Supply Chain Risk Mapping and Analysis: A FMEA Implementation on Biofuel Downstream Supply Chain

Abstract

The domestic biofuel program of Indonesia has been facing number of dynamics and challenges, such as: low production, uncertainty of feedstock availability, low realized consumption, price fluctuation and less competitive, unfit and viewer infrastructure, imbalance distribution. This study aims to map and analyze supply chain risks of biodiesel downstream business and offers a practical implementation of Failure Mode and Effect Analysis (FMEA) in the supply chain risk analysis. It employs a qualitative approach. A semi-structured surveys and interviews applied in data collection. The research level of analysis is at corporate level. The study result shows that there are three highest risks arise related to regulation related risk, product arrival (delays) risk and transportation facilities risk with the Risk Priority Number (RPN) of 72 to 48 and the Risk Score Value (RSV) of 24 to 16. The result also shows that there is correlation between stakeholder types, locations and levels of information with their perception of biodiesel supply chain risk and risk priorities. The result may become a valuable input for developing such risk mitigation strategy to improve and enhance the effectivity and the sustainability of supply chain in both the company and the biodiesel industry.