Soft Commodities, such as coffee, cocoa, sugar, are grown and harvested across the world. While the underlying processes are the same, there are both product and geographical regional differences in the way business is done. Price volatility in this market add to the significant challenges of ensuring a robust supply chain. Many of these commodities are sourced from regions that are remote from their main consumer markets. For example, coffee may be sourced from Vietnam but the coffee roaster (manufacturer) is in the Netherlands. This requires strong logistics planning and scheduling but with the ability to adjust to unforeseen circumstances as necessary. Management of all associated costs is imperative to ensure minimum risk.
This diversity adds to the complexity of the business. The source for the commodity may be a grower who expects the buyer to perform all his administration for him; preparation of a contract, sampling the quality of the crop, scheduling transportation from source to port and invoicing on their behalf. Alternatively, the source could be a multi-national trading organization who expects things to be done to their procedures.
The pricing and quality of the commodity impacts the bottom line for a company. The ability to handle multiple pricing mechanisms for the commodity, whether exchanged based pricing or handling quality adjustments is imperative to a successful solution.
Visibility of commodity availability; Positions, Shipments, Production demand, across an organization combined with strong financial and inventory management is essential for companies in this complex and diverse sector of Industry. Dynamics AX Commodity provides an end to end solution for Softs trading and consumer companies.