Supply planning in the seed industry: Complex and crucial

  • July 17, 2023
Group of Latin American workers working together at a distribution warehouse and planning some shipments

Supply planning in the seed industry affects virtually everyone. However, very few have any idea about this first step in bringing fresh produce to a hungry world. Supply planners contend with changing conditions and unpredictable environmental factors while supplying the seed variety the market demands.

The process of bringing a new seed variety to market
Bringing a new seed variety to the world is no small thing, and the process of supply planning begins here. Forecasting plays a key role in deciding on seed production levels that satisfy market demand. These potential new seed varieties are first grown in small batches — in a strictly controlled environment — for initial testing.

Seeds that pass this evaluation are entrusted to growers for high-volume cultivation and production. These crops, when mature, are harvested explicitly for seeds. These are processed, treated and evaluated to be sure they meet exacting quality levels. Seeds that pass these tests are packaged and delivered for industry purchase.

Supply planning in the seed industry

Seed industry supply planning is subject to many factors
The vagaries of agriculture — and those specific to the seed industry — complicate supply planning for the sector and make it a constantly moving target.

For one, global demand is often highly seasonal and erratic. Long-term production cycles of sowing and harvesting sometimes call for planning on a 24-month time horizon. Environmental factors, worsened by the developing effects of climate change, add to the inconsistency of supply. Strict origin and destination mapping leads to an extremely complex allocation of supply and demand sources.

With all these elements in play, there’s one more overarching need: fulfilling market demand efficiently while conserving the viability of soils and minimizing waste.

These issues require flexible solutions to supply planning difficulties
Supply planning teams must generate reliable data despite the variables inherent to the seed industry.

Planners must estimate the long-term production capacity of fields and entire production farms. They must fulfill industry seed demand while safeguarding the ongoing productivity of land compartments and protecting soils from nutrient loss. Planners must also select distribution network nodes for allocated safety stock. Drafting rough capacity plans for growers and producers helps avoid near-term supply disruptions. Those plans must adhere to standard business rules of priority and lead time.

All this is remarkable, given that these rules don’t exactly contemplate a business where too many inches of rain can disrupt supply.

Addressing these considerations
Our team knows that robust, yet adaptable methods are necessary to account for all the factors involved in the seed industry. We recommend implementing an integrated business planning (IBP) platform coupled with a heuristic optimization solver.

Formulated approaches apply order to what’s an inherently variable (if not chaotic) natural process subject to constant change. A resilient network governed by a suitable set of business rules should include an approach that can produce seeds while adhering to predefined, calculated rules. These rules are based on the default norms of compensation, sterility and yield density.

Setting grower priorities on scoring criteria like germination, experience and reliability is another concern. Planner-driven reports will identify areas of over-production and low-grade production. This determination protects soil quality and ensures the continued productivity of fields and individual parcels.

Once the productivity of precious growing land is preserved, you can address the issue of enough supply at critical points in the supply chain. Prepare for and integrate variances in production using safety stock buffers further down the supply chain. Applying a heuristic approach optimizes planning based on prioritized demand. These developments require an integrated view of the output from the quality matrix, supported by various key performance indicators. With this view, planners can make informed decisions over the short and long term.

Implemented solutions include statistically calculated safety stock targets. These targets recommend long cycle times at the processing stage and downstream from there, using already planned input days of cover. Incorporate high variations in grower yields into safety stock targets at the processing level. Generating high seasonality and long lead-time targets accounts for demand over lead time rather than bucket demand only. This approach supplies smoother and more exact high- and low-peak forecasts.

Production programs give planners high-level overviews of capacity consumption from different growers in specific growing slots. Planners will also have flexibility when creating new orders, firming existing orders and splitting suggested orders. Using IBP platform capabilities, planners receive periodically scheduled production programs via email. The heuristic method complements the current planning system. The approach provides due dates while calculating both demand and grower priorities and adhering to lot size parameters.

Planner controls offer a great deal of flexibility, unlike traditionally rigid planning methods. Also, enhanced visibility of specific-stage seed batch allocations makes in-depth planner review possible. Planners can change batch allocations manually, as well as reduce allocations as suggested by the heuristic solver.

Quality control evaluations of seed quality use scores assigned at specific intervals. They measure parameters such as disease, germination, reliability and grower experience. This comprehensive scoring includes an integrated quality matrix reporting system that gives planners visibility into all scores and percentages. Ultimately, it’s the quality matrix that decides which planned orders can be fulfilled based on produced seed quality and total yields.

The complex challenges of supply planning in the seed industry may seem too sector-specific to apply to other fields of commerce. However, these specific lessons have led to inventive solutions that solve supply issues in a variety of unrelated industries. 

— By Akshaydeep Singh and Naresh Makhijani

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