Investigation of The Connections Between Supply Chain Management Practices and Supply Chain Responsiveness from Competitive Advantage in the Palm Oil Industry

: The palm oil industry plays an important role in the global economy as one of the largest agricultural commodities traded in the world. With growing demand for vegetable oil, biodiesel, oleo chemicals and other derivatives, the palm oil industry has become the backbone of many producing countries. As a country with a rapidly growing oil palm plantation sector, Indonesia has great potential to benefit from this industry. However, amidst intensifying global competition and demands to meet higher sustainability standards, it is important for Indonesian palm oil companies to improve their supply chain management practices. Effective supply chain management will help these companies to optimize their operations, reduce costs, and improve efficiency.


INTRODUCTION
The palm oil industry plays an important role in the global economy as one of the largest agricultural commodities traded in the world.With growing demand for vegetable oil, biodiesel, oleo chemicals and other derivatives, the palm oil industry has become the backbone of many producing countries.(Irawan., et al 2021).However, the industry is also facing a range of complex challenges, which include price volatility, environmental pressures, changes in international trade policies, and increasingly diverse consumer demands.
This dynamic creates an uncertain and demanding business environment for stakeholders of the palm oil industry, including producers, governments, and nongovernmental organizations.Amid this complexity, a deep understanding of the conditions of the pallet oil industry in a global context becomes crucial to developing effective strategies to respond to challenges and exploit opportunities.Indonesia is one of the major producers of palm oil that controls 58.3% of the world's palm production (Dirjenbun, 2021), as shown in As a country with a rapidly growing oil palm plantation sector, Indonesia has great potential to benefit from this industry.However, amidst intensifying global competition and demands to meet higher sustainability standards, it is important for Indonesian palm oil companies to improve their supply chain management practices.Effective supply chain management will help these companies to optimize their operations, reduce costs, and improve efficiency.By implementing better supply chain management practices, Indonesian palm oil companies can not only improve their competitiveness in the global market, but also contribute to sustainable and inclusive economic development.The palm oil supply chain system as shown in Figure 1.2 above starts from the plantation, palm oil processing, CPO processing plant until it is distributed to consumers through ships at the port to be well integrated so as to increase operational efficiency (Ampuh Hadiguna 2013).Supply chain management is a key aspect in the operation of the palm oil industry, which includes the production, processing, distribution, and marketing of palm oil products.Effective practices in supply chain management can improve operational efficiency, reduce costs, improve product quality, and meet sustainability standards required by the global market (Taticchi et al. 2015).
Palm oil is a major contributor to Indonesia's foreign exchange income in the nonmigas sector.Indonesia has been the world's largest producer of palm oil since 2006.(Irawan., et al 2021).Total production of CPO in 2023 is 50.07 million tons or an increase of 7.15 percent from 2022 by 46.73 million tons (GAPKI, 2024) and as much as 70% of the CPO products in Indonesia have been exported and the rest are consumed domestically.Supply chains in the palm oil industry are heavily influenced by the location of suppliers, processing industries, and geographically dispersed consumers.It creates complex supply chain barriers, which require logistical and operational optimization to efficiency.Improving the National Logistics System (Sislognas) is one of the priorities undertaken by the government to maintain national economic growth.This is happening amidst the disruption of the global supply chain that the world is facing today.Supply chain management has two purposes, the first of which is to optimize the performance of the organization and the overall supply chain performance (Gorane et al., 2015).In line with this view, (Li et al. 2006) explains that supply chains management practices must be implemented in order to remain competitive in competition.Therefore, in order to this goal, companies need to develop effective Supply Chain Management Practices.These supply chain management practices are business activities by implementing strategic supplier partnership practices, customer relationships and implementing the sharing of information between companies necessary to ensure a fast and efficient delivery of products to customers.In this way, companies can build and maintain competitive advantages in a competitive market.
More in-depth research on Supply Chain Management Practices (SCMP) with dimensions, Supply chain responsiveness (SCR), and Competitive Advantage (CA), is still a little research that specifically identifies and measures with the supply chain management dimensions practices, the specific and relevant supply Chain Responsiveness in the context of the palm oil industry.From the background presented above, the researchers are interested and willing to conduct more in-depth research.

METHOD
Research design is a step in research after the development of the theoretical framework.In research design, there are several ways to make rational decisions.Quantitative method is an empirical research approach to collecting data, performing analysis and presenting data in numerical rather than narrative form.(Sekaran & R, 2017).Based on the research objectives, it was created to analyse the impact of Supply Chain Management Practices on supply chain responsiveness and competitive advantage.The type of research used is explanatory research.According to (Sekaran & R, 2017) Explanatory Research is research that shows the relationship between each variable.The purpose of the research is to test the hypothesis.In the testing of the hypothetics to show the nature of the relationship or indifference of two or more factors in a situation.

Characteristic
Respondents in this study are managers of palm oil industry companies in Indonesia who have met the requirements in accordance with the predetermined sampling criteria.The general description of respondents consists of age, position, length of work, distribution of respondents and type of industry.

Characteristics of Respondents Based on Age
Of the 110 respondents taken as a sample, can be divided by age shown in the table below:

Characteristics of Respondents Based on Position
The classification of the respondent's profile is for the manager level and above based on the position or position in the company can be seen in the following table: Based on table 1.3 above, it is known that in the analysis of the characteristics of respondents based on positions or positions with manager level and above in the palm oil industry in Indonesia.The number of respondents with company executive positions is 17.3%, purchasing managers are 3.6%, factory or production managers are 38.2%,logistics managers are 15%, supply chain management managers are 18.2%, transportation managers are 4.5% and other positions are 2.7%.

Characteristics of Respondents Based on length of work in the current position/position
Classification of respondent profiles based on length of work in the current position at the company can be seen in the following table: Based on table 1.4 above, it is known that in the analysis of the characteristics of respondents based on the length of time working in the current position in the palm oil industry companies in Indonesia.The number with a small working time range of 1 year is 3.6%, 1 to 2 years is 10.0%, 2 to 3 years is 14.5%, 3 to 4 years is 8.2%, 4 to 5 years is 2.7% and above 5 years is 60.9%.

Distribution of Respondents by Province in Indonesia
The distribution of respondents (companies) by province in Indonesia can be seen in the following table: Based on table 1.5 above, it is known that the distribution of respondents based on the Province of the location of palm oil industry companies in Indonesia.The most respondents came from West Sumatra Province, namely 27.3%, the second from Riau province by 13.6%, the third from North Sumatra by 13.6%, the fourth from Central Kalimantan Province by 9.1%, the fifth from Jambi Province by 8.2% and the sixth from Bengkulu province by 60.9%, while those from other provinces were 20.0%.

Direct influence (Direct Effect)
The test of the hypothesis in this study, can be judged by the magnitude of the statistical t-value or t-count compared to t-table 1.96 on alpha 5%.If t-statistics/t-count < ttabel 1.96 at alfa 5%, then Ho is rejected and if t-static/T-count > t-tablet 1.96 in alpha 5% then Ha is accepted.Here's the SmartPLS4 output, which describes the estimated output of the model test: Based on the SmartPLS 4 test results in table 4.20 above, the test results show that the research hypothesis starts from the first to the third, which is a direct influence of the research variable.

Non-Direct Influence (Indirect Effect)
Based on the results of data testing using the SmartPLS 4 program utility, the track analysis results can be seen from the following table:

Effect of Supply Chain Management Practices on Competitive Advantage
Based on the results of data testing using the SmartPLS4 program tool, it can be seen in table 1.6, the Supply Chain Management Practicess coefficient value of 0.674 is the magnitude of the influence given by Supply Chain Management Practicess on competitive advantage in the palm oil industry in Indonesia.Where the standard error value of 0.071 is the level of estimation error that cannot be explained by this construct and with a t-statistic value or t count of 9.501.To find out whether this hypothesis is accepted or rejected with a ttable of 1.96 at 5% alpha.Where the t-statistic value> t-table or 9.501> 1.96 and the p-values are smaller than alpha 5% or 0.000 <0.05 therefore H0 is accepted and Ha is accepted, in other words there is a positive and significant effect of Supply Chain Management Practicess on competitive advantage in the palm oil industry in Indonesia.
Research conducted by (Nigatu Habtemariyam et al., 2021) entitled "The Effect of Supply Chain Management on Competitive Advantage: Mediating Role of Supply Chain Responsiveness in Ethiopian Food Processing Industry" shows that supply chain management practices (SCMP) have a positive and significant influence on the competitive advantage (CA) of companies conducted in the food processing industry in Ethiopia, as well as research conducted by (Husin & Saha Ghafur, 2022) entitled "The Effect Of Relationship Between Management And Supply Chain On The Performance Of Companies In The Palm Oil Industry Mediated By Competitive Advantage" shows that supply chain management positively and significantly affects competitive advantage.
In a study conducted by (Sukati et al., 2011) showed that Supply Chain Integration has a positive impact on the competitive advantage of consumer goods enterprises in Johor Baru, Malaysia with the study entitled "Competitive Advantage through Supply chain Responsiveness and Supplychain Integration".Supply supply chain practices have a positive and significant impact on small and medium-sized enterprises' competitive advantages in Vietnam, studied by (Duong Vu Xuan Quynh & Nguyen Hoang Huy, 2018) with the title "Supply Chains Management Practices, Competitive Advantages and Firm Performance: A Case of Small and Medium Enterprises (SMEs) in Vietnam.According to the study carried out by (Li et al. 2006) with the name "The Impact Of SupplyChain Management Practice On Competitive Avantage And Organizational Performance" it shows that higher levels of supply chains practices can increase the competitiveness of organizations.

Impact of Supply Chain Management Practices on Competitive Advantage with supply chain responsivenes as mediation variables.
Based on table 1.7 above, it can be seen that Supply Chain Management Practices have a positive and significant influence on competitive advantage, through supply chain responsivenes as mediation variables that can be viewed from t statistics values 4,304 > 1,96 and p value 0,000 < 0,05.It can be concluded that Supply chain management practices have a positive and significant influence on competitive advantage through supply chain responsivenes on the palm oil industry in Indonesia.
However, this is not in line with the findings of a study conducted by (Nigatu Habtemariyam et al., 2021) entitled "The Effect of Supply Chain Management on Competitive Advantage: Mediating Role of Supplies Chain Responsiveness in Ethiopian Food Processing Industry" showing that supply chain management practices (SCMP) have a positive and significant impact on the competitive advantage through responsive supply chains (SCR) carried out in the food processing industry in Ethiopia.A study (Muhammad & Saad, 2023) entitled "Achieving A Competitive Advantage Supply Chain Management Practices and Responsiveness" showed that supply chain management practices have a significant influence on the responsiveness of supply chains in the timber industry in Malaysia, as well as a study (Sukati et al., 2011)  Practices on competitive advantage in the Palm Oil Industry in Indonesia.5. Companies in the Indonesian palm oil industry that implement effective Supply Chain Management Practices can increase their competitive advantage.This means that companies need to focus on optimizing supply chain management processes, including coordination with suppliers, logistics efficiency, and in-operational management to stay outstanding in competitive markets.6.It shows that companies that implement effective supply chain management can quickly respond to changes in market demand, supply disruption, or other operational problems.7. To that end, palm oil companies must continue to improve their flexibility and adaptability in their supply chain processes.Companies that are more responsive to market changes have better chances ofining and expanding their market share.Therefore, companies must invest in technologies and processes that enable them to respond quickly and effectively to changes in the market.8.Although supply chain responsiveness is an important variable in the competitive advantage of the palm coconut industry, the results show that this variable is able to be a mediator between the supply Chain Responsiveness and the Competitive Advantage.

Figure 1 .
Figure 1.1 below, where since 2006 Indonesia has become the largest producer of coconut palm that was previously occupied by Malaysia.Sawit coconut is an important commodity because palm coconut has a significant contribution to development in Indonesia.

From
table 1.1 above on the volume and value of exports of palm oil, Indonesia's total exports are 26.220.600Tons worth US$29,628.100,000with India remaining the largest importer with a volume of 4.996.300Tons with a value of US$5,320.600,000.Palm oil price fluctuations are a matter of concern, with prices still being determined by the Rotherdam and Malaysia exchanges, even though the government has tried to create its own exchange by making the Indonesian exchange the world CPO price reference regulated in Regulation 7 of the Commodity Futures Regulatory Authority in 2023.Source: Databoks (2024) Figure 3. Oil price fluctuations

Table 1 . Volume and Value of Indonesian Sawit Oil Export Source
: Processed from Customs documentation Tax and Customised (PEB and GDP) 2023

Table 2 . Characteristics of Respondents by Age
Based on table 1.2 above, it is known that in the analysis of the characteristics of respondents based on age in the palm oil industry in Indonesia.The number with a small age range of 30 years is 4.5%, age 30 to 40 years is 21.8%, age 40 to 50 years is 44.5% and age over 50 years is 29.2%.

Table 4 .
Characteristics of Respondents Based on length of work in the current position

Table .
Based on the SmartPLS 4 test results in table 4.21 above, the results of the hypothesis test have an indirect influence on the research variable.It is useful to assess the acceptance or rejection of a hypothesis, by comparing the t value of a statistical or counting t with a t-table at 1.96 (in the case of a 5% error rejecting the data).The test results of the direct effect and indirect effect hypotheses are as follows:

Table 8 . Research Results
on "Competitive Advantages through Supply chain Responsivaness and Supply CHAin Integration".CONCLUSION Based on the study, research results and discussion that have been presented previously, the following conclusions can be drawn: 1. Supply Chain Management Practices affect Competitive Advantage in the palm oil industry in Indonesia.2. Supply Chain Management Practices affect Supply Chain Responsiveness in the Palm Oil Industry in Indonesia.3. Supply Chain Responsiveness affects Competitive Advantage in the Palm Oil Industry in Indonesia.4. Supply Chain Responsiveness is able to mediate the effect of Supply Chain Management Abu, H., #1, N., Abdallah, A. B., & Sweis, R. (2018).Lean Supply Chain Management Practices and Performance: Empirical Evidence from Manufacturing Companies.In Int.J Sup. Chain.Mgt (Vol.7, Issue 1).http://excelingtech.co.uk/Alahmad, Y. Y. (2021).The Relationship between Supply Chain Management Practices and Supply Chain Performance in Saudi Arabian Firms.American Journal of Industrial ://doi.org/10.4236/ajibm.2021.111004Alvarado, U. Y., & Kotzab, H. (2001).Industrial Marketing Management (Vol.30). https