Strategic Design to Increase Indonesian Furniture Industry Export Competitiveness

Industrial Engineering Department, Engineering Faculty, Diponegoro University, Semarang, Indonesia 50275

^* Corresponding author: chaterinealvina@lecturer.undip.ac.id

Abstract

Furniture, a high-value-added product, is considered one of the strategic commodities for the economy in Indonesia because it is globally competitive. The furniture industry in Indonesia has grown by relying on local raw materials and human resources to keep its existence in the market. Despite Indonesia being known as a significant producer of raw materials for furniture due to its forestry area, the furniture export value is far behind compared to export value abroad. The offered price and appearance from abroad are more attractive than Indonesia's products. Therefore, there is a need to evaluate what factors influence the success of an industry. In general, the industry's success is mainly influenced by the interaction quality among all actors in the industry, either internal or external parties. Thus, the furniture industry needs to manage not only within the industry but also its supply chain effectively and efficiently. This study would like to evaluate the criteria and sub-criteria influencing the furniture industry's export competitiveness based on its supply chain, including circular economy implementation, and propose strategic recommendations. This study applies three methods: cut-off point, Analytical Network Process (ANP), and semi-standardized interview. The finding of this study indicates that the sub-criteria with the most decisive influence on Indonesia's furniture export competitiveness are operation cost, collaboration, and quality, respectively. Furthermore, a collaborative strategy between stakeholders in the furniture industry is proposed to increase the efficiency of operational processes, save operating costs, and increase product quality.