The full story
Agribusiness companies today face a formidable combination of obstacles: declining real prices and margins, a constant pressure to raise productivity, increasingly demanding customers, a global turn toward sustainability, and a growing array of complex and disruptive digital technologies.
To help you achieve your full potential amid these challenges we created Efficiency and Cost Transformation in Agribusiness (ECTA), a methodical approach based on the outstanding results we have delivered across nearly 500 projects worldwide. ECTA is built on what we call a cycle of discipline—a self-reinforcing, companywide effort to thrive in five areas: operational excellence, capital productivity, commercial excellence, technology and data, and organizational capabilities.
Mastery of these five elements can turn undifferentiated producers into industry leaders. ECTA has helped large-scale farmers and other industry players successfully transition from commodity pricing, with cash margins as low as 5% to 6%, to slight premium pricing and cash margins exceeding 10%.
We serve our farming clients from our firm’s nine Agriculture Centers located in Chicago, Toronto, São Paulo, Buenos Aires, Santiago, Copenhagen, Johannesburg, Singapore, and Sidney, where our multitalented teams have worked in a wide range of geographies, commodities, and business issues.
The cycle of discipline
We believe the transition to full potential can’t be achieved by simply “pulling a lever.” It requires a more methodical approach. You can choose any one element of the cycle, depending on your company’s specific needs and opportunities, but long-term success calls for all five elements working together in harmony.
Let’s take a closer look at each element of the cycle:
- Operational excellence: Efficiency in agriculture operations often means balancing a combination of factors, including yield, quality, recovery, and productivity. We review your entire operation to make sure you’re fully anticipating all the effects of any decisions you make. Our cutting-edge benchmarking data and deep library of industry practices helps you understand what best-in-class looks like, and how you can get there with (or without) capital investments.
We help you identify opportunities for improvement in sourcing, maintenance, utilization, and contractor strategy. Throughout the supply chain, we analyze your decisions on seeding and crop care, harvesting and transportation, and the mix of labor and machinery. We have helped clients optimize their fleet schedules, their harvest sequences, and the role of capital in their overall budgeting.
- Operating models and capital productivity: Decisions you make as an agribusiness leader have deep implications for costs and capital cycles. We’ll guide your considerations with the quantitative and qualitative insights to help you avoid traps, calibrate risk, and capture high returns.
We can help you match your capacity with harvest cycles; design layouts of plots and fields; correctly size planting or harvesting crews; allocate acreage to various stages of harvests; explore new fleet-ownership models; strike the right balance of human labor and mechanization; and allocate capital across crops (including for players who want to double-crop in the same acreage area).
All too often, companies invest in production systems without leveraging synergies or anticipating losses elsewhere in the process. To prevent this, we help you optimize your capital structure in a way that offers flexibility and accommodates market volatility.
- Commercial excellence: We work alongside your commercial teams to show them how to activate every enabler of a perfect commercial strategy, be it product knowledge, market intelligence or risk management. From sugar cane fields to eucalyptus forests, our experience in the market dynamics of every major crop can improve your performance in product quality, logistics, and pricing.
We’ll analyze the four main elements of a winning product portfolio: price dynamics and industry outlook; product mix optimization; key purchasing criteria (KPC) and distribution; and outbound logistics optimization. We can help you build the production flexibility for mix changes.
- Technology and digital: There’s no doubt that new digital capabilities can clarify decision making and boost efficiency. But the sheer breadth of choices companies must make today often exceeds both their investment budgets and their attention span. Our experts help you sort through the noise to select and implement the technologies best suited to close your most urgent performance gaps. Recent developments in analytics and connectivity enable integrated solutions for field process optimization, precision agriculture, and smart operations driven by automation and telematics. We’ve helped clients implement everything from agribusiness-specific ERP systems to learning algorithms focused on imagery processing and weather prediction.
- Organizational capabilities: For decades, we’ve helped companies fine-tune or overhaul their organizational models to become more resilient and adaptive. To reach your full potential, you need clearly defined decision rights, optimized administrative activities, and a disciplined research and development process that tests and improves upon new equipment or biotechnology.
Our team will help your talent learn to not only identify and adopt best practices but maintain them through continuous learning. We can synchronize your talent’s key performance indicators with incentive structures custom fit for the different parts of your company. And we’ll show you how to implement robust training systems and knowledge management practices that reduce harvesting losses.
No one-size-fits-all solution
Decades serving agribusiness companies worldwide have taught us that just as every business problem is unique, so too must be every solution. We tailor our ECTA framework to your specific concerns, while reinforcing the cycle of discipline that sustains long-term excellence.
One reason we’re able to deliver superior results is that we take the time to understand the root causes of your specific challenges. Armed with deep industry knowledge that spans every type of crop, technology innovation, and consumer trend, we have developed tools that help us quickly identify the specific improvement opportunities awaiting you. These include:
- A rapid capability-gap assessment: This survey tool determines maturity levels and gaps across your organization. We’ll help you benchmark performance and cost structures throughout your operations.
- Performance diligence playbook: A fully-fledged “how-to guide” for identifying new opportunities, this playbook outlines proven initiatives that capture value, reduce costs, and improve performance.
- Benchmarking database: We’ve harnessed data from a wide range of sources to quickly help you identify a wealth of cost-reduction opportunities, improved pricing practices, and more.
- Use case library: Our always-growing collection of use cases encompasses applications across the agribusiness value chain, including operational improvement initiatives for all major processes and vendor information for all relevant technologies.
In addition to these tools our proprietary ARC℠ software is an intuitive, highly visual application that helps you manage every element of your transformation program.
A tough row to hoe
Agribusiness is a challenging industry, and becoming more so by the day. Sustainability goals can create internal conflict, as different operational groups optimize for different parameters. Customer preferences are growing more complex every season, creating supply chain demands that impact pricing. Meanwhile, aside from natural cyclicality commodity prices rarely increase, putting more pressure on margins—at least until the newest technology gives one player a marked productivity edge.
Because these challenges are so interrelated we’ve designed ECTA as an integrated system that can help you address them one by one, to uncover new opportunities to raise yields, lower costs, and mitigate risks. You’ll see solid results sooner than you might expect, thanks to our expertise in Agile, which allows us to break large, complex problems into smaller pieces that can be solved in an incremental and adaptive manner. And, because we collaborate with your teams every step of the way, you’ll own the resulting solutions and will have the skills you need to build on them well into the future.