Risk Management on Sustainable Corn Supply Chains: Evidence from Central Java, Indonesia

Department of Agribusiness, Faculty of Economics and Business, Universitas Muhammadiyah Semarang, Indonesia

^* Corresponding author: nurmuttaqien@unimus.ac.id

Abstract

This study aims to assess the risks involved in sustainable corn supply chains in Central Java, Indonesia, and minimize them. To identify risk events and agents in the sustainability aspect, the House of Risk (HOR) approach was used, starting with mapping the activities of hybrid corn supply chain actors. Possible risks in the mixed corn supply chain were identified from related studies and validated by industry and academic experts. Twenty-two risk events and fifteen risk agents were identified from the findings. In the social dimension, there were five risk events and three risk agents; in the economic dimension, there were seven risk agents and fourteen risk events; and in the environmental dimension, there were three risk events and five risk agents. In HOR phase I, labor negligence (A5) has the lowest Aggregate Risk Priority (ARP) value, while high production cost (A14) is the risk agent with the highest ARP value. Fifteen mitigation solutions were also proposed in HOR phase II. Nine mitigation technique steps were selected from the recommended solutions based on effectiveness to difficulty (ETD) scores to prevent risks. The highest priority risk mitigation technique is to find another raw material supplier (PA6).