Coffee Supply Chain Essay

Name: Zaidan Fayez Alkeswani
Student Uni. Number: 2110147

Supply chain management is a vital decision making in every company, taking into account the customers’ satisfaction and requirements. Nestle’ has considered the “value or quality” of its products as the main factor desired by its customers. So the company designed its own supply chain to ensure having the best quality of its products to maintain the satisfaction of customers regardless of the cost encountered and ensuring giving the growers of coffee a fair deal for their good quality products.
Coffee is one of the most products subjected to fair trade, fair trade is a certificate given by specialized organizations such as Fairtrade International and FLO-CERT. These organizations gives

Intermediaries sometimes increase the final price of the product because having a number of intermediaries means that each one have to gain a profit for himself which increases the final price of the product especially if the distance between the producer and the consumer is short and the functions of the intermediaries can be held by the producer with low cost. But sometimes having intermediaries reduces the final price of the product, that’s because of the specialty of the intermediaries to distribute and transport the products which lowers the price of these costs following the economic rule “economies of scale” which states that: as the quantity increases, the cost per unit decreases. Intermediaries also save the company costs of making communication contacts, storing, transporting, and marketing the products to bigger surface of consumers. for example, without the intermediaries the company must increase number of workers and lorries to deliver the goods to all the consumers. Also the division of tasks specializes each chain member and gives them expertise in their certain tasks which in turns decreases the overall cost of the product. In general, eliminating the intermediaries does not eliminate the functions they do, and the organization then must do all the functions that were carried out by the intermediaries by itself which will not decrease the cost but will increase it as the organization does not have the specialty that the intermediaries have and which will decrease the overall cost.
Supply chain for FMCG company, example: soft drinks company like Coca Cola in jordan:
1- Soda water manufacturer; manufactures the soda water and export it to the soft drinks company directly.
2- Flavor manufacturer; export the flavor to the soft drink