Sustainable Supply Chain Based Scenarios for Optimizing Trade-off Between Indonesian Furniture and Crude-Palm-Oil Industries

Kuncoro Harto Widodo
Universitas Gadjah Mada, Indonesia

Trade-off, as the consequences of using the same resources, often occurs in the development of two or more business activities, e.g. between the supply chain of Indonesian furniture and crude-palm-oil (CPO) industries. The two industries use the land area to get supply of raw material. The furniture industries need wide area of forest to obtain an adequate wood supply while the CPO industries need wide land area to open new palm plantations. The previous research has identified the relationship of the two industries and the trade-off between them using a dynamic model approach. This research aims to modify the model and to propose some scenarios that may optimize the trade-off based on the previous results. We provide scenarios based on the development policy of Indonesian government. The scenarios are simulated using the modified of dynamic model. We obtain that the best scenario is scenario 3 which can optimize the trade-off between the supply chain of furniture and CPO industries in line with long term sustainable development. The scenario is set by increasing the productivity of palm plantations to change the pattern from extension into intensification by using robust palm plants.

Download Full Paper