6 Key Benefits of Effective Supply Chain Management in Agriculture

No matter in which corner of the world you live and what kind of lifestyle you follow, one of the prime needs for life is food. We are highly dependent on the agriculture practices and distribution of finished products.

A few years ago, it was quite challenging for farmers to maintain access to the markets to get adequate prices for their produce. But thanks to the latest advancements; the process has been much easier in today’s information and technology-driven world. The rise of supply chain industry has presented a new scope for the growth of the agriculture sector. At the same time, it has opened reliable ways to deliver products to the end-users.

Gone are the days when farmers could sell their crops in the local markets only. The emerging connections of supply chain industries enabled agriculture sector to grow on a global level. It is now easier to transport products via road, marine and airways. However, the key to success to coordinate activities in the agriculture sector is effective supply chain management.

How does supply chain management work?

In general, supply chain management is divided into three essential categories: products, finances, and information; all businesses, including agriculture sector work as per these three categories.

The product flow includes adequate storage, safe transportation, and timely delivery of the product. It is important to ensure quality assurance for each product at the end location. On the other side, the information flow includes the process of sending and receiving purchase and sale orders. In order to ensure smooth processing of the entire workflow, it is important to maintain higher accuracy of information. Ultimately, the flow of finances deals with inventory management, payments, credit terms, billing, and other workflow-related finances.

Individual suppliers, marketers, and producers all play an important role in coordinating supply chain activities. The latest tools can be incorporated to ensure significant improvement in the entire process.

Six benefits of effective supply chain management in agriculture:

With the globalization of the market, it has now become easier to transport agriculture goods to achieve the best results. The latest advancements and effective supply chain management promise ultimate benefits to the producers, industries, and the end-users as well. Here we have listed a few amazing benefits of effective supply chain management in agriculture to boost your knowledge base:

• Food traceability:

The current trends reveal that consumers are now more interested to know the contents and origins of their food. With the rising demands for locally farmed produce, sustainably raised meats and organic products, it has now become more important to trace the sources of every item. Gone are the days when producers could easily sell some mislabelled products because retailers had no way to verify the exact origin.

Thanks to the latest technologies that make it possible to trace the supply chain at every level. At one side where sellers can track their inventory and goods on the way, the end buyers can also stay informed about where their ordered items have reached.

• Optimized channels:

Effective supply chain management promise transparency in the system so that consumers can make informed decisions. The supply chain in the agriculture sector is very complex; the shipments are handled by multiple hands before making a delivery at destination. Effective management makes it easier for farmers to know at what price the ultimate product is being sold. Adequate flow of services and information help producers to set profitable prices for their goods, and they can also optimize quantities as per the specific product demands in the market. Effective supply chain management enhances transparency between farmers, agents, middleman and end buyers while promising better balance in the market.

• Better pricing and payment:

Well managed supply chain industry leads to faster payment options and low-cost delivery services. Earlier farmers needed to wait for several weeks to get paid for their sold produce. Moreover, the traditional options like wire transfers were costly affair. The advanced technologies have made this task pretty simple with reduced inefficiencies. It is not possible to transfer money instantly, even by using mobile apps. These peer to peer fund transfers for the agriculture sector are secure, cheap, and instant solution for all sale-purchase activities. Effective supply chain management has opened new opportunities for Agri-commerce participants, and they can now make more trustworthy deals in the competitive market.

• Enhanced connectivity:

Effective supply chain management helps to set up healthy connections between producers, brands, retailers, and consumers. It leads to a fully transparent system where information access becomes much easier. Companies these days are investing in the latest technologies to enable visibility and to enhance operating efficiency. The automated decision making ensures seamless integration between different channels and supply chain partners. Enhanced connectivity further leads to better demand planning, warehouse management, supplier integration and reduced delivery time. With these practices, the link between demand and supply can be established more effectively, and it promises enhanced quality of services.

• Lower time delays:

Another amazing benefit of effective supply chain management is minimized delay in tasks. There is no doubt to say that unwanted delays in transportation and delivery process can lead to the poor relationship between stakeholders and cause huge loss to the business. It further leads to many common issues such as late shipments, unwanted hold-up time and distribution-related errors. Effective management of the supply chain ensures proper control over all channels so that agriculture distributors can maintain an adequate balance between supply and demand. The advanced software tools make it easier to coordinate right from start to finish. Furthermore, on-time deliveries ensure enhanced customer satisfaction.

• Improved risk mitigation:

The proactive management help industries to set up back-up plans for some unexpected circumstances. Hence, it becomes easier to react to disruptions and concerns related to quality control as well. Proper supply chain management help companies in achieving leaner and seamless operations. It further promotes smart decision making, adequate prediction of market behaviour, instant response to risk-prone situations and better handling of rising demands. Effective supply chain management helps to eliminate wasteful spending that further leads to improved cash flow and reduced overhead cost.

Key Takeaway:

The amazing advancements in the supply chain sector have opened new growth opportunities for members involved in the agriculture sector. It is now possible to lead profitable collaborations at different levels with leveraging automated solutions for positive customer experience. It is better to utilize the latest supply chain management software tools to boost the overall productivity of your agriculture sector. The advanced systems promise better control over activities at different levels. Eventually, the suppliers can respond better to changing market conditions and rising demands. In short, effective supply chain management promise uninterrupted growth in the agriculture sector.