Abstract— This study has two objectives. First, this study aims to find out the current situation regarding the implementation of GSCM practices among Small and Medium Enterprises (SMEs) of wooden furniture industry in three regions in Central Java Province (Semarang, Jepara, and Kudus). Second, this study aims to explore the differences of the effect of the implementation of GSCM practices on environmental performance. The study used primary data through questionnaires enclosed with the Likert scale 1-5 at 142 SMEs of wooden furniture. There are 6 hypotheses and each hypothesis will be tested on the different scale (small and medium scale of the enterprise) and type of enterprise (enterprise with the indoor and outdoor product). Hypothesis testing is done by multiple linear regression and operated by SPSS 16. The rate of implementation of GSCM practices shown in our investigation is still moderate. In this case, on average, the surveyed SMEs has been reaching the stage of considering to implement for more than 90% of proposed GSCM practice. Only two of GSCM practices is in the stage of initiated to implement and only one of GSCM practices has been reaching the stage implementing successfully. Thus, this study also found that the relationship between implementation of GSCM practices and environmental performance do not always significance.. Index Terms— GSCM practices, environmental performance, Semarang, Jepara, Kudus I. INTRODUCTION HE furniture industry has emerged as one of the manufacturing sectors which largely contributes to the national economy in Indonesia and it has a socioeconomic importance in terms of workforce. The total value of Indonesian furniture and related products exports reached$1.79 billion USD in 2012 [1], [2]. Thus, related with the number of workforces, the furniture industry employs approximately two million people directly, and an additional eight million workers indirectly [3]. Recently, the furniture industry faced with the issues of Manuscript received Jan 21, 2017; revised April 13 2017. This work was supported in part by the Indonesia Ministry of Research, Technology and Higher Education under Hibah Strategis Nasional (sponsor and financial support acknowledgment goes here). A Susanty is with the Department of Industrial Engineering, Diponegoro University, Indonesia (phone: 62-024-7460052; fax: 62-024-7460052; e- mail: ariessusanty@gmail.com ). H. Santoso was with Department of Industrial Engineering, Diponegoro University, Indonesia. He is now with the Sahid University, Yogyakarta, Indonesia (e-mail: haryokrmt@gmail.com ) D.P. Sari is with the Department of Industrial Engineering, Diponegoro University, Indonesia (e-mail: dp.sari01@gmail.com ). S. Parasayu is with the Department of Industrial Engineering, Diponegoro University, Indonesia (e-mail: shafiraop@gmail.com the environmental impact as the consumers both at home and abroad seek out environmentally friendly products. Environmental consideration has a major influence on many people in their daily life, including the way consumers buy and use products [4]. Moreover, abroad markets need not only cheap products with a high variation but also that manufactured by companies that guarantee the environmental sustainability in which importers can conduct more stringent oversight [5]. Basically, the environmental impact of the furniture are many and varied and depend on the nature of the furniture and raw material used in furniture manufacturing. As an example, one of the important issues of the environmental impact faced by the wooden furniture industry is using the timber as raw material. The use of timber is accused as one of the important factors that contributed to the illegal logging that has been increasing the rate of the deforestation in Indonesia to 1.8 million hectares per year [6]. In general, according to the life cycle approach, the most important environmental impacts of furniture industry can be divided into three group, namely energy and raw material consumption, emission of chemical substances, and waste generation [7], [8], [9]. To overcome the environmental impact of the furniture industry, there are currently various voluntary instruments that can help enterprise in the furniture industry to improve the environmental performance of their product and production processes, such as eco-design, reuse and recycle the wood waste, environmental management systems, or to encourage the purchase of products that are environmental-friendly like eco-labeling. Eco-labelling is a relatively new trend and one of the effort to inform the customer about the environmental friendliness of a product [10]. It seems that the various voluntary instruments to help furniture industry for improving their environmental performance are related to the implementation of green supply chain management practices. It can be seen from the definition of green supply chain management and its practices. According to reference [11], green supply chain management (GSCM) can be seen as integrating environmental thinking into supply chain management, including product design, material sourcing, and selection, manufacturing process, delivery of the final product to the consumers as well as end-of-life management of the product after its useful life. Thus, the GSCM practice is a multi- dimensional concept which can be measured from different perspectives and the different dimensions of GSCM practices have been highlighted in the past literature according to several researchers, such as [12], [13], [14], [15], [16], [17]. The most popular concept of the dimension of GSCM practice was expressed by Zhu and Sarkis [18] Effect of Internal Green Supply Chain Practices on Environmental Performance of SMEs of Wooden Furniture Industry A. Susanty, H. Santoso, D. P. Sari, and S. Parasayu T Proceedings of the World Congress on Engineering 2017 Vol II WCE 2017, July 5-7, 2017, London, U.K. ISBN: 978-988-14048-3-1 ISSN: 2078-0958 (Print); ISSN: 2078-0966 (Online) WCE 2017