Improving Margins of the Indonesian Seaweed Supply Chain Upstream Players: the Application of the Kaizen Approach
Agus H. Purnomo, R. Kusumawati, A. Pratitis, I. Alimin, S. Wibowo, M. Rimmer and Nicholas Paul
Kementerian Kelautan dan Perikanan
Abstract
Background: Indonesia has a great opportunity to create huge revenue through seaweed hydrocolloid trades. With the production of carrageenophyte, especially Euchema sp, and agarophyte, especially Gracillaria sp, Indonesia succeeded in becoming an important player in the trade raw materials. However, success in raw material market did not occur in the hydrocolloid market; in this context of Indonesia caught only less than 4% of world market share, far behind China, Chile, Spain and the Philippines. From our previous research, problems have been identified as occurring at upstream nodes in the commodity supply chain. Among the outputs of this research is a finding the margin obtained by the players at the upstream node in the Indonesian commercial seaweed supply chain is generally small and makes the motivation for business development low. Problems found in our previous research, however, are still global in nature and need to be explored further. Aims: The research aims to identify opportunities to overcome problems facing seaweed upstream players, focusing on the identification of problem locus, root cause analysis, priority problem selection, and determination of intervention form. Materials and Methods: This research is conducted following the Kaizen Approach. Seven upstream business nodes were chosen in the commercial seaweed supply chain at three locations: two Gracilaria farmers in Brebes, one Gracilaria trader in Brebes, one Eucheumatoid farmer in Serang, one intermediary trader in Serang, and two Eucheumatoid farmers in Sumenep. Through the Kaizen technique, the productivity analysis was applied to identify the leverage actions needed to improve efficiency. The Kaizen approach itself can be briefly described as a change towards a better which is done continuously. In industries, Kaizen are normally applied to formulate strategies to increase production, increase product quality, reduce operational costs, reduce waste, and increase job security. Results: The results show there are inefficiencies in a number of loci in the business lines of intermediate farmers and traders. These include a gap (actual vs. standard value) on Gracilaria moisture content of 2%, on Eucheumatoid moisture content of 4 %, on Gracilaria pond productivity of 0.6 tons / ha / year, on productivity of by-products Gracilaria is 50%, the productivity of Eucheumatoids are 10%, on the quality of dry Gracilaria is one grade, all of which results in a loss of potential profit (margin). Root problem analysis found a number of external factors outside the Kaizen domain and other internal aspects that can be corrected through intervention. The internal aspects include: objective measurement of water content and good drying method for the inter-trade business and the implementation of Gracilaria cultivation pond maintenance techniques and spacing on Eucheumatoid. The results of the analysis, which were then communicated with each entrepreneur, determined a numb
Keywords: commercial seaweed, Eucheuma, Kappaphycus, Gracilaria, Kaizen, margins, supply chain
Topic: Environmentally Sustainable Agriculture