Int. J. Agricultural Resources, Governance and Ecology, Vol. X, No.

Y, xxxx 1

Performance measurement system for the cold fish

supply chain: the case of National Fish Logistics
System in Indonesia

Ruth Nattassha*, Yuanita Handayati,

Gatot Yudoko, Togar M. Simatupang,
Akbar Adhiutama and Nur Budi Mulyono
School of Business and Management,
Institut Teknologi Bandung,
Jl. Ganesha 10, Bandung, Indonesia
Email: ruth_nattassha@sbm-itb.ac.id
Email: yuanita@sbm-itb.ac.id
Email: gatot@sbm-itb.ac.id
Email: togar@sbm-itb.ac.id
Email: akbar@sbm-itb.ac.id
Email: nurbudi@sbm-itb.ac.id
*Corresponding author

Abstract: While fisheries represent one of the most important economic

sectors in Indonesia, the industry still experiences problems related to
imbalances in product distribution. The volume of fish products might be
abundant in one area, but scarce in another, a problem which has prompted the
Ministry of Maritime Affairs and Fisheries to develop a logistics system for
fisheries, the National Fish Logistics System (Sistem Logistik Ikan Nasional or
SLIN). To monitor the implementation of the SLIN, a tool is required to assess
its performance. This research aims to develop such a performance
measurement tool. Through a combination of analysing previous research and
conducting focus group discussions on the implementation goals of the SLIN,
seven performance indicators have been devised together with their respective
weightings from the perspective of SLIN stakeholders. These performance
indicators can be used to measure SLIN performance in different geographical
areas, in addition to identifying the areas and aspects that should be prioritised.

Keywords: performance measurement system; fish supply chain; cold chain;

National Fish Logistics System.

Reference to this paper should be made as follows: Nattassha, R.,

Handayati, Y., Yudoko, G., Simatupang, T.M., Adhiutama, A. and
Mulyono, N.B. (xxxx) ‘Performance measurement system for the cold fish
supply chain: the case of National Fish Logistics System in Indonesia’,
Int. J. Agricultural Resources, Governance and Ecology, Vol. X, No. Y,
pp.xxx–xxx.

Biographical notes: Ruth Nattassha is a Research Assistant at the School of

Business and Management, Institut Teknologi Bandung. She obtained her
Bachelor’s in Informatics and Master’s in Science Management from the
Institut Teknologi Bandung.

Copyright © 20XX Inderscience Enterprises Ltd.

2 R. Nattassha et al.

Yuanita Handayati is a Lecturer of Operations and Supply Chain Management

at the Insitut Teknologi Bandung, Indonesia. She is recently involved in various
research and activities related to agriculture supply chain. Her other research
focuses are on gamification, circular economy, value chain thinking, service
science, and creative economy. Moreover, she is associated with Indonesian
Supply Chain and Logistics Institute and contributes her knowledge to propose
strategic issue related to sustainability of agriculture supply chain in Indonesia.

Gatot Yudoko is an Associate Professor in Operations Strategy at the School of

Business and Management, Institut Teknologi Bandung (ITB), Indonesia.
He holds a PhD in Planning from the University of Waterloo in Canada.
He teaches operations management, operations strategy, supply chain
management, project management, research methodology, and theory and
model development. His research interests include green logistics (reverse
logistics), operations strategy and sustainability, supply chain management, and
technology and industrial policy.

Togar M. Simatupang is a Professor of Operations and Supply Chain

Management at the School of Business and Management in Bandung Institute
of Technology, Indonesia. He has extensively published in logistics and supply
chain management journals. He has been attributed the Highly Commended
Award by Emerald Literati Network for his research in supply chain
management. His current research and teaching interests focus primarily on
supply chain management, logistics systems, value chain management, creative
economy, design thinking, and entrepreneurship.

Akbar Adhiutama received his PhD in Management of Technology at the

Shibaura Institute of Technology in Japan. He holds both Master’s of
Engineering in Electrical Engineering and MBA in School of Business
Management from the Institut Teknologi Bandung. He earned Bachelor’s of
Engineering in Architecture Engineering at the Trisakti University. He teaches
operations management courses in under-graduate and MBA programs in
School of Business and Management ITB. His research interests are in
operations management, supply chain management and management of
technology.

Nur Budi Mulyono is a Lecturer of Operations and Supply Chain Management

at the Bandung Institute of Technology, Indonesia. He holds an Engineering
Doctoral from the Toyohashi University of Technology with dissertation on
self-organised network of relief logistic and inventory. At the School of
Business and Management ITB, he teaches operations management, supply
chain management, performance management, and the business analytic. He is
associated with Indonesian Disaster Expert Association. His research interests
include humanitarian supply chain, inventory models, operations management,
business continuity, and economic sharing.

This paper is a revised and expanded version of a paper entitled ‘Actors in fish
supply chain and criteria for supply chain traceability: a literature review’
presented at 2nd International Conference on Management in Emerging
Markets (ICMEM), Bali, 26–28 July 2017.
 Performance measurement system for the cold fish supply chain 3

1 Introduction

Indonesia is one of the most extensive maritime nations in the world consisting of
approximately 17,504 islands, 3.1 million m2 of water constituting 64.97% of the
country’s total surface area, and the second longest coast line at 95,181 km
(World Resources Institute, 2012). Given this geographical profile, fisheries constitute
one of the country’s most important economic sectors. In 2012, the industry was second
only to that of China in terms of production, while Indonesia’s aquaculture business was
the fourth largest in Asia (FAO, 2016). The country’s wild-catch fisheries production
totalled approximately 5.9 million tonnes in 2016, the second largest in world, with an
export value of USD 3.78–4.17 billion (California Environmental Associates, 2018).
With such a significant economic value, fisheries constitute one of the 26 most important
economic sectors in Indonesia, accounting for 2.0% to 2.5% of total gross domestic
product (GDP).
The potential of the fisheries sector is supported by high consumption, both domestic
and international, of its products as confirmed by the fact that total global fish
consumption reached 140.8 million tonnes in 2013 (FAO, 2016). However, while high
demand exists for fishery products across the world, the related supply and distribution
processes remain problematic. Taking Indonesia as an example, the eastern part of the
country, in contrast to its western regions, enjoys abundant fish supplies. Imbalances in
fresh fish distribution to the local processing industry (The Jakarta Post, 2016) have
exacerbated disparities in fish consumption, while also creating an east-west regional
discrepancy in the price of fish products. Indonesia is currently actively encouraging
higher domestic rates of fish consumption as a means of satisfying the nutritional needs
of its people more effectively (Amnifu, 2017). Achieving this goal will require balanced
fish consumption across the country, an objective which can only be achieved through the
appropriate distribution of fish products.
In order to manage such issues, the Indonesian Ministry of Maritime Affairs and
Fisheries aims to develop a logistics system, the National Fish Logistics System (Sistem
Logistik Ikan Nasional, abbreviated as SLIN). This logistics system constitutes whole
fish supply chain management which oversees the procurement, storage and distribution
of fish products from locations enjoying abundant supplies of fish to areas with high
demand for fish products (Azhar et al., 2018). According to the Indonesian Ministry of
Maritime Affairs and Fisheries (2014), the main objective of this system is enhanced
performance of the domestic fish supply chain, by addressing issues of price discrepancy
and volatility, inadequate supplies to meet demand and, finally, logistical inefficiency.
The implementation of fish supply chain management which seeks to satisfy national
requirements and identify solutions for the mismatch between the supply and demand for
fisheries products represents the main focus of SLIN (Azhar et al., 2018).
While the main goal of the SLIN centres on utilisation of the national fish supply
chain to achieve nationwide balanced fish consumption, in other parts of the world
similar systems also address the issue of food safety. As fish constitute highly perishable
produce, their movement within a supply chain requires effective management, especially
when consumption of a specific product occurs a great distance from its place of origin.
Other various risks include: contamination by formaldehyde (Hoque et al., 2016),
parasitic infestation and a marked deterioration in quality due to the time lag between
supply chain stages (Galvão et al., 2010). A further hazard results from the failure to
4 R. Nattassha et al.

maintain the temperature and humidity of the environment at consistent levels. According
to the FAO (2016), fish and seafood loss and waste constitute approximately 35% of the
total amount of fish caught at the beginning of the supply chain. In Ontario, certain cases
were even reported of fish products having to be recalled by companies due to their
contamination by clostridium botulinum bacteria which could infect consumers with
botulism (Inspection.gc.ca., 2017). In Scotland, similar potential contamination prompted
the recall of several products which had been repackaged in premises which had not been
approved by food standards agencies (BBC News, 2017). It is also important, therefore,
to consider the safety aspects of supply chain products, especially those relating to the
possible contamination of perishable products.
Perishability causes levels of fish food losses as high as 35%. Such potential wastage
and contamination represent an incentive to ensure that the supply chain assumes the
properties of a cold chain. According to Mercier et al. (2017), the term ‘cold chain’
denotes a supply chain in which the product requires maintenance at a constant
temperature between the points of manufacture and consumption. While this type of
supply chain and its management were initially used only for heat-sensitive medical
products such as vaccines and serums, growing concern within a developing food
industry regarding product quality has induced it to adapt the cold chain to product
movement. There are four critical points in the fish cold chain, namely: post-harvest,
storage, processing and distribution. As fish, the main SLIN commodity, is highly
perishable and requires maintenance of a constant temperature, it is also important to
consider the properties of a cold chain.
There are several existing pieces of research with regard to cold chain food product
management. That conducted by Kashav et al. (2018) reviewed 25 metrics potentially
employed to measure food cold chain performance. Other investigations also considered
the environmental aspects of the supply chain, such as reduction of carbon emission,
energy consumption and water utilisation. While these indicators are applicable to a
general situation, the SLIN might require different performance measurement metrics due
to the background to its development which was intended to achieve the implementation
objectives of government regulations. Kashav et al. (2018) also highlighted that the lack
of relevant government regulations might result in inefficient food cold chain
performance. Therefore, it has become necessary to highlight those performance
measurement metrics directly related to government regulations which could be
employed to complete already existing metrics.
In practice, several pilot project sites designed for the SLIN development project are
already up and running. Consequently, the next task to be undertaken is that of
determining the degree of implementation achieved by these pilot projects, comparing the
implementation between project sites and identifying the areas requiring improvement in
order to realise the main system development goals. This could be achieved by
developing a performance measurement system designed to measure the implementation
of SLIN in each project site.
 Performance measurement system for the cold fish supply chain 5

This research aims to develop said performance measurement system, in the form of
performance measurement metrics. These metrics would include the elements considered
necessary by SLIN stakeholders and could be used to measure its performance in
different areas, in addition to identifying the element which should be prioritised in
various pilot project locations. While other research applied existing performance
measurement metrics, for example that of Joshi et al. (2011), the result of the
investigation reported here would be specifically tailored to the needs of SLIN
stakeholders, since the metrics would be based on focus group discussions. The weight of
these metrics, in terms of the importance assigned to them by SLIN stakeholders, is also
defined by an analytic hierarchy process methodology. The findings of this research
could be used for the purposes of comparing how performance measurement metrics can
be produced when stakeholders are more focused on fulfilling the aims and
implementation goals relating to national regulations.
This paper is organised as follows. First, the performance measurement used in
general supply chains, fish supply chains and cold chains are discussed in the literature
review. The methodology employed to develop the metrics used in the performance
measurement system is then explained. The performance metrics resulting from focused
group discussions with SLIN stakeholders are defined together with an explanation of
their use. Finally, the strengths and limitations of these performance metrics are
discussed.

2 Literature review

A literature review is conducted to establish the current situation with regard to

performance measurement employed in a variety of research. As the research reported
here aims to develop a performance measurement system for the cold fish supply chain,
the literature review defines the performance measurement generally used for supply
chains, specifically used in the fish supply chain and, finally, that employed in a cold
chain.

2.1 Supply chain performance measurement in general

In order to develop a performance measurement system for cold fish supply chains, the
existing performance measurements which are generally employed for all supply chains
are first analysed. There are several performance measurement systems of this type.
Chae (2009) developed supply chain metrics from an industrial perspective where
performance measurement allocated the necessary metrics important for each supply
chain process stage. However, the metrics in this research are mostly concerned with time
and success rate, with almost no consideration given to the financial aspects of the supply
chain. Brewer and Speh (2000) developed a performance measurement system
incorporating a balanced scorecard framework with a wider perspective range compared
to that employed by Chae (2009), as it also included customer and innovation
perspectives. However, the performance measurement adopted in this research does not
consider the type of metric that might be important for specific supply chain stages.
6 R. Nattassha et al.

Another supply chain performance measurement applicable for research purposes was
developed by Gunasekaran and Kobu (2007) and is shown in Table 1. In this
performance measurement system, performance metrics, both financial and non-financial,
are distributed during the supply chain phase for which they are important. The supply
chain phases used in these performance metrics consist of the supply chain operations
reference (SCOR) model phases, namely: plan, source, make and deliver. The phases
themselves conform to the SLIN goals mentioned in part 1: the source phase is related to
procurement, the production phase is related to storage and the delivery phase is related
to distribution. For these reasons, the performance measurement developed by
Gunasekaran and Kobu (2007) was adopted for the purposes of this research. However,
the metrics are combined to compose a global supply chain performance measurement
rather than being distributed per phase. The metrics of price, cost, product value and time
will be highlighted due to their relationship with the three SLIN goals of price, supply
and logistical efficiency. Other aspects, while not fully explored in this research, can be
utilised in the further development of the performance measurement system.

2.2 Fish supply chain performance measurement

After analysing the performance measurement system appropriate to all supply chains, it
is also necessary to identify measurements specifically applicable to fish which constitute
the main commodity analysed in this research. Reviewing the existing literature regarding
the implementation of fish supply chains and the indicators employed to assess the
performance of their system is essential. The several sources reviewed do not explicitly
state the performance measurement or performance indicator employed in the research. In
such articles, the performance measurement is derived from the particular aspect of the
supply chain being focused on in the research.
Table 1 Supply chain performance metrics

Supply chain
Financial
process stage
Planning Return on investment, sale
price
Sourcing Scrap/obsolescence cost,
inventory cost, sale price of
goods and service
Manufacture Scrap/obsolescence cost,
overhead cost, inventory
cost, sale price of
goods/services, value added
Delivery Overhead cost, value added,
inventory cost, stock-out
cost, transportation cost and
warranty cost
Source: Gunasekaran and Kobu (2007)
Non-financial
Labour efficiency, perceived product value,
product development cycle time, bidding
management cycle time, compliance with
regulations, forecasting accuracy, perceived
product value, supply chain response time.
Labour efficiency, product development time,
procurement lead time including supplier
development time, delivery reliability, product
and service variety.
Labour efficiency, conformance to
specifications, capacity utilisation,
manufacturing lead-time, production flexibility,
process cycle time, scheduling accuracy,
product and service variety, value added.
Labour efficiency, delivery reliability,
perceived product value, value added, product
and service variety, perceived quality.
 Performance measurement system for the cold fish supply chain 7

The analysis includes reference to eleven pieces of research into the fish supply chain.
The research conducted by Donnelly and Olsen (2012) focused on Norwegian white fish
as the main commodity and included a case study of the fish producing and processing
company CodTrawl Inc. whose role was to catch, process (gutting, bleeding and freezing)
and ship fish products. As the research involves the implementation of a traceability
system, the focus is predominantly on the side of information recording and employee
workloads, while no consideration was given to the financial aspect of the supply chain.
The subsequent research undertaken by Donnelly et al. (2013) considered such aspects of
the mackerel supply chain operated in Norway, both within national distribution and the
export trade to Japan. The study analysed the costs and benefits of information system
implementation in the mackerel supply chain. Its conclusion was that the industries
concerned demonstrated a lack of interest in the supposed benefits of the system.
Galvão et al. (2010) studied the tracking systems employed in cod fishing. In this
research, fish quality was evaluated on the basis of the weight of the fish in addition to
the number of parasites and gaping present in the fillets. In comparison to the main body
of research, this study places more focus on the fish. Gorospe et al. (2016) concentrated
on fisheries management from the viewpoint of an ecosystem approach in which
management should also consider ecosystem sustainability. The measurements employed
are categorised according to their supply chain stages, modified for a fish supply chain
(pre-catch, point-of-catch, point-of-processing and point-of-purchase). It largely
considers the environmental and food security aspects of the fish supply chain. Hsu et al.
(2008) adopted the implementation of an information system to support a live fish supply
chain as their main focus, the subjects studied in this research being obtained from an
aquaculture farm. However, the content of the paper focused primarily on the
performance of the information system rather than the supply chain itself.
While not specifically referring to fish, Grunow and Piramuthu’s (2013) study
investigated perishable food, its shelf life and the instruments employed to determine said
shelf life. Hoque et al. (2016) focused on the fish sold in local markets in Bangladesh
and, particularly, the contamination by formaldehyde used for the purposes of
preservation. Karlsen et al. (2011b) undertook two research projects related to the fish
supply chain, the first being an investigation of the fresh saithe supply chain and the
second of the salmon feed supply chain (Karlsen et al., 2011a). Both pieces of research
relate to the traceability aspect of a fish supply chain, thus taking the recording and
connectivity of information as their focus.
Parreño-Marchante et al. (2014) presented the results of farmed fish supply chains in
two pilot test sites, together with their performance measurements. This research also
focused on information system implementation to enable the flow of information in the
supply chain in tandem with the product. In keeping with the findings of other research, it
highlighted the fact that transforming prevailing views of the system within the fish
supply industry from ones of cost to opportunity remains a challenge. In the research
conducted by Randrup et al. (2008), the recall of cod fillets, plaice fillets and saithe loins
in their respective supply chains is simulated. However, it mostly focuses on the time
required to conduct recall without considering the associated cost.
A summary of the performance measurement analysis employed which can be found
in the relevant literature is presented in Table 2. The supply chain process stage used to
categorise the measurement demonstrates slight differences to those resulting from the
unique characteristic of the fish supply chain in which the source might be either farmed
8 R. Nattassha et al.

or captured fish. The performance measurement used in these studies contained several
factors mentioned in general supply chain performance measurement, especially those of
cost and labour efficiency. However, the performance measurement analysed in this
section will include factors not yet mentioned in general supply chain performance
measurement. It is noted that, while supply chain performance measurement does not, in
general, consider the importance of information records and temperature control
(regarding quality control), these metrics are considered important in fish supply chain
performance measurement.
Table 2 Existing fish supply chain performance measurement

Supply chain process Performance measurement/key

stage performance indicator
Planning Coordination of information
systems for the participating
companies
Catching/farming Feeding and drugs (farmed fish)
Information recording speed and
accuracy
Documentary workload decrease
Management of raw Fish quality (weight, bloodspots,
materials, processing parasites, formaldehyde exposure)
Information recording speed and
accuracy
Documentary workload decrease
Data input time reduction
Data quality improvement
Confidentiality
Information availability
Inventory requirements
Methods (processing, packaging
and storage)
Shelf life
Sorting process reduction
Transport Temperature and humidity
Return (retailers/ Recall time and cost reduction
customers)
Reference
Karlsen et al. (2011b)
Hsu et al. (2008) and
Karlsen et al. (2011a)
Donnelly and Olsen (2012)
Donnelly and Olsen (2012)
Donnelly and Olsen (2012), Galvão
et al. (2010), Hoque et al. (2016)
and Parreño-Marchante et al. (2014)
Donnelly and Olsen (2012)
Donnelly and Olsen (2012)
Donnelly et al. (2013) and
Parreño-Marchante et al. (2014)
Donnelly et al. (2013)
Donnelly et al. (2013)
Donnelly et al. (2013),
Karlsen et al. (2011b) and
Parreño-Marchante et al. (2014)
Gorospe et al. (2016)
Gorospe et al. (2016)
Grunow and Piramuthu (2013) and
Karlsen et al. (2011b)
Parreño-Marchante et al. (2014)
Hsu et al. (2008) and
Parreño-Marchante et al. (2014)
Donnelly et al. (2013),
Parreño-Marchante et al. (2014) and
Randrup et al. (2008)
 Table 3

Cold chain performance evaluation

Costs Quality and safety Service level Traceability ROA Innovativeness Relation
• Operation cost • Certification • No. of billing stations • On farm • Product of • Launch of new service • Customer
• Inventory cost • Customer satisfaction • Convenience • During transit operation margins • Launch of new marketing • Farmer
• Distribution cost • Categorisation as per • Operating hours • At retail store • Total asset • Launch of new • Employee
Cold chain performance measurement

remaining shelf life utilisation technology

• Cost of expired/waste • Forms of payment • Degree of details
perishables • Delivery coverage • Degree of
• Cost of staff training • Product availability automation

Source: Joshi et al. (2011)

Performance measurement system for the cold fish supply chain
9
10 R. Nattassha et al.

The most suitable performance measurement for this research was found to be that
relating to cold chains developed by Joshi et al. (2011) as presented in Table 3. While it
lacks the supply chain stages in which these performance metrics are potentially
important, performance measurement considers a wide range of supply chain aspects.
When compared to the metrics used for measuring supply chain performance in general
and fish supply chain in particular, those used for performance measurement in cold
chains do not, for the most part, provide different metrics to be measured when assessing
the supply chain performance. However, it is noted that staff training costs are taken into
account in cold chain performance measurement. Such costs might be incurred by the
temperature control maintenance technologies used in a cold chain which might
necessitate special skills irrelevant to other supply chain technologies. Similar concerns
should arise when the implementation of SLIN and its associated system technologies is
introduced to stakeholders, for example fishermen support, who have not previously had
access to such technologies. This concern could also be linked to the relation column of
the cold performance measurement in Table 3, more specifically the farmer metric,
since fishermen are considered to constitute farmers within the fish supply chain.
The temperature and humidity control elements of those technologies have also been
shown to affect supply chain cost effectiveness, specifically the operational and inventory
costs. As far as the perishability of fish products is concerned, the cost of expired/waste
perishables in the SLIN supply chain also needs to be considered.
While the remaining performance metrics in the development of performance
measurement are not considered for the purposes of this research, several of their
defining aspects could be utilised in further development of the measurement system.
The aspects falling within the quality and safety, traceability and innovativeness
categories could be considered as further enhancements. Such improvements would
require further investment in additional technologies, especially those supporting
certification and traceability. Therefore, it might be important to specify the intended
customers of the system, as not all fish consumers in Indonesia would necessarily desire
such developments to be included in their fish products. For that reason, these aspects are
not yet included in the initial development of the SLIN performance measurement system
since, at this stage, the SLIN would be targeted at customers in general.

3 Development of the cold fish supply chain performance measurement

systems

The methodology used to construct the general performance measurement system is

presented in Figure 1. First, an analysis of both fish supply and cold supply chains was
conducted. The analysis was further expanded by listing the key performance indicators
found in several references relating to each supply chain, together with key performance
indicators of the general supply chain which are considered to be form part of the cold
fish supply chain. The performance metrics used for the case study are, generally, those
resulting from such a literature review methodology, as that in the example provided by
Kashav et al. (2018) and Micheni et al. (2014), or utilising the results of a literature
review to construct a questionnaire such as in the example featured in Begum et al.
(2018). However, in this research, the compiled performance measurement metrics were
reviewed during several focus group discussions with SLIN stakeholders in accordance
with government regulations regarding SLIN and its implementation goals.
 Performance measurement system for the cold fish supply chain 11

The performance measurement metrics were further reviewed during a focus group
discussion to ensure that the metrics were in line with the needs of SLIN from the
perspective of its stakeholders. The review resulted in a construct of performance
indicators for use by the SLIN cold fish supply chain which was subsequently weighted
according to their importance based on the feedback from a survey distributed to SLIN
stakeholders.

Figure 1 Performance measurement system development

General supply
chain KPI

Fish supply Cold fish supply

chain KPI chain KPI

SLIN cold fish supply chain

FGD performance indicator
Cold chain
KPI SLIN regulations and
implementation goals

The various key performance indicators for general supply chains, fish supply chains and
cold chains has been analysed in part 2. When compiling the results in a performance
measurement for the cold fish supply chain, it is also important to tailor the performance
measurement to the case study in question. As this research focused on the SLIN, the
next stage of the research served to determine which performance measurement actually
contributes to the system in accordance with its goal. Therefore, it is important to review
the system goal.
The specifications of the SLIN are contained in the fifth regulation of the Indonesian
Ministry of Marine Affairs and Fisheries which was issued in 2014. Section 3 contains
three identified goals for the system. The first is to increase the capacity and stability of
the production and marketing system of national fisheries. The second is to efficiently
strengthen and broaden the connectivity between the upstream production centre, the
downstream production centre and the marketing function. The third is to increase supply
chain management efficiency, along with production material, infrastructure and
information flow from the upstream supply chain to the downstream supply chain.
As mentioned in the introduction, the system is a form of cold fish supply chain basically
constituting a fish supply chain which demonstrates certain cold chain traits.
During focus group discussions with SLIN stakeholders, the performance
measurements found in the existing literature were discussed at length from the
perspective of their connectivity with the three goals of SLIN. Six performance indicators
and an analysis of which SLIN goal is measured through the performance indicator
emerged from this discussion:
1 Upstream and downstream supply chain connectivity
This performance indicator is used to measure the performance of the system in
relation to the second SLIN goal, strengthening and widening the connectivity within
the supply chain. This is the most important performance indicator as the first
implementation of SLIN would focus on supply chain connectivity.
12 R. Nattassha et al.

2 Managed excessive demand for and supply of fish commodity

This performance indicator would be measured separately when being used, but it is
mainly tailored to achieve the first objective of SLIN. Maintaining a balance between
demand and supply requires careful management of a situation in which demand
exceeds supply or vice versa. Therefore, the effective management of these situations
is also important as far as the performance of the system is concerned.
3 The increased interest of logistics service providers in the fish commodity industry
To increase supply chain management capacity and efficiency, there are stakeholders
whose involvement in the system is required, one being logistics service providers.
Their importance lies in providing the storage and transportation facilities necessary
to increase fish product capacity at certain sites and maintain efficient means of
product transportation.
4 Reduced logistics cost
SLIN has the ultimate goal of maintaining fish product price stability. In order to
achieve this goal, it is important for the logistics cost to be kept as low as possible, so
that price discrepancy will not be excessive when the geographical distance between
the locations of fish production and consumption is significant. However, it might be
necessary to quantify more precisely the decrease in logistics cost, as there are no
standards regarding how much the cost should decrease in order to be considered
successful by this indicator which is also considered in most of the performance
measurements mentioned in literature review.
5 Accessibility of information regarding fish commodity supply and demand
One of the most important highlights in the third goal of SLIN, the significance of
information accessibility is also emphasised in various literature concerning
performance measurements, especially in the fish supply chain and cold chain.
While it is preferable to provide real-time or online data, infrastructural limitations in
Indonesia might require the system to utilise off-line documents instead. Therefore,
the available information might vary from one stakeholder to another.
6 Increased price stability of fish commodities
The final goal of SLIN is to achieve nationwide price stability of fish commodities.
This performance indicator might also be influenced by others, such as managing
excess supply and demand or decreased logistics cost.
The six performance indicators developed from the discussions held could also be
mapped to the various performance measurements defined in the literature review. These
are presented in Table 4. It is interesting to note that, while existing research regarding
the performance measurement used in general, fish, and cold supply chains would include
more extensive details of supply chain performance, SLIN stakeholders are largely
concerned with the achieving of the goals of the system. The first of these is the presence
of upstream and downstream supply chain connectivity indicators. The only research into
supply chain connectivity is that conducted by Karlsen et al. (2011b) which focused on
the coordination of information systems operated by the companies involved. Other
literature on the topic does not mention connectivity between supply chain actors, most
probably because the case studies used in the research usually only relate to one
 Performance measurement system for the cold fish supply chain 13

company. As they do not consider the connection between companies, no corresponding

indicator is defined. However, considering that SLIN stakeholders are policy makers
interested in the entire system rather than one specific company, they are concerned with
coordination between all supply chain actors.
Table 4 Mapping of performance indicators resulting from focus group discussions and
performance indicators obtained from the literature review

Performance indicator (discussion) Performance indicator (literature review)

Upstream and downstream supply
chain connectivity
Managed excess of commodity
supply and demand
Increased interest of logistics service
providers of fish commodity industry
Reduced logistics cost
Accessibility of fish commodity
demand and supply information
Increased stability of fish commodity
price
Coordination of information systems for the
participating companies (Karlsen et al., 2011b)
Forecasting accuracy (Gunasekaran and Kobu, 2007)
Product and service variety
(Gunasekaran and Kobu, 2007)
Product availability (Joshi et al., 2011)
Processing, packaging and storage methods
(Gorospe et al., 2016)
Not included in literature review
Inventory cost, transportation cost, stock-out cost
(Gunasekaran and Kobu, 2007; Joshi et al., 2011)
Distribution cost (Joshi et al., 2011)
Inventory needs (Gorospe et al., 2016)
Sorting process reduction
(Parreño-Marchante et al., 2014)
Time and cost reduction of product recall
(Donnelly et al., 2013; Parreño-Marchante et al., 2014;
Randrup et al., 2008)
Information recording speed and accuracy
(Donnelly and Olsen, 2012)
Availability of information (Donnelly et al., 2013;
Karlsen et al., 2011b; Parreño-Marchante et al., 2014)
Degree of information details contributing to
traceability (Joshi et al., 2011)
Sale price of goods and service
(Gunasekaran and Kobu, 2007)

After the development of a performance indicator construct by means of a literature

review and focus group discussions, a stakeholder survey was conducted the purpose of
which was to determine the weight of each indicator based on its importance. The survey
results were analysed using the analytic hierarchy process method. The performance
indicators together with the weight of each component are presented in Table 5. The sum
of the weight of all components will total 1. In order to obtain the overall performance
score of a specific site, the weight of the component should be multiplied by the score for
that component on the site in question. The combination of the weight of each indicator
and the resulting score can be utilised to measure the degree of SLIN implementation at
the pilot project site, in tandem with identifying areas for improvement in implementation
at the site.
14 R. Nattassha et al.

Table 5 Respective weights of SLIN cold fish supply chain performance indicators

Weight
Upstream and downstream supply chain connectivity 0.326
Managed excessive demand for fish commodity 0.112
Managed excessive supply of fish commodity 0.083
Increased interest of logistics service providers in fish commodity industry 0.223
Reduced logistics cost 0.150
Accessibility of fish commodity demand and supply information 0.076
Increased fish commodity price stability 0.029

4 Results

From the resulting weight of each performance indicator calculated by the analytic
hierarchy process method, it could be inferred that most stakeholders consider supply
chain connectivity to be the most important factor for consideration during the
implementation phase. Increased logistics service provider interest is also becoming an
issue due to the low number of service providers currently involved in the system.
Interestingly, while the balanced distribution of fish commodity is considered one of the
main drivers of SLIN development, most SLIN stakeholders do not consider the issue of
managing excessive demand and supply to be of high importance, even compared to
logistics cost reduction. The increased stability of fish commodity, while thought to be an
important aspect, has also become the least considered performance factor.
A demonstration of performance measurement use is presented in Table 6. The site
being reviewed in the demonstration is in Kendari. Through focused stakeholder group
discussions, the Kendari site is rated for implementation performance relating to each
indicator with scores ranging from one to ten. The implementation score is subsequently
multiplied by the weight derived from the previous analytic hierarchy process method.
The multiplication result is the indexed score of SLIN implementation in Kendari, with
the sum of all indexed scores representing the overall score.
Table 6 Performance score of SLIN Kendari site

Implementation Indexed
No. Performance indicator Weight
score (1–10) score (1–10)
1 Upstream and downstream supply chain 0.326 6 1.956
connectivity
2 Management of excessive fish commodity demand 0.112 5 0.56
3 Management of excessive fish commodity supply 0.083 9 0.747
4 Increased logistics service provider interest in fish 0.223 2 0.446
commodity industry
5 Decreased logistics cost 0.15 4 0.6
6 Accessibility of fish commodity demand and supply 0.076 3 0.228
information
7 Increased stability of fish commodity price 0.03 3 0.09
Total 1 4.627
 Performance measurement system for the cold fish supply chain 15

From the demonstration, the SLIN performance score implementation in Kendari is

4.627, less than half the maximum amount potentially achieved by a site. This could be
caused by the level of implementation maturity of the site, as the system is at the pilot test
stage. To improve the performance score, it is necessary to find the prioritised areas for
enhancement. Based on the weight of indicators, the most important area for
consideration is the degree of connectivity of the upstream and downstream supply
chains. However, as the implementation score of the connectivity factor is not
excessively low (more than half that of the maximum score), improving the interest of
logistics service providers could prove more important. Such interest is considered to be
the second most important indicator, despite its implementation score being the lowest of
all the overall scores. Thus, while the performance indicator weight would be the main
consideration in determining the priority areas for improvement, the implementation
score for said factor should also be considered as there might be several sites which have
already covered the most important factor.
It should also be noted that, while price stability and handling of excess demand and
supply constitute two of the most important elements within the main goal of SLIN, they
are considered less important by SLIN stakeholders compared to supply chain problems,
such as supply chain connectivity and the interest of logistics service providers in the
system. This could be due to the general perspective of the potential for the score of the
first two metrics to be heavily impacted by the other two. The outcome of both the
connectivity and increased interest would be the ability to deliver products from areas of
excess supply to ones of excess demand. This ability would, in turn, facilitate more
effective management of demand and supply, as well as ensuring price stability due to the
consistent supply of fish products.
The possibility also exists that supply chain connectivity has become the main
stakeholder focus due to the social context within Indonesia. While, in general, it is usual
for the same actors to be active in various supply chain stages, relating to fish that operate
in Indonesia it is possible for several actors to function in one supply chain stage. One
example of such a phenomenon is the possible involvement of more than one small-scale
fisherman at the stage of catching or farming fish. This is because, in Indonesia, fisheries
have become one of the most common means of earning a livelihood. In this form of
supply chain, it is very important for the actors to be coordinated in order to ensure the
achieving of its goals. This is particularly the case within the Indonesian context because
of the shortfall in the number of actors available to be coordinated. Therefore, for SLIN
stakeholders, supply chain connectivity is very important in order to ensure its quality.
This includes, to a certain extent, coordination of supply chain actors.

5 Discussion

While the performance measurement applied in this research could be adopted as a means
of determining the performance score for overall system implementation at a certain site,
one future concern could be that of measuring the performance of each system
component. Taking the first indicator as an example, determining the connectivity of a
supply chain might include the availability of logistics to support its activity.
The availability of logistics would depend on each supply chain actor since several might
have access to the necessary logistics, while others do not. This example is also
16 R. Nattassha et al.

applicable to the fifth indicator of reduced logistic cost. There is a possibility that the cost
reduction on the part of one actor does not mirror such a decrease among other actors,
thereby confusing the score determination for the indicator. In order to manage this issue,
in future it might be important to expand the numbers of indicators according to the
actors included in the SLIN cold fish supply chain.
For the current performance measurement system, it is only possible to have each
actor rate the implementation sites using the indicators and use the average of these
assessments to calculate the actual performance score for the implementation site.
In addition to averaging the scores, having each actor assign his/her own grades for the
implementation scores, especially in the matters of connectivity, would allow the overall
evaluator to identify links in the supply chain that experience implementation problems.
When an actor assigns a low score to the connectivity indicator, it might also be
important to analyse said actor, in addition to other related actors. The reason for the low
score might be the actors believing there to be a lack of coordination between them.
The evaluator could, therefore, facilitate a discussion regarding the most effective
strategies to address issues of coordination and improve the situation.
Another method of analysing site performance using these indicators is by comparing
the scores of each site with each other. The comparison might be undertaken by first
comparing the overall score and, subsequently, each indexed score. Doing so will enable
the identifying of the pilot project site with the highest performance score to be used as a
benchmark when analysing the performance of the other sites. It is possible to first
identify those areas lacked by a certain site in the benchmark site and then the appropriate
strategy to improve the performance of the aspect in question to a similar level as that of
the benchmark site.
Several contributions to the system stem from the performance indicator adopted:
1 The important role of factual data in the strategic decision-making underpinning
SLIN implementation is clearly defined by each goal and indicator. Thus, each
question and impediment regarding the implementation of the system is manageable,
given clear direction which reduces possible bias to a minimum.
2 The pattern of fish transportation, the key to connectivity, will be determined by a
standard data gap. In this manner, the decision-making forming routes will be
tailored according to the prevailing conditions, as it might vary at the village, district,
city, province and national level.
3 The implementation index might be presented in the form of a countrywide mapping
of indexes. Therefore, the areas successfully implementing SLIN and those still
requiring improvement can be efficiently differentiated from each other. The
adopting of graph-based presentation would also facilitate analysis of SLIN
implementation scores across all regions of Indonesia using specific indicators.
4 Strategies and programs to be implemented at each pilot project site could be tailored
according to the level of maturity of SLIN implementation, shown by the
performance score of the site. They could also be detailed based on each
performance indicator.
This performance measurement system might prove incompatible with supply chains
designed to export products, such as the mackerel supply chain referred to in the research
of Donnelly et al. (2013). The underlying reason for this is that of the system goals
 Performance measurement system for the cold fish supply chain 17

analysed in this research, SLIN is predominantly targeted at the improvement of the fish
supply chain to fulfil the requirements of the state and manage related issues. As the issue
of distribution is more apparent in the current Indonesian context, the indicators
identified by the study relate more to the equitable distribution of fish between provinces
within the country, together with those aspects affected by distribution, for example
price, and others affecting distribution such as logistical costs. However, after these
issues have been addressed and the implementation sites score highly when analysed
using these performance indicators, there might be a need to shift the focus to exports in
order to increase national income. Shifting the performance focus onto international trade
would require adjustments to the performance measurement system, such as
incorporating support for product quality maintenance and other standards relating to the
targeted export area.
It is important to note that at the present point in time, SLIN implementation is
targeted more at the internal problems of Indonesia, primarily to improve the nationwide
distribution of fish products and ensure that all areas of the country have adequate
supplies of such products. However, should there be excess supply when national
demands have been satisfied, it might be possible to redirect commercial objectives to the
export of fish products. Most research conducted in other developing countries,
especially those in Africa, is focused on this issue, for example that of Henson et al.
(2000) and Thorpe and Bennett (2004). However, when considering fish product exports,
it is important to take into account the food safety requirements of fish product-importing
countries. In the international fish market, it is generally necessary to have adequate
information regarding the content of fish products as well as the nature of treatment that
they have undergone. However, this requirement is not considered in SLIN metrics, as
current regulations do not enforce product safety. Hence, when considering the
possibility of entering the international market, it might be important for SLIN
regulations to be adjusted to prioritise the safety of fish products.
There are several managerial implications which could act as guidelines for
practitioners operating within such systems. The first implication is that the priority when
implementing a fish supply chain featuring numerous actors is to ensure connectivity
between its upstream and downstream components. In other words, adequate
coordination between actors which ensures their compliance with supply chain
regulations in order to achieve its ultimate objective is essential. Connectivity could also
be promoted by the availability of demand and supply information relating to fish
products. In the absence of such coordination, it is possible that the goal will not be
achieved, since the problem of excessive nationwide demand and supply would be
difficult to manage. This also implies the potential need for development of a system that
could organise coordination within the supply chain. Given the existence of such a
requirement, it is also important for government regulations to be simultaneously
expanded and to regulate use of the system by supply chain actors.
The research discussed here contributes to the existing body of knowledge a potential
procedure for developing a supply chain performance measurement based on objectives
predetermined by government regulations. While conducting a literature review in order
to identify the methods used in the existing research is important, producing a
performance measurement tailored to achieve predetermined goals constitutes a
prerequisite. The importance of each measure should be subsequently identified from the
perspective of supply chain stakeholders. A combination of the importance of each
18 R. Nattassha et al.

measure and the project site score for that measure could be utilised to identify specific
supply chain areas whose improvement should be prioritised.

6 Conclusions and future research

The issues of risk and distribution imbalance relating to fish commodities have induced
Indonesia to develop a logistics system in order to support its internal fish supply chain.
The National Fish Logistics System (SLIN) has entered the pilot test stage of
development. In order to determine the performance of each pilot site, a means of
performance measurement relating to system implementation has been developed.
Consideration has been given to the existing measurement systems of the fish and cold
supply chains which were then reviewed with the SLIN stakeholders during focus group
discussions to construct the performance measurement system. From the focus group
discussions, it emerged that the performance measurement system should concentrate
more on the defined regulation and implementation goals of SLIN which are manifested
in the seven performance components.
The resulting performance system has limitations on measuring several factors
relating to the actors of the system’s supply chain. Therefore, future research might focus
on performance measurement system expansion affecting several factors specific to
certain supply chain actors and actors’ interaction especially in relation to their response
to the implementation of the system, as there might be several actors who experience
difficulty in adapting to the system. There is also a possibility of further expanding the
performance measurement system due to factors such as its environmental aspect which
have not been considered in the research to date. While Indonesia has abundant natural
fish resources, negligent harvesting and production methods could endanger the
ecosystem, resulting in the loss of potential gains. Other aspects associated with further
enhancement of the performance measurement system would be its certification,
traceability and innovativeness. Enhancing the performance measurement system in those
aspects will ensure the safety of the products moving through the system and also satisfy
the requirements of the customer segments in question.

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