Three Guidelines to Reveal What’s Hiding in Your Supply Chain

2019-01-10T17:02:54+00:00January 4th, 2019|Categories: Insights|Tags: , , |0 Comments

Matthew Himmel and Patrick Kerr

What’s the “black box” in your supply chain? Our work assessing and improving the sustainability of supply chains or value chains has revealed three universal guidelines to better see what risks and also what opportunities may be hiding beyond your direct suppliers.  

The Sustainable Development Goals (SDGs) identify traceability as a key component to achieving more responsible production practices. It is important to start with this basic understanding of the chain that goes a step beyond the simple identification of the links to also include capturing the key factors or inputs that contribute to a sustainable value chain.

Traceability is the foundation for understanding the context of farmers. At its simplest level it can be inexpensive and uncomplicated. To help companies and projects integrate this core component of sustainability, COSA has developed simple and low-cost protocols that can be used globally and are applied by major corporations as well as small projects. Having distilled the key potential sustainability factors – ranging from production efficiency to environmental practices to human rights – COSA describes its basic traceability protocol simply as “the defined system for ensuring the ability to reliably identify the product source and all intermediaries along the supply chain.”  The basics include knowing where farmers are located, who they sell to, and how much they produce.

On this basis, we can readily integrate ways to identify the key sustainability characteristics of producers and intermediaries and their production and processing systems. This reveals substantial environmental, economic, and social characteristics associated with the commodity.

But tracing the chain of custody from importers back to exporters, processors, and traders to the farms where the crop is grown (the first mile) is not always easy where smallholders are involved. Here below are three guidelines to avoid the most common pitfalls of applying a sound traceability protocol.

  1. Avoid a one-size-fits-all approach across supply chains. Standardization and inter-operability are useful but to make a system truly functional and avoid extra costs, frustration, and a lot of garbage data, the survey templates for collecting data need to be adaptable and functional in different languages, units of measure, currencies, stage of processing, and more. A system should allow respondents the flexibility to enter data in their preferred units, while converting to a common set of units behind the scenes for comparability.
  2. Ensure effective data validation. Frankly, many of the data records we come across are simply wrong. Simple technology and better protocols are available to ensure data is realistic and useful. In spite of today’s major advancements in field data collection, analysis, and even visualization, core data such as farmer lists, training attendance, and sales records are still captured or communicated between parties in basic Excel templates – when they are captured at all. For all its merits and universality, Excel has significant flaws that often undermine its utility for collecting data from the field. One such major shortcoming is data validations that get overwritten when data is pasted in, which then necessitates substantial “cleaning” in order to be useful. Incorporating in-app guidance that warns users when information is entered incorrectly ensures more complete, accurate and usable information, without the need for time-consuming and costly data cleaning or returning to recollect data. Similarly, consider the process of capturing GPS coordinates: identifying erroneous inputs at the point of entry ensures more accurate, usable information and eliminates the need to correct or discard portions of your data set.
  3. To effectively capture and organize data you need a well-conceived data model. Value is limited if you do not plan for the right kind of information and how you will use it. A common challenge is ensuring that farmer information is linked to their farm(s), the services they received, sales information and a myriad of other data points that may be stored in another table within a relational database. Consider also, for example, whether farmers are likely to operate multiple farm plots, will multiple members of the household also be tracked, and what are the number and type of services farmers receive, or the associated outcomes of those services and is it important to embed SDG alignment for reporting needs?

Being clear about both data use and what data is critical can make all the difference. Such data connections are essential to meaningful analysis, including calculations of ROI and evolving risk likelihoods.

These three guidelines represent some of the lessons learned over decades of work in complex supply chains of coffee, tea, cocoa and other commodities. COSA partners and clients have access to a suite of traceability tools for companies and other entities that source and interact with farmers to help understand their supply chain. These SDG-aligned tools integrate with COSA Performance Monitoring tools that track investments such as trainings or financing and the associated outcomes on farmers livelihoods and production.

For more information on COSA tools contact info@thecosa.org.

To learn more about our broader guidelines for sustainable sourcing in the 2018 Coffee Barometer report