About 95% of the furniture industry in Indonesia is managed in small-scale and medium enterprises. These enterprises naturally form clusters, but are not necessarily efficiently distributed in terms of obtaining wood material and marketing. This inefficiency can make the industry less competitive. In this presentation, CIFOR researcher Rubeta Andriani provides spatial analysis of small- and medium-sized furniture enterprises in Jepara, Central Java, which contribute 10% to Indonesia’s national furniture export value (US$1.5 billion). The spatial analysis provides options for making more efficient enterprise clusters for regional development. She gave this presentation at the MODSIM International Congress on Model and Simulations held on 12–16 December 2011 in Perth. The conference took the theme ‘Sustaining Our Future: understanding and living with uncertainty’.

1. Spatial Modeling Approach to Clustering the
Furniture Industry and Regional Development
in Jepara, Indonesia
Modelling and Simulation Society of Australia and New Zealand
13 Dec 2011

2. Structure
 Introduction
 Method
 Result
 Spatial distribution
 Spatial analysis
 Conclusion

3. Introduction
• 95% furniture industry managed by small-
scale and medium enterprises (SMEs)
• Jepara, Central Java, long history of significant
furniture industry player
• Provide livelihood for + 5m people
(direct/indirect) through 15,271 associated
enterprises (2005)

4. Introduction – cont.
• Dropped to 11,981 enterprises in 2010
– 96% independent (focus on specific activities, e.g.
workshops, sawmills)
– 4% integrated (integrate 2 or more activities, e.g.
workshop and showroom, log yard and sawmill)
• 92% are small scale producers
• Furniture industries contributed 27% of Jepara
district’s income (2009); accounted for 10%
national export value (US$1.5 billion)

5. Introduction – cont.
• SMEs in Jepara formed natural clusters
– Not efficiently distributed in obtaining raw materials
and marketing
• Large number of small workshops were established
during the export boom era in 1997/98
• Many exited soon after the boom; due to inefficiency:
– Unable to cope with increasing raw material price
– Unable to fulfill market demands
• Aim to analyze the spatial context of efficiency based on
the industrial location theory
– Total reduction in production costs, including minimizing
transportation costs

6. Method
• Two sets of data were used
– Spatial census 11,981 enterprises
– Detailed intensive survey 2,000 enterprises
• Upstream efficiency
– Distance from producers (workshops and
warehouses) to suppliers (wood)
• Downstream efficiency
– Distance from producers (workshops and
warehouses) to retailers (showrooms)

7. Method – cont.
• The efficiency will affect the industry’s
revenue  gross revenue
• Efficiency  reduced operation costs and time
– Less transportation costs  more efficient

8. Results – spatial distribution

9. Results – spatial distribution CEK

10. Results – spatial distribution

11. Result – spatial analysis
Distance
Distance Annual
to
to Wood Road gross
Sub-district Furniture
Supplier density revenue (in
retailers
(km) million Rp.)
(km)
Bangsri 1.46 10.48 0.0038 231,152
Batealit 0.78 0.79 0.0052 1,308,344
Donorojo 15.64 25.22 0.0033 6,788
Jepara 0.75 1.04 0.0043 1,312,824
Kalinyamatan 1.88 3.14 0.0058 23,528
Kedung 0.46 0.62 0.0055 402,600
Keling 10.58 21.24 0.0029 3,372
Kembang 3.16 14.68 0.0039 24,924
Mayong 1.78 4.16 0.0037 27,978
Mlonggo 0.90 7.22 0.0052 572,754
Nalumsari 8.11 10.92 0.0039 8,374
Pakisaji 1.02 3.24 0.0043 321,344
Pecangaan 0.76 1.22 0.0057 467,858
Tahunan 0.29 0.17 0.0066 3,306,500
Welahan 4.16 6.19 0.0059 7,380

12. Result – spatial analysis
35
30
25
20 Distance to Wood
Suppliers (km)
15
Distance to Furniture
10
retailers (km)
Annual gross revenue
5
0
Pakisaji
Welahan
BATEALIT
Keling
Kalinyamatan
Nalumsari
Pecangaan
TAHUNAN
Mayong
Donorojo
Kembang
JEPARA
Kedung
Bangsri
Mlonggo

13. Result – spatial analysis

14. Conclusion
Furniture industry in Jepara has:
• Different downstream and upstream efficiency
• significance correlation
• furniture workshop  retailers
• furniture workshop  suppliers
• Furniture industry in Jepara is more buyer driven
• Future development of Jepara needs to consider:
• Spatial configuration of furniture retailers and
wood suppliers
• Road network

15. THANK YOU