Sustainability Supply Chain Management in Indonesia: A Systematic

Review

Shelly Pramudiawardani

, Zaenal Abidin

, Achmad Nizar Hidayanto

, Nur Fitriah Ayuning Budi

and

Widia Resti Fitriani

Faculty of Computer Science, University of Indonesia, Depok, Indonesia

Faculty of Mathematics and Natural Sciences, Universitas Negeri Semarang, Semarang, Indonesia

Keywords:

Sustainability, Supply Chain Management, SSCM, Systematic literature review, Developing country, Indone-

sia.

Abstract:

The importance of implementing sustainable supply chain management (SSCM) in recent years has been rec-

ognized by various groups, both practitioners and researchers. Moreover, in developing countries, consumer

awareness of the importance of paying attention to environmental and social inﬂuences also requires compa-

nies to pay attention to their supply chain. Even in Indonesia, there have also been various studies on SSCM

adoption in the form of simulations and their implementation in several industrial sectors. But in a recent study

of the overall SSCM adoption still focused on developing countries, there has been no focus on the conditions

in each country. To overcome this gap, research was conducted to review the various adoptions that have been

carried out in Indonesia. Systematic literature review methods adopted; with selected papers reviewed from

2015 to 2019 that match our inclusion criteria. General themes throughout the literature were identiﬁed in the

mechanism and impact of SSCM adoption. This study aims to present an analysis of academic literature that

addresses the practice of Sustainable Supply Chain Management (SSCM) in Indonesia. The paper concludes

by identifying gaps in the literature that require further research on this topic, especially in the context of

developing countries. In our knowledge, this research is the ﬁrst study to review the application of SSCM in

Indonesia.

1 INTRODUCTION

Supply Chain Management (SCM) has been one of

the most productive research ﬁelds in management

science for a long time (Martins and Pato, 2019).

The academic literature review reveals important ac-

celerations in research and theory of Supply Chain

(SC) and Supply Chain Management (SCM) (Janvier-

James, 2012). One of them is in the sustainability

of the food supply chain which makes companies ex-

pand their focus beyond traditional economic objec-

tives to the triple bottom line approach that consid-

ers the environmental, social and economic domains

omez-Luciano et al., 2018). The triple bottom line

(3BL) is very important for the development of sub-

stitution power and views that the economy, society,

and environment are the three pillars of the power of

substitution (Hou et al., 2019).

Over the years, the SCM literature has been con-

solidated into broadly documented scientiﬁc disci-

plines and began a series of emerging studies. Be-

sides, Supply Chain and Supply Chain Management

have played an important role in the efﬁciency of the

company and have attracted the attention of many aca-

demics and practitioners to conduct research (Eitiveni

et al., 2017). Moreover, the inﬂuence of consumer

awareness that pays attention to environmental and

social impacts in the supply chain of a product

(Eitiveni et al., 2018) (Gong et al., 2019). Various

approaches were also proposed as a medium to im-

prove the application of SSCM outside of its 3 main

dimensions (economic, social, and environmental),

namely 5 dimensions of the approach, namely engi-

neering, economic, social, institutional and environ-

mental (Valinejad and Rahmani, 2018).

In developed countries, SSCM’s research has con-

tributed a lot. In the UK for example, Haiyan Emma

Lu in 2018 researched to analyse evidence relating to

economic, social and environmental practices to re-

veal the current state of the literature and research

gaps. Also, identiﬁcation of conﬁgurations and gov-

ernance mechanisms as key elements that character-

Pramudiawardani, S., Abidin, Z., Hidayanto, A., Budi, N. and Fitriani, W.

Sustainability Supply Chain Management in Indonesia: A Systematic Review.

DOI: 10.5220/0009906401050112

In Proceedings of the International Conferences on Information System and Technology (CONRIST 2019), pages 105-112

ISBN: 978-989-758-453-4

105

ize sustainable supply chain management in global

supply chains and synthesize their relationships with

sustainability outcomes has been studied in Spain

(Koberg and Longoni, 2019).

In developing countries certainly, have different

considerations for implementing SSCM. 11 obstacles

have been identiﬁed in IT empowerment in supply

chain management in India (Jharkharia and Shankar,

2005). In fact, in Bangladesh there has been a study

that identiﬁed 35 barriers to SSCM implementation

and ﬁnally selected 20 barriers; nine of them in-

cluded the causal group and eleven in the effect group

that were examined by the gray DEMATEL method.

Causal barriers can act as important barriers to sus-

tainable development in developing countries (Mok-

tadir et al., 2018). Several perspectives are the basis of

research, namely the environment, social, economic

and governance. Besides, theories conceptually in

SSCM are also tested for their inﬂuence in dominat-

ing their application (Saenz et al., 2015). However,

there is still little literature on the obstacles to apply-

ing SSCM in developing countries. As a pioneer, Fu

Jia et al have reviewed several drivers, barriers and

SSCM mechanisms in developing countries (Jia et al.,

2018).

As one of the developing countries, Indonesia has

also contributed to various studies, such as research

on drug supply chains (Utama et al., 2017), fulﬁlling

wood production needs (Zuo et al., 2009), simulat-

ing understanding in the biofuel production process

to support sustainability (Hidayatno et al., 2019) etc.

However, from all the research that has been done,

there are still no reviews from all sectors that have

implemented SSCM. Therefore, in this study, an anal-

ysis of academic literature was conducted which dis-

cussed the practice of Sustainable Supply Chain Man-

agement (SSCM) in Indonesia. The method used is

adopting a systematic literature review; selected pa-

pers from 2015 to 2019 that comply with our inclu-

sion criteria. A common theme in all literature is iden-

tiﬁed in the mechanism and impact of SSCM adop-

tion.

This research is organized into 5 sections, includ-

ing the introduction, literature review of SSCM, re-

search methodology, results and conclusions and sug-

gestions. An explanation of the SSCM and the sys-

tematic literature review methodology will be de-

scribed in the next section.

2 SUSTAINABILITY SUPPLY

CHAIN MANAGEMENT (SSCM)

Development of sustainable supply chain manage-

ment has been the concern of various parties, re-

searchers and practitioners, as well as developments

in the deﬁnition of supply chain sustainability man-

agement. The main foundation of the sustainability

of the supply chain is indeed inseparable from un-

derstanding the deﬁnition of the supply chain itself.

Supply chain is a collection of three or more entities

(organizations or individuals) directly involved in the

ﬂow of upstream products, services, ﬁnance and/or

information from source to customer (Martins and

Pato, 2019). Besides, Supply chains also deﬁned as

a structured manufacturing process in which raw ma-

terials are transformed into ﬁnished goods, then sent

to end consumers. The academic literature review re-

veals important accelerations in research and theory

of Supply Chain (SC) and Supply Chain Management

(SCM) (Janvier-James, 2012)

In the process the supply chain can have destruc-

tive effects on the planet’s natural systems such as

exhausting rare earth resources, producing massive

air, water, and soil waste and threatening biodiver-

sity. Also, there are growing concerns about compa-

nies that carry out irresponsible social practices such

as providing unsafe working conditions, employing

child workers and using hazardous materials (Eitiveni

et al., 2018). From here, sustainability is a concern.

Deﬁnition of SSCM deﬁned by some author, such

as the management of material, information and cap-

ital ﬂows as well as cooperation among companies

along the supply chain while taking goals from all

three dimensions of sustainable development, i.e.,

economic, environmental and social, into account

which are derived from customer and stakeholder re-

quirements (Seuring and Mu, 2008). Different author

also criticize the deﬁnition of SSCM as a set of prac-

tical Management related to the three main points,

namely environmental impact as a consideration of all

stages of all chain value values of each product and

a multidisciplinary perspective that leads to the life

cycle of a product (Gupta and Palsule-Desai, 2011).

So, sustainability issues must be incorporated into the

core functions of SC, namely purchasing, manufactur-

ing, distribution, storage, warehousing, use, recycling

and disposal, as illustrated in Figure 1.

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106

space

Figure 1: The main function of SSCM

3 METHODOLOGY

This research was developed according to the direc-

tives proposed by Kichenham and Charter (Curcio

et al., 2019) to display systematic literature review

performance. To compile a speciﬁc research stage,

it is proposed: planning, compiling and reporting the

results of the review. In the planning, phase aims to

identify research review needs, including objectives

and research questions as well as search strategies, in-

cluding word search and inclusion or exclusion crite-

ria. The explanation is shown in the following section.

3.1 Objectives and Research Questions

his study aims to present an analysis of the academic

literature that addresses the practice of Sustainable

Supply Chain Management (SSCM) in Indonesia

and provides information of mechanism and impact

of adopting SSCM. This section aims to map infor-

mation to be able to answer this research question,

namely

RQ1: What mechanisms have been used in adopting

SSCM in Indonesia?

RQ2: What impact has been felt by implementing

SSCM in Indonesia?

3.2 Searching Strategy

To synthesize research, various research database

sources were chosen. Including Science Direct, Sco-

pus, IEEExplore and Emerald Insight. The four

databases were chosen because of their qualiﬁcations

in publishing the best quality journals and proceeding

papers. The tools used to facilitate the identiﬁcation

of reference management are Mendeley Desktop. To

deﬁne which literature is the criterion and which is not

included, inclusion and exclusion criteria are deﬁned.

Inclusion Criteria:

• Research is carried out between 2015 and June

2019;

• Research related to the search for deﬁned topics;

• The research paper is written in English;

• Research carried out related to SSCM Indonesia;

Exclusion Criteria:

• Working paper, technical report and book chap-

ter are not considered for review to maintain the

quality of the Research.

• Research that is not related to the application of

SSCM in Indonesia

• The language used outside of English

• Research is not related to the purpose of this study

Some keywords are used to ﬁnd relevant research.

Keywords are arranged into Boolean sentences with

composition :(( Sustainable OR sustainability) AND

(Supply chain OR supply chain management*) AND

(Indonesia AND Developing Country). Initially, this

search obtained 393 papers related to string searches

from various databases. Furthermore, the selection

process uses inclusion and exclusion criteria, and ﬁ-

nally, there are 12 references (journal paper and pro-

ceeding paper). The search phases of the paper are

illustrated in Figure 2.

Figure 2: Stages of paper selection

4 RESULTS AND DISCUSSION

4.1 Selected Paper Review

The following are several papers selected for review.

Sustainability Supply Chain Management in Indonesia: A Systematic Review

107

space

Figure 3: Selected Paper Review.

Source of Figure 3 : (Hidayatno et al., 2019),

(Wibowo et al., 2017), (Sitepu et al., 2016), (His-

jam et al., 2015), (Amrina and Vilsi, 2014), (Purnomo

et al., 2015), (Wu et al., 2017), (deliyana Firmialy and

Nainggolan, 2019), (Kusrini and Primadasa, 2018),

(Saputri et al., 2019), (Waaly et al., 2018), (Suzianti

et al., 2018).

Remark:

P: Proceeding paper;

J: Journal;

M: Mechanism;

I: Impact;

From Figure 3, it can be seen that Agroindustry

is an industrial sector that has become the object of

research in Indonesia. This dominance shows the de-

velopment of the application of SSCM which is more

directed towards support in this sector. This is under-

standable considering that Indonesia as a country with

its vast natural resource potential, so the opportunity

to process it, either by making it as an export prod-

uct or as an effort to prosper the community through

employment opportunities from this sector. Besides

that, the mining industry is also a concern to be able

to implement sustainability in their system. Such as,

manufacturing and even furniture has also developed

its application. In the future, there will certainly be

more sectors that apply it. The more detailed expla-

nation is discussed in the next chapter.

4.2 SSCM Mechanism in Indonesia

The SSCM mechanism in Indonesia is understood as

an effort or a way to implement supply chain man-

agement so that it meets the element of sustainability

with a regulation. The background of Indonesia as a

developing country with great natural resource poten-

tial, the SSCM mechanism also provides its peculiar-

ities. Where, sustainability is fulﬁlled in 3 main di-

mensions, namely Economy, social and environment.

The description of the SSCM mechanism in Indonesia

can be seen in Figure 4.

Figure 4: Description of SSCM Mechanism in Indonesia.

Source of Figure 4 : (Purnomo et al., 2015), (His-

jam et al., 2015), (Saputri et al., 2019), (Hidayatno

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108

et al., 2019), (Sitepu et al., 2016), (Hisjam et al.,

2015), (Amrina and Vilsi, 2014), (deliyana Firmialy

and Nainggolan, 2019), (Kusrini and Primadasa,

2018), (Waaly et al., 2018), (Suzianti et al., 2018)

From the Figure 4 above it is known that various

approaches to the SSCM implementation mechanism

in Indonesia have been carried out. With many indus-

trial sectors that have implemented SSCM, of course,

the mechanisms taken are also diverse. Stakehold-

ers in the supply chain management process need to

be involved and commit to adopt sustainability. In

this case, stakeholders include policymakers, namely

the government (local and central government). Also,

stakeholders within the company itself, include sup-

pliers, manufacturers, and buyers. Collaboration is

both part of the mechanism carried out so that sus-

tainability can be applied (Purnomo et al., 2015).

Technology development has also been carried out

to be able to simulate the application of SSCM in In-

donesia. A simulation is an option that needs to be

considered given that understanding the overall con-

cept of sustainability for each party is very important.

The game simulation describes sustainability. Some

of them are, the implementation of serious simulation

Games on biofuel production (Hidayatno et al., 2019)

and simulation of Goal Programming on wood pro-

duction for furniture (Hisjam et al., 2015).

Sustainability arrangements can also be made by

controlling Key Performance Indicators (KPI) (Kus-

rini and Primadasa, 2018). The KPI used is an ex-

pert test result and produces 9 indicators for eco-

nomic sustainability, 9 indicators for social sustain-

ability and 11 indicators for environmental sustain-

ability. In this case, the KPI submission is carried

out in the palm oil industry. Besides, the Sustainabil-

ity Reporting Index Framework (SRIF) (deliyana Fir-

mialy and Nainggolan, 2019) also identiﬁed its con-

cern for social sustainability, namely for employees

and customers. Environmental sustainability, namely

3 indicators to measure emissions results in the sup-

ply chain and 15 indicators for waste control. On eco-

nomic sustainability, the role of shareholders and mar-

ket prices is reciprocal which needs attention.

In Addition, internal evaluation of the KPI that has

been carried out continues to be carried out and the

model is developed as well as incorporating ISO cer-

tiﬁcation into one indicator (Amrina and Vilsi, 2014).

In one case study on the Halmahera islands, Fair-

Trade has also been implemented.

4.3 Impact of SSCM Implementation in

Indonesia

Several papers have revealed the impact of SSCM im-

plementation through a survey of industry representa-

tives in Indonesia. The ﬁndings obtained from the re-

sults of the SSCM implementation were divided into

Economy, Social, Environmental, Operational, Public

Imagery, and organizational learning.

Figure 5: Description of Impact of SSCM Implementation

In Indonesia.

Sustainability Supply Chain Management in Indonesia: A Systematic Review

109

space

Source of Figure 5 : (Hidayatno et al., 2019), (His-

jam et al., 2015), (Purnomo et al., 2015), (Purnomo

et al., 2015), (Wibowo et al., 2017), (Kemper and

Partzsch, 2018), (Fallahpour et al., 2017), (Amrina

and Vilsi, 2014), (Wibowo et al., 2017), (Purnomo

et al., 2015), (Hidayatno et al., 2019).

In the perspective of sustainability, environmen-

tal, social and economic impacts are the main parts of

concern. Sometimes, proﬁts are often the main goal.

By applying sustainability, resources or basic materi-

als that are effective in providing better beneﬁts and

will certainly maintain the company’s ﬁnancial sta-

bility (Hidayatno et al., 2019), (Hisjam et al., 2015).

Besides, the performance of workers is also required

to always give the best. This requires companies to al-

ways appreciate them, both in the form of allowances

and the comfort of workplaces, so that the comfort

they feel can contribute to maintaining the running of

the company’s business. Besides, relationships with

buyers can also be optimized with potential workers

who get the attention of the company well.

The company’s attention to production residues,

such as emission levels, waste management, and wa-

ter content are part of the sustainability indicators that

have helped preserve the environment as well. And

simultaneously, the operational part of the produc-

tion is part of it to always be disciplined in carrying

out various sustainability indicators. In addition, con-

cern of environment by reducing pollution and pro-

duction waste, and increasing the utilization of natural

resources.

The company’s attention to consumer awareness

is its incentive to always consider their industrial sup-

ply chain. This is commensurate with the various per-

ceived effects, both the company’s reputation on their

position in the industrial world and consumer con-

ﬁdence (Purnomo et al., 2015). So that there is no

doubt the quality of their products which is not only

good for consumption but caring about the surround-

ing factors.

Overall, this is part of the learning process within

the company’s organization, to be sustainable. The

company is required to take care of the surrounding

without reducing its main purpose in seeking proﬁt

(Hidayatno et al., 2019).

4.4 Implications

From a variety of reviews, the research that has

been carried out in implementing SSCM in Indone-

sia provides great implications for practices and aca-

demics. For practices, this research has revealed var-

ious mechanism reviews from various industrial sec-

tors. Of course, other industries that have not imple-

mented SSCM are separate references to consider the

mechanism that can be used to adopt SSCM. Given

the impacts that have been felt in the industry, those

have been felt, as in Table 3. In addition, it also indi-

rectly illustrates the characteristics of Indonesia with

various natural resources and the potential to continue

to be developed in applying SSCM. Besides, this re-

search gives opportunity to evaluate business strategy

to optimize sustainability in their organization.

For academics, further research can continue to be

developed to explore the relationship between mecha-

nisms and impacts in implementing SSCM in Indone-

sia and analysing existing constraints. Besides, Aca-

demics can also continue to develop various success

factors in implementing SSCM, considering the cur-

rent subjective research in certain sectors.

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110

5 CONCLUSIONS

This research refers to the main dimensions of sus-

tainability, namely economic, social and environmen-

tal, speciﬁcally the development of sustainable sup-

ply chain management in Indonesia. A systematic lit-

erature review has been carried out that reviews the

application of SSCM in various sectors in Indone-

sia. This is also the focus of this research contribution

with the mechanism and the impact which is the main

discussion. The mechanism for implementing SCM

in Indonesia can be seen in table 2 and the impacts

that after applying the SSCM are identiﬁed as in table

3. From the description both of them, indirectly il-

lustrates the characteristics of Indonesia with various

natural resources and the potential to continue to be

developed in applying SSCM.

In further research, research can be carried out

with other sustainability approaches (Valinejad and

Rahmani, 2018), which is one of them by adding sev-

eral dimensions (other than economic, environmen-

tal and social), namely engineering and government.

For industries that have not implemented SSCM or

are in the process of preparing for the implementa-

tion of SSCM, this research provides direction on al-

ternative mechanisms that can be used through stake-

holder collaboration, technology development, con-

trolling or certiﬁcation.

ACKNOWLEDGEMENTS

This study was supported by PIT9 Research Grant

No. NKB-0005/UN2.R3.1/HKP.05.00/2019 Univer-

sitas Indonesia

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