Supply Chain Risk Management in Fried Shallot SMEs

¹ Department of Management, Faculty of Economic and Management, IPB University, Indonesia
² Department of Agroindustrial Technology, Faculty of Agricultural Engineering and Technology, IPB University, Indonesia

^* Corresponding author: mdzulfikri@apps.ipb.ac.id

Abstract

SMEs of fried shallots are faced with various risks in the form of raw material constraints, errors in planning, interference from operating machines, defective products, government policies, complaints, and others. This research aims to analyze the flow of the shallot supply chain, identify risks supply chain, analyze the priority order of risks, and determine preventive action prioritize in fried shallot SMEs. The methods used in this study are descriptive analysis, supply chain operation reference (SCOR), and risk analysis using the House of Risk (HOR) method. The risk analysis HOR 1 shows that the most significant risk agents of supliers level, was farmers who fail to harvest (AP10) with total score 572 that accounted for 19.8% of problems. Risk agents with the highest ARP scores at the SMEs level are labor negligence (AI9) that account for 12% of problems. The risk agent with the highest ARP value at the retail level was a forecasting miscalculation (AR1), with a total score 243 that accounting for 14.17% of problems. The result of the HOR 2 assessment selected primary preventive actions to be implemented first, for supplier is farmer partnership by creating a 1-year contract system (PAP4), for SMEs is, record and analyze shallots’ needs based on fixed requests from customers (PAI7) and for retail is collaborating with SMEs with almost the same type and quality (PAR1). By implementing this preventive action, companies can manage risks well to reduce losses and improve the company's business performance.