We recently explored the frictions and challenges created by disconnected systems in coffee trading, and why future market trends suggest the issues that this creates simply cannot and should not be tolerated for much longer in this rapidly changing market.
Today, we are taking a more positive tone and exploring the considerable benefits of integrating your coffee trading systems, a process that can be much easier than you expect. Imagine if every update, every change, every event was reflected immediately in your systems. Your people would be empowered to act to reduce risks, enhance profits and optimize business processes. That is the reality that we will be outlining below so read on….
Are your spreadsheets doing too much of the heavy lifting?
Now, spreadsheets have their place in almost every business, and we would never advocate for entirely getting rid of them. But their place should not be in managing your actual trading and operations. Aside from the risks we previously discussed, a major drawback of using spreadsheets is that they reinforce data silos.
When data is created or manipulated on a spreadsheet, it’s highly unlikely that it can be shared live in other systems. The data can obviously be shared, for example, Gen10’s CommOS Commodity Management System allows you to upload warehouse documents, packing lists and quality data, and automatically update the associated lots, contracts, etc. But this is a one-off file upload, not an ongoing conversation. If your operators are working in the spreadsheet, the rest of the business only sees what has been done at the end of the day once it has been uploaded.
Keeping spreadsheets for analytics and reporting, on the other hand, still allows your teams to access live data from others as it is generated while they go about their business, with reports that can be updated with a single click at any time, via a connection to the actual operational systems.
What changes when your coffee trading is integrated
The most significant change that comes from integrating your trading, risk, and operations systems (and reserving spreadsheets for reporting, where they belong), is that your view of your positions and exposure is truly live, not reconstructed after the fact.
When you are managing your physical coffee inventories, logistics, contracts, and hedges in one system, or one connected ecosystem, your positions update as things change throughout the day, not when someone remembers their report is due. When there are market or FX shocks, extreme weather events, or vessel delays, everyone can see which contracts are affected.
This also means better operational agility and a much faster response to disruption when it occurs. If tariffs change, or a storm hits, operators can instantly see which shipments are affected and react instantly. Traders can also immediately see the impact, as well as the response, and can be proactive in managing client communications, which can make all the difference between a disruptive event and a disastrous one.
Another benefit is that your quality data flows straight through to pricing. When cupping scores or moisture readings come back from an inspection, uploading the documents automatically updates the lots and recalculates pricing, reducing multiple sources of operational risk. And it enables traders and managers to understand the true value of each contract, even as that valuation changes during shipping. And with the predicted growth in specialty coffee, pricing each micro-lot accurately and quickly will become even more essential in future.
When operators can make decisions with the full picture, allocations are more efficient. They can see everything that matters in one place – where unallocated stock physically is, its quality and crop year, the flavour profile, and its certifications. There is no need to continually cross-reference across spreadsheets, and the risks of mis-reading or mis-typing information are removed, especially in a system like CommOS, which includes controls to ensure allocations match the contract tolerance.
Embedding traceability
Unifying your systems also serves to build sustainability and traceability into your workflows, rather than leaving them bolted on. You can build up a clear and verifiable chain of custody record of all stock as the records are automatically updated across systems as the trade lifecycle progresses. Mass balance credits can be managed alongside your trading and logistics in CommOS, across splitting, blending and repackaging as required.
And incorporating counterparty management along with their sustainability certificates into the same trading and logistics Commodity Management System means that it is easy to ensure these certificates are in date, link certifications to lots, and ensure you are pricing in any sustainability premiums.
Reporting under legislation such as the EUDR can also be much less onerous with a connected Commodity Management System. The full traceability across your own operations makes it easy to trace stock back to the originator. So as long as you have the satellite images or other verification from the farmer, it’s easier than ever to link each lot back to the farm and prove its deforestation-free status.
From contracts to allocations, risk to traceability, the whole trade lifecycle moves faster with a connected Commodity Management System. People are freed from low-value administrative tasks, errors are drastically reduced, and your people have the information they need to make the best strategic decisions. When a trader captures a deal, the data flows through to operations, risk, finance, and client documents without any re-typing or copying. Invoices and shipping instructions are generated from information already in the system, and updated automatically as new information flows in during the shipping journey. Approval workflows are automatically followed as standard, with no workarounds, spreadsheets, or external systems allowing for accidental control breaches.
The result is more accurate data, better counterparty relationships, and faster stock turnover, and in a business like coffee trading, faster turnover means better profitability.
Conclusion: Reducing the friction empowers your team
Spreadsheets have always had a place in coffee trading, and they always will. But there’s a difference between using a spreadsheet for analysis and using one to hold your operations together. When spreadsheets become the bridge between disconnected systems – managing allocations, tracking quality data, reconciling positions – they introduce exactly the kind of operational risk that an increasingly complex coffee business can’t afford.
But you don’t need to rely on manual copying or spreadsheets to work across system limitations. Gen10’s CommOS Commodity Management System is built to manage your trading, logistics and risk in one place – including the taste profiles, micro-lots, screen data and certifications that are so important in green coffee.
But we also know that no single system runs a business alone. Your ERP, general ledger, BI tools, and an increasing range of specialist technologies all play a role. CommOS is designed to connect with these systems, sharing data in real time so that your teams are always working from the same truly live picture in one connected ecosystem.
The question isn’t whether your team can manage across disconnected systems. They clearly can, or your business wouldn’t be where it is today. The question is how much more they could achieve if they weren’t spending their time copying data, chasing information, and working around system limitations.
Want to know more? Book a CommOS demo to see what integrated coffee commodity management looks like in practice.
