Strategic Sourcing of Think Fresh Logistics Hubs in Indonesia's Fresh Produce Market: A Quantitative SWOT Analysis

Abstract

Background: The Indonesian fresh produce sector, valued at IDR 483.91 trillion, faces fragmented supply chains, high post-harvest losses, and intense competition. For logistics centers like Think Fresh (IPB University), an optimal strategic sourcing portfolio is crucial to secure supply and competitiveness, yet conventional qualitative methods are often insufficient to manage complex and dynamic sourcing decisions.
Purpose: This study assesses the effectiveness of Think Fresh’s strategic sourcing by quantitatively comparing spot market trading, contract farming, and owned farming to inform improved sourcing strategies and resource allocation in Indonesia’s fresh-produce industry.
Design/methodology/approach: This study utilized a case study approach integrated with a quantitative SWOT analysis technique. It modifies and expands the framework developed by Lee et al. (2009) by incorporating the fuzzy Analytic Hierarchy Process (AHP) to address both numerical data and qualitative linguistic evaluations. Information was gathered from Think Fresh's detailed business plan, with the criteria weights established through fuzzy AHP. Competitive positions were then assessed to map each sourcing model onto a four-quadrant SWOT matrix for analysis.
Findings/results: The analysis identifies distinct strategic positions for each sourcing model. Contract farming is situated in the Strength-Opportunity (SO) quadrant, indicating its role as the most competitive model, leveraging partnership strengths to capitalize on market opportunities. Conversely, both trading and owned farming are located in the Weakness-Threat (WT) quadrant, indicating their vulnerability to supply volatility and substantial investment risks, respectively. This analysis highlights contract farming as the strategic cornerstone for growth, while recommending defensive strategies to address the risks associated with other models.
Conclusion: This study determined that a partnership-oriented sourcing approach, notably contract farming, represents the most promising strategy for establishing a resilient and competitive supply chain in Indonesia's unpredictable fresh produce market. It is suggested to progressively reallocate resources to enhance contract farming while simultaneously refining trading practices for greater flexibility and cautiously advancing owned farming capabilities. The quantitative SWOT methodology serves as a comprehensive framework for managing strategic sourcing portfolios in emerging markets.
Originality/value (State of the art): This study innovatively adapts quantitative SWOT, integrated with fuzzy AHP, to evaluate strategic sourcing portfolios, enabling simultaneous assessment of multiple sourcing models beyond cost considerations and addressing uncertainty in agricultural sourcing, particularly in emerging markets.

Keywords: fresh produce, logistics hubs, contract farming, supply chain management, portfolio optimization