Improving Supply Chain Performance with New Digital Technologies

The Peruvian coffee industry supports more than 200,000 small coffee growers, and accounts for US $1 billion in annual revenues, but the industry has been struggling recently to achieve sustainability due to its widespread lack of coordination and low quality production. Coffee farmers’ livelihoods rely on the market price, and this price is determined by the quality of the coffee, which has a strong correlation with technical education and how coffee is processed. Faced with limited resources and technical assistance, many farmers struggle to produce high quality coffee, and they are forced to abandon its production and may resort to planting other more lucrative crops including illicit ones.

This Capstone project assessed how digital technologies could improve the coffee supply chain and result in higher coffee quality with greater production levels. The team interviewed technology experts, researched agricultural technologies, and spent three days in the Selva Central coffee-growing region of Peru with seven different coffee cooperatives.  

In the short-term, the Capstone team recommended that an independent advisory panel should develop and guide the specific quality guidelines for the production of coffee. With their insights, the team also recommended implementing certain internet connected devices that can be monitored by a centralized data management platform to inform future production forecasts and improve quality through data analysis. With these initiatives in place, each stage of the supply chain can be traced to mitigate future risks and problems, and ensure a sustainable coffee industry for the years to come.