The new normal of supply chain disruptions in agriculture
John Brubaker
The headlines are loud and clear: fertilizer prices up 165%, input production delays, shipping containers stuck at docks. It’s been a rough few years for the ag input supply chain.
These global disruptions have led to significant unpredictability—and leaves folks throughout the supply chain asking: “Will we get our shipments on time?”
That’s getting harder and harder to say, given the ongoing challenges. But increased automation and data-driven decision-making can go a long way in helping ease the burden.
Zooming out the macro challenges
In a recent CropLife survey, 95% of respondents said they struggled to get products through the supply chain in 2021. Continued disruption and overburdening of that supply chain has led to ocean congestion, with items such as crop protection chemicals getting stuck in transit.
Things aren’t better on land. Trucking shortages have pushed wages higher, and general trucking rate increases have been the natural consequence.
Factory shutdowns and worker shortages have turned into massive product delays. Raw materials, like fertilizer, are getting harder to acquire cheaply.
Meanwhile, oil prices hit new heights in 2022, thanks to the global impact of the Russia-Ukraine conflict.
Given the Ag input industry’s scale, system shocks and inefficiencies can easily snowball. And that’s what we’re seeing today: a perfect storm of COVID-19, global conflicts, and market turmoil resulting in massive volatility. This unpredictability leads to longer wait times (aka, worse customer service) and lower profitability. Relying on outdated systems and technology to navigate these chaotic circumstances is ineffective.
Zooming out the macro challenges
On a smaller scale, barriers to max profitability still exist. Planning for purchasing behavior in the day-to-day relies on a rearview mirror, and old-school inefficiencies within that process still reign.
No retailer wants unused product on their shelves. But not stocking certain products—and customers not getting what they want—is its own problem. Businesses constantly walk a tightrope between over- and under-stocking.
Unfortunately, Ag input demand planning is usually based on prior sales. And that retroactive info feeds complex rebate program requirements.
It’s a tall task for today’s tracking tools to manage rebate programs. Initially, simple input distribution loyalty programs were easy to track in Excel. But as complexity and scale increased, spreadsheets have struggled to keep up.
Relying on those old-school methods can have a huge downstream impact: 40% of an organization’s tiered rebates are missed or won through price concessions. When that calculation process relies on manual entry, that inefficiency could add up to millions of dollars in missed rebates every year. Automated technology could be the difference that adds those dollars back to agribusinesses’ bottom lines.
Zooming out the macro challenges
The Ag input supply chain has managed for decades with minimal automation. But supply chain pressures, a fast-paced environment, fluctuating prices, and a changing market landscape have left organizations wondering: how do I escape inefficiency and better prepare for an uncertain future?
Technology can tackle the challenges that have long lurked under the industry’s surface. Proactive frameworks with built-in flexibility and automation allow industry leaders to make smart decisions and adapt to unpredictability.
You only have to look to parallel industries to see this pay off: healthcare, retail, and the financial sector have all embraced automation, for example.
Smartwyre is bringing that tech to the Ag input industry. Our digital platform has already connected over 50% of the U.S. Ag input chain. Manufacturers, distributors, and retailers get the info they need to price products, make better real-time decisions, and manage their business in a volatile environment.
With Smartwyre Planning, real-time demand planning is possible, unlocking 1-2% increased sales.
The Smartwyre Planning module breaks down corporate barriers to connect stakeholders across touch points in the supply chain. Our product catalog aggregates over 60,000 products and tracks 900,000 rebate and pricing combinations to address inventory issues, manage rebate targets, and streamline forecasting.
The bottom line: Smartwyre’s technology empowers agribusinesses to increase their profits, accountability, flexibility, and efficiency.
The ag input industry of the future needs technology to connect companies, inputs, and data, and to enable smart decision-making. Smartwyre has built the tools for that transition—so get in touch with us today to join the network.
