Ag input players desire speed, transparency, and convenience in their supply chains. But it all boils down to visibility. Unless they can have through-and-through visibility in the supply chains, it is challenging to make them more efficient. This explains why a lot of attention and investment has poured into the digitization of ag input supply chains. The technology is getting sophisticated, the tools are getting simpler, and the results are faster with better ROI.
Increasing visibility in ag input supply chain
When McKinsey’s Agricultural Commodity Research Engine (ACRE) studied some farmers with 500 or more acres of significant row crops (corn, cotton, soybeans, and wheat), it was seen that 51 percent of farmers plan to delay equipment purchases, many expect their expenditures for seed, fertilizer, and crop protection to rise. It is easy to see how a combination of lower-income and rising costs creates an adverse effect on income per farm and other aspects of farm profitability. The entire agriculture cycle is composed of a lot of stages, players, and inputs. Therefore, one must have good visibility and real-time information across this chain. Without this visibility, ag input players always risk poor forecasting, inadequate demand management, sloppy storage planning, low yields, and profitability. Hence, visibility is crucial. It comes from data and timeliness. That comes from technology. But do ag input players have it?
Challenges of legacy solutions in ag input supply chain
According to some reports, there is a wide presence of global food supply chains’ many inefficiencies. From areas like faster cross-continental commodity trading, tracking of products’ origin, implementing product safety initiatives, and correctly tracing suppliers’ certifications, the need for suitable technologies has become even more urgent after the pandemic. However, there is an enormous gap in traceability and transparency. The distributors, retailers, and consumers, too, want information and transparency on product processes. But many legacy solutions are too outdated or slow to help ag input players gain the agility and real-time visibility they need in their chains. Insufficient data and delayed data worsen the scenario. It hampers the profitability for ag input players and spills over to areas all across the chain. It affects customers in aspects like product quality, pricing and safety too. Even if one stakeholder adopts something smart, poor integration across the chain renders this investment futile. There is a lot of scope for fragmentation, fraud, and mistakes owing to poor visibility in the chain.
Advantages of automating and adding intelligence to ag input supply chain
So what happens if the ag input supply chain is automated and made intelligent?
One can reap a lot of benefits. Like:
- Faster tracking and tracing of raw materials, finished goods, and merchandise
- Better monitoring – right from the provenance to the point it reaches the customer
- Better data for online buying and selling
- More trust in product data and the ability to fight the erosion of credibility that product labeling has caused
- Ability to customize needs for different regions and market
- An ecosystem-wide reach and coverage
- Smooth data integration for global markets and supply chains
- A detailed, micro-market view of growth opportunities
- Ability to ramp up production and lower operating costs
Future is all about smarter supply chain decisions
Several ag input players are leveraging the advantages that technology can bring into their supply chains, like easy and cheap product batch-recalls in case of emergencies, availability of the complete history of the product status, increased customer trust and loyalty, fairer payments, approved vendors, and proper compliance management. As a result, there is a lot of room and demand for supply chain transparency. Because when retailers, ag input players, market players, and suppliers can see what starts where and moves where – in a real-time format- they can raise the bar on quality and safety for the customers. This leads to better margins, reduced costs, more efficiencies, and higher profits. It is a technology decision that can turn the tables. And make them come closer to stakeholders in the supply chain.