Agribusinesses are constantly evolving as our world becomes increasingly interconnected, technology advances, and consumer preferences change. Agricultural experts have noted the significant impact supply chain management has made on the industry, and how it helps to efficiently deliver goods to consumers, lowers costs, and reduces waste. This article will explore what supply chain management means for an agribusiness and the ways in which it can benefit the industry.
What is Supply Chain Management?
Supply chain management is the management of the entire production flow of a product or service, starting with the raw materials and going all the way to delivery to the customer. Supply chain management generally looks to find the most efficient way possible of getting products into the hands of the consumers.
For an agribusiness, supply chain management would begin with the sourcing of raw materials like seeds, livestock or machinery. It would then move to the manufacturing stage and transform these raw materials into a product through planting, harvesting, processing and packaging. The finished products are then transported and delivered to consumers. Supply chain management takes a look at these relations between the raw material suppliers, farmers, processors, transportation, and finally, retailers and consumers to ensure the product is getting from farm to table in the best way possible.
Benefits of Supply Chain Management
By managing all of the components of the farm to table process, supply chain management can greatly benefit an agribusiness. A major benefit is a reduction in food waste. It is estimated that nearly a third of all food produced each year is not eaten. As our world population increases, the problem of food waste becomes even greater. Supply chain management helps to reduce waste by managing inventories, improving the transport of goods, and implementing better storage and packaging practices. This not only benefits the consumer and environment, but also it can greatly improve the farmer’s bottom line. Less wasted food means less funds lost.
Supply chain management assists with quality control, which ensures practices are in place to keep the product safe from contaminants and as fresh as possible for the consumer. After the food is grown, harvested and packaged, supply chain management focuses its attention on effectively distributing the food to the consumer. Optimizing the process of transporting and delivering goods to retailers and consumers helps to further cut down on potential unnecessary costs, and strives to get the product into the consumer’s hands as quickly and efficiently as possible.
Supply Chain Technologies
Agricultural experts and innovators have come up with a variety of technologies to assist in this process. The Internet of Things and blockchain technology can provide extremely useful information to an agribusiness and offer real-time food quality and inventory monitoring. Mobile and cloud-based apps are also useful and provide data and enhance communication in the supply chain.
As our population increases and food waste remains a global issue, supply chain management plays a critical role in agribusinesses across the world. Utilizing this management tool, farmers can improve their practices, reduce food waste, and ultimately, save money. By improving every aspect of the food process, farm to table, supply chain management is making a difference for both farmer and consumer.