Green Supply Chain Management:

An agribusiness perspective
Presented by:
Leonardo
 Outline
• Introduction to Green
Supply Chain Management
• Palm Oil Industry: Overview
– Palm Fresh Fruit Bunch (FFB)
– Agribusiness Flow Process of
Palm Oil Industry

• Green Supply Chain Practices in

Agribusiness Industries
What is Supply Chain...?
 Introduction to Green Supply Chain
• Supply chain management is the management of flows between
stages (operation, distribution) to maximize total profit.

• Supply Chain connects all steps from upstream to downstream.

Source: Katopodis & Sfetsos (2019)

 Supply Chain Management
First used in context of business
Logistics is part of supply chain
SCM is cross-firm and cross-
functional
Helps in strategic and competitive
position
Source: Madaan (2009)
Logistics
First used in context of military
Transportation is part of logistics
Logistics is used in context of individual
organisation and focus on flow of goods
Focuses on locational positioning of
inventory
Introduction to Green Supply Chain

“Integrating environment thinking to Supply Chain

Management, which include: product design,
material sourcing, manufacturing process,
distribution of final product to consumers, and
end-of life management after useful life”
Palm Oil Industry: An Overview

Source: Haryono (2014)

Palm Oil Industry: An Overview (2)
Export percentage of CPO increased 7,7% in
2019 (of total export 34,71 million tonnes)
compared to the total export in 2018.

Graph 1. CPO & PKO

Production vs Export
2016 - 2019

Source: GAPKI
 Palm Oil Industry: An Overview (3)
• CPO export to China increased 27%, Middle East (18,4%) and Africa
(13,4%) compared to 2018 export.
• Conversely, CPO export to India decreased 25,8%, Pakistan (10,4%)
and
Bangladesh (2,2%) compared to 2018 export.

Graph 2. Export
Comparison 2018 vs
2019 per Country

Source: GAPKI
 Palm Fresh Fruit Bunch (FFB)

Source: PT. Smart Tbk

Agribusiness Flow
Process of
Palm Oil Industry
Source: PT. Smart Tbk
 SCM Practices in Palm Oil Industry

Source: WRI Indonesia

 Greenhouse Gases Footprint in
Palm Oil Supply Chain

Source: Lam et al. (2019)

 Green SCM Practices in Palm Oil Industry (2)
• Land Use Change
– No development of and the conservation of High Carbon
Stock forests

Source: Meijaard et al. (2018)

 Green SCM Practices in Palm Oil Industry (3)
• Land Use Change
– No development of and the conservation of High
Conservation Value areas

Source: eco-intelligent.com
 Green SCM Practices in Palm Oil Industry (4)
• Land Use Change
– No development of and the conservation and managemnet
of peatlands of any depth

Source: WRI Indonesia

 Green SCM Practices in Palm Oil Industry (5)
• Land Use Change
– No burning for new plantings, replantings or other
development

Source: sciencenews.org
 Green SCM Practices in Palm Oil Industry
(6)
• Traceability to Mill and Plantations

Source: PT. SMART Tbk

 Green SCM Practices in Palm Oil Industry
(7)
• Transportation and distribution

Source: Neste
Green SCM Practices in Palm Oil Industry
(8)

Source: Kaplan & Ranjithan (2007)

 Conclusion
• Green Supply Chain Management in agribusiness
perspective is not only about gaining maximum
profit, but also is to ensure environment
sustainability.
• GSCM can be achieved successfully in the fields of:
– Land use
– Plantation and mill
– Transportation
 References
• Gabungan Pengusaha Kelapa Sawit Indonesia. (2020). Kinerja Industri Sawit Indonesia 2019.
Jakarta.
• Haryono (2014). Policy Initiative on Palm Oil: Policy on Upstream Development of Palm Oil,
presented on the International Conference and Exhibition on Palm Oil, Jakarta, 2014.
• Kaplan, Pervin & Ranjithan, S.. (2007). A New MCDM Approach to Solve Public Sector
Planning Problems. Proceedings of the 2007 IEEE Symposium on Computational Intelligence
in Multicriteria Decision Making, MCDM 2007. 153 - 159. 10.1109/MCDM.2007.369430.
• Katopodis, Theodoros & Sfetsos, Thanasis. (2019). A Review of Climate Change Impacts to
Oil Sector Critical Services and Suggested Recommendations for Industry Uptake.
Infrastructures. 4. 74. 10.3390/infrastructures4040074.
• Lam, Wan Yee & Kulak, Michal & Sim, Sarah & King, Henry & Huijbregts, Mark & Chaplin-
Kramer, Rebecca. (2019). Greenhouse gas footprints of palm oil production in Indonesia over
space and time. Science of The Total Environment. 688. 10.1016/j.scitotenv.2019.06.377.
• Madaan K V S, Fundamentals of Retailing, 6th edition, Tata McGraw Hill, pp 46-47.
• Meijaard, Erik & Garcia-Ulloa, John & Sheil, Douglas & Wich, Serge & Carlson, Kimberly &
Juffe-Bignoli, Diego & Brooks, Tom. (2018). Oil palm and biodiversity : a situation analysis
by the IUCN Oil Palm Task Force. 10.2305/IUCN.CH.2018.11.en.
• Sinar Mas Agribusiness and Technology . (2018). Indonesia Downstream Operation . Jakarta.