The pandemic has been a force majeure, disrupting businesses across sectors and nudging them to reassess their legacy systems. Even though the Indian agri inputs sector has outperformed global and Indian benchmarks over the last decade, the post-pandemic market scenario is making no exceptions. Largely unchanged in its operations through the years, the agri-inputs sector now needs to evolve to grow. While several sectoral challenges are unique, there are several more which are functional challenges and are common to all industries. It is these areas of operation that can usher in the next phase of business growth through transformation.
Digitization and technology adoption are helping businesses gather data and gain insights to make cohesive high-impact enterprise decisions. Companies can now decide, implement and monitor with access to on-ground intelligence that has traditionally been impossible to collect or collate and lay scattered across the functional landscape. The one area that has repeatedly delivered significant value with digitization and the adoption of technology is the supply chain function.
Transitioning from a conventional supply chain to a connected, intelligent, and highly efficient supply chain ecosystem can unleash tremendous value for the business – both tangible and intangible. Let’s try and understand why it is so.
“Why do anything differently when my supply chain works well”?
Traditionally, all the moving pieces of a supply chain function are not integrated and do not communicate with each other seamlessly. Each process acts as an independent work center and requires independent management while remaining informed of the entire operation. The teams in charge of each role must make decisions on their end with limited visibility, which can sometimes deliver unpleasant surprises. For example, cutting costs in one role could inadvertently raise operational costs in another. Without an integrated system, it is much harder to make decisions and changes that benefit the operation overall without sacrificing downtime and delays.
Operating on rules-based historical transactions makes them ‘reactive’. Non-integrated supply chain management (SCM) systems usually rely on siloed standalone systems with little or no data-sharing and are designed around production and provision. As a result, they lack the ‘intelligence’ to spot problems along the value chain for quick response. Even after a problem is identified, predicting its likely effects and finding a fix can require considerable time and effort. The accruing production delays, errors, and increases in the time-to-market leads to the creation of unnecessary buffer stocks leading to bulk and inertia at multiple points in the chain — all of which mean loss of customer satisfaction and business profits.
Solution – A digitized and adaptive agri-input supply chain
The critical difference is that traditional supply chains are reactive, whereas digital supply chains are proactive. They bring all the stakeholders onto a single integrative platform and create a seamless supply chain ecosystem. Intelligent automation technologies like IoT, AI, Machine Learning, and Cloud Computing relay back authentic data, from raw material procurement to the production floor and the most remote retail outlet.
Digital supply chains are dynamic and able to adapt quickly to changing circumstances like market disruptions, political turmoil, pandemics, etc. They function in real-time and are highly agile ‘value networks’ with integrated systems and processes. When done right, digital SCM integrates materials, product development, finance, facilities, technology, third parties, and even customers into a seamless system that is centrally managed and controlled.
Here are some ways in which an integrated digital SCM delivers benefits to each stakeholder and to enhance digital adaptability between stakeholders for supply chain success, these benefits have to be communicated and demonstrated well-enough at the ground levels.
- Greater ability to adapt to and re-design supply networks to meet external changes
- High accuracy in forecasting
- Greater ability to diversify the supplier base
- Seamless onboarding and management of distribution partners
- Faster issue identification, response, and remediation
- Achieving new levels of supply chain visibility
- Optimized inventory levels
- Purchase and sales visibility
- Auto-stock replenishment against sale
- Automated receipt of company promotions and discounts
3PL / Logistic Partners
- Optimal management of inventory
- Streamlined logistical performance
- Minimized lead times and real-time tracking of shipments
- Direct access to company promotions and schemes
- Receipt of product and stock to match genuine customer demand
- Better customer service
Product Development and Innovation
- Better identification and response to changing customer preferences
- Dynamic improvement in business and product innovation through real-time supply chain feedback
- Cost reduction and accelerated innovation
- Improved predictions for planning, product quality, safety, and customer experiences
- Data centralization brings people, processes, and technology together to maximize the performance of supply chains.
- Transparency through end-to-end supply chain connectivity
- Better compliance and auditability
- Enhanced sustainability and CSR capabilities at organizational levels and all levels of the supply chain
According to an Oracle study, digital supply chains deliver –
- 20% reduction in time to market
- Up to 50% increase in forecasting accuracy
- Up to 50% in cost reductions due to minimizing waste
- 8% increase in on-time deliveries, enhancing the customer experience
Addressing the resistance to change
When considering new technologies, it is easy to believe that they will be adopted through the industry slowly and in time. However, most businesses with successful and efficient supply chains have been treading the path of digital transformation for several years now.
In a recent interview, Simon Wiebusch, COO Bayer India’s Crop Science Division pointed out that, “The Go-to-Market approaches in the Indian agri-input industry have been static over the last five decades. With the rise of digitalization, the industry will witness very dynamic shifts over the next few years,”
Whether your agri-inputs business is working with a digital supply chain transformation or is yet to get started, the time to take action and drive your supply chain operations forward is now. Discover how DforD can help drive the digital transformation of your agri-input supply chain.