Analysis of Supply Chain Integration, Innovation Capability, and Competitiveness of Coffee Processing Industry

Abstract

Coffee is one of the leading products in the plantation sector in South Sulawesi Province, apart from cocoa and passion fruit. A number of previous studies have found that the sustainability of the coffee processing industry is largely determined by the supply chain system, innovation capabilities and business competitiveness. This study aims to identify and analyse a number of indicators that form the variables of supply chain integration, innovation capability and business competitiveness. Apart from that, to explain and analyse the indicators that provide the greatest contribution in forming these three variables. This study took data through a survey of 106 respondents who were owners/managers of the coffee processing industry. Data were analysed using both descriptive statistical analysis and conformational factor analysis. The results of this study show that an effective supply chain system will be achieved through integration with suppliers. Product innovation is an important element in forming a company's innovation capability. Then this study also confirms the importance of product quality as an important element in shaping the competitiveness of the coffee processing industry in South Sulawesi.