Jaka Purnama Journal of Engineering Research and Application www.ijera.com ISSN : 2248-9622 Vol. 9,Issue 1 (Series -II) Jan 2019, pp 01-08 www.ijera.com DOI: 10.9790/9622- 0901020108 1 | Page Sustainable Supply Chain System Model in Small and Medium Enterprise Furniture with Interpretive Structural Modeling (ISM) Approach Jaka Purnama * , Budi Setiawan**, Imam Santoso***, Bagyo Yanuwiadi**** *( Industrial Engineering, University of 17 Agustus 1945 Surabaya, Indonesia **( Department of Agroindustrial Technology, University Brawijaya, Indonesia ****( Department of Agroindustrial Technology, University Brawijaya, Indonesia ****( Environmental Science, University Brawijaya, Indonesia Corresponding Author : Jaka Purnama ABSTRACT SMEs furniture Pasuruan Indonesia is a business actor who processes wood from forest products into goods that can add value to wood production. This SMEs furniture is also one of the superior products of Pasuruan Regency. To optimize the potential of existing resources, the management of a sustainable supply chain strategy is needed. The management model of an integrated strategy is sustainable by utilizing quantitative data based on economic aspects, social aspects, environmental aspects and the influence of SMEs furniture. The evaluation method used for the sub-model of strategy formulation is the Interpretative Structural Modeling (ISM) approach. This strategy evaluation is based on internal factors and external factors from SMEs furniture. The purpose of this study is to determine various alternative strengthening strategies for key elements by structuring the strengthening system of supporting elements, inhibitors, strategies, actors and needs. Based on these five elements, the supporting elements are a priority for strengthening improvements in the sustainable supply chain system in furniture SMEs. Keywords - Management strategy, SMEs , Furniture, ISM, Supply chain system. -------------------------------------------------------------------------------------------------------------------------------------- Date Of Submission: 16-01-2019 Date Of Acceptance:28-01-2019 -------------------------------------------------------------------------------------------------------------------------------------- I. INTRODUCTION The SMEs furniture business is one of the pillars of the economy that is able to support the national economy to establish a strategy for strengthening business by preparing all the requirements for production activities. Pasuruan Regency currently has formulated 6 (six) excellent programs, namely: legal supremacy, quality education, marine and marine affairs, SMEs furniture and national trade, tourism, technology, and the environment. SMEs furniture as a superior program shows the commitment of the community and local governments to maximize their potential. Pasuruan SMEs furniture must consider industry competitive pressures and management capabilities when implementing competitive strategies to achieve optimal performance [1]. This condition illustrates the importance of establishing a strategy for strengthening furniture SMEs that optimizes the utilization of the total potential of the region as a basis for competitive advantage. The increasing contribution of furniture SMEs has an impact on improving the national economy, especially in the era of free trade. Indonesian SMEs also have a very important and strategic role in becoming a strong, independent and superior industry [2]. SMEs furniture as a business in Pasuruan Indonesia is able to create jobs, absorb labor and increase the income of local people [3]. The problem of SMEs furniture is because the supply of raw materials is less, the production yield is low, while the demand for consumer needs is high, so SMEs are not able to meet consumer needs according to product demand. Based on these problems, a sustainable supply chain system is needed. In an effort to support the supply chain system, a strategy management model is integrated with the Interpretative Structural Modeling (ISM) approach. ISM provides a fundamental understanding of complex situations and solving problems with computer-based modeling [4]. Previous research also used ISM to identify strengths and dependencies in business management and sustainable supply chain knowledge [5]. ISM is a method of analyzing qualitative data used to understand and identify the interrelationships between components in sophisticated and complex systems [6,7]. ISM is based on group decision making, social science, graph theory, and computer assistance [8]. The ISM methodology is to calculate binary matrices, RESEARCH ARTICLE OPEN ACCESS