The Impact of Lean Organization to Employee Cost in Indonesia Largest Heavy Equipment Distributor Company

Abstract

Lean organization is an initiative to increase productivity in challenging business condition by evaluating ineffective processes and strengthening internal collaboration to increase value and impact, which able to reduce organizational costs. This research is assessing Lean Organization by analyzing the data using fuzzy logic. While, the correlation between lean organization with employee cost was assessed through internal company data analysis, FGD and Root Cause Analysis (RCA) in order to obtain pareto causes in Employee costs. It revealed that current level is Very Lean and the company's productivity is also increased. However, internal company data analysis also found that the causes of employee costs tend to increase due to Internal variable cost factors (linear with increasing company business performance) and fixed costs based on changes in the employee composition. This study provides recommendation for an organization to measure lean level of a company in order to identify room for improvement, that has meaningful benefits in controlling employee cost, increase value creation and gaining productivity, as a key to the competitiveness and profitability in a long term.