How Three African Agribusinesses are Responding to COVID-19 in Real-Time
The COVID-19 pandemic has highlighted both the importance and fragility of global supply chains. From nasal testing swabs to medications, and bicycles to toilet paper, shutdowns and border controls have made it clear that businesses need to thoroughly understand where their products are sourced and how to deploy their inventories most effectively.
New partnerships formed in response to COVID-19 between Feed the Future Partnering for Innovation and three southern African agribusiness firms aim to do exactly that. As the pandemic continues to spread, these companies — Agri-Input Suppliers Limited (Malawi), Casa do Agricultor (Mozambique), and Stewards Globe (Zambia) — have realized the importance of real-time information for their continued operations. Partnering for Innovation presented these firms with an opportunity to make investments to increase their resilience to this and future shocks, and all three firms chose to adopt enterprise resource planning (ERP) platforms.
ERP platforms provide businesses with a range of operational, financial, and logistical solutions to better manage their businesses. In recent years, these platforms have become less costly to implement and more adaptable to individual business needs. With expanded mobile device and rural internet access in southern Africa, these platforms are more suited than ever to integrate with agribusinesses.
Agri-Input Suppliers Limited (AISL) produces an inoculant that boosts nitrogen levels in soil and increases the yields of soybeans. For years, the company’s inventory data from rural points-of-sale would go uncollected until weeks after the input purchasing season, which meant that some shops had unsold product while others were completely sold out. This unmet demand meant that AISL was losing customers simply because it did not have access to information in real-time.
The ERP platform that AISL is implementing seeks to achieve two main goals — improve its product distribution and determine the most effective marketing messages that drive sales. Rural sales managers will log sales of AISL’s products daily, so the head office will be able to analyze trends and predict when supplies will need to be replenished at a sales site or if excess inventory will need to be shifted to another location. This will allow AISL to nimbly manage its operations on a daily or weekly basis, rather than looking back at missed opportunities after the sales season is over.
Simultaneously, AISL is launching a revamped marketing campaign to combat restrictions on large gatherings that are limiting its conventional marketing techniques of farmer field days and demonstration plots. The ERP platform will play an important part in this, as well. AISL will be able to test various product messaging to smallholder clients in different regions and see if this drives sales. The company will then be able to immediately alter its messaging to other regions to reach customers more effectively.
Casa do Agricultor (CdA), a Mozambican agricultural input and services supplier, faces its distribution difficulties in procurement rather than in sales. COVID-19 has disrupted direct imports of products into the country from multinational firms. What can be imported is much costlier than in previous years, directly damaging CdA’s bottom line. The firm needed to quickly overhaul its entire sourcing strategy to re-import from regional suppliers, such as South Africa — which is no easy feat.
CdA intends to use its ERP platform to ensure this transition occurs as seamlessly as possible. CdA will be working with numerous new vendors which will bring a host of challenges — uncertain lead times, customs land border bottlenecks, and traceability issues from origin to warehouse. The platform, which is being developed by a local Mozambican tech firm, will allow CdA to better manage its procurement, logistics, and inventory. The company will be able to utilize this information in real-time to make informed decisions crucial to its processes and operations. Once procured and in CdA warehouses, the platform will facilitate internal distribution and sales in a similar fashion to AISL.
Stewards Globe Limited (SGL), which operates in Zambia as Afriseed, is a seed multiplier that is using COVID-19 to implement an expansion strategy into 20 rural districts. This strategy represents a departure from SGL’s typical operating model by creating small Afriseed-branded storefronts in rural districts, rather than selling their products through non-branded agro-dealers. This will overcome transportation and gathering difficulties caused by the pandemic through last-mile distribution and bringing products directly to smallholder farmers’ villages.
SGL is already using an ERP platform but in a limited capacity. This particular platform, which was developed in Africa specifically for rural markets, combines an Android app and a web-based portal for managers to oversee all operations. Partnering for Innovation will help SGL scale its use across the business and to its newly established stores. Head office-based employees will be easily able to review individual store financials, inventory levels, and sales in real-time. SGL will incentivize its use to employees through monthly payments and commissions to top-performing individuals and stores with the most up-to-date data. The platform will be an invaluable asset in the rollout of SGL’s aggressive expansion strategy.
While these ERP platforms are being implemented in the context of a market-disruptive pandemic, they stand to become essential tools beyond this crisis. COVID-19 only underscored their essentialness for managing day-to-day operations. As markets stabilize in the future, AISL, CdA, and SGL will emerge better positioned to use their ERP platforms to optimize their inventories and sales. And when shocks and stressors inevitably strike again, they will be able to strategize effectively — right from the start — using real-time data insights about their operations.