ERP and the Agricultural Industry: Commodities, Procurement and Trading

NTT DATA Business Solutions has equipped many midsized companies across the food industry with track-and-trace capabilities to help guarantee food safety.  This experience has made us well acquainted with agricultural businesses that need to account not only for food quality but also the complex network of information that comes along with commodities, procurement and trading.

The value of any given commodity remains fluid, which means that a food company that buys and sells wheat, for example, must be able to dynamically account for variable cost.  If the company is a co-op that receives wheat from growers and stores and deals the wheat on behalf of the growers, we encounter even more complexity as we enter the world of commodity trading.  The co-op must be able to track what quantity of wheat was received from which growers and at what time.  The quality of the wheat must also be documented, along with the location where the wheat is stored.

In-bound and outbound contracts (in addition to the ability to reconcile the two); patronage; and splitting dividends between multiple vendors for a single unit of product also pose challenges.  The co-op must be able to see at a glance how each of these factors affects the ultimate worth of a single unit of wheat at any given moment.  While many companies continue to track all this information on spreadsheets, forward-looking agricultural organizations have begun to adopt solutions like myAgri.

myAgri, an SAP Business All-in-One Solution for the agricultural industry, resolves challenges via the versatile SAP Global Trade Management solution.  SAP Global Trade Management allows our hypothetical co-op to open tickets and record quantities, qualities and all other details that will ultimately drive what the business pays its growers for their wheat.  The same functionality also covers hedging, patronage, loans, inbound and outbound contracts, and other factors that affect not only co-ops but also companies across the entire agricultural industry.

Of course, commodities like wheat most often become part of a meal for either an animal or human, so myAgri comes equipped with the ability to track and trace product from a food-safety perspective.  In all, myAgri gives organizations the ability to create a discrete, comprehensive identity for every individual unit of commodity that the business receives.  Given the fluid nature of the industry, myAgri seamlessly updates the worth, quality and location of the unit’s identity, while simultaneously factoring in all other relevant actions from accounts-payable and other departmental perspectives.