Supply Chain Management Solutions | SAP Rural Sourcing Management

Promote Food Supply

Transparency and
Smallholder Welfare
Encourage Sustainability across the
Rural Sourcing Value Chain
© 2017 SAP SE or an SAP affiliate company. All rights reserved.

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 Addressing Key Challenges
for the Global Food Supply

World population is expected to reach 10 billion by 2050,1

and we must double agricultural output per acre by then to
meet market demand. Meanwhile consumers increasingly
demand quality, traceability, and sustainability in food
production. We must reimagine the business models
that ultimately feed our bodies. SAP is taking the lead
with a socially responsible solution that protects
business value.
© 2017 SAP SE or an SAP affiliate company. All rights reserved.

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1. World Population Prospects, United Nations, 2015, https://esa.un.org/unpd/wpp/publications/files/key_findings_wpp_2015.pdf.

 EMPOWERING THE SMALLHOLDER 5.5 million smallholders.3 The World As early as 2009, SAP
FARMER Bank tells us that agriculture is the main identified a need to help
The need to boost food production is industry in sub-Saharan Africa, employing developing nations
already being addressed in developed 65% of the labor force and accounting for
improve crop quality
countries by powerful agribusinesses with roughly one-third of gross domestic product.
ready access to the latest equipment and And challenges to agriculture abound in
and production levels,
technologies. That means the greatest the region, where there is often only limited and we focused research
future increases in global output must come access to potable water and sanitation. on enhancing food
from developing countries. Approximately Close to 30% of plantings succumb to processing on the smaller
500 million smallholder farms produce disease, and younger generations leave scales typical in Africa.
© 2017 SAP SE or an SAP affiliate company. All rights reserved.

about 80% of the food consumed in Asia the land to seek more lucrative employment
and sub-Saharan Africa,2 and 90% of in other industries.4
the world’s cocoa production comes from

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2. Viewpoint: Smallholders Can Feed the World, International Fund for Agricultural Development, February 2011,
https://www.ifad.org/documents/10180/ca86ab2d-74f0-42a5-b4b6-5e476d321619.
3. Cocoa Market Update, World Cocoa Foundation, 2014, http://www.worldcocoafoundation.org/wp-content/uploads/Cocoa-Market-Update-as-of-4-1-2014.pdf.
4. “Fact Sheet: The World Bank and Agriculture in Africa,” The World Bank, http://go.worldbank.org/GUJ8RVMRL0.
In this economic climate, we need to help smallholder
farmers succeed. We need to encourage them to begin
to work collaboratively with their neighbors and other
stakeholders in the value chain by joining farming
cooperatives, for example. We must also bring them
access to machines and scientific know-how that can
improve their crop volumes – and to educational and
financial services that can enhance their quality of life.
Figure 1 suggests an innovative way to rebuild the food
supply chain by focusing on small farmers.

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 Food
producer
Cooperative Originator

Machines
and farm Agrilab
equipment
© 2017 SAP SE or an SAP affiliate company. All rights reserved.

Agrichem
Contractor
producer
Financial
services

Figure 1: Farmer-Centric Rural Sourcing

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 PROMOTING FAIR TRADE
At the other end of the value chain, 21st-
century consumers insist on being able to
trust the physical and social wholesome-
ness of their food. They want to know that
such products as coffee, chocolate, nuts,
and tropical fruit begin life in the hands of
farmers who are fairly compensated for
their labors. And they demand transparency
in the processes that bring these products
© 2017 SAP SE or an SAP affiliate company. All rights reserved.
to their grocery shelves.
As we gradually recognize the vast cultural
and economic differences in the value
chain, we must learn to respond with
empathy and responsibility. To protect our
planet wisely, we must act on the realization
that the fate of one person affects the fate of
all in our global economy. In the developed
world, we must demonstrate our willingness
to compromise on price and convenience
as necessary to promote social justice in
the form of fair trade with the developing
world. As markets respond to these con-
cerns, fair trade sales are expected to
increase exponentially in the next few
years. Retailers and manufacturers of
consumer products will place a high priority
on traceability of their ingredients and
finished products.
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 Innovating for the Success of
Sustainable Rural Sourcing
MOVING TOWARD MOBILE
AGRIBUSINESS IN AFRICA
As early as 2009, SAP identified a need
to help developing nations improve crop
quality and production levels, and we
focused research on enhancing food
processing on the smaller scales typical
in Africa. We started with pilot implementa-
tions in Ghana and Uganda, which over
time have grown to include more than
© 2017 SAP SE or an SAP affiliate company. All rights reserved.
100,000 farmers. Our goal was to
strengthen the value chain and promote
African produce while enriching the lives
of smallholders with income security,
microfinancing, and education.
We also collaborated with the Deutsche
Gesellschaft für Internationale
Zusammenarbeit (GIZ) GmbH.
Together, we funded research into When we help ensure
equatorial agribusiness with the support the future income of small
of the develoPPP.de program run by the farmers, we move the
German Federal Ministry for Economic
world closer to the
Cooperation and Development (BMZ).
In the past, we worked with the African
eradication of poverty –
Cashew initiative to develop an innovative the first of the 17 United
mobile app that records field transactions Nations sustainable
involving small-scale producers and delivers development goals
related data analytics. With support from and one that SAP
GIZ, the Uganda Coffee Farmers Alliance wholeheartedly supports.
used this app to let managers record the
quantity and quality of coffee supplied
from its growers, along with payment and
logistics data. The individual transaction
data later served as proof of income to
increase the farmer’s access to formal
financial services. 7 / 15
EVOLVING A FULL SOFTWARE SOLUTION
The SAP® Rural Sourcing Management solution is a
cloud-based technology for enhanced management of
sustainability data through digitally recorded information
on producers, their farms, and their communities at
every level of the value chain. Field agents collect data
on farmer registration, purchasing and processing of
produce, and transportation records. From the station
that collects the farmer’s output to the corporate
warehouse, the solution helps tighten links to keep the
value chain transparent and sustainable. Activity records
related to sustainability help assess individual farmer
and community requirements and deliver higher-quality
and higher-impact support. Adding to the features
accelerating smallholder access to existing services for
shipping and packaging, SAP plans future innovations
to track the use of seedlings, fertilizers, and training
offerings. 8 / 15
ADDRESSING TWO Field
Farmer Agronomist
technician Customer admin

KEY LINKS IN THE

VALUE CHAIN
SAP Rural Sourcing
Management consists SAP® Rural Sourcing Management solution SAP Rural Sourcing

of two applications, one

(smartphone client) Management
(UI5 client)

designed for use in the

Master data import
field on mobile devices Offline OData (Microsoft Excel template)

and the other for use

in business offices on SAP Cloud Platform Mobile Services
SAP Cloud Platform

desktop computers.
Figure 2 presents a SAP Rural Sourcing Management OData services

sample architecture. SAP Cloud Platform

Identity
Authentication
service

SAP HANA® platform

Figure 2: Proposed System Architecture for SAP Rural Sourcing Management

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 Farmer registration and Farmer surveys
master data
Generating Information in the Field
As cell-phone coverage continues to expand into remote
regions, people can use a combination of desktop and
mobile access to optimally generate, share, and use data,
Price information Farmer purchasing
fostering greater value for every member of the value
chain. The SAP Rural Sourcing Management mobile
app for field agents uses screens like those illustrated in
Figure 3 to support inclusive agricultural processes that
focus on and maintain traceability in direct procurement. Certification and Advances and
traceability payments

It runs on SAP Cloud Platform Mobile Services and

works offline, with bandwidth optimization, to help
users record and manage the following input: Transportation Grading and quality
logistics indicators

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© 2017 SAP SE or an SAP affiliate company. All rights reserved.

Figure 3: Sample Screens from the SAP Rural Sourcing Management Mobile App

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 Outfitting Central Operations
with Desktop Web Access
The desktop application in SAP Rural
Sourcing Management takes advantage
of advanced technology to cope with rural
infrastructures and deep analytics to
increase the value of the mobile input.
It runs on SAP Cloud Platform to supply
field data to analysts in central processing
locations, for example, personnel in
© 2017 SAP SE or an SAP affiliate company. All rights reserved.
The functions of the desktop application
include data access management, price and
distribution information, and management
of master data related to organizations,
people, products, and certifications. It
features supply chain management with
track-and-trace functionality and up-to-date
visibility into storage and logistics. Desktop
users gain such benefits as more efficient
operations, direct exchange of information

nongovernmental organizations (NGOs) with market participants, and the ability to

or agronomists in large corporations that respond quickly to quality and distribution
market products from the developing world. issues.

The greatest future increases in global output

must come from developing countries.
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Doing Good through
Better Business
OFFERING CUTTING-EDGE ANALYTICS TO
MANAGEMENT
Transactional Self-service Geographical
Most people now accept that decisions made in our analytics analytics information displays
boardrooms can ultimately influence the health of the
world. Using the SAP Analytics Cloud solution hand in hand
with SAP Rural Sourcing Management can bring top-level
managers the information they need to make choices
that not only fine-tune their business models but also Geoanalytics Standard Information charts
and tracing geovisualization and dashboards
benefit humanity.

SAP Analytics Cloud helps with:

Definition of sustain- KPI sharing with Integration with

SAP Analytics Cloud is powered by SAP Leonardo and ability key performance customers and Microsoft Excel
indicators (KPIs) partners
can be enhanced with SAP Leonardo Analytics capabilities,
all of which adhere to high security standards.

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To date, SAP has begun agricultural
sustainability initiatives in 9 countries
with a total of 17 supplier organizations and
over 100,000 farmers. We have piloted the
SAP® Rural Sourcing Management
solution in versions for 10 languages and
6 crops. Check here for more information
on market trends and the SAP vision for
digital agribusiness. Please e-mail any
questions and comments on the software
to agribusiness@sap.com. You can also
explore our full portfolio of solutions online at
www.sap.com or through the SAP Solution
Explorer site.
TALLYING THE BENEFITS
Approaching digital transformation and supply chain
management with an eye toward sustainability is no longer
just a good-to-have option for appeasing consciences in
the developed world. If we are to continue to feed the
human population as it nears 10 billion at midcentury,
we must begin today to ensure the success of even
the smallest farmer in the least hospitable and least
developed region of the planet.
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 The SAP Rural Sourcing Management
solution offers several ways to improve
yields and lives. Large agribusiness
companies can better target efforts in
due diligence and farmer training. And
a supply chain that reliably links farm
and logistics processes can ensure full
traceability in foods for socially conscious
end consumers and keep improvements
in output – and quality of life – visible from
© 2017 SAP SE or an SAP affiliate company. All rights reserved.
farm to fork.
With this software in the hands of field
agents and on desktops at company office
locations, rural farmers gain access to
relevant information on modern equipment,
laboratory research, and emerging tech-
nologies. They can more easily collaborate
with peers and obtain income reports.
With income reports in hand, smallholders
have access to microfinancing, which
empowers them to invest in yields, for
example with seed advances. When we
help ensure their future income, we boost
their chances of prosperity. And that
moves the world closer to the eradication
of poverty – the first of the 17 United
Nations sustainable development goals
and one that SAP wholeheartedly
supports.
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