Numi Organic Tea: Managing the Value Chain, Information Technology, and E-Business.
Numi is the tea maker of choice for high-end restaurants, hotel chains, colleges, and cruise lines. As pioneer of green marketing, the organic beverage company is dedicated to sustainability, fair trade, and a small carbon footprint. Unlike most businesses, Numi has a three-fold bottom line of "people, planet, and profit," which requires managers to evaluate performance on a range of criteria, including the overall "greenness" of supply chain operations.
But maintaining an eco-friendly business isn't easy. Many international businesses don't share Numi's perspective on social responsibility, waste management, and workers' rights. Some don't even speak the same ethical language. While some disagreements are acceptable, others require shrewd political calculation and pressure to resolve.
Fortunately for Numi, the technical side of managing partnerships has become easier through information technology. Whether the task involves inventory, packaging, or transport, Numi's high-tech enterprise resource planning system (ERP) enables efficient coordination with strategic partnets around the globe. An ERP is a computer system that processes vast organization data and provides real time information on specific companywide operations. Since memebers of Numi's supply chain-mostly growers, mills, and factories- are linked to the same computer system, the tea maker is able to monitor global operations from its headquarters in Oakland, California. "We're managing our inventories in multiple countries through the same software program," says Brian Durkee, director of operations. "All we do now is simply go into the system and push a button to say we want to make a particular product, and the system pulls all the lots and materials for us and allocates the inventory."
Despite the cultural and ethical differences between Numi and certain overseas partners, managers are committed to achieving a common vission through a variety of tactics, both political and technological. The tea maker's pursuit of an ethical and sustainable supply chain reduces waste in energy and natural resources. As a result, Numi's organic tea products not only taste great, but they are good for the planet as well.
1. Describe the power relationship between Numi and its supply chain partners.
2. What issues with China-based suppliers require Numi's managers to use influence and persuasion tactics?
3. How does Numi get suppliers to comply with its policies?