Supply C hain Management Soluti ons | S A P Rural Sourcing Management

Promote Food Supply

Transparency and
Smallholder Welfare
Encourage Sustainability across the
Rural Sourcing Value Chain
© 2017 S A P S E or an S A P affiliate company. All rights reserved.

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 Addressing Key Challenges for
the Global Food Supply

World population is expected to reach 10 billion by 2050, 1

and we must double agricultural output per acre by then
to meet market demand. Meanwhile consumers
increasingly demand quality, traceability, and
sustainability in food production. We must reimagine
the business models that ultimately feed our bodies.
S A P is taking the lead with a socially responsible
© 2017 S A P S E or an S A P affiliate company. All rights reserved.

soluti on that protects business value.

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1. World Population Prospects, United Nati ons, 2015, https://esa.un.org/unpd/wpp/publications/files/key_findings_wpp_2015.pdf.

 E MPOWE RIN G T H E S M A L L H O L D E R 5.5 million smallholders. 3 The World As early as 2009, SAP
FA RME R Bank tells us that agriculture is the main identified a need to help
The need to boost food production is industry in sub-Saharan Africa, employing developing nati ons
already being addressed in developed 6 5 % of the labor force and accounting
improve crop quality
countries by powerful agribusinesses with for
ready access to the latest equipment and roughly one-third of gross domestic product. and producti on levels,
technologies. That means the greatest And challenges to agriculture abound in and we focused research
future increases in global output must come the region, where there is often only limited on enhancing food
from developing countries. Approximately access to potable water and sanitation. processing on the
5 0 0 million smallholder farms produce Close to 3 0 % of planti ngs succumb to smaller scales typical in
© 2017 S A P S E or an S A P affiliate company. All rights reserved.

about 8 0 % of the food consumed in Asia disease, and younger generations leave
Africa.
and sub-Saharan Africa, 2 and 9 0 % of the land to seek more lucrative employment
the world’s cocoa production comes from in other industries. 4

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2. Viewpoint: Smallholders Can Feed the World, International Fund for Agricultural Development, February 2011,
https://www.ifad.org/documents/10180/ca86ab2d-74f0-42a5-b4b6-5e476d321619.
3. Cocoa Market Update, World C ocoa Foundation, 2014,
http://www.worldcocoafoundation.org/wp-content/uploads/Cocoa-Market-Update-as-of-4-1-2014.pd f.
4. “Fact Sheet: The World Bank and Agriculture in Africa,” The World Bank, http://go.worldbank.org/GUJ8RVMRL0
.
In this economic climate, we need to help smallholder
farmers succeed. We need to encourage them to begin
to work collaboratively with their neighbors and other
stakeholders in the value chain by joining farming
cooperatives, for example. We must also bring them
access to machines and scientific know-how that can
improve their crop volumes – and to educational and
fi nancial services that can enhance their quality of life.
Figure 1 suggests an innovative way to rebuild the food
supply chain by focusing on small farmers.

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 Food
producer
Cooperative Originator

Machines
and farm Agrilab equipment
© 2017 S A P S E or an S A P affiliate company. All rights reserved.

Agrichem
Contractor
producer
Financial
services

Figure 1: Farmer-Centric Rural Sourcing

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 PROMOTIN G FAIR T R A D E
At the other end of the value chain, 21st-
century consumers insist on being able to
trust the physical and social wholesome-
ness of their food. They want to know that
such products as coffee, chocolate, nuts,
and tropical fruit begin life in the hands of
farmers who are fairly compensated for
their labors. And they demand transparency
in the processes that bring these products
© 2017 S A P S E or an S A P affiliate company. All rights reserved.
to their grocery shelves.
As we gradually recognize the vast cultural
and economic differences in the value
chain, we must learn to respond with
empathy and responsibility. To protect our
planet wisely, we must act on the realization
that the fate of one person affects the fate of
all in our global economy. In the developed
world, we must demonstrate our willingness
to compromise on price and convenience
as necessary to promote social justice in
the form of fair trade with the developing
world. A s markets respond to these con-
cerns, fair trade sales are expected to
increase exponentially in the next few
years. Retailers and manufacturers of
consumer products will place a high priority
on traceability of their ingredients and
finished products.
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 Innovating for the Success of
Sustainable Rural Sourcing
MOVING TOWARD M OBI LE
A G R I B U S I N E S S IN
AFRICA
As early as 2009, S A P identified a need
to help developing nations improve crop
quality and production levels, and we
focused research on enhancing food
processing on the smaller scales typical
in Africa. We started with pilot implementa-
tions in Ghana and Uganda, which over
© 2017 S A P S E or an S A P affiliate company. All rights reserved.
time have grown to include more than
100,000 farmers. Our goal was to
strengthen the value chain and promote
African produce while enriching the lives
of smallholders with income security,
microfinancing, and education.
We also collaborated with the Deutsche
Gesellschaft für Internationale
Zusammenarbeit (GIZ) GmbH.
Together, we funded research into When we help ensure
equatorial agribusiness with the support the future income of
of the develoPPP.de program run by the small farmers, we move
German Federal Ministry for Economic
the world closer to the
Cooperation and Development (BMZ).
In the past, we worked with the African eradication of poverty –
Cashew initiative to develop an innovative the first of the 17 United
mobile app that records field transactions Nations sustainable
involving small-scale producers and delivers development goals
related data analyti cs. With support from and one that S A P
GIZ, the Uganda Coffee Farmers Alliance
wholeheartedly supports.
used this app to let managers record the
quantity and quality of coffee supplied
from its growers, along with payment and
logistics data. The individual transacti on
data later served as proof of income to
increase the farmer’s access to formal
financial services. 7 / 15
E VOLVI NG A F U L L S O F T WA R E SO LU T I O N
The SAP® Rural Sourcing Management solution is a
cloud-based technology for enhanced management of
sustainability data through digitally recorded information
on producers, their farms, and their communiti es at
every level of the value chain. Field agents collect data
on farmer registration, purchasing and processing of
produce, and transportation records. From the station
that collects the farmer’s output to the corporate
warehouse, the solution helps tighten links to keep the
value chain transparent and sustainable. Activity records
related to sustainability help assess individual farmer
and community requirements and deliver higher-quality
and higher-impact support. Adding to the features
accelerating smallholder access to existing services for
shipping and packaging, S A P plans future innovations
to track the use of seedlings, fertilizers, and training
offerings. 8 / 15
A D D R E S S I N G TWO Field
Far mer
technician Ag ronomist Customer admin

K E Y L I N K S IN T H E
VALUE C H A I N
S A P Rural Sourcing
Management consists SAP ® Rural Sourcing Management soluti on S A P Rural Sourcing
(smar tphone client)
of two applications, one Management
(UI5 client)

designed for use in the

Master data impor t
field on mobile devices Offl ine OData (Microsoft Excel template)

and the other for use

in business offi ces on S A P Cloud Platf or m Mobile Ser vic es
S A P Cloud Platf or m
desktop computers.
Figure 2 presents a S A P Rural Sourcing Management OData services

sample architecture.
S A P Cloud Platf orm
Identity
Authentication
ser vice

S A P H ANA® platf orm

Figure 2: Proposed System Architecture for S A P Rural Sourcing Management

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 Farmer registrati on and Farmer surveys
master data
Generati ng Informati on in the Field
As cell-phone coverage continues to expand into remote
regions, people can use a combinati on of desktop and
mobile access to optimally generate, share, and use data,
Price information Farmer purchasing
fostering greater value for every member of the value
chain. The S A P Rural Sourcing Management mobile
app for field agents uses screens like those illustrated in
Figure 3 to support inclusive agricultural processes that
focus on and maintain traceability in direct procurement.
Certi fi cati on and Advances and
traceability payments

It runs on S A P Cloud Platform Mobile Services and

works offline, with bandwidth optimization, to help
users record and manage the following input: Transportati on Grading and quality
logisti cs indicators

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© 2017 S A P S E or an S A P affiliate company. All rights reserved.

Figure 3: Sample Screens from the S A P Rural Sourcing Management Mobile App

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 Outf itti ng Central Operati ons
with Desktop Web A cc ess
The desktop application in S A P Rural
Sourcing Management takes advantage
of advanced technology to cope with rural
infrastructures and deep analyti cs to
increase the value of the mobile input.
It runs on S A P Cloud Platform to supply
field data to analysts in central processing
locations, for example, personnel in
© 2017 S A P S E or an S A P affiliate company. All rights reserved.
The functions of the desktop application
include data access management, price and
distribution information, and management
of master data related to organizations,
people, products, and certifications. It
features supply chain management with
track-and-trace functionality and up-to-date
visibility into storage and logistics. Desktop
users gain such benefits as more efficient
operations, direct exchange of information

nongovernmental organizations (NGOs) with market participants, and the ability to

or agronomists in large corporations that respond quickly to quality and distribution
market products from the developing issues.
world.

The greatest future increases in global output

must come from developing countries.
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Doing Good through
Better Business
O FFE R I N G C U T T I N G- E D GE A N A LY T I C S TO
MAN AGE MEN T
Tran sacti onal S elf-service Geographical
Most people now accept that decisions made in our analyti cs analyti cs informati on displays
boardrooms can ultimately influence the health of the
world. Using the S A P Analytics Cloud solution hand in
hand with S A P Rural Sourcing Management can bring
top-level managers the information they need to make
choices that not only fine-tune their business models Geoanalyti cs Standard Informati on charts
and tracing geovisualizati on and dashboards
but also benefit humanity.

SAP Analytics Cloud helps with:

Defi niti on of sustain- K P I sharing with Integrati on with

S A P Analytics Cloud is powered by S A P Leonardo and ability key performance customers and Microsoft Excel
indicators (K P Is ) partners
can be enhanced with S A P Leonardo Analytics
capabilities, all of which adhere to high security standards.

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To date, S A P has begun agricultural
sustainability initiatives in 9 countries
with a total of 17 supplier organizati ons and
over 100,000 farmers. We have piloted the
SAP® Rural Sourcing Management
soluti on in versions for 10 languages and
6 crops. Check here for more information
on market trends and the S A P vision for
digital agribusiness. Please e-mail any
questions and comments on the software
to agribusiness@sap.com. You can also
explore our full portfolio of solutions online at
www.sap.com or through the S A P Soluti on
Explorer site.
TA L LY I N G T H E B E N E F I T S
Approaching digital transformation and supply chain
management with an eye toward sustainability is no longer
just a good-to-have option for appeasing consciences in
the developed world. If we are to continue to feed the
human population as it nears 10 billion at midcentury,
we must begin today to ensure the success of even
the smallest farmer in the least hospitable and least
developed region of the planet.
14 / 15
 The S A P Rural Sourcing Management
solution offers several ways to improve
yields and lives. Large agribusiness
companies can better target efforts in
due diligence and farmer training. And
a supply chain that reliably links farm
and logistics processes can ensure full
traceability in foods for socially conscious
end consumers and keep improvements
in output – and quality of life – visible
© 2017 S A P S E or an S A P affiliate company. All rights reserved.
from farm to fork.
With this software in the hands of field
agents and on desktops at company office
locations, rural farmers gain access to
relevant information on modern equipment,
laboratory research, and emerging tech-
nologies. They can more easily collaborate
with peers and obtain income reports.
With income reports in hand, smallholders
have access to microfinancing, which
empowers them to invest in yields, for
example with seed advances. When we
help ensure their future income, we boost
their chances of prosperity. And that
moves the world closer to the eradication
of poverty – the first of the 17 United
Nati ons sustainable development goals
and one that S A P wholeheartedly
supports.
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