The network of organizations involved in various processes and activities that produce value in the form of goods and services in customers’ hands is referred to in this research as the supply chain. By tightly integrating internal cross-functions inside an organization and successfully connecting them with the exterior operations of suppliers, customers, and other channel members to be successful, supply chain management aims to improve competitive performance (Managing risk in the cocoa and chocolate industry, 2020). The defining characteristics of supply chain management are cooperation, collaboration, information sharing, trust-building, partnerships, shared technology, and a fundamental change from managing separate functional processes to managing interconnected chains of activities. Thus, the paper’s purpose is to discuss the management risk in the cocoa supply chain.
To fulfill their goals of guaranteeing a sustainable and moral sector in which all parties make fair and acceptable profits, the cocoa and chocolate industries stakeholders may benefit greatly from the assistance of risk managers and risk advisors. It can aid individuals in comprehending other viewpoints and cultivating an open mind (Carodenuto & Buluran, 2021). People throughout the value chain can benefit from risk tools and techniques such as seminars, scenario analysis, risk appetite, decision trees, and control tools like bow-tie analysis to ensure they make well-informed decisions.
Raw material and product quality risks make up the quality risk in the cocoa agroindustry. Raw material quality hazards are connected to cocoa beans’ ability to meet quality standards. The quality requirements include having a maximum moisture content of 7.5%, being free of living insects, having no smoke or foreign odor, having a maximum range of broken seeds of 3%, and not be combined with foreign materials (Wulandari & Ariani, 2021). Farmers in many nations with large crop yields have access to minimal technologies to manage their finances and purchasing. Having a reliable contract system in place may assist in ensuring that the first mile is efficiently compensated.
Overall, people throughout the cocoa value chain may benefit from risk management strategies and tools like scenario analysis, decision trees, and control tools to ensure their decisions are well-informed. Along the value chain, strong linkages between the monetary and physical product may be established and maintained with the help of effective risk management. To manage their finances and purchases, farmers in many countries with high agricultural yields have access to basic technologies.
Reference List
Carodenuto, S., & Buluran, M. (2021) ‘The effect of supply chain position on zero-deforestation commitments: evidence from the cocoa industry. Journal of Environmental Policy & Planning’, 23(6), pp. 716-731. Web.
Managing risk in the cocoa and chocolate industry (2020) Web.
Wulandari, S., & Ariani, I. (2021) ‘Quality risk analysis of cocoa agroindustry: a case study in Pesawaran District, Lampung Province’, IOP Publishing, 892(1). Web.