Supply Chain Competitiveness in Food Industry: An Indonesian Case

In this study, it is of great interest to determine the supply chain competitiveness in Indonesia. We limit our study to the food industry only, due to the facts that the food industry is a major industry in terms of its contribution to national GDP and is still lacking in its supply chain competitiveness. The objective of this paper is to present the current state of supply chain competitiveness of the food industry in Indonesia. We use four perspectives to measure the supply chain competitiveness: cost, differentiation, sustainability, and infrastructure. While cost and differentiation measure the performance perspective of supply chain competitiveness, sustainability measures the demand perspective of the future supply chain, and infrastructure is the requirement perspective of supply chain competitiveness. Using the Analytic Hierarchy Process (AHP) and Analytic Network Process (ANP), our empirical analysis in the food industry finds that infrastructure is the most important perspective that determines supply chain competitiveness, followed by differentiation, cost and sustainability. Having learned that the infrastructure is a major constraint in Indonesia, the players in the food supply chain place more emphasis on differentiation rather than on cost in creating their supply chain competitiveness. Our calculation using 12 criteria from the four perspectives shows that the food supply chain in Indonesia is highly competitive with the weight factor of 0.825. These findings suggest that even in markets lacking good logistics infrastructure, the players in the supply chain can still be competitive.