INDUSTRIES

AGRIBUSINESS

What challenge(s) do our clients face?

Agribusiness is a hugely diverse sector, with variation driven by size, product and geography, however across the industry we see common challenges resulting from long production cycles, commodity pricing, and the influence of external factors

From fertilizers to consumer products, neighborhood producers to multinationals, Agribusiness is a wide net to capture a huge range of organizations with very different day-to-day realities. A small corn producer in the United States will deal with very different challenges to a major soy producer in Brazil – but both players’ success will be underpinned by a deep understanding of their specific product and markets, and a careful navigation of Agribusiness’ trickier characteristics:

Protecting margin in commodities Agribusiness products are by nature commodities, and are characterized by tight margins and price volatility which are highly exposed to global trends. To remain profitable, it is critical for players to have a deep understanding of their markets and how to play in each reality considering Service Level requirements, competitive landscape, and how to position differential – as well as the triggers to re-assess priorities due to changes in price and volume (e.g. due to FOREX swings). Balancing visibility with long production cycles Planning is arguably even more important in Agribusiness than in other industries, as production is defined by long cycles supported by a huge amount of costly infrastructure, with limited options to drive speed through further investment.At the same time, market trends are notoriously difficult to forecast (particularly in agriculture)Players need to strike a balance between taking informed decisions about future market movements what and how much to produce –and planning with enough lead time to execute comfortably, considering that the time, resource and infrastructure requirements will vary significantly by product. Developing the right capabilities in the sales team Different channels in Agribusiness require highly specialized approaches some customers demand deep technical understanding and long-term relationships, while others are entirely finance driven, needing clear KPIs, metrics and controls to make purchase decisions. Organizations must understand the leading factors per channel and reflect this proportionately in their sales team - across hiring, training, and sales routines and take make or buy decisions based on the quality of indirect sales teams in the market, and fit with the longer-term strategy. Embedding flexibility in the production chain The buying window is often short and Out of Stock (00S) inventory leads quickly to lost sales, as does lost floor space. Having inventory distributed in your saleschannels is vital for grabbing market shareHowever, overstocking can lead to excessive warehousing costs and a disposition to use promotions to shift stock, potentially impacting brand image.
Protecting margin in commodities Agribusiness products are by nature commodities, and are characterized by tight margins and price volatility which are highly exposed to global trends. To remain profitable, it is critical for players to have a deep understanding of their markets and how to play in each reality considering Service Level requirements, competitive landscape, and how to position differential as well as the triggers to re-assess priorities due to changes in price and volume (e.g. due to FOREX swings). Developing the right capabilities in the sales team Different channels in Agribusiness require highly specialized approaches some customers demand deep technical understanding and long-term relationships, while others are entirely finance driven, needing clear KPIs, metrics and controls to make purchase decisions. Organizations must understand the leading factors per channel and reflect this proportionately in their sales team - across hiring, training, and sales routines and take make or buy decisions based on the quality of indirect sales teams in the market, and fit with the longer-term strategy. Embedding flexibility in the production chain The buying window is often short and Out of Stock (00S) inventory leads quickly to lost sales, as does lost floor space. Having inventory distributed in your saleschannels is vital for grabbing market shareHowever, overstocking can lead to excessive warehousing costs and a disposition to use promotions to shift stock, potentially impacting brand image. Balancing visibility with long production cycles Planning is arguably even more important in Agribusiness than in other industries, as production is defined by long cycles supported by a huge amount of costly infrastructure, with limited options to drive speed through further investment.At the same time, market trends are notoriously difficult to forecast (particularly in agriculture)Players need to strike a balance between taking informed decisions about future market movements what and how much to produce –and planning with enough lead time to execute comfortably, considering that the time, resource and infrastructure requirements will vary significantly by product.

How do we help?

We believe that the best solutions combine your deep knowledge of your business and market with cross-industry best practices and technical methodologies

We know that Agribusiness organizations operate in highly distinctive contexts, and there is no replacement for the expertise you have developed in your environment, products and market. Our role is not just to tell you an answer, but to work closely with you and your teams to understand your pain points, tailor our methodologies and leverage expertise from both sides of the table to develop a solution which makes sense in your reality for the long term, supported by a team who know how to execute it.

Our experience in different regions, different countries, and from local, regional and global perspectives enables us to hit the ground running in identifying the technical and non-technical factors at play – be it a bottleneck in your supply chain, or a disconnect between levels of leadership. Our specialists are industry agnostic and based all over the world, hand-picked for your specific challenge, and come with a wealth of insights and benchmarks from businesses you may have never considered comparable.

Commonly applied services

Clients

We have worked with clients in different categories, geographies and positions along the value chain:

WATCH TESTIMONIAL

In this video, a range of clients from the Agribusiness sector talk about their positive experience working with Integration.  


Agribusiness: What our Clients Say Agribusiness: What our Clients Say

SUCCESS STORIES

CHALLENGE

A $14bn multinational organization, operating in seeds and crop protection, was struggling to meet aggressive savings set targets by global Leadership.

In recent years, the procurement area had become over-focused on operational activities, rather than supplier relationship development or synergy capture between businesses, and functions were executing a significant amount of purchases without oversight from governance or policies.

APPROACH

Over the course of 10 multifunctional workshops, we supported the client to redesign the procurement area and structure, based on a clear purchasing strategy per category, revised processes and system requirements, and pain points raised by functions.

To ensure compliance across the organization, a governance process was designed involving the procurement team in all decisions.

The project was implemented in 10 countries, supported by change management actions to ensure all areas understood the new structure and the benefits that would be gained through the new way of working.

RESULT

As a result, the client was able to reach the top-down saving targets (more than 10% of total spending), with 95% of orders inside the new policies.

The procurement area was able to and develop better relationships with suppliers.

CHALLENGE

To strengthen its portfolio, a multinational client in the field of seed production and technology development acquired a global competitor. Supply chain maturity was a key target in the Strategic Plan, and formed the basis of the integrated business’ competitive advantage.

The organization asked for Integration’s support to integrate the core supply chain processes, leveraging best practices to capture opportunities to improve quality, effectively manage capacity, and provide better service to customers.

APPROACH

We focused the project on planning and delivery processes, assessing the end-to-end steps to identify pain points and set priorities.

In delivery, we redesigned core processes to eliminate bottlenecks and meet service level targets, while in planning we clarified roles and responsibilities within the team, and implemented a new governance to improve day-to-day tracking and decision making.

Where necessary we adjusted the organization structure and systems to enable the new ways of working, and supported the team on the ground throughout the implementation.

RESULT

The structural, governance and process changes were successfully embedded in the day-to-day, resulting in improved performance in critical indicators:

  • 35% increase in On-Time
  • 60% increase planning accuracy of the planning, leading to lower write-off

CHALLENGE

 Our client, a multinational B2C fertilizer producer, merged with a competitor of similar size operating in the B2B business (raw material sales and private label production). The new organization was one of the top 5 players worldwide.

The organization asked for Integration’s support to redesign the Go-to-Market, and overcome three key challenges;

  • Develop competitive advantage in the supply chain beyond distributor management, in which the organization was already a national standard
  • Increase margin
  • Shift core product focus to a specialized, non-commodity product, which required a more technical sales approach

APPROACH

Our approach was divided between the two key segments for the merged organization, B2C and B2B:

In B2B, we worked with the sales team to incorporate best practices from the market and improve efficiency, reviewing pay-for-performance incentives, the key account model, and commercial policy.

In B2C, each distributor was assessed based on their ability to sell the new core product; favouring those with better technical knowledge within the sales team, or an exclusive partnership with the client. The client’s commercial structure was adjusted to meet the distributor needs in each region, alongside the necessary incentive and management models, to enable the shift in portfolio aligned with the strategy.

Throughout the project, we trained an internal resource to lead the project management after our exit.

RESULT

The organization was able to increase their margins through the new core product, and experience a 4 year CAGR of 20%. The improvement in commercial efficiency was felt by clients, with a clear increase in scores demonstrated through quality satisfaction surveys.

TALK TO US

Francisco Pereira Leite

Francisco is a Managing Partner and has been working within Integration since 1999. An all-rounder, Francisco has moved across our practices, working for the first eight years with focus in Supply Chain and then increasing his scope to the Finance & Management and Implementation areas. His experience over more than 150 projects includes Implementation and [...]

Gilberto Sarian

Gilberto is a founding Partner at Integration. Over the course of more than 25 years he has led the development of Integration`s award-winning Supply Chain practice, advising international clients across Latin America, Europe and USA. With a background in Engineering, he frequently participates in events and lectures across the world, to discuss latest trends and [...]

Henrique Barbalho

Henrique is a Manager within Integration’s German office. He has significant experience working across Integration's Supply Chain and Implementation practices, both in Germany and Brazil. His talent lies in taking projects from the redesign to the implementation phase, across different industries such as Consumer Goods, Construction and Property Development, Agriculture, Retail and the Public Sector.

João Barros

João is a partner at Integration and has been working since 2006 in our Supply Chain practice. During this period, he been instrumental to the practice's development in Integration's 7 offices around the world, contributing directly to its numerous awards in Brazil. He has led, and continues to lead on numerous projects in Planning, Distribution, [...]

Leila Penteado

Leila is a Manager at Integration and has been working since 2008 in our Supply Chain and Implementation practices. She balances technical ability with a knowledge of people; having worked in the Implementation of complex projects with strong focus on Change Management as well as in Process Redesign, System Implementation, Integrations/Mergers, Logistic Network redesign, Transport [...]

Luis C Vidal

Luis is a Managing Partner at Integration where, since 1999, he has been working in the Supply Chain practice. During this period, he has led projects in the most diverse sectors and in themes such as Logistic Optimizations, Process Efficiency, Planning (S&OP), Industrial Strategy, Go-to-Market Strategy and Distribution Structure. His international experience encompasses the opening [...]

Rodrigo Castillo

Rodrigo is a Manager within our Implementation practice. He has worked in numerous complex transformational project implementations in USA, Europe and LATAM. Across Consumer Goods, Oil & Gas, Industrials and Pharmaceutical industries projects he has developed an expertise in strategy and PMO implementation as well as systems (ERP) transformation.

Roger Saltiel

Roger is a partner at Integration and has been working since 2002 in the Marketing & Sales practice. Considered an authority in the Indirect Channel and Partner Relationship Management (PRM), he is a member of the Associação Brasileira de Atacadistas e Distribuidores (ABAD) [Brazilian Association of Wholesalers and Distributors], working in the leadership of the [...]

Thomaz Fittipaldi

Since 2009 Thomaz has worked in our Supply Chain practice, leading on many projects with international scope in several countries around Latin America and Europe. He has built solid experience in multiple methodologies including Integrated Planning (S&OP), Logistic Network Redesign and Operational Efficiency, working with clients across sectors, but in particular Agribusiness.

Vinicius Olivo

Vinicius brings a broad and deep understanding of our Marketing & Sales solutions having joined Integration in 2011. He supported leading national and international organizations in Retail and Consumer Goods in building sustainable competitive advantage. His project experience ranges from Go-to-Market models, Market Scans, Customer Segmentation, Category Management and Perfect Store design.