The Potential Analysis of Bandung Creative Clothing Industry Using Soft System Methodology and Value Chain Innovation

Concept
Pascasuseno, Agung, Bandung Institute of Technology Tjakraatmadja, Jann Hidajat, Bandung Institute of Technology Utomo Sarjono Putro, Bandung Institute of Technology School of Business and Management, Institute Technology of Bandung Ganesha 10th Street, Bandung, West Java, Indonesia, 40132 Phone: +62 22 2531923 ABSTRACT Social collaboration is a collaboration among different social groups with different roles and interests. This study was conducted by applying collaboration concept among Academician, Business, and Government (ABG) as an approach to create maximum value of creative clothing industry in Bandung, Indonesia. Soft System Methodology (SSM) is used as a method to identify the roles and values of each ABG actors and analysis relationship between actors. To maximize value of Bandung creative clothing industry, this study suggests developing Academician, Business, Government and Community (ABGC) collaboration model. Keywords: ABGC collaboration model, Soft System Methodology, Bandung creative clothing industry INTRODUCTION The development of globalization and knowledgebased economy nowadays has increased the competition in every level of human society. The competitiveness of an area high depends on the capacity of its society to innovate and developing new things continuously [4]. In the era of new economy, competitive advantage depended on the quality of creativity and initiative, design and technique, deep conceptualization, and the ability to cope with rapid changing [3]. Hence, understanding the process of innovation for creating value and providing competitive advantage is vitally important. Social components must be able to cooperate and collaborate with each other in the globalization era. Collaboration is a process where several parties with different interest share knowledge and make decision to improve shared goals [1]. In a collaboration process, differences used to enrich the alternatives decision making process and to formulate solution of shared problems. Social collaboration is a complex interaction in a social order of society that always involves many social components with different roles and interests. In this study, creative clothing industry in Bandung, West Java, Indonesia is selected as the case study. Creative clothing is one of the most eminent sectors of creative industry in Bandung. Creative industry is viewed to be more sustain because utilizes human capital where innovation and creativity are prominent to create value. This study is expected to develop a conceptual model consisting of value creation activities in social collaboration of academic, business, and government (ABG) for developing Bandung creative clothing industry. The ABG actors undoubtedly played an important role in the society. In Indonesia, the government still very involved in the business and academic activities. METHODOLOGY This study is an exploratory research because the creative clothing industry issue is a new research object in Indonesia. Research objective is to identify the core problems and ABG roles in developing Bandung creative clothing industry. Study used Soft System Methodology (SSM) as a tool to combine between two approaches (normative and descriptive). Dialectical process between reality in the descriptive process and model (reality abstraction) in the normative process will produce a learning process that is expected to give improvement and solution for the identified problematical situation. In general, SSM consists of seven stages [2], there are: 1. The situation defined 2. Rich Picture (problem expressed) 3. Root Definition 4. Developing Model 5. Comparing between model and real world 6. Developing Intervention 7. Action After the situation defined and rich picture stages, we identify values using the root definition concept. Root definition is a statement that describes purposeful activity model as a transformation process of an entity from the existing condition to a desired condition. The CATWOE (Customer (s), Actors (s), Transformation, Weltanschauung, Owner (s), Environment) mnemonic is developed to help the process of root definition. Weltanschauung in the CATWOE mnemonic is a guidance to identify values from each actor in ABG collaboration. To improve the quality of value creation from each actor in ABG collaboration, we need another tool. This study used the Value Chain Innovation (VCI)

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concept as a tool to identify value network and value proposition between ABG actors. VCI consists of eights stages, there are [5]: 1. Define 2. Value network 3. Design 4. Value proposition 5. Delivery 6. Value Realization 7. Diagnose 8. Value deficiency The integration of SSM and VCI concept can be seen in figure-1. This study used VCI concept particularly to identify value proposition stage, where SSM needed to design and propose value creation from value network developed by VCI concept. FIGURE-1: Integration of SSM and VCI Concept
THE SITUATION DEFINED

FIGURE-2: Rich Picture of Bandung Creative Clothing Industry Existing Condition

RICH PICTURE

ROOT DEFINITION

DEFINE

CONSEPTUAL MODEL DEVELOPMENT

VALUE NETWORK

COMPARISON BETWEEN MODEL AND REAL WORLD

DESIGN

INTERVENTION DEVELOPMENT

VALUE PROPOSITION

Characteristically, Bandung creative clothing industry established in the basis of creative community, where several people with shared interest and hobby gather and create something. Basically, Bandung creative community likes to have freedom what they do. Meanwhile, the Bandung creative community has an important role in developing collaboration between government and business or academician and business. Based on these findings, collaboration in ABG only is not enough to develop Bandung creative clothing industry. ABG need to consider Academician, Business, Government and Community (ABGC) collaboration model. Root Definition Root definition is used to identify desires and values of ABG actors in the collaboration. By using the CATWOE guidance, the root definitions can be identified. Since the several business practitioners are also members of community, and community cannot categorize into one of the ABG actors, this study has developed the community value. The values of each actor are: Academician; acknowledgment and appreciation from the society towards the academician contribution. Clothing (Business); the sustainability of creative clothing industry. Government; improving the economic contribution for the sake of city development Community; appreciation towards intellectual values as the main asset in the city development.

ACTION

Parallel with VCI process, SSM develops conceptual models and then made a comparison between the conceptual models with the real world to get an agreement from all ABG actors. Finally, study used intervention stage to develop value network and value proposition in Bandung creative clothing industry. ANALYSIS The researcher conducted three preliminary interviews to define the problematical situation. In-depth interviews were carried out to 15 informants that representing ABG actors. Conceptual model was developed based on in-depth interview, and then the confirmation process was carried out to six key informants in ABG actors. Finally, the researcher presented the research findings in a focus group discussion process by inviting representation from ABG and Bandung Creative Community. Rich Picture The first analysis from the in-depth interview is the rich picture, which consists of the existing relationship condition in Bandung creative clothing industry, particularly in relationship among ABG actors. Rich picture can be seen in the figure-2.

Developing Model for Recommendation The root definition from ABG and community actors was used to develop conceptual models of ABGC and community actors consisting activities to create network value in Bandung creative clothing industry. The next step was to build an integrated model that covers all the concept and values from each actor. The

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model was confirmed to the key informants to gain insight and new perspectives. Figure-3 showed the final model after the confirmation and focus group discussion process. FIGURE-3: Recommendation Model of ABGC Collaboration in Developing Bandung Creative Clothing Industry
Creative clothing industry area arrangement (G)

Bandung creative clothing industry is an ecosystem that is driven by business practitioners and community that cooperate with government and academician to empower society, so that the regional economic contribution can be improved and eventually every actor in the collaboration can gain the values that they expected.

Creative education system (A)

Public space (G)

Infrastructure (G)

Enterpreuneur education (A)

Education with the basis of local culture and asset (A)

Creative and art activities (A)

Citys quality improvement (G)

Environment:high numbers of education institutions, high competition, economic crisis, local asset potency Creative clothing network (C)

Human resource for creative clothing industry and related sectors Creative activity and event (BC)

Improvement of the societys participation in creative activity

Community (C)

City Branding (Society)

Research and diffusing knowledge (A)

Increase in creative clothing (B)

Creative Center (APBK)

Funding (B)

Creative community forum (C)

CONCLUSION This study concludes that despite the independent character of the Bandung creative clothing industry, they need to actively build collaboration with academician and government. The high competition from import and local goods nowadays require support from influential component in the society. Community needs to be considered one of the pillars in the collaboration because they serve as the basis that produces new and potential creative clothing in Bandung. Community also has a crucial role in connecting academician and government with business. To maximize value of Bandung creative clothing industry, study suggests developing Academician, Business, Government and Community (ABGC) collaboration model.

Development in creative clothing (B)

Society empowerment

Mediator (A)

Creative Economy Commission -CEC(ABGC)

Regulator and Facilitator (G)

REFERENCES [1] Anggoro, Y., Rudito, B., Putro, U.P., Simatupang T.M., Tjakraatmadja, J.H., Kolaborasi Sosial untuk Pengembangan Industri Kreatif, Inkubator Industri & Bisnis, Institut Teknologi Bandung. 2008 [2] Checkland, P. dan Scholes, J., Soft Systems Methodology in Action. Chichester: John Wiley & Sons, 1990 Florida, Richard., The Rise of the Creative Class. NY: Basic Books, 2002 Porter, M.E., The Competitive Advantage of Nations. NY: Free Press, 1990 Simatupang, T.M., dan Sridharan,R., Design for supply chain collaboration, Business Process Management Journal, 2008, Vol. 14, No. 3.

Improvement in economic contribution (G)

Evaluation by CEC (ABGC)

Action to improve (ABGC)

Academician (A) Business (B) Government (G) Community (C)

Business and Community (BC) Academician, business, government, community (ABGC) Society Main activities

[3] [4]

The red arrow in figure-3 showed the main activities in the model. These activities are considered the most crucial according to the informants.

[5]

The value proposition The model recommended basically proposing model with shared value that needs to fulfill in order to fulfill each ABGC actors values. The shared value of the recommended model is:

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