Risks and Risks Mitigations in the Supply Chain of Mangosteen: A Case Study

Abstract

Mangosteen (Garcinia mangostana L.) is the highly demanded fruit for export commodity from Indonesia. The biggest mangosteen production center in Indonesia is West Java Province. The development of the mangosteen supply chain in Indonesia, particularly in West Java Province is heavily affected by uncertain potential risks for the chain. This paper identifies potential risks of the supply chain and studies the interrelationships between strategies for mitigating those risks. Fuzzy Analytical Hierarchy Process (AHP) was utilized to identify the main risks then Interpretive Structural Modeling (ISM) was used to illustrate the interrelationship of those risks mitigations. Data were gathered through questionaires guided interviewing the experts of mangosteen business. Results show that the main risks of the chain to reach its goal are business relationships between partners and return on investment uncertainty. Horizontal coordination and trust building between partners should be considered to mitigate those risks as these strategies are found to have a strong driving power to influence others risks mitigation strategies. Improved coordination and trust building may advocate the Indonesian government to facilitate the provision of soft loans to agricultural businesses, which enables the farmers' cooperative to buy mangosteen in cash therewith improving their return on investment.

Global Supply Chain Practices and Problems Facing Developing Countries: A Study in Tanzania

“…The problems identified in this study support the findings revealed in the literature (e.g., Birou & Fawcett, 1993;Klassen & Whybark, 1994;Fawcett, et al, 2008;Colicchia et al, 2010;Cheng et al, 2012;Astuti et al, 2013). Though the respondents didn't cite training in global supply chain management as a problem during the interview, one respondent stated after the interview that the problem of top management not involving procurement and supplies personnel when buying capital goods is a clear picture of the level of training and lack of recognition of procurement at the strategic level of the organisation.…”

“…The findings are additional to the global supply chain problems addressed by other authors (e.g., Dornier et al, 1998;Manuj & Mentzer, 2008;Barry, 2004, Colicchia et al, 2010Cheng et al, 2010;Astuti et al, 2013). Also, the study has managerial implications for the practitioners.…”

“…Furthermore, there is a need to improve coordination and trust building between the partners in the supply chain (Astuti et al, 2013).…”

“…The global sourcing process, if not handled properly, can hinder the performance of the company. A recent study on risks and risks mitigations in 131 the supply chain of Mangosteen (fruit) in Indonesia conducted by Astuti et al (2013) identified business relationships between partners and return on investment uncertainty as key risks of the chain to achieve its goal. Although the problems and risks of global supply chains or global sourcing processes are well documented in the literature (e.g., Manuj & Mentzer, 2008;Barry, 2004) for developed countries, little is known regarding the problems of the global supply chain practices in the transport sector of developing countries.…”

Can an Underachiever Become Competitive? The Case of the Romanian Food Industry

“…Shifting from national underachievement towards international competitiveness requires time and a thorough process of structural change, investments in infrastructure and a new vision which implies collaborative forms, benefits and risk sharing for those who work in the industry as suggested by Beske (2013) and Astuti, Arkeman, Poerwanto and Meuwissen (2013). Meanwhile all supply chain links must improve individual performance by setting up, measuring and analysing results achieved for the six proposed indicators in order to assess progress and performance development on economic and social level as well as within their own supply chain as confirmed by Garcia (2012).…”