This means that anyone doing business in Colombia, or considering doing so in the near future, needs to keep a close eye on these changes – particularly the new players in the market. Could any of them be your direct competition, or perhaps a potential partner?

Here are some outstanding developing players, which bring remarkable new options to consumers – and should be on your radar:

1. Tostao’

A company incorporated in Panamá, with German banker Michel Olmi leading the project, Tostao’ opened for business in 2016. While the company’s motto of “coffee and bread” may be simple, its efforts to open more than 100 sites in two years were far more complex. You can now find a Tostao’ almost anywhere in Colombia.

Tostao’ brings frozen raw products from Barcelona, Spain, and bakes them at individual stores. Customer reviews demonstrate an appreciative clientele. The baguette, a type of bread that, curiously, is not usually found in Bogotá’s bakeries, leads in popularity. Tostao’s premium quality coffee is sold at the same prices as the lower quality coffee commonly sold in the city.

Tostao’ does a good job of listening to its customers, upgrading its restaurants with more seating and serving sizes based on its clients’ feedback. Bottom line: you can now find predictable, high value coffee and bakery products all around the city, whenever you need a snack.

2. D1

Owned by Grupo Santodomingo, one of the largest economic groups in Colombia, in association with the Albrecht family from Germany (owners of discount grocery chain Aldi), D1 brought the concept of discount supermarkets to Colombia in 2009, and started a massive development in 2014.

D1 offers a few prime brands, such as premium beer Club Colombia, and low cost brands with hard-to-beat prices. Among its most attractive products is a brand of Italian pasta that outperforms local options in quality, at a fraction of the price. D1 also provides great value in snacks, cleaning products and canned food for its customers.

The stores are drawing increasing numbers of customers, and are making room for more cashiers in their stores. The ability to have packaged goods at affordable prices close to your home is new for many consumers, and clearly popular with this market.

3. Ara

Owned by Jeronimo Martins S.A. from Portugal, Ara opened its first stores in Colombia in 2013. The first locations were in Pereira, a city of 474,000 inhabitants, located in the “Coffee Axis” region of the country. In 2016, a large-scale expansion began in Bogotá.

The format is that of a small supermarket, easy to see from a distance because of the intense orange color of its storefronts and logo. Prices are usually attractive, with a strategy similar to hard discount stores: offer special pricing on prominent products for a limited time.

I bought a pot in Ara for a below-market price, and it’s proven to be a high quality product. I also discovered high quality roasted chickens sold with potatoes, on sale for just USD $3.50. Ara has done an excellent job of bringing a variety of fruits, vegetables and fresh foods to the market at affordable prices.

4. Rappi

This startup led by Colombian entrepreneurs was incorporated in 2015, after being selected by Y Combinator (a startup incubator) for finance support. Basically, Rappi will purchase items for you and deliver them to your home – groceries, tech, medicine, liquor, restaurant food, and anything else you can think of. Even when you need cash, they will withdraw it, take it to your home, and charge it to your registered credit card.

You can see Rappi’s employees in supermarkets with their orange phosphorescent suits and backpacks, or on their bikes and motorcycles moving from place to place. Success has been so rapid and overwhelming that some months ago they published a letter in the newspapers apologizing for delivery delays. It seemed a sincere recognition that the company was attempting to handle more orders than it was initially prepared to receive, and is committed to working on it.

With this service you can save time while getting the same prices as you would at the store, for only a small additional fee for the service. This is something people in Bogotá can do for many stores, now that Rappi’s technology has put the ability to use it in people’s hands.

The new kids on the block are dominating Colombian business – how do you stack up?

The bottom line is that consumers in Bogotá, and increasingly throughout all of Colombia, have a growing selection of interesting and useful new options.

One immediate impact is that some small shops will have difficulty competing with new players equipped with large amounts of capital to invest. Other companies will have a tougher time standing out in this increasingly saturated market.

Their success proves, however, that Colombian customers are willing to try new products and services, and that the right offerings have the potential to attract a sizeable market.

So what’s your next step – is it time to fold on your ambitions for Colombia? Or is now the time to stay the course, or even double down on your strategy?

The post Get inspired by these 4 new companies that are kicking the competition’s butt in Colombia appeared first on Trade Ready.

A common and very effective model is the Supply Chain Operations Reference (SCOR) model, developed by the Supply Chain Council to enable managers to address, improve and communicate supply chain management practices effectively.

The SCOR model runs through 5 supply chain stages: Plan, Source, Make, Deliver, Return

The 5 supply chain stages

Stage 1: Plan

Planning involves a wide range of activities. Companies must first decide on their operations strategy. Whether to manufacture a product or component or buy it from a supplier is a major decision.

Companies must weigh the benefits and disadvantages of different options presented by international supply chains.

Options include:

• Manufacturing a product component domestically
• Manufacturing a component in a foreign market by setting up international production facilities
• Buying a component from a foreign supplier
• Buying a component from a domestic supplier

If companies are manufacturing products, they must decide how they will be produced.

Goods can be:

• Make to stock (produced and stored, awaiting customer orders);
• Make to order (constructed in response to a customer order);
• Configure to order (partially manufactured the product and completed it after a firm customer order is received); or
• Engineer to order (manufactured a product to unique specifications provided by a customer).

Sometimes, the combination of these methods can produce goods. Companies must also decide whether they will outsource manufacturing. This operations planning is essential because these decisions influence the supply chain.

Planning also involves mapping out the network of manufacturing facilities and warehouses, determining the levels of production and specifying transportation flows between sites. It also involves assessing how to improve the global supply chain and its management processes.

When planning, companies should ensure that their supply chain management strategies align to business strategies, that communication plans for the entire supply chain are decided and that methods of measuring performance and gathering data are established before planning begins.

Stage 2: Source

This aspect of supply chain management involves organizing the procurement of raw materials and components.

Procurement is the acquisition of goods and services at the best possible price, in the right quantity and at the right time.

Companies will negotiate contracts and schedule deliveries with the selected and vetted sources.

Supplier performance must be assessed and payments to the suppliers made when appropriate. In some cases, companies will be working with a network of suppliers. This will involve working with this network, managing inventory and company assets and ensuring that export and import requirements are met.

Stage 3: Make

This stage is concerned with scheduling of production activities, testing of products, packing and release. The company also manages rules for performance, data that must be stored, facilities and regulatory compliance.

Want to learn more about managing your company’s supply chain, logistics and how to mitigate risks? Check out the FITTskills Global Value Chain online course.

Stage 4: Deliver

The delivery stage encompasses all the steps from processing customer inquiries to selecting distribution strategies and transportation options. Companies must also manage warehousing and inventory or pay for a service provider to manage these tasks for them.

The delivery stage includes any trial or warranty period, and customers or retail sites must be invoiced, and payments received. Companies must also manage import and export requirements for the finished product.

Stage 5: Return

Return is associated with managing all returns of defective products, including identifying the product condition, authorizing returns, scheduling product shipments, replacing defective products and providing refunds.

Returns also include “end-of-life” products (those that are in the end of their product lifetime and a vendor will no longer be marketing, selling, or promoting a particular product and may also be limiting or ending support for the product).

Companies must establish rules for the following:

• Product returns
• Monitoring performance and costs
• Managing inventory of returned product

Do you think we covered all of the essential stages of supply chain development? If not, what would you add to the mix? 

The post The 5 essential stages in developing a successful supply chain appeared first on Trade Ready.

Each of these issues must be negotiated between exporters and importers to clearly determine which party is legally responsible for each specific aspect of the trade transaction. These discussions can be compounded by disparities in language and culture.

To improve communication and mitigate the risks of misunderstandings, the ICC developed Incoterms (International Commercial Terms) to serve as universal trade definitions. It is now far easier for trading partners in different languages and from different cultures to do business.

How and why to use Incoterms

The Incoterms establish clarity in issues such as:

• Costs: Who pays for the various shipping expenses (packing, transportation, duties) encountered throughout a shipment’s journey?
• Ownership/Responsibility: At various points of the shipment’s journey, which party owns the goods and assumes the risk?
• Liability: If goods are damaged, who is responsible for paying damages, and at what point?

Do use Incoterms to establish party obligations, risks and costs with regard to:

• Delivery terms (destination, timelines, proof requirements)
• Standards of conduct
• Required or government imposed licenses and formalities
• Transportation mode and carriage terms
• Transfer of risk from seller to buyer

Don’t use Incoterms to:

• Outline rights and obligations for service contracts or any contract other than delivery
• Outline provisions before or after delivery (only during)
• Define breach remedies
• Determine how title of goods is transferred

Incoterms categories and responsibilities

Each incoterm is referred to by a three-letter abbreviation, and they are usually listed by category.

Rules for any mode or modes of transportation:

• EXW — Ex Works: The seller’s minimum responsibility is to make the goods available at the specified location. The buyer accepts all other risks and costs.
• FCA — Free Carrier: The seller ensures the goods are made available for the buyer’s named carrier at a specific named location. The buyer then assumes all risks and costs.
• CPT — Carriage Paid To: The seller pays the freight to a named destination. The buyer then assumes all risks and costs.
• CIP — Carriage and Insurance Paid To: Same as for CPT, but the seller must also provide insurance. The buyer then assumes all risks and costs
• DAT — Delivered to Terminal or Port (Used for ocean or inland waterway transport or multimodal transport): The seller pays all transport costs to a named port but does not clear the goods through customs. The buyer then assumes all risks and costs.
• DAP — Delivered at Place (Used for all modes of transport, as long as the final shipment to the named place is by land): The seller’s obligations terminate when the goods are delivered to the specified place. The buyer is responsible for clearing customs. The buyer assumes all risks and costs from this point on.
• DDP — Delivered Duty Paid: The seller pays all costs, including customs clearance, associated duty/taxes and delivery costs, to the buyer’s named delivery address.

Rules for sea and inland waterway transportation:

• FAS — Free Alongside Ship: The seller’s obligations are fulfilled when the goods have been placed alongside the principal ship at the dock or specified port. The buyer then assumes all risks and costs.
• FOB — Free on Board: The seller’s obligations are fulfilled when the goods are placed on board the ship by the exporter. The buyer then assumes all risks and costs.
• CFR — Cost and Freight: The seller pays all costs necessary to transport the goods to the named destination. Risks are transferred to the buyer when the goods pass over the ship’s rails.
• CIF — Cost Insurance Freight: Same as for CFR, but the seller must also provide marine insurance.

Each of these groups reflects varying degrees of seller cost and risk, and establishes the balance of responsibilities between the buyer and the seller.

Departure, main carriage unpaid and main carriage paid Incoterms are all shipment contracts. In these, the seller delivers simply by handing over the contract goods to a carrier somewhere on the seller’s side.

Depending on the terms, the place could be the seller’s premises, a carrier’s terminal, and a forwarder’s warehouse, or alongside or on board a ship. The need for payment to be made to the seller is recognized as soon as this delivery occurs.

Incoterms letter meanings

Terms beginning with the letter ‘E’ indicate that the seller’s responsibilities are fulfilled when the goods are made available for shipping by the buyer’s chosen carrier.

Terms beginning with the letter ‘F’ refer to shipments where the primary cost of shipping is not paid for by the seller.

Terms beginning with the letter ‘C’ refer to shipments where the seller pays for a portion of the shipping but the seller’s responsibility ends when the goods are delivered to the carrier somewhere on the seller’s side.

Terms beginning with the letter ‘D’ are destination contract terms because the seller delivers somewhere on the buyer’s side. The shipper or seller’s responsibility ends when the goods arrive at a predefined point. Delivery on the buyer’s side means that recognition of payment is deferred.

What other advice or information about Incoterms do you think are necessary to become adept with them?

It is advisable for entrepreneurs to become familiar with Incoterms to accurately and clearly understand what rights they are entitled to and obligations they are responsible for when transporting goods internationally. This in turn can help them determine the insurance requirements compatible with their business needs.

The post Avoid logistics and shipping pains by refreshing your knowledge of Incoterms! appeared first on Trade Ready.