The transportation of agricultural products from production to the end consumer is known as the agriculture supply chain. At the distribution level, it is usually characterized by numerous tiny holders. In the agri-food business, these supply chains in agriculture encompass post-consumption and pre-production operations. Farm produce processing is included in several agri-food supply networks.
Agriculture supply chain management
Supply chain management (SCM) in agribusiness refers to the coordination of interactions between enterprises responsible for the efficient production and distribution of products from the farm to the customer to fulfill consumers' needs in terms of quality, and price.
Multiple roles interact with diverse, possibly competing purposes, and there are numerous interconnections between material and information flows, making supply-chain activities fundamentally complicated across sectors. Fragmented incoming and outgoing networks complicate and are part of challenges in agriculture supply chain even further. The three phases of a typical agriculture supply chain are farmers to intermediate silos, silos to transformation facilities, and transformation plants to clients.
Agriculture supply chain software
Advances in digital and analytics technology are allowing the agriculture supply chain to be optimized. More useful information is being gathered than ever before in the agriculture business on everything from agronomy to weather to logistics to market price volatility. Data storage capacity has expanded, storage costs have decreased, and computing power has increased. Predictive data science and prescriptive optimization approaches have grown in popularity in the meanwhile.
Creating a digital duplicate of the physical farmer supply chain—from farmers to end customers—and using it to perform virtual simulations and optimizations is one appealing method to leverage digital and analytics technology. All aspects of the supply chain and their interactions, including procurement, production, inventory points, transportation, warehousing, and points of sale for finished items, can be included in digital twins. Depending on the company's demands, players can adjust mathematical models to incorporate goal functions, such as profit, throughput, cycle time, or inventory optimization.
The digital twin's usefulness comes from its strong predictive ability. It explores all conceivable planning and scheduling combinations of variables, for example, lot sizes, while conducting multivariate function optimization under user-defined limitations using artificial intelligence algorithms. When unexpected events occur, the planning and scheduling optimizers can be repeated in real-time. Rush orders or demand adjustments, for example, can be promptly incorporated into a new timetable.
The digital twin also has high scalability, allowing it to provide early insights while adapting flexibly to user demands swiftly. Its agile strategy enables quick digitization, starting with a minimal viable product that meets 80% of user demands in two to three months and then upgrading as those needs evolve. In addition, short development cycles guarantee that solutions adapt fast.
Blockchain in agriculture
Blockchain is a technology that is changing business and supply chain paradigms. Agriculture supply chain blockchain can revolutionize how information is transferred between participants in a chain by using distributed software design and sophisticated computation. In agriculture supply chain management, blockchain technology provides a platform for tackling the challenge of tracking product information.
Most people think of blockchain when they think about Bitcoin. However, the technique applies to a wide range of sectors. Blockchain technologies are decentralized cryptographic ledgers that anybody with the appropriate keys may access. They can't be edited or modified by anybody at the same time.
As a result, blockchains enable safe, transparent data storage that promotes trust. Some describe the value of blockchain as a "single source of truth" with no intermediaries. In the food business, this has several applications.
Blockchains can provide a shared standard for every participant in the supply chain to log and exchange data at each stage of the commodity's journey when combined with the Internet of Things (IoT) technology and data analytics.
The method may incentivize each stakeholder to give vital and correct data, lower inefficiency costs, increase revenues, and achieve government and consumer-driven sustainability and transparency goals.
People are eager to know where their food originates from to ascertain if it is good or bad. Agribusinesses are looking for supply chain management technology software to increase food safety and quality in the farming supply chain due to a desire to eat healthier mixed with extensive use of technology across all sectors.
As the human population grows, so makes consumer demand for digital services tailored to their specific requirements. To enhance the financial performance of farms and fulfill the need for food of a rising population, farmers and agribusinesses should explore using blockchain technology in agricultural and farm management software.
Agricultural technologies, such as precision farming, farmland mapping, IoT sensors, vertical farming systems, location intelligence, crop management software, and transportation technologies, enable agricultural businesses to achieve better food production and supply chain management results. Increased food consumption creates additional challenges, such as counterfeit goods, which threaten agriculture food supply chains at various levels. Farmers and consumers are at a disadvantage due to a lack of transparency and inefficiency.
Finally, blockchain farming and distributed ledger technology (DLT) can improve agricultural supply chain efficiency, transparency, and trust. By establishing trusting partnerships, blockchain for the agriculture supply chain can empower all market participants.
Challenges of implementing blockchain technology in agriculture
Agriculture supply chain management is more complicated than other supply chains since agricultural productivity is influenced by unpredictable elements such as weather, pests, and diseases. Because of the absence of traceability in the agricultural supply chain, financial transactions are slower and physical labor is often required. Furthermore, counterfeits might surface at any point throughout the supply chain, posing a risk to all corporate stakeholders, governments, and consumers.
Potentially eliminate fraud and counterfeit in the supply chain
The agribusiness can prove how a product was handled with the tightest adherence to organic guidelines from the farm to the store using the blockchain-based supply chain. Consumers may check the organic origin of their items by scanning a QR code.
Furthermore, with a blockchain-enabled monitoring system in place, there are considerably fewer possibilities for fraudulent and counterfeit items to find their way into genuine retail establishments, where unwitting consumers may purchase them and suffer the repercussions.
The blockchain can help meet the urgent requirement for product traceability and agriculture supply chain companies transparency cost-effectively and dependably. A blockchain helps to eliminate duplicate procedures, guarantee quality control, and monitor storage conditions by capturing information about products at every level of the agricultural supply chain. Agricultural firms currently use smart IoT sensors to monitor crops, and using distributed ledger technology to record and validate all data would strengthen sensing technologies.
Using traceability, companies can follow the environmental, economic, health, and social repercussions of agricultural production processes, allowing them to compute the "real cost of food." It can also assist in fulfilling rising consumer demand for transparency and increase producer revenue, market access, and capital access prospects.
Big companies that serve customers worldwide must maintain a close watch on the supply chain to guarantee that only the best items are available. Farm-to-shelf traceability is an essential component in determining the origin of a food ingredient, and it is viewed as a quality and food safety criterion by end-consumers. As an essential component in the Agri supply chain, procurement organizations may use cutting-edge digital technologies to track all of the processes involved in cultivating the agri-commodity and use this knowledge to improve the supply chain and gain confidence and loyalty end-consumers.
Blockchain may offer transparency to agricultural financial transactions, credit histories, and financial agreements for smallholders who wish to invest in farming. Smaller farmers will be able to pay for raw materials and machinery partially or after delivery with shared access and irrevocable agreements, ensuring fair market pricing.
Challenges in Farm Foods Supply Chain
- High operating costs
The overall cost of operation in the fresh foods supply chain is relatively high due to some middlemen.
- Perishable nature of farm foods
Fresh foods are perishable by nature, which is the largest problem in the agricultural food supply chain. Except for grains and legumes, which have a longer shelf life, the bulk of agricultural food, such as fresh fruits, vegetables, milk, and dairy products, is perishable.
As a result, maintaining the quality and freshness of the food from the moment, it is picked until it reaches the final client is critical. It also entails storing and delivering them at the proper temperature and humidity along the supply chain.
- Last-mile bottlenecks
The supply chain for agricultural goods is extremely time-sensitive. The produce must get to the client in the best possible condition, with no quality issues. Transportation, particularly for perishable produce, is critical in the transfer of agricultural commodities to consumers. The quality and freshness of food are frequently hampered by a lack of adequate transportation infrastructures, such as cold storage or refrigerated vehicles.
In addition, inefficient dispatch and delivery planning results in underutilization of the delivery fleet and additional kilometers traveled. One of the most significant logistical problems in delivering agricultural goods is a lack of supply chain awareness.
- Farmer to Consumer
The COVID-19 epidemic has only complicated things further. Farmers and poultry dealers have been forced to abandon traditional selling techniques and rethink business models to reach their consumers. In addition, guaranteeing cost efficiency and high-speed last-mile deliveries, with retail outlets, supermarkets, and fresh food markets closed for unknown periods.
Farmer-to-consumer selling is becoming more common in the farm foods supply chain, just as in other retail and consumer products industries. The farmer-to-consumer supply chain approach allows farmers to bypass intermediaries like processors, distributors, and retailers and sell their fresh products directly to customers.
- Optimizing the Farmer-to-Consumer Direct Sales with Logistics Tech
While going direct to customers is a good method to save operational costs and eliminate intermediaries in farm food distribution, using AI and logistics technology can improve every leg of the supply chain.
Route planning and optimization software can aid in planning day-to-day dispatch activities from farms to client locations, automating manual planning procedures, and improving accuracy.
Route optimization also aids in the selection of the shortest, most optimum, and cost-effective routes for delivering farm goods to clients, lowering fuel costs and considerably increasing delivery efficiency.
Businesses may trace the flow of items through the supply chain from when they are packaged and sent until they arrive at the customer's doorstep using last-mile visibility technologies. Farmers may also provide clients with real-time status updates, fostering a feeling of trust and openness.
Although supply chain from farmer-to-consumer sales are on the rise, they are progressively influencing the future of the farm foods supply chain by shortening the time and distance between farm and fork and linking farmers directly with customers.