Business Strategy and Supply Chain Development for Commodity Based Social Enterprise in Eastern Indonesia

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In this project, together with Starlab we had the opportunity to assist one of our clients, Kobumi in developing their business strategy and supply chain optimization. Kobumi is a joint venture with the EcoNusa Foundation and 10 cooperatives and economic institutions in West Papua and the Maluku Islands. With various business services and focus, Kobumi seeks to develop its business strategy and a practical roadmap with a 3-year timeframe to strengthen its operational and supply chain performance as well as its financial performance.

In the span of 12 weeks, Nectary Sustainability Solutions worked closely with Kobumi to develop its business strategy. Starting with the alignment of understanding between shareholders, Nectary developed a review of the work plan and the approach that will be used, including the timeline, risk management, scope of the project, and other related matters. We also analyzed and synthesized data needs, interviews, and site visits during the project through a discussion with Kobumi. The last step in the preparation phase was the kick-off meeting, where we informed Kobumi of every analysis and the list of internal data needed for further analysis of the project.

The second step of our approach was the baseline study. Where we did a deep dive into their aspirations, internal conditions, and external conditions – especially those related to supply chains and market access. Here, we did a further analysis of the fundamental internal aspects of their company starting from their organization, financial, business model, and operation model through analysis of the internal documents, site visits, and interviews with some of their stakeholders. We also equipped the report with an external study, where we did desktop research and expert interviews that focused on the commodity trend, and commodity landscape, which includes supply chain, key players in the industry, and many more. This analysis mainly focused on four commodities; coconut, cloves, cocoa, and fisheries. In this part, we have successfully mapped the potential production regions for each commodity, their current driving trends, and demands, as well as their supply chain and possible route of distribution.

After analyzing the company’s internal factors and external study of each commodity, we finally came to the final deliverable, which was the development of a business strategy and roadmap for the next three years for Kobumi. In this part of the deliverables, we formulated several initiative strategies, along with milestones, prerequisites, and targets, by summarizing the results of aspiration analysis, internal analysis, and external analysis. In order to do that, we used the SWOT and Gap Analysis for the company and each commodity, as well as the prioritization matrix to come up with the commodities that are preferred to be prioritized. After that, we conducted a financial analysis to explore the operation model, validate the initiative strategies, and estimate the rough profit of the key commodities. We used the top-down analysis for coconut, cloves, and cocoa, while the bottom-up analysis was conducted to analyze the fisheries.

After validating the formulated initiative strategy from the financial side, we could then start to develop detailed initiative strategies. We came up with a total of 9 strategies, which consist of 22 initiatives, and 57 sub-initiatives that were grouped up as 2 main pillars; 1) for the key commodities development, and 2) for Kobumi’s internal capacity. We then analyzed the impact and effort required in general (on a scale of “high”, “medium”, and “low”), and came up with which strategies could be categorized as a quick win, medium-term, and longer-term, which then summarized into roadmap and timeline, on when we advised doing each initiative.

With that, we have concluded our development process of business strategy and supply chain optimization for Kobumi. We are thrilled about this opportunity and hope that our output will be useful knowledge for Kobumi and its operations, which will also aid local people in Maluku and Papua and promote Indonesia’s top commodities locally and internationally. We are excited to support more organizations like Kobumi on their journey to creating a more sustainable and equitable world.