IJIEPR                   Back to the articles list | Back to browse issues page

XML Print

The Strategy Development of the Local Content Requirements Policy in Indonesia Paints Industry Supply Chain
Raden Pujiyono1 , Marimin Marimin2 , Arif Imam Suroso1 , Setiadi Djohar3
1- School of Business of IPB University, Bogor, Indonesia
2- School of Business of IPB University, Bogor, Indonesia. , marimin@ipb.ac.id
3- Department of School of Management, PPM, Menteng, Jakarta, Indonesia.
Abstract:   (304 Views)
The Indonesian paint industry contributes significantly to the national economy but remains highly dependent on imported raw materials, constituting approximately 77% of the total supply. This study aims to develop strategic solutions to increase local content and reduce import dependency by applying the Analytic Hierarchy Process (AHP) and Interpretive Structural Modeling (ISM). Based on AHP results, Capacity Building and Workforce Development emerged as the top-ranked strategy, with a final priority value of 0.330, followed by Strengthening Local Supply Chain (0.262). ISM analysis identified the Centre for Increasing Local Content as a key institutional driver influencing other actors in the supply chain. The sensitivity analysis confirmed the robustness of the AHP prioritization, showing less than 5% variation in rankings across multiple expert input scenarios. This indicates that the proposed strategies are stable and reliable under varying assumptions. The research provides a structured, multi-criteria framework aligning local strategies with national policy and international trade obligations. The study offers policymakers and industry leaders practical insights by integrating technology, human capital, and supply chain optimization to support a resilient and sustainable local content policy. Integrating AHP and ISM methods presents a novel approach, contributing original insights to the industrial strategy literature.
Keywords: AHP, ISM, Local Content, Paints Industry, Strategy Development
     
Type of Study: Research | Subject: Decision Analysis and Methods
Received: 2024/12/14 | Accepted: 2025/06/11
Add your comments about this article : Your username or Email:
CAPTCHA
Send email to the article author

Rights and permissions
Creative Commons License This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.