Risk Management for the Petrodiesel-Biodiesel Fuel Blend Supply Chain in Indonesia

Abstract

This research addresses the management of risks within inter-business unit networks, focusing on two key levels of risk mitigation: strategic and operational. Prior research primarily explored risk management within specific fuel industry units supplied by a single source. This study represents a novel approach, delving into dual-source fuel strategies and engaging various supply chain stakeholders to identify and mitigate operational risks accordingly. The research findings demonstrate that stakeholders can reduce risks through integrated planning and collaboration among business units, with government support further reducing inter-unit risks. This study’s main contribution is establishing a basis for future research in eco-friendly fuel supply chains, specifically examining the long-term viability of blending petrofuel with biofuel. This extends risk analysis to supply chain networks involving multiple business units. Moreover, this research emphasizes the significance of case studies covering end-to-end product flows in fuel blend supply, encompassing various supply chain functions. Additionally, it investigates stakeholder perceptions of operational risks associated with different business unit types, addressing potential domino effects. It highlights the importance of information technology in risk reduction through collaborative information exchange within the supply chain.