“All games have morals; and the game of Snakes and Ladders captures, as no other activity can hope to do, the eternal truth that for every ladder you hope to climb, a snake is waiting just around the corner, and for every snake, a ladder will compensate.” – Salman Rushdie, Midnight’s Children
I will be turning 34 in few days and my mood has been thankfully sombre. I have enough hair and reasons to think about my grey hair. And if that weren’t enough, eyeing an additional margin, my amazing barber has been reminding me of it every single time we meet. No thanks mate! I prefer to sprinkle my life with some salt and pepper please!
If you think about it, Life has a funny way of sprinkling ginormous amounts of salt and pepper at you, every time you think you think the food is getting bland. .
You spend 25% of your life fantasizing how unique you are, and life sprinkles its salt and pepper over the remaining 25 % to strip you naked and demolish your ego to remind how same you are from the rest.
There was a time when as a young and naive marketer, I misunderstood marketing to be a a job where you cook up cool taglines and design creative logos. And there was also a time when as a young, clueless consultant, I conflated my heavy-dose reading of eastern Vedanta Philosophy with Strategy.
There was yet another horrible mistake I had committed when I was wet behind the ears in the consulting business. I thought “strategy” was way more “cool” with its 2x2s and high-sounding platitudes than bureaucratic “operations” with boringly written SOP guidelines.
Given my baggage, I have been a slow learner, especially when it comes to prioritizing “operations” over “strategy”, and it has taken me a while to understand the power of operations and SOP documentation in maneuvering through the game of strategy.
Today, as I observe agribusiness leaders who deeply understand Traceability, I have understood this.
All the talk about strategy will remain nothing but a story, unless you don’t convert it into reality through the rigor and discipline of operations – “a powerful mix of deliberative, reactive and opportunistic planning, scheduling, resource allocation and risk management, in the fog of action” (to use Venkatesh Rao’s definition of Operations)
It helps to approach Agri-Input Channel and Retailing Operations through a game metaphor. And nothing can be more powerful than our very own “Snakes and Ladders”. Is it any coincidence that this game originated from the business-savvy Jain community to teach its operational virtues of Karma and Moksha to its followers?
Let’s get to business. Allow me to give you a tour of the Snakes and Ladders of Traceability.
Every Agribusiness Leader sitting in the Head Quarters of Agri-input firms, aspiring to incorporate “Traceability” into his everyday channel and field operations, will have to understand one day that it is nothing more than a game of Snakes and Ladders.
There will be a few things that will propel us forward in our strategic journey towards Traceability ( the ladders) and there will be a few things that will pull us down ( the snakes) from the goal of Traceability.
Let’s first look at the Ladders of Traceability, although the real challenges lie in the snakes, which will force us to respond, if not react.
Ladders of Traceability
Union Govt. Traceability Regulations
It is a great thing that Govt. is coming out with compliance norms so that hygiene standards are met at a bare minimum and organizations who understand the strategic nature of Traceability have even more compelling reasons to set the bar even higher. This last point is crucial, because with Government planning to provide traceability software by June 2020, it wouldn’t take efforts to be “compliant”, even though you may not be thinking strategically about Traceability and how it can really help you do business better than how you do currently.
Serialization and Aggregation
Serialization and Aggregation of Agri-Input products will remain a powerful leverage, if it can adopt the best practices prevalent in the Pharmaceutical industry and re-frame them to suit agribusiness operating conditions.
I won’t be surprised if you are wondering what leverage there could be in doing something as basic as Serialization and Aggregation. It’s only when you understand the back-ward and forward integrations in agrochemical context, you start realizing the power of Serialization and Aggregation.
Here is a neat illustration of the bigger picture, put together by Anil Kakkar, Excel Crop Care Ltd, when he presented the distribution patterns of Agrochemicals in India, at International Crop Science Conference. I am not going to explain this diagram to you. I will leave it to you to connect the dots.
Working Capital Efficiency
This is an extremely tricky leverage because every agribusiness leader leveraging this, is making a hard trade-off between two mutually opposing forces a) Cost of Credit b) Maximize Availability of the product to farmers. I have explored this problem in greater depth, when I wrote about the Dharmasankata of Traceability.
The dharmasankata an Agribusiness Leader investing on “Traceability systems” faces is this:
“I am damned if I incorporate the data from Traceability systems in my business processes with the sole aim of protecting the Channel partner’s best interests”
“I am damned if I incorporate the data from Traceability systems in my business processes with the sole aim of protecting the farmer’s best interests”
How do agribusiness leaders work towards maximizing working capital efficiency and address this dharmasankata through systems of Traceability?
Snakes of Traceability
I presume that if you are reading this, you understand the origin and context of this term and I don’t have to explain it you as a layman. You can read about its origin here.
It’s incredible that we are living in 2019 and still there are no reliable demand-forecast mechanisms in the Indian market to capture the demand signals at agri-input retailing channel. Of course, Bull-Whip effect is one visible symptom of the problem, and if you start peeling the onion, you would notice that it is deeply enmeshed with the prevalent “Pump and Dump” sales-strategies used by Agri-Input firms.
In a blog that has now been deleted, Pran Arora once beautifully summarized the voice of the agri-input sales executive well.
“What I see in front of me is lot of unsold material but too much pressure from management to get the payment from the trade , no-one wants to take back the material . Even my next year’s targets are being determined by my this year’s sales ,half of which is just pump-and-dump material on the directions of senior management” he said ,almost sobbing.”
It will be impossible for me to do complete justice to unraveling Bull-Whip effect, and I will be writing in detail about this in the upcoming articles. For now, I will leave you with this diagram which clearly sums up why this is such a tough nut to crack.
Spurious Seeds and Pesticides
Regular readers of my blog will know that I have already written about this phenomenon in greater depth and offered three reasons why this problem will never go away.
Reason-1: Channel doesn’t yet have the adequate skin in the game yet to sell authentic agri-inputs to farmers.
Reason-2: Technology can 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.
Reason-3:Even Digital Giants like Amazon, Alibaba haven’t yet cracked the counterfeiting problem.
So, you’ve heard me loud and clear.
If someone tells you that you can install traceability software and your counterfeiting problems will vanish just like that, like a spell of magic, either he is lying or both of you are deluded. This problem is very complex, and at best, Traceability can only mitigate the problem, post-facto.
If you can imagine this Traceability game, with these snakes and ladders, you would know that although I have only put two snakes for now in the game, these are two extremely complex problems and require a lot of iteration in the market and channel to ensure that you minimize the consequences of these snake-bites and do your best to leverage the ladders available at your hand.