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 100CHS To Acquire Illinois River Energy Ethanol Plant
May 1, 2014
CHS has signed an agreement with Sinav Ltd. to acquire 100% of the company's stock, which includes Illinois River Energy, a 133-million-gallon-per-year ethanol plant at Rochelle, IL. Read More
Top 100 Articles
CropLife 100The Andersons Starts Venture Capital Subsidiary
January 26, 2015
The Andersons has established Maumee Ventures, a venture capital subsidiary designed to foster promising innovations that strategically align with the company’s core businesses. Read More
CropLife 100CHS Partners With Northern Partners Coop On Fertilizer Warehouse
January 21, 2015
In addition, the two companies will form a joint venture to build and operate a grain barge loading facility that will handle corn, soybeans and wheat for export through the CHS terminal at Myrtle Grove, LA. Read More
CropLife 100Wilbur-Ellis Move To Colorado Complete
January 20, 2015
Wilbur-Ellis Co. announces the opening of its new Agribusiness Division location in the Denver, CO, Metro Area. The new facility will host key personnel as the company shifts the base of its Agribusiness operations from California to Colorado. Read More
CropLife 100United Suppliers, McGregor Co., Five Others To Form Aligned Ag Distributors
January 20, 2015
These companies will continue to operate as independently owned and operated businesses, however, their crop protection divisions will now be formally aligned under the umbrella of Aligned Ag Distributors. Read More
CropLife 100Bozeman Named SEEDWAY Chief Operating Officer
January 16, 2015
He succeeds Donald Wertman, who will retire at the end of August 2015 after 40 years with the GROWMARK subsidiary. Read More
CropLife 100Wilbur-Ellis’ Craig Bair Honored For Safety Contributions To Ag Aviation
January 14, 2015
The William O. Marsh Safety Award recognizes significant achievements in safety, safety education or an outstanding operational safety program. Read More
Latest News
Seed/BiotechDow Details Enlist Trait Stacking Standards
January 30, 2015
Dow says it will allow the Enlist trait to be stacked with advanced glyphosate traits only, and will not allow stacking with the first generation of the Roundup Ready trait. Read More
ManagementCropLife Retail Week: IFCA’s Jean Payne on Illinois wat…
January 30, 2015
Editor Eric Sfiligoj shares insight from the Illinois Fertilizer and Chemical Association conference including a chat with IFCA President Jean Read More
ManagementOABA Conference Set To Highlight Trends, Technology And…
January 29, 2015
The third annual Ohio AgriBusiness Association (OABA) Industry Conference is set to take place February 4-5. Read More
FertilizerThe Fertilizer Institute President Jahn Testifies Befor…
January 28, 2015
The committee hearing, "Freight Rail Transportation: Enhancing Safety, Efficiency, and Commerce," looked at challenges facing our nation's freight rail network created by higher demand, rules and regulations and infrastructure needs. Read More
HerbicidesPurdue University Acquires Technology For Herbicide Mol…
January 28, 2015
Protea's LAESI DP-1000 Instrument System will be used in Purdue's College of Agriculture, the Department of Botany and Plant Pathology, for the molecular imaging of herbicide active ingredients and other related compounds to optimize herbicide applications and improve weed management.  Read More
FertilizerH.J. Baker Hires New Crop Peformance Marketing Manager
January 27, 2015
As Marketing Manager for the Crop Performance division, Usman Khalid will work out of H.J. Baker’s global headquarters in Westport, CT, and will drive new initiatives for the division. Read More
CropLife 100The Andersons Starts Venture Capital Subsidiary
January 26, 2015
The Andersons has established Maumee Ventures, a venture capital subsidiary designed to foster promising innovations that strategically align with the company’s core businesses. Read More
Exclusive state-of-the art Stueve Construction designed “Vista View” Elevated Control Room.
Eric Sfiligoj2015 Agricultural Market Read: Mixed
January 26, 2015
The agricultural market could look radically different this year, profit-wise, depending upon which segment you do business in. Read More
Edward Chell Biosafe
Crop InputsBioSafe Systems Names Ed Chell California Territory Man…
January 26, 2015
BioSafe Systems has announced the recent addition of Ed Chell as California Territory Manager for the agrichemical division, supporting the crop protection, water treatment and food safety business segments. Read More
InsecticidesBayer CropScience Introduces Sivanto Insecticide
January 26, 2015
Sivanto precisely targets key damaging pests at multiple insect life stages to prevent damage to plants and help minimize the spread of diseases from insect carriers. Read More
ManagementRetail Collaboration, Communicating Agriculture’s Good …
January 23, 2015
Editors Paul Schrimpf and Eric Sfiligoj discuss the recent creation of Aligned Ag Distributors, and the US Farmers and Ranchers Read More
FertilizerOSU Expert: Toledo Water Crisis A Turning Point For Ohi…
January 23, 2015
The August 2014 water crisis in Toledo, OH, impacted Ohioans’ views of Lake Erie algae problems by increasing the attribution of blame of algae growth on agriculture. Read More
FertilizerH.J. Baker Launching TIGER XP
January 22, 2015
Tiger-Sul introduces this next generation sulphur-bentonite product with a proprietary activator – ensuring farmers have a well-balanced nutrient replacement program. Read More
Crop InputsH.J. Baker Expands China Sales Force
January 21, 2015
Global Agricultural firm H.J. Baker announced that sales veteran Shi Dongshen has joined their Shanghai office in China. This newest hire follows the recent opening of their Lianyungang Sulphur Bentonite Plant. Read More
CropLife 100CHS Partners With Northern Partners Coop On Fertilizer …
January 21, 2015
In addition, the two companies will form a joint venture to build and operate a grain barge loading facility that will handle corn, soybeans and wheat for export through the CHS terminal at Myrtle Grove, LA. Read More
Matt Hopkins5 Bold Predictions For Ag Retail In 2015
January 21, 2015
This past year was filled with ups and downs for the nation’s top ag retailers, but what will 2015 have in store? Read More
SoftwareDeere Launches App Center
January 20, 2015
The John Deere App Center provides users the ability to search and find apps most useful to their business or operations. Read More
Crop InputsNew Syngenta Herbicide Approved In Soybeans, Sunflowers
January 20, 2015
Syngenta will sell BroadAxe XC herbicide in 2015 for use on soybeans, sunflowers and dry peas Read More