Supply chain management and Agribusiness

Supply chain management and agribusiness
Supply chain management and agribusiness

Supply chain management and Agribusiness. Through the growth of agro-based industries and the provision of jobs and income(s), agribusiness plays a crucial role in economic transformation. Agribusiness investments drive agricultural expansion by building new markets and developing a vibrant supply sector for inputs. A supply chain consists of producers, vendors, carriers, warehouses, dealers, distributors, and, eventually, consumers. This entire supply chain leads to the distribution of value to the consumer through each of the entities within the network of companies.


Agribusiness refers to the agricultural-related business activities carried out by the development and delivery of agricultural inputs through the fork, covering the supply of agricultural inputs, the production, and processing of agricultural products, and their sale to the final customer. Agribusiness firms provide the inputs, skills, and services needed for farm production, as well as for the processing and selling of agricultural products.

The tenacity of agribusiness companies is to turn the agricultural sector from a lifestyle to an entrepreneurial one, to boost productivity growth, increase revenue and job creation, enhance food security. Some level of growth and development continues in the agri-business climate. While agribusiness is seen as a genuine weapon for the country’s economic growth, the industry is at a crucial level where there is a lack of modernized technology in the industry and no connection between the agricultural sector and the market.

Impact of urbanization and globalization in agribusiness supply chain management: 

Because of greater urbanization and globalization, commercial interest in supply chain management in agri-business companies has increased. Although the differentiation of goods, increased efficiency, more cost-effective transport, and timely distribution have led to the growth of supply chains from the farm gate to the retail level, the stimulus for the creation of these chains is the customer demand for variety, quality, and year-round availability. Traditional agriculture and food companies based solely on costs are unable to fulfill the demands of customers. Individually, members of the chain lack the resources to respond to the demands of customers.

Understanding the supply chain management principles provides a means for managing the improvements needed in the environment to respond successfully to customer demands, combining and organizing the actions of all members of the supply chain.

These adjustments include the restructuring of companies at the level of the plant, processor, and supermarket; organization of production to reach economies of scale; and the accumulation of market share and strategic power to sustain foreign competition. Importance of essential factors such as shared trust; leadership by one or two members of the chain; the use of information technology (IT) in input sourcing, production preparation, and market access; reorganization of strategy to establish better production methods to satisfy customer requirements and food safety standards; and the smart use of market information to help small farmers overcome productivity

Supply chain management (SCM): 

Supply chain management (SCM) is a cross-functional approach to handling the flow of raw materials into an enterprise and the movement to the end-consumer of finished products from the organization. Today, companies are gradually realizing that in order to perform effectively in the competitive market and networked environment, they need to focus more and more on efficient supply chains, or networks.

What kind of output impacts various supply network systems could have on companies is not evident, and little is known about the conditions of cooperation and trade-offs that could occur among the participants. A dynamic network structure may be decomposed into individual component firms from a system’s point of view.

Supply Network: 

Traditionally, supply network firms have centered almost exclusively on the inputs and outputs of the processes, with no overt awareness of the internal control roles of individual network players. The selection of the system of internal management control has also historically centered on focal business efficiency. In modern years, as a result of globalization and the emergence of multi-national firms, joint ventures, corporate alliances, commercial collaborations, rationalization, ‘Just-In-Time’, ‘Lean Management’ and ‘Agile Production’ techniques, developments in the business climate have led to the growth of more diverse supply chain networks. In addition, technical advances, especially the drastic decrease in the cost of information exchange, a key component of transaction costs, have also lead to changes in the coordination of supply chain network variables.



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