01 Nov How AAD Assesses Partners
Four steps to finding the right crop protection partner
The crop protection product supply chain is like an internal combustion engine: It’s an integrated mechanism with a lot of components and moving parts that all must function properly to get product from the manufacturer to the farmer.
Just like the most reliable engine can break down, the most dependable supplier or distributor can face disruptions or logjams that obstruct its ability to provide products farmers need to raise their best crops. But just like performing routine engine maintenance can prevent major breakdowns, planning ahead and creating a strategy for establishing and maintaining productive relationships with suppliers can help shore up vulnerabilities that would otherwise disrupt the crop protection supply chain.
And that’s exactly what Aligned Ag Distributors (AAD) has done to ensure its owners get the products they need when they need them. As a result, AAD owners’ can eliminate one of the many variables that adversely affect their growers’ crop yield potential.
Aligned Ag Distributors President Mary Tolke and her team have worked together with AAD owners to build a four-step vetting process for suppliers. It’s driven by product pipeline, market position, product performance and business relationships.
“There are a lot of suppliers in the crop protection industry and we have purchase agreements with a lot of different companies,” Tolke said. “So, when we think about our key suppliers and what it takes to sustain crop protection supply chains for our owners, we think about the four specific attributes that matter most to our owners and their customers. AAD is able to put our owners in competitive positions in the crop protection product marketplace, and this vetting process is a big part of making that happen.”
Current and future product pipeline
As the first step in the vetting process, assessing suppliers based on current product pipelines is a way to make a considerable dent in the complexity of navigating the entire crop protection marketplace by focusing on those with the capacity AAD owners and their customers need.
Looking to the future through the same lens helps AAD not only select the right suppliers and distributors to meet customers’ immediate and short-term needs but ensure those crop protection partners will remain viable well into the future. The global marketplace analysis that helps determine suppliers’ supply chain viability goes beyond helping AAD owners align with the right crop protection companies, according to Buttonwillow Warehouse Company CEO Clay Houchin.
“Aligned Ag takes the evaluation of suppliers to a whole other level. We’ve always evaluated our suppliers consciously and subconsciously, but AAD is so good at being deliberate about their evaluations and the aggregated data that helps show who has the best products, availability and programs that will work best for us,” Houchin said. “Aligned Ag’s supplier evaluations give me confidence that we will have the products we need. That helps us retain and create value for our customers.”
Financial and technological standing
The third step in the AAD supplier assessment process — cost — is straightforward on the surface, but ties in closely with short- and long-term supply chain viability. Any crop protection distribution agreement must be based on product availability as well as the cost of that availability. From the perspective of its owners’ revenue potential, AAD selects suppliers that can maintain consistency and cost-effective product supplies. That means more than just short-term cost; it also accounts for how costs will change in the future as new technology advances product offerings.
“We ask ‘Will our owners make money with this supplier?’ We have some suppliers who help our owners be cost-efficient but don’t have a strong product pipeline. Eventually, we have to consider the financial impact of working with every supplier beyond their supply chains in general,” Tolke said. “That also means technology; long-term supply chain viability also must account for new chemistries and other technologies and how they’ll impact profits. If we have financially strong suppliers now, we have to consider how technology will potentially impact them in the future.”
Each company’s technology attitude is a major consideration in the supplier selection process for Houchin, and AAD provides additional analysis in helping him make the right decisions.
“We want to make sure our suppliers are truly investing in future technology. We want to innovate along with our suppliers and deliver that innovation to the farm gate. We need our suppliers to innovate in ways that help our growers attain the highest yields and crop quality,” Houchin said. “We need suppliers who can support that goal. It’s all about helping our growers succeed.”
Ease of doing business
Will a supplier be a flexible business partner who’s easy to work with in getting crop protection products to growers when and where they need them? That’s the final step in AAD’s assessment process, and one that’s “absolutely key” to long-term fruitful relationships. But it’s more about personal working relationships; how a business is operated and managed contributes to the ease of doing business and, ultimately, a supplier’s ability to meet the needs of AAD owners’ customers.
“It’s all about how straightforward and accurate they are in managing invoicing, credit and billing. How flexible are they in terms of managing product? We don’t want to work with suppliers who have a philosophy of ‘These are my rules. Do it my way,’” Tolke said. “We strive to work with suppliers who can help us be more efficient through flexibility in processes and how they manage product supplies. All of these things help us better serve our owners, who can in turn take better care of their grower customers.”