The foregoing is a realistic scenario of the
execution of a coffee contract from origin to delivery at the destination market
to a roaster. The example makes optimal use of electronic means of transferring
data without the need for rekeying, as is also the case for example with ICE's
All electronically issued data are reused through
back-office integration, or through making the data available through online
service providers or e-marketplaces, facilitating the trade or the services
performed by different service suppliers.
It appears to be a complicated process, but thanks
to electronic messaging, use of XML standards and secure electronic transfer of
title and financial settlement, the administrative handling is far less
cumbersome than in the paper environment. The efficiencies realized will
translate into direct cost reductions and savings across the supply chain.
Equally important are the reduction in finance cycles and the possible reduction
in inventory cycles, easier management, and improved cash flow.
As mentioned earlier (06.03), for many exporters the
business process described above can take 15 to 25 days from shipment to receipt
of payment when executed through physical transmission of paper documents. Using
an electronic system, the transfer of documents, transfer of title and
financial settlement can be reduced to four days or less, depending on the
complexity of the business process and the state of preparedness in the
Outlook: The use of back-office systems, often linking multiple locations within large companies, is increasingly widespread and can be expected to continue growing as these make the trade in coffee more efficient, more secure and less costly. However, as explained in topics 06.01.02 and 03, electronic supply chain management is not yet widely used in the coffee trade although it is expected to grow. Sofar though, other than linkage with the futures markets of New York and London, most systems are not used for actual green coffee trading activities. For more go to www.bolero.net, www.theice.com, www.coffeenetwork.com, www.eximware.com, www.commoditiesOne.com, www.iRely.com, www.ekaplus.com and www.essdocs.com. (List not all-inclusive).