SCM 300_ASU_ASSIGNMENT 2024_ROBUSTA COFFEE AGRO-INDUSTRY VALUE CHAIN SYSTEM DESIGN BASED ON GREEN TOTAL FACTOR PRODUCTIVITY

ROBUSTA COFFEE AGRO-INDUSTRY VALUE CHAIN SYSTEM DESIGN

BASED ON GREEN TOTAL FACTOR PRODUCTIVITY

Introduction:

Industry processing coffee is a sector important at The availability of coffee in the

future is a major factor in the prosperity of the wider community, activities between

stakeholders in the agro-industry value chain globally are highly dependent on available

resources, production quality and sustainable productivity are a concern at the International

Coffee Organization (ICO 2019) conference. The international coffee organization is

committed to providing information on safety issues in the food industry, especially regarding

the maximum residue limit (MRL) of pesticides that apply to coffee plants, in accordance with

article 34 of the 2017 international coffee agreement which is a routine activity program for

the development of coffee commodities throughout the world in 2017/2018. International

coffee organizations are required to conduct studies, as well as t o report on relevant aspects

of the coffee sector to reduce the impact of climate change in the role and reduce the impact

on the environment. The international community is progressively building a green ecosystem

to maintain an effective climate to create increased opportunities in the coffee sector promote

low-carbon and climate-resilient development pathways.

The development of coffee trade flows, as identified in the 2007 International Coffee

Agreement and its five-year action plan is mandated to carry out analytical functions on

research in the form of studies related to the coffee sector (ICO-ED 2267/18), as part of the

implementation of resolution 465 of the International Chamber of Commerce (ICC), an online

survey was launched to gather information on various economic, social, and environmental

issues. The survey was intended for the development of a global communication plan

involving consumers, stakeholders and the entire international community on the

sustainability issues of coffee production, including a market study specifically on seven

emerging coffee markets in South and East Asia, the markets analyzed being India, Indonesia,

the Philippines, and Vietnam representing 95% of coffee producing countries with China, the

Republic of Korea and Taiwan as coffee importers (ICO-ED-2291/18).

Coffee consumption in the market grew at an average annual rate of 6% in the last 25

years, while worldwide coffee consumption grew at an average annual rate of 2%, during the

same period there was a slowdown to 1% after the 2007-2008 global financial crisis, while

consumer preferences in emerging markets in South and East Asia showed a very significant

growth rate. The determination of coffee price levels approved by the International Coffee

Council at its 122nd Session held in London in September 2018 in collaboration with the

Department of Agriculture and Resource Economics at the University of California shows

that the cost of production and the drivers of farm profitability are important indicators,

another new empirical evidence is the need to formulate a sustainable strategy design for

coffee farmers to increase income in the agricultural sector while increasing the economic

sustainability of coffee production.

Figure 1 National coffee consumption and growth 2016-2021 Preparation of the

National Industrial Development Master Plan (RIPIN) 2015-2021 2035 has placed the coffee

industry as one of the pillars of the economy, and given a considerable role to the government

in encouraging the progress of the national industry in a planned manner. This role is needed

in directing the national economy to grow faster in catching up with other countries, to

strengthen and clarify the role of the government in national industrial development, it is

necessary to prepare a systematic, comprehensive and futuristic national industrial

development plan in the form of RIPIN. In accordance with the mandate of the provisions of

Article 9 of Law Number 3 of 2014, and Law Number 22 of 2019 concerning Industry

emphasizes the seriousness of the government in realizing the objectives of industrial

implementation, namely: (1) Realizing the national industry as a pillar and driver of the

national economy, (2) Realizing the depth and strength of the industrial structure, (3)

Realizing an independent, competitive and advanced industry and oriented towards becoming a

green industry, (4) Realizing business certainty, management, fair competition, and

preventing concentration or control of industry by one group or individual to the detriment of

the community, opening business opportunities and expanding employment opportunities, (5)

Realizing equitable distribution of industrial development throughout Indonesia in order to

strengthen and strengthen national resilience, and increase prosperity and welfare of the

community in an equitable manner. Some aspects and characteristics that are relevant to

current national industrial development include:

1. The dynamics of the industrial sector, namely those related to the

increase in the amount of production, changes in composition, and improvement in

population welfare, including the globalization of production processes that have an

impact on the involvement of national industries in global supply chains, where the

creation of added value through the production process is spread across many countries,

and trade in industrial components is predicted to increasingly dominate the structure of

trade between countries. The involvement of national industries in the supply chain

Globalization also has the potential for vulnerability to world economic turmoil,

therefore the policy of independence and resilience of the national industry is very important

in the future, also related to increased concern for the environment in ensuring the

sustainability of the industrial sector, the development of green industry needs to be

prioritized through regulation of environmentally friendly products, use of renewable energy,

and detection of hazardous materials, coupled with a change in the manufacturing paradigm

which also resulted in a change in the manufacturing system from mass production to mass

customization production, where the first attention is given to design to produce product

quality according to customer needs, followed by market considerations to set prices, and

investment aspects to set production costs. Thus to be able to meet market acceptability,

production and collaboration processes outsourcing is an alternative that must be developed,

there have been many industries in developed countries that carry out the entire production

process in developing countries or known as industrial relocation, meaning that outsourcing is

not only on the entire process but also includes the use of human resources (people

outsourcing). The availability of a competent workforce with the existence of a free market

with the formation of the ASEAN Economic Community (AEC) which has been in effect

since 2015, the development of a competent industrial workforce is an urgent need that must

be carried out through vocational education, education and training, apprenticeship, and

supported by the implementation of the Indonesian National Work Competency Standards

(SKKNI).

International cooperation agreements, the existence of international cooperation

agreements have the following impacts: the increase of Foreign Direct Investment (FDI) due

to the attractiveness of Indonesia's market potential or due to the attractiveness of Indonesia's

potential natural resources or raw materials, will also increase global trade transactions by

Trans National Corporation (TNC) which makes industries in Indonesia as part of Global

Value Chains (GVCs) this will also reduce protection instruments, This will also reduce the

protection instruments, both tariff and non-tariff, for the development, resilience and

competitiveness of domestic industries, the increasingly swift flow of imports of goods and

services that have the potential to threaten the conditions of the balance of trade and balance

of payments and the tight competition between foreign workers and domestic workers as a

result of the freer movement of skilled workers.

Regional autonomy policy, the implementation of regional autonomy or

decentralization as stipulated in Law Number 23 of 2014 concerning Regional Government is

directed to accelerate the realization of community welfare through improved services,

empowerment and community participation, and increased regional competitiveness, in

relation to the industrial sector, the division of government affairs provides many

opportunities that can be utilized by provinces, districts and cities to accelerate the growth and

development of industry in the region and minimize the uneven distribution of industry in the

territory of Indonesia.

Coffee is one of the strategic commodities, in addition to meeting domestic needs it

is also a foreign exchange earner, in general commodities Coffee is cultivated by People's

Plantations (PR), Large State Plantations (PTPN) and Large Private Plantations (PBS), the

coffee area in East Java in 2018 was 96,933 ha with a production of 50,687 tons per year and

an average productivity of 861 kg/ha/year, the people's coffee area was 59.448 ha (58.99%) of

the total coffee area in East Java, the rest is owned by Large State Plantations of 21,327 ha

(21.15%) and Large Private Plantations of 20,032 ha (19.86%), (East Java Plantation Service

2019).

Supply chain management (SCM) is an integrated method and approach to manage

the integrated flow of products, information, money by involving all parties from upstream to

downstream, consisting of suppliers, manufacturers, distribution networks and logistics

services (Pujawan and Mahendrawathi 2010). A key component of competitiveness and

effectiveness for organizations aims to improve the efficiency of supply chain operations by

minimizing the risk of supply disruptions and focusing on cost reduction (Zeng FG 2011), and

that supply chain activities are networked material flows from suppliers to manufacturers and

finally to consumers (Stadtler 2015). The network flow of information, goods, services and

profits runs smoothly between the parties involved, the success and improvement of company

performance can be measured based on supply chain activities, in the last decade the issue has

grown that supply chain activities have a major influence on performance and engineering

mechanisms in the global distribution flow. Activities or activities in the world of agro-

industry a r e indispensable in sustainable development, so that new ideas and terms appear

Green Supply Chain Management (G-SCM), reversed supply chain, closed loop supply chain

management, which in essence is an effort to integrate thinking on environmental aspects,

including product design, raw material sourcing and selection, manufacturing processes, final

product delivery to the hands of consumers, as well as product life management after its

useful life (Srivastava 2007).

The application of the concept of Green Supply Chain Management in addition to

reducing environmental pollution can also improve the efficiency of companies in the supply

chain, with the G-SCM method, companies can reduce the use of resources in the production

process, especially in the procurement of raw materials, because this approach will encourage

companies to constantly innovate technology for better use of materials, energy and labor

(Kitzman and Asmus 2006). The emergence of the issue of sustainable supply chain

management (SCM) aims to be a concern for the government in issuing regulations for

companies to produce environmentally friendly products. The Republic of Korea has required

every company to use the Green Supply Chain Management Practice model (Lee 2011),

followed by the European Union by intervening in a number of relevant regulations (Iakovou

et al. 2014). According to the World Commission on Environment and Development (WCED

1987), sustainability is defined as the utilization of resources to meet current needs without

compromising the ability of future generations to meet their own needs. The concept of

Sustainable Supply Chain has become very popular for agro-industrial development and is of

great concern in supply chain management and has been the subject of many studies (Pagell

and Shevchenko 2014). Researchers and practitioners are currently paying special attention to

environmental issues to achieve the needs of a sustainable business environment by increasing

and accumulating knowledge aimed at adding new methods to be applied in agro-industry.

The concept of sustainability in supply chain management has been identified not only on the

constraints factors, but also developing methods to improve performance in creating

environmentally friendly products, product image, processes, systems and technology and

business (Lawson et al. 2006).

This condition encourages every company to be serious in considering the

environmental impact of doing business (Ahi and Searcy 2013). The implementation of

sustainable supply chains is one of the effective methods that can encourage organizations to

focus on improving environmental issues by providing economic and social benefits. Steps to

develop supply chain sustainability lead to a balance of the three aspects of economic, social

and environmental or the triple bottom line of profit, people and planet (Porter and Kramer

2006).

To analyze and identify the impact of the implementation of sustainable development

based on economic, social and environmental aspects, one of the mechanisms that must be

done is the fair trade approach or fair trade (Fahnia 2012). Alternative trade and a guaranteed

purchase price, is a response in order to provide a sustainable life and provide opportunities

for farmers in developing countries in the world, one of the things that must be fulfilled so

that farmers in developing countries can participate in this movement is to have Fair Trade

(FT) certification. In order to obtain FT certification, a local organization must be formed,

and this organization then registers the farmers for Fair Trade certification.

After obtaining the certification, the producer organization must do several things such

as strengthening the organization, documenting activities and production, making reports and

receiving visits from Fair Trade Labelling Organization (FLO) inspectors, who will come to

the location periodically both in terms of guidance and in terms of audits (Suhartana and

Sumino 2009). FLO itself is a non-profit organization responsible for direction and execution,

setting standards and supporting producers and traders in trading activities within FT, it can

also be interpreted as a process of labelling or standardization on a product, i.e. the product is

specifically certified by the Fairtrade International organization (FLO) and products sold by

members of FLO are recognized by the FT community (Stenzel 2012). The Fair Trade label

is given to food products imported and produced in developing countries, in accordance with

the social and environmental agreements contained in the conventions of the International

Labor Organization (ILO) and the recommendations of agenda 21 by the United Nations

(UN) (Loureiro & Lotade 2005). FLO specifically defines two criteria for producers who

want to join the FT, the first is small producers, and the second is farmers or workers who are

active in plantations or industries (Gendron et al. 2009). According to FLO, the minimum

standard for this group of small producers is that they must be willing to practice

environmental protection in nature and make environmental protection part of farm

management. FT highly values and encourages environmentally sustainable agricultural and

production practices and producers are also encouraged to strive to apply organic principles,

Fair Trade International Organization (FLO 2010).

One form of environmental protection that must be carried out by producers is

related to environmental management, integrated pest management, preservation of soil and

water resources, waste management, prohibition of using genetically modified organisms,

maintaining biodiversity and greenhouse gas (GHG) energy, with the aim of strengthening the

sustainability of local production systems by reducing dependence on external inputs for

adaptation to climate change (FLO 2011). The principle of environmental protection applied

in FT actually refers to the principle of diversity in the environment, in addition to better

product prices, farmers also benefit from improved environmental quality including increased

soil fertility, increased biodiversity, crop resistance to weather changes, reduced costs of

purchasing chemical inputs, additional income from side crops, utilization of local labor to

create jobs, strong farmer organizations for production and marketing and improved health of

local farmers (Suhartana 2008). One of the FT-certified organic agricultural products that is in

demand by many consumers around the world is coffee, with approximately 240 coffee

producers worldwide participating in this certification (Loureiro and Lotade 2015).

The development of coffee certification has clearly indicated an initiative to improve

environmentally friendly farming patterns and social responsibility in coffee production and

trade systems (Valkila and Nygren 2009). Coffee is one of the organic agricultural products in

Indonesia In 2021, Indonesia's coffee production reached 795 thousand tons per year and

more than 80% came from smallholder plantations, this number is expected to increase in the

following period given the export market share and high consumption needs for coffee, this

high consumption activity will have a high ecological impact as a result of human lifestyles

which ultimately rely on the ability of natural resources to provide adequate fulfillment of raw

materials (Arief et al. 2011).

This agro-industry value chain system design is an approach used to increase added

value in the upstream-downstream of robusta coffee commodities, the agro-industry value

chain system based on the total factor of green productivity is designed as an effort to increase

added value, by improving the flow of the value chain at each stage, this value chain approach

is expected to provide an understanding of improvement and provide insight into how to

design a business strategy that serves to create value, and is expected to provide implications

for the future. The design of this system involves various actors involved in production,

processing, distribution, and marketing in the upstream-downstream management of robusta

coffee in Kalibaru. The need and role of agro-industry in rural areas is very important to

increase added value, there are several factors that can affect the success of increasing total

green productivity factors, namely being able to make changes in economic, social and

environmental conditions, therefore the future of the supply chain in the value chain sub-

matter must be developed until the formation and or establishment of better collaboration,

connectivity, skills and ability to build sustainable partnerships. This value chain system

design is also part of the evaluation process of efficiency and effectiveness in each activity

that may require improvement, value chain flow mapping can also detect gaps or obstacles in

each flow that have too many stages and or unnecessary processes, and can help optimize

resource allocation in the agro-industry.

The people's coffee processing industry must be a top priority to increase the

economic growth of planters and surrounding communities, the lack of awareness and

knowledge of farm owners towards sustainable system management can be proven by not

achieving minimum standards of quality, quantity and continuity produced. The level of

difficulty of implementation in each processing unit is also a major obstacle that needs to be

studied to get the expected production results.

System design in coffee agro-industry is a planning and design that involves

identifying the supply units and value chain flow of coffee products from upstream to

downstream, with the hope of producing better products, by analyzing and exploring

opportunities and obstacles more deeply in the main activities and supporting activities to

provide a clearer and more complete picture and design in meeting the needs of stakeholders.

System development is an activity to identify problems and needs in a system from

data collection, data analysis, then detection of potential implementation and system testing

for the system ensuring that the resulting system can run well, until the maintenance stage.

The development of this coffee agro-industry value chain system aims to answer the main

problems by detecting key factors as the cause of not achieving the target, by detecting

primary activities and detecting supporting activities as a direction for the formation of a

better and balanced coffee agro-industry system. An integrated agro-industrial value chain

system, in accordance with the environment of actors, institutions, stakeholders is one of the

productive agendas for the future of coffee in the region and nationally.

One of the recommendations that has become a concern to date is to restrain the flow

of raw material supply chains on a large scale with the aim of building production activities in

areas near raw materials, as for the basic assumption that this concept can be applied, if it gets

support from planters, farmer groups, government, support from related parties and support

for market access.

A value chain (RN) is a collection of activities related to value creation, starting with

basic raw materials, coming from suppliers and moving through a series of value-added

activities spanning production to marketing. Value chains are also an analytical activity in

agro-industry development, to understand how a supply creates value for customers by

examining the contribution of different activities within each supply. RN is a strategy in

viewing agro-industry towards agribusiness seen as a chain of activities that transform inputs

into more valuable outputs, the RN framework can be used as one of the analytical tools in

making strategic decisions, as for the purpose of applying RN is to identify activities in the

production system so that the weaknesses and shortcomings of the activities contained in the

system can be known.

RN analysis is a strategy that can be used to build the value of agro-industry towards

a better direction, this analysis can help to focus more on planning the chosen strategy so as to

achieve competitive advantage (Assuari 2011). RN activities can be divided into two

activities, namely:

1. Primary activities, which are activities related to the creation of products to

consumers.

2. Supporting activities, which are activities that assist the overall operation by

providing infrastructure, so that primary activities can run continuously, such as

general administration, human resource management, technology and system

development.

As for what the primary activity focuses on: (1) Inbound logistics, which are

company activities related to receiving, storing, and outputting. (2) Operations, namely

activities that transform inputs into outputs in the form of final products. (3) Outbound

logistics, which are activities related to the distribution of products or services to customers.

(4) Marketing and sales, (5) Service, which is an activity related to providing services to

improve product maintenance such as training, repair, and maintenance. Meanwhile, the focus

of support activites: (1) Infrastructure/facilities, i.e. activities related to costs as well as

(1) Asset management, which deals with general management, accounting, finance,

security, and safety of information systems. (2) Human resources management, activities

related to hiring, training, development, and compensation for all types of personnel,

including developing workers' skill levels. (3) Technology development, which is activities

related to product costs, process improvements, equipment design, computer software

development, telecommunications systems, new database capabilities to the development of

computer-based system support, (4) Procurement, which is activities related to how to obtain

resources.

Total Factor Green Productivity (TFPH) is the development of effectiveness and

efficiency measurement tools that involve social and environmental aspects, as potential

factors to achieve more optimal and sustainable goals. The notion of productivity is related to

effectiveness and efficiency with optimal use of resources to achieve desired results

(Summanth 2001). Productivity is the ratio of outputs to inputs for the improvement of living

standards and quality of life, productivity is not only about how to get maximum efficiency by

"doing things right" but also achieving maximum effectiveness by "doing the right things"

Asian Productivity Organization, (APO 2001). Green productivity can be interpreted as

environmentally friendly productivity, which is part of the productivity improvement program

in order to answer the global issue of sustainable development (Nurcahyanie 2013). Referring

to the definition of Green Productivity of the Asian Productivity Organization, TFPH aims to

involve and ensure the protection of social and environmental aspects as potential factors in

the measurement of productivity, while still oriented towards economic aspects.

Total Factor Green Productivity is a systematic and holistic multi-disciplinary

approach, emphasizing teamwork and the application of appropriate techniques and

technologies, as well as integration among relevant stakeholders. The objectives of TFPH are

(1) to identify potential factors to avoid pollution from the source, (2) to reduce the level of

resource input through optimization or rationalization, (3) to improve resource efficiency to

protect natural resources, and (4) to increase productivity. By using a combination of green

engineering, social engineering and value chain analysis methods, TFPH has six general

objectives in order to improve environmental, social and economic quality in implementing

continuous improvement of effectiveness and efficiency, namely: (1) waste reduction, (2)

material management, (3) derivative production performance, (4) pollution prevention, (5)

social responsibility, (6) product enhancement, and (7) value chain improvment, while the

characteristics of TFPH are characterized by four distinguishing characteristics, namely:

1. Environmental compatibility, TFPH is environmental protection, the first step is

regulatory compliance. TFPH emphasizes the practice of pollution prevention and

problem source reduction, residues should be managed by using problem end treatment,

this is the first step. A unique characteristic of TFPH is that productivity will also increase

while the organization achieves environmental compliance and this practice may lead to a

situation of going beyond compliance to the ultimate goal of ensuring quality of life.

2. Productivity improvement Another aspect of TFPH is productivity improvement under

the concept of continuous improvement which is achieved by adopting a cycle aimed at

ensuring not only productivity improvement, but also environmental improvement.

3. Integrated community-based approach One of the strengths of TFPH is its worker

involvement and team-based approach, its community-based approach is extended to

improve working environment, worker health and safety, nondiscrimination, and related

social welfare issues. This approach involves stakeholder participation.

4. For improvement information, TFPH applies not only to the manufacturing sector, but

also to the agricultural and service sectors, TFPH also addresses the interaction between

economic activities and community development, while another dimension of TFPH is

the role of the public sector (government and education) in environmental protection

and awareness.

The development of productivity always gives an interesting impression, this topic

has its own power to be discussed and developed, reviewed from some existing experiences, it

cannot be denied that the determinant of success both in organizations, companies,

associations and others is how each performance can be measured and measured. As in Figure

The scope of productivity needs to be studied in depth because behind the simple

understanding of productivity is a unique power. Basically, productivity is closely related to

the willingness and ability to work well, a comfortable work environment, income that meets

the needs of life, adequate social security, humane working conditions and harmonious

working relationships. Productivity is not a one-time project but a continuous program,

productivity measurement is the initial action in determining the next steps to be taken,

evaluation of the results of productivity measurement must be done to determine the factors

that cause the decline and increase in productivity, the following is the relationship between

the value chain system and the increase in TFPH.

Concentration on value chain activities strengthens, and provides an assumption that

productivity must be placed at the forefront, with the increasingly intense global competition

where environmental conditions are always changing, productivity measurement becomes

significant to be constantly tested and this is in line with the vision and mission of plantation

development, namely: (1) Plantation development for the realization of efficient, productive,

competitive and sustainable plantation agribusiness, (2) Plantation development with the

application of good agricultural practices, efficient and effective optimization of resources,

technical capabilities and clean moral integration. (Disbun Jatim 2019).

Coffee Plantation:

Coffee commodity production in Indonesia ranks fourth largest in the world, coffee

plants have a long history and have an important role for economic growth in Indonesia.

Indonesia has and is blessed with a geographical location that is very suitable for coffee

plants, Indonesia's location is ideal for the microclimate for coffee growth and production. At

first coffee in Indonesia was under the Dutch government, introduced in Indonesia through Sri

Lanka-Ceylon, at first the Dutch government planted coffee in the area around Batavia-

Jakarta, Sukabumi and Bogor. Coffee was also planted in East Java, Central Java, West Java,

Sumatra and Sulawesi, at the beginning of the 20th century coffee plants were attacked by

many pests and almost destroyed all coffee plants in Indonesia. At that time coffee was also

planted in Timor and Flores, both islands were under Portuguese rule at the time.

Natural disasters, World War II and the struggle for independence all played an

important role for coffee in Indonesia. In the early 20th century coffee plantations were still

under the control of the Dutch government. Infrastructure was developed to facilitate the

coffee trade, and before World War II in Central Java there were railroad lines used to

transport coffee, sugar, pepper, the, cloves and tobacco to Semarang to be transported by ship,

as well as in East Java, Banyuwangi, Kalibaru. Coffee grown in Central Java is generally

Arabica coffee, while in East Java (Kayu Mas, Blawan, Jampit, Jember and Kalibaru,

Banyuwangi) it is generally Robusta coffee. In the mountainous areas from Jember to

Banyuwangi there are many Arabica and Robusta coffee plantations. Robusta coffee grows in

low areas while Arabica coffee grows in high areas, after independence many coffee

plantations were taken over by the new government and or abandoned.

Coffee plants are the nation's leading commodity capable of improving the

Indonesian economy, this can be seen from the source of foreign exchange earnings, provision

of employment, and is a source of income for coffee planters, including other economic actors

involved in cultivation, processing, to the derivative chain. Coffee yield in 2017 amounted to

663,871 tons and continued to increase by 666,992 tons in 2018 (Directorate General of

Plantations 2018), and is the fourth largest exporter in the world after Brazil 38.30%, Vietnam

16.86%, Colombia 13.29% and then Indonesia by 5.87% (ICO 2016).

Coffee has a high enough opportunity to be continuously developed in Indonesia,

there are still many fundamental problems that can actually be improved, especially in the

area of smallholder coffee plantations, this is related to the quality and continuity of coffee

raw materials that are still not guaranteed, cultivation techniques that are still simple, the lack

of availability of agro-industrial facilities and infrastructure, including the low coffee

marketing network that has not been managed properly and also the inadequate quality of

human resources (Hariyati et al. 2013).

In Indonesia, East Java Province, Banyuwangi Regency, Kalibaru District is an area,

a village that is quite famous as a robusta coffee producer with an area of 3,847 hectares, as

one of the largest coffee producing areas in Banyuwangi Regency, supported by a suitable

climate and geographical location that is different from other areas, so all forms of efforts to

develop the people's coffee commodity in Kalibaru village will be optimized in the hope of

being able to contribute better to improving the welfare of farmers, as has been done in

various parts of Indonesia such as Sumatra, Bali, East Nusa Tenggara, West Nusa Tenggara,

Kalimantan to Papua (AEKI 2018). Kalibaru Village is an area that is geographically located

at an altitude of 428-800 MPDL, flanked by two National forests on the West side, namely

Alas Gumitir and Meru Betiri, on the East side is Alas Purwo and Baluran Forest, on the

North side is Mount Raung and Ijen Crater, on the south is sea water, and is dominated by

robusta type coffee plants, for the coffee plantation area in Kalibaru amounting to ± 3,847 ha

with a production of ± 4.124 tons/year, consisting of 53.08% of government-owned

plantations, 15.27% of privately-owned plantations and 31.65% of smallholder plantations, in

terms of location and land contours, almost all types of plantation crops and other agricultural

crops thrive in this area, coffee plants are the main commodity, after rice, fruits and yams,

with the large number of farmers and the area of coffee plantations in this village indicating

how important and potential coffee plants are to be developed and managed properly with a

sustainable integrated system.

2.1.1 Anatomy of a coffee fruit

Every living thing on this earth must have a structured anatomy and every cell with

other cells is interrelated to either protect or complement other cells, not apart from the

anatomy of the coffee bean fruit also has unique magic cells, in coffee beans there are two

anatomical structures of coffee fruit, namely coffee skin (pericap) and coffee bean fruit

(seed), these two parts have contents and layers, the skin has meat and the seed has seeds that

can be extracted into coffee brew, as for the illustration of the skin and coffee bean fruit as

shown in Figure 4.

1. The coffee skin is the outermost part of the coffee fruit, this part has three layers:

exocarp (skin), mesocarp (mucilage) and endocarp (parchment).

a. Exocarp (skin), exocarp can also be called skin which is the outermost layer of the

coffee bean fruit. Formed by one layer of dense parenchyma cells. The color of the

exocarp at the beginning of fruit development is green due to the presence of

chloroplasts that are released when the coffee fruit becomes ripe. The color after

the coffee fruit ripens can also depend on the coffee variety. most often red, the rest

are yellow, for example like yellow caturra.

b. Mesocarp (Mucilage), mesocarp is sometimes also called mucilage, which is the

flesh-shaped part of the coffee bean in the form of lender, when the coffee fruit is

still raw, the mesocarp is not slimy and stiff. Then as the coffee matures pectolytic

enzymes break down the pectic tissue producing a hydrogel solution rich in sugars

and pectin, based on research that the ratio of mucilage or mesocarp water gets

higher with increasing altitude of the planting site. The post-harvest process of wet

processing actually removes the mucilage layer with the fermentation process,

because the mucilage layer varies in amount, the wet process can make the coffee

taste consistent, different from the dry process or natural all parts of the coffee fruit

are left intact during the drying process.

c. The endocarp (parchment) is the innermost layer of the coffee skin and the

covering that envelops the coffee bean. Made up of three to seven layers of

sclerenchyma cells, which are fiber cells that serve as the main cells in a plant, the

endocarp hardens during the ripening of the coffee fruit, limiting the final size of

the coffee beans inside so that the weight of the coffee is reduced by an average of

nearly 80% from wet to dry coffee fruit.

2. Coffee beans (Seed) or often called (green bean) is the content of the coffee fruit, this is

where the main component or substance that will be processed and extracted into a

delicious coffee brew, coffee fruit seeds consist of silver skin, endosperm and embryo,

while the size of coffee beans varies but has an average generality of 10 mm and a

width of 6 mm, divided into several parts:

a. The epidermis in coffee is also called perisperm or spermoderm, an outer layer that

encloses the seed, this epidermis is formed from the nucellus or the center of the

ovule of the coffee fruit. Generally, the epidermis remains in the roasting machine

during the roasting process, at maturity the epidermis is usually easily detached

when sucked by the blower, some green bean producers polish the coffee beans

using an AP (after polished) machine so that the epidermis is detached from the

coffee beans and the color of the coffee becomes bright, some argue that this

method can reduce the taste of coffee or cause many defects in the beans.

b. Endosperm is the first tissue in coffee seeds and consists of only one tissue, the

outer and inner cells of the endosperm have different oil content and cell wall

thickness, the endosperm content is very important because it is the forerunner that

represents a flavor in coffee beans. The chemical compounds contained in the

endosperm are soluble fiber and water insoluble fiber, the water soluble fiber part

are caffeine, trigonelline, niacin acid, chlorogenic acid, oligosaccharides, some

proteins, minerals and lipids.

c. Coffee embryos consist of a hypocotyl (the axis of the embryo) and two cotyledons

and are 3-4 mm long. Coffee seedlings germinate through epigeal germination,

which is germination characterized by the formation of a stem that emerges to the

surface of the soil, while the original cotyledons remain underground and new

cotyledons will form into the embryo, as shown in Figure 5.

2.1.2 Coffee bean elements and compounds

In coffee fruit not only contains bitter, sour, sweet and other common flavors such as

bitter, concentrated, sticky, seppo and others, as for the many chemical compounds contained

in coffee drinks can be grouped according to the dominant compounds that are felt every time

we taste coffee, as for the elements contained in coffee beans including:

a. Sweetness in coffee develops and will appear when the green beans begin to roast, in

addition to releasing the aroma when roasted, the coffee will also release a caramel flavor

after the caramelization process.

b. Acidity or known as acidity makes the taste of coffee complex, the fruity acidity of coffee

is generally enjoyed because it gives a unique and fresh taste, the higher the altitude the

coffee is grown, the more pronounced the acid profile will be.

c. Bitterness is the core flavor or often referred to as the life of coffee that cannot be

separated from coffee itself, without bitterness in coffee, the coffee is difficult to

recognize. The bitter taste balances the acidity that appears in the taste of coffee, while

the element of caffeine contributes about 10% to the bitter taste, and what brings out the

real bitter taste in coffee is the trigonelline compound (niacin).

d. Chlorogenic Acids (CGAs) are another type of acid that appears in the roasting process.

These chlorogenic acids turn into caffeic and quinic acids and phenols. This one acid is

known to be more inclined to a bitter sour taste.

e. Aromatic Acids are another type of acid that includes lactic acid and acetic acid.

f. Inorganic Acids are acids that belong to the phosporic acid compound and are one of the

strong acid compounds, usually It reacts with other types of acids to give pleasant and long

notes to the coffee flavor.

g. Aromatics, are compounds that create aroma due to the Maillard reaction. The Maillard

reaction is a reaction that occurs when sugars chemically combine with amino acids.

h. Mercaptans are compounds that are also born from the Maillard reaction. These

mercaptans belong to a 'family' of volatiles that have a high sulfur content.

i. Pyrroles are compounds that give caramel and sometimes mushroom aromas.

j. Phenol is also an important compound that gives the whiskey-like aroma and sometimes

character of seaweed.

k. Thiophenes are compounds that have a meaty aroma that also appear in the Maillard

reaction. It is in the reaction between sulfur amino acids and sugars.

l. Furan is the compound that gives coffee its most aromatic side. It also contributes to the

caramelized aroma of the sugar. Furans are often damaged by the heat involved in the

roasting process.

m. Pyrazines are compounds that give roasty aromas, nuts and baked goods. Pyrazines also

give earthy aromas and many other types.

2.1.3 Other compounds in coffee beans

In addition to caffeine, which is one of the compounds in coffee also contained in the

seeds, leaves and fruits of other plants, coffee is one type of plant with caffeine content that is

very often consumed by humans besides tea. Caffeine itself is classified into drugs and proven

safe for consumption in certain doses, but if consumed excessively, then caffeine can cause

dependence and in chronic conditions can also cause several diseases such as sleep disorders

and cancer, as for other compounds contained in each coffee bean are

1. Quinic Acid or sour taste in coffee will be determined by the amount of quinic acid which

is also one of the compounds in coffee. The level of quinic acid in each type of coffee is

also different, which is also used in medicine as an ingredient to make cold medicine.

2. H2O or water is also a compound in coffee that cannot be separated, the chemical content

in coffee is also very important for the body because 70% of the body consists of water,

even so the water content in coffee is sometimes reduced due to the drying process of the

coffee beans, but the water content in coffee also remains part of the chemical

compounds in coffee beans.

3. Ethyphenol or a compound in coffee is a substance that gives coffee a special aroma, this

substance is also similar to tar and also contains pheromones in it.

4. Dicaffeoylquinic Acid or a compound in coffee is an antioxidant that is very useful for

warding off free radicals, although antioxidant levels in coffee beans are not as high as

other medicinal plants, coffee has become a source of antioxidants that are very widely

consumed by people around the world. Dimethyl Disulfide in coffee beans that are still

green and have not been dried and roasted, the compound in coffee, dimethyl disulfide, is

also high in coffee beans, the substance that makes human feces smell like the smell of

sulfur compounds.

5. Trigonelline is one of the compounds in coffee that is very useful for protecting teeth,

coffee drinkers generally have a slightly black tooth color because of this substance, but

this compound will protect teeth so they are not easily cavities.

6. Niacin is a compound in coffee that is actually not so good for the body because it can

absorb several types of vitamins in the body, for this reason, drinking coffee is

recommended not to exceed 3 cups per day so that the vitamin content needed by the

body in various processes is not lost too much because of coffee.

2.1.4 Coffee Types and Varieties

Robusta coffee (Coffea canephora) is one of the commodities that are widely

cultivated in various countries, commonly known coffee varieties are Arabica coffee and

Robusta coffee, in general coffee grows in countries with tropical and subtropical climates.

Coffee in Indonesia today can generally grow well at an altitude of 700 meters above sea

level. in its development with the introduction of several new clones from abroad, some

clones can now be planted starting above 500 meters above sea level, however, the best is

above 700 meters above sea level, especially the robusta coffee type, however coffee planting

land in Indonesia ranges from 700-900 meters above sea level, with suitable rainfall of 1500-

2500 mm per year, with an average dry month of 1-3 months and an average temperature of

15-25 degrees Celsius with supporting land and climate (puslitkoka, 2016). Arabica coffee is

a coffee plant that can grow high to an altitude of 600-2000 meters above sea level, ideally

planted at an altitude of 1200-1950 meters above sea level, the optimal temperature for

Arabica coffee growth is 18-26o C with rainfall of 1200-2200 mm per year. Plants grow on

loose soil rich in organic matter (top soil) and ph 4.5-6.5, plants can bear fruit starting in the

3-4th year. Arabica coffee takes 6-8 months to harvest from flowering.

2.1.5 Coffee Processing

Coffee processing is carried out in a wet and semi-wet way, the stages of wet coffee

processing are as follows: harvesting, hard skin (HS) stripping, dry bean sorting, drying,

washing, fermentation, red fruit skin stripping, fruit sorting, packaging and storage.

Meanwhile, the stages of semi-wet coffee processing are as follows: select harvest, fruit

sorting, red fruit skin stripping, fermentation and mucus washing, drying for 1-2 days,

moisture content ±40%, shell stripping, drying the beans until the moisture content is 11-13%,

sorting and packaging, storage and warehousing. Fermentation is needed to get rid of the

mucus layer on the coffee horn skin, fermentation is carried out usually in arabica coffee

processing, to reduce bitterness and maintain coffee flavor, fermentation can be done by

immersing the beans in water or dry by putting the coffee beans in a plastic bag and keeping it

closed for 12 to 36 hours (Starfarm 2010), after this stage, washing with water can be done to

remove the remaining mucus after fermentation. The fermentation process is generally only

done for

arabica coffee processing, and is not widely practiced for robusta coffee processing,

especially for smallholder farms. The purpose of this process is to remove the layer of mucus

remaining in the horny skin layer of the coffee beans after the hulling process. In arabica

coffee, fermentation also aims to reduce bitterness and encourage a "mild" impression in the

brewing flavor. The principle of fermentation is natural and assisted by oxygen from the air,

in the fermentation process can be done wet by soaking the beans in a pool of water and dry

fermentation, namely without water immersion.

While the structure of the coffee plant teridri of: roots, stems and branches, leaves,

flowers and fruit, types and varieties that are widely circulated include: for Arabica coffee:

Varieties Kartika1, Kartika2, Abesiana3, Variety S795, USDA 762, Andungsari, Sigarar

Utang, Kopyol Bali, while for robusta types: Clone varieties BP42, BP234, BP288, BP358,

BP409, SA237, BP436, BP534, BP936,

2.3 Coffee Agro-Industry

The coffee processing industry generally uses coffee bean raw materials according to

their type with a certain dose of composition and comparison, for arabica type coffee lies in

the dominance of its taste, while for robusta type coffee lies in the dominance of a stronger

shape structure, in the advanced processing industry it is necessary to add additional

ingredients, such as sugar, corn, chocolate, milk and others to complement the taste and also

requires auxiliary materials such as packaging, sacks, pallets and others. Types of coffee

product diversification include ground coffee, instant coffee, cooked bean coffee, artificial

coffee, low-caffeine coffee, blended coffee, dipped coffee, coffee extracts, bottled c o ff e e

drinks and other derivative products, (Disperindag 2017). In general, the process of

cultivation, processing, treatment until reaching consumers can be seen in Figure 9.

The processing of the coffee industry can be categorized into four parts, namely: (1)

Cultivation starting from seedling, pruning, fertilization, plant care, picking of logs, to

distribution to t he factory, (2) Bean processing starting from drying, breaking the skin to

determining the moisture content, (3) Roasted bean processing starting from density

measurement, roasting, to the process of sorting cooked beans, (4) Packaging / brewing

starting from grinding, measuring doses, to branding and or serving. Meanwhile, the

downstream industry can be grouped into seven parts, namely the cooked coffee industry,

ground coffee industry, instant coffee industry, decaffeinated coffee industry, coffee beverage

industry, mixed coffee industry and flavored coffee beverage industry, while the coffee

processing industry tree can be shown in Figure. The coffee processing industry is still

underdeveloped due to technical, social, and economic factors. The application of coffee

processing technology is only applied by a small number of coffee processing companies, due

to limited information, capital, technology, and business management. This processed

industrial product has the potential to provide high added value and in the current era of trade

globalization, while competition conditions are getting tougher where each country opens its

market, the development of diversified processed coffee products, such as: roasted coffee,

instant coffee, blended coffee, decaffeinated coffee, solution coffee, beer coffee, iced coffee,

will have a significant impact on the progress of a region, because it can become a superior

commodity that has high competitiveness in local, national and international markets.

Indonesia as a tropical country in addition to the opportunity for the development of

diversified processed coffee products mentioned above, also has the potential for the

development of specialty coffee processing industry products with distinctive flavors such as:

Lintong, Lampung, Java, Kintamani, Toradja. Although Indonesia has great opportunities in

the development of the coffee processing industry and has great prospects in the domestic and

international markets, the problems are also very complex, there are still many influencing

factors both internal and external, including factors from consumer behavior, as well as price

fluctuations in world coffee trade (Balitri Webinar 2020). World coffee consumption from

2012 to 2018 has increased by an average of around 2%. World coffee consumption in 2018 is

estimated at 7,680 thousand tons, consisting of 4,909 thousand tons of Arabica coffee and

2,771 thousand tons of Robusta coffee (Balitri 2020). The increase in world coffee

consumption is due to the fact that coffee consumption in coffee producing countries is

growing very fast, although in consumer countries it has also increased. The growth in coffee

consumption that occurs in producing countries is in line with economic growth in these

producing countries, most of which are developing countries including Indonesia and Brazil.

According to the International Coffee Organization (ICO) consultant, P&A Marketing

International, estimates that global coffee consumption growth in the 2016-2019 period

increased by 35.5%.

Analysis of the development of the coffee processing industry tends to increase, so

the value of world coffee consumption is a driver for the coffee processing industry, to

increase production. Indonesia's coffee consumption has increased by an average of around

3% each year, higher than the growth in world coffee consumption which averages around

2%. This is an opportunity for the coffee processing industry. However, the increasingly high

prices of agricultural production inputs such as fertilizers, pesticides, labor, make it

increasingly difficult for coffee production to increase and may even decrease coffee

production, while to increase production, the coffee processing industry requires a greater

supply of raw materials. The impact of the global financial crisis is analyzed to have no effect

on coffee consumption, given the small household expenditure on coffee, as long as the

supply of coffee is still guaranteed at an affordable and reasonable price, it is likely that the

development of the coffee processing industry will remain attractive and the effect of the

global financial crisis will be insignificant.

One of the problems faced by the coffee processing industry is the understanding of

upstream raw materials to downstream processing, lack of knowledge of post-harvest

handling in the traditional way, so that the quality of coffee beans as raw material in the

coffee processing industry is low, in addition to very limited production related to the use of

coffee bean production facilities such as the use of machines or equipment for drying, peeling

and sorting, especially at the level of small and medium scale industrial businesses. Limited

mastery of process technology at the roasting stage. The application of good manufacturing

practice (GMP) and hazard analysis and critical control point (HACCP) and ISO is still quite

low, resulting in low and inconsistent product quality, lack of ability to innovate and diversify

products in accordance with domestic and international market demands, while in the

marketing aspect the high import duty rates on auxiliary materials such as packaging, sugar

and other auxiliary materials: packaging, sugar and other auxiliary materials are still quite

high, the general composition of packaging is around 15% while sugar is 40%, the low R&D

of innovation and diversification of processed coffee products in accordance with domestic

and international market demands and limited international market access, so far the export of

processed coffee products is mostly only aimed at traditional markets such as the European

Union, Japan and the USA. The discrimination of import duty tariffs in the European Union

against Indonesian coffee commodities at 3.4%, while other countries are 0%, and

infrastructure support at the coffee plant cultivation business level such as roads,

transportation equipment and coffee processing industries such as electricity and energy is

still minimal. Communication and coordination forums between stakeholders, especially those

leading to the formation of cooperative partnerships, are also still lacking. World, regional

and domestic demand and supply for coffee commodities continue to increase, in line with the

increase in coffee consumption in Europe, East Asia and North America. At the regional

level, coffee demand in Malaysia and Singapore is substantial. However, Vietnam,

Indonesia's competitor, has the ability to supply world-leading coffee that is highly

competitive. Domestic market demand is quite potential, while coffee production in Indonesia

is still not fully in line with market demand, from the results of a gap analysis that has been

carried out previously, there is a surge in world coffee production and supply in the last 5

(five) years decade, while world demand has increased insignificantly, this has resulted in a

drop in world coffee prices. Coffee prices in the upstream industry are less attractive, causing

Indonesian coffee farmers to be less eager to increase their production either by

extensification or intensification (Disperin 2016).

2.4 Supply Chain Management

SCM is an effort to create a coordinated supply chain by considering the economic,

social and environmental dimensions in order to obtain more effective and efficient results in

its management, there are three management flows in SCM which are specifically focused on

the flow of each process unit through which it passes, namely the flow of products, money

and information. Sustainability in the supply chain is aimed at building a model with the

intention of increasing competitiveness (Wichaisri 2017), if reviewed from a large amount of

literature, the definition of supply chain development is that the supply chain is sustainable.

Sustainability has two main missions, namely increasing profits or competitiveness

and minimizing impacts and threats to the environment and social life through effective and

efficient business management, the following is a supply chain situational analysis

framework, as in Figure 11.

The analysis and performance of the supply chain at each member of the chain and

commodity flow consists of:

a. Farmers, actors who carry out pre-harvest coffee activities such as coffee breeding,

coffee planting, coffee plant maintenance, and coffee harvesting to traditional post-

harvest coffee handling.

b. Collectors, actors who collect coffee commodity products from farmers and sell them to

various agro-industries or related companies.

c. Processor, processing natural raw materials into semi-finished products (dried beans).

d. Roaster and packer, the actor who roasts or roasts raw coffee beans into cooked coffee

to the finished product.

e. Exporters/Distributors, actors who sell coffee commodities from collectors or from the

agro-industry to local, national, and international buyers.

f. Finished product retailers market finished products from agro-industries to consumers.

g. Farmer extension workers, actors who provide counseling to farmers related to the

development of science and technology.

h. Gapoktan/Village Unit Cooperative, an institution consisting of various coffee farmers

who share the same goals.

i. Universities, institutions that provide science facilities and institutions that can be

collaborated with in research to solve coffee quality problems.

j. Agro-industrial actors, actors who carry out production activities at the industrial level

with coffee raw materials.

The goals in the supply chain include:

a. Target markets, for the local market are hotels, restaurants, cafes and consumers, for the

national market are small and medium industries, and for the international market are

exports according to demand.

b. Target Development, Small and Medium Enterprises, SMEs, Village Cooperatives.

c. Partnership development, village government, related agencies, financial institutions,

research centers, universities and cooperative business activists.

Sustainability in the supply chain can be defined as the management of materials,

information flows, and capital to work together between stakeholders along the supply chain

to achieve the target value of economic, social and environmental dimensions to meet the

demands of consumers and other stakeholders. (Zhang et al. 2018), the following illustration

of the supply chain and its relationship with various actors and institutions can be seen in

Figure 12.

Sustainability is part of an important strategy that supports companies in achieving

excellence in improving overall performance, which means sustainable supply chain

management is a concept of planning, implementing and controlling processes to create added

value to the company by considering social, ecological and economic aspects of the business

for the purpose of long-term performance and while increasing production, maintaining

supplies and availability, SCM is also implemented through programs related to recycled

product design, environmental certification, as a form of social responsibility, in addition to

this SCM aims to improve employee working conditions and support community activities

not only within the company but also with all members of the supply chain (Wang et al.,

2018). 2018), the following illustration of the coffee industry supply chain and its relationship

with various other external chains can be seen in Figure 13.

2.5 Definition of Productivity

Productivity initially appeared and discussed since 1976 by Francois Quesnay, a

French economist in an agricultural article (Sumanth 1984), but according to Walter Aigner's

opinion in his work "motivation and awareness", the philosophy and spirit of productivity has

existed since human civilization, then in 1883, Uttre defined productivity with the ability to

create and or the ability to produce which means the desire to produce something.

Furthermore, in the early 19th century a more specific definition was known which stated that

productivity is the relationship between output and the resources used to produce the output,

in 1950 the Organization for European Economic Cooperation (OEEC) defined productivity

as: "the quotient obtained by dividing output by one of the factors of production in this way it

is possible to speak of productivity of capital, investment, or row materials according to

whether output is being considered in relation to capital, investment or row materials, etc.".

Productivity is defined as the quotient obtained by dividing the output by one of the

factors of production, namely capital, investment, raw materials and others (Sumanth 1984).

One of the important issues in the 1990s is the effort to improve productivity and quality,

productivity is one of the performance measures, both individual or group work, individual

economic units, industry and economic performance nationally, even internationally,

therefore, every economic unit or business entity is very interested in productivity analysis,

because with productivity can be known to what extent the performance has been achieved,

for more details, the chronology of development of the definition of productivity, in Table 6.

Since the first time in its development, experts differ in defining productivity,

because there is no general agreement on the definition of productivity itself, it is also

supported by no standard criteria in measuring productivity clues, and there is no conception

of the method of application or how to measure free of criticism. However, in principle,

productivity is defined as the relationship between the real and physical results of goods or

services with the actual input, which is a comparison between output and input. Productivity

is also defined as the level of efficiency in producing goods or services (Sinungan 1992), then

L. Green berg also defines productivity as a comparison between the totality of expenditures

at a certain time divided by inputs during that period, and a person's labor is considered

productive if it is able to produce more output than other workers, for the same unit of time, if

productivity measures are only measured by units of time, it is clear that productivity is highly

dependent on the expertise and skills possessed by each worker. Often the term productivity is

equated with the term production, many people think that if production increases then

productivity increases, this is a view that must be straightened out because productivity is not

the same as production, but production is part of productivity. Unraveling the difference

between the two terms can be explained that an increase in production is to show an increase

in the number of results, while an increase in productivity implies an increase in results by

improving ways of producing by using resources better to produce goods and services, from a

quantitative point of view, productivity is a result of the increase in production.

productivity is the ratio of the output produced to the inputs used. Meanwhile,

according to (Simorangkir 1984), the productivity measure used is the real production divided

by working hours. Productivity is a concept that describes the relationship between the results

of the number of goods and services produced with the source of the amount of labor, capital,

energy, land and others, which are used to produce production, the following is a productivity

cycle consisting of four stages called MEPI, namely: (1) Measurement of productivity, (2)

Evaluation of productivity, (3) Planning of productivity, (4) Improvement of productivity. The

productivity cycle is an ongoing and continuous activity, in this sense it will be shown and

explained in Figure 14.

A new company or organization running a productivity program begins with

measuring productivity, the level of achievement of the measurement results then assessed or

compared with the value of the plan that has been set. Based on this assessment then planned

productivity level goals both in the short and long term, in achieving the goals that have been

set need to run productivity improvement efforts in the future, by measuring productivity

again and or repeatedly. These activities are cycles that are carried out continuously as long as

the productivity program is carried out. Based on some definitions of productivity experts

above, productivity is something that can give and have value, meaning and meaning to

something. The birth of productivity comes from a problem and continues to a question and

ends in an answer, approach and decision so on. The concept of productivity is not obliged to

end, so the law of cause and effect can be used as an approach to the starting and ending

points of productivity. Productivity has its own art and way to determine its direction, it

depends on the direction of the organization.

The development of human needs for better living standards will also develop the

variables and or attributes that limit it (Hadi and Baskoro 2007). Referring to the development

of the definition of productivity, it is believed that productivity comes from the word product

and was born or derived from the needs of measuring work activities in the industrial field,

meaning that there is a positive correlation to the results, inputs and outputs of a production,

whether the product meets the criteria or not, in the development of productivity, developing

not only the industrial sector but productivity measurements have been everywhere, so that

many definitions of productivity have emerged. If assumed correctly, that productivity comes

from the word product then the definition of productivity will be more complex. (Ulrich and

Eppinger 2000) and the definition of the product is not only about goods and services, but

"Product is something" (wigjnosoebroto 2005).

The idea of productivity above, will be deeply rooted, if it is connected with the

history of the birth of industrial engineering, which is since humans have to realize something

better in meeting their needs. Some prominent figures or inventors in the era of the industrial

revolution have implicitly put forward the concept of productivity, including Adam Smith

(The Wealth of nations 1976) put forward the concept of designing production processes to

improve the efficiency of the use of labor, which emphasizes the importance of specialization.

This discipline eventually developed to meet the needs of skilled experts in planning,

organizing, operating and controlling a large and complex production system.

The need to improve efficiency and effectiveness is the driving force behind the

establishment of the discipline of industrial engineering. Similarly, Charles Babbage as a

predecessor in the development of the concept of industrial engineering suggested the need

for division of labor to increase productivity in his book On Economic of Machinery and

Manufacture 1832, with the division of labor (according to its specialization) the work will be

simpler, time-saving and cost-effective. In 1886, Henry Towne pointed out the importance of

engineers paying attention to the profitability of their decisions in The Engineers as

Economists published in the Transactions of the American Society of Mechanical Engineers.

Towne stated the importance of economics for engineers in making decisions.

2.5.1 Productivity Measurement

Productivity measurement activities can be carried out on various scales of activity

units, the smallest unit of activity is the work station, then the collection of work stations

becomes a work unit and so on. At the unit level forms the scope of productivity

measurement, each of which has its own benefits. The benefits of productivity measurement

in a company organization, among others (Vincent 1998)

1. The company can assess the efficient use of resources in producing goods or services.

2. Resource planning will become more effective and efficient through productivity

measurement, both in short-term and long-term planning.

3. Economic and non-economic goals in the company can be reorganized by giving certain

priorities from the point of view of productivity.

4. Based on the results of measuring the current productivity level, future productivity

targets can be planned.

5. Strategies to improve productivity can be determined based on the difference between

planned productivity levels and measured productivity levels.

6. Productivity measurement can be used to compare productivity levels among corporate

organizations in similar industries and is also useful for industrial productivity

information on a national scale.

7. The productivity values resulting from a measurement can be useful information for

planning the profitability of the company.

8. Productivity measurement will create a climate for competition among employees in the

measured work unit.

9. Continuous productivity measurement will provide useful information to determine and

evaluate the trend of the company's productivity development over time.

Measuring productivity means comparing productivity levels in several ways:

a. Comparing the performance of the measured period with the performance of the base

period.

b. Comparing the performance of an organizational unit with other organizational units.

c. Comparing the performance of the measured period with the performance value set

together, this determination can be made in various ways, including consideration

from management and statistical approaches.

2.5.2 Productivity Growth Climate

Organizations or companies can run and be able to increase productivity if individual

goals are aligned with organizational goals, individual goals are determined by individual

needs, while organizational goals are determined by organizational needs. The relationship

between inputs and outputs in the transformation process can be presented in Figure 15, this

will show and clarify that the main elements in the production system are inputs, processes

and outputs, as well as a feedback mechanism for production system control and continuous

improvement. Lower selling prices can be achieved if the benefits of economies of scale are

well implemented, namely production efficiency, use of technology, easy access to raw

materials and so on. Companies can also carry out differentiation strategies by creating

perceptions of certain values in consumers, for example, companies provide better service. In

addition, strategies can also be applied to gain an advantage in competition that has been in

accordance with the expected segmentation and targets.

2.5.3 Productivity System Schematic

These elements can provide a strategic advantage for the company to increase

productivity and competitive ability, which shows the existence of low costs, can obtain

profitable materials and is able to run the business well, it can also be said, production

capability is a function of the production process and business strategy of the company. The

production process is a process of transforming inputs into outputs. Meanwhile, strategy

according to (Porter 1985) is a very important tool to achieve competitive advantage.

According to Porter, there are three strategies that companies can do to gain competitive

advantage, namely cost leadership, differentiation and focus strategies, and from another

point of view it can be explained that, if a company can provide a lower or cheaper selling

price than the price offered by other companies with the same value or quality of products.

Cleveland (1989) identifies the performance dimensions of a company's competence into

several key strategies as strengths and weaknesses for the failure and success of a company,

namely: (1) adaptive manufacturing, (2) cost effectiveness of labor, (3) delivery performance,

(4) logistics, (5) production economic scale, (6) process technology, (7) quality

performance, (8) throughput and lead time and (9) vertical integration, then Robin (1993),

states: "ability refers to an individual's capacity to perform the various tasks in the job. It is a

current assessment of what one can do an individual's overall ability is essensially made up of

two sets of skills, intellectual and physical".

Capability refers to the company's skill in coordinating its resources and putting them

to productive use, as also written by (Hill and Jones 1998) "Capability refers to the company's

skill all coordinating it's resources and putting them to productive use. These skills reside in

an organization's routines, that is, in the way a company makes decisions and manages its

internal processes in order to achieve its goals.

133

organizational objectives. More generally, a company's capabilities are the product

of its organization structure and control system." Capabilities have a very important meaning,

where a company may have unique and valuable resources, but if it does not have the ability

to use these resources effectively and efficiently, the company will not be able to create and

maintain its capabilities. In Figure 16. it can be seen that efficiency, quality, innovation and

customer response are the most important elements to generate competitive advantage by

obtaining higher profits.

2.6 Total Green Productivity Factor

Total Factor Green Productivity (TFPH) always gives an interesting impression, this

topic has its own power to be discussed and developed, reviewed from some existing

experiences it cannot be denied that the determinant of success both in organizations,

companies, agriculture, industry and others is how each performance can be measured and

measurable, the scope of productivity needs to be studied in depth because behind the simple

understanding of productivity is contained a unique power (Hadi and Baskoro 2007).

Basically, productivity is closely related to the willingness and ability to work well in a

comfortable work environment, income that meets the needs of life, adequate social security,

humane working conditions and harmonious working relationships.

Productivity is not a one-off project but an ongoing program. Productivity

measurement is the initial action in determining the next steps that must be taken, evaluation

of the results of productivity measurement must be done to determine the key factors that

cause the decline and rise of a performance. This reinforces and assumes that productivity

must be placed at the forefront of global competition with ever-changing environmental

conditions, productivity measurement becomes significant to be constantly tested.

Explanation related to partial productivity development to the finite total productivity of the

TFPH model as intended in this follow-up study can be seen in Figure 17.

Total Factor Green Productivity (TFPH) is a development of efficiency and

effectiveness method measurement tools, involving social and environmental aspects as

potential factors to achieve more optimal and sustainable goals (Summanth 2001).

Productivity is the ratio of outputs to inputs to improve standards and quality of life,

productivity is not only about how to get maximum efficiency by (doing things right) but also

achieve maximum effectiveness by (doing the right things) (APO 2001).

Green productivity can be defined as environmentally friendly productivity, which is

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part of the productivity improvement program in order to address the global issue of

sustainable development (Nurcahyanie 2013). Referring to the definition of green

productivity, TFPH aims to involve and ensure the protection of social and environmental

aspects as potential factors in productivity measurement, while still being oriented towards

economic aspects. TFPH is a systematic and holistic multi-disciplinary approach that

emphasizes teamwork, applying appropriate techniques and technologies, and integrating all

stakeholders, the objectives of TFPH are: (1) Identify potential factors to avoid pollution at

source, (2) Reduce resource inputs through optimization and rationalization, (3) Increase

resource efficiency to protect natural resources and (4) Increase productivity, using a

combination of green engineering, social engineering and value chain analysis.

TFPH has six general objectives in order to improve environmental, social,

economic, energy transition, digital transformation and global health, as well as to implement

continuous improvement of effectiveness and efficiency, namely by: (1) waste reduction, (2)

material management, (3) derivative production performance, (4) pollution prevention, (5)

social responsibility, (6) product enhancement, and (7) value chain improvment, while the

characteristics of TFPH are characterized by four distinguishing characteristics (APO 2001),

namely:

1. Environmental compliance, TFPH is environmental protection, the first step is regulatory

compliance. TFPH emphasizes the practice of pollution prevention and problem source

reduction, waste should be managed using problem end treatment, it is a unique

characteristic of TFPH that productivity will also increase while the organization

achieves environmental compliance, and this practice can lead to a situation of going

beyond compliance to the ultimate goal of ensuring quality of life.

2. Productivity improvement Another aspect of TFPH is productivity improvement under

the concept of continuous improvement which is achieved by adopting a cycle aimed at

ensuring not only productivity improvement, but also environmental improvement.

3. Integrated community-based approach one of the strengths of TFPH is the involvement of

workers and team-based approach, the community-based approach is extended to

improve the working environment, workers' health and safety, non-discrimination, and

related social welfare issues, this approach involves participation from all stakeholders.

4. For improvement information, TFPH applies not only to the manufacturing sector, but

also to the agricultural and service sectors, TFPH also addresses the interaction between

economic activities and community development, while another dimension of TFPH is

the role of public sector government and education in environmental protection and

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awareness.

2.7 Research Position and Roadmap

Research on coffee agro-industry has been carried out a lot, but most of the research

is still partial and only a small part has conducted research that integrates various products,

actors, institutions to produce models and strategies, but from the literature review, previous

studies still tend to focus on product development on coffee beans and taste alone, while the

Total Green Productivity Factor in the agro-industry supply chain is an indicator of

sustainability by applying value chain analysis that focuses on main activities and supporting

activities, then evaluating and assessing each dimension, while the supply chain sustainability

assessment can be carried out in 6 stages: (1) Select and determine relevant Key Performance

Indicators (KPIs), (2) Measure current ongoing performance, (3) Determine opportunities in

the required dimensions, (4) Analyze the impact of the supply chain sustainability assessment

to the actions to be taken, and (5) Make a redesign, (6) Build a strategy (Vorst and Peeters

2013). The following is the position of the dimensions in several studies, in Table 7.

METHODOLOGY

3.1 Frame of mind

The framework in this study is poured into a conceptual model based on Supply-

Input-Process-Output- Customer (SIPOC) thinking, where: (1) Supply, which means physical

or non-physical resources that are still outside the system boundary (have not entered the

system process), (2) Input, are all resources, raw materials and other supporting materials that

are used as the beginning of the process to produce commodities (first products), (3) Process,

in this case is basic processing and derivative processing tailored to the processing objectives

by complying with the predetermined standard operational procedures (SOP), (4) Output, is

the desired output with the desired variety, quality and quantity, and (5) Customer, is the last

system unit in receiving products, either semi-finished products or finished products in

packaging. As a further rationale in the input-process-output concept, the conceptual model in

Figure 18 is an initial framework for creating a sustainable coffee agro-industry design, with

the guidance of Green Supply Chain Management theory with a sub-theory focus on the value

chain as a vertical flow from the upstream process, middlestream to downstream in finding

critical value in each path in the supply chain, while the Green Total Factor Productivity

theory as a productive measure of each activity of the system units through which it passes, as

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well as supporting measurements involving factors, dimensions, aspects and elements as an

effort to design a sustainable coffee agro-industry system.

3.2 Basic research concepts

The coffee plantation in Kalibaru Banyuwangi is the main base of the research, while

coffee plantations in other places are for comparison, as is the Input-Process-Output (IPO)

framework and illustration of objective achievements divided into four parts, in Figure 19.

The principles and characteristics of life cycle sustainability assessment (LCSA) are

a combination of life cycle assessment (LCA), life cycle costing (LCC), and social life cycle

assessment (S-LCA) (Kloepffer 2008). LCSA requires a multi-criteria evaluation to obtain a

balance between the indicators and weightings used in the assessment, this is necessary to link

social indicators with their impacts into a functional model and to limit the social indicators

used so that they are easier to manage and compare, in LCSA the environmental, social and

economic dimensions have equal weight but each indicator contributes differently to global

sustainability (Vinyes et al. 2013). In sustainability assessment, there is a difference between

negative indicators and positive indicators according to the contribution of sustainability in

the characteristics of the system being assessed. Negative indicators are indicators that have a

negative impact or contribution to economic and environmental sustainability. Positive

indicators are indicators that have a positive impact or contribution to social sustainability.

One of the dimensions chosen to conduct research on green total factor productivity,

researchers include social impact assessment in making coffee agro-industry systems, this

dimension (S-LCA) is a factor that emphasizes the social impact caused by a system, product,

process, or service in terms of its life cycle (Jørgensen et al. 2010). Furthermore (Arcese et al.

2013) stated that S-LCA can be described as a tool that allows management or companies to

evaluate social impacts on an ongoing basis during the product life cycle. According to

(Benoit et al. 2010) S-LCA allows identification and assessment of key issues and at the same

time describes social conditions in the production process, product use and disposal of

production waste. This method can also be used to increase knowledge, convey information

and social improvement in the product life cycle.

3.3 Soft System Method Approach and Research Foundation

Soft System Methodology (SSM) is a procedure or way to solve chaotic or

unstructured and unorganized problems by thinking Systems, in the basic principles of the

system approach the first thing that must be met is:

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1. A system must be greater than the sum of its parts.

2. The parts of the system being studied must be predictable.

3. Although each sub-system is self-contained, it is part of a larger system.

4. There must be or be a sacrifice of an objective if it is to improve another objective

(trade-off).

The basic principles of the second systems approach, which must be met, can be explained in

the three principles below:

1. Complex systems must be broken down into smaller sub-systems so that they can be

analyzed and understood before being recombined.

2. System components interact with each other, changes to an element will affect all

components.

3. All systems tend to reach an equilibrium which is a balance of various forces from

outside the system.

The background of Soft System Methodology (SSM) actually started from action

research in real-world problem solving, and SSM was developed from "Hard System

Engineering" to solve messy, ill-structured real-world problems. The following illustrates the

improvement of the system rationale as shown in Figure 21.

Basically, soft systems methodology (SSM) has been developed before the

contribution (Checkland 1991) was first introduced and now its use has been widespread in

various literatures with various approaches and applications, (Sinn 1998) explains that SSM is

a problem solving framework specifically designed for situations where the nature of the

problem is difficult to determine. SSM has the capability of providing a framework for

understanding the problem at hand even complex problems (Daellenbach and Nickle 2005).

The understanding of SSM is specifically designed for situations where the nature of the

problem is difficult to determine, making the methodology relevant in decision making in the

absence of clear facts. SSM is a response to the difficulty in applying hard systems thinking

(HST) approaches to business problems and human activity systems. HST analysis states that

unpredictable behavior with complex feedback between components is a problematic method

when applied to human systems (Jackson and Andarini 2009) and based on his research on

human resource management, suggests that SSM can be utilized to produce information that

is superior to that obtained through the use of conventional methods, basically SSM is a

special form of action research that has the aim of improving practice and understanding of

the situation through self-reflection of the participants, namely the parties explored in SSM

(Brocklesby 1995). SSM encourages researchers and practitioners to look at organizations

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from a cultural perspective because in organizations, the human component is an important

characteristic of the organization as well as an attribute and purpose of the organization itself

(Maqsood 2001).

Although SSM has undergone a number of revisions and modifications over the

period 1981-1990, the original seven-stage model is the most commonly used model and

forms part of the stages in this research. The seven stages are a number of illustrations that

result from an interactive process so that in practice, the process can start anywhere.

(Checkland and Scholes 1990) emphasize that SSM is a continuous process but the stages in

SSM are not rigid so that they can be adapted to the situation in implementation, usually in

use it does not have to stick to a forward sequential process, but the movement of each stage

in SSM can go forward or backward to each stage.

(Brocklesby 1995). Research can begin at any stage with iteration and backtracking

as important components (Maqsood 2001). The seven stages according to (Checkland and

Scholes 1990) are: (1) assessing an unstructured problem; (2) expressing the problem

situation; (3) building a problem definition related to the problem situation; (4) building a

conceptual model; (5) comparing the conceptual model with the problem situation, (6)

determine feasible and desirable changes, and (7) take corrective action on the problem, as in

Figure 23.

Actually, it can be inferred that the essence of SSM is to build models of systems

related to the problem situation, these models are used as a medium of discussion to bring

about changes in the actual situation. The discussion process allows participants to debate and

question each other in s u c h a way that a diversity of perspectives can be revealed. Soft

systems methodology is classically implemented through seven stages, as a process (Martin

2008). Robusta coffee agro-industry development in Kalibaru Banyuwangi uses the SSM

method as a supporting part for an integrated agro-industry system.

3.3.1 Stage 1 - Assess the unstructured problem

Assessing an unstructured problem is the same as stating a problem that requires

analyzing the problem and situation by allowing assumptions to circulate without limiting and

jumping to conclusions. At this stage, a number of required information such as history,

culture, social structure, type, and number as well as the views and assumptions of the parties

involved or the parties being explored using SSM were collected. The information collected is

directed to one theme, namely the development of robusta coffee agro-industry in Kalibaru-

Banyuwangi, although it does not rule out the possibility of other information that is not

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directly related to the business problem agro-industry development is also collected. This

information can be obtained through a series of observations of relevant stakeholders and

these observations can take the form of interviews with coffee actors or experts, local research

and development centers and selected industrial/private parties.

This observation was carried out to encourage the parties to be willing to meet in one

forum and dialogue on the issue of partnerships between government R&D institutions and

industry players. The results of each dialog were then distributed to the parties

involved/interested and this activity was carried out repeatedly as needed, then at each

meeting, either in the form of interviews or FGDs, recording was carried out and discussions

and questions and answers were carried out as needed, to assess or seek data on the

characteristics of respondents, themes that emerged, and the views of researchers on

respondents. The goal is that this information is richer and can be returned to the parties

concerned as input and evaluation, as for the input-output system and logic of thought for the

development of coffee agro-industry in Kalibaru, in Figure 24.

3.3.2 Stage 2 - Expressing the problem situation

The results of the previous stage are used to build a rich picture of the problem being

observed, this macro picture should be able to describe the activity process of each unit

involved in the problem situation so as to form relationships between the relationships of each

activity. This macro picture is also able to illustrate problems, functions, roles, and

environmental elements that must be easily understood, this is the basis for further discussions

and the rich picture is a useful tool for explaining to the parties involved in the problem of

partnerships between R & D institutions and industry and the private sector in various

situations.

3.3.3 Stage 3 - Building a problem definition related to the

problem situation

This part is to formulate the root definition, which is a short sentence that states "a

system does P in Q ways to achieve R". The root definition of the problem is built to identify

the relevant human activity systems in stages one and two. The root definition states the core

purpose of the underlying goal of each system. It is expressed as a transformation process in

which a number of input entities are transformed or transformed into a new form of the same

entity, the output. To determine the emergent properties it is necessary to consider CATWOE

(Table 8).

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4.1 General Condition of Coffee Plantations

Coffee plants grow well in tropical climates, located at 20° north latitude and 20°

south latitude, coffee plantation areas stretch from South America, Southeast and South Asia

to several countries in Africa. In the past, European nations brought coffee seeds from

Ethiopia, but the plant could not grow well in their country, therefore several European

countries utilized colonies located in tropical areas to cultivate coffee, from here then coffee

became the main commodity to be traded in the world. Indonesia is the second largest coffee

producer and exporter in the ASEAN region after Vietnam, and at the world level Indonesia is

the fourth largest coffee exporter after Brazil, Vietnam, and Colombia. Plantation is a

subsector supporting the economy in Indonesia, one of the important commodities is coffee

after rubber, coconut, and palm oil commodities, the volume of coffee exports in Indonesia

reaches an average of 1.5 million tons per year.

±379,354 tons per year with an average production of ±795,000 tons per year and

consumption reaching ±370,000 tons per year, including robusta coffee (81.87%) and arabica

(15.13%). Coffee production in Indonesia has increased from 2016-2021, with an average

increase of 2.44%, while coffee consumption in the market grew at an average annual rate of

6% in the last 25 years, while coffee consumption worldwide grew at an average annual rate

of 2%, and in the same period there was a slowdown rate to 1% after the global financial

crisis (Ministry of Agriculture 2019) and only 20% was produced into processed coffee, the

remaining 80% in the form of dry beans (Balitri Webinar 2020).

The area of coffee plantations in East Java reached 96,933 ha with a production of

50,687 tons per year, with an average productivity of 861 kg/ha/year, consisting of 59,448 ha

of smallholder plantations (58.99%), 21,327 ha of large state plantations (21.15%) and 20,032

ha of large private plantations (19.86%), (East Java Plantation Office 2019). Plantations in

Banyuwangi Regency are areas that are overgrown by the hardwood industry, one of which is

coffee plants, starting from the Kalibaru, Glenmore, Songgon, Pasangrahan, Glagah, Giri,

Wongsorejo, Kalipura to Licin areas. Kalibaru is an area that is geographically located at an

altitude of 428-800 MPDL, on the west side there are two national forests Alas Gumitir and

Meru Betiri, on the east side is Alas Purwo and Baluran Forest, while on the north side is

Mount Raung and Ijen Crater, on the south is water and sea, dominated by robusta type coffee

plants, with a coffee plantation area reaching ± 3.847 ha with a production of ±4,124

tons/year, consisting of 53.08% large state plantations, 15.27% large private plantations and

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31.65% smallholder plantations.

The people's coffee processing industry must be a top priority to increase the

economic growth of planters and surrounding communities, the lack of awareness and

knowledge of farm owners on the management of the coffee processing system.

Sustainability is evidenced by the fact that the minimum standards for quality,

quantity and continuity have not been achieved. The level of difficulty of implementation in

each processing unit is also a major obstacle that needs to be studied to get the expected

production results. This research on the coffee agro-industry value chain system aims to

answer the main problems by detecting key factors as a cause of not achieving the target, by

detecting primary activities and detecting supporting activities as a direction for the formation

of a better and balanced coffee agro-industry system. An agro-industrial value chain system

that is integrated and appropriate to the environment of actors, institutions and stakeholders is

one of the productive agendas for the future of coffee in the region and nationally. One of the

recommendations that has become a concern to date is to restrain the flow of raw material

supply chains (Gelondong) on a large scale with the aim of building production activities in

areas near raw materials, as for the basic assumption that this concept can be applied, if it gets

support from planters, farmer groups, government, support from related parties and support

for market access.

In general, this research is a systemic approach to managing the integrated flow of

products, information, money from upstream to downstream, (Pujawan and Mahendrawathi

2010), prioritizing components that increase efficiency in each operation (Zeng 2011),

building a network of flow activities from upstream to downstream (Stadtler 2015),

encouraging companies to innovate (Kitzmann and Asmus 2006), building the concept of

agro-industry sustainability (Pagell and Shevchenko 2014), this is an effort to integrate

thinking on all aspects involved (Srivastava 2007), with the intention of leading to the triple

bottom line balance of profit, people and planet (Porter and Kramer 2006); Ahi and Searcy

2013), and an integrated approach using the concept of green productivity (Marimin 2017).

This is also in line with the vision and mission of plantation development, namely: (1) the

realization of a productive, competitive and sustainable plantation agribusiness, (2) the

application of good agricultural practices, efficient and effective optimization of resources,

technical capabilities and clean moral integration (Disbun Jatim 2019). So that this area

becomes important to manage to increase the amount of production, maintain the quality and

continuity of raw materials, and continuously find a way out for the sustainability of coffee

production in the future by conducting more in-depth detection of the dimensions of

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sustainability, then conducting evaluations for strategic policy development, and determining

critical alternative assumptions for designing design concepts and sustainable value systems

in the robusta coffee agroindustry in Kalibaru (AGRIBARU).

4.2 AGRIBARU Sustainability Concept and Planning

Soft System Methodology (SSM) is a process-oriented problem approach (Checland

and Paulter 2010), providing practical solutions (Hanafizadeh et al. 2011), adopting a

participatory approach with stakeholders (Hidle 2011), integrated and dynamic to complex

problems by promoting interaction patterns between actors and experts for business

development and welfare improvement (Marimin and Maghfiroh 2011; Dalkin et al. 2011).

2018). In this research, the SSM steps which have seven stages of the process are added with

information and inserted with a method approach with the aim of clarifying and emphasizing

the study and facilitating visualization in the evaluation, of course, it does not change the

pattern and essence of the stages in the Checland and Paulter version of the SSM process, as

for the illustration of the stages of the SSM process and method binding in Figure 34.

Conclusions :

The design of the AGRIBARU value chain system is a systemic, adaptive and

comprehensive approach using soft system methodology (SSM) with the inclusion of binding

methods at each stage, then continued with several methods through deductive and inductive

analytical processes in each data processing, resulting in:

1. That farm productivity is still low at less than one ton per hectare per year, the supply

chain system is still weak with price uncertainty, poor supplier relations, no

understanding has been formed between business actors, and the value chain has not

been running well, due to the lack of quality of farmer services, limited quality of raw

materials, decreased productivity, uncertainty of demand, and demands for production

and processing quality continue to increase. Then produce projections and maps of

coffee research positions that can be used as an agenda for robusta coffee development

in the future by prioritizing coffee as a strategic commodity that has projections and

types of sustainable development for increasing total green productivity factors.

2. The performance assessment of farmers, traders, and industry resulted in a supply

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chain design and value chain structure pattern with grade 4a on raw material flow,

hard cash on money flow, and accurate-trustworthy on information flow.

Improvements in each performance metric can be used for continuous business

process improvement, as well as an implementation approach to improving coffee

production, quality, and continuity in Kalibaru.

3. Produce three main dimensions that have a strong sustainable influence as a

consideration in formulating the concept of sustainable design, namely the dimensions

of quality assurance, technology and resources.

4. Produce a tiered policy development formulation, starting from level IV independent

12 sub-elements, level III linkage 20 s u b -e l e me n t s, l e ve l II dependent 23 sub-

elements, level I autonomous 16 sub-elements, and for strategic alternative priorities

produced B4, G9, A3, C10, E7, I3, and E5, can be used as a recommendation material

in decision making, and implementation of implementation on AGRIBARU.

5. Produced a model for value system improvement oriented towards increasing activities

in primary functions and secondary functions, resulting in a system design and

sustainable value chain mapping that is more productive, adaptive and comprehensive

among value chain actors, with a potential value addition of 9.03% for loose coffee,

52.4% for dry bean processing, 70.9% for roasted beans, 77.9% for ground coffee, and

96.6% for packaged coffee.

SCM 300_ASU_ASSIGNMENT 2024_ROBUSTA COFFEE AGRO-INDUSTRY VALUE CHAIN SYSTEM DESIGN BASED ON GREEN TOTAL FACTOR PRODUCTIVITY

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