Economic Benefits of Standards –

Pilot Project
Final Report: Indonesia

National Standardization Agency of Indonesia

2011
Economic Benefits of Standards – Pilot Project – Final Report: Indonesia i
Economic Benefits of Standards – Pilot Project
Final Report: Indonesia

National Standardization Agency of Indonesia

March 2011

Economic Benefits of Standards – Pilot Project – Final Report: Indonesia 2

Content

Chapter I...................................................................................................................... 4
Background, objectives, and organization of the pilot project
Chapter II..................................................................................................................... 7
Introduction of selected company: PT. Wijaya Karya (WIKA) Beton
CHAPTER III ............................................................................................................. 16
Company Attitude towards standardization
CHAPTER IV ............................................................................................................. 18
Value Chain Analysis
CHAPTER V .............................................................................................................. 20
Scope of the assessment on the pilot project
CHAPTER VI ............................................................................................................. 22
Use of standards in the value chain of PT. WIKA Beton
CHAPTER VII .......................................................................................................... 26
Operational indicators to calculate the impacts of standards
CHAPTER VIII .......................................................................................................... 35
Calculation of economic benefits of standards
CHAPTER IX ............................................................................................................ 43
Qualitative and semi-quantitative impacts of standards
CHAPTER X .............................................................................................................. 45
Evaluation results
CHAPTER XI ............................................................................................................. 47
Conclusions and recommendations
ANNEX …………………………………………………………………………………………
WIKA Beton's product leaflets
Indonesia Presidential Regulation No. 54/2010

Economic Benefits of Standards – Pilot Project – Final Report: Indonesia 3

Chapter I
Background, objectives, and organization of the pilot project

1.1 Background
BSN, the National Standardization Agency of Indonesia, is a Non-Ministerial
Government Institution which is responsible for the development of standardization at
the national level and to represent Indonesia in the International Organization for
Standardization, ISO.
There are various ways in which ISO and BSN are promoting the development of
standardization. One of them is to assess and inventory the benefits of standards
which are important to prioritize standardization activities, raise awareness, promote
the benefits of standards, and encourage the participation of stakeholders.
Examples of benefits of standards can be used to study more systematically the
impact of standards and try to quantify these impacts in terms of their economic
benefits. Such studies have long been developed, and BSN is one of the national
standardization bodies in the world, which has conducted a study as well as held
seminars on similar topics, such as in 2009 when BSN held an international seminar
Impact of Standarization on the Economy with speakers from German’s national
standardization body, DIN.
The methodology for assessing the economic benefits of standards (EBS) was
developed by ISO in 2009 and published in 2010 (the "ISO Methodology") after a
review of existing methods that had been developed independently of each other,
but with the consequence that the results of the studies done on the basis of these
methods could not be compared to each other. In order to facilitate the application
and dissemination of the ISO Methodology, ISO organized an implementation
program for the application of the ISO Methodology in pilot studies in various regions
of the world, involving 3 to 4 countries per region.
Indonesia is part of the Southeast Asia region and was invited by ISO and then
selected in the project implementation together with Singapore, Thailand, and
Vietnam.

Economic Benefits of Standards – Pilot Project – Final Report: Indonesia 4

1.2 Objectives
The main objective of this study is to determine in quantitative form which
benefits can be gained by a company from the use or the implementation of external
standards in their business functions. The term "external standards" refers here to all
standards that are publicly available and developed on a consensus principle and in
which the participation in their development is open to interested parties. This is the
case for national standards, international standards, standards of other standards
development organizations or consortia in as far as the criteria of public availability,
consensus-basis and open participation are met. Excluded from this study are
company-internal specifications and specifications that are developed and shared
only between some cooperating companies.
It is very useful for a Standards Agency to demonstrate to its stakeholders the
benefits of participating in standards development initiatives, or at least the
advantages of using standards. In this form, companies will also better appreciate
the economic and social impact of consensus-based standards, the awareness of
policy-makers may increase as well as of decision makers, business leaders about
the importance of standardization. Such studies may also result in providing further
insights to the company about how to achieve and increase benefits from using
standards in the company's processes. The development of case studies applying
the ISO Methodology has also significance for:
- Creating and strengthening the interaction between stakeholders at the national
level, focusing on their business interests and providing an understanding of how
standards can contribute to organizational performance
- Developing cooperation between standards bodies and academic institutions
- Building a collection of case studies, organized by the ISO Central Secretariat,
which can be used to promote the economic value of standards to the various
stakeholders.

1.3 Organization of the pilot project

The implementation project of the ISO methodology on Economic Benefits of
Standards (ISO-EBS) in Indonesia was undertaken by the National Standardization
Agency (BSN) starting with the invitation for participation in implementing the ISO-
EBS methodology in early July 2010, to which BSN responded declaring the interest
Economic Benefits of Standards – Pilot Project – Final Report: Indonesia 5
of Indonesia in the participation in the project. Indonesia was then selected by ISO in
the implementation project of ISO-EBS methodology together in regional area with
Singapore (SPRING), Thailand (TISI), and Vietnam (STAMEQ) in the first week of
August 2010.
In conducting this project, the team was supported by Mr. Reinhard Weissinger,
Manager, Research, Education, and Strategy from the ISO Central Secretariat and
(in accordance with the purpose to develop cooperation with academic institutions)
by Mrs. Ida Busneti, lecturer at the Faculty of Economics, Trisakti University, Jakarta,
who is working towards obtaining a doctoral degree.
Mr. Reinhard Weissinger provided support through tele- and web-conferences
conducted periodically, via e-mail correspondence, and one visit to Indonesia, while
Mrs. Ida Busneti assisted the BSN’s team by attending the meetings at the BSN
office periodically or based on invitation, as well as by participating in the tele- and
web- conferences with Mr. Weissinger or in the company visits.

Economic Benefits of Standards – Pilot Project – Final Report: Indonesia 6

Chapter II
Introduction of selected company: PT. Wijaya Karya (WIKA) Beton

2.1 Background on the selection of PT.WIKA Beton

In the ISO guidance, the selection criteria given for the company are:
- The company has an understanding of standards and uses standards in its
business operations
- The National Standards Body (NSB) has a good relationship with the company to
ensure that interviews with some of its key staff can be conducted and that certain
information, including about financial data, can be shared
Based on the criteria of the guidance, the team has chosen a company which has
been an SNI Award winner. The SNI Award is an award given by the government, in
this case by the National Standardization Agency (BSN), to the organization in
recognition of the of implementation of Indonesian National Standards (SNI), of their
involvement in the development of standards, and their good performance.
Receiving the SNI Award is a proof of the consistency in applying standards.
PT Wijaya Karya (Persero) Tbk (WIKA) is the first winner of the SNI Award 2008 in
the category of Large Service Business. PT. Wijaya Karya (WIKA) Concrete was
chosen from some subsidiaries because it is a manufacturing company that is using
a variety of product standards and test methods in its business operations in addition
to the quality management system that is widely used by large corporations. Based
on the above criteria, PT. WIKA Beton, a subsidiary of PT. Wijaya Karya, Tbk, was
selected as the company to be assessed in the pilot project implementing the ISO
Methodology.

2.2 Overview of parent company: PT. Wijaya Karya (WIKA), Tbk

PT. Wijaya Karya (hereafter: WIKA), Tbk is a State Owned Company. WIKA
has been formed during the nationalization of the Dutch companies named
Naamloze Vennotschap Technische Handel Maatschappij en Bouwbedijf Vis en Co.
or NV Vis en Co. Based on Government Regulation No. 2/1960 and the Decree of
the Minister of Public Works and Power (PUTL) No. 5 dated March 11, 1960, with the
name State Building Company Widjaya Karya. The scope of operations of WIKA at

Economic Benefits of Standards – Pilot Project – Final Report: Indonesia 7

the time was limited to electrical installation and plumbing. In the early 1960s, WIKA
participated in the development projects of Bung Karno Sports Venues for the Games
of the New Emerging Forces (Ganefo) events and the 4th Asian Games in Jakarta.
The first significant development was in 1972, at which time the name of the
company "State Building Company Widjaja Karja" was changed to "PT Wijaya
Karya". WIKA then developed into a construction contractor handling various
important projects such as the installation of electricity networks in the Asahan and
irrigation projects in Jatiluhur. A decade later, in 1982, WIKA expanded the division
with the formation of several new divisions, namely the General Civil Division,
Building Division, House Facilities Division Board, Division of Concrete and Metal
Products, Industrial Construction Division, Division of Energy, and Trade Division.
In 1997, WIKA established its first subsidiary, namely PT Wijaya Karya Beton,
reflecting the rapid growth of the WIKA Concrete Products Division at that time. The
establishment of PT Wijaya Karya Beton was followed by the establishment of PT
Wijaya Karya Realty in 2000 as a Development Realty Division. In the same year it
also established PT Wijaya Karya Intrade as the development of Industry and Trade
Division.
This continued development resulted in an increase in the level of public
confidence in the company's capability. This is reflected in the success of WIKA’s
IPO (Initial Public Offering) on October 27, 2007 at the Indonesia Stock Exchange
(then called the Jakarta Stock Exchange). In the IPO, WIKA released 28.46 percent
of its shares to the public, so that the Indonesian government holds a stake of 68.42
percent, while the remainder is owned by the public, including employees, through
the Employee/Management Stock Option Program (E/MSOP), and Employee Stock
Allocation (ESA).
In 2008, WIKA has established a subsidiary company named PT Wijaya Karya
Building, which is specialized in the business of constructing high rise buildings.
WIKA also acquired a 70.08 percent stake in PT Catur Insan Pertiwi, a mechanical-
electrical company. Afterwards the name of PT Catur Insan Pertiwi changed to PT
Wijaya Karya Insan Pertiwi. In 2009 with PT Jasa Sarana and RMI, established PT
Wijaya Karya Jabar Power in the business of development of Geothermal Power
Plants. In the middle of 2009, WIKA together with other companies, successfully
completed the Suramadu Bridge, a prestigious project that connects the island of
Java with Madura island.
Economic Benefits of Standards – Pilot Project – Final Report: Indonesia 8
 Table 1 – List of PT. Wijaya Karya, Tbk subsidiaries
Subsidiary companies Operation year Field

1997 Precast concrete industry

PT. WIKA Beton

2000 Realty & Property

PT. WIKA Realty

2000 Industry and trade

PT. WIKA Intrade

Installation of Mechanical
2008 Electrical Industrial and Power

PT. WIKA Insan Pertiwi Plant Projects

Residential and Non-Residential

2008 Building Construction.

PT. WIKA Gedung

2009 Power Plant Projects

PT. WIKA Jabar Power

PT. WIKA, Tbk, as a state-owned company that uses product standards, benefits
from the Presidential Regulation No. 54/2010 regarding government procurement.
This regulation requires in chapter VII:

- to maximize the use of goods and services produced domestically.

- to maximize the use of national goods / services
- to include in agreements / contracts requirements for the use of Indonesian National
Standards (SNI) or other applicable standards and / or equivalent international
standards stipulated by relevant agencies and authorities.

Economic Benefits of Standards – Pilot Project – Final Report: Indonesia 9

2.3 PT. Wijaya Karya (WIKA) Beton
2.3.1 Overview of PT.WIKA Beton

Figure 1 – Activities in PT.WIKA Beton

PT Wijaya Karya (WIKA) Beton is one of PT. Wijaya Karya (WIKA), Tbk,
subsidiaries, which has been established on March 11, 1997. This subsidiary is a
WIKA expansion in the precast concrete industry. WIKA has started concentrating on
the precast concrete industry in 1977 by developing precast concrete products for
residential projects.
The head office of PT. WIKA Beton is located on Jl. D.I. Pandjaitan Lot 3-4,
Jakarta. The total number of permanent employees of PT. WIKA Beton throughout
Indonesia in 2010 are as many as 911 people, who are spread over 8 (eight) plants
and 10 (ten) sales offices. The locations of the factories are: Bogor (main factory),
North Sumatra, Lampung, Majalengka, Boyolali, Pasuruan, South Sulawesi, and
Algeria (the status of the plant is temporary). The location of sales offices are as
follows: Banda Aceh, Medan, Pekanbaru, Palembang, Lampung, Jakarta (head
office), Semarang, Surabaya, Balikpapan and Makassar. Currently WIKA Beton
makes the biggest contribution to the profit from the WIKA subsidiaries.

Economic Benefits of Standards – Pilot Project – Final Report: Indonesia 10

 Figure 2 – Location of factory and sales offices of PT. WIKA Beton in Indonesia

The precast concrete business in Indonesia is an oligopolistic competition

where the market is dominated by a small number of companies that control their
market share. According to data of PT. WIKA Beton there are as many as 40 larger
or smaller local competitors with each company producing one or more products that
are similar to those produced by PT. WIKA Beton. The main competitors are 7
companies (source: PT.WIKA Beton data about 7 companies that have the highest
market share and approach compared to PT. WIKA Beton on the basis of 12 points
of customer expectations regarding precast concrete manufacturers).
The market share of PT. WIKA Beton for the major products amounts on average to
22.4%. The market share can be further detailed as follows: 22.6% in the market for
piles, precast concrete retaining products (sheet pile) 23%, precast concrete products
for bridges (concrete bridge products) 21.8%, precast concrete products for train
(railway concrete products) 21.2%, and the market share for power line products is
23%.
All suppliers (of which 50 are main suppliers) of PT. WIKA Beton are domestic
companies. The customers of PT. WIKA Beton are mostly domestic construction
companies with only a few overseas customers (<1%).
PT. WIKA Beton sells its products on the basis of orders from customers, so there is
first an order and then the production is carried out in response.
Economic Benefits of Standards – Pilot Project – Final Report: Indonesia 11
2.3.2 Products
2.3.2.1 Introduction to precast concrete, prestressed concrete, and post-
tensioned concrete
(1) Precast concrete is a construction product produced by casting concrete in a
reusable mold or "form" which is then cured in a controlled environment,
transported to the construction site and lifted into place.
Precast concrete products are commonly used in construction today, and
have many advantages. Precast concrete products are fast, structural
components from concrete made with precast can be made simultaneously in
the factory while the other construction activities may continue so time is saved
on projects. Precast concrete products are more economical and durable than
wood (which is not durable) and steel (which is more expensive). Timber as well
as steel need maintenance, while concrete does not require maintenance.
Precast concrete products also have the advantage of freedom in terms of
shape, since any shape can be made at the request of the customer. The
quality of precast concrete products can be better assured than when making
these products on-site.

Figure 3 – Precast concrete which is transported to the construction site to be lifted

and put into place

(2) Prestressed/post tension concrete is a method for overcoming concrete's

natural weakness in tension. It can be used to produce beams, floors or bridges
with a longer span than is practical with ordinary reinforced concrete.
Prestressing tendons (generally of high tensile steel cables or rods) are used to

Economic Benefits of Standards – Pilot Project – Final Report: Indonesia 12

provide a clamping load which produces a compressive stress that balances the
tensile stress that the concrete compression member would otherwise
experience due to a bending load. Traditional reinforced concrete is based on
the use of steel reinforcement bars, rebars, inside poured concrete.
Prestressed concrete and post tension can only be made by precast in factory.
The difference are in the timing of giving compression on the concrete. In
prestressed concrete, steel cables with high tensile strength within the product
give tension/stress before the concrete cured, so that after the concrete cured
and later when the stress is released, the compressive stress remains in the
concrete due to static friction.
In the post-tension concrete, compression is applied after pouring concrete and
the curing process (in situ). The concrete is cast around a plastic, steel or
aluminium curved duct, to follow the area where otherwise tension would occur
in the concrete element. A set of tendons are fished through the duct and the
concrete is poured. Once the concrete has hardened, the tendons are tensioned
by hydraulic jacks that react against the concrete member itself. When the
tendons have stretched sufficiently, according to the design specifications, they
are wedged in position and maintain tension after the jacks are removed,
transferring pressure to the concrete.

Concrete without
reinforcement, easy to
crack in area with high
tensile stress

Concrete with traditional

reinforcement, stronger

Concrete, prestressed/post
tensioned, strongest.

Figure 4 – comparison between type/method for concrete reinforcement

Economic Benefits of Standards – Pilot Project – Final Report: Indonesia 13
2.3.2.2 Raw materials which are used by PT. WIKA Beton
Raw materials which are used by PT. WIKA Beton in producing their products
and the respective reference standards are listed in the following table:

Table 2 – Raw materials which are used by PT. WIKA Beton and reference
standards
Raw materials Standards Title of standards Specifications
reference
Aggregate (sand and ASTM C33 - 1999 Standard Specification -
for Concrete
gravel/ crushed
Aggregates
rocks)
Cement SNI 15-2049-2004 Portland Cement Standard product: type I
Special order: Type II or V

Admixture ASTM C494-1985 Standard Specification Type F: Water reducing

for Chemical admixtures
Admixture for Concrete

Prestressed JIS G 3536-1999 Uncoated Stress- SWPD 1

Relieved Steel Wire
Concrete Wire
and Strand for
Prestressed Concrete

Prestressed JIS G 3137-1994 Small Size Deformed SBPDL 1275/1420

Steel Bars for
Concrete Bar
Prestressed Concrete

Spiral Wire JIS G 3532-2000 Low Carbon Steel Wire SWMA / SWMP

Rolled Steel JIS G 3101-2004 Rolled Steel for General SS-400

Structure

ANSI / AWS D1.1- Structural Welding Code- AWS A S.1 / E 6013

1990 Steel NIKKO STEEL RB 26 / RD
260, LION 26, or equivalent

2.3.2.3 Products of PT. WIKA Beton

As an industry with the main basis of concrete material, except end product
standards, PT. WIKA Beton also intensively uses the concrete standard SNI 03-
2847-2002, Indonesian Concrete Code. Below are the steps of the production of
concrete piles:

Economic Benefits of Standards – Pilot Project – Final Report: Indonesia 14

 Preparation of Mould Reinforcing Concrete Pouring

Spinning/vibrating Tensioning of PC Mould Closing

Wire

Detensioning Demoulding

Steam Curing

Stacking & Water Curing

The end products produced by PT. WIKA Beton are listed below. A complete list of
products can be found in the annex to this report.
1. Prestressed Concrete Poles
2. Prestressed Concrete Piles
3. Railway concrete products
4. Bridge concrete products
5. Retaining wall (sheet pile) concrete products
6. Hydro structure concrete products
7. Building and housing concrete products
8. Marine structure concrete products
9. Others concrete products

Economic Benefits of Standards – Pilot Project – Final Report: Indonesia 15

CHAPTER III
Company attitude towards standardization

In chapter two it has been stated that the main reason for having selected the
company was that the main company, PT. Wijaya Karya, Tbk is the first winner of
SNI Award 2008 for the category of Large Services Business. The SNI Award is a
token of appreciation given by the National Standardization Agency (BSN) to the
organization for implementing Indonesian National Standard (SNI) and its awareness
of the development of standards, and its good performance. The SNI Award is
awarded as a proof for the consistency in implementing standards.
In their production, PT. WIKA Beton uses some standard products for raw
materials and final products. PT. WIKA Beton has also implemented a quality
management system in accordance with ISO 9001:2008 certified by Lloyd's Register
Indonesia as well as a management system for occupational health and safety
certified by the Indonesian Ministry of Manpower. The ISO 9001 quality management
system in PT. WIKA Beton has been implemented since 1995 and continuously
updated based on the development of ISO 9001.

Figure 5 - Certificate of ISO 9001:2008 and Management System obtained by PT.

WIKA Beton

In addition, PT. WIKA Beton has received many expressions that indicate the
satisfaction of their customers in written form. In 2005, PT. WIKA Beton was given a
Economic Benefits of Standards – Pilot Project – Final Report: Indonesia 16
Letter of Commendation for Safety Performance by Chevron as an appreciation and
satisfaction for the business and safety performance for the project execution phase
III Darajat Geothermal.

Another appreciation was also obtained by PT. WIKA Beton from PT. Decorient
Indonesia when they produced 447 pieces of precast concrete components for the
port Makahayati Aceh in 2006.

Figure 6 - Letter of Commendation from Chevron and a letter of appreciation from PT.
Decorient Indonesia to PT. WIKA Beton

The experts of PT. Wijaya Karya, Tbk or PT. WIKA Beton participate actively
in the national mirror committee to ISO/TC 71 Concrete, reinforced concrete, and
pre-stressed concrete.

Economic Benefits of Standards – Pilot Project – Final Report: Indonesia 17

CHAPTER IV
Value Chain Analysis

4.1. Construction industry value chain

The construction industry value chain can be described as shown in the
following scheme:

Owner

Project Consultant

Construction
Company

Supplier

Sub Supplier

relationships between stakeholders in the construction industry

direct relationship which may occur

Figure 7 – Scheme of the construction industry value chain

In the construction industry value chain, PT. WIKA Beton operates in the supplier
segment for construction companies.

4.2. Company value chain of PT. WIKA Beton

The generic value chain model developed by M. Porter of Harvard Business
School for manufacturing companies consisting of 9 business functions can represent
the company value chain in PT. WIKA Beton, A few modifications, however, have

Economic Benefits of Standards – Pilot Project – Final Report: Indonesia 18

been made for the way production is organized on the basis of orders. It was also
found more appropriate to merge Engineering and Research & development into one
function.
As a result the company value chain of PT. WIKA Beton can be displayed as
shown in the diagram below:

Figure 8 - Generic model of a value chain for manufacturing companies

modified for PT.WIKA Beton
(Source: model of a company value chain of M. Porter, in Economic Benefits of Standards-ISO Methodology
Guide, Version 1, 2010 [modified])

4.3. Key value drivers in PT. Wika Beton

Based on the interviews, PT. WIKA Beton has several core values that
became the key value drivers of the company on the basis of core business
processes:

Table 3 - PT WIKA Beton core processes and value drivers

No. CORE PROCESS VALUE DRIVERS
1. Sales & Marketing customer intimacy
2. R & D / Engineering product leadership
3. Production operational excellent

Economic Benefits of Standards – Pilot Project – Final Report: Indonesia 19

CHAPTER V
Scope of the assessment in the pilot project

The scope of the case study conducted in PT. WIKA Beton is focused on the
following key business functions: (1) Research & Development; (2) Inbound logistics,
(3) Production and (4) Sales & Marketing. Also, the study is limited to the main
factory in the city of Bogor.
The selection of the business functions are based on the core processes of
PT. WIKA Beton namely: engineering, production, and sales.

C S
O CORE PROCESSES A
S T
C
T I
SALES O
U S
S
M F
ENGINEERING PRODUCT T
E A
U
R PRODUCTION C
M
E T
N I
R
E O
E N
D
S

Figure 9 – Core process diagram of PT. WIKA Beton.

Sales is part of the activity of marketing and sales. Research and development
and engineering cannot be separated and are considered to be part of one business
function. In this study R&D is chosen because it provides results for long-term use.
Inbound logistics is included in the study because of this function, prior to production,
may affect / determine the quality of the final product.

Economic Benefits of Standards – Pilot Project – Final Report: Indonesia 20

 Result of process based
Apply results of on input of raw materials
R&D quality

Order Inbound
processing Engineering Production
Logistics

R&D Scope of business

functions

Support business function

Core process

Figure 10 – Selected business functions

Economic Benefits of Standards – Pilot Project – Final Report: Indonesia 21

CHAPTER VI
Use of standards in the value chain of PT. WIKA Beton

External standards used in PT. WIKA Beton in general can be divided into 3
types: (1) standards for raw materials, (2) standards for the final product, (3) and
standards for management processes. The use of standards that were identified in
the selected business functions and their relationship to supporting the company's
value drivers are described in more detail in the diagrams below:

Support to Customer Product Operational excellent

value
drivers
intimacy leadership

I - Customer - Fast and - Trust in raw - Production

M trust cheap materials innovation
P - Ease of product - Courage in refers to end
A determining development decresing product
the technical - Quality of safety factor standard
C
specification new & custom - Saving of - Process
T - Fast in the made raw materials (faster-cheaper)
S process of products - Min. accident
contract guaranteed

B F
U U Order Inbound
S N processing Engineering Logistics Production
S C
I T
N I
E O R&D
S N
S

S
T Raw material standards
A
N
D
A End product standards End product standards
R
D
S QMS & HSEM

Figure 11 – Relationship between type of the standard, business functions, types of

impacts and value drivers

Economic Benefits of Standards – Pilot Project – Final Report: Indonesia 22

 Table 4 – Standards used in the selected business functions
No. Standards Bussiness functions
Standards Title Type Sales R&D Inbound Prod
number Log.
1. ISO Quality
9001:2008 management X X X X
systems -- CS
Requirements
2. - Safety, Health, X X X X
and
Environment CS
management
3. ASTM C33 - Standard
Specification
1999 PdS X X X -
for Concrete
Aggregates

4. SNI 15-2049- Portland

2004 Cement
PdS X X X -

5. ASTM C494- Standard

1985 Specification
PdS X X X -
for Chemical
Admixture for
Concrete

6. JIS G 3536- Uncoated

1999 Stress-
X X X -
Relieved Steel
Wire PdS
and Strand for
Prestressed
Concrete

7. JIS G 3137- Small Size

1994 Deformed Steel
X X X -
Bars for
Prestressed PdS
Concrete

8. JIS G 3532- Low Carbon

2000 Steel Wire
PdS X X X -

9. JIS G 3101- Rolled Steel for

2004 General
PdS X X X -
Structure

Economic Benefits of Standards – Pilot Project – Final Report: Indonesia 23

No. Standards Bussiness functions
Standards Title Type Sales R&D Inbound Prod
number Log.
10. ANSI / AWS Structural
D1.1-1990 Welding Code-
PdS X X X -
Steel

11. SNI 03-2847- Indonesian

2002 Concrete Code PdS X X X X
12. Recommendati
on for design
SNI 03-1752-
loading of PcS X X - X
1989
highway
bridges
13. Prestressed
JIS A 5309-
spun concrete PdS X X - X
1981
poles
14. Prestressed
JIS A 5335-
spun concrete PdS X X - X
1987
piles
15. Prestressed
JIS A 5326-
concrete sheet PdS X X - X
1988
piles
16. Reinforced
JIS A 5325-
concrete sheet PdS X X - X
1983
piles
17. Core type
JIS A 5332-
Prestressed PdS X X - X
1980
concrete pipes
18. Prestressed
EN 642-1994 concrete PdS X X - X
pressure pipes
19. Building code
ACI 318 - requirements PcS X X - X
2002 for structural
concrete
20. Design,
manufacture X X - X
ACI 543R-00
and installation PcS
of concrete

Economic Benefits of Standards – Pilot Project – Final Report: Indonesia 24

No. Standards Bussiness functions
Standards Title Type Sales R&D Inbound Prod
number Log.
piles
21. Prestressed
SPLN concrete poles PdS X X - X
93:1991 for distribution
line
22. PD No.10 Railway design
Perumka PcS X X - X
23. American Manual for
Railway railway PcS X X - X
Engineering engineering
Association
(AREA)
Chapter 10 –
1996
24. GOST 10629 Prestressed
– 1988 concrete PdS X X - X
sleepers for
railway wide
1520 mm
25. TB/T 3080 - -
2003 - X X - X
26. Bridge design
BMS 7 - 1992
code PcS X X - X
27. Standard
AASHTO - specification for PcS X X - X
1992 highway
bridges

X  used
-  not used
CS  compliance standard
PdS  Product Standard
PcS  Process Standard

Economic Benefits of Standards – Pilot Project – Final Report: Indonesia 25

CHAPTER VII
Operational indicators to calculate the impacts of standards

To calculate the economic benefits of the impacts of standards, we have to

carry out a certain approach in the form of mapping business functions to the
standards used. To do this we need to identify the standards impacts on the activities,
and then define operational indicators so that finally economic benefits of the impacts
from standards can be measured.
In cases when the operational indicators applied could not be calculated due
to lack of data or limitation of the project duration, but if there was an impact from the
standards felt by the company, the relevant operational indicators and the impacts
were still listed and described in chapter 9.

Economic Benefits of Standards – Pilot Project – Final Report: Indonesia 26

 Table 5 – Impact of standards on activities in business functions by identifying operational indicators
1 2 3 4 5 6 7
Business Related Value Standard Impact Operational Indicator Explanation
function business drivers used
function
activity

Research Information Product Raw material a. To get There are savings on labor costs 1. By applying QMS ISO
and collection leadership product supplier because the information about 9001, the
Development about standards, information capable suppliers is already organization is able to
suppliers (in end product easily available. If there is no information make lists of suppliers
the product standards, b. The available on capable suppliers, the so the information is
development quality competence collection of information may take available immediately
process) management to convey 2 days with a team of 3 people. 2. Suppliers are able to
system technical With reliable information about the accommodate the
standards specifications existence of capable suppliers, company needsquickly
about raw only 1 person is required for a and easily, because
materials period of 15 minutes. These the product
quickly. savings are due to the influence of specifications are
information technology such as based on external
email, phone and websites and standards that are
also due to the consistency in agreed between
using standards. producers and
customers and may
already be used by
previous suppliers

Product Product 1. Standardization research is Under the standardized basic

Economic Benefits of Standards – Pilot Project – Final Report: Indonesia 27

 1 2 3 4 5 6 7
Business Related Value Standard Impact Operational Indicator Explanation
function business drivers used
function
activity

development development is research that has passed research, therefore the cost used
research more efficient sustainable laboratory testing and for research are below actual cost.
process has been simulated for the large We assumed that the saving is 25
amount of activity as operational % of developing standard cost
standard. Previously, the company and the impact of standard is 25%
did not standardize some of the of total saving
activities that had significant
impacts on the consumption of
time and the quantity of labor.
After the company standardized
the activity gains in time and labor
efficiency were reached. The
results of time motion study
related the company activities
have been applied in the whole
plant. For example, the company
determines that a certain activity
should be done within 15 minutes
that applies for each plant.
2. Basic research is research that
is a basis for the development of
new products. For example : the
company produces the old product
piles which have 600 mm
diameter and would like to create
new product piles with 1000 mm

Economic Benefits of Standards – Pilot Project – Final Report: Indonesia 28

 1 2 3 4 5 6 7
Business Related Value Standard Impact Operational Indicator Explanation
function business drivers used
function
activity

diameter. In this case, the

company just used the 600 mm
diameter basic research to
develop 1000 mm diameter
technology, The conclusion is that
basic research (No.2) for new
product development should be
standardized and refer to
standardization research (No.1) to
attain cost efficiency

Standard Quality Management

Submission of System ISO 9001 demanding all The saving of time consumed to
Dissemination information to documents and specifications transfer information is identified as
of research be better should be standardized and a standards effect, an effect due to
results and should be applied consistently. the use of new technology and
transfer of Due to this implementation, innovation as well as due to other
information indicator standard are provided by factors. Therefore it is assumed
R&D such as material that the standard benefit is 25% of
specification, process specification the total savings
and standardization of the
product. Furthermore they are
transformed into working
Instructions, operational
procedures, brochures etc that
have a significant effect for the

Economic Benefits of Standards – Pilot Project – Final Report: Indonesia 29

 1 2 3 4 5 6 7
Business Related Value Standard Impact Operational Indicator Explanation
function business drivers used
function
activity

production process and marketing.

After the information transfer is
done, the related divisions are
able to apply it in their operational
processes. These processes are
needed by the eight plants in
order to provide a similar process
and result for each plant. This
standardized process saved time
needed for the transfer of
information from 1 day to 15
minutes.

Inbound Raw material Operatio- Raw Preparation of In the preparation of raw materials Decreasing of tolerance power is
logistic selection nal materials raw materials is before mixing, PT. Wika Beton identified as a standard benefit.
excellence product more efficient implemented all the requirements These savings are equivalent to 5
standard of external standards to ensure kg cement per 1 ton of concrete
and Quality the quality of the raw materials. At mix (concrete mix)
Management first to get concrete with such
System force 600 kg/cm2 (K600) PT. Wika
standard Beton determines the power
tolerance of + 50 kg/cm2. Now,
after using standards consistently,
PT. Wika Beton can reduce the
power tolerance to + 20 kg/cm2

Economic Benefits of Standards – Pilot Project – Final Report: Indonesia 30

 1 2 3 4 5 6 7
Business Related Value Standard Impact Operational Indicator Explanation
function business drivers used
function
activity

Production Removing the Operatio- Raw Efficiency of Removing the evaporation QMS ISO 9001 requires the
steam curring nal materials Production process has saved 3% of EBIT. organization's efforts to improve
process in the excellence product Process These savings are identified as a QMS continuously. PT. Wika
production standard standard effect and technology – Beton developed a production
process and Quality innovation effect.. process by eliminating the
Management evaporation process and substitute
System it with adding material non-steam
standard admixture in concrete materials.
However, the company has to
maintain product quality in
accordance with all requirements
as specified in the standard,
therefore it is assumed that the
standard benefit is 50% of the total
savings

Production Efficiency of Efficiency of the process carried The standard benefit is 50% of the
process: wire Production out on the wire caging process. total savings from the reduction of
caging Process This process replaces manual by manpower.
electronic functions. The efficiency
of this process saves manpower
costs by reducing the need
previously for 10 workers within 20

Economic Benefits of Standards – Pilot Project – Final Report: Indonesia 31

 1 2 3 4 5 6 7
Business Related Value Standard Impact Operational Indicator Explanation
function business drivers used
function
activity

minutes to 3 people in 5 minutes.

It is assumed these savings are
not only caused by the
development of technology, but
also include benefits from the use
of standards. The benefits from
standards are assumed to be 50%
of the total savings.

Production Production The savings of machine time Efficiency occurred due to the
process: process consumption (powerless) from 15 replacement of equipment so that
single efficiency minutes to 5 minutes is identified the system was changed from
stressing to as the standard benefit and single to simultaneous stressing.
simulant technological benefit. Although this efficiency is due to
stressing technological change but the
factory still maintains its product
quality in compliance with the
specifications in the standard.
Therefore the standard benefit is
assumed to be at 50% of the total
savings.

Marketing Sales Customer Raw Reduced time In determining the standards PT. Wika sells the product by
and sales intimacy materials in selling benefit, we compare the current using the technical specifications
product situation with a situation in which as a tool to market its products. In

Economic Benefits of Standards – Pilot Project – Final Report: Indonesia 32

 1 2 3 4 5 6 7
Business Related Value Standard Impact Operational Indicator Explanation
function business drivers used
function
activity

standard the technical specifications in this way customers find out their
and quality external standards would not be needs easily and PT Wika can find
management available. In the latter case, it out the requirements of customers
system would take about 3 days with a immediately.
standard team of 3 persons to sell the
product. Since PT Wika provides
clear specifications to the market,
it takes only 2 days and 1 person
until the contract is completed.
There are 1500 contracts per year
for a total of 7 factories. The
Cibinong factory in Bogor as the
object of the study has contributed
30% of the total sales. This saving
was supported by a marketing
method, marketing staff and
technology information, which
included impacts from standards
that were required to attain cost
efficiency.
Regarding the business process,
the standards support the
complete main business process.
Therefore we assume that the
impact of the standards amount to
5% from the total savings.

Economic Benefits of Standards – Pilot Project – Final Report: Indonesia 33

 1 2 3 4 5 6 7
Business Related Value Standard Impact Operational Indicator Explanation
function business drivers used
function
activity

Sales Good quality In 2010 no product was rejected, Good quality product that is
products, so 0.13% of EBIT are achieved as continuously maintained in
consistent savings. These savings are a accordance with the standards
compliance with result of using standards and agreed upon by both parties, that
the standards appliying the Quality Management is between producers and
System consistently. The consumers. Standards are used
economic benefits of standards as a tool and as a mainstay in
are assumed to be 50% of the selling products. Therefore PT.
total savings. Wika determines the impacts from
avoiding defect products to be
0.13% of the profits of production
per year.

Economic Benefits of Standards – Pilot Project – Final Report: Indonesia 34

CHAPTER VIII
Calculation of economic benefits of standards

The method of identifying and calculating the standards impacts with

operational indicators has been explained in the chapter VII. The result of the
calculation of the impacts of standards with the operational indicators in the selected
business functions can be seen in the Tables 6 and 7 below:

Table 6 - Calculation of economic benefits of standards by business function

1 6 8
Selected Operational Indicator Estimation of economical
business benefit for operational
function (FB) indicator
(IDR/year)

There are savings on labor costs because the IDR 11.535.278

information about qualified suppliers is available. If
there is no information available on qualified
suppliers, the collection of information may take 2
days with a team of 3 people, with such information
only 1 person using 15 minutes is required. These
savings are due to the influence of information
technology such as email, phone and website and
also due to consistency in using relevant standards.
(Calculation 1)

FB 1
Research and There are savings in basic research due to 186.666.667
Development standardization in product development. These
savings are assumed to be 25% of the total cost of
product development (Calculation 2)

The calculation of standard benefits can be seen 2.807.442

when QMS ISO 9001 does not apply and external
standards are not available in which case the
information transfer takes 1 day. By applying a
quality management system, the transfer of
information is easier and it takes only about 15
minutes. Savings of this time are identified as a
standards effect as well as a technology/innovation

Economic Benefits of Standards – Pilot Project – Final Report: Indonesia 35

 1 6 8
Selected Operational Indicator Estimation of economical
business benefit for operational
function (FB) indicator
(IDR/year)
effect. It is assumed that the standards benefit is
25% of the total savings
(calculation 3)
In the preparation of raw materials before mixing, PT.
FB 1 Wika Beton implements all the requirements of 341.716.540
Inbound external standards to ensure the quality of the raw
logistic materials. In the preparation of concrete with a force
of 600 kg/cm2 (K600) PT. Wika Beton determines
the power tolerance to be + 50 kg/cm2. After using
standards consistently, PT. Wika Beton can reduce
the power tolerance to + 20 kg/cm2 (calculation 4)
Removing the evaporation process has saved 3% of
EBIT. These savings are identified as a standard 264.286.500
effect and technology/innovation effect. It is assumed
that the standard benefit is 50% of the total savings
(calculation 5)
Efficiency of the process carried out on the wire
caging process has increased. This process 135.240.000
replaces manual with electronic functions. The
efficiency of this process saves manpower costs by
reducing the need for manpower from 10 workers
within 20 minutes to 3 people in 5 minutes, while
FB 3 maintaining the product quality in compliance with
Production the standard. This impact can be identified as a
combination of technological and standards impact.
We assumed the standard benefit is 50% of the total
savings
(calculation 6)
The savings in the use of machine time consumption
(powerless) from 15 minutes to 5 minutes is IDR 19.209.680
identified as a standards benefit and a technology
benefit.
(calculation 7)

In determining the standards benefit, we make a

comparison with a situation in which external IDR 78.750.000
standards would not be available. In the latter
situation, it takes about 3 days with a team of 3
persons to sell the product. However, since PT Wika
provides clear specifications to the market, it takes 1
day and 1 person until a contract is completed.
These savings are also not free from the influence of
information technologies that facilitate access to

Economic Benefits of Standards – Pilot Project – Final Report: Indonesia 36

 1 6 8
Selected Operational Indicator Estimation of economical
business benefit for operational
function (FB) indicator
(IDR/year)
technical specifications for consumer purposes. It is
assumed that the standards benefits are 50% of the
FB 4 total savings.
Marketing and (calculation 8)
sales
In 2010 no product was rejected, so 0.13% of EBIT 11.452.415
are achieved as saving. These savings are caused
of the use of standards and applying the Quality
Management System consistently. The economic
benefits from the use of standards are assumed to
be 50% of the savings. (calculation 9)

Economic Benefits of Standards – Pilot Project – Final Report: Indonesia 37

 Table 7 – Calculation of the economic benefits of standard and the percentage
contribution to company revenue and EBIT

1 8 9
Related business function Calculation The
economic benefit percentage
for operational contribution
indicator to Revenue
(IDR/Year) (% )
11.535.278
FB 1
Research and Development 186.666.667
2.807.442

Total BF 1 201.010.271 0,08 %

FB 1 341.716.540
Inbound logistic

Total BF 2 341.716.540 0,14 %

264.286.500
FB 3
Production 135.240.000

19.209.680

Total BF 3 418.779.020 0,17 %

FB 4 78.750.000
Marketing and sales

11.452.415

Total BF 4 90.202.415 0,04 %

TOTAL Benefit 1.051.708.246 0,43 %

Details of the economic benefit calculation based on the operational indicators are
explained as follows:

Economic Benefits of Standards – Pilot Project – Final Report: Indonesia 38

Calculation 1
The impact of standards can be identified from the assumption that companies do not
implement QMS ISO 9001, so the documentation is not done well, they do not have a list of
suppliers and external standards are also not available. If there are no external standard
available, the product specification are difficult to explain and the supplier has difficulty to get
information and they are not familiar with standard, so to transfer information must be done
by a direct face-to-face meeting. When this happens the collection of information requires 2
days and 3 people (the procurement staff and technical staff). However, if external standards
are available and accessible, the collection of information only takes 15 minutes (via
telephone or email) and it takes only 1 person in charge. But these savings are also caused
by advances in information technology such as websites, telephone, fax and other factors.
We assumed the benefit of using standards to be 25% of the total savings

It is known that in 1 month there are 4 times when the company contacts the suppliers, the
salaries in 2010 were IDR. 3.22 million, and 1 month of work has on average 20 working
days.

The cost of searching for information if the company did not implement ISO 9001 QMS and
external standards are not available:

= 3 people x (IDR 3.220.000/20 working days) x 2 days

= IDR. 966.000

Cost savings after companies implement ISO 9001 QMS and external standards are already
available:

= 1 person x (IDR 3.220.000/20 working days / 8 hours) x (15 minutes/60 minutes)

= IDR. 5.031

The savings are:

= (IDR 966,000 - IDR 5031) x 4 times x 12 months
= IDR. 46.141.112

The advantages of using standards are:

= 25% x IDR. 46.141.112
= IDR. 11.535.278 /year

Calculation 2
Product development costs in 2010 were 56% of the total costs of R&D of IDR
1.000.000.000
With the standardization of basic research that does not need to be done again in
subsequent research led to the reduction in research costs. Standardization of the results of
this study is assumed to be 25% of actual costs.

The cost of product development research is:

= IDR 1.000.000.000 x 56% x (100% / (100% - 25%)
= 0.56 x IDR 1.000.000.000 x (1 / 0, 75)
= IDR 746.666.666, 7/year

The real cost of product develpment research is:

Economic Benefits of Standards – Pilot Project – Final Report: Indonesia 39

= 56% x IDR 1 billion
= IDR 560.000.000

The advantages of using standard are:

= IDR 746.666.666, 7 - IDR 560.000.000
= IDR 186.666.666, 67/year

Calculation 3
The saving result from faster transfer of information.
The calculation of standard benefits can be seen when QMS ISO 9001 does not apply and
the external standards are not available. When this happens, the information transfer takes 1
day. By applying the quality management system, the transfer of information is easier and it
takes about 15 minutes. This information is given to 3 person from factory division and there
are transfers of such information on average twice per month. These savings of time are
identified as a standard effect and technology–innovation effect, so it is assumed that the
standards benefit is 25% of the total savings.

Salary/month in 2010 = IDR 3.220.000

Salary/day = IDR 3.220.000/ 20 = IDR 161.000
Salary/ 15 minutes =( IDR 161.000/8 hours (15 minute/60 minute) = IDR 5.031
Saving = (IDR 161.000 – IDR 5.031) x 3 personel x 2 (twice) x 12 month
= IDR 11.229.768

Standard benefit = 0,25 x IDR 11.229.768 = IDR 2.807.442/year

Calculation 4
In the preparation of raw materials before mixing, PT. Wika Beton implements all the
requirements of external standards to ensure quality of the raw materials. At first to get
concrete with a force of 600 kg/cm2 (K600) PT. Wika Beton determines power tolerance of
+50 kg/cm2. Now after using standards consistently, PT. Wika Beton can reduce the power
tolerance of + 20 kg/cm2. The saving is equivalent with 5 kg cement/1 ton concrete mixing.

Production in 2010 was: 170,858.27 m3

1 ton of concrete mixture = (1 / 2.5) m3 of concrete mix

The price of cement per 1 kg = IDR 1,000

Savings that occurred = 5 kg x (1/2.5) x 1,000 x 170,858.27

= IDR 341.716.540/year

Calculation 5
Removing the evaporation process has saved 3% of EBIT. These savings are identified as a
standard effect and technology/innovation effect. It is assumed that the standard benefit is
50% of the total savings

Average of EBIT/year is IDR 17.619.100.000

Saving = 0,03 x IDR 17.619.100.000

= IDR 528.573.000

Economic Benefits of Standards – Pilot Project – Final Report: Indonesia 40

Standard benefit = 0,5 x IDR 528.573.000
= IDR 264.286.500/year

Calculation 6
Efficiency of the process carried out on the wire caging process. This process replaces
manual by electronic functions. The efficiency of this process saves manpower costs.
Savings of 10 workers using each 20 minutes to 3 people using 5 minutes. It is assumed that
these savings do not result from the influences of the development of technology but include
standard benefits, which are assumed to be at 50% of the total savings.

Salary per worker per month in 2010 is IDR 3.220.000

Saving/year = (10 - 3) man x salary/month x 12 month
= 7 x IDR 3.220.000 x 12
= IDR 270.480.000
Standard Benefit = 0,5 x 270.480.000
= IDR 135.240.000/year

Calculation 7
Efficiency gains have been reached due to the replacement of equipment so that the system
was changed from single to simultaneous stressing. Although this gain in efficiency was due
to technological changes, the role of standards cannot be discarded and is assumed to be at
50% of the total savings.

The savings of using of machine time consumption (powerless) from 15 minutes to 5 minutes
is identified as a standard benefit as well as a technology benefit

Machine power use is 2000 Watt (2 KWH) and the costs for power consumption is Rp.700
/KWH. This process occurs in the manufacture of concrete power poles (poles) and piles
(piles) as follows:

Year Poles (ton) Piles (ton)

2006 2.650 150.497
2007 2.245 170.300
2008 4.445 154.070
2009 3.882 149.057
2010 2.386 183.740
Average 3121,6 161532,8
Total average 164654,4

Savings: = (15 – 5) minute/60 minute x 2 KWH x 700 / KWH x IDR 164654.4

= IDR 38.419.360

Standard benefit = 50% x IDR 38419360

= IDR 19.209.680/year

Calculation 8
In determining the standards benefit, we are comparing with a situation in which the technical
specifications provided by external standards would not be available. In such a case, it takes

Economic Benefits of Standards – Pilot Project – Final Report: Indonesia 41

about 3 days with a team of 3 persons to sell the product. However, PT. Wika provides clear
specifications to the market, so it takes 2 day and 1 person until a contract is signed. There
are 1500 contracts per year for a total of 7 factories. The Cibinong factory in Bangor as the
object of this study has contributed 30% to the total sales. This saving occurred with support
by marketing methods, marketing staff and technology information including standard impact
which had an influence with regard to attaining cost efficiency.
The standards support all the main business processes, and we therefore assume that the
standards impact is 5% of the total savings.

Marketing personel salary is IDR 10.000.000/month

Salary/day = IDR 10.000.000/20 = IDR 500.000

Saving = (3 days x salary /day x 3 man) – (2 day x salary /day x1 man)

= {(3x500.000x3) – (2x500000x1)} x 1500 contract x 0,30
= .IDR 1.575.000.000

Standard benefit = 0,05 x IDR 1.575.000.000 = IDR 78.750.000/year

Calculation 9
In 2010 no product had been rejected, so 0.13% of EBIT are achieved as savings. These
savings are caused through compliance with specified standards and by applying the quality
management system consistently. The economic benefits from the use of standards are
assumed to be 50% of the savings.

Year Revenue (IDR)

2006 1,52727E+11
2007 1,81002E+11
2008 3,38206E+11
2009 3,43915E+11
2010 2,08259E+11
Average 2,44822E+11

EBIT of the production process is IDR 17.619.100.000

Savings = 0.0013 x 17,619,100,000 = IDR 22,904,830
Standard benefit = 0.5 x IDR 22,904,830
= IDR 11.452.415/year

Economic Benefits of Standards – Pilot Project – Final Report: Indonesia 42

CHAPTER IX
Qualitative and semi-quantitative impacts of standards

Impacts of the application of external standards that cannot be quantified e.g. due to
unavailability of data or the time which would have been required for such an analysis,
are listed below as follows:
o It is easier to implement external consensus-based standards than to develop
internal standards. (There is no data about the costs for the development of
internal standards)
o With the implementation of external standards that are known and widely used,
products from suppliers and the own production by the company will be more
interoperable, cheaper, faster to produce, and will decrease the variety of
product types than if internal standards would be implemented that are not
known and not widely used. If all customers determine their own specifications
for the same purpose, then the production will have high overhead costs. This is
due to necessary research and development (starting from materials, market
research related to prices and quality of supplies, production techniques, the
need for mold / molds specifically, the final test, and so on). These impacts
cannot be calculated in detail.
o The company success in meeting the required quality from customers based on
external standards, increases customer’s trust, and improves the corporate
image
o By implementing external standards that have been widely recognized,
PT.WIKA Beton products can be accepted internationally
o Promotion of products by using external standards that are widely known also
enhance the image of the products and the company
o There is a better information transfer because communication between units
using the same formats for data and documentation. This can reduce
misunderstandings in communication that can cause errors or defects. It is
also possible to reduce the occurrence of and the costs for rework

Economic Benefits of Standards – Pilot Project – Final Report: Indonesia 43

o Unified management system: Integrating the standards for quality management,
health and safety through one integrated system for key production stages can
provide additional efficiency in quality control.
o Better competitor information: To get information about competitors is faster
than before. Since competitor's products specifications are standardized, market
research can be conducted more efficiently by reducing the costs for competitor
screening activity
o Quick response on complaints: It decreases repetitive complaints, so the there
are no repetitive complaints because the answers should be delivered to the
customer in less than 24 hours

Economic Benefits of Standards – Pilot Project – Final Report: Indonesia 44

CHAPTER X
Evaluation of the results
Some important things that affect the calculation of economic benefits of standards in
this study (source of uncertainty, assumptions made) are as follows:
1. Data on the impact of standards for the selected four business functions in the
scope of this assessment in PT. WIKA Beton are based on the observations of
benefits by key staff and have been agreed by the business development
manager as a representative of top management. The quantification of the
standards impacts expressed as economic benefits has been undertaken by
identifying relevant operational indicators that can be associated with unit costs
(monthly salary, prices of materials, electricity costs per KWH, and others).
2. Operational indicators in this study are based on a comparison between the
normal company operation (standards are being used) with the assumption of a
hypothetical situation when standards are not used in the company operations.
Such a comparison was necessary because PT. WIKA Beton has implemented
compliance standards (ISO 9001, Health and Safety management), process
standards, product standards since the company was established, so there is no
record of a situation before these standards were applied.
3. As mentioned in point 2, after an impact defined by an operational indicator was
found as a result of the application of a standard and a calculation was possible
due to using a unit cost, it was still found that not 100% of the impacts (e.g. of
savings) could be related to the use of the standard, because other factors, such
as use of new technology etc, had an impact on the result. In such cases, we
made assumptions about the percentage of the standards contribution, which - in
this study - was based on a consensus within the project team and the company
rather than a more quantitative method such as a weighting system.
4. There are certain assumptions in this study that we found difficult to judge with
regard to their acceptability.
5. Although a declaration of confidentiality has been signed with the company and
the company has been willing to participate in the project as the object of the

Economic Benefits of Standards – Pilot Project – Final Report: Indonesia 45

study, the company has an internal policy of non-disclosure of confidential data to
the public.

Economic Benefits of Standards – Pilot Project – Final Report: Indonesia 46

CHAPTER XI
Conclusions and recommendations
11.1 Conclusions
The conclusions summarize the overall findings of the analysis and the key points
that have been learned by the study/project team from the assessment that has been
conducted.
1. The impacts of standards can be quantified into economic value using the ISO
methodology. In the case study of PT. WIKA Beton, the standard impact on the
four business functions of research and development/engineering, inbound
logistics, production, marketing and sales, we have identified nine types of
impacts with a total economic value of IDR 1.051.708.246 or 0,43% of the total
revenue and close to 6% as a contribution to EBIT PT. WIKA Beton.
2. Through the study discussions were triggered with the standards user, the
company, which created awareness of the benefits of standards and their
contribution to the company profit.
3. The results from the project can be disseminated as an effort for the promotion
of the use of consensus-based external standards.
4. The summary of the ISO-EBS methodology manual made by Mr. Reinhard
Weissinger from ISO Central Secretariat as a supervisor, helped the study team
to conduct the pilot project.
5. There were difficulties regarding the company which can be used as a
participant in such a study because of the need for confidentiality of the data.
Even if a company is willing to become the object of such a study, in some
cases the company is not willing to disclose all data to parties outside the
company, even if they are members of the project team.
6. There were some difficulties for the study team to understand the benefits
identified by the staff of the company because it was sometimes related to
highly technical matters expressed in a very technical language.
7. There are sources of uncertainties and assumptions which we have
summarized in Chapter X.

Economic Benefits of Standards – Pilot Project – Final Report: Indonesia 47

8. Consultation activities between the study team with Mr. Reinhard Weissinger as
a supervisor from the ISO Central Secretariat through teleconferences and
email correspondence can be done effectively (the problems could be presented
and discussed) and efficient (easy, saving time and money).

11.2 Recommendations for next steps

1. The results of the study should be disseminated to related stakeholders, through
seminars or workshops in order to raise awareness and interest in the use /
application of consensus-based external standards.
2. The methodology should be disseminated to standard users so they can
perform their own assessment of the impact of standards following a training,
because it is more difficult when the assessment is made by parties outside the
company.
3. There is a need to do a similar study by BSN/ISO in another industry sector in
order to further disseminate the implementation of the methodology to
companies, to increase the awareness about the economic benefits of
standards in other sectors, to improve personal skills of BSN staff and to refine
the results of the study.
4. Similar studies conducted in the future by BSN/ISO need to be done with a
personal approach to top management and an explanation of the purpose and
objectives of the studies and access to company data that are needed.
5. Making a pocket book/leaflet/brochure containing key steps in the
implementation of the methodology in a very compact form would be useful.
6. Individuals should be included in a study team that have knowledge about the
technological aspects of the industry sector of the chosen company and who
understand the technical terms used by the company that has been selected as
an object for the study.
7. Teleconferencing as a media for communication - as exemplified by ISO can be
used by BSN as an efficient and effective tool in disseminating standardization
activities.

Economic Benefits of Standards – Pilot Project – Final Report: Indonesia 48

8. The ISO Central Secretariat needs to conduct a workshop on the results of the
ISO methodology on economic benefits of standards either in a regional forum
or an international forum (such as the ISO General Assembly) in order to share
the outcomes with other ISO members.

Economic Benefits of Standards – Pilot Project – Final Report: Indonesia 49