Designing supply chain network of photovoltaic in Indonesia

Abstract

Depleting fossil fuel resources, increasing the need for energy and the carbon emission lead many countries to substitute non-renewable energy resources to renewable energy resources, including Indonesia. Considering the geographical characteristic of Indonesia, solar energy can be a promising alternative energy resource; thus, the demand for photovoltaic (PV) might increase. To facilitate this need, a strong supply chain of photovoltaic in Indonesia is necessary. An appropriate design of the supply chain can be formulated once the analysis of supply chain capability is done. The supply chain capability can be analyzed through supply chain capability mapping to give a clear visualization of supply chain capability. This research aims both to map the supply chain capability of photovoltaic in Indonesia and to design the associated supply chain network. Further discussion about the supply chain network of photovoltaic is done based on the customer's point of view. A linear programming model is built to optimize transportation costs from customers to service centers. This model is made by considering the supply chain capability of photovoltaic in Indonesia and the plan of the Ministry of Energy and Mineral Resources (ESDM) for building solar power plants. Results indicate that once five service centers built in the five different biggest islands of Indonesia, the transportation cost would decrease as much as 75%.