Track: Supply Chain Management

Abstract

This research aims to examine the effect of leanness and product price on the supply chain in Oil & Gas Industry by examining the role of local content policy. The data collection technique used questionnaires distributed to Supply Chain Management (SCM) organizations from 70 out of 82 companies under Satuan Kerja Khusus (SKK) Migas. We received 194 valid responses representing SCM organizations and other organizations strongly related to SCM in those companies. The method of data analysis used Structural Equation Modeling-Partial Least Square. This research shows that leanness in supply chain and price positively affected social performance, economic performance, and environmental performance in supply chain sustainability. The study also shows that local content policy moderated the relationship between price and economic performance positively. Social performance is proven to have a non-linear effect on economic performance. Environmental performance is also affected positively on economic performance. The conclusion of this research suggests that the oil & gas industry should maintain and support local content policy to have sustainability in the supply chain.

Keywords

Leanness, Local Content Policy, Product Price, Supply Chain