Strategic decisions include what products to produce, and which sites to produce them in. These decisions not only include the operation of the facilities but also determining the exact path through which a product flows to and from facilities. Other things to consider are the capacity of manufacturing facilities, scheduling, equipment maintenance, timing and balancing of workload, and quality control measures. Inventories must also be managed at every stage of the supply chain. From raw materials to semi finished, to finished goods. Then there are transportation costs to consider and the weighing of faster/cheaper/better as well as logistics. In the life of the supply chain, customer service must also be considered.

In the diamond supply chain, the next steps are sorting, cutting and polishing, and manufacturing the final products.
The Kimberley Process, which tracks every cross-border interaction, helps reduce the quantity of conflict diamonds in the market, and also enables each link of the global value chain to be documented.


Once mined, rough diamonds are delivered to sorting experts who categorize and assign a value to them. Those diamonds that are of gem quality are classified into categories based on size, shape, quality and color. The majority of diamonds fall within a range of standard colors from colorless to faint yellow or brown tints. Almost all rough diamonds have some distinguishing marks, known as inclusions, which make each one unique. The best diamonds are sent off to the next stage of the value chain, with a Kimberley Process certificate proving they are from a conflict free source. The rest are used for industrial purposes. These industrial diamonds are then used in equipment such as drill bits and lathes.

Cutting and Polishing

4c's_overall.jpgAfter sorting, the diamonds are cut and polished. Cutting and polishing often does not occur in the same location as the exploration and mining. Rather, sorted diamonds are shipped off to be cut and polished in countries further along the supply chain. Currently cutting and polishing take place in southern Africa, Belgium, China, India, Israel, Russia and the US, among other countries. Cutting a rough diamond takes great skill. A well-cut diamond reflects light within itself, from one facet to another, as well as through the top of the diamond, bringing out its spectral brilliance. The most popular cut is the 57 facet round brilliant.
Global production at this stage is worth over 19 billion dollars. This is one of the most crucial aspects of the diamond supply chain. It is where a substantial part of the mark-up occurs, and it is almost always what makes the supply chain "global". The countries and firms that are able to find the most cost-effective, quality-assured, and safest means of cutting and polishing represent those that will be globally competitive in the future.

After a stone has been cut, it is then polished and classified again, this time by its cut, color, clarity and carat weight, also known as the "Four Cs”: as well as diamond shapes and certifications.


diamond_cut.gifMost gemologists consider cut the most important diamond characteristic because even if a diamond has perfect color and clarity, a diamond with a poor cut will have dulled brilliance. Brilliance refers to the white light that is reflected up through the diamond. The cut is the only factor of a polished diamond's value that is controlled by human hands.
The art of polishing a diamond is to maximize its brilliance and fire (dispersion). The cut of a diamond determines its brilliance. A diamond that is cut too deep or too shallow will be less brilliant and ultimately, less valuable. The width and depth can have an effect on how light travels within the diamond, and how it exits in the form of brilliance.
A diamond acts as a prism and can divide light into a spectrum of colors. This reflected light is exhibited as colorful flashes called fire. Just as when looking through colored glass, color in a diamond will act as a filter, and will diminish the spectrum of color emitted. The less color in a diamond, the more colorful the fire, and the better the color grade.


Color is the second most important aspect when considering a diamond. With diamonds, even the smallest variation in color can make a big difference. Colorless diamonds are the most popular, but nature has also created diamonds in all colors of the rainbow. All other “Cs” being equal, the rarer the color, the more valuable the diamond. Color becomes especially important when considering diamonds of larger size, since the additional light reflected on the surface of a diamond effects the scintillation, the sparkling pattern on a diamond


clarity_scale_490.gifClarity indicates how "clean" the diamond is, or how many inclusions (i.e. scratches, trace minerals or other tiny characteristics) the diamond has. Most diamonds contain naturally occurring inclusions, which developed while they were forming in the earth. The number, type, size, position and brightness of these inclusions can affect the clarity of a diamond, although most are too small to affect the beauty or brilliance of a stone. There is a detailed system of rules and standards to summarize the number, location, size, and type of inclusions present in a diamond.


carat_sizes_460.jpgWhen diamonds are mined, large gems are discovered much less frequently than small ones, which make large diamonds much more valuable. In fact, diamond prices rise exponentially with carat weight. So, a 2-carat diamond of a given quality is always worth more than two 1-carat diamonds of the same quality. As with all precious stones, the weight – and therefore the size – of a diamond is expressed in carats. One carat (equivalent to 0.2 grams) can be divided into 100 'points'.


After being cut, polished and categorized, diamonds are then sold via one of the 24 registered diamond exchanges (also known as 'bourses') located around the world or direct to wholesalers or diamond jewelry manufacturers. Using designs from jewelry designers, retailers, or in-house designers, manufacturers transform these diamonds into jewelry. There is also a great deal of value-addition in this phase of the supply chain; the diamonds are finally "becoming" jewelry. Further, this is one of the higher levels of production, and one that many countries aspire to "upgrade" to. Ultimately, the manufacturing centers hold a lot of power in the final destination of the diamonds, which has the highest potential for profit.