How Startups are bringing supply chain management to Indian Ag
Cloud based SCM startups are transforming the efficiency of Indian agribusiness through integration. One-third of all food produced in India is wasted before reaching consumer due to poor infrastructure and inefficient supply chains. While infrastructure is capital intensive, there is tremendous opportunity for startups able to bring integration within the supply chain. Integration provides companies greater control over their bottom line through managing risks, driving out wastes and ultimately lowering the cost of doing business.
How Supply Chain Management Helps
Lack of visibility and established connections within the value chain make it hard for companies large and small to plan and manage operations efficiently. However, through cloud based Supply Chain Management (SCM), companies large and small can now receive the necessary visibility and information to establish healthy collaborative relationships and holistic planning for their products. For example, in the case of producing and selling a mango, large companies may need access to significant quantities of mangos. Without control, they could under or over plant or buy, in an effort to hedge their bets, either wasting precious resource by producing too much fruit that has to be sold at discount, or by losing sales by not producing enough.
An example SCM startup is CropIn Technologies. They provide agri-businesses the technology and expertise needed to create a smarter and safer food supply for consumers around the world. CropIn is creating a network of connected farmers across Rural India and collaborating with the different value chain participants along the supply chain to monitor farm produce status more closely, thus increasing yield and buying efficiency.
Transparency and insight into the factors of production provide companies more control and flexibility. Increased control enables companies to account and plan for possible challenges, allowing them the flexibility and opportunity to quickly redirect course based upon market volatility.
Integration Enables Precision and Planning
Large established companies are able to approach the production of their goods with significant precision and planning, forecasting cost requirements and obligations before a seed is ever planted. In the life of our mango example, food companies must determine the region, secure the inputs, insure the product, provide training and expertise for cultivation, arrange transportation from farm to processing and then ultimately to the market. At the end of the day, this isn’t just about managing a product, it’s about creating the framework and standards necessary to incorporate current and new agents into the process, over time, across different geographic and social realities. It this sounds complex and riddled with potential problems, that’s because it is. Planning at this scale with the complexities agriculture has to offer is difficult.
Companies Creating Cloud Based SCM Solutions
Streamlining and collecting data internally is hard enough, doing it for an entire ecosystem is even more difficult. For scale, a baseline level of sophistication is necessary to provide the basic data points necessary, and it is even more challenging to develop the plans and necessary software to integrate others. Thankfully there are a number of startups in this arena.
Frontal Rain’s best-in-class pedigree
A great example is Frontal Rain who offers supply chain software for agribusiness companies on the cloud and was established by three senior executives from SAP with over 50 years of combined business and product development experience in the enterprise software business. Frontal Rain consolidates the benefits of tightly integrated business processes of an enterprise application and combines this with collaboration, e-commerce, social networking and mobile capabilities, enabling customers to seamlessly interact with their suppliers and customers. Through their primary product offering, Rain+, large companies enjoy a comprehensive suite of services while smaller agri-business companies are able to benefit from select portions of services.
Companies streamlining the value chain
Other examples of SCM companies making important contributions include ThinkLink and Lal Commodity’s agri-logistic services; Stella Apps provides cloud-based tools and dairy technology to farms, co-ops, and private companies; and the recent start up, Knids Green KPGL, is streamlining the vegetable value chain.
SCM’s Impact on Organic and Certified Fair Trade
To receive certifications such as Fair Trade or organic, companies must be able to demonstrate the end to end elements of production. SCM and IT services are helping companies manage their supply chains to qualify for these benefits.
SCM helps fair trade and organic certification.
Cloud based services provide companies, co-ops and NGOs a means to collect this information in an affordable and scalable way. They also make it easier to plan and incorporate marginal farmers into the value chain. This helps farmers gain access to the inputs and support necessary for productivity and market access. In India, farm gate prices are often only 25% of retail price. A company working to fix this discrepancy is the Mumbai-based Under the Mango Tree (UTMT). UTMT is committed to improving the lives of marginal farmers by advancing sustainable community-based beekeeping using indigenous bees for the purpose of increasing crop yields and garnering a fair market price through the sale of single origin honey.
Other companies providing SCM services, include Suminter India Organics who produce and export organic grains, rice and cotton; Zameen – a farmer owned marketing company pursuing fair trade pesticide-free organic cotton; and INI Farms who present a Fair Trade horticulture focus with full integration from farm to consumption.
Cloud based SCM is a hot space for startups
SCM is a hot opportunity within Indian agribusiness for those with a vision and commitment to introduce innovative and disruptive services that can reduce risk and waste while creating efficiency and a lower cost for doing business and increasing the bottom line.