And the same is also true with SOPs, just provides only
SOPs element evidence for quality. There is no any idea research
or paradigm to combine two strategic scenarios to achieve a high
quality more efficient effective. The framework of this research is
expecting to achieve high value of the firm (scenarios TQMs
realization performance + ideal standardized SOPs integration =
maximal value of formula output theory of optimization).
II. PROBLEM IDENTIFICATION
Based on introduction case and problem above, the following
are formulated research questions:
a) How to find the best quality?
b) How to establish the best quality?
c) How to establish the excellence management?
d) How to get the best quality to achieve the organizational
competitive advantages for creating maximal value of the
firm?
III. THEORITICAL FRAMEWORK
A. What is Quality
Quality is the ability of a products and services in fulfilling
the customer needs. Quality is also the level and standard of a good
or standard of a bad something created. Its term is widely used in
business, engineering, and manufacturing in conjunction with
engineering concepts to products quality improvement and services
quality improvement such as Six Sigma, Kaizen, etc.
B. Excellence Management
Excellence management is outstanding practices in managing
the organization and achieving results, all based on a set of eight
fundamental concepts, these being: a). Result orientation; b).
Customer focus; c). Leadership and constancy of purpose; d).
Management by processes and facts; e). People development and
involvement; f). Continuous learning; g). Innovation and
improvement; h). Partnership development; and i). Public
responsibility.
C. Total Quality Management (TQM)
Total Quality Management (TQMs) is a management strategy
which aims to instill awareness of quality in all processes within
the organization. In accordance with the definition of the ISO,
TQMs is "a management approach for an organization centered on
quality, based on the participation of all its members and aims for
long-term success through customer satisfaction and provide
benefits to all members in the organization and the
community." Short definition, TQMs is customer focus and
company-wide by doing: a). The activity system approach; and b).
Activities of scientific approaches.
The basic philosophy of TQMs is "organization can
experience success and it is effects of customer satisfaction”.
TQMs is a management philosophy oriented to increasing
operating and business results of an organization through activities
of continuous improvement (Agus, 2005; Antony, Leung,
Knowles, & Gosh, 2002; Krumwiede & Lavelle, 2000; Noronha,
2002; Powell, 1995; Prajogo, 2005).
As such, the philosophy is composed of principles, models
and practices: practices are the observable actions that illustrate the
underlying principles, while principles are the beliefs or dogmas
(Boaden 1997; Powell, 1995). Models are conceptual frameworks
developed from the TQM principles that have been adapted to
changes in the atmosphere of business. Examples of the TQM
models include ISO 9001:2015, Malcolm Baldrige, Six Sigma, and
the European Foundation for Quality Management (EFQM)
excellence model. The principles constitute the deepest and most
constant part of the management philosophy; however, researchers
have not yet reached a consensus on the TQM principles and
whether the principles are universal (Powell, 1995; Samson &
Terziovski, 1999; Zeitz, Johannesson, & Ritchie, 1997).
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D. Standard Operating Procedure (SOP)
In today’s business environment, SOPs must take bottom-line
economic sense, especially if we invest in time and energy to
develop and implement effective total quality management
(TQMs). Why? Because: a). Business need consistency to achieve
top performance. We are talking about consistency in routines not
mind numbing boredom; b). Identify the key areas of concern for
our operation where SOPs might be useful; c). Using the list from
step one, identify the top one or two priority areas for attention; d).
Focusing on the selected top priority areas from step two, identify
all the processes, functions or operations that occur within each of
these areas; e). Group together and combine or subdivide further
(which ever makes sense for our operation) all important processes,
functions or operations within each area, then prioritize them for
SOP development; and the last is f). Identify the best individual to
lead the development effort for each SOPs and assign a
development team of employees, managers, agribusiness
representatives, consultants and anyone else who can bring
relevant expertise to the effort.
So, what exactly is standard operating procedure (SOP)?
Standard operating procedure (SOP) is a set of instructions having
the force as an instruction or directive. This includes things from
operations that have a plan or standardized procedure without loss
of effectiveness. Any good quality management system is always
based on the SOP. Well-written standard operating procedures
(SOPs) provide direction, improve communication, reduce training
time, and improve work consistency.
The SOP development process is an excellent way for
managers, workers, and technical advisers to cooperate for
everyone’s benefit. A very positive sense of teamwork arises when
these parties work together toward common goals. Standard
operating procedures used in combination with planned training
and regular performance feedback lead to an effective and
motivated workforce. Producing a high-quality product at a profit
depends on the consistent operation of all systems within the dairy.
To develop the SOPs, there are many different approach, such
as: a). The first, name the SOP using descriptive action word, tips:
If we are developing SOPs for several different areas of our
operation processes, give area an identifying code the number the
SOPs within it, example: in Marketing Efectivity, SOPs M-1, M-2,
M-3…in the Operation area, O-1, O-2, O-3…for Financial
efectivity, F-1, F-2, F3…for Human resources security and
discipline, HR-1, HR-2, HR-3…This will make it easier to file the
SOPs, refer to them in related SOPs and for an employee to find a
specific SOP for reference later. Keep them filed in one or more
notebooks accessible to the employees. Include the date the SOP
took effect, any revision dates and the authors’ names; b). The
second, write a scope for the SOP; c). The third, develop an overall
task description (number of people required, skill levels, equipment
and supplies required, personal protective, and etc); d). The fourth,
describe each task in detail as specific order in which activities are
don, timing sequences and times allowed, materials or tools used
and how they are used, reward and bonus consideration, safety
consideration, healthy consideration, references to other associated
Sops, and etc; e). The five, define terms and concepts when
needed, people can’t remember more than 10 or 12 steps, so they
tend to have difficulty with long SOPs. If our SOP goes beyond 10
steps, either break it into logical sub-task SOPs or write a second
shortened form at job site listing in mainly step, remember: not
detailed explanations of the steps. Help to ensure that an important
items are not missed; f). The sixth, get everyone on board by ask
several experienced employees to be involved in drafting the initial
SOP; have trained employees check the written procedures against
actual practices before implementation, make revisions if
necessary; talk with all employees to gain agreement that
procedures and expectations are appropriate and achievable; inform
everyone about the written SOP; train them on the SOPs content
and tell them where they can find it for future references, be aware
that all our employees may not be able to read that (SOPs); and the
last is g). The seventh, set up a system to monitor the SOP
regularly.
Benefits of SOPs are: a). SOPs will reduce system variation
which is the enemy of production efficiency and quality control;
b). SOPs can help in conducting performance evaluations, they
provide a common understanding for what needs to be done and
shared expectations for how tasks are completed; and the last is c).
Employee can coach and support each other if there is
documentation available on exactly how various tasks must be
done and everyone knows what their co-workers are supposed to
be doing. This can also help generate a more cooperative team
approach to getting all the daily tasks done correctly, everyday.
How presenting the SOP? Presenting the SOP are must be a
simple steps and most likely a checklist, hierarchical steps, linier
flow chart, annotated pictures, and branching flowchart. The SOP
development process is critical to successful implementation of
SOPs. It should be an inclusive process that considers the input of
everyone with an interest in the procedure’s success. Managers
who write procedures without input from workers or technical
advisers run the risk of upsetting workers and producing a poorly
written SOP. Managers who enlist the talents of workers and
technical advisers will increase buy-in and produce better SOPs.
Most importantly, they will take advantage of an important
opportunity to foster teamwork among workers, managers, and
advisers. Human nature dictates that people support what they help
create.
Important notes: it is important to realize that developing
useful and effective SOPs requires time and commitment from all
management and employee levels. Once the development task is
complete three important steps still remain, are: a). Educate
employees about the new SOP; b). Control “procedural drift” by
ensuring that the SOP is followed consistently over time; and the
last is c). Establish an evaluation and review system to be certain
that over time all the steps of an SOP are still correct and
appropriate for the production system flow and role.
The SOP development process is an excellent way for
managers, workers, and technical advisers to cooperate for
everyone’s benefit. A very positive sense of teamwork arises when
these parties work together toward common goals. Standard
operating procedures used in combination with planned training
and regular performance feedback lead to an effective and
motivated workforce. Producing a high-quality product at a profit
depends on the consistent operation of all systems within the dairy.
E. Optimization
Normative economic decision analysis involves determining
the action that best achieves a desired goal or objective. This
means finding the action that optimizes (that is, maximizes or
minimizes) the value of an objective function. For example, in a
price-output decision-making problem, we may be interested in
determining the output level that maximizes profits. In a
production problem, the goal may be to find the combination of
inputs (resources) that minimizes the cost of producing a desired
level of output. In a capital budgeting problem, the objective may
be to select those projects that maximize the net present value
(NPV) of the investments chosen. There are many techniques for
solving optimization problem such as these. This focus
(optimization) focuses on the ise of differential calculus to solve
certain types of optimization problem. In technique of linier
programming, used in solving constrained optimization problems,
are examined. Optimization techniques are a powerful set of tools
that are important in efficiently managing an enterprise’s resources
and thereby maximizing shareholder wealth.
Optimization is a process to achieve the ideal or optimal
(effective value that can be achieved). In the mathematical
discipline refers to study of optimization problems trying to find a
3
minimum or maximum value of a real function. To achieve the
optimal value of the minimum or maximum, the value of
systematically conducted elections integer or real variables which
will provide an optimal solution. There are many methods used in
determining the optimal decision making. However, in this section
we will learn the following techniques: a). Marginal analysis
technique; and b). Derivative technique. The basics form of the
problem is to identify the alternative means of achieving a given
objective and to select the alternative that accomplishes the
objective in the most efficient manner, subject to constrains on the
means. In programming terminology, the problem is optimizing the
value of some objective function, subject to any resource and/or
other constraints such as legal, input, environment, and behavioral
restriction. Mathematically, we can represent the problem as:
Optimize y = f(X1 . X2 … Xn ) … … … … … … … (C. 1)
≤
Subject to g j (X1 . X2 … Xn ) {=}bj j = 1,2, … , m … … … … … … … (C. 2)
≥
Where equation C.1 is the objective function and equation C.2
constitutes the set of constraints imposed on the solution. The X j
variables, X1, X2,…,Xn, represent the set of decision variables.
Depending on the nature of the problem, the term optimize means
either maximize the value of the objective function. As indicated in
equation C.2, each constraint can take the form of an equity (=) or
an inequity (≤ or ≥) relationship.
E.1. Basic Roles
E.1.1. Marginal Analysis Technique
Marginal analysis was introduced as one of the fundamental
concepts of economic decision making. In the marginal analysis
framework, resource-allocation decisions are made by comparing
the marginal benefits of a change in the level of an activity with the
marginal costs of the change. A change should be made as long as
the marginal benefits exceed the marginal costs. By following this
basic rule, resources can be allocated efficiently and profits or
shareholder wealth can be maximized. In the profit-maximization,
the application of the marginal analysis principles required that the
relationship between the objective (profit) and the decision variable
(output level) be expressed in either tabular or graphic form. This
framework, however can become cumbersome when dealing with
several decision variables or with complex relationship between
the decision variables and criterion can be expressed in algebraic
form, the more powerful concepts of differential calculus can be
used to find optimal solutions to these problems.
E.1.1.1. Relationship Between Marginal Analysis and
Differential Calculus
Initially, let us assume that the objective we are seeking to
optimize, Y, can be expressed algebraically as a function of one
decision variable, X.
Y = f(X) … … … … … … … (C. 3)
Recall that marginal profits is defined as the change in profit
resulting from a one-unit change in output. In general, the marginal
value of any variable Y, which is a function of another variable X,
is defined as the change in the value of Y resulting from a one-unit
change in X. the marginal value of Y, M., can be calculated from
the change in Y, ΔY, that occurs as the result of a given change in
X, ΔX as follow:
∆Y
My = … … … … … … … (C. 4)
∆X
When calculated with this expression, different estimates for
the marginal value of Y may be obtained, depending on the size of
the change in X that we use in the computation. The true marginal
value of a function (e.g., an economic relationship) is obtained
from equation C.4 when ΔX is made as small as possible. If ΔX
can be thought of a continuous (rather than a discrete) variable that
can takeon fractional value1, then in calculating Myby equation derivative of a constant function is equal to zero.
C.4, we can let ΔX approach zero. In concept, this is the approach dY
taken in differential calculus. The derivative or more precisely, = 0 … … … . . … … … . . … … (C. 11)
dX
first derivative, dY/dX of a function is defined as the limit of the E.1.1.3.2. Power Functions;
ratio ΔY/ΔX as ΔAX approaches zero, that is: Y = aX b … … … … … … … … … (C. 12)
Where a and b are constants. The derivative of a power
dY ΔY functions is equal to b times a, times X raised to the (b – 1) power:
= limit … … … … … … … (C. 5) dY
dX ∆X→0 ΔX
If we describe to the graphic, the first derivative of a function = b. a. X b−1 … … … … … … … (C. 13)
dX
will represent the slope of the curve at a given point on the curve.
The definition of a derivative as the limit of the change in Y (that E.1.1.3.3. Sums of Function;
is, ΔY) as ΔX approaches zero. Suppose we are interested in the Suppose a function Y = f(X) represents the sum of two (or
derivative of the Yj = f(X) function at the point X0. The derivative more) separate functions, f1 (X), f2 (X), that is:
dY/dX measures the slope of the tangent line ECD. An estimate of
this slope, albeit a poor estimate, can be obtained by calculating the Y = f1 (X) + f2 (X) … … … … … … (C. 14)
marginal value of Y over the interval X0 to X2. Using equation C.4 The derivative of Y with respect to X is found by
a value of: differentiating each of the separate functions and then adding the
∆Y Y2 − Y0 results:
Myt = = … … … … … … … (C. 6)
∆X X2 − X0 dY df1 (X) df2 (X)
is obtained for the slope of the CA line. Now let us calculate = + … … … … (C. 15)
dX dX dX
the marginal value of Y using a smaller interval, for example X 0 to
X1. The slope of the line C to B which is equal to: E.1.1.3.4. Product of Two Functions;
Suppose the variable Y is equal to the product of two separate
∆Y Y1 − Y0 functions f1(X) and f2(X):
Myt = = … … … … … … … (C. 7)
∆X X1 − X0
gives a much better estimate of the true marginal value as Y = f1 (X). f2 (X) … … … … … … … (C. 16)
represented by the slope of the ECD tangent line. Thus we see that In this case the derivative of Y with respect to X is equal to
the smaller the ΔX value, the better the estimate of the slope of the the sum of the first function times the derivative of the second, plus
cure. Letting ΔX approach zero allows us to find the slope of the Y the second function times the derivative of the first.
= f(X) curve at point C. as shown illustrated in graph analysis, the
slope of the ECD tangent line (and the Y = f(X) function at point dY df2 (X) df1 (X)
C) is measured by the change in Y, or rise, ΔY, divided by the = f1 (X). + f2 (X). … … … … … … … (C. 17)
dX dX dX
change in X, or run, ΔX.
E.1.1.3.5. Quotient of Two Functions;
E.1.1.2. Process of Differentiation Suppose the variable Y is equal to the quotient of two separate
The process of differentiation – that is, finding the derivative functions f1(X) and f2(X):
of a function – involves determining the limiting value of the ratio
ΔY/ΔX approaches zero. Example: Taking limit of equation: 𝑓1 (X)
Y= … … … … … … … … … . … … (C. 18)
𝑓2 (X)
∆π 140∆Q − 20Q∆Q − 10(∆Q)2 For such a relationship the derivative of Y with respect to X is
= … … … … … … … (C. 8)
∆Q ∆Q obtained as follows:
= 140 – 20Q - 10ΔQ
Taking the limit of equation C.8 as ΔQ approaches zero yield df1 (X) df2 (X)
dY f2 (X). dX
− f1 (X).
dX
the expression for the derivative of company profit (value of the = … … … … … … … (C. 19)
firm) is: dX (f2 (X))2
dY ΔY
= limit … … … … … … … (C. 9) E.1.1.3.6. Functions of a Function (Chain Rule).
dX ∆X→0 ΔX Suppose Y is a function of the variable Z, Y = f1 (Z); and Z is
= 140 – 20Q
in turn a function of the variable X, Z = f2(X). the derivative of Y
with respect to X can be determined by first finding dY/dZ and
If we are interested in the derivative of the profit function at a
dZ/dX and then multiplying the two expressions together:
particular value of Q, equation C.8 can be evaluated for this value.
For example: suppose we want to know the marginal profit, or dY dY dZ
slope of the profit function, at Q = 3 units. Substituting Q = 3 in = .
equation C.9 yields: dX dZ dX
dπ df1 (Z) df2 (X)
Marginal Profit = = 140 − 20(3) = $80 per − unit = . … … … … … … … (C. 20)
dQ dZ dX
E.1.1.3. Roles of Differentiation E.1.2. Derivative Technique
Fortunately, we do not need to go through this lengthy process This involves the use of calculus in solving maximization and
every time we want the derivative of a function. A series of general minimization problems.
rules, derived in a manner similar to the process just described, E.1.2.1. Basic Rule
exist for differentiating various types of function, these are: Because the derivative is a limit, many of the rules of limits
E.1.1.3.1. Constant Functions; apply to the derivative:
Y = a … … … … … … … … . … (C. 10) 1. (cf (x))' = c(f'(x)) where c is a constant. This says that
Where a is a constant (that is, Y is independent of X). This the derivative of a scalar multiple of a function is
equal to the derivative of the function multiplied by
the scalar multiple;
1
For example: if X a continuous variable measured in feet, pounds, and 2. (f (x) + g(x)) = f'(x) + g'(x) . The derivative of a sum of
so on, then ΔX can in theory take on fractional values such as 0,5, 0,10, two functions is equal to the sum of the individual
0,05, 0,001, 0,0001 or pounds. When X is a continuous variable, ΔX can be derivatives.
made as small as desired.

4
 IV. RESEARCH MODEL AND FRAMEWORK DEVELOPMENT

Analysis & Evaluation

Management Review Performance
Monitoring Evaluation
Measurement Design Tasks Stabilizations
Internal Audit Placement of The Right People
Appropriate Performance Measurement SOPs
Internal Issues Context Suggestion Appropriate Work
External Issues

Direct Customers
Suppliers Interest Parties Context of
Distributors Organization
Retailers
Value of The Firm =
Maximally Profit &
Process Sequences Scopeof Quality
TQMs Organization Satisfaction
= Optimization
Method Mgt System

Management Commitment
Policy
Leadership
Organization Roles
Responsibility & Authority

Organization
Product
Planning
Process
Workforce

Resources Support

Input
Process Operation
Output

Continual Improvement
Noncorformity & Corrective Improvement
Action

Figure 1. Research Model

5
Internal Issues
Management review required the monitoring of internal
issues. The organization must consider issues related to product
and service offerings, value, organizational structure, performance
and knowledge, assets (e.g., facilities, property, equipment and
technology), capabilities, understood in terms of resources and
knowledge (e.g., capital, time, people, and process), information
systems, information flows, decision making process (both formal
and informal), and relationships of the staff/volunteers/members
and internal stakeholders.
External Issues
Management review required the monitoring of external
issues. The organization must consider issues related to value,
culture knowledge and performance of the organization for
understanding of external issues. The organization must consider
issues related to arising from legal, technological, competitive,
market, cultural, social, and economic environments, whether
international, national, regional or local for understanding of
external context.
Context
The organizations must determine external and internal issues
relevant to its purpose and that affect its ability to achieve the
intended outcomes of its QMS2. In addition monitor information
about impact changes in context of our organization’s quality
management system.
Direct Customers
Customer service is the service provided to customers before,
during and after purchasing and using goods and services. Good
customer service an experience that meets customer expectations.
It produces satisfied customers. Bad customer service can generate
complaints. It can result in lost sales, because consumers might
take their business to a competitor. Customer service is must
consider to direct customer service. Repeat buying and positive
customer feedback is two point indicator achieve loyalty of the
customer. Therefore organization must attract and retain customers
by offering products services that meet their needs along with
providing excellent customer service.
Suppliers
Suppliers provide organizations with the resources they need
to carry out their activities. If a supplier provides bad service, this
affects the way organization operates. Close supplier relationships
are an effective way to retain competitive and secure the resources
needed.
Distributors
A distributor owns the energy infrastructure – the poles, wires
and meters that supply energy to us (company, organization). We
may not need a traditional distributor, we may need a logistical
specialist. To determine the appropriate distributors, effectively we
may joining an industry association and attending trade shows to
find out how similar companies – the competition – move their
products (distributors gather in herds). Organizations (companies)
need to recognize that their business is now interdependent with
that of the distributor, because the distributor is not our customer.
Retailers
Determine an appropriate retailers is a great way to expand
company (organization) sales channel and increase the profits.
Interest Parties
The organization must determine: a). interested parties
relevant to the quality management system, and; b). the
requirements of these interested parties. List of interested parties
the organization must consider: a). direct customers; b). end users;
2
QMS is quality management system;
6
c). suppliers, distributors, retailers or others involved in the supply
chain; d). regulators; and e). any other relevant interested parties.
Process Sequences
The organization shall determine the sequences and
interactions of these processes. Include: a). Resource management
(people and infrastructure), product and service realization
(purchasing from suppliers, actual production, customer services
delivery, etc), management activities (planning, system review,
document control), measurement, analysis and improvement
(customer complaints, corrective and preventive actions). The
standard contains a generic model
Method
Determine methods needed to check our processes for
implement the organization (company) quality management
system.
Scope of Quality
The quality management system scope should include: a).
Physical location, example: maybe only manufacturing but not
sales locations; b). Products and/or services controlled by the
quality management system, example: manufacturing but not
installation; c). Processes within the quality management system,
example: accounting maybe left out. Therefore, the scope of the
quality management system should be repaired, such as: a).
Determine the processes that our quality management system
needs; b). Determine process sequences and interactions; c).
Determine methods needed to manage processes; d). Determine
resources needed to support processes; e). Determine process
responsibilities and authorities; f). Determine risks and
opportunities for each process; g). Determine methods needed to
check our processes; h). Determine opportunities to improve our
processes; i). Support our process with based quality management
system (QMS); and j). Improve our process based quality
management system.
Context of the Organization
Context of the organization is one of the new concepts and
differences between the ISO 9001:2008 and its younger brother
the ISO 9001:2015. It pretty much changes the concept and
application. The context of the organization as described in the ISO
9001:2015 requires you to define influences of various elements
on the organization and how they reflect on the quality
management system; the company’s culture, objectives and goals,
complexity of products, flow of processes of and information, size
of the organization, markets, defines customers etc. It is also a
mean to detect risks and opportunities regarding the business
context. Context of the organization requires the organization to
evaluate itself and its context. The output of this context evaluation
will be determination of the scope of its quality management
system. The context quality that require by organization must be:
a). As quality context; b). Interested parties; c). Scope of quality
management system; and the last d). Must be in quality
management system.
Analysis and Evaluation
The organization must determine and provide analysis and
evaluation needed for the quality management system, the steps
are: a). Analyze and evaluate our monitoring and measurement
results by analyze and evaluate the data and information we have
collected, and use analytical results and evaluations to generate
relevant outputs with use outputs to show that requirements are
being met, to demonstrate that our plans are working, to asses
performance, compliance, and effectiveness, to identify quality
management system improvement needs and opportunities, to
evaluate the performance of our quality management system
processes, and the last is use outputs to provide inputs for
management review process.
Management Review
The organization must determine and provide management
review needed for the quality management system, the steps are:
a). Plan and perform management reviews at planned interval by
plan our management review activities with schedule quality
management system reviews at planned intervals, and review our
organization’s quality management system at regular intervals by
review quality management system suitability, adequacy, and
effectiveness; b). Generate management review outputs and
document results by generate suitable management review outputs,
and document the results of our management reviews.
Monitoring
The organization must determine and provide monitoring
needed for the quality management system, the steps are: a). Plan
how we’re going to monitor, measure, analyze and evaluate by
plan how to monitor, measure, analyze, and evaluate our quality
management system with monitor, measure, analyze, and evaluate
our organization’s quality management system by monitoring,
measuring, analyzing, and evaluating the performance and
effectiveness of our quality management system.
Measurement
The organization must determine and provide measurement
needed for the quality management system, the steps are: a).
Obtain customer information and monitor customer satisfaction by
establish methods for obtaining and using customer information,
obtain information about the opinions and perceptions of
customers, and monitor the perceptions, opinions, and attitudes of
our customers.
Internal Audit
The organization must determine and provide internal audit
needed for the quality management system, the steps are: a). Audit
our quality management system at planned intervals by conduct
internal quality management system audits at planned intervals
with find out if our organization’s quality management system
meets requirements, and examine the effectiveness of our
organization’s quality management system; b). Develop an internal
audit program for our organization by plan the development of our
internal audit program with develop a program that can find out if
quality management system meets requirements and develop a
program that can determine if our quality management system is
effective. And then establish our organization’s internal audit
program by establish internal audit responsibilities, planning
requirements, reporting requirements, schedules, and last must
establish internal audit methods.
Performance Evaluation
There are three methodologies to evaluate performance of
quality, are: a). monitoring, measurement, analysis and evaluation;
b). Internal audit; and the last is c). Management reviews.
Management Commitment
Top management shall provide evidence of its commitment to
the development and implementation of the quality management
system and continually improving its effectiveness by: a).
Communicating to the organization the importance of meeting
customer as well as statuary and regulatory requirement; b).
Establishing the quality policy; c). Conducting management
reviews, and; d). Ensuring the availability of resources.
Therefore, the management commitment of the QMS should
be repaired, such as: a). Provides leadership by focusing on quality
and customers; and b). Provides leadership by encouraging a focus
on customers.
The method to provide leadership by focusing on quality and
customers is a). Provide leadership by encouraging a focus on
quality; and b). Provide leadership by encouraging a focus on
customers. The method to provide leadership by encouraging a
focus on quality is a). Accept responsibility for our quality
7
management system; b). Demonstrate a commitment to our quality
management system; c). Ensure that a quality policy is developed;
d). Ensure that quality objectives are established; e). Ensure that
requirements are built into processes; f). Ensure that our QMS
achieves all intended results. The method communicate our
commitment to the quality management system are: a). Explain
why quality management is important; b). Expect managers to be
accountable for their quality management system; c). Encourage
our personnel to support their quality management system; d).
Promote an awareness of the process approach. The methods
provide leadership by encouraging a focus on customers are: a).
Expect personnel to focus on customers; b). Expect personnel to
manage all relevant requirements; c). Expect personnel to provide
compliant products and services; d). Expect personnel to manage
relevant risks and opportunities; and e). Expect personnel to focus
on enhancing customer satisfaction.
Policy
In quality management system, a quality policy is a document
jointly developed by management and quality experts to express
the quality objectives of the organization, the acceptable level of
quality and the duties of specific department to ensure quality.
Quality policy management is a long term strategic issue and often
has a 10 year scope. Well defined quality policy that is
communicated and understand within an organization.
Therefore, the quality policy of the quality management
system should be repaired, such as: a). Develop an appropriate
quality policy; and b). Formulate our organization’s quality policy.
The method develop an appropriate quality policy is a). Make
sure that it supports our organization’s purpose; b). Make sure that
it deals with our organization’s context; and c). Makes sure that it
can be used to set quality objectives. The method formulate our
organization’s quality policy is a). Make a commitment to satisfy
applicable requirements; b). Make a commitment to continual
quality management system improvement.
Organization Roles
A new wording is produced the top management shall ensure
that process interact with each other instead of only established
implanted and maintained. This comes from the new process
approach. In the practice the organization will have to prove that
inputs and outputs of processes are defined, produces in the right
moment and delivered to the appropriate process according to
process flow. Therefore, the organizational role of the quality
management system should be repaired, such as: a). Assign quality
management system roles; and b). Communicate quality
management system roles must also be considerable.
Responsibility and Authority
A part of the management responsibility is to appoint an
authority that will have the task of importing the quality policy and
expectations of top management to the organization on one hand,
and to receive feedback regarding the statue and performance of
the quality management system on the other hand. While the ISO
9001:2008 requires only that the top management shall assign a
representative responsible for the quality management system, the
ISO 9001:2015 requires that the top management itself shall be
account for the effectiveness of the quality management system.
Leadership
Top management must demonstrate leadership and
commitment with respect to the quality management system, by:
a). Ensuring the integration of the quality management system
requirements into the organization’s business processes; b).
Promoting awareness of the process approach; c). Supporting other
relevant management roles to demonstrate their leadership as it
applies to their areas of responsibility. Top management must
demonstrate leadership and commitment with respect to customer
focus.
Organization
Organization provides size, structure, responsibilities and
accountability, and etc
Product
Product provides quality, performance, reliability,
maintainability, design technology and innovation, demand, mix,
packaging, pricing, warranty, support, and etc.
Process
Processes provides facility, capability, capacity, technology,
reliability, and quality.
Workforce
Workforce provides labor availability, competence, mix,
utilization, compensation, health and safety, and etc.
Planning
In order to start planning, we need to determine what our
goals are for and define actions to manage risks and address
opportunities, set quality objectives and develop plans to achieve
them, in addition control changes to our QMS.
Resources
The organization must determine and provide the resources
needed for the quality management system (establishment,
implementation, maintenance and improvement of the quality
management system). Resources may include: a). Provide internal
and external resources for our quality management system by
determine the resources that our quality management system needs,
and provide the resources that our quality management system
needs; b). Provide suitable people for our quality management
system and our processes by provide the people that our quality
management system needs to be effective, the step to ensure that is:
the first provide the people that we need in order to be sure that our
organization is capable of meeting customer requirement on a
consistent basis; the second provide the people that we need in
order to be sure that our organization is capable of meeting all
applicable statutory and regulatory requirements on a consistent
basis. b). Provide the infrastructure that our processes must have by
determine the infrastructure that our processes need with identify
the infrastructure that our organization needs in order to support
process operations and to achieve conformity of products and
services, and the second by providing the infrastructure that our
processes need; c). Provide the appropriate environment for our
processes by determine the environment that our processes need
with identify the environment that our organization needs in order
to support process operations and to achieve conformity of
products and services, and the second provide the environment that
our processes need; d). Provide suitable monitoring and measuring
resources by determine monitoring and measuring resource
requirements with identify the monitoring and measuring resources
that we need in order to be sure that we can provide products and
services that meet all relevant requirements, and the second by
determine our measurement traceability requirements with identify
the measurement traceability resources that customers and
interested parties expect we to have and identify the measurement
traceability resources that governmental agencies expect we to
have; and the last is e). Provide knowledge to facilities process
operations by determine the knowledge that our organization needs
to have, acquire the knowledge that our organization needs to have,
make organizational knowledge available to the extent necessary,
monitor relevant trends and changes in knowledge and
information, and the last is maintain the organizational knowledge
that has been acquired.
Support
Top management must accordance support, such as: a).
Support our quality management system by providing the
necessary resources; b). Support our quality management system
8
by ensuring that people are competent; c). Support our quality
management system by explaining how people can help; d).
Support our quality management system by managing our
communications; and e). Support our quality management system
by controlling documentation information.
Input
The organization must plan, implement and control the
processes needed to meet requirements and to implement the
actions determined in actions to address risk and opportunities by:
a). Establishing criteria for those processes; b). Implementing the
control of the processes in accordance with the criteria; c). Keeping
sufficient documented information to demonstrate the processes
have been carried out as planned. The organization must control
planned and review the consequences of unintended changes,
taking action to mitigate any adverse effects, are necessary. In
addition, the organization must ensure the operation of a function
or process of the organization by an external provider is controlled
(outsourcing).
Process Operation
The organization must determine and provide the operational
planning process needed for the quality management system by
three step, are: a).Plan the implementation and control of
operational processes; b). Prepare operational process
implementation and control plans; c). Use our plans to implement
and control operational processes; d). Control planned operational
process changes and modifications; and the last e). Retain suitable
operational process documents and records.
Output
The organization must determine and provide the release of
goods and services needed for the quality management system by
three step, are: a).Establish planned arrangements to verify
products at each stage by verify that product requirements were
met at appropriate stages; and b). Establish planned arrangements
to verify services at each stage by verify that service requirements
were met at appropriate stages.
Operation
The organization must determine and provide the ideal quality
operations for the quality management system by three step, are:
a). Operational planning and control; b). Determination of market
needs and interaction with customers; c). Operational planning
process; d). Control of external provisions of goods and services;
e). Development of goods and services; f). Production of goods and
provision of services; g). Release of goods and services; and h).
Non-conforming goods and services.
Continual Improvement
The organization must determine and provide continual
improvement needed for the quality management system by four
steps, are: a). Consider evaluation, analytical, and management
review outputs; b). Use outputs to confirm that QMS improvement
opportunities exist; c). Select methodologies to analyze causes and
support improvement; and the last d). Improve the suitability,
adequacy, and effectiveness of our QMS (quality management
system).
Nonconformity and Corrective Action
The organization must determine and provide the non-
conformity and corrective action needed for the quality
management system by two steps, are: a). Determine improvement
opportunities and make improvements by consider ways of
enhancing customer satisfaction with consider opportunities to
support innovation, to take corrective action, to transform our
operations, and to make incremental changes. And also meet
customer requirements and enhance satisfaction; b). Control non-
conformities and take appropriate corrective action by correct non-
conformities and address causes and consequences with react to
our organization’s non-conformities, control and correct our non-
conformities, evaluate the need to eliminate causes, develop
corrective actions to address causes, implement corrective actions
to address causes, and review the effectiveness of our corrective
actions. And also, document our non-conformities and the actions
that are taken by document our organization’s non-conformities,
document the actions taken to address non-conformities, and the
last is document our organization’s corrective action results.
Improvement
The organization shall continually improve the effectiveness
of the quality management system through the use of the quality
policy, quality objectives, audit results, analysis of data, corrective
and preventive actions and management review.
Total Quality Management
Total quality management provides management strategy
which aims to instill awareness of quality in all processes within
the organization. According to ISO 9001:2015, total quality
management adopts a number of indicator management such as
context of the organization, performance evaluation, leadership,
planning, support, operation, and improvement of the organization.
Design Tasks Appropriate and Stabilizations
Design tasks appropriate and stabilization provides
management strategy that: a). Design process of analyzing and
articulating the kind of learning that we expect tile employees to
know how to perform. b). Decide the dimensions of performance
(vertical axis) or the essential elements that must be evident in high
quality work. c).Decide the levels of employee achievement:
number and type (horizontal axis). Examples of mastery are:
competent, exemplary, proficient, marginal, unacceptable,
accomplished.
e). Avoid having too many dimensions of performance or
levels employee of achievement. Overly Marking Guides complex
reduce the effectiveness and the efficiency of the approach. f). For
each dimension of performance, first distinguish between
acceptable and unacceptable (failing) performance: write the
criteria for unacceptable performance clearly and unambiguously.
g). For each dimension of performance, write clear performance
descriptors (criteria) at each achievement level (see below). State
(if possible) the consequences of performing at each level. For
example, the standard of the work would (or would not) be
accepted by the profession or a business or a professional journal.
h). Add the marking scheme you will use and apply any weighting.
Decide if marks will be awarded for work below the minimum
standard. Include the criteria for ‘failure’. i). Evaluate and revise
accordingly. Few Marking Guides will be constructed perfectly the
first time. They are developmental tools and need to be critically
evaluated after use. j). Differentiating performance levels. k).
Performance criteria (excellent, good, need improvement, and
unacceptable).
The organization shall continually develop the
progressiveness of the quality management system through the use
of the domain of designing authentic performance tasks to be use
or have been used, activity analysis, learning analysis, subject
matter/content analysis, job/procedural analysis, and cognitive task
analysis, quality performance (achievement levels), dimensions of
performance, criteria describing elements of performance at each
level, differentiating performance levels, and performance criteria
(excellent, good, need improvement, and unacceptable).
Placement of the Right People
Having and keeping the right people on our team makes all
the difference in running a productive and successful cultural
organization. The key factors in making successful hiring
(placement) decisions is by a). First, define appropriate skill and
talent profile requirement. b). Second, attract the right people,
9
provides checking references, evaluation based interview
(behavioral based interview, work interest based interview, work
experience, and skill based interview); and c). Third, select the best
person.
Developing a talent profile will help us explain the job and
our organization to applicants for selecting the best people. The
points to consider as we develop our one-page talent profile, are:
a). Don’t delegate this work to someone else; b). Always start by
asking ourselves whether this position is really needed. Is there
some way to combine tasks or positions in a more effective way,
and thereby free up financial resources for other uses?; c). Think
about people who are or have been successful in this particular
role. If possible, talk to them about their work, what they like about
it and why. Find out what skills they use most. Ask what they look
for in their employer and co-workers; d). Consider what type of
person will fit into our current work environment; e). Think about
our personal and team skill gaps.
Here the steps to identify the expertise, experience, and other
qualities we want in team, whether they are permanent employees
or temporary resources, are: a). Confirm that the work we’ll assign
to the new employee is critical to achieving the goals of our
organization; b). Define primary roles and responsibilities; c).
Define the critical skills and characteristics required (basic skills,
specific job-related skills, technical skills, interpersonal and
communications skills, personal characteristics and values); d).
Identify preferred or required previous experience and achievement
level.
Appropriate Performance Measurement
Appropriate performance measurement provides develop a
basic result chain, identify and select performance indicators, set
performance targets or benchmarks, draft a performance
measurement plan, capture and analyze the performance
information, interpret the findings and take corrective action as
necessary, and the last is communicate the result.
All measurement process above also must be considerate by a
good program management process, constructing a basic results
chain, and matrix for a performance measurement plan.
Suggestion Appropriate Work
Suggestion appropriate work provides all suggestion that
indicate the cleans work (all material finish as instruction),
assessment and works without breaking or tearing work materials,
tools, or supplies, exhibits appropriate safety behaviors, around
materials, equipment, and supplies, continues working during
distractions, works on acquired job/parts of jobs without direct
supervision, works steadily at assigned job, responds appropriately
to corrections/feedback, and appropriately follows instructions.
Standard Operating Procedure
The SOP development process is an excellent way for
managers, workers, and technical advisers to cooperate for
everyone’s benefit. A very positive sense of teamwork arises when
these parties work together toward common goals. Standard
operating procedures used in combination with planned training
and regular performance feedback lead to an effective and
motivated workforce. Producing a high-quality product at a profit
depends on the consistent operation of all systems within the dairy.
Standard operating procedure provides design task
appropriate, placement of the right people, appropriate
performance measurement, and suggestion appropriate work.
Benefits of SOPs are: a). SOPs will reduce system variation
which is the enemy of production efficiency and quality control;
b). SOPs can help in conducting performance evaluations, they
provide a common understanding for what needs to be done and
shared expectations for how tasks are completed; and the last is c).
Employee can coach and support each other if there is
documentation available on exactly how various tasks must be
done and everyone knows what their co-workers are supposed to
be doing. This can also help generate a more cooperative team
approach to getting all the daily tasks done correctly, everyday; d).
SOPs will achieve top performance consistency (answer the
business need consistency).
V. RESEARCH METHODOLOGY
Research operational framework for this research are below:
A. Dependent Variable
Dependent variable (Y) of this research is optimization (value
of the firm = maximally profit and organizational satisfaction).
Optimization = value of the firm = maximally profit and
organizational satisfaction was measured by Martin J & Osborne
(2013).
B. Independent Variable
Independent variable (X) of this research is: Total Quality
Management (context of the organization, leadership, planning,
support, competence, operation, performance evaluation, and
improvement). And variable support is: Standard Operating
Procedure (design task appropriate, placement of the right people,
appropriate performance measurement, and suggestion appropriate
work).
Context of the organization, the International Standard for
Quality Management (ISO 9001:2015) measure it by: Context (the
organization must determine external and internal issues relevant to
its purpose), Interest parties (such: a. direct customers; b. end
users; c. suppliers, distributors, retailers or others involved in the
supply chain; d. regulators; and e. any other relevant interested
parties), Scope of Quality Management System (such: physical
location, product and service controlled, determine process
sequences and interactions, methods needed to manage, resources
needed, process responsibilities and authorized, opportunities to
improve process, and improve process based standard).
Leadership, the International Standard for Quality
Management (ISO 9001:2015) measure it by: Management
commitment, Policy, Organizational roles, responsibility and
authority.
Planning, the International Standard for Quality Management
(ISO 9001:2015) measure it by: Actions to address risks and
opportunities;Objectives and plans to achieve them (such: a.
Markets: share and growth, customer base and diversification,
competitor information, pricing, sales, and etc; b. Organization:
size, structure, responsibilities and accountability, and etc; c.
Product: quality, performance, reliability, maintainability, design
technology and innovation, demand, mix, packaging, pricing,
warranty, support, and etc; d. Processes: facility, capability,
capacity, technology, reliability, and quality; e. Supplier
management: quality, delivery, price, consistency, and flexibility;
f. Workforce: labor availability, competence, mix, utilization,
compensation, health and safety, and etc; g. Capital: sourcing,
availability, cost, prioritization of use, return, and etc; h. Other:
environment, regulatory issues, governmental policies,
communications, and etc), and Planning of changes (such: consider
the purpose of the changes we intend to make, consider
responsibilities and authorities whenever we make changes; and
consider the consequences that changes could potentially produce).
Support, the International Standard for Quality Management
(ISO 9001:2015) measure it by: Resources; Competence;
Awareness; Communication; and Documented information.
Operation, the International Standard for Quality Management
(ISO 9001:2015) measure it by: Operational planning and control;
Determination of market needs and interaction with customers;
Control of external provisions of goods and services; Development
of goods and services; Production of goods and provision of
services; Release of goods and services; and Non-conforming
goods and services.
10
Performance evaluation, the International Standard for
Quality Management (ISO 9001:2015) measure it by: Monitoring,
measurement, analysis and evaluation; Internal audit; and
Management review.
Improvement, the International Standard for Quality
Management (ISO 9001:2015) measure it by: Nonconformity and
corrective action; and continual improvement.
VI. DISCUSSION AND RESULT
Sample Characteristics
Indicator quality performance of total quality management
(TQM) based ISO 900:2015 and appropriate standard operating
procedure approach we used as basis data for our study. An
objective of risk or uncertainty situation is internal issues and
external issues (context). The combination TQM and SOP play an
important role as basis solution of holes problem in high
managerial performance of optimization (value of the firm =
maximally profit and organization satisfaction) in reviewing
control structures, quality structures, and recommending stable
term to control any context uncontrolled risks. Furthermore, the
combination TQM and SOP model can provide a relatively
objective, stable, and organizational smart improvement. The
design of our TQM and SOP is very much take problem road-
mapping and solution from people, system, supporting facilities,
technology and error feedback of the organization (company’s
upstream till downstream area with in independently assessment).
Thus, the TQM and SOP is one of the best moderating strategy in
assessing value of the firm or maximally profit and organization
satisfaction (optimization).
The research found that TQM based on ISO 9001:2015
has 7 indicator analysis with 22 variable substitution analysis will
be good parameter for determine the best performance quality.
Thus with SOP which has 4 indicator analysis by 4 success level
scenario. 7 indicator analysis of TQM is performance evaluation,
context of organization, leadership, planning, support, operation,
and improvement. The 22 variable substitution analysis of TQM is
analysis and evaluation, management review, monitoring,
measurement, internal audit, context, interest parties, scope of
quality management system, management commitment, policy,
organization rules, responsibility and authority, organization,
product, process, workforce, resource, input, process, output,
continual improvement, nonconformity and corrective action. Thus
with 4 indicator analysis of SOP and scenario, are: design task
stabilizations, placement of the right people, appropriate
performance measurement, and suggestion appropriate work.
Table 1. Demographic Characteristic
A Case Understanding Frequency Percentage
Focus Here 1: Performance
- -
Evaluation
Focus Here 2: Context of
- -
Organization
Focus Here 3: Leadership - -
Focus Here 4: Planning - -
Focus Here 5: Support - -
Focus Here 6: Operation - -
Focus Here 7: Improvement - -
B Measurement and Measures
- -
Design Task Stabilizations
Placement of The Right People - -
Appropriate Performance
- -
Measurement
Suggestion Appropriate Work - -
Table 1 indicates that there are 7 superior element analysis very competitor information, pricing, sales, and etc; organization: size,
probable to change ‘quality performance3’ of the organization structure, responsibilities and accountability, and etc; product:
(company), based current study literature analysis. The mean quality, performance, reliability, maintainability, design
design task stabilizations (or appropriate design task), placement of technology and innovation, demand, mix, packaging, pricing,
the right people, appropriate performance measurement, and warranty, support, and etc; processes: facility, capability, capacity,
suggestion appropriate work in measurement and measures is technology, reliability, and quality; supplier management: quality,
moderating and advance step to manage the powerful output from delivery, price, consistency, and flexibility; workforce: labor
TQM that 7 element above (performance evaluation, context of availability, competence, mix, utilization, compensation, health
organization, and etc) to create more excellence output of and safety, and etc; capital: sourcing, availability, cost,
optimization (value of the firm = maximally profit and prioritization of use, return, and etc; other: environment, regulatory
organization satisfaction) in the organization. issues, governmental policies, communications, and etc. Fifth is
support that focus on resources, competence, awareness,
Structural Equation Modelling communication, and documented information. Sixth is operating
The structural equation modelling of this research is used that focus on operational planning and control, determination of
TQM and SOP was used to test optimization (value of the firm = market needs and interaction with customers, control of external
maximally profit and organization satisfaction) hypotheses provisions of goods and services, development of goods and
proposed in the model. services, production of goods and provision of services, release of
Table 2. Critical Weights of Variables goods and services, and nonconforming goods and services. And
Dependent
Independent Variable
Hypothesize the last (seventh) is improvement that focus on nonconformity and
Variable Sign corrective action, and continual improvement.
Optimization Performance Evaluation + I think enough, we close case for discussing quality
(value of the
Context of Organization + management (TQM). We upgrade into advance level (SOP) that
firm =
maximally Leadership + maintaining that quality performance into sustainability process
profit and
Planning + and progress.
organization I (researcher) believe that to establish a good quality
satisfaction) Support +
management system is always based on the SOP. Well-instruction
Operation + of standard operating procedures (SOPs) provide direction,
Improvement + improve communication, reduce training time, and improve work
Design Task Stabilizations + consistency. The SOP development process is an excellent way for
managers, workers, and technical advisers to cooperate for
Placement of The Right People +
everyone’s benefit. A very positive sense of teamwork arises when
Appropriate Performance + these parties work together toward common goals. Managers who
Measurement
Suggestion Appropriate Work + enlist the talents of workers and technical advisers will increase
buy-in and produce better SOPs. That’s statement answer question
why a good SOPs is very control in routine successfully activities.
In this research, I (researcher) analyze that critical dimensions Managers who write procedures without input from workers or
to build core management framework for optimization of the technical advisers run the risk of upsetting workers and producing
company or organization is to build an appropriate of total quality a poorly written SOP. Answers this case, I (researcher) give our
management (TQM) and standard operating procedure (SOP). And structural idea and recommendation below:
if there is question how about creating optimization its self?
Answers: optimization (value of the firm = maximally profit and
organization satisfaction) is just consequences of excellence
performance of TQM and SOP in an organization or company.
When TQM and SOP walk in a good progresses, surely the final
numbers of optimization (value of the firm = maximally profit and
organization satisfaction) is positive (high/ mostly achieved).
As the design created, to maintain best quality performance
and excellence people is; firstly, performance evaluation, that focus
on monitoring, measurement, analysis and evaluation, internal
audit, and management review. Secondly, context of organization
that focus on organizational context (the organization must
determine external and internal issues relevant to its purpose),
interest parties (such: a. direct customers; b. end users; c. suppliers,
distributors, retailers or others involved in the supply chain; d.
regulators; and e. any other relevant interested parties), scope of
quality management system (such: physical location, product and
service controlled, determine process sequences and interactions,
methods needed to manage, resources needed, process
responsibilities and authorized, opportunities to improve process,
and improve process based standard). Thirdly, leadership that focus
on management commitment, policy, organizational roles,
responsibility and authority. Fourth, planning that focus on
markets: share and growth, customer base and diversification,

3
Quality performance referee to creating the best quality management or
excellence management

11
Scenario of Productive SOPs for Organization
ORGANIZATIONAL
ACHIEVEMENT
ORIENTATION
Performance
Evaluation
Context of
Organization
Leadership (2). Placement of the right people
Planning
Support
SOPs
Operation
(4). Suggestions appropriate work
Improvement
Figure 2.
Framework and Architecture of Scenario on Productive SOPs
for Organization
The organization shall continually develop the
progressiveness of the quality management system through the use
of the domain of designing authentic performance tasks to be use
or have been used, activity analysis, learning analysis, subject
matter/content analysis, job/procedural analysis, and cognitive task
analysis, quality performance (achievement levels), dimensions of
performance, criteria describing elements of performance at each
level, differentiating performance levels, and performance criteria
(excellent, good, need improvement, and unacceptable).
As we know above (design productive flow and scenario), to
maintain best flexible SOP for sustainability in excellency
management is; firstly, appropriate design task, that must focus on
design process, dimensions of performance (vertical axis),
employee achievement: number and type (horizontal axis), overly
marking guides complex reduce the effectiveness and the
efficiency of the approach, write the criteria for unacceptable
performance clearly and unambiguously, write clear performance
descriptors (criteria) at each achievement level (see below), decide
if marks will be awarded for work below the minimum standard;
include the criteria for ‘failure’, evaluate and revise accordingly,
differentiating performance levels, and performance criteria
(excellent, good, need improvement, and unacceptable). Secondly,
placement of the right people that must focus on variable focus of
placement of the right people is define appropriate skill and talent
profile requirement, give attract the right people, provides checking
references, evaluation based interview (behavioral based interview,
work interest based interview, work experience, and skill based
interview), and select the best person. Developing a talent profile
will help us explain the job and our organization to applicants for
selecting the best people. The points to consider as we develop our
one-page talent profile, are: a). delegate this work to someone else;
b). Always start by asking ourselves whether this position is really
needed. Is there some way to combine tasks or positions in a more
effective way, and thereby free up financial resources for other
uses?; c). Think about people who are or have been successful in
this particular role. If possible, talk to them about their work, what
they like about it and why. Find out what skills they use most. Ask
what they look for in their employer and co-workers; d). Consider
what type of person will fit into our current work environment; e).
ORGANIZATIONALISM PRIDE IN THE
ROLE OF
PARTICIPATION
(1). Design tasks appropriate
PRODUCTI-
VITY
(3). Appropriate performance
measurement
Think about our personal and team skill gaps. Here the steps to
identify the expertise, experience, and other qualities we want in
team, whether they are permanent employees or temporary
resources, are: a). Confirm that the work wel assign to the new
employee is critical to achieving the goals of our organization; b).
Define primary roles and responsibilities; c). Define the critical
skills and characteristics required (basic skills, specific job-related
skills, technical skills, interpersonal and communications skills,
personal characteristics and values); d). Identify preferred or
required previous experience and achievement level. Thirdly,
appropriate performance measurement that must focus on variable
focus of appropriate performance measurement is develop a basic
result chain, identify and select performance indicators, set
performance targets or benchmarks, draft a performance
measurement plan, capture and analyze the performance
information, interpret the findings and take corrective action as
necessary, and the last is communicate the result. All measurement
process above also must be considerate by a good program
management process, constructing a basic results chain, and matrix
for a performance measurement plan. Fourth (the last), suggestion
appropriate work that must focus on variable focus of suggestion
appropriate work is work provides all suggestion that indicate the
cleans work (all material finish as instruction), assessment and
works without breaking or tearing work materials, tools, or
supplies, exhibits appropriate safety behaviors, around materials,
equipment, and supplies, continues working during distractions,
works on acquired job/parts of jobs without direct supervision,
works steadily at assigned job, responds appropriately to
corrections/feedback, and appropriately follows instructions.
By those consideration above, here we build a special concept
and scenario producing appropriate productivity based smart
indicator of people, process, product, and productivity it selves:
12
Chain Scenario of Producing Appropriate Productivity Based Smart Indicator of People, Process, Product, and Productivity It Self
PEOPLE
(Is responsible for: Skill, Experience,
Knowledge, Attitude, And Ability)
PRODUCTIVITY
(Is responsible for: Efficient, Effective,
Satisfaction, Sustainability Progress)
PROCESS
(Is responsible for: SOPs, Task
Design, Supporting Facilities, and
Technology)
Figure 3. Chain Scenario of Productivity and Excellence Performance
Organization must analyze and evaluate generate relevant
outputs to show that performance requirements are being met.
Internal and external resources must provide suitable people to be
effective. Therefore why we need a right people, a right
capabilities, a right time, price, place, and a right quantity. To
provide the people that we need are capable, we need to be sure
(confirmatory) too that our organization is capable of meeting all
applicable statutory and regulatory requirements on a consistent
basis. Why we must detail in first analysis, because concept of
quality is revolution. Management frame is must meet 'quality
criteria'. When we brought huge teams on specific stages, all must
necessarily complete. Therefore why organization (company) must
oversee the quality of performance and rectifying of errors (to
'catch' defects) and any deviation of management system that must
be analyzed and corrected.
VII. SUMMARY, CONTRIBUTION AND
LIMITATION
This study literature examined empirically correlation
between performance evaluation, context of organization,
leadership, planning, support, operation, improvement, and design
task stabilizations, placement of the right people, appropriate
performance measurement, suggestion appropriate work to build
optimal output in number of optimization (value of the firm =
maximally profit and organization satisfaction). Other factors that
influenced the level of excellence management performance and
optimization were also examined. Normatively, we take 11
indicators that examined and give respond to our quality
organizational performance. 11 indicators is taken 7 on TQM and 4
for moderating strategy on SOP. And the result of this research is
all variable in quality management (TQM) and give significantly
influence for the company or organization in case of value of the
firm or maximally profit and organization satisfaction or
optimization output number. Another factor that emerged as salient
was report format.
This should really come as no surprise, for it is well in-line
with many other studies that have shown the importance of quality
activities (TQM element) is must to maintain with an ideal and
flexible SOP to achieve maximally performance of optimization. I
(researcher) note that to establish a good quality management
system is always based on the SOP. Well-instruction of standard
operating procedures (SOPs) provide direction, improve
communication, reduce training time, and improve work
consistency. The SOP development process is an excellent way for
managers, workers, and technical advisers to cooperate for
everyone’s benefit. A very positive sense of teamwork arises when
these parties work together toward common goals. Managers who
enlist the talents of workers and technical advisers will increase
13
PRODUCT
(Is responsible for: Right On
Quality, Right On Quantity, Right
On Price, Right On Place, And
Right On Time)
buy-in and produce better SOPs. That’s statement answer question
why a good SOPs is very control in routine successfully activities.
Managers who write procedures without input from workers or
technical advisers run the risk of upsetting workers and producing
a poorly written SOP.
The organization shall continually develop the
progressiveness of the quality management system through the use
of the domain of designing authentic performance tasks to be use
or have been used, activity analysis, learning analysis, subject
matter/content analysis, job/procedural analysis, and cognitive task
analysis, quality performance (achievement levels), dimensions of
performance, criteria describing elements of performance at each
level, differentiating performance levels, and performance criteria
(excellent, good, need improvement, and unacceptable).
To maintain best quality performance, management must
consider performance evaluation-by monitoring, measurement,
analysis and evaluation, internal audit, and management review.
Secondly, context of organization by determine external and
internal issues relevant to its purpose, consider of interest parties
(such: a. direct customers; b. end users; c. suppliers, distributors,
retailers or others involved in the supply chain; d. regulators; and e.
any other relevant interested parties), scope of quality management
system (such: physical location, product and service controlled,
determine process sequences and interactions, methods needed to
manage, resources needed, process responsibilities and authorized,
opportunities to improve process, and improve process based
standard). Thirdly, leadership by management commitment, policy,
organizational roles, responsibility and authority. Fourth, planning
by markets: share and growth, customer base and diversification,
competitor information, pricing, sales, and etc; organization: size,
structure, responsibilities and accountability, and etc; product:
quality, performance, reliability, maintainability, design
technology and innovation, demand, mix, packaging, pricing,
warranty, support, and etc; processes: facility, capability, capacity,
technology, reliability, and quality; supplier management: quality,
delivery, price, consistency, and flexibility; workforce: labor
availability, competence, mix, utilization, compensation, health
and safety, and etc; capital: sourcing, availability, cost,
prioritization of use, return, and etc; other: environment, regulatory
issues, governmental policies, communications, and etc. Fifth is
support by resources, competence, awareness, communication, and
documented information. Sixth is operating that focus on
operational planning and control, determination of market needs
and interaction with customers, control of external provisions of
goods and services, development of goods and services, production
of goods and provision of services, release of goods and services,
and nonconforming goods and services. And the last (seventh) is
improvement by nonconformity and corrective action, and
continual improvement. Organization must analyze and evaluate
generate relevant outputs to show that performance requirements
are being met. Internal and external resources must provide
suitable people to be effective. Therefore why we need a right
people, a right capabilities, a right time, price, place, and a right
quantity. To provide the people that we need are capable, we need
to be sure (confirmatory) too that our organization is capable of
meeting all applicable statutory and regulatory requirements on a
consistent basis. Why we must detail in first analysis, because
concept of quality is revolution. Management frame is must meet
'quality criteria'. When we brought huge teams on specific stages,
all must necessarily complete. Therefore why organization
(company) must oversee the quality of performance and rectifying
of errors (to 'catch' defects) and any deviation of management
system that must be analyzed and corrected.
For managers, this study also points to a number of initiatives
they might undertake to create a good and appropriate SOP, by;
firstly, appropriate design task, that must focus on design process,
dimensions of performance (vertical axis), employee achievement:
number and type (horizontal axis), overly marking guides complex
reduce the effectiveness and the efficiency of the approach, write
the criteria for unacceptable performance clearly and
unambiguously, write clear performance descriptors (criteria) at
each achievement level (see below), decide if marks will be
awarded for work below the minimum standard; include the
criteria for ‘failure’, evaluate and revise accordingly,
differentiating performance levels, and performance criteria
(excellent, good, need improvement, and unacceptable). Secondly,
placement of the right people that must focus on variable focus of
placement of the right people is define appropriate skill and talent
profile requirement, give attract the right people, provides checking
references, evaluation based interview (behavioral based interview,
work interest based interview, work experience, and skill based
interview), and select the best person. Developing a talent profile
will help us explain the job and our organization to applicants for
selecting the best people. The points to consider as we develop our
one-page talent profile, are: a). delegate this work to someone else;
b). Always start by asking ourselves whether this position is really
needed. Is there some way to combine tasks or positions in a more
effective way, and thereby free up financial resources for other
uses?; c). Think about people who are or have been successful in
this particular role. If possible, talk to them about their work, what
they like about it and why. Find out what skills they use most. Ask
what they look for in their employer and coworkers; d). Consider
what type of person will fit into our current work environment; e).
Think about our personal and team skill gaps. Here the steps to
identify the expertise, experience, and other qualities we want in
team, whether they are permanent employees or temporary
resources, are: a). Confirm that the work well assign to the new
employee is critical to achieving the goals of our organization; b).
Define primary roles and responsibilities; c). Define the critical
skills and characteristics required (basic skills, specific job related
skills, technical skills, interpersonal and communications skills,
personal characteristics and values); d). Identify preferred or
required previous experience and achievement level. Thirdly,
appropriate performance measurement that must focus on variable
focus of appropriate performance measurement is develop a basic
result chain, identify and select performance indicators, set
performance targets or benchmarks, draft a performance
measurement plan, capture and analyze the performance
information, interpret the findings and take corrective action as
necessary, and the last is communicate the result. All measurement
process above also must be considerate by a good program
management process, constructing a basic results chain, and matrix
for a performance measurement plan. Fourth (the last), suggestion
appropriate work that must focus on variable focus of suggestion
appropriate work is work provides all suggestion that indicate the
cleans work (all material finish as instruction), assessment and
works without breaking or tearing work materials, tools, or
supplies, exhibits appropriate safety behaviors, around materials,
equipment, and supplies, continues working during distractions,
14
works on acquired job/parts of jobs without direct supervision,
works steadily at assigned job, responds appropriately to
corrections/feedback, and appropriately follows instructions.
There are some limitations that should be highlighted when
interpreting the study’s results. First, this research is based on
literature study that no exactly tested significantly in practice level.
Second, there are some issues of structural equation modeling
design.
To our knowledge, this study is the first to explicitly consider
the link between performance evaluation, context of organization,
leadership, planning, support, operation, improvement (TQM
element), and SOP element that design task stabilizations,
placement of the right people, appropriate performance
measurement, suggestion appropriate work to build optimal output
in number of optimization (value of the firm = maximally profit
and organization satisfaction). Previous studies much considered
just into TQM or just into optimization. There is no research that
focusing optimization by good TQM and combination of SOP
model approach. I think it is very good and we hope will give
much benefit for the organization, company, or any other element
stakeholders.
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15
All Authors Biographies
First Author
Bahrul Fauzi Rosyidi, Born in Banyuwangi, East
Java, Indonesia at February, 27 1988.
He is a lecturer of Applied Financial Management
Department, Vocational School of Universitas
Gadjah Mada, and researcher assistant at CEPPS
(Centre of Economic and Public Policy Study)
Universitas Gadjah Mada Yogyakarta Indonesia.
He is also a productive writer of
business/economic and motivational books.
Researchs, a.l:
a). Medium Term Development Plan for Ngawi Regency, East Java,
Indonesia (2015); b). Regional Financial Road-mapping for Daerah
Author’s formal
Istimewa Yogyakarta, Indonesia (2015); c). Vehicle Tax Potential Road-
photo
mapping for Daerah Istimewa Yogyakarta, Indonesia (2015); d).
Locally-generated revenue Road-mapping for Daerah Istimewa
Yogyakarta, Indonesia (2015); e). Medium Term Development Plan for
Indragiri Hilir Regency, Riau, Indonesia (2013); f). Analysis of ICOR
(Incremental Capital Output Ratio) Model for Economic Planning for
Ngawi Regency, Indonesia (2014); g). Analysis of ILOR (Incremental
Labour Output Ratio) Model for Economic Planning for Ngawi
Regency, Indonesia (2014); h). Business Plan of Cassava, Kutai
Kartanagera Regency Case Study, East Kalimantan, Indonesia (2013);
i). Structuring and Empowerment of Small Business Community in
Tenggarong City, Kutai Kartanegara, East Kalimantan, Indonesia
(2013); j). Feasibility Analysis of Ampera Market, Merauke, Irian Jaya,
Indonesia (2012); k). Workload Analysis Study and Research for Ngada
Government, Flores, Nusa Tenggara Barat, Indonesia (2011); and l).
Work Valuation and Evaluation of BP Migas, Recommendation for
Ministry of Energy and Mineral Resources (ESDM), Whitehouse, and
President of Republic Indonesia (2010).
Second Author
Mohammad Halimi,
Research, a.l:
a). Analysis of Attitude, Subjective Norm,
Behavioral Control and Consumer Interests
Buying at KFC Yogyakarta (2015); b).
Problem Identification and Solution for SME
in Yogyakarta (2014); c). Business Plan
Training and Implementation for Youth
Groups Mororejo and Sumber Rejo Village as
Candidate Future Indonesian Young
Entrepreneurship (2013); d). Public Perception of SWA Magazine
(2013); and e). Optimization of Ceramics Production Enterprises in
Bantul (2012).
Author’s formal
photo
Third Author
Sufitri
Research a.l:
a). Business Plan Salak Pondoh to Maximize
Profit for Farmers and Manufacturer in Sleman,
Yogyakarta, Indonesia (2014); b). Efficiency
Products Salak Pondoh (Export Quality) for
Author’s formal
Sleman Regency, Yogyakarta (2014); c).
photo Bankruptcy Prediction PT Bank Century Tbk
(2013); d). Feasibility Analysis for UPT Maguwo
Harjo, Sleman Regency, Yogyakarta (2013); e).
Potential Development of UPT Kuliner Condong Catur, Sleman
Regency, Yogyakarta (2012).