A Sustainable Supply Chain Model of Manufacturer-Buyer Relationship in Export Oriented Furniture Industry in Indonesia

Abstract

Furniture made from teak wood has an important role in Indonesia’s economic growth. It has contribution to boost country income from export and to provide high employment for community. However many obstacles occur as challenges that must be overcome by this industry. Beside limited supply of high quality teak wood and production inefficiency as the main problems, furniture industry also faces sustainability problem in their activities. Export destination countries impose strict requirement for furniture exporters to comply with social and environmental issues. This paper proposes sustainability supply chain management model that considers economic, social, and environmental factors. In solving the problems, we use goal programming method because the model consists of several conflicting objectives that must be satisfied simultaneously. A numerical trial is used to illustrate how the model can satisfy the goals. The results can be used to analyze the trade-off among several set of alternative solutions.

Keywords: Export oriented furniture industry, sustainable SCM, goal programming, manufacturer-buyer relationship