Agriculture has come a long way since the time of mediocre tools. But, that’s a story for another day. Today we will talk about the agriculture supply chain. And do you know what it means?

The supply chain is a stage that refers to the process of delivering food from farmers to consumers. Once converted into sellable goods, the products can be processed and then packaged and stored before being shipped to market.

Steps involved in Agriculture Supply Chain

Typically, a supply chain in an agricultural setup involves three critical steps: goods transported from farmers to intermediate silos. The second step is where goods are then taken from the silos to plants and finally from the transportation plants to customers. Each of these steps requires many decisions and for each, the number of possible outcomes mires complex optimization analysis.

Generally, there are six parts of the agriculture food supply chain. This chain encompasses the businesses and/or individuals involved in agricultural production and food processing, and storage. Other parts are trading, distribution, and consumption.

Inventory Management System

An agriculture inventory management system is a way of keeping inventory levels and raw materials as well as other products in stock and accounted for. For instance, agricultural inventory may include pesticides, various fertilisers, seeds, fuel, and other things farmers use in the production process.

In other words, an inventory management system is put in place to ease the process of ordering and storing products. The inventory helps in automating end-to-end production, demand forecasting and accounting, and business management.

The Importance of Inventory in Agriculture

Firm assets inventory makes a critical part of the farm record-keeping system. It includes lists of all the assets a business has and their current value and facilitates the management processes. The depreciation schedule for income tax purposes is used as an asset inventory of a firm.

Agro-based industries find inventory management systems very important. Agribusinesses can ensure better packhouse management and better cost savings. Similarly, with greater visibility into their fluctuating stock levels, it becomes easier to maintain adequate amounts of farm inputs – raw materials, fertilisers, etc.

Take Away

The agriculture supply chain simply means the steps that are involved in delivering food from farmers to the consumers. The supply chain generally has six steps, which are production, processing, storage, trading, distribution, and consumption. The agriculture inventory system plays a critical role in the management processes of agro-based businesses.

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