The real measure of supply chain success is how well activities coordinate across the supply chain to create value for stakeholders while increasing the profitability of every link in the supply chain.
While the Indian agri-inputs sector has several unique logistical challenges, a digital supply chain can overcome most of them. By bringing all the logistical functions onto a single digital supply chain breaks through function silos and provides access to real-time, on-ground information at all times to create better insights.
By deploying various sensors, IoT devices, and other data collection tools to capture real-time data, digital supply chains optimize inventory levels, production capacity, delivery times, and other key performance indicators – helping all participants to make accurate material, cost and time decisions effortlessly.
Challenges of the Indian agri-inputs sector
- Selling spurious products – It is not uncommon for retailers to push out false and inferior quality products to farmers for a high profit margin. A study suggests that 40% of products sold in rural India are non-genuine, which are harmful and inferior formulations, unable to kill the pests efficiently. Due to the supply chain inefficiencies and inadequate infrastructure, post-harvest losses amount to INR 45,000 crore yearly.
- Lack of adequate logistics & warehouse delays – Geographically remote, small landholding with population residing in smaller hamlets, Indian agriculture and farmers are not the most well-connected logistically. In addition, there is a lack of proper infrastructure / warehousing facilities.
- Dominance of conventional channel partners – Farmers experience a lack of adequate information and awareness, and seek guidance from the local dealers and retailers, who push for non-genuine products (for higher margins), give improper advice on how and how much product should be used.
- Demand generation driven by climate factors – Usage of agri-inputs (especially Fertilizer and agri-chemicals) are directly proportional to the weather and climate movements.
- High credit gestation period – The agri-input sales structure essentially functions on credit. Farmers usually take the agri-input on credit from the retailer and repay post harvest of the produce. Similarly retailers take material on credit during the beginning of the season and repay post getting it from farmers.
How a digital supply chain delivers
The demand and supply of agri-inputs are guided by crop cycles and weather patterns. Additionally, the existing supply chain setup relies heavily on traditional distribution and places excessive power with distributors / retailers, creating multiple complications for the input manufacturers. By digitizing the supply chain end-to-end, companies can overcome most of these challenges, greatly improving efficiency, reducing costs and much more. Here’s how-
- Getting accurate on-ground intelligence – By digitizing the supply chain, you can gain real-time and accurate visibility into end-to-end operations – from tracking live inventory levels at all distribution points to monitoring delivery times,and identifying bottlenecks. This really enables faster and more accurate decision-making enabled by actual on-ground data.
- Greatly improved forecasting accuracy – Inventory planning becomes proactive rather than reactive. Predictive analytics optimize inventory allocation and forecast demand. The logistics managers get a snapshot of the entire inventory situation – at plant, in transit, in storage and even with retailers. This information allows you to greatly improve forecasting accuracy, optimize production and reduce inventory carrying costs.
- Enhanced collaboration – The input manufacturers can collaborate more effectively with suppliers, distributors, and other partners in the supply chain, by enabling them to share data and insights in real-time. It also facilitates collaboration among different stakeholders in the supply chain, including suppliers, manufacturers, distributors, and customers – leading to better communication, more effective problem-solving. With digitisation, fire-fighting between logistics, transporters and the sales team instantly becomes zero, with each party having access to on-ground data at all times.
- Increase agility – A digital supply chain enables organizations to respond quickly to changing market conditions and customer demands, by automating key processes and making data-driven decisions.
- Increased efficiency – Digitization can help organizations to streamline their supply chain processes, reduce manual errors, and eliminate redundant activities. This can result in faster lead times,and increased throughput.
- Reduced costs – By streamlining processes, reducing errors, and optimizing operations, supply chain digitization reduces costs throughout the supply chain. Data aggregation and data mining can provide insight about the past, helping to deliver savings from cost reduction and cost avoidance by anticipating future behavior.
- Enhanced customer experience – Advanced business intelligence tools can be leveraged to identify new opportunities and track savings opportunities. By increasing visibility, improving accuracy, and reducing lead times, supply chain digitization can improve the overall customer experience.
As Martin Chrsitopher puts it, “The real competition is between supply chains, not companies.” And a digital supply chain can easily become a competitive advantage, creating value for all partners at each step of the journey and in each function of the chain.
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.