Driven by opportunities to increase transparency and efficiency for customers, global agribusinesses are turning to emerging digital technologies – including blockchain and artificial intelligence options – to reduce resource- and time-intensive processes associated with the global agricultural commodity value chain.
Archer Daniels Midland Co. (ADM), Bunge Ltd. (Bunge), Cargill and Louis Dreyfus Co. (LDC) are investigating ways to standardize and digitize global agricultural shipping transactions for the benefit of the entire industry. They are also seeking broad-based industry participation to promote global access and adoption.
Initially, the companies said they are focused on technologies to automate grain and oilseed post-trade execution processes, as these represent a highly manual and costly part of the supply chain, with the industry spending significant amounts of money every year moving documents around the globe. Eliminating inefficiencies would lead to shorter document processing times, reduced wait times and better end-to-end contracting visibility.
Longer term, the companies are seeking to drive greater reliability, efficiency and transparency by replacing other manual, paper-based processes tied to contracts, invoices and payments with a more modern, digitally based approach. Specific benefits would include:
- Improved quality and reliability of documents and data, with reduced review time and seamless transfer of transaction data to customers;
- Greater visibility across supply chain movements underpinning transactions, leading to reduced costs associated with shipping, storage and wait times;
- Standardized data using technologies accessible to all players, driving further efficiencies;
- Compatibility with other applications supporting electronic and digital solutions, providing an end-to-end experience for users, and
- Increased efficiency and transparency, enabling the industry to better serve its customers and consumers.
“We’re pleased to join the effort to foster modernization and standardization of data and documents in the global agribusiness value chain. By working together to design and implement a digital transformation, we will bring hundreds of years of collective knowledge and experience to simplify processes and reduce errors for the benefit of the entire industry,” ADM chairman and chief executive officer Juan Luciano said.
Bunge CEO Soren Schroder said, “We expect an industry-wide initiative of this nature to be able to accelerate improvements in data management and business processes and bring much-needed automation to the industry. Promising technologies will not only provide synergies and efficiencies for ourselves; we believe they will prove vitally important to serving customers better by laying the foundation to enable greater transparency.”
David MacLennan, Cargill chairman and CEO, said, “Agriculture has always been a technology industry. Farmers and our customers expect us to deliver innovations that make them more efficient, effective and profitable. We embrace this as an opportunity to better serve the industry and ignite innovation through new products, processes and partnerships.”
In January 2018, LDC completed the first agricultural commodity transaction through blockchain, which showed the technology’s capacity to generate efficiencies and reduce the time usually spent on manual document and data processing. LDC CEO Ian McIntosh said working with the industry to adopt standardized data and processes will allow companies to harness the full potential of emerging technologies to improve global trade.