In light of Brexit – including competition from imports as we strive to sign new trade deals, and a likely reduction in support from a pressured treasury – food producers and their supply chains must innovate to thrive.
Data is going to impact agriculture more than anything else in the 21st Century, said Graeme McCracken, Managing Director of Proagrica, during a recent interview. Farmers will use their data to apply the right products, at the right rates, and at the right time; distributors will use data to properly buy inputs and to position them properly; manufacturers will use data to improve the way they manufacturer and recommend the use of their products. Every business in the agriculture supply chain stands to benefit from a network of advanced connectivity solutions.
“Today, as an industry, we are collecting huge quantities of data, but I would say 90% of it is wasted,” said Mr McCracken. “By that I mean that 90% of the collected data is not used to impact the decision making on the farm, or higher up in the supply chain. Everyone has grand ambitions in this area, but due to the lack of trust between participants, and the lack of standards around data management, progress has been slower than the opportunity would dictate.”
Proagrica’s global agriculture integration and data analytics network, which has implemented data solutions across the globe, works with a large base of collaborative farmers and their supply chains to increase the available data’s quality and consistency. The insight produced from the accumulated data provides actionable value for farmers and their respective supply chains, sharing the benefits across the supply chain.
“Trust is a big issue for the industry when it comes to data – particularly given recent events in the news outside of agriculture,” continued Mr McCracken. “We believe that farmers, agronomists, and everyone else in the supply chain should own and control the data they collect, but to really gain value from their data they will need to leverage each other’s strengths on how to interpret the data, for example, to make cropping plans and to execute those plans.”
Proagrica believes data should be a tool for a business’s own development, adding value to their own processes and hard work. Connectivity and collaboration across the industry increases the data’s insight value and helps to create robust supply chains, which is crucial as consolidation increases. There is much work to do in encouraging supply chains to work more closely together, but the tools are here. The opportunity to transform the efficiency and profitability of the sector is within the grasp of all business owners.
“We are independent from the supply chain, and therefore have no interest in what products a farmer buys. We are integration specialists that can connect systems, experts in delivering business intelligence and it’s my belief that all of these attributes are needed to help farmers and the supply chain work together for the common goal of advancing the agricultural industry”.
As an example of how data could be used for the benefit of all in a supply chain, specialists and charities have published wide-ranging research on best-practice for the food and grocery industry, demonstrating the waste created by inefficient supply chain management, and the resulting financial impact:
- 2 in 3 businesses are increasing investment in supply chain technology ¹
- Customers are 170% more likely to cite higher sales among their top benefits from using supply chain technology ²
- In the UK retailer standards (e.g. size, shape and blemish criteria of fruit and vegetables) can reject up to 40% of edible produce (avoidable waste), which may never reach market ³
- In the UK, over 2 million tonnes of fresh produce are lost or wasted each year in the supply chain alone. It is estimated that, through action to reduce or prevent this waste, the UK fresh produce industry could make savings of between £400 million and £500 million a year.⁴
A key issue outlined by Mr McCracken is the need to better meet contract specification from buyers. Elements of the Horticulture sector, and outside agriculture, the automotive industries, were given as examples of turbulent trades that have adapted and thrived after implementing instant electronic communications, priming them to take advantage of the data revolution.
Mr McCracken emphasized the potential for data integration to make the agricultural industry more profitable and productive, at every level. “Farmers, manufacturers, distributors and processors should be operating hand in hand to deliver the most efficient and profitable supply chains,” said Mr McCracken. “Data will make specifications more specific and empower farmers to meet them by providing insight that aids in measuring and managing the process. For example, consistently producing into tighter specifications will increase margin across the whole supply chain. Farmers will earn more because a higher percentage of output is meeting the correct spec, and processors will gain because the spec is tighter, so they are able to deliver more end-product.”
Mr McCracken closed with a call for involvement from everyone across the entire sector: “Potatoes, oats, dairy products, biofuel, meat, grain – the list of commercial applications is endless. An adaption of data driven supply chains will make the UK more competitive – vital given the uncertainty surrounding our post Brexit environment. The Brexit vote and the re-evaluation of the support system can prove a stimulus for adopting cutting-edge technology and supporting investment in a network of connectivity that will encourage innovation and attract new talent, creating a truly active and dynamic sector.”