2022 International Seminar on Application for Technology of Information and Communication (iSemantic)

The Supply Chain Management Model of Small

Medium Enterprise (SME): Case Study Dry Food
Souvenirs
Diana Aqmala
Mila Sartika Edi Noersasongko
Faculty of Economics and Business
Center of Excellence Faculty of Computer Science
Universitas Dian Nuswantoro
Faculty of Economics and Business Universitas Dian Nuswantoro
Semarang, Indonesia
Universitas Dian Nuswantoro Semarang, Indonesia
diana.aqmala@dsn.dinus.ac.id
edi.noersasongko@dsn.dinus.ac.id
Semarang, Indonesia
Semarang, Indonesia Zainal Arifin Hasibuan
mila.sartika@dsn.dinus.ac.id Center of Excellence,
Faculty of Computer Science
Universitas Dian Nuswantoro
Semarang, Indonesia
zhasibua@dsn.dinus.ac.id

Abstract—The SME sector contributes to Indonesia's GDP,
which is 61.07% where SMEs are able to absorb 97% of the
workforce in it. This proves the important role of MSMEs in
the Indonesian economy is very large. However, attention to
MSMEs is still not optimal, several obstacles are still faced by
MSMEs, including supply chain management performance
that has not been optimal so that SME productivity has not
been maximized. The purpose of this research is to create a
supply chain management based on ICT (Computer
Information Technology) so that the performance of SMEs
increases and is able to compete in the global market. The
system was created with the aim of making the system in this
study: 1) Ensure that the raw materials needed by SMEs are
not interrupted, because with the system it is expected that the
supply of raw materials and consumer demand for products
can be balanced. 2) Optimizing the supply chain in SMEs, with
an integrated system starting from farmers who provide raw
materials, suppliers. 3) Turn on the nodes in the supply chain
in order to create a digital ecosystem for SMEs
Keywords—Supply Chain, SME
I. INTRODUCTION
SMEs have a very large contribution to state income
where based on data from the Ministry of Cooperatives and
Small and Medium Enterprises (KemenkopUKM) in March
2021, the number of SMEs reached 64.2 million with a
contribution to Gross Domestic Product of 61.07 percent or
Rp. 8,573, 89 trillion. SMEs are able to absorb 97 percent of
the total workforce, and can collect up to 60.42 percent of
total investment in Indonesia. In addition, SMEs are also the
strongest economic sector to survive the economic crisis that
hit Indonesia in 1998. and also proven to be able to survive
during the Covid-19 pandemic
On the other hand, attention to promoting SMEs has not
been optimal, for example the availability of infrastructure
(roads, telecommunications, electricity, etc.) is still limited,
the availability of capital is difficult to access, assistance
from experts to improve product quality is still minimal. As a
result, the productivity of SMEs is not optimal. One of the
efforts to improve the performance of SMEs is to ensure the
supply chain from raw materials to products. Besides being
continued to marketing [1]
To realize the performance of SMEs to increase, ICT-
based interventions (Computer Information Technology) are
needed. The system in question will integrate from raw
materials to finished products to marketing. It is very
important to revitalize SMEs, especially in the use of ICT,
with several objectives, including creating a source of
competitive advantage, then creating better marketing and
also improving customer service.[2]
The ICT-based system is expected to be able to overcome
the problems that are often faced by SMEs, the problems
include: SMEs have difficulty in providing raw materials
because information about how much raw materials are
available to farmers or available at large suppliers
(middlemen) is still limited. In addition, information about
the price of raw materials is still unclear, so that sometimes
there are price differences in each part of the supply chain in
MSMEs, which ultimately causes the prices of SME
products to become expensive and this has an impact on the
purchasing power of the product.
Therefore, to overcome these problems, it is necessary to
integrate all elements to develop special programs that
support the SME development strategy. This study aims to
propose a dry food MSME supply chain system
II. METHODOLOGY
This research methodology uses the waterfall model
system development life cycle (See Figure 1) which is
divided into 4 stages, namely planning, analysis, design,
implementation and evaluation. [3]
The first process carried out is the planning stage, which
begins with data collection that includes various sources and
data methods. Data collection will use two data sources,
namely primary data and secondary data. Various research
instruments (questionnaires, interview guidelines, and
observations) will be used to collect primary data in this
study.
Survey data collection will capture the behavior of each
actor (stakeholder), including producers (farmers, dry
souvenirs SMEs), collectors, retailers (souvenir shops,
supermarkets, etc.) and consumers (See Figure 2). The
survey will be conducted with an instrument in the form of a

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 2022 International Seminar on Application for Technology of Information and Communication (iSemantic)
questionnaire. The questionnaire contains various variables
such as the type of goods produced, the number of goods
produced, the need to produce goods, and so on.
Furthermore, the survey data will be equipped with
observation data.
Fig 1. Research Methodology
Fig 2. Stakeholders of MSME Supply Chain Management
Observations will capture the condition of producers,
collectors, retailers and consumers such as how much land is
available, the obstacles they face and so on. Observations
will be carried out using participatory observation
techniques. Observation targets include producers, collectors,
retailers and consumers. After the observation data is
obtained, interviews will be conducted to deepen the
quantitative data that has been obtained. The interview
targets included producer (farmers, dry food SMEs, etc.),
collectors, retailers (gift shops, supermarkets) and dry
souvenir consumers. The instrument that will be used for
interviews is an interview guide.
After the data is collected, the second stage is the analysis
stage, at this stage the data collection will be analyzed using
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the following steps: Data Preprocessing (lost data, removing
duplicates, data outliers, data balancing, data normalization),
Data Processing (data mining with algorithms K-Means and
recipes), and Development Tools.[4][5] The first step in data
preprocessing would be to check the primary and secondary
data for missing values. This step aims to ensure all data is
complete. In the second step, duplicate data will be removed,
i.e. data with the exact same information will be removed
from the dataset. The third step is to check for outliers and
remove outliers from the data set. Then do the balancing of
data and test the normality of the data (See Figure 3).
Fig 3. Stages of SCM Development
After the data is processed, the next step is to analyze the
data. At this stage, data analysis will be carried out using
feature selection and feature extraction which will form dry
food MSME supply chain patterns.[6] The MSME Supply
Chain aims to strengthen every node in the dry food MSME
value chain that is formed by involving the role of
technology 4.0 (AI and IoT).[7]
These nodes consist of groups of producers (raw material
providers), collectors (semi-finished material providers and
finished material processors), retail (retail traders, gift shops,
stalls, supermarkets) and product users (consumers). Each of
these nodes forms a micro, small and medium enterprise
(MSME) supply chain. [8]Technology 4.0 will optimize the
transparency and accountability of the dry food SME value
chain and integrate all these nodes so that their performance
is efficient and effective. where the data that has been
obtained is in the form of a data collection containing who,
where and how many suppliers of raw materials (farmers,
breeders, SMEs), how to work from collectors, then
processing raw materials (how much does it take raw
materials, how much does it cost), where and when the
product is made to find out when the product expires. From
the results of the data collection, patterns in the dry food
 2022 International Seminar on Application for Technology of Information and Communication (iSemantic)
SME supply chain are made, where these patterns will be
continued with the next stage, namely the third stage is
design.
In the design stage, the patterns that have been made will
be used as a system that will be used by dry food SMEs,
where these patterns are integrated starting from producers
providing raw materials (farmers, breeders, SMEs, etc.), then
to material collectors.[9] raw materials which are then also
integrated with retail (supermarkets, gift shops, food stalls,
souvenir shops, etc.) to consumers. These actors are
connected to the same system, namely SME Supply Chain,
so that information related to product needs will be obtained
at each node of the dry food SME supply chain will be easier
to obtain.
The next stage is implementation, at this stage the
designs that have been made previously have been made into
program codes. Once programmed, the system will be tested
to check whether its functions work as needed. The last stage
is evaluation, at this stage it is carried out if in the process of
using it there are features that need to be improved. This
stage is carried out to correct errors when the system is used
by the target or user.
III. RESULTS AND DISCUSSIONS
The integrated system for MSME prevention and control
supply and demand will use IoT and AI to capture data in
real-time and quickly produce a result. The application of AI
and IoT showed below (See Figure 4)
Fig 4. The Design of SME Supply Chain System
The MSME supply chain system will use IoT and AI to
capture field data quickly and effectively. The data collected
in will be transformed and analyzed by machine learning. If
the MSME supply chain system is implemented, it will
create the required information from each node.
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Data were collected through questionnaires, observations
and interviews with actors in the dry food MSME supply
chain, then classified into several nodes, namely producers,
collectors, retailers and consumers. At the producer node
(farmers, breeders, MSMEs, etc.) data will be available about
who and where the raw material provider is, when and how
much raw material is available, etc. The collector's node will
contain how much raw material is available in the market,
how many collectors are available, etc. The retail node will
contain how many retailers are partners in dry food SMEs,
how many products are needed, while consumer data is data
that contains how many consumers are based on customer
data from retail. The data will be classified based on the
needs of supply chain actors.
As an illustration of how this supply chain system will
work, it is implemented in dry food souvenir products, where
the actors from the supply chain consist of producers,
collectors, retailers and consumers. Dry food SMEs can find
out from producers about the availability of the main raw
materials for their products, how many raw materials are
available, then when the raw materials are available and
where the raw materials are available.[10] At the collector's
node, dry food MSMEs can get information about the price
and number of semi-finished products or finished goods so
that MSMEs can estimate when MSMEs can produce, how
much can be produced and when the product will be
distributed to retailers. Dry food SMEs will get information
about product demand from retail nodes and consumers. In
the retail node, there will be information about how many
products are needed, consumers, while in the consumer node,
information about consumer behavior can be obtained such
as how many products are purchased, when the products will
be purchased.
This system is expected to be able to balance the demand
and supply of dry food products, so that there is no excess of
raw materials in producers and collectors or vice versa,
MSMEs do not lack raw materials during production so as to
ensure the availability of products that can meet product
demand from retailers and consumers.
IV. CONCLUSION
We will establish big data from multiple sources and
instruments from this research to collect data (validated
questionnaire, interview guide, and observation). This
research will produce a system that will provide benefits for
MSMEs such as ensuring the raw materials needed by
MSMEs are not interrupted, because with the system it is
expected that the supply of raw materials and consumer
demand for products can be balanced. The system can also
optimize the supply chain in MSMEs which will be
integrated starting from farmers who provide raw materials
and then collectors who then sell them to MSMEs, and
MSMEs who process them into finished goods and distribute
them to retailers. until it reaches the consumer so that it will
turn on the nodes in the supply chain in order to create a
digital MSMEs ecosystem.
ACKNOWLEDGMENT
We sincerely thank Direktorat Jenderal Pendidikan
Tinggi, Riset, dan Teknologi, Kementerian Pendidikan,
Kebudayaan, Riset, dan Teknologi, Republik Indonesia for
partially funding this project through the Kedaireka Program.
This work is also supported by Universitas Dian Nuswantoro
 2022 International Seminar on Application for Technology of Information and Communication (iSemantic)
(UDINUS) through the Center of Excellence in Science and
Technology, UDINUS with the grant document contract:
Acceleration of Digital Talent Training, Education and
Research at AI Center of Excellence UDINUS with
NVIDIA, No. 3606/E3/PKS.08/KL/2021
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