Effingham-Clay: Rethinking Everything

Terry Thomas, Effingham-Clay FS

If you’ve given consideration to the idea that the traditional approach to retail management is something that is broken and needs to be fixed, you’re certainly not alone. But if you are among those who have actually done something dramatic about it, you’re in an elite class of managers.

Terry Thomas, area business manager at Effingham-Clay FS in Effingham, IL, along with his management staff, recognized that the existing ag retail business model was not sustainable in the long term. Everywhere he looked, he saw efficiency drain, from fertilizer distribution to personnel management to equipment logistics, and nothing short of an internal business revolution was going to make things better. Management’s lofty goal was to tear down every aspect of the business and rebuild it for the way they plan to do business over the next two to three decades.

Looking For Efficiency

“There were absolutely no sacred cows throughout the process,” says Thomas. They dug into everything and analyzed it, he says, setting new baseline expectations for efficiency across the board. From equipment to people to a nifty new software program, the cooperative managers now feel that the business is set for the long haul and has established a significant competitive advantage in their service area.

Effingham-Clay FS is a seven-county cooperative in south-central Illinois, serving a traditional row crop customer base. Not surprisingly, it was an early adopter of precision agriculture practices, and has much internal experience in working with mapping and georeferenced fields.

Over the past year, Effingham-Clay followed the evolutionary path of centralizing fertilizer storage — in its case, the plan was to make the Sullivan location serve as the main fertilizer hub for the northern three counties of its trade area. “It was becoming increasingly challenging to get the fertilizer materials from suppliers when we needed it, so establishing more storage became a priority,” says Thomas.

This new priority led to a greater discussion about cooperative-wide efficiency, and launched Effingham-Clay into its drive to improve on this front. In the case of fertilizer, there were really divergent priorities — centralizing fertilizer would increase capacity, but at the same time put fertilizer at a greater distance from its most far-flung customers.

Compensating for the distance would require faster mixing and loading at the plant, and improved logistical control from the plant to the field. At the plant, Effingham-Clay worked on increasing blending capacity substantially.

“We replaced three 10-ton blenders with a volumetric blender that can blend 120 tons per hour,” says Thomas. “We wanted to be able to fill a tender in five minutes or less.” Combined with two, 30-ton overhead bins above the loading platform, the Sullivan-based outlet can load 24 tons on a tender in less than three minutes.

Enter Field Equipment

Another aspect of the company’s efficiency analysis related to fertilizer was field equipment. The cooperative studied and earmarked underperforming field equipment to be retired to improve the movement and application of product, “in some cases trading three machines for one,” says Thomas.

The third aspect of fertilizer efficiency, logistics management, is the proverbial “elephant in the room” for retailers. Most fertilizer managers are good men in a storm, ably adjusting to the slings and arrows of the busy season. But few have been able to reinvent the way they handle fertilizer to address the ever-increasing seasonal mayhem.

This season, Thomas and his crew at Effingham-Clay decided to try out a new logistics offering from Software Solutions Integrated (SSI). The cooperative was already using SSI’s Agvance software to manage the agronomy side of their business, so adding an integrated dispatching tool was an easy decision and a key component to its plan to centralize fertilizer blending.

In the field, Agvance Dispatch provides a system that employs a Web-enabled computer program and GPS-equipped cell phones to provide real-time tracking of tender and equipment operators. And because it ties into the business management software, the system can handle the customer transaction from order to application to billing without a hitch.

Effingham-Clay management has declared the first season a success, but it wasn’t as simple as plopping a new software program into place. Dispatch had to be implemented in the context of the company’s overall efficiency analysis, which included some significant changes in the sales and logistics staffing.

The sales staff experienced the most significant changes in the cooperative, as management chose to take a completely new tack moving forward. “We eliminated sales territories and opted instead to work toward matching the personalities of our sales people with the personalities of our growers,” says Thomas. “We did personality profiles on our sales staff. We also eliminated commissions, and our sales goal is structured so that everyone on the team must perform well to succeed.”

Then, implementing the dispatch program itself presented challenges to the sales staff. Salespeople who were used to being able to personally influence the dispatcher now had to trust an automated program to keep the work in order.

“Transparency of information was an important idea in developing and adopting the logistics program,” says Thomas. “The field sales people need to understand how the program works, and how to access the information, and be able to trust that orders will be filled. They also need to realize that the program allows them to better communicate the status of orders with customers.”

When the sales staff sells a plan for a grower and enters the order into Agvance, the fields are set and ready to go. Once it is time for an order to be filled, the salesperson changes the order status to “ready” so that it appears in the dispatch grid. Its location can then be viewed on the map, giving the dispatcher a view of everything that’s needed to set up the day’s work without reentering data.

Inside The System

With the new dispatch system, each applicator carries an Internet-ready phone with a data plan. The dispatcher at the home base is able to communicate wirelessly from computer to cell phone with a complete schedule, up to the minute schedule changes, and turn-by-turn navigation from site to site. The system monitors the driver’s location and activity, allowing the dispatcher to track tenders and applicators and make real-time decisions about how and where to move materials across the service area. The software also collects route data and records it for later analysis, allowing the dispatcher to unearth inefficiencies and improve logistics management.

The program is designed to work on a large flat panel screen, which displays the location of every cellular device, and therefore every machine, in the field. Numerous details are available about what the operator is doing, including direction headed, speed, and work completed so far. The dispatcher can communicate changes in orders or order priority by sending updates through the dispatch module, directly to the operator.

Making individual equipment operators more efficient is key, but being able to see the bigger picture is also a big benefit. The dispatch program is being used to coordinate logistics for the northern three Effingham-Clay counties, so it is possible to make better decisions for the cooperative organization as a whole that a local outlet couldn’t make by itself.

One example Thomas cited this past spring was during the region’s bout with rain. As one particular area near one outlet began to dry out enough to get into the field, the central dispatcher was able to coordinate all the available application equipment across all the outlets to descend upon the area and fill orders before the next weather event.

The dispatch module has been a great tool for the cooperative, but in the grand scheme of things is merely frosting on a pretty substantial business reengineering cake. Thomas has no regrets.

“We needed to change to address the needs of agribusiness today — there was a much larger risk by not doing anything,” says Thomas. “With the price instability of fertilizer and inputs and the need to work better with our customers, we need to be as efficient as possible.”

Leave a Reply

CropLife 100 Stories

CropLife 100CHS To Build $3 Billion Fertilizer Plant In North Dakota
September 5, 2014
The fertilizer plant in Spiritwood will be the single largest investment in CHS history, as well as the single largest private investment project ever undertaken in North Dakota. Read More
CropLife 100BRANDT Acquires Lemon Ag Services
August 4, 2014
The acquisition of Lemon Ag fits BRANDT’s aggressive corporate strategy of providing superior agronomic advice and services for customers in central Illinois. Read More
CropLife 100Wilbur-Ellis To Relocate Agribusiness Division To Denver
July 16, 2014
The move Eastward will allow Wilbur-Ellis’ Agribusiness Division to be more accessible to relevant geographies and is expected to enhance communication and collaboration among the division’s nearly 3,000 employees. Read More
CropLife 100Map: Pinnacle Agriculture Holdings Acquisitions In 2014
May 29, 2014
Pinnacle Agriculture Holdings continues to expand its agricultural retail distribution business through these key acquisitions in 2014. Read More

Trending Articles

HerbicidesAdjusting To The New Reality Of Weed Control
November 4, 2014
Even with new cropping systems being readied for market introductions, weed control will remain a challenge for many. Read More
StewardshipResponsibleAg Begins Auditor Training
October 31, 2014
ResponsibleAg auditor training is now underway at the Ford B. West Center for Responsible Agriculture in Owensboro, KY. Read More
InsecticidesNew Research Study Shows The Value Of Neonics
October 29, 2014
The study evaluated seed treatment, soil and foliar uses of neonicotinoid insecticides in the U.S. and Canada. Read More
Crop InputsPlatform Specialty Products To Acquire Arysta LifeScience
October 20, 2014
Once the acquisition is complete, Platform Specialty Products will combine Arysta LifeScience with previously acquired companies Agriphar and Chemtura Crop Solutions. Read More
Seed/BiotechMonsanto Offers New Support For Ferguson, Area Communities
October 8, 2014
Monsanto Co. has committed $1 million in new support for several collaborative efforts in Ferguson, MO, and surrounding communities in North St. Louis County. Read More
Seed/BiotechUnapproved Genetically Modified Wheat Found In Montana
October 3, 2014
USDA reports that one year after discovery of Monsanto's unapproved wheat in a single Oregon field disrupted U.S. wheat export sales, the GMO wheat has again been found in Montana. Read More

Latest News

soybean field
Crop InputsABM Patents Microbial R&D Technique
November 25, 2014
Focused Microbial Diversity (FMD) is a newly patented technique employed by Advanced Biological Marketing (ABM) to research and develop microbials that will be used in ABM products Read More
Crop InputsStorage Options Help Grain Growers Go To Market
November 24, 2014
While on-farm storage in a traditional upright storage bin is one possibility for storing grain, it may not be for everyone. Read More
Eric SfiligojGiving Thanks For Another Great Year
November 24, 2014
As Thanksgiving Day 2014 arrives, agriculture has plenty to be thankful for. Read More
Crop InputsSyngenta Cost-Cutting Program To Affect 1,800 Jobs
November 24, 2014
The company's Accelerating Operational Leverage program will result in job reductions and relocations totaling around 1,800 across the company, the majority of which will occur in 2015. Read More
EquipmentAGCO Announces Operator Of The Year Finalists
November 20, 2014
Four custom applicators have been selected by AGCO Application Equipment as finalists for 2014 Operator of the Year, an honor that recognizes them as being among the top professionals in their industry throughout North America. Read More
MicronutrientsH.J. Baker Expands Tiger-Sul Business
November 20, 2014
H.J. Baker has created and filled two strategic positions in business development and sales within its Crop Performance Division. Read More
soybean field
FertilizerGeneral Mills Honors United Suppliers For Nitrogen Opti…
November 19, 2014
United Suppliers winning proposal detailed SUSTAIN, a consulting network that provides customized products and services for farmers using a needs-based system approach. Read More
EmployeesOhio AgriBusiness Association Awards $25,000 In Scholar…
November 19, 2014
Each year, the Ohio AgriBusiness Association Educational Trust scholarship program awards scholarship dollars to students enrolled in an agriculture-related field attending several state colleges. Read More
ManagementServi-Tech Names New CEO
November 17, 2014
Servi-Tech has named Greg Ruehle its new president and CEO. Read More
CropLife 100Pinnacle Ag Acquires Colorado Aerial Application Outlet
November 17, 2014
Ft. Lupton, CO-based Reck Aviation — a full-service chemical application company providing aerial crop applications of fertilizers and crop protection products — will operate as part of Pinnacle's AgOne Application Services brand. Read More
Eric SfiligojMcDonald’s Message: Biotech Crops Scarier Than Cancer
November 17, 2014
Despite their potential health benefits, one of the world’s largest potato users will pass on a new biotech offering. Read More
MicronutrientsWinField Releases 2014 NutriSolutions Results
November 14, 2014
A number of significant regional and national crop deficiency trends emerged from the 2014 WinField NutriSolutions tissue sampling program. Read More
FertilizerH.J. Baker Opens Chinese Production Lines
November 14, 2014
The occasion was the official launch of the Tiger-Sul sulphur Bentonite production line of two much anticipated fertilizer products in China, T90CR sulphur fertilizer and TZinc micronutrient enhanced sulphur fertilizer. Read More
ManagementOhio Certified Crop Adviser Program Accepting Nominatio…
November 14, 2014
The award recognizes an individual who delivers exceptional customer service for farmer clients in nutrient management, soil and water management, integrated pest management and crop production in Ohio. Read More
HerbicidesSyngenta Announces Acuron Trial Plot Results
November 14, 2014
Acuron was tested at 167 trial locations across 35 states. Trials included 95 Syngenta locations, 54 university locations and 18 distributor locations. Read More
Crop InputsVerdesian Expands Sales Force
November 13, 2014
The new sales representatives will work with growers, retail partners and distributors to oversee technical training and product education. Read More
EquipmentAGCO Raises $100K For Wounded Warrior Project
November 13, 2014
AGCO Corp. partnered with local AGCO dealers across the U.S. and Canada to raise nearly $100,000 in support of wounded service veterans. Read More
HerbicidesDow AgroSciences Announces Launch Of Enlist Duo Herbici…
November 12, 2014
It will be launched in conjunction with a stewarded introduction of Enlist corn, and seed production of Enlist soybeans in 2015. Read More