Frankincense is one of the many valuable trade commodities that Indonesia
possesses, with much of its source, Boswelia trees, located at North Tapanuli,
Sumatra Island. In response to the rising demand of frankincense in Java Island,
distribution centers start emerging around Java. One of them is located in
Purwokerto, Central Java. Lately, the company is facing a customer
dissatisfaction problem, which is apparent by the decreasing number of
customers in the sales book. The owner suspects that this was due to late
deliveries from supplier and competitor’s prices, but he had no way of knowing
because of the lack of supply chain performance system in place. Moreover,
because he does not know exactly what is wrong, he also does not know how
and what to improve. Therefore, a supply chain performance measurement
framework needs to be given to the owner to enable monitoring along with
recommendations on how to improve them.
The supply chain performance measurement framework consists of several key
performance indicators that are generated based on literature with respect to
SCOR’s process pillars; plan, source, make, and deliver. After that, AHP is
utilized to prioritize the generated KPIs to be proposed to the owner for final
selection process involving his capability and commitment. Afterwards, value
stream mapping is conducted to formulate improvement recommendations to
eliminate problems and improve KPIs.
In the end, four key performance indicators were chosen by the owner to be
implemented as a part of supply chain performance measurement framework
within the company. Recommendations to improve them revolve around the
application of lean principles such as continuous flow, supermarket pull system,
Kanban, and inventory minimization. Information exchange between supplier and
distribution center also needs to be refined by adding forecast and supplier
evaluation feedback.