A system dynamics approach to balancing wood supply and demand for sustaining the future industry

Abstract

The Indonesian furniture industry demonstrates a long chain from production to consumption, from tree growers to producers, and retailers to exporters. The furniture industry provides employment and livelihoods for millions of people. However, an insecure supply of raw materials has produced only poverty and an unsustainable furniture industry. The methods used in this research employed conceptualization, specification, evaluation and use of a model. The model describes the wood supply and demand of the furniture industry, state owned and community teak forests, furniture workshops, and domestic and international markets. It simulates tree dynamics, furniture processing, markets and market impacts on sustainability of the industry. We developed "business as usual", free trade and certification scenarios to understand their impacts on wood and the balance between supply and demand, as well as sustainability of the furniture industry. We recommend scrutinizing plausible impacts prior to the introduction of certification and free trade.