Technology Innovation Adoption to Improve the Performance of Dairy Small-Medium Enterprises (SME): Case study in Pangalengan-Bandung Regency, West Java, Indonesia

Abstract

This study explores the conditions and the problems of the production and quality of the product faced by dairy SMEs in Pangalengan-Bandung Regency. This study aims to recommend the technology that might be accepted and adopted to address the problem in the framework of GMP and to identify factors that may influence the adoption of the new technology. Problems related with the quality of the products have been identified and GMP implementation evaluation has been conducted. This research recommends the technology adoption that might be acceptable and adopted to address the problems are: 1. Establishing a process control system. A scheme of standardized production process has been proposed; 2. Mechanization of key processing stage, such as moulding and cutting machines and the use of boiling pans equipped with the thermocouple; 3. Improvement of the product’s packaging to enhance protection of the product thus will extend the shelf life. It is suggested to modify the secondary packaging using standing pouch aluminum foil. Factors that may influence the adoption of technology by the SMEs have been identified. The positive factors are: the motivation and efforts to improve the quality and performance of the product; consumers’ demand for quality and good manufacturing practices; government or regulatory enforcement; and increasing production volumes. The negative factors are: limited knowledge and educational background of the SMEs’ human resources; the reluctance of the SMEs to change their current traditional practices; and financial cost.The SMEs perceived that the relative advantage of GMP implementation is low due to the cost that arise as a results of facilities and equipment improvement. Implementation of GMP and the new technology embodied in it are perceived as complicated by the SMEs.