Questioning the competitiveness of Indonesian wooden furniture in the global market

Nurkomariyah, Siti; Firdaus, Muhammad; Nurrochmat, Dodik Ridho; Erbaugh, James Thomas

doi:10.1088/1755-1315/285/1/012015

Cited by 8 publications

(9 citation statements)

References 9 publications

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“…The difference between the second and third scenarios is that in the third scenario a raw material purchasing subsidy is given for two consecutive years (2020 and 2021) as much as 15 and 5%. Besides helping the industry to become more vulnerable during the pandemic, the wage subsidies for the wooden-based furniture industry are essential because this industry is a labor-intensive business fragmented by numerous small manufacturing producers and few large firms (Susanty et al, 2018;Nurkomariyah et al, 2019), which make this industry play a vital role for Indonesian economic growth. After building several scenarios, the next step simulated and evaluated the results based on three indicators.…”

Section: Measuringmentioning

confidence: 99%

“…Indonesian wooden-based furniture export value dropped dramatically during the global economic crises of 2009 and 2011 and then increased slightly since 2012 in line with the recovery in global economic conditions. Wooden-based furniture exports were valued at US$1.34bn in 2015, showing an increase of 5.41% from the previous year (Nurkomariyah et al ., 2019). The COVID-19 pandemic has not dampened Indonesia's wooden-based furniture export performance.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Moreover, Indonesia was the ninth largest exporter of wooden furniture in 2015, with a market share of 2.09%. The primary markets for Indonesian exports include the US (42.2%), EU (24.2%), Japan (10.08%) and Australia (3.50%) (Nurkomariyah et al ., 2019).…”

Section: Literature Reviewmentioning

confidence: 99%

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Measuring the performance of SMEs during the pandemic situation using system dynamic

Susanty

Puspitasari

Fachreza

2023

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PurposeThis study aims to create a system dynamics simulation model to forecast the performance of small and medium-sized enterprises (SMEs) if some decision-making is executed to reduce the negative of the coronavirus disease 2019 (COVID-19) pandemic. In particular, this study will focus on SMEs that belong to the furniture industry because the furniture industry is one of the leading industries in Indonesia.Design/methodology/approachThe study develops a system dynamics-based model by using three subsystems, i.e. the “production subsystem,” “demand and revenue subsystem” and “raw material (or wood supply) subsystem.”FindingsThe best scenario is the third scenario which increases the capacity to the normal situation and government subsidy during and after the pandemic. This scenario gives the best performance for industry revenue and gross domestic product (GDP). However, for the government, the most significant expenditure occurs in the third scenario. This seems a trade-off for the government whether to save the wooden-based furniture industry by encouraging the industry to continue operating during the pandemic accompanied by high subsidies or limiting the activities of the wooden-based furniture industry to prevent the spread of COVID-19 by providing low subsidies.Research limitations/implicationsFirst, this study does not try to combine the system dynamics (SD) methodology with the other method or use a multi-methodology since SD has several limitations and the other method may have several advantages compared to SD. Second, the models used in this study do not consider the decline in forest area and quality. Third, the demand for wooden-based furniture is obtained from historical data on domestic and foreign sales and fourth, the model does not include the government budget as a constraint to make any subsidy to help the SMEs.Practical implicationsThis study provides essential insights into implementing the policies in the world pandemic situation when SMEs face lockdown policy.Social implicationsThe study revealed that relevant policy scenarios could be built after simulating and analyzing each scenario's effect on SMEs' performance during the pandemic.Originality/valueThis study will enrich the previous study on the impact of the pandemic on SMEs and the dynamic system modeling on SMEs. The previous study discussed the pandemic's impact on SME performance and the impact's analysis in isolation from the dynamic nature of SME owners' decisions or government policy. In this study, the impact generated from the pandemic situation could be different depending on the decision and policies taken by managers from SMEs and the government.

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Section: Measuringmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

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Measuring the performance of SMEs during the pandemic situation using system dynamic

Susanty

Puspitasari

Fachreza

2023

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“…15/2020 concerning Forestry Industry Product Export Provisions), the competitiveness of the country's wooden furniture has decreased in the global market, especially in the United States, Japan and Australia. Indonesia's wooden furniture for example, experienced a decline in competitiveness from 3.14 in 2006 to 2.65 in 2015 on the Revealed Comparative Advantage index (RCA) (Nurkomariyah et al, 2019). The figures represens export competitiveness of a country in a commodity traded globally (Setyawan et al, 2016).…”

Section: Stringent Forestry Regulationsmentioning

confidence: 99%

Untangling the Regulatory Environment: Why do Wood Processing Businesses in Indonesia Fail to be Competitive in the Global Market?

Wibowo¹,

Hayati²,

Bisjoe³

et al. 2022

Small-scale Forestry

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Smallholder tree planting has long been practiced by rural people throughout the tropics. However, the competitiveness of Indonesian wood products has decreased in the global market. Indonesia's wooden furniture for instance, was assessed to have declined in competitiveness during 2006 to 2015. In addition, the World Economic Forum in its latest annual Global Competitiveness Index report (2019) lowered Indonesia's position from 45th position to 50th in the product market. Although the small-and medium-scale wood processing businesses have begun to focus on commercial forest management goals, the way in which the competitiveness of their timber products is affected by forestry regulations remains a debate with significant policy implications. New regulations have been designed and implemented to solve various problems associated with smallholder-managed forests, such as specific administration of smallholder forest products, regulation of access to forests for people living near forests, and attempts to bridge the gap in forest management expertise between forestry companies and rural communities. However, rather than producing positive results for those concerned, new regulations appear to have become an additional constraint. This study aimed to map how regulations have influenced smallscale tree planting and wood processing industries in Indonesia, both directly and indirectly. It also examines the extent to which these regulations can be reformed to become an efficient and effective legal instrument in governing small-scale tree planting and wood processing industries. In addition, this study explored two less examined issues, namely: (1) Have the regulations become too complex and constraining? and (2) How does Indonesia create an 'enabling' regulatory environment? The study found that excessive regulation of commercial timber production reduces the interest by smallholders in tree growing. In addition, complicated regulations tend to increase the transaction costs incurred by those involved in commercial timber production.

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“…Wood is one of the materials used in global furniture production and is mainly used in southeast Asian countries [1][2][3][4]. The value of global furniture exports, excluding seats and medical, surgical, dental, or veterinary furniture, from 2015 to 2021, amounted to more than USD 630.4 billion [5].…”

Section: Introductionmentioning

confidence: 99%

A Review on Sustainability Characteristics Development for Wooden Furniture Design

et al. 2022

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The design of furniture products is influenced by increasing consumer interest in green products and sustainability values. However, although the demand for sustainable furniture products is high, the standardization of sustainability characteristics in furniture design has still not been achieved. A thorough literature review was conducted, which considered various sustainability characteristics that apply in industries that design furniture. This review paper aimed to identify common sustainability characteristics so that a new standard for furniture industries can be established. In this review, numerous themes were explored relating to design guidelines, design criteria, design preferences, design optimization, design evaluation and assessment, design decision making, strategic planning, design strategies, the integration of eco-design, and eco-design tools. A total of 137 articles were reviewed regarding their sustainability characteristics according to the triple bottom-line framework for a relevant product sector. Due to the limited reports on the sustainability characteristics of furniture design activities, this paper also tried to include common sustainability characteristics of non-furniture products that are available on the market. Through the review, 10 sustainability characteristics were identified for the environment, 17 for the economy, and 16 for the social dimension as being common among manufacturers when designing their products. A further in-depth analysis was conducted by mapping the characteristics to those that were significantly implemented in the design process, of which five (5) were environmental, two (2) were economic, and five (5) were social sustainability characteristics. This review is significant in helping furniture designers to use appropriate and effective sustainability standards in the design and manufacture of products that meet customers’ demands. Previous literature reviews have not clearly measured the triple bottom line. Furthermore, no definite characteristics were proposed in previous works regarding wooden furniture design, leaving a gap to be closed by future works.

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Questioning the competitiveness of Indonesian wooden furniture in the global market

Cited by 8 publications

References 9 publications

Measuring the performance of SMEs during the pandemic situation using system dynamic

Measuring the performance of SMEs during the pandemic situation using system dynamic

Untangling the Regulatory Environment: Why do Wood Processing Businesses in Indonesia Fail to be Competitive in the Global Market?

A Review on Sustainability Characteristics Development for Wooden Furniture Design

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