Building “Porang” processing industry using supply chain management method

Abstract

Wonogiri Regency is one of the leading porang producing regions in Indonesia, but the potential of its industry is still largely unexplored. Currently, business actors market corms and chips in East Java Province, resulting in a multiplier effect. This is because these actors cover only a small portion of the region. Therefore, the purpose of this study was to develop porang processing industry model through Supply Chain Management method. The study employed both quantitative and qualitative methods with Interpretive Structural Modelling (ISM) analysis. The triangulation method was used to cross-examine data at the respondents’ level. Based on the results, processed product demand, supplier engagement in the production process, and glucomannan production technology were the sub-criteria with the greatest effect on supply chain management. Furthermore, market access was identified as the major factor influenced by other sub-criteria. The strategies for establishing processing industry based on the 18 sub-criteria were in the linkage quadrant, showing the presence of high effect and interconnection. Variables in this sector must be investigated carefully because the relationship between variables is unstable. Every action on this variable will affect others and the feedback effect can magnify the impact. The strategy implemented must undergo various reviews to obtain best results. The findings of this study can be used as a reference for stakeholders to strengthen competitive advantage and implementing effective strategies