- As per Data Bridge Market Research, “Food Traceability market is expected to rise to an estimated value of USD 24.49 billion by 2026”. Agribusinesses worldwide are not investing on Traceability for altruistic reasons. Agribusiness leaders understand that Traceability can be used as a competitive weapon, as a mechanism of changing the market environment they currently exist in.
- Agribusinesses worldwide understand this fundamental lesson from Microeconomics 101 : Demand for a product increases when the prices of its complements decrease.
- Government of Punjab released probably the most honest press-release, when it announced its Potato Seed Traceability Program few days back.
4. Applied Micro Economics 101: Demand for Punjab Potato seed would increase when the prices of its complements – unscrupulous elements – decreases.
5. Can Traceability solve counterfeiting problems once and for all? As I’ve written before in greater depth and repeated many times here, Technology can only do its best to predict counterfeiting before the sale and report counter-feiting after the sale in the channel. However, no solution is fool-proof. This is going to be a Tom-and-jerry chasing race between the agri-input manufacturer and the counterfeiter. All you have to do is this: Smartly use technology and remain one step ahead of the counterfeiter. You can’t do anything beyond that.
6. How do Agri-input firms use Traceability as a strategic power play? Traceability data helps in better Working Capital Management. When you are able to provide accurate batch level inventory at Factory and Warehouse, you are able to eliminate manual data entry and eliminate wrong dispatches. You do better inventory reconciliation in SAP. And when you do that, agribusiness executives are able to manage their working capital efficiency better and can sleep more peacefully.
7. Agribusiness Leaders who understand Traceability know that Channel Management is politics. There is no such thing as a “disorganized” channel. Every state of “organization” of channel is a means of control for somebody. And If you don’t know who that is, it probably isn’t you.
8. Agribusiness Sales Leaders in agri-input firms know what it takes to use Traceability systems to gain political control over the channel. They want to know how many Inter-party Transfers are happening across the channel so that they have better distributor inventory visibility.
9. Agribusiness Leaders know what it takes to use Traceability systems to find out the fast-moving and slow-moving SKUs. They have better insights into distribution and production planning.
10. Supply Chain strategists from agri-input firms use Traceability systems to optimize the inventory data to determine the right safety stock levels. It helps them set optimum inventory norms, lot sizes. They analyze slow-moving, obsolete inventory and balance stock across locations to ensure lower inventory carrying cost.
11. Agribusiness Marketing Leaders from Agri-Input firms understand the importance of tracking marketing activities on the field and correlating them with the data that is coming from the channel. When you track field marketing activities with channel liquidation data from Traceability, you start getting a glimpse of what the industry often loves to talk about, but seldom does in the ground: Marketing ROI.
12. Agribusiness Leaders with grey hair who understand Traceability also know the limitations of data and the decision trade-offs involved in transparency. When you are dealing with problems on the channel which are political in design, they understand the insight provided by the data and sometimes take wise decisions against what the data is instructing them to.
13. If you want to deeply understand how far the strategic play of Traceability can go in food and agribusiness, try and understand how software companies gained from adopting open source. Try and connect the dots, and you might perhaps get a sense of what I am talking about.
