Used Cooking Oil Supply Chain Risk Management (Used Cooking Oil) Based on ISO 31000:2018

Muh. Sofyanul Ikram; Tantri Yanuar Rahmat Syah; Edi Hamdi

doi:10.69693/ijim.v4i3.2739

Authors

Muh. Sofyanul Ikram Universitas Esa Unggul
Tantri Yanuar Rahmat Syah Universitas Esa Unggul
Edi Hamdi Universitas Esa Unggul

DOI:

https://doi.org/10.69693/ijim.v4i3.2739

Keywords:

Risk Management, ISO 31000:2018, Used Cooking Oil (UCO), Supply Chain, Risk Priority Number, Biodiesel, Sustainability

Abstract

Indonesia's reliance on fossil fuels and the growing volume of household used cooking oil (UCO) present opportunities for a sustainable biodiesel business while simultaneously introducing complex risks across the supply chain. This article outlines and analyzes the risk management plan of PT Biofuel Unggul Lestari (PT BUL)—a company engaged in the collection, pre-treatment, and export of UCO—based on the ISO 31000:2018 Risk Management Guidelines framework. This descriptive-qualitative study employs a case study approach, using External Factor Evaluation (EFE) and Internal Factor Evaluation (IFE) analyzes as the basis for risk identification, alongside the Risk Priority Number (RPN = Probability × Impact, on a scale of 1–5) method to assess and prioritize risks. The identification process revealed 35 risks categorized as either internal or external: 18 were classified as High, 17 as Medium, and none as Critical. The five risks with the highest RPN scores (16) were fluctuations in the Crude Palm Oil (CPO) reference price, reliance on a single supplier, exchange rate risk, sudden changes in government regulations, and competition from CPO-based rivals and regional players. Mitigation strategies implemented include a combination of risk reduction and transfer measures, such as supplier diversification based on the 20:80 principle, long-term supply contracts, hedging via forward contracts, and accelerating International Sustainability and Carbon Certification (ISCC) acquisition. These findings confirm that the application of systematic, international-standard risk management can serve as a foundation for the sustainability of waste-based biodiesel businesses in Indonesia.

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