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THE MANY new combinations of traits and seed-applied insecticides have quickly multiplied the number of seed choices available to growers. Although most ag retailers would agree that having a wide choice of seed for customers is a good thing, tracking what has been booked, delivered and invoiced and what remains available for sale can prove to be a big challenge. That is why inventory management programs, especially those that take into account the unique needs of the seed business, are a valuable asset.
Just what kinds of seed inventory management software programs are available to ag retailers? The following companies responded to inquiries from APPLY: Breckenridge Software (Breckenridge Seed Management Software), Littleton, CO; MetaSoft (Seed Management System), New Ulm, MN; Software Solutions Integrated (Agvance Accounting), Shelbyville, IL; and SeedChoices.com (SeedMarketplace), Portland, MI. (See pages 18 and 19 for a comparison of the companies' products.)
Inventory management perspectives
Seed inventory management has always been important. But with the proliferation of transgenic traits, seed treatments, technology trait reporting requirements and the increasing cost of seed, it has become even more critical to the retailer's everyday business. Dave Craft of Software Solutions Integrated (SSI) points out that the number of seed products is currently growing at a pace of nearly 10 to 1 over conventional crop protection products.
“Approximately 25 to 30% of the price the farmer pays for seed, feed or fertilizer is for the cost of distribution,” says Rick Mason, SeedChoices.com. “A significant amount of that cost can be the result of imperfect information.”
If a retail company's salespeople do not have access to updated inventory levels, they cannot make a sale, and if the company is unaware of the amount of unsold product in its warehouses, it will likely keep larger than necessary inventories to keep product flowing, Mason adds. “According to CarMetrics.com, Chrysler keeps an average inventory equal to 7% of estimated yearly sales,” he says. “The average seed company, on the other hand, keeps an inventory equal to 30% of annual sales. Using information technology, Chrysler cut inventories in half. We believe seed companies and dealers can do the same.”
Complicating matters is that seed is a live product. “It's open to spoilage and loss of yield over time. Carryover seed that has been treated also presents waste disposal issues,” says Bartt Strobel, Breckenridge Software.
Strobel adds that, except for crop protection products, seed is the only product in an ag retailer's inventory that is tracked by lot. Therefore, it is important that a retailer's seed inventory management system is able to handle lot numbers from start to finish.
Seed products containing transgenic traits also must be tracked for reporting purposes — both to the biotech trait suppliers and to the EPA to ensure refuge compliance. Retailers must know if their customers have the appropriate license to plant transgenic traits. This will become more complex as more stacked traits enter the market, Strobel says.
MetaSoft offers upload reporting. Tom Roberts of MetaSoft says the company is willing to work with any company in the development of electronic reporting via its Seed Management System. In addition to ensuring that refuge requirements are met, the reports help ensure the proper channeling of grain where a trait is not yet approved for certain export markets. Reporting requirements will likely increase as more output traits are commercialized for specific end users, such as food processors who may require ISO compliance.
Ask questions
Companies that are planning to buy a new or different seed inventory management system are well advised to ask the suppliers several questions, such as the following: Is it possible to try the software before buying it? How is the software working for current users? Can we get references? Can this software handle all of the unique discount calculations associated with the seed industry? Does the program handle substitutions and returns? Can we customize the program with our discounts, rebates and pricing? Is the software oriented to seed, or is it more general in nature? Is the software vendor evolving along with the seed industry? How are traits and treatments tracked? Are there capabilities for tracking lot numbers? What type of reporting capabilities are there? How well does the software support non-seed ag items? Do salespeople have remote access to the program? Can the software talk to my existing accounting program? Does the software supplier offer on-site training? What kind of technical support is available?
The advantage of a good seed inventory management program is knowing exactly what seed size, seed treatment and/or trait attribute(s) are available for a particular hybrid or variety. Real-time inventory management also helps when you need to switch out seed sizes and/or brands in season, says MetaSoft's Char Roberts.
Each product item becomes its own product with the MetaSoft software, Roberts says. “You might have one product in several versions. Our system accounts for each product inventory item so you know how many bags you still have that are treated with Cruiser or Poncho, for example.”
Remote access
Programs that provide remote access and real-time inventory levels are invaluable. For example, district sales managers may be responsible for storing product; without instant knowledge, they may be caught in short supply and lose a sale. Retailers with multiple locations need to know where seed is stored and at what location it is needed so they can easily move it.
In the near future, salespeople will likely have the ability to check inventory and place orders from a cell phone or a BlackBerry device, says Mason of SeedChoices.com. “Data from yield monitors and grid soil sampling also will allow the seed company (with the dealer's help) to match up seed better with a farmer's soils and management practices.”
A seed inventory program also should help assure that the right product gets to the customer. The Agvance program, for example, provides lookup tools to ensure the correct product is selected in a timely manner, says SSI's Craft. “Handheld inventory modules with bar-coding capabilities for the warehouse provide the ability to load out previously entered delivery tickets and verify the correct product was selected,” he says.
Because rebates and discounts also have a big impact on seed inventory costs, retailers interested in inventory management software should consider whether those programs will make it easier for them to adjust the cost of their seed for discounts and rebates that normally do not come until the end of the season and after they have invoiced all of their seed.
Inventory control is critical to successful supply chain management. “There is a critical need to match customer demand with product availability,” Craft says. “Inability to do this adds costs up and down the supply chain.”
The inventory management program exists within the Agvance Accounting module and is affected by all areas of the Agvance product line that might affect levels, cost or movement of an inventory item.
Inventory levels viewed within Agvance are up-to-date and reflect product movement before invoice is generated. Users can record receipt or delivery of product when it happens (such as a blend ticket that was just loaded; a delivery ticket; or an inventory transfer or shipment the retailer just received).
Lot numbers can be used to track seed from initial receipt of product to point of sale and then can be broken out for reporting.
Purchase order management allows for vendor prepay (multilocation and companywide purchase order management).
Key inventory reports showing status and disposition of seed products can be generated.
Flexible inventory costing methods include the ability to calculate estimated costs based on future discounts or rebates.
Optional bar coding for quick “check-in” of products
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