One Of The Best Examples Of Successful Supply Chain: Colombian Coffee

The Colombian Coffee Supply Chain.

According to an analysis done with the global auditing company KPMG in Colombia, it was deduced that by 2020, the diversity of consumers and purchasers of Colombian coffee will significantly grown and it will force the business to create new distribution strategies to meet the demand of new importers and customers that will have different needs. This of course, answers to the expected requirements or organizations that are changing their supply chain models and complementing them with new strategies themselves. The fact that those companies want to maintain their market penetration further cements the idea that new approaches need to be found to offer novel solutions to more sophisticated and demanding customers.

Today here at David Kiger’s blog we want to take a look at a very specific commodity as coffee is, and take a deeper glance at how the industry works from the most basic breakdown of its process and internal supply chain within its region of origin.

Coffee is a product that is harvested once a year, but depending on the country of origin and the variety of methods of planting, it can happen twice as year as is the case with Colombia. Right after crude oil, this is the world’s most traded commodity and while it may be rare in many countries, Colombia has it as one of its main local products.

The local grower and the supply chain.

The main objective of the supply chain in a country like Colombia as far as production goes is to maximize the well-being of the local growers because they are the one who provide the coveted product that enables end-users to enjoy a fresh and flavorful cup of one of the greatest coffees in the world. The purpose of the Colombian Coffee Growers (Federación de Cafeteros de Colombia) is to guarantee a better quality of life and consistency of the product and to mediate in order to find a better atmosphere of negotiation between those producing and those purchasing.

Links of the supply chain.

The majority of places where the bean is grown are small pieces of land owned by local farmers. This fact makes the process more difficult and increases the importance of an efficient supply chain. This process involves different parties in a context of market and economy in which the competence of local markets operating near the crops helps the price of the transaction be more favorable to the growers by reducing the distance the product has to travel to be sold. At the same time, they maintain prices that are fair and promote the continuous production. If the coffee is being sold to international buyers, then the procedure is more complex because the buyers operate differently with negotiators employed by the big companies who deal directly with the growers ensuring fair prices and great quality of the product.

The people that operate inside the supply chain between the growers and the buyers are the transportation agencies who play a very important role in the entire process. The transportation agencies move the coffee from areas that stand very far away from urban centers and that are not easily accessible. The have to transport the product to the mills where they bean is processed making sure it maintains the humidity and exposure to light and air necessary so the product is always subject to the most optimal conditions to stay fresh in great shape. This is very important because even the smallest changes can alter the taste and consistency of the final product.

coffee-cherries-growing-in-cauca_supply-chain_colombian-coffee
Image courtesy of CIAT at Flickr.com

Behind this entire process and right at the end of the supply chain you can find the customers, the main reason why the quality control is so rigorous. Client satisfaction is the most important aspect of the whole operation and it is strictly graded and reviewed to decide whether the quality of the product mirrors the excellence of its service.

Safety in the supply chain and export of Colombian coffee.

According to the coffee competitive index established in the year 2008, the coffee growers guild instated rigorous quality controls when it comes to the coffee bean and it defined that it must be hand-picked and a small sample must be separated to be roasted, ground and processed to be categorized according to aroma, acidity and uniformity. Depending on that test, the rest of the crop can be deemed worthy of export quality or not.

To pass this judgment, the federation has a central laboratory, 16 regional branches, 3 port locations as well as locations in other countries where rigorous controls take place to test the quality of Colombian coffee. Thanks to this process and the great quality verification that takes places in order to ensure the superiority of the product; Colombian coffee is known all over the world as one of the best products the country has to offer.

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