• You are the new supply chain and vendor risk manager for Ethical Coffee, Inc.
• Sketch of Ethical Coffee's Supply Chain
  • Ethical coffee purchases green coffee from farmers in Colombia, Costa Rica, Yemen, Saudi Arabia, Ethiopia, and Papua New Guinea.
  • After its local agents (all independent contractors) have sourced and purchased the coffee beans, Ethical Coffee contracts to transport the beans to the closest suitable shipping port.
  • Ethical Coffee also contracts with port warehouses to store the coffee until the shipping date.
  • Ethical Coffee enters into contracts with container ship companies to have the beans shipped to New York, San Francisco, or New Orleans.
  • Once the beans arrive in the U.S., they are transported by truck and/or train to the company's 5 regional roasting plants.
  • After the coffee beans are roasted, they are packaged and shipped to grocery stores and to Ethical Coffee's 10,000 coffee shops.
• The company's founder recently sold Ethical Coffee, Inc. to a retired Wall Street investment banker, who loves coffee but has little knowledge of the coffee industry.
• As a result, the new owner has asked you to discuss the vendor and third party risk management issues in the following 3 areas:

1. Green Coffee - Ethically Sourced Coffee and Blockchain Technology

• Describe:
  • At least three potential "fairtrade/ethical-coffee" operational and reputational risks faced by the company, and
  • The "fairtrade" certification process, as well and two other types of "ethical coffee" certifications.
• Discuss the costs and benefits of adopting blockchain technology to:
  • Increase the overall efficiency of the company's coffee supply chain, and
  • Reduce fairtrade/ethical-coffee operational and reputational risks

2. Warehousing and Storage Risk Management

• Discuss the warehousing and storage risk management issues in the coffee supply chain.

3. Shipping of Coffee - Transportation Risks

• Describe how the COVID pandemic affected the shipment by sea of coffee beans to the United States.
• Identify at least two ways to reduce the risks associated with shipping coffee beans to the United States.