Policy making for GSCM implementation in the wooden furniture industry: A DEMATEL and system dynamics approach

Abstract

The purpose of this paper is to implement the combined approach of Decision Making Trial and Evaluation Laboratory (DEMATEL) and system dynamic (SD) for examining the impacts of several elements on the implementation of green supply chain management (GSCM) practices in the furniture industry concerning the amount of wood waste resulted and the demand of wood materials.,The paper develops an SD-based model by using four approaches, i.e., “demand of furniture”, “raw material”, “revenue of furniture industry” and “the implementation of green supply chain management (GSCM) practices”.,The simulation results have shown that the best conditions occur in the fourth scenario or a combined scenario. This scenario can guarantee a decrease in need of wood and discarded wood waste due to the use of wood waste for raw material by some industries. This scenario can thus increase the share of wood waste used as raw materials.,The first limitation of this study is on the calculation of the amount of wood, which has used the data of wood products obtained from the Central Java Provincial Agency of the Environment and Forestry. This calculation has not taken into account the forest area degradation. Second, the demand for furniture has been converted from the historical data of domestic and foreign sales. Third, the model used in this study has not considered the decrease of the production cost and the increase of the profit gained by the wooden furniture small- and medium-sized enterprises that use the wood waste as part of their raw material.,This research provides essential insights into the context of implementing the policies to increase the implementation of GSCM practices.,This research can make a difference in two aspects. First, it has tested policies, not in isolation. It has simultaneously tested various combinations of policies because the furniture industry can be seen as a system with complex relationships among the elements. Second, this study can broaden scientific insights related to the use of the DEMATEL method in the SD methodology.