Abstract
The purpose of this study was to determine and analyze the effect of kaizen and innovation management on Organizational Sustainability through Green Supply Chain Management in the Palm Oil Industry in North Sumatra Province. The independent variables in this study are kaizen and innovation management, the intervening variable in this study is Green Supply Chain Management, while the independent variable is organizational sustainability. The population in this study were 127 palm oil processing companies located in North Sumatra. Samples were selected using saturated samples. The data was processed using the SEM method with SmartPLS 3.0. The results of this study prove that the application of kaizen has no effect on organizational sustainability in oil palm processing companies in North Sumatra. Innovation management has a positive and significant effect on organizational sustainability, kaizen has a positive and significant effect on green supply chain management, innovation management has no effect on green supply chain management, green supply chain management has a positive and significant impact on organizational sustainability, green supply chain management mediates relations kaizen on organizational sustainability, while green supply chain management does not mediate the relationship between innovation management and organizational sustainability in palm oil processing companies in North Sumatra.
Highlights
The manufacturing industry is one of the important factors in the economic development and progress of a country
This shows that 63.7% of green supply chain management variables are influenced by kaizen and innovation management variables and 84.3% organizational sustainability variables are influenced by kaizen, innovation management, and green supply chain management variables
This shows that the application of kaizen in palm oil industry companies in North Sumatra can not directly affect organizational sustainability in the company
Summary
The manufacturing industry is one of the important factors in the economic development and progress of a country. One type of industry in the Directory of Manufacturing Companies is the food industry (manufacture of food products), which consists of 8 industrial divisions. In this industry, there are types of edible oil and vegetable and animal fats (manufacture of vegetable and animal oils and fats) industries, which include discussing manufacturing companies engaged in palm oil processing, both CPO (Crude Palm Oil) and PKO (Palm Kernel Oil). Palm oil is included in one of the economic activities of the Master Plan for the Acceleration and Expansion of Indonesia's Economic Development 2011-2025 (MP3EI) for the Sumatra region. In MP3EI 2011-2025, Sumatra's main economic activities are oil palm, coal, steel, and shipping. One of the reasons is that plantations in Sumatra are dominated by oil palm production, where 70% of palm oil producing land in Indonesia is located in Sumatra (Tree Corp Estate Statistics Of Indonesia 2018-2020)
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