How TAGIS enabled FarmCo to track Performance of Products & Stores
FarmCo is a fast-growing company engaged in trading, processing and retailing of fresh farm produce. It has over 300 SKUs sold daily across over 25+ stores and a revenue of close to Rs. 500 crore. It sources the produce from over 5,000 + farmers. The company operates through its own retail stores and e-commerce platform. We set-up daily profitability report tracking product-level and store level profitability leading to a huge impact on regular and strategic decision-making driving sales, profitability, wastage, procurement etc.
Key Challenges & Our Solutions:
The key challenge at FarmCo was its network of stores was widespread and the suppliers, who were the producers of the products were large in number. This was leading to large amount of data on the production, procurement, and sales side, which is sometimes difficult to manage. The sales of the company are derived from two verticals, namely e-commerce and offline stores (i.e., own retail stores and to other stores) with customers located in different districts.
Recently, the company has migrated to a widely used ERP from Tally. However, some finer product or store level allocations of fixed costs and depreciation cannot be carried out in ERP, which are done manually outside the software. The company has developed inhouse software for procurement and uses SaaS software solutions to track secondary sales (Point of Sales systems).
- Creating a Data Model by integrating data from multiple software, for efficient and automated Report generation:
Due to the lack of integration of various software and complexities of manual calculations (reconciliations and adjustments between datasets from two or more software sources), Report generation used to be extremely a time-consuming and prone to manual errors.
Our TAGIS solution enabled cleaning & processing raw data from SAP, Sales (stores and E-commerce) and Procurement software. Our well-structured data-model based on these datasets further enabled effective data interaction. With the help of common masters, which contains definitions of the products, SKUs, and customers across all the systems; the datasets from different sources can be connected easily.
These interconnected data sets flowing into an integrated model have led to Reports getting generated in a matter of 1-2 hours as and when the base data is ready, which used to take 2-3 days of the team earlier.
End to End (Farm to Fork) Profitability:
Ruby team has enabled a model for calculating profitability at various levels from the farmer till the end consumer. This required Direct costs allocations and Indirect Costs apportionment. Daily wastage and rejections were also taken into consideration while calculating profitability. Along with end-to-end profitability, benchmarking with daily procurement price is enabled. This helps the management for cost-effective procurement of the material and in turn pricing of the final product.
Shift from Monthly to Daily Reporting:
For the internal team, monthly reporting took some serious efforts every month. We defined specific formats in the software for data extraction, which are linked into the model, thus automating the data collection & update process eventually.
With clean and pre-defined formats in the software, the reporting process progressed from monthly to weekly and further to daily reporting. This reporting technique validates to be a critical decision-making tool for tracking profitability, performance of various stores and farmers, pricing mechanism for products, etc.
Customized KPI calculations & Analytics:
Key challenge was calculating product level profitability with data coming in from various software and different formats from different software. Accurate allocation and apportionment of costs on daily basis was another challenge.
TAGIS team along with their understanding of Business model, made allocation and apportionment of costs at product level, daily basis possible.
Keeping key numbers always in focus
We well understand the importance of key numbers and unit economics. TAGIS team came up with outlier analysis, top performing farmers or stores, highest and lowest selling products. With consolidated key numbers such as Revenue and Cost per product, Direct cost and Gross Profit per Product, Operating Profit per product, repeat buying patterns, tracking transportation costs, scheme impact that helped the management evaluate performance, growth in a seamless manner.