Productivity Improvement of Small Scale Medium Enterprises (SMEs) on Food Products: Case at Yogyakarta Province, Indonesia

Project Abstract

<p><b>ABSTRACT</b></p><p>Small and Medium Enterprises have a central role for national economic. Unfortunately, it still has a domain of low productivity, as well as for SMEs on food products. This study is aimed to identify the factors that influence performance in correspond to increase the productivity of SME on food products. The analysis is based on a fuzzy DEMATEL and ANP as a hybrid MCDM. The objects are SMEs on food products located at Yogyakarta province, Indonesia. The result shows that the most critical factor of the SME performance is human resource. This finding also supports argument that non-monetary reasons play more important role than financial reasons.&nbsp;</p>

Project Overview

<p> </p><div><b>Introduction</b> </div><div>Small Scale Medium Enterprises (SMEs) have an important role In</div><div>donesian economic (Bhasin, 2010; Gunawan </div><div>2012; Hamdani, 2012; Indrawati, 2012; Pawitan, 2012; Setyaningsih, 2012). Sharman and Wadhawan (2009) stated&nbsp; that the importance of the SMEs sector is even recognized around the world because it can significantly improve the&nbsp; social and economic systems in a variety purposes. The increasing number of SMEs can support the economic to be<div>stronger. </div><div>In Indonesia, SMEs have contributed over 75% of nation all income and occupied 97% national employment (National Cooperative Department, 2011). This number reflects that SMEs prosecute to be carefully developed due to wide variances of labor skill and technology adopted in contrast to the customer requirements over the products&nbsp; of food (Setyaningsih, 2012).<div>The question is what about Indonesia SME situation and how the performance work out. Taking into account this problem, it needs multi criteria to be considered. Hence, a multi-criteria decision making (MCDM) approach proper to be applied. A MCDM model has been widely applied to solve many multi criteria problems (Tsai et al 2011). Yang et al (2008) said if a MCDM is more suitable for evaluating and improving problems in the world than previously available methods. According to Pribadi and Kanai (2011) the government of Indonesia needs to reformulate their policy in strengthening and regulating the small firms in Indonesia. The government should dedicate more effort to eliminate&nbsp; SMEs boundaries and decide the effective way for helping SMEs to develop their strengths and potentials (Irjayanti&nbsp; and Aziz, 2012). This statement briefly shows that there are several criteria that should be incorporated to delegate more productive SME in Indonesia. Therefore, this study is aimed to identify factors that significantly influence the performance of SME which responsible to increase the productivity. This research mainly focused on SME on food products located at Yogyakarta Province, Indonesia.</div><div><br><div>2. Methods </div><div>The analysis in this study combines Decision Making Trial and Laboratory (DEMATEL), and Analytic Network (ANP) as a hybrid MCDM model for evaluating and improving problems related to SMEs performance. A hybrid MCDM is not only dealing with problems of interdependence factors and feedback but also improves the normalized supermatrix to suit the real world (Tsai and Kuo, 2011; Yang et al, 2008; Huang and Tzeng, 2012; Liao et al, 2014).<div>DEMATEL was used to identify complex relationships and build a network structure among the factors, whereas ANP was used to determine criteria weights with dependence factors and feedback. On the other hand, fuzzy model can helps decision makers to reduce uncertain factors in the assessment, especially for qualitative factors. The correspondences employed for answering the questionnaire are experts in a related field. The ANP method was used to determine the factors relative weights. The ANP includes all relevant factors and decision-making alternatives to form a network that incorporates feedback and interdependent relationships. Because of the interdependence, the factors that are less important individually might turn out to be more important when evaluated collectively.</div><div>This study used fuzzy technique to acquire the structure of MCDM problems. The fuzzy judgment was used to assess by the experts (decision makers). The fuzzy linguistic scale is described on table 1 and 2</div> </div> </div> </div> </div> <br><p></p>