JB Cocoa Enabling Traceability to Achieve ESG Commitments

Chocolate is much loved by people around the world. With cocoa powder and butter as key ingredients that may be customized, chocolate makers can tailor the flavor, color, and texture of their chocolate to suit different taste buds. JB Cocoa, one of the major cocoa ingredient producers in the world with roots in Southeast Asia, has today grown beyond Malaysia where it was founded to make its mark globally, with presence in North America, Europe, Asia and most recently, Ivory Coast in West Africa. It grinds cocoa beans into cocoa mass, further processing it into cocoa butter and cocoa powder that are used to make all kinds of delicious treats. To meet growing consumer expectations for sustainable products, leading manufacturers are making traceability and sustainability an integral part of their business, and participate in programs such as Rainforest Alliance for governance.

Certified manufacturers expect producers like JB Cocoa to source raw materials from traceable and sustainable farms, identifying and addressing issues of deforestation and child labor in its supply chain. Increasingly, it was vital for JB Cocoa to digitize its supply chain with SAP on Google Cloud for a consolidated view of cocoa bean procurement across its business entities.

“SAP on Google Cloud centralizes our business processes, from sales to logistics, and incorporates internal and external data for greater traceability and financial transparency,” says Yeo Yean Mei, Group Project and IT Manager at JB Cocoa. “Our use of Google Cloud powered by renewable energy will enable us to meet our Environmental, Social and Governance (ESG) goals and, more broadly, contribute to our customers’ emission reduction targets.”

Optimizing business processes for sustainable cocoa

Cocoa is dominated by small-scale farmers around the world. Since JB Cocoa needs cocoa beans in bulk for its cocoa ingredients, it sources from cooperatives that represent the farmers, which could make traceability challenging.

To ensure a smooth execution and transition process, JB Cocoa partnered with Google Premier Partner Deloitte who helped the company to replace its legacy Enterprise Resource Planning (ERP) system with SAP S/4HANA on Google Cloud, thereby enabling custom codes for new business needs such as traceability to be added. “With a single transaction code, we can list out each batch of cocoa beans and packaging used in the finished goods, the type of quality assurance inspection, and the shipping location for the finished goods for generating reports,” says Yeo. “SAP on Google Cloud has effectively helped us to respond to customer queries and compliance audits in a much shorter duration.”

Previously, the on-premise legacy ERP lacked scalability, restricting customization unless additional hardware was used. “Compared to other cloud providers, Google Cloud gives us the flexibility to scale our CPU since it’s not tied to the RAM, allowing us to fine-tune the server specifications over time. If an application requires more RAM, we can upgrade it immediately with less than 15 minutes of downtime. We no longer need to wait for provision servers that can take months.”

Improving data visibility across the business

As the company expands, JB Cocoa needs to gain visibility across its operations to improve decision-making and minimize risks. Prior to SAP on Google Cloud, the month-end costing process, which runs on the legacy ERP system, proved very challenging for the finance team who needed to track expenses.

Due to a database locking issue, the production operator can only report the output of goods into the system when the finance team completes the costing run. To minimize disruption to production, the finance team had to conduct the costing run, section by section, after office hours till midnight.

With SAP, JB Cocoa resolved the bottleneck and reduced the time needed to run product costing from three days to half a day. Product costing helps JB Cocoa see cost variance from month to month, and make business decisions such as changing a supplier if cost is too high. Moreover, the automated costing reporting capability also enables the finance team to easily calculate the yield analysis now.

Because cocoa is a traded commodity, JB Cocoa’s business model is driven by the Cocoa Futures trading trend that determines the price of physical cocoa. “One of our business challenges is to understand our risk exposure and position,” says Yeo. “With SAP on Google Cloud, we can automate the complex intercompany transactions with a customized pricing engine to track commodity price fixing and forex hedging. We can therefore analyze the changing risk exposure and position on a daily basis with real-time data.”

Innovating with AI to minimize downtime

In a typical food processing plant, machinery may be running more than 10 hours a day. Unplanned downtime can be costly, especially if replacement parts are not readily available. JB Cocoa currently integrates equipment data such as motor running hours and temperature from its Supervisory Control and Data Acquisition (SCADA) system with SAP to plan downtime for preventive maintenance.

“We would like to explore the usage of Google BigQuery in our future roadmap to analyze real-time data for predictive analysis to prevent unplanned downtime,” says Yeo. “Our goal is to build a centralized production dashboard to perform more analytics directly on Google Cloud in the future, combining data sources from SCADA and SAP.”