Integrating fuzzy logic-house of risk for risk mitigation analysis of bondowoso arabica coffee supply chain (a case study in Indonesia)

Abstract

Indonesia is one of the world’s largest coffee producers. One of Indonesia’s leading Arabica coffee-producing areas is Bondowoso Regency, East Java. UD Barokah is one of the leading coffee processors in Bondowoso Regency, with a production capacity of 30 – 40 tons of green Arabica beans per year. Currently, UD Barokah faces several obstacles in supply chain management that impact the quality of the final processed green Arabica coffee bean product. These obstacles have the potential to cause a risk of loss. Risks that arise in the supply chain can be minimized by implementing a risk management process to enhance competitiveness. This research was conducted during the coffee harvest season from May to August 2024, involving 67 respondents consisting of farmers, suppliers, academics, representatives from the agroindustry, and local government officials. This study used an integration between the House of Risk (HOR) method and fuzzy logic (FHOR). HOR is used as the main framework for risk mapping and designing mitigation strategies. Meanwhile, the fuzzy approach is applied to accommodate uncertainty and subjectivity in assessing the level of risk importance. The results of the study using FHOR integration for all actors in the supply chain can identify risks in all supply chain actors in detail, from 65 identified risk agents, 31 of which are prioritized, and a risk mitigation strategy design is obtained that can be implemented. Risk agents can be mitigated with the most effective and least difficult mitigation strategy approach.