SUSTAINABLE VALUE CHAIN STRATEGY FOR TOFU SMEs

Globalization, free trade, and the current pandemic can be both a challenge and an opportunity for SMEs in Indonesia. One of the opportunities that arise from this phenomenon is the expansion of supply and demand networks. One of the SMEs in the food sector affected by the pandemic is the Tofu SME. Currently, only about 36% of tofu SMEs still survive in carrying out the production process. Most of the SMEs have problems in raw material inventory management, they do not yet have a standard warehouse. This problem minimizes their production capacity. Besides that, Tofu SMEs are still difficult to develop and sustain in the new normal era. For this reason, research on increasing the sustainability of SMEs needs to be carried out. The value chain analysis approach is used in the study to map the operational processes of SMEs and to identify activities and problems that make an important contribution to increasing the value of the SME business processes. K-means clustering method is used to group value chain levels. The Analytical Hierarchy Process (AHP) method is then used to choose a level-up strategy. Cluster 1 has the most members, which is 62 SMEs. Cluster 2 has the smallest member of 1 SME while cluster 3 has 9 SME members. The value coalition strategy is a recommended strategy to be applied to cluster 1 SME groups.


INTRODUCTION
Globalization and free trade today can be both a challenge and an opportunity for SMEs. One of the opportunities that arise from this phenomenon is the expansion of supply and demand networks [1]. However, the challenges faced by SMEs cannot be considered simple and overlooked, especially in the increasingly tight business competition during pandemic Covid-19 outbreak [2]- [4]. Some of SMEs contributions to society are utilizing natural resources and being labor intensive, generally in the fields of food crop agriculture, plantations, food processing and other areas. The concept of sustainability by promoting a green supply chain is also a challenge for business actors [5]. The application of the green supply chain concept can be implemented by mapping the value chain in the SME business process.
Understanding the value chain in the operational process in an industry is very important to be carried out thoroughly starting from the input process to the output to the process of using the product by consumers. This process is commonly referred to as value chain analysis. The concept of the value chain was first introduced by Porter [6]. Value chain is a method to determine the chain of activities that convert inputs into outputs that are of value to consumers. Value for consumers consists of three basic sources, which are product differentiation, reducing cost activities, and customers' fulfillment needs. A value chain analysis is a process carried out to identify the main activities and supporting activities that can add value to a product. It can be used to analyze the company's internal activities and identify the competitive advantage and the weaknesses of the SMEs. Value chain is suitable method to view part of processes cooperation between small and large enterprises in business chain [7]. Tofu is a processed food product made from soybeans. The production process is carried out by agglomerating the protein content found in soybeans. In East Java, there are several tofu SME centers which are quite important in contributing to the community's economy. Tofu SMEs are still difficult to develop and compete with similar food businesses during pandemic Covid-19 outbreak [8]. The main raw material for tofu is soybeans which are included in materials that are easily damaged or not durable. Likewise, the finished product of Tofu requires a special place for storage if the product is not immediately sold. The management of material flow and finished product storage is still a problem at Tofu SMEs [9]. Most of the SMES do not have warehouses and storage areas for raw materials and finished products that are in accordance with standards. Raw materials procurement is a factor that influence the performance of the SMEs [10]. Activities related to inventory and product handling also require the largest energy consumption in the product life cycle [11]. Knowledge transfer in supply chain systems needs to be implemented to SMEs as a strategy to increase profits [12]. Formerly, most of the tofu marketing is dependent on mobile vegetable traders [13]. E-commerce commonly used as a strategy to cope expand the market in the normal era [14].
Previously, still few research conducted on increasing productivity and competitiveness of Tofu SMEs. Therefore, research on increasing the sustainability of Tofu SMEs needs to be carried out. This study uses a value chain approach to map the operational processes of tofu SMEs and identify activities and problems that create an important contribution to increase the value of the SMEs business processes.
The research was conducted at a center of tofu SME in East Java. The number of SMEs registered at the center is more than 200 SMEs. However, during the pandemic Covid-19 outbreak, only 72 SMEs still survive and conduct the production process. Results of the initial study, the SMEs center consisted of several SMEs classes. Therefore, it is necessary to conduct a cluster analysis to determine the value chain characteristics of each SME as a step in aiding the Tofu SME center to improve its competitiveness. The cluster method used was the K-means method because with this method the researcher can determine in advance the number of clusters to be formed. Three clusters are determined based on the maturity value chain level of the SME operating system, namely low, medium, and high levels. Next, a strategy is chosen to help increase the maturity value chain level for SMEs with low clusters.

RESEARCH METHOD
The study uses a questionnaire to measure the maturity value chain level. Questions on the questionnaire refer to the variables in the value chain, as shown in Table 1. These variables will be used as the basis for making questions in the questionnaire. The questions are divided into two parts. The first part contains a company profile with 11 questions, such as the name of the company, the address of the number of employees, turnover and profit per year. While the second part is a questionnaire for value chain analysis with questions obtained from the variables and attributes of the value chain. The second questionnaire is about value chain analysis of MSME business processes. The questionnaire contains 42 questions, where respondents answer the questionnaire by comparing the variables in the value chain with real conditions in MSMEs using a Likert scale of 1 to 5. Score 1 = Very unsuitable for MSME conditions, Score 2 = Not in accordance with MSME conditions, Score 3 = Not suitable for MSME conditions, Score 4 = In accordance with MSME conditions, and a score of 5 = Very in accordance with MSME conditions. The importance of production process training and occupational health and safety for all employees Company support systems and functions that enable it to maintain day-to-day operations such as accounting, law, administration and management

Information Systems
Application of information systems in business operation processes Planning Production schedule planning is arranged according to the inventory of raw materials in the storage area The K-Means method [15] is used to determine the grouping of SMEs based on the characteristics of the sustainable value chain. Three types of clusters were determined, those are low, medium, and high levels. The Analysis of Variance method is used to identify the variables that are thought to have an influence in grouping the SME into each cluster.
The hypotheses proposed in this study are: H0 = Variable X has no effect on cluster formation H1 = Variable X has an influence on the formation of clusters Decision-making: If Sig ≤ ∝ (0, 05) then reject 0 If Sig > ∝ (0, 05) then accept 0 After understanding and analyzing the three clusters that were formed, then a strategic plan was chosen for SMEs that are in the lowest cluster. Alternative strategies and criteria were obtained from a literature study which then selected the best strategy using the Analytical Hierarchy Process method [16]. The results will become recommendations for alternative solutions to problems found in SMEs.  Figure 1. Value Chain Improvement Hierarchy Figure 1 is a hierarchical model of value chain improvement with alternative strategies and selection criteria to determine the best strategy. The criteria level consists of implementation costs, implementation period, infrastructure facilities, human resources and availability of technological facilities. Each criterion has its own intensity value. While the alternatives consist of horizontal keiretzu, vertical keiretzu, value coalitions and customer linkages. Keiretzu horizontal is a network consisting of companies engaged in the same business. Keiretzu vertical is a network consisting of one company and its suppliers. Value coalitions are simultaneous relationships of several support units within the organization to produce a product. Customer linkages establish relationships with distributors to customers to increase the competitive advantage of SMEs (Widarsono 1999). Calculation with the Analytical Hierarchy Process method is carried out to determine the best alternative seen from the final total of each alternative.  Table 2 shows the profile of Tofu SME which has been established for more than 15 years. From the results of the analysis of the number of employees, it can be seen that all tofu SMEs belong to the middle classes industry with the number of employees between 5 to 18 people. Likewise, the total annual turnover shows that all SMEs are in the medium-sized business category. Nevertheless, from the total profit, it is still very small when compared to the category for medium-sized businesses.  Table 3 shows the number of members in each cluster. Cluster 1 has the most members, which is 62 SME. Cluster 2 has the smallest member of 1 SME while cluster 3 has 9 SME members. From the results of clustering, it is known that cluster 1 has the lowest average sustainable value chain. Therefore, it is necessary to have a strategy that can be used to improve the competitive quality of the tofu company. Table 4 is a table of the results of the analysis using the ANOVA method to identify variables that have a sig ≤ 0,05 value, which means that the above variables affect the cluster formation process. Among all the variables used there are several variables that have a major influence on the formation of clusters, including the age of the company, number of employees, annual turnover, X1, X3, X4, X5, and X6, X25 and X26 variables.

RESULT AND DISCUSSION
These variables are used as a reference in determining the criteria in the Analytical Hierarchy Process Method for making strategic decisions which are the best and recommended for SMEs in solving the existing problems. The AHP method can assist the SMEs management in determining the priority of the criteria and alternative strategies [17]. Raw materials received are directly stored in the warehouse 0.00 X3 SME has raw material warehouse 0.000 X4 The warehouse used is in accordance with the established standards 0.000 X5 Raw materials are directly placed on the production floor 0.000 X6 Raw material checking is always done in the storage area 0.000 X25 Importance of raw material prices 0.004 X26 Importance of raw material quality 0.022 Based on the calculation results between the alternatives against the criteria multiplied by the criteria, the results are shown in Table 5. From the final total value of the strategy selection results, it can be concluded that the best and recommended alternative strategy for SME Tofu is the value coalition strategy. SMEs are expected to improve their business and operational relationships with their supporting units, including consumers, suppliers and distributors, and society in order to optimize material flow management and reduce impact of waste [18]. For example, the application in the process of purchasing raw materials must have an agreement or contract so that SME can manage raw material inventory, because most SMEs do not yet have a raw material warehouse. In the digital transformation era, the SMEs could implement an e-purchasing system to simplify the management process for purchasing raw materials from suppliers and minimize raw material inventory costs [19]. To improve relationships with consumers, SMEs must identify the tofu products that consumers want. Innovation in the development of new products with tofu raw materials can be carried out to open new market opportunities.

CONCLUSION
Based on the results of the research and data processing that has been carried out, it can be concluded that the characteristics of SME are divided into 3 clusters. The division of clusters is based on the economic level. Cluster 1 is known to have 62 SME members. This characteristic of cluster 1 is that it has the lowest value chain from other clusters. In addition, cluster 1 has an average company age of 36 years with an average annual income of seven hundred million and an annual turnover of nine million. Cluster 2 is known to have 1 SME member. The characteristic of cluster 2 is that it has the highest value chain among the other two clusters and has a company age of 18 years with an annual turnover of eleven million. Meanwhile cluster 3 is known to have 9 SME members. The characteristic of cluster 3 is that it has a value chain that tends to be moderate because it is between two other clusters. In addition, cluster 3 has an average company age of 36 years with an average annual income of seven hundred million and an annual turnover of nine million. Based on the results of the Analytical Hierarchy Process calculation to determine the best alternative recommended as a strategy to improve competitive competence, it is known that the alternative with the largest final value is the alternative value coalitions with a value of 0.371.