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All Journal MANAJEMEN HUTAN TROPIKA Journal of Tropical Forest Management
M Melati
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Agriculture, Biological Sciences & Forestry

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Upgrading Wood-Based Industries: Harnessing the Social Network of Small-Scale Furniture Producers and Their Institutions M Melati; Rika Harini Irawati; Herry Purnomo
Jurnal Manajemen Hutan Tropika Vol. 16 No. 1 (2010)
Publisher : Institut Pertanian Bogor (IPB University)

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Abstract

Furniture is a major export commodity in Indonesia with a total value of USD 1.96 million in 2007.  Jepara District is one of the key location for wood furniture production with 15,271 furniture related business units employing 176,469 workers.  However, inefficiencies and power imbalances throughout the furniture value chain have resulted in overharvesting and uneven distribution of gains among the industry’s actors.  In contrast to price-setting international furniture retailers, small-scale producers enjoy the least value from their products.  In order to increase added value and competitiveness, small-scale furniture producers have made efforts to upgrade by harnessing their social network and institutions.  This paper describes small-scale furniture producers’ efforts to upgrade by utilising their social network and institutions in Jepara.  Data was collected through in-depth interviews with members of the small-scale furniture producers’ association.  The research provides insight into the nature of social networks and information flow and develops future scenarios to upgrade.  The scenarios will not only benefit the furniture industry in Jepara, but may also be adopted for similar industries throughout Indonesia and the world, and potentially improve many people’s economies and livelihoods.
Analysis of Value Chain Governance: Scenarios to Develop Small-Scale Furniture Producers Rika Harini Irawati; M Melati; Herry Purnomo
Jurnal Manajemen Hutan Tropika Vol. 15 No. 3 (2009)
Publisher : Institut Pertanian Bogor (IPB University)

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Abstract

Furniture industry had shown a long chain of production to consumption, from raw material producers (tree growers), semi-finished producers, finished product producers, and retailers to exporters. Jepara as a centre furniture industry in Indonesia incorporates around 15,000 business units and provide livelihoods to approximately 170,000 workers. This sector contributes about 27% of Jepara‘s people domestic income. Small and medium furniture enterprises (SMEs) have significant roles in the furniture industry as production structures are characterized by them. Power and information imbalance throughout the furniture value chain have resulted in problems of uneven distribution of gains among actors of the industry. SME furniture producers have experienced an unfair value added distribution. Hence, development of SMEs is important for strengthening the industry and expected to result in a portion of value added distribution to them.  We are trying to develop scenarios for SME improvement in the furniture industry in Jepara by identifying their problems and implementing Value Chain Analysis (VCA). VCA is an approach to describe SME producer relations with other actors in the industry and the governance type of their relations. Data is collected by interviewing selected SMEs from the association of small scale producers in Jepara to get detailed maps of their value chain. The research will produce future scenarios and intervention points to improve small-scale producer sustainability and better value added distribution among furniture actors. The scenarios will not only benefit selected producers but also the furniture industry of Jepara, and can be adopted for similar industries throughout Indonesia and abroad. 
Co-Authors Herry Purnomo Rika Harini Irawati