By Molly Goad
Two million farms grace America’s landscape. And nearly 98% of those are operated by individuals, family partnerships, or family corporations (source: America’s Diverse Family Farms: 2018 Edition).
The top three farm products in the U.S. are cattle, corn, and soybeans. It doesn’t matter what the crop is, though; all farms can benefit from electronic data interchange (EDI).
Agriculture’s Supply Chain
The agriculture industry encompasses all businesses that cultivate crops, raise animals, farm fish, and log wood; i.e., farms, hatcheries, orchards, greenhouses, ranches, and dairy farms.
The agriculture supply chain is complex, with many players involved before the food reaches the hands of consumers.
The story begins with suppliers (seeds, fertilizers, machinery, etc.). Next up are the producers, or farmers, who plant, grow, and harvest the crops. Then the product heads to the processors, where it is inspected, weighed, cleaned, graded, packaged, and labeled. From there, it moves on to distributors, who manage the circulation of the product to sellers and retailers, where it reaches the shelves for consumer purchase.
There are numerous steps before the food hits your dinner table, and most businesses involved use EDI to manage the process efficiently. EDI stands for electronic data interchange, which means sharing documents in a 100% virtual format between all parties. Communications include contracts, purchase orders and confirmations, order amendments, advance ship notices, movement notifications, goods receipts, invoices, payment remittances, and cancellations.
Growers can benefit immensely from an EDI solution. The electronic format means no more human errors — mistyped quantities, product numbers, prices, and more. These errors bring great headaches as producers have to scramble to make things right.
Here are a few more ways EDI technology can change the game.
Level the Playing Field
This industry has a wide array of business participants, from small, family-owned farms to the giant grocery store chains. The mom-and-pop operations are able to compete with large commercial farms, as well as get their items into the big supermarkets once they have established an EDI system. EDI provides everyone with the transparency needed to stay on course.
Mitigate the Uncontrollable
Agriculture is an industry that is affected by many things that are out of the growers’ control. Pests, disease, drought, heavy rain, unseasonable temperatures are a few that come to mind. While you can’t stop a rainstorm, you can control your business’s reaction by having a solid EDI solution ready to move the product efficiently so trading partners earn the most profit as possible from a low production year.
One obstacle agriculture faces that not all industries share is seasonality. Farming is highly seasonal, and businesses need to be ready for the busy times. EDI provides its users the ability to act and react quickly; you don’t want to be asleep during the periods when there are many irons in the fire. Missed opportunities mean you’ll have to wait until next year.
Major grocery retailers issue fees when products don’t meet certain parameters. For example, if a shipment arrives outside its must arrive by date (MABD), the retailer will issue a chargeback by way of a deduction on the invoice. It’s critical for the MABD to be met because stores place orders strategically (based on historical data), to stock shelves at the moment they become empty. This keeps costs down. If a shipment arrives before or after its preassigned window, that model established by the retailer is disrupted, and the supplier pays the price.
EDI provides a layer of protection, as its advanced level of information at your fingertips empowers you to correct any delivery errors and other mistakes before it hurts the bottom line. For example, trading partners are notified of the contents and delivery window of all orders with advanced ship notices (ASNs), and if that document isn’t received by the retailer, EDI alerts the distributor. The distributor can intervene to make sure the retailer is ready for the shipment, and adjust if it looks like the delivery window is going to be missed.
For more details about how EDI aids grocers, check out EDI, The Grocery Industry, and Lessons from the Pandemic.
Choose BOLD VAN
If you’re involved in the agriculture supply chain, make sure you’ve found the right EDI partner, and don’t be afraid to scrap it if it’s not working out. Sometimes, the EDI integration just isn’t acceptable for your needs. We can help tailor a solution that’s right for you, and we will ensure seamless integration.
To find out how to get started, contact BOLD VAN by calling 844-265-3777 or emailing firstname.lastname@example.org.