Supply chain in the ag input market
What happens in the world of agriculture? How much transpires before a farmer gets agri-inputs, before the crop grows, changes shape, fights the weather, drinks the rain, kisses the harvest, passes through machines, gets wrapped into something, enters a truck, walks into cold storage, moves into a market, lands on a shelf, and then gets served in someone’s bowl!
That’s like the supply chain for any ag input player. Since so much is going on, and at different places, under multiple eyes, in various hands – it is essential that this entire chain is connected, cohesive and congruent.
Components of an organized ag input supply chain
A McKinsey’s data pool that analyses ten years of crop-yield data reveals over 150 agronomic scenarios (defined in a series of potential yields per parcel) that could apply to crop-collection planning and allocation logistics. It has been seen that a variety of agriculture players, from farmers to end customers, are discovering technologies that can play a role in optimizing the complex agriculture supply chain.
It makes sense to use all the data they are capturing across all stages. Data keeps traveling and changing shape in this complex and multi-faceted supply chain from crop planning to weather forecasting to yield management, market pricing, storage areas, and logistics areas.
Top challenges in ag input supply chain management
When we look at the supply chain of agribusiness in India, we should not be surprised to find that India tends to easily lose 20 percent of its agricultural production because of improper logistics. Since so much of data entry was manual, delayed, error-laden, and poorly managed – the wastage and losses that happened were quite severe.
With no data for monitoring and low visibility for governance, it is easy for confusion and inefficiencies to come in and corrupt this supply chain.
The complexity of the chain also injects barriers in the ‘input to farmer’ path. The outcomes of poor visibility keep emerging- in the form of delays, information gaps and wrong supplies.
Indian agriculture landscape, as a whole, has always suffered because of lack of visibility and poor planning.
A study published in FAO or Food and Agriculture Organisation of the United Nations unraveled farming operations that can depend on logistical services for production inputs and post-harvest and marketing activities. There are a wide range of challenges – the high cost of inputs, lack of information, limited flow of inputs, lack of suitable storage facilities and transportation services, lack of market access, lack of management skills, and lack of training.
When a supply chain lacks visibility, it is easy to see another problem-area cropping up::
- Fraud and counterfeit in the supply chain – because no one is accountable or being monitored
- Contamination of inputs – because of poor logistics and storage planning
- Traceability – which affects trust and end-customer pricing
- Lack of actionable data and insights – which wastes investments in governance
- Traditional inventory techniques – which worsen demand and supply alignment and heighten costs
- Slower digital transformation – which makes both farmers and ag input players less competitive
- Lack of risk mitigation strategies – because of lack of real-time data
How to overcome such challenges?
Supply chains are complex creatures. They have many players, conflicting objectives, and many dependencies, along with many inbound and outbound networks.
That’s why we need a well-planned and robust adoption of supply chain automation and intelligent tools. It can bring in:
- Visualisations and detailed information
- Deep insights into your partners
- Digitisation and standardization of your supply chain data
- Traceability of your products and supply chain from end-to-end
- Exchange and sharing of validated information
India’s agriculture sector generates a lot of employment, yet its contribution to GDP does not correspond to that level.
In the NASSCOM’s 2019 report, India was seen to have over 450 agri-tech start-ups, growing at a rate of 25 percent annually. So there is a lot of room for innovation and improvement. All we need to do is get started. Indian players must raise their game in traceability, tracking, and visibility. The recent crisis has shown the need for the availability of essentials and the critical nature of agriculture management.
It’s time for smooth and intelligent supply chains.