AgriChain – technologies for effective changes in agro

Agrobusiness is a type of activity based on a huge amount of data. Until recently all this information has been accumulated by an agronomist. He defined, according to his paper records, what would be good for his economy next year: What to use the agricultural products that buy varieties-hybrids, which are norms of fertilizer introduction to get the optimum yield.

This model has worked for many years, but the human brain is unable to keep and analyze such a volume of information as modern it-solutions allow. Especially in questions of statistical analysis, estimation, and correlation of different events among themselves, to make the most effective decisions.

An era of digitalization in the agro-industry has enabled us to transfer to the information system a huge array of data describing all the characteristics of fields in which we work: Agrochemical, physical and chemical, climate history, yield history, history of applied ZR, standards, yield, etc. Digitalization is the use of this data to make the right business decisions to increase profits.

Today we communicate with Natalia Bogachev, the director of AgriChain. She is an agent of change, she is an ideologist of change and a realist of change, and our magazine has always been a slogan – “you can’t do tomorrow what yesterday did,” that is, changes are our credo and our calling. AgriChain is a company that develops a new generation of IT-solutions for agribusiness, solutions that help to analyze activities competently, respond to risks in time, and manage agribusiness effectively.

– Finally, on our cover, a person with it is involved in the digitization of processes, what we all hear, about but rarely see the authors of innovations. How did you come to this? It seems that a young person can aspire to become an actor or lawyer… but write programs?

– I graduated from Podolsky Agricultural Engineering University and remained there to work, went to postgraduate study, and defended the candidate thesis on the economy. For eight years she worked as a teacher at the university and taught the economics of agricultural enterprises, statistics, and labor economics. My background is an economy in agriculture. This is a huge experience of system, organization, and structure, which became an integral part of me as an expert in the field and as a person in general. However, the practice has shown that what is happening in real agribusiness, and what is being taught at the university – things divided by the abyss, science is far from practice, and this process also needs fundamental changes.

– But how did you find yourself in agribusiness?

– Agro is a huge foundation branch, providing food security. I have always been impressed by the scale of agro, the potential of our land, and, of course, the huge work of people on the ground in difficult conditions. I remember the first time I went to the huggings, the holiday of the first snowboard. I have loved my love, I have seen with whom love people treat the land and their business, as it is important to them. Here and the university is involved – everything was built on love for the industry, on patriotism, on sensitivity to agriculture. My work in agribusiness began with the post of economist at the company “Charivnyy svitanok”, which is a part of agribusiness holding “Agroprosperis” (NCH). The company and my colleagues gave me invaluable experience, and it was where my way of optimization and automation of business processes started to improve the effectiveness of the agro-producer activity. Large-scale industry and people, with whom I want to be equal, became my motivation for further development.

– But how did you start doing it?

– It is a coincidence. Working in Agropropiers, I became a part of the Agronomist project – it is an addition to the production process, which we have implemented from scratch. Then I realized that every successful project is system and structurization, it is a continuous work on functionality, constant analysis of current processes, variants of their optimization, communication with users, and constant work with their feedback for further improvements.

After I went to the agro-industrial holding “Astarta-Kyiv” because what is offered here, without exaggeration, is a subject of my life, something bigger it is difficult for me to imagine.

– You can see that you are motivated that you are inspired to manage great energy, but how did you find it interesting and fascinating in the topic of automation of processes? I would understand if you were creating a new social network or messenger…

– I constantly analyze all processes, which I face both in life and at work, on the possibility of optimization and automation for getting the most effective result with the least resources spent. And it is exciting for me. And getting visible results from such automation motivates me.

When I worked as an economist, we conducted factor and correlation analyses to find out what influenced the outcome, why it is exactly where there are specific losses, and where the hidden reserves are. This experience has enabled us to sort out operational processes by almost molecules to create tools that will help farmers reduce costs and increase potential.

– Does your system throw a window at some point – “ATTENTION”?

– That is the case, the system is based on the business logic of risk management, which makes markers and signals what to pay attention to prevent problems, not to eliminate their consequences later. In addition to risk management and message system, our system is based on automated flexible business processes, professional task management, automated document management, a deep analytical reporting system, and online business events. The system collects data from a variety of equipment and telemetry, satellite, and weather data that become part of the process analysis and help make the right management decisions.

The benchmark is the maximum yield per hectare

– Does your system work only in “Astarta”?

No, it is already working in other agricultural enterprises, for external customers, the first modules, management of land bank and management of production processes have already been introduced.

Is the system named?

– It is the same name as our company, called AgriChain – it is the only portal for agribusiness management, which consists of 8 modules, each of them completely covers the needs of a separate block of the production chain. It is possible to use one module separately, combine them depending on needs, or combine them with third-party services.

The system consists of the following modules:

AgriChainLand is a module for online management of the land bank, it covers databases of all fields and sites of the company, management of land exchange, lease agreements, payments, and charges, including cost budgeting. The function of the land module allows for avoiding the widespread risks associated with land management, such as inadequate or untimely information, discrepancies in the area of leased and processed sites, violation of procedural actions on land lease agreements, and many others.

AgriChainFarm is a module for planning, execution, and management of a production program with automated workflow related to display business operations. The main tasks of the system are seasonal planning of the production program, construction, and automation of business processes for the operational management of the operational cycle based on the seasonal plan between all services: Agronomic, engineering, dispatch, warehouse, economic, and accounting in real-time mode.

AgriChainScout is a module for online monitoring of crop conditions, analysis, and dynamic yield forecasting. The main tasks of the system are to build a culture and business processes for systematic monitoring of crops for effective risk control and making proper management decisions. The system allows to collect of information about the condition of crops from different sources (historical, satellite, aerial photo-links), to automatically plan field surveys, to plan individual rules of the survey in the field of culture, to detect risks – diseases, pests, weeds for making decisions on their effective elimination and estimation of their economic efficiency, receive operational business analysis and reports on the condition of crops.

AgriChainBarn is a module for online management of warehouse logistics of the enterprise with automated document management. The main tasks of this module are the construction of efficient warehouse logistics with the use of additional equipment (data collection terminals, printers of bar codes, scanners), which will allow building business processes on effective management of part movement, movement control, and container utilization, thus optimizing logistics costs and warehouse balances.

AgriChainKit is a module for managing the business processes of the company. This solution is integrated with other AgriChain platform modules, and business process configuration is implemented as a flexible designer (to cover the needs and peculiarities of any company) that in case of changes in external and internal business conditions allows to quickly adjust the work of the company, creating at the user level the most complicated business processes schemes, personalizing areas of responsibility, to build management tasks of specialists, control of their deadlines.

AgriChainLogistics is a module for managing the logistics of parts (warehouse-field) and products from the field (field-current-elevator / sugar plant) with automated document circulation (universal TTS), is the working place of the logist on the management of own and the most important equipment. In the far distance, we plan to integrate with the weight complexes and GPS monitoring system.

AgriChainAuto is a module for monitoring work and repairs of machinery (own GPS monitoring system). The module is currently not available, the first release of the module is planned for the first quarter of 2021.

AgriChainReport is a module for generating analytical reports using the BI system as part of the AgriChain portal.

What are the main problems in the implementation of such a system at a foreign enterprise?

Regardless of who the customer is, the implementation of different management systems is often opposed. Our solutions not only help to build business processes and optimize costs, but also increase control over targeted resource use, performance, compliance with operational standards, human error, and more. People have worked for 25 years in a certain model, and now they say that everything should be changed.

To avoid the confrontation during the implementation of the system, it is necessary to “sell” the system to the internal client, have a clear plan of implementation, conduct qualitative training, and accompany users.

However, we need to understand that all loud slogans – digital transformation, digitalization – are only instruments. If the company is not ready to transform its business processes, it will be reorganized – there will be no real results from the implementation.

– That is… do you build and sell ideology?

– We promote it. For a large holding company, implementation is a change of regulations, regulations, instructions, and a certain bureaucratic route, which will have to go on the way to transformation, and this should be understood at the very beginning.

I believe that any successful business should be based on well-designed automated flexible business processes that can be easily adapted to changing external or internal business conditions.

System product for non-system market

– Ukrainian agribusiness is developing rapidly. The man who bought the new tractor has already got it with GPS-trackers, computer, auto-piloting, and it is in the economy, where yesterday rakes have buried… How do you guess to overcome this gap of consciousness – perhaps? You offer an incredibly system-wide product on the market that is accustomed to manual management and personal relationships…

– I think a lot about it. “We have been working so for 25 years and so we will work…” but even if we take your example – we already have farmers who use technology, capabilities, and technologies effectively, but there are others.

When we communicate with the owners and show that we can go to another level of management, develop processes competently, to abstract from their historical practices, we understand that they are ready for change. After all, all owners think categories of money, actually we can operate, direct reduction of expenses. However, the average level of leadership is not always ready for change.

The Astarta case is a case of rapid improvement of operational efficiency in the course of transformation, which we are now experiencing together. We are very conscientious in the process of implementation of the system in other companies to ensure that every project is successful and brings real results. I and my team have an ambitious dream to make the system the standard for the industry, which will change the entire management system in agribusiness. And concrete case studies, examples, and results of implementation will help us get closer to it.

Flexibility and power of possibilities

– How many factors does the system analyze?

Hundreds of each direction. Here we talk about the management of the land bank, there are the areas we rent, and there are the areas we process. For example, the system says that consolidation of the land bank is 65%, i.e. 35% – undertreatment. The system says that certain areas can be exchanged with neighbors, and issues a list.

The system says to the owner: 15% of the land you rent – technical losses, forest lands, cities, plants, and others. So, you lose 200 thousand per year at your land bank. It is time to make the right decision: Either to give up this land or process it. The system says: In three months you end the agreements with 150 mutual deposits, you should start the process of prolongation of contracts.

For example, the system says that the technique works outside the field contour. Why is it there? Is it processing some other people’s massive? Or the technique works with the speed setting overspeeding. What should be done? Or the technique is applied at a temperature above +30°С and with a strong wind. Markers are many. Moreover, all the data are provided by the economic component.

We know the plan, the working capital, which is used for field processing, and we know that fulfilled. What operations have been performed and which are not performed during the period? If we talk about monitoring crops, there are a lot of metrics, starting with changes in indices, ending with unfavorable conditions of vegetation, and objects to be responded to immediately.

We have fixed diseases, pests, weeds, calculator issued to us, how much additional processing costs, in online mode, agreed this decision and in the online mode set the task immediately to take measures not to lose the crop. And many other indicators.

– But if we move to the system body… is it able to adapt to changing conditions and is it able to predict possible risks and possible preconditions for changing conditions during the cycle?

– Yes. The system is very flexible, the basis of our modules is flexible automated business processes, it consists of designers – business process designer, role model designer, or report designer…

It easily adapts to changing conditions. As for forecasting, we can predict certain things based on the comparison of the result of performance and the part that has not yet been fulfilled. If we talk about an economic forecast, the system can provide it.

However, if we are talking about predicting yield based on satellite images, we are not yet going into these algorithms. Now there are attempts at the market, but I am skeptical about them, there are deviations from 10 to 50%. The best predictor and scout is an agronomist on the field. It is a person who dynamically analyzes the biological yield in each field, makes data in the mobile application, and the system makes a conclusion on how it will affect EBITDA.

Artificial and natural intelligence

– I am talking about the future, about the perspective, about some elements of artificial intelligence…

– The work of the system based on algorithms of machine learning and artificial intelligence is still planned for future development. But now we are laying some foundations of artificial intelligence in our system, these are elements of modeling.

For example, the system itself develops planned sowing, taking into account the predecessors that were on the fields, taking into account the aggregate of the majors, geography, and logistics, which is set by the enterprise. The best, middle and bad predecessor – all this is built into a certain model.

The next example of algorithms is the structure of the elevator logistics, how much shaft is there, how much should be taken from one elevator, to the second one, and how much to leave on current. The system, taking into account the algorithms of the optimal route, and the minimum distance from the field, offers the fields from which the export will take place and where it will take place. Or, for example, in planning the production process algorithms for identification of abuses.

Is it at the middle level?

– Yes. The system closes at the ixntersection of periods, the intersection of cultures, the intersection of operations the calculation, how much is performed by the own resource, and what services are demanded. And then there are questions: Why did we employ so many techniques?

Why was it so inefficient to use it? I give examples of automated algorithms markers, which can be easily implemented. Crop rotations are an important factor, which is not always owned by people, but in the system, it is in every field.

Logistics in the warehouse are often abused. This is all poured into money, that is why control and structuring of the system are needed.

– How do real owners approach the system? However, they are also scattered among young educated, old heads of collective farms, old heads of collective farms are very wealthy, old heads of collective farms are very poor…

– The perception in 90% of cases is positive: Interestingly, it is worth looking at how it works in other cases and so on. There are organizations that are not yet ready for transformation but are ready to accept the experience of other companies, to share feedback, which would like to see in such systems.

Constant communication with agribusiness representatives helps us to promote our ideology and develop the functionality of our products.

The main problem of the Ukrainian APK

– This is the general situation for the market… however, IT-industry is developing rapidly.

It’s really stormy. Over the past seven years, about $17 billion has been invested in AgTech, but most of the solutions available on the market are focused on solving a specific issue, and few offer comprehensive solutions. There are good decisions from international developers, but they need full adaptation to our realities.

Ukrainian painting management is not only the organization of the process, it is the mentality of our people, Ukrainian painting management is the 1C system, complicated accounting, road letters, moving parts, acts for a write-off, etc.

Our market requires systems with automated document management, the ability to maintain operational accounting, and full integration with the 1C accounting system. We have created a system for Ukrainian agribusiness, it is adapted to our conditions.

– And how is the protection of commercial data of users organized in the system, now everything works in cloud services, and probably they are also afraid of them?

Technical implementation of the system does not allow access to information from third parties. In the variant of cloud service, we place systems of our clients in the data center Hetzner, which has a high degree of data protection both on the physical and program level, physical data centers are located in Germany and Finland. Additional protection is provided by Cloudflare. However, if the customer has any doubts about the use of cloud services, he can always choose a solution in the form of a box. In this case, the system is placed on the customer’s servers.

– What, do you think, is the main problem for the Ukrainian agro-industrial complex today?

– There are problems, they are enough. The main thing, probably, is the high production cost compared to the main players of the world market.

For example, the cost of corn grown in the US is much lower than we have, with it growing at 15 tons, and we are 10 tons. Our holdings can employ from 38 to 45 workers per thousand hectares, and they handle 5 people.

And this is all in the situation with land lease, in certain regions it has increased to 200 dollars per hectare and for some companies already have a question: Whether it is expedient to rent this land. We have large direct costs, which are high cost of production, and at the same time, the income part of us is the same, because we sell at the same price.

“But you understand that Ukraine is at the crossroads of civilizations, we are slowly coming out of the conscience and going to us for a long time…

– Yes, this process lasts quite a long time, but we have all the tools to manage the business effectively. We have a resource, a beautiful land, and beautiful people, who only need to learn. We are already working with the world’s best manufacturers, we have affordable seeds and ZPR of world brands.

Let’s combine all of this to get the best result so that the industry is becoming more efficient and profitable.

And on the dedication of the case

– And how do you charge at all? It is quite difficult, you have been in the intensive mode for more than seven years…

– In fact, I am also charged at work. The more difficult the task, the more fanatically I put to the achievement of a successful result, and when I get it, I get a huge dose of adrenaline. The more I grow the pace, the more I solve impossible tasks, and the more I have the motivation and strength to work even more.

– So, do you get the result, and it gives you adrenaline?

– Yes, it is the successful results, but even the process itself captures when everything goes the right organized way, when everything is properly planned, you already understand that soon the result of the activity will be obtained.

I am not a manager, I have been a part of my daily routine. This is a difficult and interesting way for me, but for seven years I have never had a question about whether I am engaged in my business, or whether I need to change something radically. I am so impressed by the scale of business, that we influence its results. We are involved in changing the vision, approaches, and creation of a highly efficient industry, as it may not affect.

When you go to the fields, communicate with agronomists and see that they treat cultures as children, protecting them from possible threats, when you see how they sincerely rejoice in a successful harvest, how it may not be exciting or inspiring when we are involved in changing vision, approaches, to increase the efficiency of the sector and to create a powerful agrarian state.