MEASUREMENT OF THE EFFICIENCY OF SME CLUSTER USING DATE ENVELOPMENT ANALYSIS (DEA)

Abstract

This study explored the efficiency of SME Cluster. We developed an efficiency model consisting
of operational capital, labor cost and raw material cost as the inputs. We proposed sales revenue
and assets as the outputs of the model. Furthermore, a survey was conducted by involving 83
SMEs in three different clusters. These three different clusters were batik cluster, furniture cluster,
and apparel cluster. These clusters had been considered as SMEs with large labor absorption and
enormous productivity, particularly in the area of Central Java, Indonesia. Our result shows that
most SMEs included in those three clusters are not efficient in operating their businesses. The
main problem is related with the cost structure, especially in costly raw materials. In addition, it
is suggested to improve the performance of human resource in those SMEs.