Tech Talk Series 2 – Technology Solutions for Inefficiencies
Part 2: How Technology Can Remedy Coffee’s Supply Chain Inefficiencies
Part one of our three-part series explored the current state of coffee’s supply chain—riddled with logistical inefficiencies, siloed information, a lack of transparency, and ultimately, economic inequity.
Each of these challenges ignites a ripple effect throughout the supply chain, with a single instance of process inefficiency or failure to communicate resulting in additional obstacles throughout the remainder of the seed-to-cup journey. Although coffee’s supply chain has evolved over the years, much of the trade process (and subsequent challenges) remains the same.
Fortunately, the coffee industry has entered an era with greater global access to technology and a deeper understanding of the industry’s systemic challenges. As a result, actors in coffee’s supply chain are better positioned to revitalize the industry when equipped with the right digital technology.
Today, technology such as CropConex’s end-to-end platform is helping to streamline supply chain processes through access to vital crop information, transparent communication between involved parties, and logistics management.
Beyond being a convenient tool for managing complex supply chain processes, technology also acts as a long-term remedy to the coffee industry’s numerous challenges. Let’s explore how.
Data Transparency Leads to Greater Traceability
Much of the data throughout coffee’s supply cycle is collected and documented manually, from pH levels at the farm to futures contracts agreed upon by buyers and sellers. Due to the manual nature of the data, little to none of this information is communicated to other parties responsible for a coffee crop’s activities further along in the supply chain.
This lack of transparency leads to a multitude of problems, most of which ultimately burden coffee’s weakest link in the supply chain—producers.
Without access to pertinent information such as the final sale of the coffee, producers endure economic disparity in the form of low or unfair wages for their crops. If coffee farmers and producers are unable to understand the pricing of their coffee at each stage of the supply chain, how are they to adequately price their coffee when selling to cooperatives, importers, or other buyers?
Access to pricing, distribution, and agricultural data provides data transparency for all involved in coffee’s value cycle. But most importantly, it gives producers the leverage and insight they need to improve profits for their business.
With access to innovations in technology, data across the supply chain can be easily documented and available to all those who need access to it. New technology can assist the coffee industry by creating an accurate and transparent supply chain through the documentation of digital transactions, shipment, and activity records.
This means no matter if a person is the first or tenth person to access a coffee’s record, all information is accurate and available for full transparency. CropConex’s platform provides users—including producers, importers, exporters, and roasters—access to these digitally-captured records. Meaning, users can actively trace a coffee’s path and transaction history from seed to cup.
Data transparency and traceability play a major role in transactions involving certified coffee products. Farms with organic, fair trade, Rainforest Alliance, and other third-party certifications must provide in-depth documentation about farming practices, equipment, chemicals, and more.
With digital records of transactions, crops, and farm labor, producers can actively manage all aspects of the certification process. Additionally, as many end-customers seek out certifications when purchasing coffee, producers have the opportunity to leverage their certification status and seek a higher price for the year’s harvest.
Reducing Supply Chain Inefficiencies Through Data Management
Of course, access to data is only the beginning. The key to overcoming supply chain challenges is how the respective data is managed and utilized.
As we mentioned in the first part of our series, supply chain inefficiencies can absorb up to 40% of a perishable product’s export value, accounting for over $700 billion of waste every year.
These inefficiencies are often the result of mismanaged information and siloed communication—or a complete lack of both. The complex nature of supply chain processes coupled with the growth of coffee consumption worldwide has left major inefficiencies in coffee’s value cycle unresolved.
However, technology such as CropConex is working to provide digital data management solutions to solve such inefficiencies.
CropConex’s software enables users to:
- Manage an entire network of cooperative members, producers, buyers, and suppliers
- Track coffee production and real-time status from harvest to delivery
- Monitor crop stock and accurately create offer sheets based on existing inventory levels
- Document coffee quality for physical inspections and sensory analysis at various stages throughout the supply chain
- Compile and export lot, sample, and crop data through QR code labels
Through these digital tools, nearly all aspects of coffee’s supply chain can be managed, documented, and analyzed in a single environment. As a result, complex workflows are simplified and automated, actively reducing the possibility of cross-border obstacles each time the coffee changes hands.
Encouraging Seamless Communication
With much of coffee’s value cycle still requiring manual data collection and paper documentation, communication between parties becomes siloed. This leads to missing information that can derail coffee’s long journey to its final destination, causing detrimental issues for all involved.
Digitizing the supply chain promotes synchronous communication and builds trust between all parties.
Producers can speak with exporters, importers, and roasters about cup quality and pricing. Distributors can communicate with farmers about buyer expectations and needs. Roasters can inquire about upcoming lots by chatting directly with farmers and importing partners.
By communicating from the beginning of a coffee plant’s life cycle to the moment it’s brewed in a customer’s home, all those in coffee’s supply chain can use technology to work together toward a more economically sustainable and fair industry.
However, given the remote areas where coffee is grown, access to digital data collection and management resources can be limited. Rather than asking producers to bear more of the burden and adopt new (often expensive) technologies, tools such as CropConex were built to operate with limited network accessibility and without the requirement for smartphones. In addition, CropConex offers coffee data management features for free, reducing the financial barrier to adoption.
SMS integrations and short key-in prompts enable producers to utilize CropConex service lines that compile, monitor, and record data while also updating producers as to when conditions change and new information is acquired. With access to either CropConex’s text prompts or digital platform, producers have the opportunity to receive pertinent insight on how to improve their operations for the best financial, agricultural, and operational success.
Improving Economic Equality Throughout the Supply Chain
The goal of alleviating inefficient supply processes, removing barriers to effective communication, and ensuring data transparency is ultimately to yield a greater return for all involved in coffee’s value cycle.
Supply chain inefficiencies are the primary obstacle preventing producers, exporters, importers, and roasters from realizing their goals. Rather than pitting one actor against another, digital tools such as CropConex can unify all parties toward a common objective: reducing the monetary impact of supply chain inefficiencies and redistributing value to producers.
The purpose of introducing new technologies into the supply chain is to ensure that those who work long and hard to grow and harvest coffee receive proper compensation for their efforts. Through data transparency and management available on CropConex, all parties can review a coffee’s transaction history and work together to provide value for producers.
In the final installment of our three-part series, we’ll explore the revolutionary long-term impacts digital technology can have on the coffee industry and supply chain.