Risk management of shallot supply chain using failure mode effect analysis and analytic network process (case study in Batu, East Java)

Abstract

Shallot is one of the perishable horticultural commodities. Therefore, proper supply chain management is needed. This study aimed to identify risks from each supply chain actor, as well as to carry out risk measurement, and formulate priority risk mitigation strategies from the shallot supply chain. The methods used in this study were failure mode effect analysis (FMEA) and (analytic network process) ANP. The FMEA method was used to measure the priority risks that have been identified. While, ANP was used for weighting strategies in determining supply chain risk mitigation strategies. Research results showed that there are several risks identified by supply chain actors. Priority risks for the supply chain of farmers (suppliers) were risks related to government policies, namely import-related policies. Distributor supply chain priority risk was the risk associated with competition with imported shallots, and the risk of retailer supply chain priority was the risk of competitors with other retailers. There were six alternative mitigation strategies, the highest priority was choosing the right variety followed by maintaining quality, increasing promotion, forging partnerships, maintaining supply and maintaining price stability.