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  • 6.1.3-E-COMMERCE AND SUPPLY CHAIN MANAGEMENT-EFFICIENT COMMERCE FIRST

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  • Efficient commerce first

     
     

    No organization can seek the advantages of a paperless Internet business system without first having a relatively sophisticated internal control computer system. The Internet is a data transfer medium and users need a database of their own before beginning to think of sending and receiving data to and from third parties.Supply chain management is not e-commerce - instead of 'electronic marketplaces', what is required first of all is standardization of the way in which an industry or a group of companies operates. Before we can have successful e-commerce in coffee, we need efficient commerce, and this is where the Internet offers huge potential that is increasingly being exploited. Prime examples already operating in the coffee industry include the London LIFFE CONNECT™ futures trading system (08.05 Futures markets), the GCA's XML contract (04.04.03 Contracts), the  eCOPS system (next section), shipping portals and tracking systems (05.01.00, Logistics). These are widely used by many participants in the coffee trade. 

    However, one of the original expectations behind electronic documentation was that such systems could eventually link all or at least most actors along the entire coffee chain. And that the logical outcome of such a process would, over time, facilitate the emergence of electronic market places where buyers and sellers of green coffee would meet.

    Instead, electronic documentation   has developed into something quite different from the original vision. In today's coffee trade most such systems with automatic database updates generate internal documents only and then email or send confirmations to third parties. These third party documents must then be entered manually into the database of the party receiving them. 

    The problem for fully automated documentation systems is twofold in that experience has shown that few in the coffee trade are (yet?) willing to pay a third party for document generation and, individual companies want to maintain their own database. Documents that update a communal database might save duplicating data entry but in the coffee trade the communal database concept is still perceived as less than secure. Many large coffee companies today employ electronic databases and documentation systems but these are used internally. And, as far as we know, they are seldom linked to other parties in the coffee trade and certainly play no role when it comes to trading green coffee. This then relegates the concept of electronic market places for green coffee still further into the future…

    But, electronic documentation systems are here and they are being used extensively although not as fully as one would have expected. Section 06.03 shows how such systems can or should work.