Value Engineering of Coco Peat Product to Increase Productivity
Listiani Nurul Huda
1
, A. Rahim Matondang
1
and Indra Nasution
2
1
Department of Industrial Engineering, Universitas Sumatera Utara, Kampus USU, Medan City, Indonesia
2
Department of Mechanical Engineering, Universitas Sumatera Utara, Kampus USU, Medan City, Indonesia
Keywords: Coco Peat, Productivity, Value Engineering, Ergonomics Design
Abstract: Coco peat is a scrap from the process of sweeping coco fiber and coco bristle fibers in the form of fine
granules. The selling value of coco peat block is more expensive compared to coco peat fine grain, hence
why value engineering is needed. In this paper the process of making the coco peat block press machine is
ergonomically described. Productivity of coco peat block fine grain and coco peat block will be compared.
The method used for ergonomic design uses anthropometric data and Rapid Entire Body Assessment
(REBA) analysis, while productivity measurement uses total productivity. The results obtained showed that
the design using anthropometric data of workers resulted in an improvement of 4 points of work posture
from conditions that needed to be improved to be safe. The total productivity of technological engineering
changes carried out shows an increase in index of around 0,41. There is an increase in selling value between
fine grain coco peat with 3 times coco peat block. These findings indicate that the procurement of press
machines that are ergonomically designed to add the value of coco peat is a viable solution to increase the
productivity of the company.
1 INTRODUCTION
Coconut is one of the most agricultural products has
many derivatives. Not only from the flesh of the
fruit, even coconut husk which is classified as scrap
can be utilized as a product that is worth selling. The
derivative of coconut husk can be divided into three,
namely coco fibre, coco bristle, and coco peat.
Figure 1: Industry Tree of coco peat
Coco fiber and coco bristle are fibers of coconut
husk which has been combed to separate from one
another (not sticking together). The granules
resulting from the sweeping process is called coco
peat. The difference in selling price of these three
products are shown in Table 1.
Table 1: The selling price of the products.
No.
Product
Selling Price (Rp) / kg
1
Coco Bristle
14,000
2
Coco Fibre
2,700
3
Coco Peat
600
Coco peat has the lowest sales value. But if you
consider the ratio of the proportion of the quantity
produced by the coconut husk for each product,
where the coco fiber, coco bristle, and coco peat in a
row, namely 20%, 10% and 70%, then it would be
very unfortunate if the coco peat not utilized. Mainly
because of coco peat also has a good resale value
because it can be used as a fertilizer and growing
media such as hydroponics, vegetables, also flowers
and trees nursery.
Coco peat has a mild nature, it can absorb large
volumes of water, the acceptable pH, and have
oxygention propertieswhich make coco peat suitable
as planting media for root growth (Awang, 2009).
Such properties make the coco peat to be one good
alternative in lieu of the land, because the amount of
land is increasingly limited.
Huda, L., Matondang, A. and Nasution, I.
Value Engineering of Coco Peat Product to Increase Productivity.
DOI: 10.5220/0008554303510357
In Proceedings of the International Conference on Natural Resources and Technology (ICONART 2019), pages 351-357
ISBN: 978-989-758-404-6
Copyright
c
2019 by SCITEPRESS – Science and Technology Publications, Lda. All rights reserved
351
The compny that become the object of study has
a production capacity of 4,500 kg per day. Coco
peat, packed into 30 kg sacks, deposited into the
warehouse and sold to the local market for Rp
18,000 per sack. Process undertaken to acquired
coco peat products, namely:
1. Combing: Coconut coir parsed using a machine
to separate Crasher coco fibers and CCO bristle
fiber and coco peat granules.
2. Sieving: Beads of coco peat granules then
filtered three times with sifting machine to obtain
fine granules according to the standard of the
company.
3. Packaging: Sieving results then packed into 30
kg sacks sized manually by workers.
Sales of coco peat in bulk form is the simplest
way of selling. Generally coco peat is sold in the
form of blocks, especially for countries that are more
developed in their agribussiness like India, Europe,
and America. The block form is easier to handle in
terms of transportation because it has a smaller
volume than the bulk form.
(a)
(b)
Figure 2: (a) Coco peat bulk in sacks (b) Coco peat
pressed into block.
Value engineering (VE) is an organized effort to
analyze the function of the product or service so that
the company can find a way of generating the
required functionality of the essential characteristics
that users want while achieving the target set fee.
Value engineering is widely used in target costing,
product design and / or development, quality control,
etc. In this research, value engineering done for
product development. Value added activities carried
out by changing the shape of the packaging of bulk
into blocks which have a higher selling value, at Rp
23,000 / 10kg. Cost engineering is done on
designing products by considering the option
ofbuilding a new machine design with ergonomic
principles or buy the machine available in the
market.
Value addition of coco peat bulk into blocks can
be done with the procurement of a press machine.
Thus in this study will be a comparison of
productivity of sales coco peat with a bulk form and
block. They will also do a comparison of
productivity between the use of the press machine
individually designed with ergonomic considerations
with engines purchased from the market.
2 METHODS
Stages of the research conducted in this study
include the ergonomic design of the press machine,
productivity calculations, and the analysis of the
value added.
Manually packing Method is analyzed by using
Rapid Entire Body Assessment (REBA) to look at
risk due to work postures that are not good. This
method is chosen because the workers use almost
entire body part to work. Then the machine will be
designed with consideration of workers
anthropometry so that in addition to having better
productivity, health and work comfort is also
obtained in the presence of the press machine.
Productivity calculation method used in this
study is total productivity. This method compares
the magnitude of the overall output of the input
used. Input factors are taken into account include
labour, materials, capital, energy, and others while
the output factor is the revenue earned from the sale
(Sinulingga, 2014). Productivity on the conditions
before and after value engineering is compared to
see which options are most profitable productivity.
The formula used to calculate the total productivity,
namely:
Total productivity = Output / Input
(1)
An option with the best productivity index is
submittedas the best proposal of this study. To find
out how much value is actually done in the
ICONART 2019 - International Conference on Natural Resources and Technology
352
engineering of this value then the calculation of
added value is done. This calculation is performed in
a way to calculate the necessary costs (materials,
labour, packaging, depreciation, etc.) to make one
kilo of product. Then the value of the product sales
will be reduced by the value of the production cost.
The result of these reductions is actual profit earned
by the manufacturer.
Calculation of profit per kilo product is done for
the condition before and after engineering. Then the
difference of thevalue of the two is the added value
that has been done. The larger the value, the better
the added value that has been done.
3 RESULTS
3.1 Ergonomic Design Press Machine
Packaging method performed before the value
engineering is manually done by workers. Activity
of manual packaging is done by using a shovel to
move the coco peat located on the production floor
into the sack.
95
25
10
60
50
15
Figure 3: Method of manual packaging.
Figure 3 shows that the worker bent to 95
o
repeatedly for a long time. The manual method is
then analyzed posture using REBA method (see
Figure 4). REBA assessment results show the value
of nine which indicated that necessary action as soon
as possible. This means that the procurement of a
new working method or an ergonomic press machine
is required in terms of packaging.
The design of the press machine is done by using
the worker's body dimensions (five workers) as
consideration of the dimensions of the press
machine. Body dimensions used were High Standing
Elbow, Hand Reach and Height Upright.
Figure 4: REBA sheet assessment before value
engineering.
Theresults of the collected anthropometric data
are then processed statistically by calculating the
average, standard deviation, and uniformity test.
Then the dimensions used is the 95th percentile
results in accordance with the principle of upper
extreme.
The costs necessary to make the press machine is
shown in Table 2.
Table 2: Cost of each component machine press.
No.
Unit price
(Rp 000)
Quantity
(Unit)
Total Price
(Rp 000)
1
8,750 / m
15
8.242
2
8,750 / m
15
16.485
3
4.770 / unit
1
4.770
4
123 / unit
1
123
5
950 / unit
1
950
6
9,000 / unit
1
9,000
7
428 / unit
1
428
Total
39.998
The costs in Table 2 was obtained by interviews
with experts of construction machinery. This
machine is able to suppress the bulk 4 kg coco peat
coco peat into one unit block. The cost of
construction of this machine is much cheaper when
compared to the cost of purchasing the press
machine of the market for Rp 65,000,000 per unit
with the same capacity. Figure 5 shows the
appearance of the proposed draft press machine.
1. Raw materials
- Aluminum - Bentonite
- Wood - Cat Pilox
- Silica Sand - Graphite
- Powder Cooper 108 - Kerosene
- Nail
2. Equipment
- Mixer -
GayungPenuang
- Mal - Grinding
machine
- Hose - Furnace
- Shovels - Palu
- Pressure Equipment - Sand Paper
- Scoop nets
- Oil Drum
3. Capital
4. Labor
5. Information
6. Managerial
7. Land
Value Engineering of Coco Peat Product to Increase Productivity
353
200 cm
3
4
2
1
5
97,26 cm
120
cm
69
,
25
cm
154,53 cm
(a) (b)
Figure 5: (a) Draft of the press machine (b) How to use.
Information:
1. Container as a place to put coco peat
2. Control valve as a means of controlling the lowering
and raising the working cylinder.
3. Cylinder as a means to lower and raise the mould
presses.
4. Mold presses as a tool that puts pressure on coco peat
into blocks.
5. Door as a place to put out the coco peat that has been
printed.
In Figure 5 (b) is shown posture coco peat bulk
of workers when inserting bulk coco peat into the
machine. Posture thus already looks much better
when compared with the posture before the press
machine. Posture assessment work on the use of the
press machine shown in Figure 6.
2
2
3
5
0
5
1
2
3
1
2
4
1
5
2
Figure 6: REBA sheet assessment after value engineering.
REBA assessment results show the value of five,
which indicates that the working posture is safe to
do in the long term.
3.2 Calculation of Productivity
Productivity calculations carried out for before and
after value engineering. Factors taken into account
the inputs and outputs include:
1. Raw material costs namely the costs required in
the acquisition of raw materials (Rp 7 / kg)
2. Telaborcost which consist of salaries to
employees (five workers with a salary of Rp
50,000 / day / person before value engineering
and Rp 75,000 / day / person after value
engineering).
3. The energy cost which consist of electric power
costs for machinery and other production
purposes.
4. Transportation cost is the transportation cost to
the consumer (Rp 283 / kg prior to value
engineering and Rp 373 / block after value
engineering).
5. The cost of packaging ie the cost of procurement
of sacks for bulk coco peat or plastic / cardboard
for products coco peat block (Rp 1,500 for sacks
and an assumed amount of Rp 6,708,000 for
plastic and cardboard)
6. Depreciation costs of equipment and machinery.
7. Machinery maintenance costs.
8. The output is the result of revenues from product
sales (Rp 600 / kg for bulk and Rp 2,300 / kg for
the block). Each of the coco peat block is made
of 4 kg of coco peat bulk.
To see a comparison of productivity of prior to
value engineering and after value engineering, then a
simple simulation is done using historical data. The
production data with press machine designed
ergonomically and the ready to use purchased
machine is considered the same as the specification
is also considered as the same engine capacity. Coco
peat production data 2016-2017 period are shown in
Table 3.
Table 3: Comparison of production data before and after
value engineering.
Raw material
(Kg)
Prior to Value
Engineering
After Value
Engineering
(A)
(Ton)
(B)
(Rp
000)
(A)
(000
Blocks)
(B)
(Rp 000)
99.400
71
2.3
17.75
6,708
105,000
75
2.5
18.75
6,708
106.400
76
2.5
19:00
6,708
105,000
75
2.5
18.75
6,708
96,600
69
2.3
17:25
6,708
96,600
69
2.3
17:25
6,708
ICONART 2019 - International Conference on Natural Resources and Technology
354
Table 4: Comparison of production data before and after
value engineering (continued).
Month
Raw material
(Kg)
Prior to
Value
Engineering
After Value
Engineering
(A)
(Ton)
(B)
(Rp
000)
(A)
(000
Blocks)
(B)
(Rp 000)
2017, Feb'
109,200
78
2.6
19:50
6,708
2017, Mar'
105,000
75
2.5
18.75
6,708
2017, Apr'
105,000
75
2.5
18.75
6,708
2017, May
109,200
78
2.6
19:50
6,708
2017, June
'
109,200
78
2.6
19:50
6,708
2017 July '
100,800
72
2.4
18:00
6,708
Total
1,247,000
891
29.7
223
80,496
Information:
(A) The raw material is processed and sold
(B) Costs incurred for packaging
Based on production data on Table 3 the
productivity of each condition can be calculated.
Comparison of productivity before and after value
engineering can be seen in Table 4.
Table 5: Productivity comparison before and after value
engineering.
No
Description
(A)
(Rp 000)
(B)
(Rp 000)
(C)
(Rp 000)
1
Output (Income) (Rp)
534.600
683.100
683.100
2
Input (Rp)
Raw material
8.731
8.731
8.731
Labor
74.250
111.375
111.375
Energy
16.375
60.106
60.106
Packaging
44.550
80.496
80.496
Transportation
252,000
110.820
110.820
Depreciation
1,450
5,050
7,300
Maintenance
60
1,800
2,400
Total Cost of
Production
397.958
378.379
381.230
3
Gross Revenue (Rp)
136.641
304.720
301.869
4
Corporate Income
Tax 15%
20.496
45.708
45.280
5
Net income
116.145
259.012
256.589
6
Productivity Total
(D)
1:34
1.81
1.79
Information:
(A) Prior to the engineering value
(B) After engineering value with the press machine design
results
(C) After engineering value with the press machines
purchased in the market
(D) Calculated by a formula (1)
Total productivity index for the condition before
value engineering and after value engineering with
designed machine and purchased machine
successively 1.34, 1.81, and 1.79. This figure means
that every US $ 1 generate Rp 1.34 to conditions
prior to engineering, and so on for the other options.
This means the condition after the value engineering
with designed machine is the best option because it
has the highest index value.
3.3 Added Value
,
Added value calculation is performed to see how
much profit is obtained by producers as compared to
prior to value engineering. This calculation will be
done by comparing the value of profits after value
engineering using the press machine which is
ergonomically designed, with the profit before value
engineering. The option of after value engineering
with designed machine is chosen to be analyzed
because this option has the highest value. Tables 5
and 6 respectively show the cost of production and
the selling value of the condition before and after
value engineering.
Table 6: Production cost and income before value
engineering.
No.
Production
description
Price
(Rp)
Total
(Rp)
1
Income
2,300
2,300
2
Production cost
Raw material
7
29
Labor
375
Energy
202
Packaging
271
Depreciation
17
Transportation
373
Maintenance
6
Total Production Costs
434
Profit per kg (Rp)
166
Table 7: Cost of production and income after value
engineering.
No.
Production
description
Amount
(kg)
Price
(Rp)
Total (Rp)
1
Income
1
600
600
2
Production cost
Raw material
1
7
10
Labor
83
Energy
15
Packaging
50
Depreciation
1
Transportation
283
Maintenance
1
Value Engineering of Coco Peat Product to Increase Productivity
355
Total Production Costs
434
Profit per kg (Rp)
166
It can be concluded that by using the system of
bulk sales, manufacturers have lost Rp 860 per kg or
Rp 766,260,000 per year. This figure is quite large
because the value has exceeded the value of sales of
bulk per year that is Rp 534,600,000. In other words
there is an increase of 143% of income compare to
prior of value engineering.
4 DISCUSSION
There are three options on this study to be
considered. Option 1 is the condition without VE,
option 2 is VE with the designed machine, and
option 3 is VE with purchased machine. Productivity
values of the three options can be seen on Figure 7.
Figure 7: Options comparison.
From productivity point of view, the added value
for option 1 and 2 are above the production cost
which means both option is giving better cost to
income ratio than option 3. From the opportunity
cost which means the loss that gain by choosing
other option, the base value is the option 2 because it
has the best added value. If option 1 is chosen
company would lost the income of Rp 840 per
kilogram and if option 3 is chosen then company
will lost Rp 257 per kg.
Basically the option 2 is the best option to
choose. But there is also some disadvantage of it
such as a necessary of an expert machine constructor
to deliver the design into real life in the right way.
This option will need some adjustment for the
workers to get used to it. The period of adjustment,
there will be a slight deviation in the productivity
due to learning curve. A sensitivity analysis also has
not been done. So we cannot make sure the
reliability of the investment against various
scenarios.
Generally this method of value added is not
something new in the development of coco peat. But
there is still limited study which discussed about the
economic value of coco peatfor most of them are
discussing about the usage of coco peat as growing
media such as done in (Yahya, A, 1997 and Trivedi,
Darshini R., 2014)
The kind of coco peat discussed in this study is
the kind that needs a further treatment before use.
Especially if it is to be used as growing media. Coco
peat has a chemical property name tanin which is
harmful for plants for it can prevent them to grow.
Hence why, coco peat need to be soaked in water for
several hours before used. This process is meant to
reduce or eliminated the tanin in the coco peat by
rinsing it off with water (Ramadhan, Dimas, 2018,
Arif, 2014).
This study is only discussing the press machine
because for now it is the only required condition to
fulfil the market demand. The current local market
preferred a low cost rather than a quality product. If
needed, a further research can be done to develop
further the value of coco peat such as making a
ready to use coco peat which has already labelled
and standardized quality parameters such as weight,
size, impurities, moisture, electrical conductivity,
pH, phytosanitary test (Plant Quarantine Certificate),
salinity, fibre content, cation exchange capacity
(CEC), etc.
This standardization is necessary if we want to
expand our business internationally. In Netherland,
there are already many coco peat producers which
has been certificated by European Certification body
for Agricultural Sector (ECAS). These companies
not only provide a standardized coco peat, they are
also selling a customized coco peat-based media
mixtures for each type of plant. So buyer can buy the
most suitable type to increased the success rate in
growing plants (trubus online, 2009).
In India, they even have a Coir Board which has
a lot of information about coconut derivatives
products and control the regulations and the
development of coco peat industry. Not only for
growing media coco peat even used for a living lawn
that can be rolled up, as a raw material to make
briquettes, bio oil, insulator, production of vanillin,
activated carbon, even textiles (Ministry of MSME
India, 2016).
1,34 1,81 1,79
600
2300 2300
166
1026
1283
434
1274
1017
840
0
257
0
500
1000
1500
2000
2500
Option 1 Option 2 Option 3
Rupiah
Rupiah
Options Comparison per kg Product
Productiv
ity index
Selling
price
Productio
n cost
Added
Value
Opportun
ity cost
ICONART 2019 - International Conference on Natural Resources and Technology
356
5 CONCLUSIONS
In conclusion, this study indicates that the value
engineering done by transforming the form of coco
peat from bulk to block can increase the productivity
and income to the company. The added value is not
only the increase of productivity, but also the
healthy and comfort while working for the chosen
option is to make the ergonomically designed press
machine rather than the ready to use machine that
can be purchased from the market.
ACKNOWLEDGMENTS
The authors gratefully acknowledge that the present
research is supported by Talenta Research Grant of
Research Institution of Universitas Sumatera Utara
on Contact Number of 5338/UN5.1.R/PPM//2017,
date of 22 Mei 2017. The gratitude is also intended
for Leni and RatihSulastri for the help and support
provided for this paper.
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