By connecting the various actors in the supply chain in an efficient, fast and cost-effective manner, a newly-formed Swiss company believes it can reduce costs and create value
CommoChain, a software-as-a-service that connects people and systems, claims to be able to address structural inefficiencies in supply chains. It allows users to instantaneously transfer documents, information, and ownership, and guarantees the security, compliance and traceability of transactions.
To find out more about what CommoChain might have to offer the coffee industry and other agricultural commodities, C&CI spoke to Ludwig Clément, one of the company’s co founders.
Mr Clément is a serial entrepreneur in the industry, and combines experience in physical and derivatives trading, including a spell in cotton trading, as well as project management on commodity trading and risk management (CTRM) systems.
His fellow co-founder is Anthony Dupré, who has 15 years of experience in start-ups in the US, where he managed software development teams and enabled successful delivery of a number of products. As the company’s Chief Technology Officer, he is in charge of the architecture and front end applications for the CommoChain platform.
Managing information and data
Based in Geneva, one of the world’s leading commodity hubs, the raison d’être for CommoChain is companies’ need to efficiently manage information and exchange data related to physical transactions.
As highlighted on a number of occasions by C&CI, today this is usually done in an unstructured, company-specific way, relying on ad-hoc corporate processes and using non-tailored software tools, sometimes even manually-updated spreadsheets. CommoChain claims it can put an end to this kind of labour-intensive, time-consuming way of working, and dramatically improve the efficiency of trade execution, enabling users to communicate much more efficiently with colleagues, suppliers and clients, and monitor supplier performance and client preferences.
To a certain extent, the easiest way to look at CommoChain’s Trade Execution Assistant solution is to draw a parallel with Microsoft’s Outlook. Most companies now use Outlook to manage the flow of emails within them and with external parties.
In the context of international trade Outlook is a key software platform, running separately from a company’s enterprise resource planning (ERP) and CTRM systems.
Data relating to physical flows
However, as Mr Clément explained, the big difference between Outlook and CommoChain lies in the fact that the Trade Execution Assistant is designed to uphold the flow of information pertaining to physical flows – such as coffee samples, which it can track in real time – which the start-up has elected to focus on first as it rolls-out its solution in the coffee industry.
Because of this key difference, CommoChain was designed to be a much more user-friendly and efficient interface than Outlook, and it can be integrated to a company’s ERP/CTRM systems, unlocking a second-tier of immediate, tangible benefits. In a nutshell, CommoChain allows users to streamline internal processes and those that involved interaction with other parties in a supply chain.
“The benefits are obvious, whether in terms of ease-of-use, data management and analytics, as well as associated cost and time reductions,” Mr Clément told C&CI.
Ultimately, our Trade Execution Assistant will have to prove itself as worthy of investment, but we are confident that it will do so, and our benchmark case study indicated that it has a return on investment of less than three months.” The company believes that it can reduce the costs involved in sample management by 50 per cent and guarantee 100 per cent traceability.
Reducing costs and guaranteeing traceability
The Swiss company has already conducted a pilot project with a well-known coffee trader and has partnered with a Swiss-based trading company, Tropicore, in order to optimize the architecture of the solution it is offering, and to enhance its parameters and interface with an infusion of real-world know-how and application in day-to-day situations.
“We are in talks with a number of medium-size and large traders and roasters,” said Mr Clément, “and the initial feed-back has been extremely positive.
“All of the stakeholders in the supply chain and those involved in sample management understand that our solution does away with most of the multiple data entries that take place using old technology. As a result, everyone is a winner.
“In addition, we are already in contact with warehouses that handle coffee, who also understand that moving towards more streamlined, better integrated trade execution processes is inevitable. Our long-term aim is to integrate them into the benefits that CommoChain provides.
“Given our current stage of development and the potential our Trade Execution Assistant has, we are actively seeking early adopters who want to stay ahead of the curve and protect their competitiveness, be it exporters, importers, roasters or service providers.” C&CI