IOP Conference Series: Earth and Environmental Science | 2021
Risk management of chilli supply chains using weighted failure mode effect analysis
Abstract
Chilli supply chain is very vulnerable to risk due to scattered production centre, large number of actors along supply chain. Hence, risk management of chilli supply chain is very crucial to be executed in order to reduce the losses received by farmers and traders. The study aims to (i) identify and assess supply chain risks, and (2) arrange efforts to manage risks in the chilli supply chain. Weighted Failure Mode Effect Analysis (WFMEA) enriched by Analytical Hierarchy Process (AHP) was implemented to evaluate high-risk priorities and to manage those risks. The results showed that risk in marketing chain got the highest priority to be controlled since the greatest potential failure occurred in this channel with the weighted Risk Priority Number about 647.3. Risk indicators in this channel were cashless payment, major harvesting, and price fluctuations. Strategies to manage those risks were the provision of storage warehouses, planting time arrangements, bailout funds for cash purchase, harvest and post-harvest technology and farm capital loan. Government supports was required for providing the small-scale storage, home scale ozonation technology to extent the chilli shelf life and improve the product quality as well as policies on accessible farmer’s credit with farming guarantee system.