CASE STUDY

Supply Chain Risk Management Helps an Agricultural Equipment Manufacturer to Save Millions

Dec 20, 2017

Overview of the Agricultural Equipment Industry

The agricultural equipment manufacturing industry comprises of a wide range of tools and machinery that are used in various processes of farming to improve output and enhance the overall crop quality. Primitive tools are now being replaced with various new agricultural equipment, which mainly includes drip irrigation equipment and crop processing equipment.

The increasing population across the globe is one of the primary drivers for agricultural equipment market as it spurs the requirement for food which, in turn, aggressively demands improved equipment for agriculture. Also, factors such as government initiatives and rising urbanization rate are shifting the focus of farmers to modernization and improving their investment power on agricultural equipment.

Let’s look at some of the vital factors that are expected to influence the growth prospects of the agricultural equipment industry in the coming years.

  • Lack of media skills: Digital applications need to become part of farmers’ everyday routines, whatever their prior knowledge or age. Further training and formal education are necessary as these applications provide added value to the farmers and help them identify the risks involved in the supply chain.
  • Deficiencies in telecommunications infrastructure in rural areas: Modern agriculture, like all other sectors of the economy, rely on up-to-date telecommunications infrastructures. But in rural areas, there is often only a limited mobile signal or internet connection. This usually makes it impossible to make optimum use of digital applications to achieve costs savings and increase efficient utilization of resources.

As a result of these factors, firms specializing in the manufacturing of agricultural equipment are leveraging the use of supply chain risk management solutions. The supply chain risk management solutions help assists firms in this space to achieve production and delivery capabilities while avoiding sales losses. These solutions also help business integrate several previous or ongoing initiatives, including those for business continuity and supply-chain security. request free proposalFirms operating in the agricultural equipment manufacturing can also identify and prioritize risks that it faces and devise risk treatment plans which include measures to protect the supply chain from risks and plan and respond to events that may cause risks.

The Business Challenge and Journey

The client, a leading manufacturer of agricultural equipment, wanted to identify the opportunities to make their supply chain more resilient and maintain topline revenue and market share even in the case of a supply chain upset. The client’s procurement function was also fragmented and spread across the numerous business units, which led to business challenges when external events – such as natural calamities– disrupted the supply base. These events sent buyers scrambling for available capacity without any collaboration or teamwork.

To drive the transformational aspect of changing the way the client engages with its risk exposure, SpendEdge tailored an extensive research methodology. The research approach comprised of primary and secondary research coupled with qualitative and quantitative data collection procedures.

During the course of this supply chain risk management engagement, the agricultural equipment manufacturing client was able to monitor the complete process from risk evaluation and risk analysis through risk management and right up to residual risk control. The client was also able to align their category management strategy with supply chain risk exposure. This helped them make better sourcing decisions and adjust the total cost of ownership accordingly.

Fundamental questions answered in this supply chain risk management engagement

The Results

With the help of this supply chain risk management engagement, the agricultural equipment manufacturing client gained a full visibility into all types of risks including by supplier, cost and quality, category and location, legal and compliance, and natural disasters. This helped them saves millions across the supply chain and business units.

To know more about our supply chain risk management solutions

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