Exploring the best policy scenario plan for the dairy supply chain: a DEMATEL approach

Abstract

Purpose This research primarily aims to find and analyse the interaction among success factors for improving the performance of Indonesia’s dairy milk supply chain. Further, this research aims to formulate the right policies for improving the performance of the chain based on the success factor that belongs to cause groups. Design/methodology/approach The paper analyses 10 success factors for improving the performance of the Indonesian dairy supply chain with the decision-making trial and evaluation laboratory (DEMATEL) method and analyses the Delphi method to formulate the right policies for improving performance. Findings There are four important influencing factors that directly impact the overall system, i.e. the number of dairy cattle import, national milk demand, the total number of dairy farmers and the number of dairy cattle ownership or herd size. Several alternative policies have been designed by several experts according to the influencing factors, i.e. the government assists in the procurement of imported cattle, provides financial assistance to farmers in the form of low-interest financing, improves the partnership system between farmers and dairy cooperatives, provides a reward system for the farmers and increases the level of formality of contract between the farmers and cooperatives. Research limitations/implications Interrelationships of each success factor and the most important influencing success factors could not be generally determined because it depends on the point of view of the experts. Future research can apply the success factors proposed by this research to the different dairy milk supply chain. Then, this research used only nine experts for formulating alternative policies. Future research may repeat this method using multiple experts to justify the validity of the research. Moreover, this research only explored 21 success factors of the increase in the performance of the Indonesian dairy supply chain. Future research should consider not only the supply side and number of dairy cattle but also several success factors from the causal relationship diagram in the broader dairy milk supply chain. Practical implications This research provides essential insights for policymakers, as they have to understand and evaluate the success factors before formulating several alternative policies. Social implications The research has revealed that the right alternative policies can be designed, as the causal factor has been known. Originality/value This research contributes to applying a combination of causal relationship diagram of System Dynamic and DEMATEL method as a qualitative and quantitative method in one integrated way through performance dairy supply chain analysis. As a result, this research draws a policy for the dairy supply chain referring to the success factor as a cause for the low performance of the Indonesian dairy supply chain.