Investment in data integration is crucial for companies in the agricultural supply chain

Editor’s note: Peter Leppan is the VP of supply chain data solutions at Proagrica. The views expressed in this guest article do not necessarily represent those of AFN.

Over the last decade, the agricultural industry has shown a strong willingness to embrace digital transformation. Significant advancements in technology and data have improved commercial performance and competitiveness in an ever-evolving market landscape. To date, digitization has been focused on the farm itself, but there is a growing emphasis on the wider agricultural supply chain.

The acceleration of transformation in agriculture

In recent years the global agriculture industry has experienced a near “perfect storm” of external events in a condensed timeframe, such as the pandemic, the ongoing war between Russia and Ukraine and ever-increasing food demands. Because of this, we are seeing further acceleration of digital transformation and reassessment of processes as organizations strive to optimize their commercial performance and retain competitiveness.

Proagrica research has found that 100% of companies interviewed had started investing in the digitalization of internal workflows, including ERP systems, as well as external digital integration with customers and/ or suppliers. Most now recognize that this investment is crucial to not only their profitability and customer loyalty but also their competitiveness and indeed in some cases, survival.

Considering the above change in emphasis, the data-driven transformation of the agricultural supply chain is growing, but each organization consider take certain vital steps to begin with.

Critically, organizations must ensure that integrated digitization is the first of these. Without this, the more ambitious goal of connecting to the supply chain of the future will remain impossible.

Removing data silos through integration is critical                   

The agriculture industry has undergone much consolidation in the recent past. Approximately 60% of the companies consulted for a Proagrica white paper have been involved in merger and acquisition activities over the past three years.

In light of this market consolidation, it is not uncommon to find organizations operating multiple operational processes at the same time. This leads to organizational and data silos. These silos can lead to a host of issues, including overstaffing, data errors, and delayed message transmission. Such issues can limit the potential of data to optimize the supply chain.

Data in these scenarios tends to stagnate within the confines of individual organizations. On top of this, market consolidation processes are usually complex, and organizations do not want this complexity to spread externally and have an impact on how easy it is to conduct business with them, and how they serve their customers.

Connecting this valuable data and removing these silos is essential in order to improve commercial outcomes across the agricultural supply chain.

Reaping the rewards of effective integration

Once effective integration is put in place, the impact on maximizing commercial performance can be immediate, whilst also setting a foundation for numerous benefits in the future.

Integration solutions offer huge advantages straight away in terms of error and cost reduction. The full automation of the order-to-cash process, for example, reduces manual labor, paperwork, and operational costs — advantages that ultimately lead to an improvement in the organization’s bottom-line results.

When we look to the future of an organization, integrated supply chain networks can also enable seamless connectivity between suppliers, distributors, retailers, and other stakeholders in the agricultural supply chain, ultimately improving commercial decision-making.

Successfully utilizing sales effectiveness data can further enable real-time customized loyalty programs, driving customer satisfaction, fostering brand loyalty, and improving financial performance.

Finally, through integration, businesses have the opportunity to prepare themselves to become more agile and accurately track inventory levels, demand patterns, and consumption rates. This data enables more precise forecasting, efficient inventory management, and timely replenishment.

Connecting valuable data, whether it’s coming from an animal, a truck or an input from a farmer is the crucial first step organizations can take to improve commercial outcomes. This is the foundation that sets the course for a transformative journey, ultimately leading to connecting to the supply chain of the future.