Dealers may be surprised at how far e-business has advanced in the last 18 months at manufacturer/distributor levels — and how those gains can be passed on. “This level of e-commerce is not a new hatchling, but what’s new is the completion and implementation,” says E-Markets President Scott Cavey.
Why the gains? One reason is a group of companies from various ag industry sectors including crop protection chemicals, fertilizer, seed, grain, equipment, and feed have joined together to form a new organization called AgGateway to develop and implement e-commerce databases and standards. A primary goal: totally fluid, accurate, and faster transactions from one company’s business system to another’s. The group has developed a “council” for each industry segment so companies can work out their own e-business needs. Each council elects two members to serve on the AgGateway Board.
Crop protection’s own organization for driving standards-setting and e-connectivity, RAPID, has been around for about 14 years, says Ron Farrell, president and executive director. Its Board is encouraging members to join forces under the AgGateway umbrella and become part of the appropriate council.
RAPID has already developed the database called AGIIS (Ag Industry Information System), which contains unique trading partner and product identifiers, one critical foundation for e-commerce. The other foundation is standards and guidelines; many of these are already in place.
Farrell explains that actual implementation of the e-business protocols started in earnest in late 2004 “with manufacturers at the top of the supply chain, then moved down through distribution, then into what we call the fully integrated retailers, which would be companies such as Agrium, Helena, GROWMARK, UAP, Agriliance, Wilbur-Ellis, etc.” In 2008, AgGateway anticipates moving further along the supply chain to the independent retail segment or independently managed cooperative, he says, with the seed connectivity projects and crop nutrient connectivity project.
Indeed, the growing complexity of the seed industry cries out for an electronic solution. “Retailers now sell more than 50% of all seed to farmers — with some seed companies producing some 60,000 different SKUs to include all types of hybrids, traits, treatments, and seed sizes,” points out E-Markets’ Cavey. It’s up to business systems vendors to make access to databases more easily available to retailers, say Cavey and Dave Craft, vice president of marketing at SSI. The mechanisms for communicating with AGIIS have to be built into software platforms, and retailers have to push vendors to create them.
“We have recently added the ability to access the AGIIS directories from within Agvance,” reports Craft. “One of the benefits this provides our customers is the ability to link their products and trading partners to the industry identifiers contained within the directories in a quicker, more efficient manner.”
Farrell says, “One of the biggest benefits to retailers as we move forward are the additional data elements being incorporated into the AGIIS database — the most recent relates to grower license information for seed sales.”
Last November, RAPID completed its Accelerated Electronic Connectivity (AEC) project. “We have 10 distributors and 7 basic manufacturers that are electronically connected, computer to computer, for the whole order-to-invoice process. It’s resulting in improved efficiencies and is taking costs out.” An example: One large distributor was taking 12 to 14 minutes to place a single order.That time has been reduced to approximately 90 seconds.
Farrell explains the long-term vision is to be able to say to retailers that doing e-commerce utilizing AgGateway Standards and the AGIIS database will be accurate and significantly reduce the amount of information that needs to be re-keyed or re-entered into their systems.
Dealers should be able to link to their seed supplier, link to their grower’s information contained in AGIIS, and begin flowing necessary information through computer to computer connections, thus reducing the amount of manual intervention required.
“We don’t want to oversell it by giving the impression that a business can pick up the phone and call AgGateway and in 15 minutes be plugged in and ready to go. It’s not as simple as that, but if a business is dedicated to gaining these efficiencies and is willing to put time and effort into the process, the net result is quite beneficial,” says Farrell.
Hintzsche Fertilizer, Maple Park, IL, has put in some time as well as drawn on the expertise of SSI. The dealership uses SSI’s program Agvance and tried Web services for the first time last year in its seed ordering and sales from Monsanto. Donna Harvey, staff accountant, was impressed with both the accuracy and time savings. “In the past, reporting back our seed sales to Monsanto was so time consuming, we’d have two or three people manually entering data,” she says.
Buying Aids For Grower-Customers
Tech advances are also being made with grower-customers. Farm Plan – John Deere Credit’s multi-use accounts for grower short-term financing — has been around for 30 years, but the product went through major changes 18 months ago to add more convenience and value for its 1 million customers, says Jayma Sandquist, director of Farm Plan sales and marketing.
About two years ago, SSI, AGRIS, and several other software suppliers that take care of functions such as business system, general ledger, and accounts/receivables began to offer an interface with Farm Plan that captures invoice detail and displays it on the grower’s statement.
Southern States Cooperative began offering Farm Plan four years ago, and management likes the results. Instead of receiving a statement from Southern States, customers will get it directly from Farm Plan, and payments are made to Farm Plan, explains Anne Clingenpeel, director of credit with the co-op. She says the program frees her company to concentrate on its core: providing products and services for farmers and livestock producers.
Many of Farm Plan’s services are available right on the program’s Web site, in the “merchant tool kit,” explains Sandquist. One newer, helpful service is Farm Plan’s ability to provide high quality, personalized promotional mailings for retailers to send to growers and other customers. “At less than 50 cents per piece mailed, it’s very cost effective,” says Sandquist.