Integrating House Of Risk (HoR) and Root Cause Analysis (RCA) With Key Performance Indicator (KPI) for Enhanced Risk Management and Operational Efficiency in Manufacturing Operations

Abstract

Manufacturing industries encounter substantial challenges due to operational inefficiencies and risks that affect productivity and profitability. To mitigate these issues, this research integrates the House of Risk (HOR) method, Root Cause Analysis (RCA), and Key Performance Indicators (KPI) to enhance risk management and streamline operations. The study focuses on PT. Sinar Semesta, a metal casting company in Indonesia, which deals with production delays, machine failures, and inconsistent product quality. The research begins by applying HOR to identify and prioritize risk agents based on their severity and likelihood. RCA is then utilized to determine the root causes of critical risks, enabling the development of targeted mitigation strategies. Subsequently, KPIs are used to assess the effectiveness of risk management measures, focusing on key metrics such as defect rates, production cycle times, and downtime reduction. The findings highlight the effectiveness of integrating HOR and RCA in establishing a structured and proactive risk mitigation approach. Implementing prioritized corrective actions is shown to significantly reduce operational risks and enhance production performance. KPI validation confirms measurable improvements, demonstrating the feasibility of this integrated framework as a tool for continuous process optimization. This research contributes to industrial engineering by presenting a comprehensive model that strengthens risk management in manufacturing. The integration of HOR, RCA, and KPI offers a data-driven methodology that allows companies to systematically identify, address, and evaluate risks, ensuring long-term operational sustainability.