Kyle Barton, procurement manager at Simplot Grower Solutions, along with his team manage the supply chain of crop protection, adjuvants, micronutrients, and biologicals for the company’s retail locations west of the Rocky Mountains.
In total, that’s over 100 supplier relationships.
Barton explains managing existing suppliers and entering distribution agreements with new suppliers presents unique challenges.
How does an ag retailer onboard a new product?
Barton says the process begins and ends with the customer.
“We really vet products out with our sales management team—region managers in their geographies, market managers who work with sales staff,” he says. “So if a product comes to us, we see how it fits into the portfolio—what benefit it’ll bring not only for us, but for our grower customers.”
One product segment Barton has seen grow in just a handful of years is the spectrum of biological products. He says proof of the scale of this is how major manufacturers have acquired smaller biological companies.
“It’s obvious there are more and more biologicals coming into the marketplace. We know the industry is going that way, and we know our customers are going to ask what’s our offering,” he says. “So internally, not only do we need a procurement plan for those products, but we also need to make sure we’re knowledgeable and can speak to the products and answer questions.”
What’s the biggest challenge right now?
Barton come on The Scoop podcast during one of the busiest times of year for his team—early spring—when there are lots of spot fires to be put out as planting season ramps up.
Longer term, he says the challenges of COVID’s supply chain hurdles persist, but maybe not in the exact same way.
“We’ve seen it the last few years we’ve kind of got out of this phase of never ending inventory from manufacturers and suppliers,” he says. “It’s no longer ‘Oh, I need to go pick up a pallet here’ because there is product on-hand. We’ve seen in the last few years, with the market dynamics with everything across the whole distribution channel, we’re seeing more and more vendors that are managing their inventory levels and not wanting to have a lot of carrying inventory.”
Heightening the need to closely manage inventories is the evolving discussion around global trade and tariffs.
“We have a 90 day pause, and it’s tough for us to navigate as the retailer. But I also understand on the manufacturer/supplier side. How do we manage our supply chain, our cost points, the inventory we’re going build when we don’t use it?” he says.
The ongoing price fluctuations are disruptive to planning, especially with tight margins at the farm gate.
“Economics at the farm gate aren’t great. It’s a challenge our sales team is dealing with as well,” he says.
How to assess the risk in ‘normal’ product procurement planning
Barton says elevating the discussions with farmer customers to improve the forecasting process has been informative to the business.
“When we sit down and meet with our sales managers and region managers, we’re trying to look for any changes and trends that they expect,” he says. “We look at three year averages for sales history.”
If those multi-year averages are consistent, Barton says they are more comfortable positioning product against those histories. When they see fluctuations, that’s when they really engage into a deeper conversation.
“If we see some fluctuations, that’s when sales management really helps find the right number. We may position a little bit of product here, but we’re going to kind of throttle it back and be less than the 3 year average. Or if two years ago was a abnormal year and last year is more like the history. If we don’t have the inventory built, it could bite us, but also it’s one of the risks we have to live with right now.”
