SCM 463_ASU_ASSIGNMENT_2024_SUPPLY CHAIN ANALYSIS OF PUREBRED CHICKEN EGGS ON SUCCESSFUL CHICKEN FARMS IN PATI DISTRICT

SUPPLY CHAIN ANALYSIS OF PUREBRED CHICKEN EGGS ON

SUCCESSFUL CHICKEN FARMS IN PATI DISTRICT

Introduction:

Laying-race chickens are cultivated to produce eggs commercially. The population

of layer breeds is increasing from year to year due to the increasing public interest in eggs for

consumption (Purba et al. 2018). According to the Decree of the Minister of Agriculture No.

425/KPTS/OT.210/7/2001, layers are adult chickens that are undergoing a period of egg

laying (production). Broadly speaking, it can be interpreted that layer breeding is all business

activities related to production related to processing, marketing, exploitation and livestock

housing, namely laying hens developed from the chick phase to the adult phase which is

undergoing a period of production (Purwaningsih. 2014). The layer breeder livestock sector

business is a business field that plays a very large role in fulfilling animal protein needs and

various industrial needs (Purwaningsih. 2014).

From eggs, nutrients are obtained that contain complete supplements and are easily

processed by the body. The protein content is quite high at 13-14% in chicken eggs so it is

very often used as the main side dishes and mixed ingredients for making food (martabak,

bread, and so on). Protein found in eggs has an important function in human daily life

because it contains various amino acids needed for human growth and intelligence. This role

cannot be replaced by vegetable protein sources (Purwaningsih. 2014). Egg consumption in

Indonesia is mostly fulfilled from purebred chicken eggs (91.82%). All levels of society have

become accustomed to purebred chicken eggs which are cheaper than other animal protein

sources such as chicken, beef or other animal protein sources. (Setyono et al. 2013).

According to the Center for Agricultural Data and Information Systems, the national

consumption of eggs in 2020 was 4.94 million tons and in 2021 it increased by 1.65% to 5.02

million tons. In 2022, national consumption of broiler eggs is estimated at 5.18 million tons

and continues to increase until 2024 to 5.48 million tons. (Pusdatin, 2020)

The increase in consumption projections indicates an increase in demand for

domestic chicken eggs, so this is an opportunity for the supply chain actors of broiler eggs

from upstream to downstream subsystems so that product quality is maintained when it

reaches the final consumer. To increase products in quantity, product specifications, price,

time, and quality in accordance with what is expected by end consumers. So that effective

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and efficient handling between aspects of production and distribution is needed. One of the

priority activities to improve the marketing of livestock products is to apply supply chain

management (Yolandika, 2016).

Chicken eggs are one of the well-known food sources of animal protein in the eyes of

the public and are in great demand, including the people in Pati Regency where the per-capita

consumption of purebred chicken eggs is higher than other animal protein source

commodities such as meat as shown in table 2 where the annual per-capita consumption of

purebred chicken eggs is the highest with 7,072 kg. which if converted to the level of

consumption of purebred chicken eggs for the people of Pati Regency with a population in

2021 of 1,349,172 people is found to be 9,567,653.238 kg.

Apart from being an ideal food ingredient, eggs are also one of the products that

have fragile properties and their quality changes rapidly both in the transportation cycle and

during storage (Nuryati et al. 2012). Broiler egg products have a limited storage period and

are susceptible to spoilage before being sold. Therefore, the way eggs are stored must be

considered by producers especially chicken egg farmers so that the egg storage period is

longer. The principle of egg storage is to minimize the evaporation of carbon dioxide (CO2)

and water vapor (H2O) in the egg, therefore a relatively low temperature is needed so that the

weight loss of the egg is slower (Nova et al. 2014). Based on the characteristics of the broiler

egg commodity, consideration is needed in analyzing the supply chain of broiler eggs

(Yandra et al. 2007). Increasing competitiveness is a key factor in developing supply chains,

especially in broiler egg commodities. Competitiveness can be improved through increasing

added value, business operations and customer service starting from cultivation, distribution

and marketing activities.

Based on production and consumption projection data, layer chicken farming is one

of the businesses with very good prospects in Indonesia. This is reinforced by data on the

projected balance of eggs in the future, which is estimated to experience a surplus from 2020-

2024, where in 2020 it is estimated that a surplus of 97.17 thousand tons, in 2021 a surplus of

156.92 thousand tons, in 2022 a surplus of 110.22 thousand tons and in 2023 a surplus of

70.28 t h o u s a n d t o n s and in 2024 a surplus of 35.67 thousand tons. Although broiler

eggs are surplus every year, the average growth has decreased (Pusdatin, 2020).

Meanwhile, Pati Regency itself contributes to the fulfillment of broiler egg needs

with the number of eggs produced in the 2021 period of 59,578,685 eggs, or if converted as

much as 3,723,667.813 kg. The number of eggs is produced from productive-age female

laying hens with a population of 3,351,811 individuals spread across 21 sub-districts in

Kabupaten Pati (BPS, 2021).

Thus, from the data on consumption and production of broiler eggs in Pati Regency,

it is found that in 2021 there is a deficit balance of -5,843,985.43 kg where the level of

production of broiler eggs in Pati Regency in 2021 which amounted to 3,723,667.813 kg has

not been able to meet the level of consumption of broiler eggs by the people of Pati Regency

which amounted to 9,567,653.238 kg. In addition, from the deficit balance, it is found that the

supply of chicken egg commodities that are in the hands of businesses/traders to meet

consumer demand are generally imported from outside the district. Imports or purchases of

chicken eggs from outside the district include from chicken egg producing centers in Java

such as Tuban, Blitar, Lamongan, Nganjuk and Bojonegoro (Suroso, 2017).

During 2019 until June 2022, the price of chicken eggs also tended to fluctuate at

the consumer level in Central Java Province. During this time span, the lowest price of broiler

eggs was between the level of IDR 18,950 per kilogram which occurred in October 2021, and

the price of IDR 18,950 per kilogram in October 2021. The highest level occurred in June

2022 at IDR 27,750 per kilogram. The highest level of broiler egg prices in 2019 to 2021

generally occurred at the end of the year in December but for 2022 the highest level

temporarily occurred in the middle of the month (MoT, 2022).

According to Susanty et al (2018), the supply chain is a system composed of

suppliers, manufacturers, transportation companies, warehousing, retailers, and consumers

who aim to produce goods or services, as well as deliver or distribute the goods or services

produced to end consumers. Meanwhile, according to another expert opinion, Chopra and

Meindl (2007), it is stated that the supply chain has dynamic characteristics and is always

flowing, involving three constant flows, namely the flow of information, goods and money.

In addition, Chopra and Meindl also explained that the main goal of any supply chain is to

meet consumer needs and generate profits or profits at each level of the supply chain.

The Food Supply Chain Network (FSCN) describes the supply chain, actors

involved, processes, products, resources and management, relationships, and characteristics

to understand complex supply chains (Vost, 2006). The FSCN framework begins with a

discussion of chain objectives to identify the characteristics of a supply chain. This is

followed by a discussion of 4 components, namely the first chain structure regarding

members in the FSCN, as well as their roles in the supply chain. third, the chain business

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process with the identification of actors in the FSCN, as well as the identification of these

actors in the integration or blending in the supply chain process. Third, chain management

explains how management between each supply chain process, and what level of support

from the government and other institutions in the supply chain process. Fourth, chain

resources identify the resources used in each supply chain process. Descriptive explanation of

the FSCN framework is not enough to explain the condition of the supply chain, so the next

step is to measure the performance of the supply chain to see the level of efficiency and

effectiveness of the supply chain which can be done by identifying added value, asset

management efficiency, marketing margins, and farmer's share (Vost, 2006).

Performance or can be called performance is the output resulting from the functions

of a job both in quality and quantity achieved in a certain period of time (Wirawan 2009).

Factors that can affect a performance achievement are also called ability and motivation

factors. Ability consists of potential and realization (knowledge and skills), and motivation

which is an attitude towards the work situation (Mangkunegara 2005). Performance or

performance is based on the level of successful implementation of work and abilitas (ability)

in achieving work goals. Performance can be concluded to be good and successful if the work

objectives achieved are also good. A supply chain consists of a collection of organizations or

companies that partner with each other. The supply chain functions to flow products from the

initial producer to the final consumer. The ultimate goal of the supply chain is to maximize

the value obtained and meet the needs and satisfaction of end consumers. If one of the

organizations or companies as a supplier is not good in terms of performance, for example,

the quality of the products produced is not in accordance with the agreement with the partner,

it will affect the partner's performance in remarketing the product which will result in the

overall supply chain performance which can be concluded that it cannot meet the satisfaction

of consumers who want quality products, as a result the value of the supply chain is reduced.

Competition is often faced by supply chains today, therefore all members of the supply chain

must be integrated in order to produce good supply chain performance or performance seen

from the achievement of supply chain objectives (Wirawan 2009).

One of the supply chain actors in Pati Regency at the producer level is Success

Chicken Farm, which produces eggs for the domestic market. This farm is located in

Bumirejo Village, Margorejo Subdistrict, Pati District and is run by the family of Mr. Edi

Sulistyono and managed individually. Although it is not the only broiler egg farm in

Bumirejo Village as there are similar broiler egg farms such as UD. Langgeng Jaya and Tani

Maju Chicken Farm, but this Successful Chicken Farm has the distinction of being the only

pioneer layer chicken farm in Bumirejo Village which has partner cooperation with home

breeders in terms of broiler egg production. DOC at Successful Chicken Farm amounted to

1532 heads per production cycle. According to the owner, in carrying out its activities, the

successful chicken farm often encounters several obstacles to its business, especially in its

supply chain, especially in managing relationships between chain members who work with

the Successful Chicken Farm.

1.1 Problem Formulation

Supply chain application in livestock agribusiness is one form of application that is

expected to be able to meet the needs of most people involved in the livestock business to

increase productivity, competitiveness, efficiency of distribution of information, money and

goods. From this supply chain analysis, it will be known what factors affect prices, added

value, and margins between supply chain levels, especially at the level of broiler egg

producers.

The main constraints in the supply chain are planning, socialization, delivery and

expectations (Achmadi, 2020). Therefore, supply chain management plays an important role

in efforts to improve the distribution of chicken eggs. The progress of an industry is

inseparable from the existing facilities and infrastructure, the cooperation and collaboration

between companies is one of the effectiveness in ensuring the supply chain until the concept

of supply chain management (SCM).

The existence of a cheap market program from the government by selling cheap

basic food products based on Pati Regent Regulation Number 2 of 2019 concerning the

provision of subsidies for the price of basic necessities for the community in weekly cheap

market activities should be an opportunity and challenge in supply chain competition in the

fulfillment of broiler eggs and an opportunity to establish cooperation with input suppliers,

farmers, partners, marketing institutions in order to compete and take advantage of

opportunities through effective and efficient supply chain management, it would even be

better if they could take part in the cheap market activities as a form of supply chain

development.

Based on previous years from the Pati Regency Central Bureau of Statistics, it is

stated that in 2017 the balance of broiler eggs in Pati Regency experienced a deficit of

7,465,713.83 kg, where the level of production of broiler eggs in Pati Regency was unable to

meet the level of consumption needs of broiler eggs in the Pati Regency community, with a

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production level of only 199,814.7 kg in 2017 and a very high consumption level of

8,116,162.95 kg (BPS, 2017). Chicken egg commodities that are in the hands of

businesses/traders are generally imported from outside the region due to deficit conditions.

Imports or purchases of chicken eggs from outside the region include: Tuban, Blitar,

Lamongan, Nganjuk and Bojonegoro (Suroso, 2017). From the statement put forward by

BPS, it can be seen that the production of purebred chicken eggs in Pati Regency is relatively

low. From the low production of purebred chicken eggs, it can be used as a challenge in the

supply chain of purebred chicken eggs in Pati Regency to increase efficiency and

effectiveness in the quality and production of purebred chicken eggs by improving all aspects

of the supply chain both in goals, resources, management, business processes, structure, and

performance.

Successful Chicken Farm is one of the broiler egg farmers in Pati Regency who is

also responsible for the sustainability of broiler egg production, seen from the situation where

there is a deficit condition of the broiler egg balance in previous years this has become a

challenge and learning for broiler egg farmers, especially meeting the demand for broiler eggs

to their consumers by identifying the supply chain at Successful Chicken Farm by knowing

how the conditions in the supply chain structure, how to manage the supply chain, and

whether the supply chain performance is maximized or not in the supply chain. This can later

be used as an evaluation material for the Successful Chicken Farm and the elements

incorporated in the supply chain in fulfilling the demand for broiler eggs as a product to its

consumers, as well as for maximizing the supply chain to realize the satisfaction of

consumers of broiler eggs, namely the people of Pati Regency.

So from the things described earlier, the author wants to identify whether the supply

chain of Successful Chicken Farm has been running well or not whether it is seen from the

actors involved, processes, products, resources and management, the relationship between the

elements involved in the supply chain with the Food Supply Chain Network (FSCN)

framework by looking at the supply chain objectives, supply chain management, supply chain

resources, supply chain business processes, supply chain structure, and supply chain

performance or performance.

From the explanation of the previous problem formulation, several points of problem

formulation can be drawn as follows:

a) What is the supply chain target of broiler eggs in Successful Chicken Farm in Pati Regency?

b) What is the supply chain structure of Successful Chicken Farm in Pati Regency?

c) How is supply chain management implemented in Successful Chicken Farm in Pati Regency?

d) What are the chain resources of Successful Chicken Farm in Pati District?

e) What are the chain business processes that occur in the supply chain of Successful Chicken

Farm in Pati Regency?

1.1 Supply Chain

Balher et al (2022) conducted research on the supply chain of chicken egg

commodities on chicken farms in Papakelan Village, Minahasa Regency which found that the

supply chain starts from producers/farms, then goes to small traders, and ends at the final

consumer. Product flow, financial flow, and information flow that occurs in the supply chain

process of chicken egg commodities in Papakelan Village, Minahasa Regency is quite good

because of the interaction and coordination that is well established between the actors

involved.

Research on supply chains was also conducted by Emhar et al (2014) related to the

beef supply chain in Jember Regency which showed that there were 3 flows in the beef

supply chain in Jember Regency that were not running optimally, and marketing efficiency,

marketing margins, and shared value were profitable and proportional to the contribution

made by each link in the chain.

So from some of the above statements, it can be concluded that the supply chain is a

series of cooperative activities between parties providing goods or services that are

interrelated in a collaboration to produce and distribute goods or services to end consumers

for consumer satisfaction and profit.

1.2 Food Supply Chain Network

In Is's (2019) research on the analysis of the supply chain of broiler egg commodities

in Bungo Regency using the FSCN framework, it was found that the market target for broiler

egg commodities is universal. Farmers tend to choose to sell the crops of buyers who have

become subscriptions. The business process of the supply chain of broiler eggs through the

cycle view, namely the procurement, replenishment and customer order cycles. The

procurement and replenishment cycle occurs before the end consumer places an order

classifying breeders, retailers, wholesalers, /distributors carry out the push process.

The research method used in supply chain analysis research is a descriptive method

using a supply chain management analysis framework called the FSCN (Food Supply Chain

Networking) Framework as conducted by Riwanti (2021). Riwanti (2021) conducted research

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on organic broccoli supply chain management. The method used by Riwanti (2021) is not

only the FSCN Framework, but also uses the marketing efficiency analysis method with

marketing margin and farmer's share tools. The FSCN Framework is used to descriptively

analyze supply chain management conditions. This method analyzes six elements that make

up the supply chain. The FSCN Framework will be used in this research with aspects

reviewed from Riwanti's (2021) research. The aspects that explain each element in the FSCN

Framework are also reviewed from books and other literature.

From Yolandika's (2016) research on broccoli supply chain management using the

FSCN framework, it was found that the condition of the broccoli supply chain was already

running well in terms of goals, management, resources, business processes, structure, and

supply chain performance.

In addition, there are also several research sources that use the FSCN framework to

measure supply chain performance including; Sumaiyah et al. (2013), Purba (2015), and

Fajar (2014). Sumaiyah et al. (2013) examined the analysis of shallot market integration in

Pamekasan Regency to see how supply chain performance was analyzed through marketing

efficiency by measuring marketing margins and farmer's share. Purba (2015) analyzed the

cabbage supply chain in Simalungun Regency also using marketing efficiency analysis. Fajar

(2014) measured the performance of the corn supply chain in West Java using marketing

efficiency analysis and value-added analysis.

1.3 Supply Chain Goals

From Sari and Nurmalina's (2013) research on supply chain management in the

organic rice networked supply chain. There are two goals to be achieved in the organic rice

supply chain including market and development goals.

In addition, Yolandika's (2016) research on Broccoli Supply Chain in Lembang

District, West Bandung Regency with FSCN Approach stated that market targets can be seen

from market segmentation efforts, integrated quality, and chain optimization. The

development goal to be achieved by the broccoli supply chain is to strengthen the supply

chain by implementing a sustainable partnership.

1.4 Supply Chain Structure

In a study conducted by Is (2019), it was stated that the structure of the supply chain

relationship of layer egg products in Bungo Regency was analyzed through the members that

make up the supply chain and the role of each member. Supply chain members in this case

are institutions or actors involved in product flow, financial flow, and information flow from

layer chicken farmers to end consumers.

Whereas in the research of Balher et.al (2022) it was stated that the supply chain

structure of chicken egg commodities in Papakelan Village, Minahasa Regency consisted of

several actors in the supply chain. The actors involved in this supply chain include producers

(In this supply chain structure, there are also 3 flows, namely product flow, financial flow,

and information flow.

Pathiassana's research (2022) states that the structure of the distribution channel

chain of broiler eggs through organizational units within the company consists of agents,

distributors, wholesalers, and retailers through commodity products or services that are

marketed.

1.5 Supply Chain Management

In previous research from (Collins Dunne 2002, referenced in Lestari 2009), it was

found that there are six key basic principles in supply chain management to strive for an

optimal supply chain. The six principles are (Collins Dunne 2002, referenced in Lestari

2009):

1. Focus on consumers and customers

The more competitors there are, the more supply chain management turns into a pull

system where consumers are the determinants of decisions made by the company

(Indrajit Djokopranoto 2006; Anatan Ellitan 2008). The basic and important thing in the

supply chain is to understand the needs of consumers and how suppliers work because

the ultimate goal of supply chain management is to meet the satisfaction of end

consumers.

2. Creating and spreading value

Value creation is fundamental in fulfilling customer satisfaction. The value distribution

of each supply chain member involved must be in accordance with each value created by

the chain members. Value can be created when there is innovation and utilization of

technology that makes production more effective and efficient.

3. Effective implementation of quality management

According to Indrajit Djokopranoto (2006), product quality is not only viewed from the

specifications of the product, but all influencing factors beyond the price desired by

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consumers, such as product distribution speed, product aesthetics and durability, product

safety, post-sales service response, and so on.

4. Establish open communication

The accuracy and trustworthiness of information can create effective communication.

Open communication can build good relationships between supply chain members.

Communication can be used as a reference in creating added value.

5. Ensure effective and efficient product logistics

Logistics management includes the process of handling, storing, and transporting

products. Supply chain management includes managing logistics from suppliers to end

consumers in a supply chain whereas logistics management is only logistics management

at the company level (internal).

6. Build good relationships between supply chain members

Good relationships in the supply chain are necessary for successful cooperation between

supply chain members. Honesty and openness to information can prevent

misunderstandings or miscommunication so that the relationship between supply chain

members is well maintained. Research on supply chain management has been conducted

by Noviyanty (2005). This research resulted in the assumption that for efficient supply

chain management, there must be cooperation from upstream to downstream companies

by paying attention to the performance matrix on prominent elements.

Usman (2007) conducted research on supply chain management analysis starting

from suppliers and factory activities. Research that uses this descriptive method

describes the entire supply chain management network contained in the company

concerned. From previous research, there is a similarity that supply chain management is

needed by companies for integrated and controlled company management development

efforts from primary activities to secondary activities in order to produce the right

product distribution, good productivity levels, and good company performance at the

company level.

1.6 Supply Chain Resources

In Is's (2019) research on the analysis of the supply chain of broiler egg commodities

in Bungo Regency, it is known that supply chain resources, especially physical and

technological resources in the supply chain of broiler eggs in Bungo Regency, are still

simple.

Meanwhile, Qhoirunisa's (2014) research on the rice supply chain stated that

constraints in supply chain resources in agribusiness are especially experienced in capital

resources because it is related to the smooth flow of money and capital to be used in the

smooth running of the business.

1.7 Supply Chain Business Process

Is's research (2019) states that the indicator of the smoothness of the business process

of a supply chain runs smoothly if the flow of products, finance, and information runs

smoothly and is well integrated.

In addition, it is also explained by Qhoirunisa (2014) that in the supply chain business

process there are supply chain business process relationships, if The cycle view consists of

four stages: procurement cycle, manufacturing cycle, replenishment cycle, and customer

order cycle.

2.8 Supply Chain Performance

In previous research from Sari (2014) which examined the performance of the

catfish supply chain in Indramayu Regency by comparing the channel performance of farmer

members of the farmer group-company and farmer members of the farmer group-bandar

found that the performance of farmer members of the city partner is still not efficient enough

when compared to the supply chain performance of farmer members of the company farmer

group. Soka et al (2017) assessed the performance of the commercial vegetable supply chain

in the traditional market of Bogor City by examining the added value and farmer's share of

each member of the supply chain involved.

Theoretical Framework

Supply Chain Concept

Lambert et al (2004) explain that the supply chain consists of a series of parties that

can be spread from raw material providers, manufacturers, distribution centers, retailers or

small traders as well as transportation that brings raw materials, semi-finished materials, or

finished products to the parties in need. The supply chain is a system where the organization

distributes its production goods and services to its customers. This chain is also a network or

network of various interconnected organizations that have the same goal, namely the best

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possible procurement or distribution of these goods (Kotler, 2004).

There are several previous studies that have examined the supply chain. Research

related to the supply chain of broiler eggs (Sundari et al 2018), there are 3 types of supply

chain components, namely:

a) Upstream Supply Chain

The upstream part of the supply chain includes the activities of a manufacturing company

with its suppliers. The main action in the upstream supply chain is procurement.

b) Internal Chain Management

Part of the internal supply chain includes all the processes of getting goods into storage that

are used in converting inputs from suppliers into the organization's outputs. The main

concerns in the internal supply chain are production management, manufacturing, and

inventory control.

c) Downstream Supply Chain Segment

Includes all activities that involve delivering products to end customers. The downstream

supply chain, directing consumer attention to retailers. According to Pujawan (2005), a

supply chain is a network of companies that work together to create and distribute a product

to customers. The company usually consists of a series of suppliers, factories, distributors,

stores, and supporting companies such as logistics companies. In a supply chain, there are

three kinds of flows that must be managed from upstream (raw goods) to downstream (final

products ready for consumption). The three kinds of flow are material, information, and

money.

Supply chains are managed by parties in a value chain for two important reasons. First,

companies try to get closer to consumers, thus reflecting a bond with the market. Third, all

companies organized in a supply chain formulate common supply chain goals as guidelines

for activities in the supply chain. In the supply chain, all stakeholders have a role, not just

companies such as suppliers. The three main levels of actors in the supply chain include the

single actor level, the supply chain level, and the political level that has a role in supply chain

operations. A simple supply chain has components called channels consisting of suppliers,

manufacturers, distribution centers, warehouses, and retailers that work together to meet the

needs of end consumers (Anatan & Ellitan 2008).

The supply chain cycle clearly explains the processes involved in the owners of each

process and their roles and responsibilities (Vorst et.al 2007). The supply chain is a system in

which the organization distributes its production goods and services to its customers. This

chain is also a network or network of various interconnected organizations, which have the

same goal, namely. the best possible procurement or distribution of these goods (van der

Vorst et.al 2007).

Supply chain applications in the livestock industry are one form of application that is

expected to be able to meet the needs of most people involved in the livestock business to

increase productivity, competitiveness, efficient distribution of information, money and

goods.

There are three kinds of supply chain components (Pujawan, 2017), First, the

upstream part of the supply chain includes the activities of a producer company with

suppliers. The main activity in the upstream section is procurement. the third internal

management of the chain is the internal part of the supply chain covering all the processes of

input goods to the processing stage. the main concerns in the internal management of the

chain are production management, manufacturing, and supply control. The third segment of

the supply chain. downstream includes all activities involving the distribution of finished

products to end consumers. The downstream supply chain directs attention to packaging,

distribution, transportation, and post-purchase services.

Food Supply Chain Network

Hudson (2007) states that the supply chain is a process of interaction between levels of

marketing institutions. And Mentzer et al. (2001) have described that the level of complexity

of the supply chain consists of three levels: direct supply chain, extended supply chain, and

ultimate supply chain. This supply chain analysis is conducted or evaluated in the context of a

complex network called the Food Supply Chain Network (FSCN) (Vorst, 2007).

Vorst (2007) and other researchers have discussed a framework for describing supply

chains, the actors involved, processes, products, resources, and the supply chain. The FSCN

framework is a tool for analyzing supply chain management conditions, management,

relationships, and characteristics to understand complex supply chains. The FSCN framework

is used as a tool to descriptively analyze supply chain management conditions. This method

analyzes the six elements that make up the supply chain. The beginning of the discussion in

the FSCN framework is chain objectives by identifying the specific characteristics of the

supply chain, integrating quality and optimizing the chain.

In the FSCN framework a number of distinctive characteristics of supply chains can be

identified by distinguishing the following four elements that involve coordination and can be

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used to describe, analyze and/or develop supply chains, namely:

•

The supply chain structure describes the actors involved in the network and their

respective roles in the supply chain. The structure also describes the elements within

the supply chain that can drive business processes. The key is to sort out which

members are critical to the success of the supply chain in line with the supply chain

objectives, so managerial and resource attention should be given.

•

Supply chain business processes are structured, measurable business activities designed

to produce specific outputs (consisting of physical types of products, services, and

information) for specific customers or markets. In addition to logistics processes such

as operations and distribution, the supply chain contains other business processes such

as new product development, marketing, finance, and customer relationship

management. In determining business process relationships In the supply chain, there

are cycle view and push or pull views (Chopra and Meindl, 2004). Cycle view in a

supply chain consists of 4 (four) process cycles. The first is procurement, which is a

cycle of ordering products from the earliest supply chain members. The third is

manufacturing, which is a cycle of processing raw products into finished products. The

third is replenishment in the form of replenishing the supply of products from previous

supply chain members due to more demand by consumers or also as an action to

anticipate unexpected demand. The fourth is customer orders in the form of orders by

end consumers (Chopra and Meindl, 2004). Push or pull is divided into two cycles, in

the pull process consumer demand can be known with certainty, in the push process

demand from consumers is not known with certainty and there needs to be an

anticipation process. The boundaries of push or pull in the supply chain business

process can be identified by the customer order arrives (Chopra and Meindl, 2007).

The chain business process also describes the distribution pattern in the form of

product flow, financial flow, and information flow that occurs between chain members. In the

supply chain business process, it can be seen whether the entire supply chain flow has been

integrated with each other with each member of the supply chain and whether the integration

is running well and explains how through certain strategic actions it can realize an integrated

supply chain.

•

Supply chain management describes the form of coordination and management structure in

the network that facilitates the decision-making process and the implementation of the

process by members in the supply chain, by utilizing the resources available in the supply

chain with the aim of realizing the supply chain performance objectives. With the existence

of supply chain management, it can be seen which party acts as a regulator and actor.

key points in the supply chain. Some things to look at as well are partner selection,

contractual agreements, and transaction systems, as well as government support and supply

chain collaboration.

•

Supply chain resources used to produce products and deliver them to customers (called

resource transformation). Supply chain resources can be physical resources, technology,

human resources, and capital.

Vorst (2005) also states that the implementation of FSCN can be used to identify one

or more supply chains, either parallel or sequential. As a result, companies or organizations

can play different roles in chain arrangements, and work with different chain partners.

Therefore, dynamic horizontal and vertical partnership changes are required.

In addition, performance measurement is also carried out. Company performance is

an assessment of the results of a number of factors in the form of internal organizational

environmental factors, external environmental factors, and internal individual factors within

the company (Wirawan 2009). Without knowing these factors, it will result in less than

optimal or even poor performance.

Operational Framework

The researcher focused on reviewing the broiler egg supply chain to assess the

chain's objectives, structure, management, resources, business processes and performance. By

identifying supply chain patterns, as well as analyzing the elements of the FSCN framework

in the supply chain, especially at the farm level, and continuing to other supply chain levels.

Then, calculating prices and profits in each supply chain flow, marketing margins and shares,

and added value at each level of the supply chain. In addition, an analysis of asset

management efficiency was conducted at the Success chicken farm level only due to the

focus on the overall broiler egg supply chain. Supply chain assessment requires a thorough

search for information and investigation. The method of qualitative analysis of supply chain

management refers to the Food Supply Chain Network's supply chain development

framework which modified by Vorst (2005).

Some things that need to be considered are first identifying targets in the supply

chain, then examining the four elements in the supply chain that are interrelated and

synergistic in the form of supply chain structure, supply chain management (SCM), supply

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chain resources, and supply chain business processes. The four elements synergize and

coordinate with each other to produce good supply chain performance output (Vorst, 2005).

The elements of supply chain performance in the FSCN framework are analyzed with the

following approach marketing efficiency using marketing margin and farmer's share tools

and asset management efficiency approaches using inventory turnover, inventory days of

supply, and cash to cash cycle time tools. After the condition of the purebred chicken egg

supply chain is clearly described, a value-added analysis is carried out to determine whether

this supply chain can achieve the goal of maximizing added value or not and how much

added value is obtained by the entire organic rice supply chain.

In order to successfully improve product competitiveness, a company also needs to

look for competitive advantages outside its own company, namely to the value chain of

suppliers, distributors and customers. In addition to paying attention to the target elements of

the supply chain system, it is also necessary to descriptively identify which parties are

involved in the supply chain.

Food Supply Chain Network (FSCN) Framework

The broiler egg supply chain model was analyzed using a supply chain development

method that follows the Food Supply Chain Networking (FSCN) process framework of

Lambert and Cooper and modified by Van der Vorst (Vorst 2007). Each part of the

framework is analyzed descriptively but not the chain performance. Supply chain

performance will be analyzed and measured quantitatively through marketing efficiency

analysis.

In the FSCN Framework, there are dashes that contact each element. There are one-

way and two-way dashes. One-way dashes indicate that one element affects another. A two-

way line indicates that there is a mutual influence relationship between the three elements.

The implementation of management in the supply chain will affect the business processes

that occur between members of the supply chain and vice versa, the business processes that

occur will also affect what management a supply chain will implement. The six elements in

the FSCN framework are:

Target Supply Chain Target Market

Describes how the supply chain model takes place for the product being marketed.

Market objectives are described such as who the customers are, what they want and need

from the product. Market objectives in FSCN can be classified into: (1) market segmentation,

(2) ntegrated quality, and (3) chain optimization or a combination of the three.

Development Goals

The target or object in the supply chain that is to be developed by several parties involved in

it. The target of developing the supply chain of broiler eggs is designed jointly by the supply

chain actors. Forms of targets can be in the form of creating coordination, collaboration, or

developing the use of information technology and other infrastructure that can improve

supply chain performance.

1. Supply Chain Structure

The supply chain structure will be explained in two parts, namely (1) chain members

and commodity flows or describing who are members of the supply chain and the role of each

supply chain member and (2) supply chain entities or elements in the supply chain that can

stimulate various business processes. These elements include products, markets, stakeholders,

and competitive situations.

2. Supply Chain Management

Supply chain management. describes the form of coordination and management

structure in the supply chain network that facilitates the process of making decisions quickly

by supply chain actors by utilizing the resources owned in the supply chain to improve supply

chain performance. The aim is to find out which party acts as a regulator and the main actors

in the supply chain. The main actor is the party that carries out most of the activities in the

supply chain and has full ownership of the assets it owns. Some things that need to be studied

are partner selection, contractual agreements and transaction systems, government support

and supply chain collaboration.

3. Supply Chain Resources

Each member of the supply chain has potential resources to support supply chain

development efforts. The resources assessed include physical, technological, human, and

capital resources.

4. Supply Chain Business Process

The supply chain business process explains the processes that occur in the supply

chain in order to find out whether the entire supply chain flow is integrated with each other

with each member of the supply chain and whether it is running well or not and explains how

through certain strategic actions it is possible to realize an established and integrated supply

chain. Supply chain business processes can be reviewed based on aspects of business process

relationships between supply chain members, and distribution patterns.

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5. Supply Chain Performance

After the five previous elements are descriptively analyzed, supply chain performance is then

assessed to achieve the ultimate goal of the supply chain, which is to meet consumer

satisfaction and satisfy all supply chain members. Supply chain performance measurement is

carried out by analyzing marketing efficiency by examining asset management efficiency,

added value, marketing margin, and farmer's share.

4.1 Quantitative Analysis

4.1.1 Marketing Efficiency

Marketing efficiency is used to determine the performance of a supply chain assuming

that outputs are in physical form. Marketing efficiency is usually measured by the price

correlation of the same commodity at different market levels. Marketing efficiency can occur

when: (1) suppression of marketing costs so as to obtain a higher level of marketing profit,

(2) the percentage difference in prices paid by consumers and producers is not too high, (3)

the availability of physical trading facilities, (4) the existence of healthy market competition

(Soekartawi 1989). Marketing efficiency in this study can be seen from the indicators of asset

management efficiency, added value, marketing margin and farmer's share.

4.1.2 Marketing Margin

Marketing margin is the difference between the price paid by consumers and the price

received by producers. The price difference is due to the different value of the services that

marketing institutions have performed in the supply chain. The services carried out by each

unit of the marketing agency are included in the expenses referred to as marketing costs.

However, in the marketing margin there are not only marketing costs, there are also profits or

profits obtained by marketing institutions.

Each marketing institution carries out different marketing functions, resulting in

differences in selling prices from one marketing institution to another to the consumer level.

The more marketing institutions involved, the greater the price difference between the

producer level and the price at the final consumer level. The more marketing institutions

involved, the greater the price difference between the producer level and the price at the final

consumer level, which means the greater the level of marketing margin (Kohls & Uhl 2002).

Marketing margin analysis is carried out to determine the components of marketing

costs that make product prices increase and differ between one supply chain actor and

another. The marketing margin reflects the difference in income received by each supply

chain actor. This is because the amount of marketing costs incurred by each supply chain

actor is also different, depending on the marketing function performed. The marketing margin

can be mathematically formulated as follows (Kohls & Uhl 2002).

Once the farmer's share value is known, the marketing efficiency of the broiler egg

supply chain can be determined. Then, other performance such as asset management

efficiency is measured through other metrics such as inventory turnover, inventory days of

supply, and cash to cash cycle time. These three metrics are only measured at the level of

Successful Broiler Farm because the supply chain member at the center of this research is

Successful Broiler Farm.

4.1.3 Asset Management Efficiency

Supply chain asset management efficiency is one of the performance measurement

attributes in SCOR (Supply Chain Operations Reference) metrics. There are two categories in

SCOR metrics, namely the customer side and the internal side. For this study, only the

internal side is analyzed because when analyzed from the customer side, the final product of

broiler eggs received by customers does not come from just one supplier, but comes from

many suppliers. Meanwhile, the focus of the supply chain of purebred chicken eggs in this

study is a business that acts as a supplier of purebred chicken eggs, so the results of the

analysis are less appropriate. The asset management efficiency attribute is on the internal

side. Therefore, this study only analyzes the efficiency of asset management in supply chain

members who are the main focus of the broiler egg supply chain, especially at the Successful

Broiler Farm.

•

Inventory turnover

This metric measures the frequency of inventory turnover that has been replaced over a

period of time and explains how many times an asset can be used to generate profit or

revenue. According to Russell and Taylor (2000), inventory turnover is obtained by dividing

the cost of good sold by the average aggregate value of inventory. The cost of product sales

does not include discounts or mark ups, while the average aggregate value of inventory is the

sum of the values of all items in inventory. Supply chain performance is said to be better if

the value of

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the greater the inventory turnover. The following is a mathematical calculation of inventory

turnover (Russell & Taylor 2000).

•

Inventory days of supply

This metric measures inventory adequacy in days. Inventory days of supply is the average

period (in days) a company can survive with the amount of inventory it has if there is no

further supply. Supply chain performance is said to be good if it is able to rotate assets

quickly. Thus, the shorter the inventory days of supply, the better the supply chain

performance. The calculation of inventory days of supply can be seen below (Russell &

Taylor 2000).

•

Cash to cash cycle time

This metric measures the speed at which the supply chain turns inventory into money. The

shorter the time it takes, the better for the supply chain. A good company has a short cash to

cash cycle time. There are three components to this calculation, namely:

Average days of account receivable (in days) is a measure of how quickly customers pay for

goods that have been received.

Average days of accounts payable (in days) is a measure of the speed at which the company

pays suppliers for materials/raw materials that have been received.

Inventory days of supply (in days).

The following is the calculation of cash to cash cycle time according to Pujawan (2005).

4.1.4 Added Value

In creating added value, there are two ways, namely innovation and coordination.

Innovation is an activity to improve existing processes, be it procedures, products, and

services by creating new or modifying existing organizational configurations. Meanwhile,

coordination is the harmonization of functions in all parts of the system. This can be an

opportunity to improve product coordination, information services in agricultural production

to increase product value at every stage of the agricultural production process. The concept of

added value does not solely apply to the physical product, but also to the service created

(Boadu 2003). According to Darius (2021), economically, increasing the added value of an

item can be done through the following:

•

Form utility, the added value of the product will be obtained when t h e goods change

shape.

•

Place utility, the added value of t he product will be obtained if the goods are moved.

•

Time utility, the added value of the product will be obtained when it is used at different times.

•

Position utility, the added value of the product will be obtained when the ownership of the

goods moves from one party to another.

Value addition is the process of combining and modifying activities, processes, and

products. Adding value to the product aims to differentiate one's own product from

competitors' products because there are special characteristics in the product that contain

more value in the eyes of consumers so as to create a competitive advantage (Boadu 2003).

There is a typology concept of value-added initiative opportunities based on the dimensions

proposed by Coltrain et al. (2000) as follows.

According to Hayami (1990) the added value obtained is the difference between the

selling price and the cost of inputs during the production process. Value added shows the

reward for capital, labor and management of the company.

The added value obtained by the supply chain of purebred chicken eggs will be

measured and analyzed in this study. The value-added results reflect the economic value

obtained by members of the whole supply chain. The method used in measuring the value

added of the broiler egg supply chain is Balk's method called the firm's value added. This

method is used because it will not cause double counting in measuring the value added of the

whole supply chain of broiler eggs because the component that becomes the input value is the

cost of intermediate inputs. Intermediate inputs are outputs produced by other producers.

Inputs included in this type are materials, energy, and services. These three inputs do not

become inputs used by other producers because they can only be consumed by producers who

buy them. Unlike capital and labor inputs, they are primary inputs because they can be used

by two or more producers, which can lead to double counting when measuring the value

added of all supply chain members. In addition, the Balk Method is also used because there is

an explanation of what components make up the values in the calculation formula, especially

the input values. The formula for calculating the added value created by each member of the

supply chain of broiler eggs (Balk 2002):

Value-added measurement is done in one year. The product of output price (p) and

output quantity (y) i s t h e output value. The outputs are products in process and finished

products (Brunton & Trickett 2007). The sum of the product of the number of inputs (x) and

energy cost (E), the product of the number of inputs (x) and material cost (M) and the product

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of the number of inputs (x) and service cost (S) is the input value. The difference between

output value and input value is called value added. Energy costs are costs incurred for the use

of energy inputs in production such as gasoline, water, electricity, and others. Material cost is

the cost incurred for consumption of raw materials in the production process such as feed,

medicines, and others. Meanwhile, service costs are costs incurred for the maintenance of

assets used such as cages and others during production or can also be said to be maintenance

costs.

SUPPLY CHAIN OVERVIEW:

The supply chain of broiler eggs at Successful Chicken Farm flows from partner

farmers to Successful Chicken Farm. From Successful Chicken Farm, some eggs flow to

retailers and some flow directly to end consumers. The supply chain consists of several

partner farmers, Successful Chicken Farm, retailers, and end consumers, as well as

supporting parties outside the main supply chain. All members of the broiler egg supply chain

are respondents in this study with various characters that differ from each other.

5.1 Overview of Partner Farmers

There are five respondent farmers as partners of Successful Chicken Farm. These

five farmers are small-scale or home-based laying hens that are then sold to Successful

Chicken Farm. Successful Chicken Farm in this case becomes a collecting partner that

bridges partner farmers in helping to market their products. 2019 was the first step in the

respondent farmers' farming experience with Successful Chicken Farm and already

cultivating laying hens. Initially, only three farmers partnered with Successful Chicken Farm,

then the number of partner farmers increased to five farmers. The respondent farmers were

further studied in terms of several characteristics, namely age, number of individual laying

hens, formal education, farming experience, and side businesses cultivated by the farmers.

From field data, the labor of each partner farmer is all self-managed by the farmer.

During the cultivation of laying hens, the labor is in charge of managing, and controlling

individual laying hens (feeding, medicine, waste management, and cage cleanliness),

harvesting, and depositing to Successful Chicken Farm as a sales partner.

The broiler egg farming of the respondent partner farmers is a side business as an

additional income apart from the main job. In terms of age, the age range of respondent

farmers is quite long, from 27 to 56 years old. In terms of gender, 4 partner farmers are male,

and 1 is female. For general data on respondent farmer partners can be seen in Table 8.

The level of formal education of all partner farmers varies from the lowest level of

elementary school to the highest level of Bachelor's degree. In this case, the level of

education received by the breeder formally does not factor in the good or bad quality of the

breeder, the breeder relies on the experience gained during his life in the laying hen

cultivation business (Sari, 2012). The length of farming experience can be used as a

benchmark for the quality of performance for farmers because from every time they maintain

or cultivate laying hens, every different good or bad event has been experienced by farmers,

such as indications of declining egg quality related to biological factors of chickens, to

poultry diseases that attack, to handling these bad things, and even succeeding in making

concoctions of drugs and good feed for chickens. The following data on the time distribution

of farming experience and the number of individual chickens owned can be seen in Table 9.

The length of time of experience in livestock farming or laying hen cultivation is

calculated from the first time the farmer started to raise chickens until the time this data was

taken. Partner farmers have different farming experiences, ranging from the longest at 12

years to the most recent at 3 years. The average number of individual laying hens from the

five partner farmers is 45 laying hens.

5.2 Overview of Successful Chicken Farm

Successful Chicken Farm is one of the individual businesses engaged in animal

husbandry. This business was established and operated starting on 23 February 2016 by Mr.

Edi Sulistiyono, who is the Secretary of Bumirejo Village, Margorejo Subdistrict, Pati

District. This livestock business started as a hobby and then continued as a profitable

business unit. The business is located in Dukuh Blado RT 08/RW 01, Bumirejo Village,

Margorejo Subdistrict, Pati District with a land area of 1.5 hectares.

2,000 m2 with 4 lanes of open house configuration cages. Each lane is 40m x 6m and the

building is 10m high. The farm is located on the edge of the village some distance from the

village and is built behind the owner's house, Mr. Edi. The location of the cage, which is

some distance from the village, was chosen with the consideration that the odor from the

chickens does not disturb the surrounding residents. For the main management, there is an

office of the business which is located in the house of the owner, Mr. Edi.

In addition to cultivating laying hens, Successful Chicken Farm is also conducting a

small stage of cultivation for Peking ducks with a temporary number of 200 heads. The land

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used for duck cultivation is still one complex with layer cages. Currently, for the broiler egg

commodity, Successful Chicken Farm is a business entity that moves from the on-farm

subsystem to the downstream subsystem (egg sales or marketing). This business entity

cultivates broiler eggs, starting from raising laying hens, harvesting eggs, collecting eggs

from partner farmers, sorting, to marketing b r o i l e r eggs to broiler retailers. In addition,

the chicken farm also successfully serves direct sales to consumers who buy on a small scale.

In an interview with the owner of this business, Mr. Edi, Successful Chicken Farm

has several objectives including:

1. Become a pioneer chicken farming business, especially in the Bumirejo Village area,

Margorejo District.

2. Producinggood quality eggsthat are in accordance with consumer desires.

3. Helping local farmers and partner farmers become better and more prosperous.

Successful Chicken Farm has a clearly structured organization. This structure

consists of functional positions that serve to delineate the responsibilities of each worker in

the enterprise. The structure also provides information on the scope of work or tasks of each

worker and illustrates the direction of coordination between them. The organizational

structure of Successful Chicken Farm can be seen in Figure 8.

The cultivation of laying hens is not only carried out by partner farmers, but also by

Successful Chicken Farm. The principle of cultivation carried out by all three is the same,

including the inputs used. Every week there are two production cycles (harvesting of broiler

eggs) and after harvesting, the partner farmers immediately deposit the eggs to the successful

chicken farm to be weighed. After weighing, the farmer gets the deposit of the chicken eggs

according to the quantity of eggs produced. The process of broiler egg cultivation carried out

by partner farmers and Successful Chicken Farm can be described in the following stages:

Breeding of layer breeds of DOCs

Partner farmers and Successful Chicken Farm use 4-6 week old starter class layer

DOC purchased from southern Pati (Pucakwangi and Tambakromo subdistricts) or from

Semarang (Charoen Pokphand) to raise before becoming Layer Chickens that are ready to

produce until 6-8 months of age.

Layer Chicken Care and Disease Management

Daily chicken care includes feeding and drinking every morning and evening. For

chicken feed concoction consists of a mixture of several ingredients including rice bran,

concentrates, grains, and vitamins to stimulate egg production (such as AMINOVIT,

Microgen, and so on). According to Mr. Edi, the feed mix between farmers from both

successful chicken farms and partner farmers may be somewhat different, but farmers must

have their own feed mix recipes so that layer chickens produce high quality eggs and high

productivity. The point is that although the feed mix is different, the farmers have one goal to

produce good quality eggs and produce more eggs. The cleanliness of the cage is also always

maintained every day, especially the cleaning of chicken feces. Chicken feces are collected

and used as a by-product in the form of manure which is usually purchased by surrounding

farmers at a price of IDR 5000 per 1 sack of 25 kg. Every 1 week, cleaning and disinfection

of the chicken coop is mandatory. Checking the chickens is done every afternoon while

feeding to determine the health condition of the chickens. For chickens that are sick, they

will be injected with medicine or also with mixing the medicine into the feed in the cage

block with the sick chickens.

Harvest

Harvesting is done when the hens have started producing eggs, on average

Laying hens start producing after 24 weeks or 6 months to 48 weeks or 8 months of age. At

that age, laying hens are already biologically mature. The characteristic is that the cockscomb

of the laying hen has grown perfectly and is bright red in color. For the productive age of

layer chickens in laying eggs is up to 2 years old. After that, the chicken enters the afkir

period where it is no longer productive to lay eggs. Harvesting is done every day in the

afternoon before feeding. Then the eggs are collected and sorted. After going through the

sorting process, the eggs enter the storage warehouse to be ready for sale.

Marketing Activities

Marketing of purebred chicken eggs carried out by Successful Chicken Farm can be

seen from the components of the STP marketing strategy (segmentation, targeting,

positioning) and the 4P marketing mix (product, place, price, promotion). The segmentation

of organic products produced by this business entity is for all groups because eggs are one of

the products that contain a common source of protein, and their high affordability.

The target market segment pattern set is full market coverage because the egg

products offered can be enjoyed by anyone because they are universal, segmented to all levels

of society for all circles, both upper, middle and lower classes. The placement of product

characteristics in the minds of consumers as a positioning of broiler egg products from this

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Successful Chicken Farm business is nothing specific and special, the point is a good and

quality egg product. Judging from the 4P marketing mix, the products sold by this business

are purebred chicken eggs and Peking duck. For the place component, Successful Chicken

Farm markets purebred chicken eggs to retailers such as Takyla Retail, Manunggal Roso

Retail, Mrs. Sri. Meanwhile, Peking duck products are sold to the poultry market at Puri

Market as well as to the culinary industry and restaurants in Pati and Kudus Districts. The

prices offered by Successful Chicken Farm vary due to the variety of products sold. Eggs are

sold at wholesale prices between Rp. 18,000 - Rp. 26,000/kg, live Peking duck at individual

prices depending on weight, for a basic weight of Rp. 28,000/kg. Not many promotional

techniques are used because this business entity sells its products to retailers that are already

subscribed. Promotion is done by word of mouth.

5.3 Retail Overview of Takyla Retail

Takyla retail is a business that sells various kinds of egg products on a large scale. The

products sold include purebred chicken eggs, free-range chicken eggs, quail eggs, and duck

eggs by targeting consumers with large-scale purchases such as culinary MSME players and

consumers with retail purchases. Product storage is placed in crates/boxes according to

product category, and stored at room temperature so that product quality is maintained and

does not spoil quickly.

The retail owner has only opened a sales retail in one place, which is near the Pati

Regency Center. It is located in Parenggan Village, RT 09/RW 05, Pati District. Suppliers of

egg products come from various regions such as purebred chicken eggs, one of which is from

Success Chicken Farm, free-range chicken eggs supplied from farmers in Tambakromo sub-

district, quail eggs from farmers in Margoyoso sub-district, and duck eggs from farmers in

Trangkil sub-district. The retail location where egg commodities are sold is very strategic

close to the highway, and is in a residential complex, so the affordability is easy for

consumers who want to buy a variety of egg products. The retailer agreed to work with

suppliers, one of which is Successful Chicken Farm to provide the supply of broiler eggs.

Takyla retail has a workforce that is entirely family members. The retailer has never

hired outside family members because as long as the task can be handled by family members

themselves, there is no need to take labor from outside, besides that because of the family

member factor, they already know the characteristics of the individual and trust the

individual. Not many promotional techniques are used in marketing egg products. In the

beginning, the marketing of the products sold was only through mouth to mouth techniques,

then it became developed because of the quality of the goods and satisfactory service to the

end consumers, this retailer then serves delivery for the Pati District area. Because the image

of egg products from this retailer is always fresh and the quality is maintained, the name

Takyla Retail is increasingly known to the community around Pati District, so that more and

more consumers buy egg products from this retailer.

Manunggal Roso Retail

Manunggal Roso Retail is an egg and milkfish product retailer located in Puri

Village, Pati District. This retailer sells a wide range of products related to fresh and

processed chicken eggs and milkfish. The products sold by Manunggal Roso Retail include

broiler eggs, native chicken eggs, milkfish, milkfish brains, and frozen crispy milkfish. This

retailer Targeting consumers with large-scale purchases such as culinary MSME players and

household consumers with retail purchases. The retailer has a special warehouse to store

products according to their type, namely a special room to store eggs, a special pond to

temporarily accommodate milkfish, and a freezer to store processed milkfish. There are three

workers employed, one person who is still in the same family as the owner, and two people

from outside the family. Workers who are always friendly in every service to end consumers

and are not stingy in providing information are an added value of this business and of course

consumers will be comfortable if they will buy products from this place. The division of tasks

for workers in this retail, namely one person in charge of cashier as well as administration of

goods, two people in charge of helper as well as loading and unloading goods.

There are no special promotional techniques in selling the products. Despite this,

there are many end consumers who buy organic products at this retailer because the sales

location is in a strategic location, which is very close to the Puri Baru Pati Market block. This

retailer is not the only one selling eggs at that location. There are quite a number of other

shops, kiosks or retailers that both sell broiler egg products near the business location, so

there is bound to be competition between this retailer and other businesses. To compete with

its competitors, Manunggal Roso Retail certainly tries to provide the best products and

optimal service to consumers. This retailer is selective in choosing suppliers as its partners to

be able to produce products, especially purebred chicken eggs that meet consumer demand.

Mrs. Sri's Retail Shop

Mrs. Sri's Retail Shop is a retailer that sells general necessities such as groceries and

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other goods located in Sidokerto Village, Pati Subdistrict. Among the groceries sold is one of

the eggs supplied by Success Chicken Farm. For product storage, this retailer does not have a

special place to store large quantities of eggs, because they are sold directly to consumers

with the target of household end consumers. The retail workforce is managed by Ms. Sri

Setyaningsih. There are no special promotional techniques in selling the products. However,

the end consumers who buy organic products in this retail are very many because the sales

location is in the middle of a settlement and even though it is classified as retail, the prices of

goods sold in this shop are cheaper than retail stores in general, and that is the main attraction

for consumers.

5.4 Overview of End Consumers

The end consumers in the supply chain of purebred chicken eggs do not sell chicken

eggs again to other parties, but consume them directly or if in large parties, they are used as

raw materials for the MSME and culinary industries, such as bakeries, fried rice traders, and

others. The consumers targeted in this supply chain are all people without regard to class,

status and gender.

The supply chain of eggs from successful chicken farms sells its products through

three different supply chain members. The end consumers who are customers or buyers of the

products in large-scale retailers such as Takyla and Manunggal Roso include local residents,

or industry owners or MSMEs and those from the local area, namely residents of Pati

Regency. However, the difference in end consumers who are the sales objectives of small-

scale retailers such as Toko Ibu Sri is that retailers target end consumers from both the

general public and households, so that the consumers targeted by large-scale retailers are

more than small-scale retailers.

5.5 Overview of Supporting Parties Outside the Supply Chain

Supply chain supporting parties are parties that help support activities in the supply

chain indirectly. In this supply chain, there are supporting parties that indirectly help support

the operational raw materials needed by the Successful Chicken Farm and partner farmers

such as poultry feed ingredients, vitamins, and DOC.

The supporting party referred to here is Intan Putra PS, a company that provides various

needs related to poultry farming such as feed, vitamins, and DOC. This business is located on

Jalan Pucakwangi-Sokopuluhan RT 1 RW 3, Pucakwangi village, Pucakwangi sub-district,

Pati district. Intan Putra PS as a supporting party is technically not included in the supply

chain of purebred chicken eggs directly because it does not involve activities or matters

related to either the cultivation, distribution, or marketing of purebred chicken egg products.

5.1. Supply Chain Goals

Supply chain goals are the chain objectives that the supply chain aims to achieve. This

element explains what the supply chain objectives are. Chain goals can be seen from two

sides, namely market goals and development goals. The results of the assessment of chain

objectives are one of the elements that determine whether the supply chain of broiler eggs is

running well or not.

5.1.1. Target Market

The target market for broiler egg products is generally aimed at the domestic or

regional market. There is a grade in purebred chicken eggs marketed at the farmer level and

the grade is determined jointly by partner farmers, Success chicken farms, and retailers by

observing the characteristics of chicken eggs according to consumer demand, the sorting

process to categorize eggs according to grade is not complicated. The sorting process that is

carried out is categorizing chicken eggs based on size, shell hardness, and color. For grade A,

eggs with large size, hard shell, and bright color, grade B with small size, hard shell, and

bright color, and grade C with small size, slightly hard shell, and pale color. This sorting

activity is only carried out at the Success chicken farm level but on the basis of joint

formulation with partner farmers and retailers, and is not carried out at other levels of the

supply chain.

Market targeting can also be seen from market segmentation efforts, integrated

quality, and chain optimization. Broiler eggs are segmented for all groups (full market

coverage) by this supply chain. Broiler eggs are a common product with a price that is easily

accessible to the public. Affordable prices and a large number of product enthusiasts are due

to the image of purebred chicken eggs, which are one of the products that contain daily

protein sources, as well as the general availability embedded in the minds of consumers.

The quality of the purebred chicken eggs produced according to grade is emphasized

by this supply chain. This purebred chicken egg product. All supply chain members always

maintain good product quality. If the quality of the product changes, then the chain member

who knows about it, immediately communicates it with the previous chain member.

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Chain optimization is carried out by the broiler egg supply chain in creating value in

the broiler eggs produced. Purebred chicken eggs receive special attention by all members of

the supply chain because this product must be completely maintained in quality and avoid

rupture or spoilage during storage and transportation, because purebred chicken eggs are the

most important part of the supply chain is a perishable product with a relatively short shelf

life. It is important that the quality of the eggs is maintained until they reach the consumers.

5.1.2. Development Goals

Development goals are the objectives to be achieved by developing something

together in the supply chain. This development can take the form of creating coordination,

collaboration, and the use of technology that can improve supply chain performance. This

development process must be planned, carried out and evaluated together by all members of

the broiler egg supply chain. This is because the development carried out aims to benefit all

members of the broiler egg supply chain. The development process is not allowed to benefit

only one party in order to create added value to the broiler egg product and create a

competitive advantage in the supply chain. Now, competition is no longer faced by each

business actor, but is faced together by the supply chain.

The development target to be achieved by the supply chain of purebred chicken eggs

is to increase the quality and quantity of better purebred chicken eggs, especially for farmers

and partner farmers to be more productive, in addition to improving the quality of service

from retailers. This is for the sake of the demands of market demand for purebred chicken

eggs by consumers who want the best purebred chicken egg products because it is known that

if quality is maintained, then consumers will increasingly trust. In addition, from a

psychological perspective, good service fosters a closer relationship between

retailers/retailers and consumers.

Supply chain coordination and collaboration in achieving its goals can be seen from

the communication that is carried out. Farmers can find out the quality of broiler eggs

through shared information from retailers, retailers know it from consumers. If there are

complaints from consumers, it will be conveyed to the retailer which is then conveyed again

to the successful chicken farm. From this submission, the successful chicken farms then

jointly communicate with partner farmers to find solutions. In responding to consumer

complaints, partner farmers and successful chicken farms related to the quality of chicken

eggs by creating the right feed mix for chickens so that the eggs produced have hard, bright,

and good quality shells. This is done to maintain product quality and achieve the ultimate

goal of the broiler egg supply chain, which is consumer satisfaction and loyalty.

5.2. Supply Chain Structure

The supply chain structure of broiler eggs can be analyzed through the members that

make up the supply chain and the role of each member as well as the entities or elements

contained in the supply chain such as products, markets,

stakeholders, and the competitive situation. The members of the supply chain are the actors

who are involved in the product flow, financial flow, and information flow. The end

consumer becomes a part of the supply chain structure because the end consumer is also

involved in the flow of products, finances, and information. The supply chain structure of

broiler eggs on successful chicken farms is in the form of a network or can be called a

network supply chain. The network supply chain structure can be seen in Figure 9.

The chain structure shown in Figure 9 is a network supply chain structure where

there is no flow. The lines only illustrate the relationship between members of the supply

chain. The supply chain structure in Figure 10 already includes the three flows that flow

along the supply chain of broiler eggs and each member of the supply chain has been grouped

based on the same role to facilitate discussion. Partnering farmers are grouped as partner

farmers -retailers that distribute purebred chicken eggs are grouped as retailers.

5.2.1. Partner Farmers

Partner farmers are chain members who initiate the broiler egg supply chain. These

farmers play an important role in the supply chain because the quality, quantity and

continuity of egg supply are determined by them. There are five farmers who partner with

Successful Chicken Farm. All of the partner farmers are located in the same area as the

successful chicken farm in Bumirejo Village, Margorejo District, Pati Regency. The land

used for farming for partner farmers is around their respective homes such as the land behind

the house or the side of the partner farmer's house.

Farmers carry out layer breeding activities, starting from breeding DOC, chicken

care, harvesting, and depositing the harvest. These activities are carried out according to the

principles of layer farming in general. The type of laying hens used are medium layer hens of

the Hyline Brown strain. Just like successful chicken farms, partner farmers harvest eggs

every afternoon and deposit them to successful chicken farms every midweek on Wednesdays

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and Saturdays. Egg harvesting itself is done manually with a hand picking mechanism, then

the harvested eggs are stored in crates or storage boxes and stored in a room with room

temperature so that the quality is maintained.

Partners deposit eggs independently to be weighed at the successful chicken farm,

after weighing the successful chicken farm pays the farmer's harvest according to the weight

of the scale. The form of the final product that partner breeders produce is in the form of

broiler eggs and there is no final product changes in product form. The technology used in

production is still traditional and uses simple tools such as songkro carts to transport eggs,

buckets to collect eggs after harvesting, and so on.

Each partner farmer conducts eight deposit cycles in one month. The price received

by farmers for their eggs is not fixed, but follows the market price for farmers per kilogram

minus 10% for reciprocal successful chicken farming services.

In 2021, partner farmers contributed to the production of broiler eggs deposited with

the Successful Chicken Farm of 3073.2 kg with the largest contribution being farmer 5 with a

total production in 2021 of 854.8 kg. while the smallest contribution was farmer 3 with a total

production of 314.9 kg.

CONCLUSIONS :

Some conclusions that can be drawn from the results and discussion of the research, namely:

1. The target market for the supply chain of purebred chicken eggs at Successful Chicken

Farm is segmented for all groups (full market coverage) in the Pati district area. And the

development objectives to be achieved by the supply chain of purebred chicken eggs at

Successful Chicken Farms are improving the quality and quantity of eggs at the farmer

and partner farmer level to be more productive, as well as improving the quality of

service from retail.

2. The supply chain of purebred chicken eggs in Pati Regency is in the form of a network

supply chain with elements of the supply chain structure members as many as nine core

marketing institutions, and one supporting institution outside the core structure in the

supply chain members consisting of five partner farmers, Successful Chicken Farm, three

retailers namely Takyla Retail, Manunggal Roso Retail, and Ibu Sri Retail, the final party

that is the target of the supply chain is the consumer, and one supporting party is the

provider of raw materials in cultivation for Successful Chicken Farm and partner farmers

namely Intan Putra PS.

3. The implementation of supply chain management is not going well because in the aspect

of collaboration between chains set by members of the supply chain is not smooth,

especially on the Successful Chicken Farm towards retail or vice versa regarding

responses regarding obstacles in the cultivation process that are not responded to by the

retailer.

4. The resources owned by the broiler egg supply chain are in accordance with the needs of

the supply chain at each level of the supply chain.

5. The business process in the supply chain of purebred chicken eggs is not running well

because the flow of information is not smooth between retailers to Successful Chicken

Farm.

6. From the results of the measurement of supply chain performance carried out at

Successful Chicken Farm, it was found that marketing efficiency seen from the

marketing margin was good because the margin between each channel was small ranging

from Rp. 2,000 to Rp. 2,916 per kilogram. The percentage value of farmer's share is very

high between 80.25% to 91%. The small marketing margin value causes a large farmer's

share value and makes the marketing activities carried out by the broiler egg supply

chain efficient so that it can make the price offered by the broiler egg supply chain

competitive and able to compete with other broiler egg supply chains through the

efficiency of asset management in the form of broiler egg inventory at Successful

Chicken Farm is quite good, but the management of money assets is not good enough

cash is not good. The performance of the supply chain of broiler eggs can be said to be

good in marketing and not good in cash asset management.

7. Of the six elements of the FSCN framework, there are three elements that are not good

enough in the broiler egg supply chain. These three elements are management, business

processes, and supply chain performance so that the overall condition of the broiler egg

supply chain can be said to be not good enough, but can still be improved so that it can

survive and keep up with the competition between other broiler egg supply chains, and

even be far superior.

SCM 463_ASU_ASSIGNMENT_2024_SUPPLY CHAIN ANALYSIS OF PUREBRED CHICKEN EGGS ON SUCCESSFUL CHICKEN FARMS IN PATI DISTRICT

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