Streamlining direct materials sourcing in agriculture through automation
Direct material procurement of agricultural materials is an inherently complicated process since it involves multiple stakeholders and complex specifications. Factors such as climate change, food security concerns, and geopolitical volatility bring in an additional layer of uncertainty.
Legacy systems used by agribusinesses are often ill-equipped to handle this level of complexity. Siloed systems result in a lack of transparency as information is buried across multiple systems. Supplier collaboration happens primarily through emails, phone calls, and messages, making it extremely tedious. Purchase cycle times tend to be higher due to inefficient collaboration and manual reconciliations. Decision-making is slow and sub-optimal since manual status updates lead to data errors and latency.
Addressing cumbersome processes and sub-optimal decision-making
Take the case of one of our customers, a leading agri-trading business, one of the world’s largest. The company found itself weighed down by disparate processes resulting from legacy technologies, spreadsheets and multiple point solutions acquired over time that don’t talk to each other.
Minimal buying support meant that the company’s buyers spent 15–20% of their time negotiating, setting prices, and answering queries on payments, schedules, invoices, and shipments. There were multiple portals and systems to interact with farmers, acquirers, and demand customers. As operations began to scale, managing with a network of disconnected legacy systems, while collaborating over emails, calls and faxes, was proving increasingly cumbersome. This was problematic given that the success of an Agri-trading company lies in its ability to make the best possible deals when engaging with farmers and suppliers.
Eka’s source-to-pay (S2P) solution replaced the customer’s erstwhile manual supplier collaboration process with pre-built, industry-specific workflows to digitalize the entire process of price discovery, contract creation, document exchange and other critical workflows. This enables seamless collaboration between buyers and partners along with demand customers for easy exchange of information and faster decision making. As a result, the company can effortlessly manage 60,000 tickets, 30,000 contracts, 1,000 growers, 750 customers, and 150 acquirers. It also accrued cost savings by reducing transactional processing costs by up to 60% and reducing spending by 18% through optimizing maverick spends. Automation of accounts payables reduced the workload of the department by 30%.
Attributes of a truly effective S2P solution for agriculture
An effective and efficient solution for sourcing direct materials for agriculture should ideally have the following attributes:
Successful automation of price discovery can allow Agri-businesses access to market prices on-demand and in real-time. This equips them to deliver consistent approvals and manage documents faster with barely any manual intervention. Eka’s S2P solution enables a 3-way match, intelligently matching the PO, receipts and invoices for automated reconciliation and invoice finalization. It is also equipped to manage exceptions and trigger automated ‘Ok to pay’ messages to ERP/payment systems.
- Streamlined and integrated processes
A ccentralized S2P portal can link all stakeholders — farmers, demand customers, acquirers, truckers, and users — in one place for seamless collaboration. Supplier onboarding also becomes faster. Bids management is easier since all negotiations, acceptance/rejection of bids, contract creation, purchase orders, invoicing, and payment processes, are managed effortlessly through one portal. Eka’s solution allows for a seamless ‘bid and offers’ process with decision support on market pricing personalized to the user. It can also handle spot buys enabling businesses to accept, counter or reject offers from counterparties immediately. Prebuilt connectors with leading ERPs and open APIs play an important role in faster time to market.
- Real-time visibility
With analytics weaved into each step of the process, Eka’s S2P solution enables real-time visibility and insights into processes and performance, including supplier performance and ratings. Integrations with internal systems and APIs to connect third-party systems can help significantly reduce the latency of information sharing as all parties have a single view of data and visibility into live customer data. This is useful to maintain comprehensive audit trails throughout the supply chain.
- Ease of use
Low-code / no-code architecture that uses intuitive rule-based workflows can allow for extensive self-service capabilities by making it easy to customize new features and configure new processes on the platform. Even processes such as supplier registration can be performed in minutes irrespective of location.
These capabilities can not only enable faster scaling with efficient supplier collaboration and improved productivity, but they can also help cut down operational costs through automation. It also eliminates the bulk of manual processes such as paperwork, emails, phone calls and messages, freeing up time and resources. Robust reporting and enhanced visibility across multiple systems also promote better decision-making.
Eka’s S2P is a cloud-based intelligent solution that helps businesses digitally transform the sourcing and procurement processes of direct material. Since it is built to address specific needs, it is equipped to handle complexities related to direct material sourcing in industry segments such as agriculture, metals, mining, and manufacturing.
Read more about the solution here