3 Tips For Supply Chain Optimization in Agriculture

Organizations in just about all industries are starting to identify new ways to create value across their supply chains by maximizing their efficiencies as well as overall productivity.

Often, one of the most effective ways to achieve this is by using innovative technologies that address common issues within the supply chain such as bottlenecks and visibility that can help in further optimizing the journey of a product at each stage of the value addition process.

Keep reading for additional information about the inefficiencies in the agricultural supply chain along with ways for suppliers to not only identify but also overcome such obstacles with some assistance from technological developments.

Tip 1: Improving Visibility Across the Supply Chain

On a global scale, the demand by consumers for sustainability as well as greater transparency within the supply chain is reshaping the agricultural market in drastic ways. In a study on consumer behavior, IBM found that up to 71 percent of consumers are ready to pay a premium for “traceability.”

The interest by end-consumers in nutritional value content and more sustainable growing practices will lead to a steady increase in the overall cost of production. Increased visibility and agricultural logistics transparency will not only offset this cost for suppliers, but will also help in better aligning the quality of products with this demand.

Visibility is not just a growing concern for consumers. In 2018, the Business Continuity Institute released a report on global supply chain resilience that revealed that 69 percent of organizations agree that they lack full visibility into supply chains.

A traditional method to address visibility is by utilizing journey mapping to outline each step within the supply chain clearly. The map helps managers in identifying any potential gaps based not only on historical information but also opportunities for improvement.

In 2020, more organizations started employing technology, such as the Internet of Things, which the Journal of Food Engineering noted will give managers the ability to monitor inventory’s entire life cycle in real time. This will give managers access to new, meaningful insights, which include microbiological information, storage temperatures, and other parameters of food and nutrition quality.

If you first identify the specific challenges that are costing your organization the most resources and time, you can determine how best to improve your supply chain’s visibility.

Tip 2: Agriculture Vs. The Cloud

Using cloud-based technology to digitize the supply chain can help introduce automation to time-consuming activities within the daily operations, which include manufacturing, planning, as well as distribution.

Through the introduction of automation to such activities and combining the power of technology with industry expertise, companies can potentially reduce distribution, warehousing, and manufacturing costs by 10 to 20 percent and working capital by 15 to 30 percent.

Within the agricultural industry, in particular, this becomes especially critical because cloud-based automation will allow for a faster response to the changes in global demand, supply prices, as well as international trade policies.

Tip 3: Bottlenecks Should Be Identified and Addressed Before They Happen

One of the commonest obstacles to overcome within any supply chain is bottlenecks. It is one activity in the supply chain that reduces the entire process’s capacity that can lead to overstock and reduced production.

While this can be typically pinpointed to one constant activity within your operation, this effect can also be brought about by irregular market disruptions, such as unforeseen demand fluctuations for agricultural products in case of scenarios like the global pandemic.

Advances in machine learning and analytics mean that algorithms are not only able to produce more accurate forecasting models compared to their traditional counterparts, but they can start simulating environments with more complex data sets.

By making use of historical data from more standard years in the agriculture industry, along with outliers such as 2020, managers can utilize predictive analysis to identify the potential for shifts in the market and resulting bottlenecks before they happen and plan their yields accordingly.

Looking Towards the Future of Agriculture

The increased global demand for agricultural products has resulted in the need for improved productivity throughout the supply chain and suppliers need to start identifying the inefficiencies within their own supply chains, such as bottlenecks and visibility, and use the best method for addressing it.

Technology within the agricultural supply chain is evolving rapidly and cloud-based systems can help in optimizing global trade and system processes by addressing some of the most common obstacles faced by suppliers.

From simplifying the storage and retrieval of key historical documents and certificates as well as compliance records to facilitating the exchange of data between partners seamlessly throughout the supply chain, the cloud presents a wide range of solutions for even the most complex processes in the industry.