Agriculture companies are facing a major challenge of supply chain visibility as of recently when crops treated with pesticides have been sold as organic products. Because of a lack of traceability, farmers are not getting their worth and retailers are losing their credibility too.
Supply chain visibility has been a buzzword for several years and it is not hard to imagine why. With the advent of globalization and the internet in the 90s, the world became a lot more connected and consequently, supply chains became intricately networked and complex.
As companies grappled with this complexity, the need for better visibility was felt acutely. It has been more than two decades since globalization and the internet has now become mainstream, but it is harder than ever to maintain visibility over supply chains.
A survey of 623 supply chain professionals by GEOIDS indicated that visibility is still one of the top 3 priorities, while only 6% of them confessed having complete visibility over their supply chain. It is obvious that maintaining supply chain visibility is a very complex challenge facing agriculture companies today.
One way to look at this issue is through the “people, process, and technology” lens. Often, teams managing different points of the supply chain operate in siloes. To be fair, a lot of agriculture companies do understand this and have put in place processes that enable better collaboration between teams. But unfortunately, supply chains have a habit of being impacted by unexpected events – what if an important supplier collapsed? Or perhaps there was a political change or unexpected weather patterns squeezed supply? The truth is no one can anticipate these events. Even the best teams and the most well-designed processes will find it hard to adapt when the “unexpected” happens within a supply chain.
The challenge then lies with technology – specifically due to the fragmented nature of the technology being used. Teams in agriculture companies often use multiple software solutions to manage different activities of their supply chain, such as contract management, logistics, hedging & risk management, automation & task scheduling, etc. While this software does make it easy to carry out specific tasks, often they do not talk to each other. So someone has to manually collect information from these systems, put it in a spreadsheet, and apply specific algorithms to analyze data to get some visibility – which often takes days and weeks. This severely affects the company’s ability to respond rapidly to changes in the marketplace.
In today’s connected world, it is very important for agriculture companies to have a platform that can connect multiple systems to gather and analyze data, using algorithms specific to commodity supply chains. Such a platform would reliably support collaboration between teams and help supply chain executives adapt to unexpected events, providing a distinct advantage to agriculture firms.
To read the original commentary from Global Trade Magazine, please click here.