Uncertainty in supply due to nature: An everyday struggle for you, too?

sower's hand with wheat seeds

Is your agriculture business dependent on what nature is giving you? Are you sourcing from different countries and facing logistical complexities? Read on to find out what the main challenges faced by seed manufacturers are and how they can overcome them to boost efficiency in areas they have control over.

Pressure to deliver

The global agricultural community is facing some significantly tough challenges: volatile weather due to climate change; rising population; and rapidly changing dietary habits. This places pressure on seed companies for production output today and in the future. If the population continues to rise at its current pace, there will be close to 10 billion people by 2050 so seed companies simply must increase productivity and efficiency to achieve food security.

The need for visibility

A seed manufacturer processes and mixes seeds according to customer demands and growing environments. The difficulty here is that there are thousands of varieties for each type of seed. Supply and network planners typically plan seed processing and mixing operations to be completed as needed – not in advance. But when things are planned at the last possible moment and there is little to no visibility, there is less time to react to changes. For example, if demand for sugar beet outweighs available capacity, orders will need to be delayed or brought forward.

Let’s imagine that you are sourcing corn seeds from France and Spain, processing and mixing in Hungary, and delivering to Germany.  As it is common practice to plan production and logistic processes independent of each other, planners have reduced visibility throughout the supply chain and limited understanding of the consequences of their planning decisions. The logistical complexity also means that your planners often struggle to ensure a smooth flow of materials through the network.

Adapting to constraints

When it comes to quality, seed companies have very different issues compared to other manufacturers. They cannot just produce new seeds as this would mean that they miss a season. Also, seed quality deteriorates over time, so planners have to make sure older batches are delivered to customers and distribution centers as soon as possible – or they have to mix a good batch with a less optimal batch to optimize the usage. While 80% of the seeds may give a plant in a fresh batch, only 50% will give a plant when the batch is a few months old.  To tackle the issue of differing seed quality, mixing recipes must take into account the seed characteristics. A variety of combinations in seed characteristics can end up complicating a planner’s task of finding the best possible mixing options for these batches.

Rethink the way you do planning

Because of the uncertainty and complexity inherent in the industry, a seed manufacturer needs a system that can create a new plan that includes all new information, fast. This system has to give planners the ability to modify optimization parameters to respond to new and unexpected situations as well as changing business conditions. As any kind of changes made in the production plan are automatically carried through into the logistics plan and vice versa, seed planning companies require an integrated planning system combining both production and logistics. Scenario planning and the generation of what-if scenarios helps them to find the mix that will not only boost profits but is also in line with their business KPIs.

The right software solution can bring about significant improvements, including:

  • Improved customer satisfaction
  • Minimized costs and maximized productivity
  • Optimal inventory usage
  • Streamlined daily decisions

In the past, seed companies could take weeks to create an alternate plan. Discover how they can run different scenarios with the right planning system overnight. Download our brochure here.

This post was previously published on LinkedIn.

CATEGORY

Manufacturing

AUTHOR

Anna Burschik.

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Anna Burschik

About Anna Burschik

As an experienced marketer and photography enthusiast, I strive to open my eyes for new things and see the world from different perspectives. Having started my career in Asia and Germany, I now focus on European manufacturing companies, their products and planning puzzles. Their unique stories inspire my daily work on contents, events, projects and campaigns.