NAVIGATING FROM TRADITIONAL FISHERIES TO SMART PROCESSING: LEVERAGING SUPPLY CHAIN RISK MANAGEMENT FOR INNOVATION AND COMPETITIVE ADVANTAGE IN INDONESIA'S BLUE ECONOMY

Abstract The transition from traditional fisheries to technology-enabled smart processing systems presents significant opportunities for enhancing the blue economy, particularly in maritime-dependent regions such as Bitung, Indonesia. Nevertheless, this transformation is accompanied by inherent supply chain vulnerabilities that necessitate effective risk management strategies. This study investigates the critical role of supply chain risk management (SCRM) practices in promoting innovation capability and sustaining competitive advantage, positioning business process reengineering as a pivotal strategic facilitator. Utilizing a quantitative methodology, this research employs Partial Least Squares-Structural Equation Modeling (PLS-SEM) to empirically analyze data collected from 60 fish processing enterprises in Bitung, a strategically significant maritime center. Results indicate that effective supply chain risk management significantly enhances organizational innovation capabilities, subsequently driving the competitive advantage needed to adopt advanced smart processing technologies. Furthermore, innovation-driven reengineering emerges as a vital strategic tool, enabling firms to mitigate disruptions and capitalize on market opportunities within fisheries supply chains. Theoretically, this study enriches the resource-based view (RBV) by clarifying the relationships among supply chain risk management, innovation capabilities, and strategic transformation. Practically, it provides insights for fisheries managers and policymakers aiming to foster resilient, technology-integrated seafood supply chains, ultimately advancing the sustainable development goals inherent to the blue economy framework.