Harvard Case - Coda Coffee and Bext360 Supply Chain: Machine Vision, AI, IoT, and Blockchain
"Coda Coffee and Bext360 Supply Chain: Machine Vision, AI, IoT, and Blockchain" Harvard business case study is written by William E Youngdahl, B. Tom Hunsaker. It deals with the challenges in the field of Information Technology. The case study is 9 page(s) long and it was first published on : Dec 1, 2018
At Fern Fort University, we recommend that Coda Coffee implement a comprehensive digital transformation strategy, leveraging Bext360's technology to optimize its supply chain, enhance customer experience, and achieve sustainable growth. This strategy will involve a phased approach, focusing on key areas such as data management, AI and machine learning, IoT integration, and blockchain adoption.
2. Background
Coda Coffee is a rapidly growing specialty coffee roaster facing challenges in managing its supply chain, ensuring product quality, and meeting increasing customer demands. Bext360, a technology startup, offers a suite of solutions powered by machine vision, AI, IoT, and blockchain, aiming to revolutionize the coffee industry.
The case study focuses on Coda Coffee's decision to partner with Bext360 to implement its innovative technology platform. The main protagonists are:
- Coda Coffee: A specialty coffee roaster with ambitions to scale its operations and maintain high-quality standards.
- Bext360: A technology startup offering a disruptive solution to optimize the coffee supply chain.
- Daniella: Coda Coffee's CEO, responsible for strategic decision-making and growth strategy.
- Jacob: Bext360's founder, leading the development and implementation of the technology platform.
3. Analysis of the Case Study
This case study presents a compelling scenario for applying a digital transformation framework to analyze Coda Coffee's situation. We can break down the analysis into key areas:
1. Strategic Analysis:
- Industry Analysis: The specialty coffee industry is experiencing rapid growth, driven by consumer demand for high-quality and ethically sourced products. However, competition is intensifying, requiring companies to differentiate themselves through innovation and efficiency.
- Competitive Strategy: Coda Coffee aims to differentiate itself through its commitment to quality, sustainability, and customer experience. However, it needs to improve its supply chain efficiency to remain competitive.
- Growth Strategy: Coda Coffee's ambition to expand requires a robust supply chain that can handle increased volume while maintaining quality control.
2. Operational Analysis:
- Supply Chain Management: Coda Coffee faces challenges in tracking coffee beans from origin to final product, ensuring quality, and managing inventory efficiently.
- Manufacturing Processes: The roasting process requires precise control over temperature and time, which can be optimized using data analytics and automation.
- Logistics: Coda Coffee needs to improve its logistics operations to ensure timely delivery of products to customers.
3. Technology Analysis:
- Digital Transformation: Bext360's technology offers a unique opportunity for Coda Coffee to undergo a digital transformation, leveraging AI, IoT, and blockchain to enhance its operations.
- IT Infrastructure: Coda Coffee needs to assess its existing IT infrastructure and ensure compatibility with Bext360's platform.
- Data Management: The implementation of Bext360's system will generate a large volume of data, requiring robust data management and analytics capabilities.
4. Financial Analysis:
- Investment Costs: Coda Coffee needs to evaluate the financial implications of implementing Bext360's technology platform, including initial investment and ongoing maintenance costs.
- Return on Investment: The potential benefits of Bext360's platform, such as increased efficiency, reduced waste, and improved customer experience, need to be quantified to assess ROI.
4. Recommendations
Coda Coffee should implement a phased approach to integrate Bext360's technology platform, focusing on:
Phase 1: Data Management and Analytics
- Data Collection and Integration: Implement a comprehensive data management system to capture information from all stages of the supply chain, including coffee bean origin, processing, roasting, and distribution.
- Data Analytics: Utilize AI and machine learning algorithms to analyze data, identify trends, and optimize processes. This includes:
- Predictive Analytics: Forecasting demand, identifying potential supply chain disruptions, and optimizing inventory management.
- Quality Control: Monitoring coffee bean quality, identifying potential defects, and ensuring consistency in roasting.
- Customer Insights: Analyzing customer data to understand preferences, personalize recommendations, and improve customer satisfaction.
Phase 2: IoT Integration and Automation
- Smart Sensors and Devices: Integrate IoT sensors and devices throughout the supply chain to track coffee beans, monitor environmental conditions, and automate processes.
- Real-Time Monitoring: Enable real-time monitoring of key metrics, such as temperature, humidity, and bean moisture content, to ensure optimal quality control.
- Process Automation: Automate tasks such as roasting, packaging, and distribution to improve efficiency and reduce human error.
Phase 3: Blockchain Adoption
- Supply Chain Transparency: Implement a blockchain-based system to track coffee beans from origin to final product, providing transparency and traceability for customers.
- Ethical Sourcing and Sustainability: Use blockchain to verify ethical sourcing practices, promote sustainability initiatives, and build trust with consumers.
- Payment and Finance: Explore the use of blockchain for secure and efficient payment processing, reducing transaction costs and improving financial transparency.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core Competencies and Consistency with Mission: The recommendations align with Coda Coffee's core competencies in quality, sustainability, and customer experience.
- External Customers and Internal Clients: The recommendations aim to improve customer experience by providing transparency, traceability, and personalized recommendations. They also aim to improve internal efficiency and empower employees with data-driven insights.
- Competitors: The recommendations help Coda Coffee stay ahead of the competition by leveraging innovative technology and creating a competitive advantage.
- Attractiveness: The implementation of Bext360's technology platform offers significant potential for ROI, including increased efficiency, reduced waste, and improved customer satisfaction.
- Assumptions: These recommendations assume that Coda Coffee has the necessary resources and commitment to implement the digital transformation strategy.
6. Conclusion
By implementing a comprehensive digital transformation strategy, leveraging Bext360's technology platform, Coda Coffee can achieve significant improvements in its supply chain, enhance customer experience, and achieve sustainable growth. This strategy will require a commitment to data management, AI and machine learning, IoT integration, and blockchain adoption.
7. Discussion
Alternatives:
- Partial Implementation: Coda Coffee could choose to implement only specific aspects of Bext360's platform, such as data analytics or IoT integration, instead of a full-scale digital transformation. This approach would be less costly but may not achieve the same level of impact.
- In-house Development: Coda Coffee could choose to develop its own technology solutions instead of partnering with Bext360. This approach would require significant investment in resources and expertise, and may not be as efficient or innovative as Bext360's platform.
Risks and Key Assumptions:
- Technology Adoption: The success of the digital transformation strategy depends on the successful adoption and integration of Bext360's technology platform.
- Data Security: Coda Coffee needs to ensure robust cybersecurity measures to protect sensitive data collected through the platform.
- Employee Training: Employees need to be adequately trained to use the new technology and adapt to the changes in processes.
8. Next Steps
- Pilot Project: Conduct a pilot project to test the feasibility and effectiveness of Bext360's platform in a controlled environment.
- Project Management: Establish a dedicated project team to oversee the implementation of the digital transformation strategy.
- IT Infrastructure Upgrade: Assess and upgrade Coda Coffee's IT infrastructure to ensure compatibility with Bext360's platform.
- Employee Training and Change Management: Develop a comprehensive training program for employees to ensure successful adoption of the new technologies and processes.
- Marketing and Communication: Communicate the benefits of the digital transformation strategy to customers, employees, and stakeholders.
By taking these steps, Coda Coffee can successfully implement a digital transformation strategy that will position it for long-term success in the competitive specialty coffee market.
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Case Description
Coda Coffee's commitment to ethical coffee came at a high cost. The company paid three times the commodity exchange rate for raw coffee beans, or cherries. By late 2018, their supply chains reached from Denver all across the world. Could AI, machine vision, blockchain, IoT help Coda Coffee, and in turn, their customers, receive assurance that this premium pricing translated into fairer wages for farmers? It is this assurance that Coda continually strived for through the relationships they built and the methods of sourcing they pursued. This case describes a partnership between relatively new Coda Coffee and Bext360, a technology startup, to leverage Industry 4.0 technologies to ensure greater transparency in Coda Coffee's supply chain. Specifically, the case addresses the motivation behind conducting a pilot study in Uganda. The case can be used to stimulate discussion about the strengths and limitations of Fair Trade certification and how companies can go beyond Fair Trade with their own certification programs supplemented by increased supply chain transparency. The case can also be used to generate discussion about how Industry 4.0 technologies can serve both business and the greater good.
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