Cost-benefit model in improving traceability system: case study in Indonesian bulk-liquid industry

ABSTRACT

Traceability system (TS) is a part of a food safety management system to support efficient food recall process. Building a TS for bulk-liquid food industry has been identified as the most difficult task due to its operational characteristics. This paper captures the real phenomenon of TS and food recall in three edible oil industries in Indonesia. Cross-case comparison shows that the TS practices in similar industries may vary. Although, their TS proves to have an effect on their capability to recall, building an excellent TS is costly. Therefore, a cost-benefit model based on a system dynamic approach is proposed to assist the industry in setting the traceability improvement program. The cost-benefit model considers the influence of traceability dimensions on profit and recall cost. The cost-benefit conceptual model is presented in a causal loop diagram. Then, the stock flow diagram runs the simulation improvement scenarios in real case. Scenario 3 is chosen as the best short-term TS improvement program.

KEYWORDS:

• Bulk-liquid industry
• cost-benefit model
• food recall
• traceability system

Disclosure statement

No potential conflict of interest was reported by the authors.

Additional information

Notes on contributors

Ivan Gunawan

Ivan Gunawan is currently a PhD candidate in Logistics and Supply Chain Engineering in the Department of Industrial Engineering at Institut Teknologi Sepuluh Nopember (ITS), Surabaya, Indonesia. He received a bachelor’s degree in Industrial Engineering from Universitas Katolik Widya Mandala Surabaya (UKWMS) and a master’s degree in Technology Management from ITS. His research interests are in food supply chain and quality management. During past few years, he has provided lectures in statistical quality control, operations research, and industrial system simulation to undergraduate level at UKWMS.

Iwan Vanany

Iwan Vanany is a Professor of Business Process Reengineering in the Department of Industrial Engineering at Institut Teknologi Sepuluh Nopember (ITS), Surabaya, Indonesia. He received his PhD degree from Universiti Teknologi Malaysia (UTM) in Manufacturing and Industrial Engineering and both Master’s and Bachelor’s degrees in Industrial Engineering Department from ITS. His research interests are in the business process management, food supply chain management, and operations management. He has published in International Journal of Information System and Supply Chain Management, Meiji Business Journal, Supply Chain Forum: An International Journal, International Journal Logistics Systems and Management, Journal of Islamic Marketing, and International Journal of Lean Six Sigma. He teaches business process reengineering, supply chain management, enterprise resources planning (ERP), logistics management, and productions and planning control.

Erwin Widodo

Erwin Widodo was granted his Master Degree from Ritsumeikan University of Kyoto and his Doctoral Degree from Hiroshima University both in Japan, in 2006 and 2012 respectively. His expertise is of multi-player decision-making in industry especially by using game theory. In this current period of 2016-2020, he is assigned as postgraduate program coordinator in his institution, namely Industrial Engineering Department of Institut Teknologi Sepuluh Nopember (ITS), Surabaya, Indonesia. He actively joins several international associations related to his field, i.e. IDGS, Informs, IAEng, IEOM and the likes. Moreover, he also joins as board member in several international journals such as IJISE, OSCM, IJTech, Cogent Engineering, etc.