Thursday, October 5, 2017

75. JDE Assessing the Power of Lean

Oct. 5, 2017
In the September 2017 Issue of Global Coffee Report, an exciting article appeared about a six year initiative Jacobs Douwe Egberts (JDE) created in Honduras. Click here for the article.  SIX years is a long commitment. Many USAID projects only last three to five years. Six years is enough to see the impact of Lean efforts across a large geographical region. Looking for clues as to whether the JDE - Cohonducafé Foundation project is a Lean project, a few can be found. The key one was this:

“We conducted value-chain analysis to identify what our priorities should be,” Project Manager Edgar Joel Castro explained, detailing how the team at Cohonducafé Foundation worked with staff at JDE to evaluate key indicators in the market and narrow down the project’s objectives.  A "value-chain analysis" that is well-done at a high level of the supply chain is an excellent tool to help link many "value stream analyses" once you start drilling down.

The rationale for the strategic analysis couldn't be clearer. "The industry that their grandfathers once knew and operated in has changed drastically in line with increasing global demand for the commodity, climate change, greater instance of pests and diseases and other economic factors," (GCR).

The key impact metric may sound small, "overall productivity has increased 25 percent" but if we assume this is across all 15,000 farms in the project, that is actually a very impressive bump to Honduras' 2016 production of 5.93 million 60 kg bags, (USDA’s FAS annual GAIN Report), which comes from 97,000 producers (Instituto Hondureño del Café report 2015/2016).

Another helpful illustration in the Honduras story is how the project united many players along the value-chain. One alone could not have achieved the same result -- even the "largest one with the most money." Here's how they describe the collaborative group:

Through the foundation’s connection with Cohonducafé, the largest exporter of coffee in Honduras, and partnership with JDE, the project gained access to the coffee companies’ extensive networks and superior logistics. “We had direct business relationships with more than 40,000 producers,” says Castro. “We believe that if they weren’t part of this, it would have been much more complicated.”
The foundation also has strategic alliances with 30 different organisations, from universities and municipalities to local and international NGOs.

This example of a large project, combined with examples from the small projects Artisan has lead in Rwanda and Burundi, should encourage other industry players to take Lean training seriously for their strategic supply chain efforts. Invest in the sustainability of quality coffee supply, start your value chain analysis now with help from Artisan Coffee Imports.

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