The sweet spot of supply chain:

sustainability
In Uganda, the streets will smell like chocolate
Flavia Stoian - November 6, 2015
A project involving 8 SDGs:

INTRODUCTION
HEIMA is a large chocolate manufacturer. We have a range of over 50 varieties of chocolate products and, over
the last 20 years since we are on the market, we created an exclusivity image for our products, favored for
select moments. But in the light of promoting companies with sustainable vision and policies the
competition leverage changed and we want to be on top of our game, not only to keep our market share on
long term but also to take advantage of the present shift of customer preferences and gain more popularity. We
consider taking extensive measures to improve the sustainability of our business. After the 08 downfalls, our
company collected considerable amounts of cash and we consider with proper justification it is time to
invest this money1 to take a new turn in our companys life: sustainability.
Headquartered in US, HEIMA has two other large chocolate manufacturing location, one in The Philippines
and one in Cuba. We have around 15 warehouses, spread equally in Asia, US and South America. We sell
around 30% of our product in Europe through independent distributors.
We decide it is time to expand our business but only in a sustainable way, both for the environment and the
communities around our business. We want to expand in such way that we could cover the European market
needs with a manufacturing unit that is closer, in order to minimize costs and eliminate surplus of distributors.

http://dupress.com/articles/excess-cash-growth-strategies/

SUSTAINABLE SUPPLY CHAIN IN CHOCOLATE PRODUCTION

FLAVIA STOIAN - 1

We already have a main factory in The Philippines to cover supply for the Asian and Australian markets and a
factory in Cuba to cover for demand in US and Latin America.
After attending the Bentley Sustainability Colloquium, we purpose to build a major production and
distribution center in Uganda. Here are only a few objective arguments:
Uganda is on the geographical chocolate belt of the world, having very good weather and terrain
conditions for the cocoa trees;2
Uganda has a culturally rich background in small-scale farming, which is how cocoa trees are grown
because mechanization is hardly possible3 ;
We can build a new supply chain model to adapt to the specifics of the country, in such way that we can
minimize risks and maximize profits4
The main sustainability initiatives that we should take upon should be: A New Model of Supply Chain (1),
Redesigning the Company Image Around the Concept of Sustainability (2) and Building Up on Education (3)

A NEW MODEL OF SUPPLY CHAIN

Technology to be used: MESs, APS, WMSs and TMSs
It is necessary to redesign some of the core strategies concerning our supply chain:
1.
Externalizing the cocoa production to small family farms. By externalizing the cocoa tree production
to small farm families and supporting them with know how and small investments in assets, we can avoid
registering property and at the same time we promote a strong sense of achievement and an increase of
image capital with the local communities.
2.
Responsible Farming - Making the family farms partners. We plan on offering incentives to the
families to register as companies and making them partners and shareholders of HEIMA to increase their
loyalty to the company and to develop a real sustainable network of companies. Instead of drawing their
capital towards HEIMA by making the company buy shares of the small farms, we propose that the farms be
shareholders of the company. Like this, we insure the scalability of the development, by making sure the farms
will always have a strong interest into growing the company so they will not think of externalizing their
services to another company in the future.
3.
Core Sustainability Expanding to Complementary Goods. In order to promote a truly sustainable
and eco-friendly supply chain, we need to insure that all raw materials come from the local community and
our production and business helps the community grow. For this, we should have a very clear overview of the
main social issues the Ugandans people are facing and try to be part of the solution:
Milk: Families that sell their milk directly to our plant get priority for our workforce demand and for
each 8-cows production, if the family has a girl in school, she will receive free books and support to continue
her education from our company.
Sugar: We will closely work with the Uganda Sugar Manufacturers Association5 to establish strong ties
with the sugar cane farmers. Having extensive experience with the sugar cane industry from our production
center in Cuba, we plan on doing exchange of know-how in terms of cocoa trees production and sugar cane
specifics between our Cuban 6 farms and our Ugandans farms, especially in terms of producing sugar cane in
environmental friendly conditions
Wrapping: We aim for vertical integration of our chocolate wrapping services, firstly in Uganda, then to
the rest of our manufacturing centers. We want to produce wrapping from reusable cardboards and paper
leftovers from the local community, using local workforce to collect the scraps, recycle them and produce the
final wrapping.

https://www.barry-callebaut.com/system/files/download/cocoa_growing_countries.jpg
https://www.cadbury.com.au/About-Chocolate/Cocoa-Growing-Countries.aspx
4 http://www.doingbusiness.org/data/exploreeconomies/uganda/
5 http://www.ugandasugar.org/
6 http://latino.foxnews.com/latino/news/2012/09/26/cuba-sugar-industry-showing-signs-life/
2
3

SUSTAINABLE SUPPLY CHAIN IN CHOCOLATE PRODUCTION

FLAVIA STOIAN - 2

Design: We intend of using local artists and crafters to work with our design team together in order to
come up with the designs of the wrapping; it needs to illustrated our efforts of building and sustaining a
healthier Ugandan society.
4.
Being Part of the Community - Sustaining education, innovation and initiative. Any attempt for local
entrepreneurship needs to be sustained, encouraged and nourished, nudging the future generation of Uganda
to build a loyalty capital, not only to towards our brand, but also towards our methods, values and vision.

REDESIGNING THE COMPANY IMAGE AROUND THE CONCEPT OF

SUSTAINABILITY
Technology to be used: ERP - because of the highly customizable structure of the supply chain
and the company itself, the ERP is necessary, mostly because of its modular architecture,
flexibility and the external linkage to the supply chain.
We need to fundamentally switch to sustainability, starting from the bottom up, working on both our vision
and the message we communicate to our stakeholders. We also need to expand our business and we have
enough resources to sustain this expansion. But we need to build it in a sustainable way.
Methods of insuring social sustainability:
Making the community a part of our company and our company a part of the community.
Promoting equality and integration for women in our workforce; promoting women in leadership positions
and having set in place international short time good-practices exchanges in order to expand the benefits of
cultural diversity and no gender discrimination.
Promoting education by establishing a number of grants and benefits for families that keep the girls in
schools;
Encouraging initiative and entrepreneurship in young women, connecting them with the opportunities of
small farming in their country and abroad
Establishing a non-formal education program for young people who want to start a business in cocoafarming, production of milk and associated products or sugar cane, with international exchange and
learning opportunities with people from our production locations in other countries.
Methods of insuring environmental sustainability:
Promoting the end of planned obsolescence: hire local workers and crafters to take care and repair the
inventories and assets, promote energy awareness among our local employees and helping them to achieve
environmental efficiency
Educating farmers and implementing a cyclic resource usability based on the Kingston Winery model
(Valdivia, Chile), where the waste from the cattle was used for fertilizing the ground.
Agreeing on doing business only with sugar cane plants that do not contribute to soil erosion and
degradation, pollution and they agree on containing and keeping track of their industrial waste7. The
alternative is importing cheap sugar cane from our partners in Cuba. The incentive for local farmers consists
of extensive international good-practices exchanges and financially sustaining investing in Eco-friendly
farms.

BUILDING UP ON EDUCATION
Our goal is to develop an education and awareness division, parallel with our production activity that would
bring together good practices from Uganda, Cuba and The Philippines, creating an international community
for social and environmental sustainability. I would represent a conglomerate of agricultural practices,
business approaches, entrepreneurial and social integration techniques, a fusion of liberal arts and business
knowledge tailored to the cultural and individual specifics.

http://www.worldwildlife.org/industries/sugarcane

SUSTAINABLE SUPPLY CHAIN IN CHOCOLATE PRODUCTION

FLAVIA STOIAN - 3

Final Note From the Author:

In addition to aiming from the beginning to
have a project that would involve at least 5
Sustainable Development Goals, as presented
by Jonas Haertle in his keynote address,the
project is based on three main sustainability
projects presented at the Bentley Colloquium:
1. Frameworks to Integrate Sustainability by
Ryan Bouldin
2. Value Creation for Stakeholders in MultiStakeholder Initiatives in Global Supply
Chains: An Instrumental Perspective
3. Understanding the Cycle of Poverty:
Menstruation and the Effects on a Girls
Education by Catherine Dolan (SOAS), Linda
Scott, University of Oxford, Sue Dopson,
University of Oxford, Paul Montgomery,
University of Oxford
Beyond the obvious location pick, the references to
using the cattle for the chocolate industry rather than
for dowry, and the integration of girls education into
the company policies, I chose the chocolate industry
because chocolate is known as one of the main natural
remedies for menstrual pains
Ive also used ideas from the following talks:
4. Fusing Liberal Arts and Business Education
through Sustainability Curriculum
Development by Donna Fletcher, FI Dave
Szymanski, NAS Rick Oches, NAS
5. From Used to New: Increasing Profit Through
Product Renewals by Michael Pangburn
Euthemia Stavrulaki
6. Making Books Out of Trash: Sustainable
Literary Production in the Globalized
Cultural Marketplace by Jane D. Griffin

SUSTAINABLE SUPPLY CHAIN IN CHOCOLATE PRODUCTION

FLAVIA STOIAN - 4