Ethiopian Coffee Supply Chain Risk Assessment

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Date

2018-06

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Publisher

AAU

Abstract

The global coffee sector daily confronts risks that could hamper production, curtail potential markets, decimate margins, and even ruin entire networks of growers, roasters, marketers, traders, and exporters. Recent events have vividly demonstrated that a disruption affecting an entity anywhere in the supply chain can have a direct effect on a company’s ability to continue operations, get finished goods to market or provide critical services to customers. Coffee sector can be considered as an important industry for the development of agriculture and rural areas of Ethiopian. However, the current practices in production and the changes of domestic and global economy, especially price crisis risk, Environmental change risk; coffee growers, collectors, unions, Exporters in Ethiopia are in conditions of being exposed to various types of risks and uncertainties. This study assesses and analyze the risk factors that adversely impact the Ethiopian coffee supply chain and those working within the coffee sector. Eighty-one risk factors are identified using Literature review, questionnaires and interview. These risk factors grouped under nine categories which are including, Financial and Economic Risks, Technical, Personal and Managerial, Resource, Governmental and Political, Contract and Legal, Safety and Security, Environmental, Farm risk and analyzed using FMEA; thirty-two of them are characterized as major risk factors. By using vensim which is a system dynamic tool, relationship of the major risk factors was made and based on these major risk factors, mitigation strategy and risk management frame work are proposed. The result can help managers to shift resource to identified major risk factors.

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Keywords

Risk, supply chain, failure mode, effect analysis

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