How Investing in Technology can Offset Labor Challenges and Rising Input Costs

The past couple years have certainly not been the easiest time in history to work in agriculture. 

But we’re also at a critical time for the industry. As war-related shortages abound, and with the world’s population set to eclipse 8 billion people by next year, ensuring a stable, productive food industry has never been more important.

With that in mind, Ag must be financially viable for those who actually do it. But with rising input costs over the past 12-18 months, plus ongoing labor shortages, that’s getting more and more difficult. The produce industry in particular has always run on small, tight margins. With the way things are going, those aren’t going to get any wider without some crucial, intentional decisions. Investing in technology should be the first of those choices. 

Tech can create smoother, more streamlined operations, eliminate hours of manual work from existing employees’ schedules, and improve access to data, which can help growers and operators make more informed, profit-driven decisions. Put simply, investing in tech can help you make up ground in the face of rising costs, and offset challenges of the ongoing labor shortages.

But it’s crucial to remember integrating technology into ag doesn’t just have to be about defending against mounting challenges. Tech can also help growers play a little offense, recognize and pursue new opportunities, and even open more profit centers. 

What does it look like when a labor shortage AND lack of technology collide? 

The challenges of labor shortages within the ag sector are obvious: delays in harvesting or shipping, slow supply chains, and empty shelves at grocery stores. 

But when ag operations don’t have integrated tech solutions, they’re putting an even bigger burden on the existing employees. 

As operators struggle to fill open job positions, existing employees are forced to do more tasks daily. Without modern tech solutions in place, this can mean they’re having to work in multiple software systems, spreadsheets, and even old-fashioned paper documents. This only exacerbates your labor shortage problem. As existing employees’ jobs become more onerous and tedious, training also becomes more difficult (and time-consuming). Meanwhile, job satisfaction decreases, turnover increases, and hiring becomes a giant time suck. 

So what’s the solution? 

Digitization, in the form of a supply chain tech solution. Finding an option that centralizes all data management and acquisition into a single, accessible-anywhere platform means employees can be even more efficient in day-to-day operations. 

That efficiency translates to happier, less stressed out employees, who stay at an operation longer. That longevity prevents you from having to go on the hunt for more labor at a time when the market is already squeezed. And it saves you money: according to Gallup, U.S. businesses lose $1 trillion a year on voluntary turnover. The cost of replacing one individual employee can be anywhere from one-half to two times that employee’s salary. Beyond saving money through retention, a more efficient operation also means you’re wasting less time on manual data entry, searching for old files, and fixing mistakes. 

Investing in a SaaS solution also means less money spent on ongoing IT and software engineering maintenance. These kinds of staff members are extremely expensive. Relying on them to maintain your own servers and software applications is just not cost effective:

  1. Their salaries are high
  2. You’re also spending money on staff hours as they recruit, train, and replace software engineers and IT employees.

Integrating technology into the ag value chain can also mean decreasing the risk of mistakes. During an era where complicated supply chains are under increased strain from external forces like labor shortages, inflation, and more, those mistakes can be costly.

What does an ag supply chain look like without adequate tech? 

We’re continually surprised by how many operations still print, file, and store physical documents. While it’s helpful to have analog backups of your materials, ag operators should still be thinking ahead and complementing those files with a digital solution. But with the right digital security and protection against theft or hacking, digital recordkeeping can be hugely supportive to your operation. (Not to mention the money you’ll save on paper, ink, and file folders…)

By integrating electronic documents, employees in the ag value chain can quickly view each one by order, see who sent it, and create an entire electronic “paper” trail that includes vendors’ or customers’ history. This makes it easy to find past orders, customer preferences, or vendor invoices when you need them. It also opens up opportunities for business development and more data-driven decisions: when everything is neatly laid out electronically, you can more easily track patterns and predict future needs. 

This electronic solution extends to the need for signatures, too—from drivers, shippers, and receivers. How many times daily do users who rely on analog have to print a document, sign it manually, then scan it back into a document management system? Utilizing a platform that has this process embedded into it, like Fusionware, can add a whole hour back into an employee’s day. Again, this makes their life easier (at a time when employee retention is critical). But it also clears the space for them to do work that actually adds value. According to a WorkMarket report, 53% of employees say they could save two hours of work per day if their companies took advantage of opportunities for automation. The average company could save more than $4 million a year when factoring in the hours of work they’re gaining back from their employees.

Beyond simplification, though, tech holds an even more important benefit: it reduces mistakes. Having streamlined, tech-forward processes means fewer holes in the value chain, lower risk for employees to mess up, and increased optimization. In a complicated supply chain like agriculture, mistakes can be costly. 

It’s also vital that a supply chain that gets food on families’ tables is transparent and safe. Tech can do that, with SaaS solutions that improve traceability of food, provide info on how items were produced, and improve communication amongst stakeholders when something goes wrong, like an initial outbreak of a foodborne illness. 

Imagine the lapses that could happen if, at every stop along the value chain, operators or retailers were having to dig into paper files for information instead of clicking a few buttons on their laptop. AgTech can help correct mistakes quickly, improve consumer safety, and help operators avoid the costs associated with shipment delays or a foodborne illness outbreak.

What to invest in: Characteristics of the best tech solutions in ag  

Not all supply chain tech solutions are created equally. So if you’re looking to streamline your operations and offset some of the recent high costs of doing business, it’s important to keep a few characteristics in mind. You’re going to want a platform that: 

  • Is accessible from any device, anywhere in the world

We saw what can happen when this is not the case. At the beginning of the Covid-19 pandemic, many companies used old server systems that required employees to be on site to use desktop apps and in-office VPNs. This needlessly chains employees to a specific location, and prevents operators from taking advantage of the flexibility they need to thrive in a 21st century supply chain. 

By choosing a software solution that’s accessible from anywhere, you empower your employees to manage their own time and accomplish their day-to-day tasks even when they can’t be on-site. 

  • Is customizable and extendable

Unfortunately, most technology platforms and systems are black boxes. You get what you pay for, and nothing else. However, it’s nice to have an option that is able to gather unique data points from an operation and present that data back to their customers/vendors uniquely on their own documents. Dynamic form generation is an increasingly helpful tool that can be embedded into a supply chain solution. This allows for further customization and optimization based on the specific operation. 

  • Offers reporting and business intelligence features

Centralized data is incredibly powerful. So, invest in the technology that can give it to you. 

Instituting a tech solution that centralizes data acquisition across an entire operation can keep your team from hunting down information from disparate data sources, decrease the time they spend compiling numbers, and give your operation a bird’s-eye-view of the business. Once data is all accessible in one central hub, you can start seeing patterns and opportunities for optimization. In a time when input and labor costs are so high, finding these efficiencies can majorly offset some of your expenses. 

Fusionware, for example, prevents employees from having to hunt through multiple tools for what they need. It provides one seamless system to manage operations, customers, transportation, and sales and marketing.

  • Integrates with other systems 

Although it would certainly be nice, a supply chain tech solution cannot do everything. However, in many cases, several different applications can be integrated together to form one cohesive repository. There, users can access all the data and information they need rather than having to log into multiple systems. Fusionware, for instance, is accounting system agnostic, and can integrate with whatever accounting software your employees are already using. 

Find a solution that can “talk to” your operation’s other systems, and your whole team will thank you. 

How does life improve for farmers and ag operators who integrate more tech? 

When operators invest into technology, it can often look like: 

  • Better management decisions thanks to centralized, accessible data
  • Streamlined processes, leading to fewer (costly) mistakes
  • Safer, more traceable food, leading to happy vendors and end consumers
  • No longer having to rely on a fickle labor force for every need along a value chain, and being able to use software for manual, tedious tasks
  • Happier employees, who can lean on smooth, tech-based solutions instead of outdated, messy paper documents or analog systems 
  • Wider profit margins 
  • A more stable operation, capable of handling ongoing challenges like inflation, labor shortages, or rising input costs

Investing into a supply chain tech solution can protect operations against a variety of problems and challenges. But it can also help them discover where to design a counterattack. 

Having a robust, centralized tech solution can mean more visibility over profit-driving opportunities that you might have missed before. 

How investing in tech can help uncover new profit centers 

Many operations along the ag supply chain are focused on their core business. And this makes sense: you want to be providing value in the way that you know best. 

But in many cases, there are ancillary services throughout the supply chain that aren’t being monetized. 

Within the produce industry, take, for example, transportation and logistics. Many grower shippers only make money on the produce being shipped. They embed the cost of finding transportation into the price of the product. They do this because there hasn’t traditionally been an easy way to track or monetize the shipping side of the business (and it takes a considerable amount of time to manage). 

But with the right technology like Fusionware, all of that is baked into the platform’s native processes. Users can easily see how much is being made per load to “book a truck.” We’ve even seen some companies take full advantage of this vision and start building out their transportation division with dedicated employees. Soon enough, it can become almost as profitable as their core product. 

A supply chain tech solution could be the spotlight shining into the dark corners of your agribusiness. Maybe it illuminates an opportunity you’d never given much thought to (or previously couldn’t figure out how to monetize). Critically, it can also shine that light into the corners of the business actually costing you money. 

Once you’re armed with this info, you can make better business decisions, shift to products or services that provide the best margins, and build a bigger cushion against external challenges and rising input and labor costs.

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