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

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
Equipment2014 Product Of The Year Voting
September 19, 2014
The deadline to vote for the 2014 CropLife IRON Product of the Year is October 31. Please cast your vote today to help us determine the winner. Read More
FertilizerFall Fertility 2014: Forecasting Fertilizer Use
September 7, 2014
Great crops this year have tapped the soil, and fall work is definitely called for, but how challenging will that get? Read More
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

Latest News

InsecticidesValent U.S.A., MGK Form Marketing Agreement
October 24, 2014
Valent has formed an agreement with Minneapolis-based MGK to manage the marketing and sales of MGK’s crop protection line of insect control products within the U.S. beginning April 1, 2015. Read More
StewardshipFlorida’s 4R Advocate Keeps Improving
October 24, 2014
Florida farmer Alan Jones uses the 4R principles of nutrient stewardship as the core of his fertility program, which allows him to maximize production and keep costs in check. Read More
Seed/BiotechMonsanto Named One Of The World’s Best Multinational …
October 23, 2014
Monsanto ranked No. 8 in the world’s largest annual study of workplace excellence that identifies the top 25 best multinational companies in terms of workplace culture. Read More
Crop InputsArysta Hires Former Agri-Chem, CPS Employee For Delta S…
October 23, 2014
New Territory Sales Manager Mark Peel’s primary role will focus on working with growers regarding fungicides in Louisiana, Mississippi, Arkansas and Tennessee. Read More
CropLife 100GROWMARK Announces Appointments In Plant Food Division
October 22, 2014
GROWMARK, Inc. has announced the three key staff changes in its Plant Food Division. Read More
CropLife 100GROWMARK Appoints New VP Of Finance And Risk Management
October 22, 2014
Wade Mittelstadt has been named GROWMARK Vice President, Financial and Risk Mangement, effective December 1, 2014. Read More
FungicidesEPA Approves BASF In-Furrow Corn Fungicide
October 22, 2014
Field trials show Xanthion In-furrow fungicide provides more rapid emergence, extended residual control and improved seedling health than untreated crops. Read More
EquipmentAgraScout App Available At No Cost To Universities
October 21, 2014
AgraScout, a fast and easy to use mobile crop scouting app, is now available at no cost to University students, Read More
LegislationNew Farm Bill Program To Provide Relief To Farmers Affe…
October 21, 2014
The USDA has implemented a new Farm Bill initiative that will provide relief to farmers affected by severe weather, including drought. Read More
ManagementGreenfield Scholars Program Aims To Sustain Agronomy Wo…
October 21, 2014
The program encourages talented students to study agronomy, crop and soil sciences while cultivating networks to develop the necessary workforce to sustain the profession. Read More
Paul SchrimpfPrecision Ag: Taking It To The Hill
October 21, 2014
A new coalition took the good news message of precision agriculture to Washington, DC, last month. Read More
ManagementUSDA Awards $18 Million In Small Business Research Gran…
October 21, 2014
The grants will provide high quality, advanced research and development that will lead to technological innovations and solutions for American agriculture. Read More
FertilizerCF Industries Terminates Merger Discussions With Yara I…
October 21, 2014
CF Industries Holdings and Yara International have terminated their discussions regarding a potential merger of equals transaction. Read More
Seed/BiotechSyngenta Ranked A Top 10 Biotech Employer For Third tim…
October 20, 2014
Syngenta ranked in the top 10 among the world’s top biotech employers, according to an annual survey conducted by Science magazine. Read More
CropLife 100Wheat Growers Break Ground For New Facility At Kennebec
October 20, 2014
Wheat Growers has broke ground for a state-of-the-art shuttle loader grain handling, fertilizer and agronomy facility in Kennebec, SD. Read More
FertilizerVerdesian Life Sciences Signs Agreement With Los Alamos…
October 20, 2014
Verdesian Life Sciences has signed a licensing agreement with Los Alamos National Laboratory to develop and market LANL’s latest nitrogen enhancement technology for plants. Read More
MicronutrientsStoller Group Announces Groundbreaking At New Office Bu…
October 20, 2014
Jerry Stoller, founder and president of Stoller Group, announced the groundbreaking at the site of the company’s future headquarters in Read More
Crop InputsBioSafe Systems Opens New Production Facility In Nevada
October 20, 2014
BioSafe Systems has completed construction of a state-of-art production facility in Sparks, NV, for its line of activated peroxygen products. Read More