Analysis of the Factors Affecting the Palm Oil Industry's Supply Chain with Consideration of Circular Economy

Abstract

The generation of solid waste and liquid waste from Indonesian palm oil processing factories tends to be increased. To overcome the problem, Indonesia must be able to implement a sustainable supply chain with the concept of circular economy, which focuses on reduction, reuse, and recycling areas. However, it is necessary to know in advance the factors that are the keys to the application of the concept. The purpose of this study is to identify the problem’s profile of the key factors in the implementation of a circular economy in the Indonesian palm oil industry. The method in this study uses Interpretative Structural Modeling (ISM) to analyze the key factors in the implementation of a circular economy in the palm oil industry. This study will investigate three groups that influence the implementation of circular economy, namely objectives, participator, and problems with their elements. The results are identified that the key factors in implementing a circular economy in the palm oil industry are the factors of competitive advantage, farmer, and infrastructure from each group.