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Upgrading wood-based industries: Harnessing the social network of small-scale furniture producers and their institutions.
Journal of Tropical Forest Management JMHT Vol. XVI (1): 10-17 April 2010. ISSN : 2087 - 0469
Melati, Rika Harini Irawati and Herry Purnomo


Furniture is a major export commodity in Indonesia with a total value of USD 1.96 million in 2007.  The industry is centred in Central Java where the district of Jepara is a key location for wood furniture production. The district has 15,271 furniture related business units employing 176,469 workers.  However, inefficiencies and power imbalances throughout the furniture value chain have resulted in overharvesting and uneven distribution of gains among the industry’s actors.  In contrast to price-setting international furniture retailers, small-scale producers enjoy the least value from their products.
In order to increase added value and competitiveness, small-scale furniture producers have made efforts to upgrade by harnessing their social network and institutions.  The social network has a positive effect; it encourages collective action and enables access to market information, and thus functions as a safety net for small-scale furniture producers.  This paper describes small-scale furniture producers’ efforts to upgrade by utilising their social network and institutions in Jepara.
Data was collected through in-depth interviews with members of the small-scale furniture producers’ association.  By identifying actors’ roles and status, information flow, and the role of institutions, the data was then used for network analysis.  The research provides insight into the nature of social networks and information flow and develops future scenarios to upgrade.  The scenarios will not only benefit the furniture industry in Jepara, but may also be adopted for similar industries throughout Indonesia and the world, and potentially improve many people’s economies and livelihoods.

Keywords: upgrading, wood-based industry, furniture, small-scale, social network, institution


Analysis of Value Chain Governance: Scenarios to develop small-scale furniture producers .
Journal of Tropical Forest Management JMHT Vol. XV (3) : 96 - 101 December2009. ISSN : 2087 - 0469
Rika Harini Irawati, Melati and Herry Purnomo


The furniture industry had shown a long chain of production to consumption; from raw material producers (tree growers), semi-finished producers and finished products producers, and retailers to exporters.  Jepara as a centre of furniture industry in Indonesia, incorporates around 15 000 business units, and provide livelihoods to approximately 170 000 workers.  This sectors contributes about 27% of Jepara`s people domestic income. Small and medium furniture enterprises (SMEs) have significant roles in the furniture industry as production structures are characterized by them. Power and information imbalance throughout the furniture value chain has resulted in problems of uneven distribution of gains among actors of the industry.  SME furniture producers have experienced an unfair value added distribution.  Hence, development of SMEs is important for strengthening the industry and expected to result in a portion of value added distribution to them.  We are trying to develop scenarios for SME improvement in the furniture industry in Jepara by identifying their problems and implementing a Value Chain Analysis (VCA).  VCA is an approach to describe SME producers relations with other actors and the governance type of their relations.  Dara collected by interviewing selected SMEs from the association of small-scale producers in Jepara to get detailed map of their value chain.  The research will produce future scenarios and intervention points to improve small-scale producer sustainability and better value added distribution among furniture actors.  The scenarios will not only benefit selected producers, but the furniture industry in Jepara as a whole, and can be adopted for similar industries in Indonesia and abroad.

Keywords: furniture, value chain, governance, scenario, small-scale


Purnomo H., Guizol P., Muhtaman D.R.. 2009. Governing the teak furniture business: A global value chain system dynamic modelling approach.  Environmental modelling and software, 24 (12) : 1391-1401.


Javanese teak forest constitutes more than 35% of world teak forests. It provides employment and livelihood to millions of people. This paper describes the use of systems dynamics to mimic the value chain of teak from forest to final furniture market using phases of conceptual design, model specification, model evaluation and model uses. The model comprises Perhutani plantation teak, community agroforest, teak log trading, furniture manufacturing and market. From the model we observe baseline trends of teak forest and incomes to various actors participating in teak business including forest state enterprise Perhutani, local communities, brokers, manufacturers and retailers. We use the model to produce governance scenarios of fair trade and vertical integration, their impacts on actors’ income and
the sustainability of teak plantations.

Keywords: Furniture, Value chain, Systems dynamics Governance, Sustainability