Cooperative product supply and contract management system
The cooperative compares the member's forecast supply to agreed quantities and buyers' orders. The changed quality or quantity indicates which period the output will be missing.
Members of the cooperative, their fields or animals, planned quantities, breeds, contracts, advances, commitments and previous result are held in CRM, accounting and tables. The cooperative inaccurately predicts total supply, communicates slowly with members and has difficulty managing the risk of contractual obligations.
How the solution works
- Identify the supplier and the role of the contract
- Collect a dated estimate of quantity and quality
- Separate the contractual obligation
- To meet the buyer's need and limitations
- Renewing the Plan of Risky Promises
Key challenges
- Data for member farms, contracts and planned productions are fragmented
- The buy-in forecast is not sufficiently tied to buyers' orders
Solution capabilities
Supplier and member
The supply ratio does not always imply a cooperative membership. A member's rights and commercial contract are protected separately.
Forecast version
The quantity, quality group and period have an estimate date. Milk collection cycle is not managed as a single grain crop.
Commitment link
The buyer's need is compared to the right supply and real reservations. The same amount without being promised twice.
Shortage response
A reduced estimate shows the affected contracts and responsible commercial action. The change of forecast does not change the contract itself.
Business context
- Data for member farms, contracts and planned productions are fragmented
- Members of the cooperative, their fields or animals, planned quantities, breeds, contracts, advances, commitments and previous result are held in CRM, accounting and tables. The cooperative inaccurately predicts total supply, communicates slowly with members and has difficulty managing the risk of contractual obligations.
- The buy-in forecast is not sufficiently tied to buyers' orders
- Farm yield or output forecasts, quality classes, storage capacity, transport, buyer contracts and market prices are analysed separately. Too much or too little commitment to buyers increases the cost of urgent sales, outstanding contracts and logistics.
- The quantity offered to the buyer is justified by the supply of members
- The cooperative has to match farm forecasts with supply commitments already made. Visible changes in quantity and quality allow for earlier discussion of the shortage or other supply schedule. The sales team can evaluate a new order according to the relevant supply, distinguishing it from the quantities agreed.
Core features
- Supplier and member
- Forecast version
- Commitment link
- Shortage response
Key integrations
- Sources of suppliers and contracts
- Dated estimate, contracted quantity and buyer criterion.
- The course of reception and warehouse
- Actual delivery, quality and free suitable batch.
Potential impact (%)
The ranges indicate an illustrative relative change in the metric under the stated assumptions. Results depend on the starting position and actual use of the solution. Percentages for different metrics must not be added together.
Supply forecast error
3–16%Decreasing
This illustrative scenario assumes that 15-40% of forecast error is attributable to the data and model used. That share is assumed to fall by 20-40%. Company data is needed to verify both the addressable share and the resulting change.
To measure the absolute difference between forecasted and actual quantities in tonnes at a specified forecast moment.
Unnoticed double quantity promise
5–25%Decreasing
This illustrative scenario assumes that 20-50% of missed actions can be identified through task and deadline tracking. That share is assumed to fall by 25-50%. Company data is needed to verify both the addressable share and the resulting change.
To calculate liabilities that duplicated the amount already assigned without an expected additional supply.
Part of negative feedback on supply changes
4–15%Decreasing
Indicative assumption: 15-30% of negative feedback is related to a late explanation of supply quantity and deadline changes. The solution could reduce this share by 25-50%. This is a scenario of potential; assumptions need to be verified by feedback collected by the company.
When a company starts collecting reviews, negative feedback about supply changes is counted from all assessments received on the topic. The same method of evaluation applies before and after installation and similar customer groups are compared. Without initial data, the actual change is not determined.
Conditional calculation scenarios. The assumptions have not been validated against client measurements.
When this solution is relevant
- Several member productions are combined for general buyers' orders based on quantity, quality and supply time.
- The total quantity available does not indicate whether the terms of the contract for a particular buyer will be fulfilled.
Implementation requirements
For supply planning, supplier forecasts, contractual quantities and buyer quality requirements are separated. Changes in supply periods and quantities must reach responsible commercial liability managers in a timely manner.
Further expansion
- Other products after their revision of different cycle, quality and contractual reservation rules.