Members of industry-led AgGateway sit down for an insightful conversation on eConnectivity and where the opportunities and challenges may be for retailers considering it.
Moderator: Brent Kemp, Executive Vice President and Chief Operating Officer of AgGateway
Prior to joining AgGateway in 2014, Kemp held the position of manager of process development at Southern States Cooperative, where he helped implement electronic connections with numerous trading partners.
Taylor Wildeman, Director of Operations, WinField United Canada
Wildeman has been with WinField United Canada since 2012, focusing on strategy, managing internal operations systems, developing e-business and overseeing accounting and finance functions.
Jordan Kuhns, Agronomy Portfolio Manager, GROWMARK
Kuhns is responsible for the strategy, development, marketing, training, installation and support of all IT applications used by Growmark’s crop nutrients, crop protection and seed business units.
Ryan Adams, Product Manager for Digital Agronomy, Nutrien AG Solutions
Adams has managed a digital development team for Nutrien’s Precision AG Group, as part of Nutrien AG Solutions’ digital transformation, building digital tools to support the retail business of Nutrien AG Solutions.
Brent Kemp: What comes to mind when somebody mentions the phrase “digital retail”?
Ryan Adams: For us, the digital retail concept is about getting information out to all of our retailers more efficiently. We have a rather large retail network across North America, South America and Australia. Just within our North American market, the ability to transfer data from our central locations and get it to the retail in a timely fashion in the same format is a huge advantage.
Jordan Kuhns: We've got a network of cooperative members in the Growmark system and all of them do business their own way – how it best suits their model. So, when we look at digital retail, we take the approach of “How do we meet the grower or end-customer where they're at?”
We see trends come from the farm gate that say, “I want to see more information. I want to be able to trace this from you, to me, to maybe the grain originator – how can I do that?” We look at digital retail as something that's coming from grassroots up; a new expectation on what we've got to be able to do. And, so, we look at eConnectivity and the tools of AgGateway as ways to do that. Because if we can pass information from start to finish electronically, it builds that network of track and trace and the ability to share information that the grower may want or require from us in the future.
Taylor Wildeman: I would echo a lot of Jordan's comments. The two things that I think about digital ag retail are, first, actionable intelligence – finding reporting tools that will allow us to act quicker and more accurately in a cost-effective manner. And the second thing that comes to mind as we've been down this journey in Canada is omni-channel. This means meeting the grower where they want to be at the time they want, whether it’s in your physical location or electronically – when they're out in a tractor or somewhere else and they want to engage with you. The real magic is making that experience look and feel the same.
BK: You made an excellent point about omni-channel. How do you develop that strategy? What are your markers for setting that vision and how do you measure against that?
TW: A lot of setting the strategy is deciding how you want to interact with the customer. When we have a customer that's interested in going down the “e-business journey,” as we like to call it, it's sitting down with them, and letting them understand some of the opportunities that we have available to them, but also spending lots of time on just what is it they're trying to get out of it. That's the first place that I say you should start.
JK: The next thing you probably want to do is segment and prioritize everything that you want to accomplish. There's so much noise out there, in terms of the possibilities and the connections you can make and all the things you can do in the sphere of digital ag. What's going to be beneficial for your operation? What's going to benefit the end customer? What will benefit your connections with vendors or trading partners? Identify those things, prioritize the ones that are most important and figure out the path you want to take. Then, I'd say dip your toe in the water. Start with something small – a connection that you've identified as valuable – and then just try to work it out. Don't try to transform the whole system right out of the gate. If you start small and try to get that quick win, you'll get more buy-in from other locations or other partners.
RA: To build a little bit on Taylor's strategy point there, we're also going down the omni-channel journey and a large portion of my focus is helping to curate and make sure we have the right agronomic data to help people on that journey, and to help support what we want to achieve. That goes back to the reason we're here for a discussion about AgGateway – a lot of the information you need to facilitate an agronomically-relevant conversation with a grower in an omni-channel context doesn't exist today, because we're all on disparate and different systems. So, bringing that together to support the omni-channel in the e-commerce marketplace is a huge piece of our strategy.
TW: That’s really the challenge – you have a great tool that you want to use, but it doesn't talk to anything. You've mapped all your boundaries in one place, you want to do it somewhere else, but how are you going do that? You can't. So, that's where the system connectivity really works.
We have a proprietary tool out of the States called Data Silo, and its job is just to have different systems talk to one another so that you don't have to do that. You can bring all your field boundaries in and that saves, let's say, 100 hours of someone's time and possibly getting things wrong. That's the type of thing you need to start focusing on, as well as “How are we going to get this technology to speak to another?”
BK: Since we're here, it's worth diving into interoperability. How do you and your organizations get to the place where you say, “This is something that I need to work on as a collaborative standard”?
TW: What we want to do is provide a tool that's available for the end-user and, for us, that’s generally the independent ag retailer. Our strategy is to take the expertise we have internally and leverage that through our parent company on the IT side to build an ecosystem where (retailers) have a tool available to them; a base-level tool that they can use and bring out to the marketplace, to their growers and to their employees. And then from there, working on APIs (application programming interfaces) and other connections that enable the tools that they have today to make them better for their business.
The challenge we have is that the one tool that we present is actually a number of tools behind the scenes doing the work. It looks nice, but there's a lot of behind-the-scenes work. That's where you need to have systems that talk together nicely and you have to have standards – an equivalent where you can quickly build API connections between one and the next so they can talk to one another and do what you want. If you don't – everyone's got a little different way of doing things and engaging and providing orders or providing information – then it just doesn't talk, it doesn't talk well or, it is inconsistent. We have to do some of that heavy lifting behind the scenes, getting everything ready and enabled, so that when independent ag retail is ready to take on that journey, we have something as a framework and then can work with them on other opportunities available.
If you start small and try to get that quick win, you’ll get more buy-in from other locations or other partners
RA: We talk a lot about interoperability and moving data between separate platforms, but a huge problem in the ag industry is that a lot of our data is not digitized. And, so, (the solution is) building a system to digitize that data and make the data available in a consistent format. Another industry issue we face, especially with equipment, is proprietary formats. When you start trying to move proprietary data formats between platforms, you run into huge interoperability issues. So, as an industry, how are we going to help digitize all of our information so we can put it into those API systems?
JK: I'll add to that, too. Along those same lines, sometimes you may not necessarily be ready to make the transition because of that. If a grower walks into your office tomorrow and says, “I want to know how many tons of fertilizer we put on each of my fields this past year. Can you provide that information?” As the retailer, maybe you may not be able to do that because that information isn't digital – it's in the head of the applicator who did the spreading and you're just sending them a bill for 250 tons of fertilizer across all of their fields. So, we first dive into the process – what processes need to change and why? And, there's going to be work there, so who gets the value out of the process change because of the extra work that may be involved to send out 10 invoices instead of just one lump-sum invoice?
First, look at the process that may need to change and then build on that to see where you're currently at. You may not necessarily be able to have a proprietary-built solution at your fingertips, so never dive into one approach without asking, “Should I buy this, should I build this, or should I partner with somebody on this?” If you have the mentality of “you don't have to go at it alone,” there could be another provider out there that you could purchase their tool or their solution – white label it, so it's branded in your own way, or even partner with another person in the industry that may have a solution and are willing to work with you on it.
Instead of trying to be a master of all things, you can find people who are masters of a single process that you need done and use a common data structure to connect to them.
RA: I think one more point to add is, as we get into a digitally connected ecosystem, it really enables us, too. Instead of trying to be a master of all things, you can find people who are masters of a single process that you need done and use a common data structure to connect to them. So, if it's processing field boundaries from log data, go find the person that's the best at that and connect with them. Let them do what they're great at and then focus on doing what you're great at – working with growers out in the field.
BK: Are there any success stories that you can share about how eConnectivity and interoperability has improved your process or improved your bottom line?
TW: I'd say, no, not at this point. This'll be our third year here in Canada operating as WinField United. Winfield United in the states has been around quite a bit longer and there are some really good success stories – I believe there was a case study done with Winfield and AgGateway looking at how the connectivity between themselves and the ERP and the manufacturers to process orders and do invoicing and how much efficiency there was saved. It was significant. You know, you're doing the same amount of volume with a third of the people to be able to process those payables. The accuracy of information – particularly the timeliness of information – that's where we see the opportunity here. We've seen success in the states and are really optimistic about what that opportunity is here in Canada.
JK: I don't have any metrics around it, but there’s one thing that sticks out in my mind. We send EDNs (electronic delivery notifications) or ship notices, to our retailers. When you get a full truckload of seed coming to your location for a group of farmers, with all the different lots or batches and all the item numbers and SKUs that come with it, it's just rife with opportunities for error. What we hear a lot from our retail locations is that when that EDN comes in and pre-populates the accounting system with the lots and the quantities and the item numbers that are on that load, they’re basically at a zero per cent chance of mistyping one of those in. It reduces a lot of work because they can import the EDN, rather than somebody sitting down with the bill of lading to type it in. And you know, if you mistype a lot number and then the vendor recalls the batch, you lose that link and you've got to go manually look for it.
RA: Similar to Taylor, we're too soon on our digital journey to have specific examples of where we've seen successes in Canada, but one area we do see success today is in our California market and how they are using the data interoperability down there. If you're not familiar, before you can sell a crop protection product or fertilizer in California, you have to send a form to the government. They have to acknowledge the receipt of it, and check that your prescription was correctly built for the regulations in California, before they can send it back and you can hand the jug of chemical to the grower. It becomes a huge headache. I can't speak for the Californians, but from all the feedback they've given me, if it wasn't for having digital systems that can connect and fire-off that information electronically, it would grind the retail to a halt. It makes a huge difference being able to just send that information, whether it's a bill of lading with lot numbers or the land location or what products are going to go down at what rate for regulatory purposes, and digital connectivity gets us there.
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BK: Let's talk a little bit about what happens in the field and the gobs of information being collected on equipment and implements. AgGateway members have developed what they call the ADAPT data model and it's a standard reference data model that allows any equipment manufacturer to take their proprietary format and transform it to a standard that anybody else can consume. Where do you see opportunities for retail to play in that space?
RA: I think the one that stares us in the face every day is custom application. Today, probably most of your retails work the same as most of ours. You get a hand drawn picture from the operator showing you where he went on the field and where he put his product down. Having the ability to pull the as applied map off that applicator and directly connect that to the ERP system and then ship that out with a bill to say, “Hey, look, you wanted ammonium sulphate floated on that field… here's the map of where the ammonium sulphate went. We put 40 pounds an acre, as you asked us, and we got even coverage and we applied two hundred and one acres. Here's your bill, Mr. Farmer.” It's a huge opportunity for the retailer right now.
JK: I'm going to gravitate towards custom application, as well. We're looking at tools across our system, piloting this year and next year, that can ingest all the custom application work orders that need to be done and then build a route for the retailer that says, “Based on the products that you're putting down and the location of the fields that you need to go visit today, I’d say do them in this order and I'm going to assign these jobs to this applicator and these jobs to that applicator, because if they divide and conquer, they'll be the most efficient they can be.” That can allow you to put some lighter fluid on your operations and make you be a little bit more efficient, whether that's in fuel usage – using less fuel because you’re not bouncing across the area in a way that's not optimal – or maybe you have too many sprayers because you’re not really optimizing your applicator’s days appropriately.
TW: A lot of it is around going back to understanding what it is you want to get out of the tool and how you're going to be able to use it and the people that are involved in that process.
I think one of the questions that we hear from our customers all the time is, “How do you get started?” The first thing you do is get to know your processes. You think you know your processes specifically, having multiple locations, but there's a very high chance that you don't do the same thing from one location to the next. And as soon as you don't, the system you're going to enable electronically will not work correctly because you've got to define the rule. If the rule says ‘do X after Y’ and one location does it and another doesn't, all hell breaks loose. So, you need to really focus in on your business processes. What we've found from the experience of connecting our customers’ ERP systems with our own, is that they get really good at that and then as they go along, they actually get sharper. The pencil gets sharper when they start working through that specific thing. So, I'd say, really, look towards your processes, get them down on paper, work as a team and make it happen.
You could start now by cleaning your data. Why? Because you're behind the system. The data comes in a database or tables and they need to talk to one another. There needs to be a standard language. And, so, you need to standardize that first. A system isn't going to do that. You need to do that. That's some of the heavy lifting that you need to do to enable those systems. So, instead of a three week, one month or two month implementation, that could take half a month, half a year or longer if you just don't have the data ready, and then you're always playing catch up.
BK: When we talk about interoperability and data standards, a lot of people immediately leap to, “Oh, my gosh, my computer has to talk to somebody else's computer and that sounds really expensive – both in time and resources and dollars.” We have the ability in most of our systems to output a spreadsheet and, once you've got clean data, that spreadsheet may serve just as well as any other standard, so long as you agree this is the column that your customer goes in, this is the column that your product goes in and this is the column that you're quantities go in.
Talk a little bit about that cost curve, if you can. What are those things that a retailer needs to consider in terms of investing in legacy systems, knowing that nobody is going to go out and change everything immediately on day one?
JK: I think it's a little bit of what I alluded to earlier – the “build, buy or partner” mentality. So, with a legacy system either you look at what you can do with that system, with maybe your in-house developers or in-house IT team, or is there another thing you can just plug in on top of it to make it work? A couple of things that stand out to me, though, is we make sure we've got people or resources dedicated to B2B e-connectivity type activity, because there is there is some monitoring and some vigilance that has to go into some of those things. And then the other thing is – I'm not necessarily sure if it's a financial cost – but would we like to make sure that the people using the connectivity or using that standard understand what's happening in the back end. We try not to tolerate the “Oh, that's over my head” attitude. We try to really explain that when you hit “save” on this order, it's going to send that Excel file, for example, over to the vendor and they know what to do with it. We like to foster that understanding across the company, so the effort’s not solely isolated on the IT division.
TW: There certainly is a cost to build your processes, to think through your strategy, to spend the time to do that. That's time you could be doing something else. So, there is that initially and some of it's unknown – you don't know how you're going to get there. It takes time and patience and you have to just be willing to work with it, and you need to be willing to be comfortable that it's always going to be changing a little bit. So, you start with small changes like, 2.0, 2.1, 2.2, then to a bigger change say, 3.0. That's how this is happening in the technology space. It's not waiting for the perfect thing to be built. It's doing a couple of things that you think is right that you can really engage in, and that you can do really well, and then figuring out how to adapt with other stuff. But there will be costs. These ag technologies cost, a lot of them are yearly annual subscriptions, and a lot of that's because they're reinventing the wheel and building and adding onto the tool.
RA: We talked a little earlier about getting some of your older data up to snuff and cleaning data sets. I think the warning there is you can also burn money faster than anything you've ever seen, spinning your wheels, trying to clean old, archaic datasets. For some of this stuff, there's got to come a time where you just say, “No, we're going to move along” because you can burn millions in the snap of a finger trying to clean data.
Audience Question: What are you doing for security when you're running on different platforms?
JK: We’ve got a couple of people that work on single sign on, so our tools can talk to each other. But then with that comes the risk that one log-in can access multiple tools, so in tandem with that, we implemented multi-factor authentication – you've got your password and then you've got something else on you, whether that's a mobile phone being texted or something along those lines. Building some of those security layers helps protect the data and, as more of these tools and software applications move into the cloud, you can make sure that your data is redundant. And then, finally, ask a lot of detailed questions about the partners that you're getting involved with. Make sure they've got experience in the things you're trying to do and ask those pointed security questions, as well.
TW: Very much, very much the same as what was mentioned on multi-factor authentication and equivalent. Cyber security is a really big piece and there’s even more risk the more you buy into the strategy. A quick tip just for any retailer – you can password protect any of your Excel files and its 128 bit encryption. It's like the same as the Sierra uses, so that could easily be one quick way to implement through Excel sheets or equivalent. Downside is, don't forget your password because there's no way to come back from it.
BK: To build a little bit off of Jordan's comment, ask questions of your trading partners. When you're talking about interoperability in the supply chain connectivity that we've discussed here, it's important to have that conversation with them as well.
Mitch Rezansoff: How important is change management and investing time into change management?
RA: It's absolutely critical. We have a huge network across North American of “change champions” who are specifically trained to help facilitate change. Almost as much effort goes into our change management strategies as actually building the digital product that we intend to change, because we have to change habits, in some cases.
JK: I'd say you could spend at least half of the time involved in just managing the change, and that's just getting people up to speed on what's happening, why it's happening and when, then getting the buy-in and mapping the processes. It's a large chunk of the time – we will go out and we'll demo a tool for an hour and then once we get the green light from the retailer that they're interested in implementing the tool, we'll schedule a full day workshop just to find out how they operate so we can figure out how to set the tool up itself.
TW: It's going to happen down at the field level and all the way up, and you need everyone involved to make it happen. You need to spend time thinking about it and you need people to engage in it, or else you're not going to get the end result that you're looking for.
MR: When you go through the process of redesigning and implementing systems, using invoices as an example, how critical is it to design for the end use customer and not just for internal reporting purposes?
RA: With digital, everything is stored in an electronic data format, so now we have the ability to make an internal report or invoice that works great for the accountants. But then, on the flip side, we can design a completely different invoice to go to the customer that works exactly for their needs. Being digital, you have the ability to have the two separate reports that are pulling the same data from the same database, but it shows in the right format for the end user who needs to action off it.
BK: The take-away from this discussion is that, yes, there's cost and, yes, there's time, but at the end of the day, what we're talking about is improving your process, so that you can have information available in a format that's meaningful to your customer, and that's usable by them, so you can spend more time with them as the trusted advisor and you can improve your sales to that customer. That's what this is all about.
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