Standardizing Agriculture: Easing The 'Pain Points'
AgGateway and its member companies are now working on standards in precision agriculture, seed and ag retail that will build efficiency and create cost savings in the distribution channel.
March 1, 2012
AgGateway, the organization that is facilitating the creation of data standards across all aspects of agriculture from feed and grain to crop nutrition and crop protection, has been making tremendous strides in recent months by focusing on key compatibility “pain points” for ag retailers.
In particular, councils within the group focused on seed sales and distribution and precision agriculture have made progress, and a council comprised of and dedicated specifically to issues within ag retailing have set a solid foundation and a course forward.
The councils are comprised of stakeholder companies in agriculture who have joined AgGateway specifically to engage in the standards creation process. The leadership of AgGateway fills a facilitation role, providing resources that guide the agendas, help set priorities and keep the process moving forward ensuring industrywide consistency. It also helps members to implement the standards.
Over the last 18 months, three councils facilitated by AgGateway — Precision Ag, Ag Retail, and most recently, the Seed Council — are of particular interest to the agricultural retailing community and are rapidly gaining traction.
“Ag retailers are facing significant economic, regulatory, and operational challenges resulting from the many changes that are taking place in agriculture,” says Rod Conner, president and CEO of AgGateway. “They aren’t looking to AgGateway to solve their problems, but to provide them and their software developers with proven industry tools that will help them deal with ever-increasing complexity and demands for information.”
The latest project of the Seed Council, Seed Connectivity II, had its kickoff meeting in January. It follows up on the first seed connectivity project, which established the standards, guidelines and processes for the ship notification, invoice, product price sheets and grower sales reporting. The first phase of Seed Connectivity II will focus on extending the connectivity to a broader industry base, creating a repeatable process of what was developed from the first seed connectivity project, says Conner.
Once fully implemented, this project will help to eliminate the routine manual process of the administrative paperwork and phone calls, so that companies can reallocate those resources to focus on customer service. This should result in lower operating costs and more revenue from the strengthened relationships with trading partners.
“Because of the high volume of transactions in the seed industry, most companies are struggling with ways to manage inventory, to mitigate lost or mistaken shipment and expedite the delivery, pickup, and return of seed during the busy time of the year,” says Conner. “Moving to electronic processing of normal business processes will lessen or alleviate many of these struggles.”
A number of non-integrated retailers have gotten involved on the ground floor of Seed Connectivity II because they see tremendous potential for gains in efficiency. Brian Bailey, chief financial officer for Heartland Co-op, West Des Moines, IA, got involved in the project because of the significant inefficiencies he experiences in the seed ordering process.
“Right now for example, we order seed from Monsanto using an item number and seed variety identification,” says Bailey. “When we receive a bill from Winfield Solutions, it might come back with a different product description, a different product number, and sometimes even a different unit of measurement. We really need a system that is common throughout the sales process.”
Ultimately, the process will be made fully electronic from order to fulfillment to virtually eliminate the potential for human error.
Members of Seed Connectivity II project have committed to weekly conference calls to keep the process moving forward. Many of the key players are at the table, says Bailey, and he hopes that the progress that Seed Connectivity II makes will lure in additional companies as the project gains traction. He also feels that the success of this project could help clear the way for supply chain standardization work in other areas, such as crop nutrition.
Coming Into The Fold
The benefits of relieving the operational pain points are not limited to the large and deeply resourced regional and national retail organizations, but participation in industry groups like AgGateway have historically been weighted toward fully integrated retailers simply because of the issues of time and resourcing. The recently formed Ag Retail council of AgGateway is working to alleviate the discrepancy and get non-integrated retailers — smaller to medium sized, localized or closely regionalized businesses — more fully engaged in the process.
At its meeting on January 31, the Ag Retail Council identified three key goals for itself in 2012. It committed to participating in the Seed Connectivity II project, identifying other existing projects that its members would support and participate in, and identifying three leading “pain points” retailers experience related to doing business with suppliers, distributors and growers. There were 21 individuals represented, including nine people representing retailers.
Two days later, a working group comprised of non-integrated retailers held a meeting that served to firm up their commitment to the process. Each retail entity committed to providing one or two individuals to get fully engaged in the Seed Connectivity II project. This led naturally to a discussion of the pain points in the seed ordering and sales process.
“We identified not only external challenges but also internal challenges,” says Brian Gates, IS manager at Key Cooperative and chair of the Ag Retail Council. “Some of these challenges can be solved with industry changes and others are internal process challenges that we need to solve ourselves,” he says.
The next step is consolidating the Council’s message to take to the other councils. With the non-integrated retailer members actively participating in the SCII project, it adds to the credibility of the Council’s message, says Gates. “We want to be active in being part of the solution,” he says. “It isn’t just up to our trading partners to solve our pain points but rather our willingness and ability to change together.”
Finally, within the Precision Ag Council, work is also continuing on precision agriculture standards with the development of a Precision Ag glossary of terms.
“Standardization in precision ag is long overdue,” says Conner. “We all expected that by 2012 there would be a high level of adoption of precision ag technologies, so it’s clear that lack of standardization across the industry has been one of the inhibitors of adoption. It’s exciting to see the major players in this space come together to work out common standards. The results will have a major positive impact on growers that use the technology.”
Industry support for this segment has been outstanding, says Conner, including the active involvement of most of the major precision ag companies in the council.
Schrimpf is the Group Editor for the CropLife Media Group at Meister Media Worldwide, with full editorial responsibility for CropLife, CropLife IRON, Cotton Grower and PrecisionAg Special Reports.