{"id":9163,"date":"2020-09-21T08:50:22","date_gmt":"2020-09-21T08:50:22","guid":{"rendered":"https:\/\/bartalks.net\/?p=9163"},"modified":"2021-03-14T17:34:06","modified_gmt":"2021-03-14T17:34:06","slug":"ecom-service-delivery-model-explained","status":"publish","type":"post","link":"https:\/\/bartalks.net\/ecom-service-delivery-model-explained\/","title":{"rendered":"ECOM SERVICE DELIVERY MODEL EXPLAINED"},"content":{"rendered":"\n\n\n

Farmer-Level Sustainable Management: The ECOM Way<\/h2>\n\n\n\n

Coffee is one of the three most-popular beverages in the world (alongside water and tea) and one of the most-profitable international commodities. 1<\/a><\/sup> It has been grown worldwide since the era of colonization. Now at the time of global development, production relations change with new models like direct trade, and large corporations needing to show their ethical credentials. Problems at the farm-level arise but can be met by several solutions, and one of them is the formation of a formal management system.<\/p>\n\n\n\n

Indonesian Coffee Production<\/h2>\n\n\n\n

Indonesia is a big player in the world coffee industry. It is the fourth largest producer in the world after Brazil, Vietnam, and Colombia. The country produces a total of 675,000 tons per year, 92.6% of which are derived from smallholder plantations. 2<\/a><\/sup><\/sup><\/p>\n\n\n\n

However, several local difficulties threaten its sustainability. One of them is the trend for young farmers to move outside coffee production, who eschew the industry for more viable crops like fruits. Another reason cited by reports is the perceived low status of coffee farmers, at least some part attributable to the lower income received in coffee production. 2<\/a><\/sup><\/sup><\/p>\n\n\n\n

Management Solutions<\/h2>\n\n\n\n

One approach for tackling these issues are in forming a capable management system. 3<\/a><\/sup> One such example is the formalized methodology by ECOM Agroindustrial Corp. Ltd, (ECOM), a global commodity merchant and sustainable supply chain management company that applies management systems in Indonesia and Vietnam.<\/p>\n\n\n\n

Focusing primarily on coffee, cotton, and cocoa, ECOM ranks globally as one of the top two coffee merchants and largest coffee millers as of 2019. In line with the company\u2019s commitment to sustainable and socially responsible leadership within the soft commodities’ industry, ECOM establishes Sustainable Management Services (SMS) within its local operating companies.<\/p>\n\n\n\n

SMS provides training, certification, and other value-added services to farmers in their supply chain. ECOM provides access to inputs and finance intended to improve the performance of farmers, and ultimately their profitability and livelihoods.<\/p>\n\n\n\n

In the field, Service Delivery Models (SDMs) are supply chain structures within which services are provided to farmers.<\/p>\n\n\n\n

Key Players and How it Works<\/h2>\n\n\n\n

Between the farmers who raise and harvest the crops and the company (ECOM) who may buy them, is a separate entity that is the SMS. This entity establishes, through services and products, an enabling environment for the farmers to improve practices, raise yield and build sustainability, eventually transforming the old-type farmer-producer to the new global-participant farmer-supplier.<\/p>\n\n\n\n

The training is organised through their facilities in local SDM areas. Resources from third-party\u2019s such as soil test providers, research institutes (for planting material expertise), input providers (for seedlings, fertilizers, and crop protection products or CPPs), and tarpaulin suppliers (for tarpaulin print needs).<\/p>\n\n\n\n

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For the SDMs to function successfully, ECOM deploys the use of Crop Doctors, who play a crucial role in distribution of agrochemicals and farming tools at affordable prices, as well as lending their expertise and conducting skill-transfer. They share a responsibility to facilitate the development of their local SDM area.  <\/p>\n\n\n\n

Recruited from the ranks of the local farmers by the SMS to act as facilitator in the service delivery, they are Subject Matter Experts that act as the intermediaries between the farmers and the SMS.<\/p>\n\n\n\n

The services by the SMS and the Crop Doctors come at a price, however, and although the necessary products and services are marketed as affordable, they have to be paid for by the farmer.<\/p>\n\n\n\n

If the farmer can see a benefit however, the service pays for itself and ECOM tracks the progress and return on investment made through its programme. If farmers\u2019 incomes are too low to afford these products and services, sources for outside funding are accessible.<\/p>\n\n\n\n

Key Findings<\/h2>\n\n\n\n

The report demonstrates that financial sustainability and return of investment are possible within the SDM, both for farmers and the SMS. Graphed data of SDM annual net income per region within a ten-year scope indicate a rise in net income, and clearly show points of reaching break-even for all regions, and signal a rise beyond.<\/p>\n\n\n\n

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SDM Structure<\/h3>\n\n\n\n

Although the SMS services are each available independently, they are designed to work together and can be considered complementary.<\/p>\n\n\n\n

Within the SDMs, the most crucial services are soil testing, fertilizer provision, and provision of planting materials for structural renovation of trees.<\/p>\n\n\n\n

Financing<\/h3>\n\n\n\n