Vyacheslav Rodionov: “There is no best time for agricultural companies to do this: Start here and now”

The activities of agricultural companies are usually closely connected with efficient use of machinery, time, accounting of fuel and other resources, and monitoring of crops. And when large companies can still afford small “failures” due to the “closing” of losses by the higher profitability of other businesses, for small or medium-sized businesses the cost of the loss can be substantial and equal to the further possibility of doing business and fulfilling their obligations to partners and creditors.

Modern agriculture – the use of technologies can be equated with the aerospace industry. Modern tools with the help of telematics allow   to monitor the movement of machinery on the field, automatically calculate the salary of the combine for the work performed, calculate the use of fuel, carry out satellite monitoring, to set tasks to line personnel, to forecast yield, to carry out document circulation and to monitor the crop. And all this can be done online – in one tablet.

Our case tells about the cooperation between MVA Group and AgriChain company. In total, the latter succeeded in reestablishing accounting and control standards for key production processes and establishing reporting for MVA Group. And today our conversation with Vyacheslav Rodionov, the main economist of MVA Group will be about it.

Vyacheslav, tell us about the company.MVA Group of Companies as it is – has been formed in the last few years. And works in three directions – the cultivation of crops by 6,5 thousand hectares, dairy cattle-breeding, and also in 2021 the elevator with a total capacity of 40 thousand tons of simultaneous storage was started.

Why did the need arise in the implementation of the paint-management system?

At first, our economy was small and few in the cultivation of only 1800 hectares of land. The main part of the area was occupied by growing fodder for dairy cattle breeding, but in 2019 the land bank increased to six thousand hectares. This happened during the merger of two agro-enterprises. And here we started the most interesting, we realized that we could not qualitatively establish business processes, as ideal as we imagined it, independently.

How did you choose the solutions, and why did AgriChain choose?

When the process of enterprise integration began, we and the team began to look for a digital solution to solve production problems. In a short time, we managed to get acquainted with many market offers. Of course, we had a lot of doubts, but we did not have much experience with the DJ systems, but we decided in favor of AgriChain. First of all, we liked how the company keeps in contact with a potential client and responds to the appeal. For example, before the budget was agreed upon for the digitalization, we asked the company to provide an economic justification, especially since we were interested in the article optimization of the fund of labor remuneration and fuel economy, and the economic effect itself. And AgriChain shared with us the case of agro-industrial holding “Astarta-Kyiv” – it was a very client-oriented gesture that helped convince the team of the correctness of the decision.

What documents were optimized by the rate, and what were the production needs?

The first thing we saw was the standardization of accounting with the possibility of analyzing the data received. We could no longer and did not want to do it simply on paper.

Our company strives to optimize resources because we are a relatively small business, so efficiency is our priority. After all, the number of assets increased significantly in 2019 due to the merger of “Leticiv-Agro” LLC with MVA Group. Thus, legal integration has taken place quickly, but the integration of processes, reporting, and unification of people into one team – the task is not simple. At the beginning of the project of the implementation of the paint-management system, we had two separate bases 1C – seventh and eighth versions respectively. According to AgriChain’s advice, we purchased a new 1C license to consolidate the company’s information in a single database. It was the first stage, without which further steps to optimize business processes would be impossible.

What were the main objectives of the company when implementing the Farm and Scout systems?

The main goals were focused on the automation of the accounting of fuel write-off and salary calculation, because these parts of the production process are very sensitive to the influence of the “human factor” and sometimes are made in an empiric way, based on the tests: “Something average” or “I think so”. And we were not satisfied with such answers, we needed accuracy.

When we signed a cooperation agreement, it became clear that we do not have enough technical equipment (fuel calculation sensors, trackers, well-equipped servers) to receive data from. According to AgriChain’s recommendation, we purchased a license to use the specialized monitoring system “Violon”. Due to timely recommendations and effective cooperation, we have returned to the right track to calculate working time, worked hectares, costs, and most choral. As a result, some reports are immediately available through the AgriChain Farm application.

Tell us more about what additional technical equipment the company purchased for digitalization? What amount was spent on it?

For AgriChain Farm to calculate the fuel correctly, we need to determine which equipment will show more accurately. That is why we bought two types of sensors according to AgriChain’s advice and in the process of usage, we realized that more accurate for us are flow sensors of fuel control.

This equipment has helped to see a picture of our costs. Thus, the tracker of movement gives information about how the driver controls the technique. This information is needed to increase wages. On the trailer equipment, we installed tags that indicate the type of equipment to understand what the operation is on the field.

As for AgriChain Scout, our contribution was insignificant. We have purchased powerful plates for agronomists with protection standard IP68, which guarantees protection of the decaysas against dust and moisture. That’s all.

How before was the company organized the process of fuel write-off and control over the movement of machinery?

If we talk about fuel, the reporting was in paper form, we generally focused on the records that the fuel tank was made. This process was not as dynamic as it was now when we saw the amount of fuel used at the moment, but earlier it took several days because we were waiting for the information to be brought to 1C.

And the data on the fields were mostly reduced, we had to rely on information provided by agronomists in the decision-making process. It was included in the Excel sheet and already from this, we tried to make reports and analyze the information. All this took time.

The same applies to payroll. First, we used the number of hectares worked as a basis and this was the way we calculated them. But the introduction of AgriChain Farm prompted us to convert the payment system to the weather. It is important to pay special attention to this process, as the motivation of employees depends on it. That is why a special group was created, which developed standards so that the time was calculated not only for payroll but also for fuel write-off. In this way, we decided that for the operator to work, we will establish qualitative criteria and norms, in which it should fit not lower or higher. Thus, for the sowing, it was the same indicators, and for the cultivation, it was the other ones.

Therefore AgriChain has become our buffer for process consolidation and has been able to process data in the format we need. That is, the dry balance of the accountant should only be reported as to whether everything was correct and whether there were no comments from the agronomist on additional conditions of payment. In this case, the standards can be changed slightly in manual format depending on the situation.

Earlier, the information we received from the documents was difficult, and it is almost impossible to analyze. And the human factor was not very influential. If the agronomist did not like how a tractor operator worked, he could write in the documents he considered necessary, and we could not verify the objectivity of this information.

And there were conflict situations?
Yes, of course, because the level of wages of the person working on the machinery was based on the comments made by the agronomist. Previously, we calculated the operator’s salary depending on how many hectares he purchased for the day. And to control the truthfulness of information could only be agronomist, but it physically could not be in all the points of work of technics simultaneously. Now thanks to AgriChain we know exactly all the information about the work of a person on technique: With what speed he moves, on what technique, how much and during what time he makes a stop. Such detail allows to make more accurate and balanced decisions and not to make people underpay. First of all, we insist that a person receive an honest reward for effective work.

How did the team accept the innovations and how did the company work with the team to increase loyalty to new systems?

I admit that specialists in the field have accepted innovations with difficulties and moral support. The implementation team received certain grooves in the wheels during the implementation of the systems. And, probably, it is normal at the initial stage. First, we have moved from one accounting system to a new and unified system that required detail, which required additional effort. For our part, we have convinced our colleagues that part of the information that is manually entered during the transition period will be automated over time.

Secondly, we have started to spend more time explaining that innovation is not only about strengthening control, it is about optimizing processes, during which workflow will become easier and will not need to be immersed in work with primary documents, because at once logic and sequence of processes will be visible.

For example, when introducing AgriChain Scout agronomists did not want to do field reviews, although earlier they said that the day and evening are in the fields, look at how crops grow, everything knows and control the situation. But we managed to oblige them to take pictures of fields, to follow the planned yield, to change it systematically during the season only after the use of tough measures. We acted according to the scheme: There is no information about the reviews – there is no prize or a fine. And only then did the fuss come together and began constructive work three months after the start of AgriChain Scout.

Як працюєте зі звітністю, яку інформацію вдається згенерувати за допомогою додатків Farm?

Сьогодні ми отримуємо багато інформації та можемо приймати більше управлінських рішень, про які раніше не підозрювали, бо не знали, що проблема має місце. Наприклад, у нас з’явилися опосередковані стандарти щодо використання пального, і ми й далі будемо працювати над їхньою деталізацією та класифікацією: зробимо ранжування полів, визначимо їхній рівень складності. Те саме стосується оплати праці. Ми розуміємо, що людина не має отримувати нижчу зарплату через те, що працює на транспорті нижчого класу. Тобто на одному тракторі за однаковий час один працівник може обробити, наприклад, 50 га, а інший – 40 га, тільки через те, що працюють на різній техніці. Раніше теоретично ми могли підозрювати про цей перекіс. А зараз завдяки додатку AgriChain Farm ми це бачимо в цифрах та можемо справедливо оцінювати роботу людей, оперуючи фактами.

We have now started to follow the forecast yield better. And every month agronomists make its revision. Yes, we do not force agronomists to “provide”, but it is important for us that they, relying on photo broadcasts, change the forecast of yield. For us to be able to review our forecast financial results based on the data, we have received.

In your dump, did you choose the time to start Scout and Farm?

I think that for companies engaged in agriculture, the best time for digitalization simply does not exist – because one production period is over and preparations for the next one start here and now.

However, we have implemented in the period of the off-season and consider this time as successful as possible for the development and testing of all processes.

Do you plan to conduct further production processes? How exactly?

Today, thanks to the mobile application AgriChain Farm, we track the movement of machinery and when entering the field’s geofence we can see at once how the processed hectares are recorded.

AgriChain Scout helps us minimize risk through satellite monitoring with NDVI and EVI indices. Thus, we can set the task to the agro-industrial for review without leaving the office. And he will immediately see this task on his tablet. We have also become available tools for crop forecasting and crop control for further planning of economic activities.

We are very excited about such results, so we are already conducting negotiations with AgriChain about the automation of business processes for working with electronic goods and transport bills through the AgriChain Logistics plugin. We also plan to work on the web version of AgriChain Farm, where seasonal planning and plan-actual analysis on the execution of the production program will be available. So there is a lot of interesting and hard work ahead, but we are confident that effective cooperation with AgriChain will lead us to the best results.