<p>The global coffee sector faces intensifying pressure to integrate economic viability with environmental and social sustainability, a challenge acutely felt by resource-constrained small and medium enterprises (SMEs) that must innovate under severe limitations. This study aims to systematically diagnose the barriers hindering the synergistic integration of frugal and ambidextrous innovation for enhanced sustainable supply chain performance in Indonesian coffee SMEs. Employing a novel hybrid Intuitionistic Fuzzy AHP–TOPSIS–DEMATEL framework, the research captures expert uncertainty to first weigh and rank barriers, then map their complex causal interdependencies. The analysis reveals that frugal innovation concerns, particularly technological and financial constraints, dominate the decision structure in terms of priority weight, whereas sustainability and ambidextrous innovation barriers emerge as the primary causal drivers within the innovation system, with frugal challenges manifesting as systemic outcomes shaped by these broader structural constraints. Key findings identify poor sustainability performance measurement and inconsistent innovation strategy as the most severe barriers, providing a decision-support framework for prioritizing strategic interventions. Furthermore, a diagnostic severity-causality matrix is developed, translating insights into a strategic action grid and a phased implementation roadmap. The study's primary contribution is a validated decision-support framework that advances the integrated theory of frugal-ambidextrous innovation and provides managers with a systemic tool for optimizing intervention strategies to foster resilient and sustainable coffee supply chains.</p>