Ethiopian Coffee Supply Chain Risk Assessment
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Date
2018-06
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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