Mitigation of clove supply chain risk using house of risk method

Abstract

Presented in this paper is the utilization of house of risk in formulating a risk mitigation strategy for the supply chain of cloves in Simeulue District, Aceh Province, Indonesia. This application is expected to minimize the risk of the clove supply chain, as well as create an effective and efficient clove supply chain condition that can benefit producers (farmers). Cloves are strategic commodities and agricultural products that are mostly managed by the Indonesian people. Simeulue Regency is one of the clove producers in Aceh Province, where most of the people work as clove farmers. Fluctuation of clove prices every year makes the welfare of clove farmers decrease. This is due to supply chain risks that have never been mapped by local farmers. To solve this problem, house of risk method will be used to map the risk of the clove commodity supply chain from upstream to downstream as a whole. The risks that have the highest value will be formulated for mitigation actions. The results of the house of risk mapping, there are 6 highest risk agents whose mitigation actions will be formulated, namely: Improper transportation technique (A7) with an ARP value of 330, lack of experience in sourcing raw materials (A3) with an ARP value of 288, non-compliance with clove shipping documents (A13) with an ARP value of 276, ineffective communication (A9) with an ARP value 258, non-compliance with agreements with clove suppliers (A11) with an ARP value of 189, and failure to negotiate prices with producers (A15) with an ARP value of 126. Mitigation measures that have been formulated are conducting training (A7), evaluating the performance of raw material suppliers (A3), take work measurements (A13), evaluating effective communication systems (A9), evaluating supplier performance (A11), and evaluating cooperation with the producers (A15).