Ofir Ardon: 0:03

When you have a lot of data incoming from farmers, not just one point of data, but a lot of them, you can suddenly see something like, okay, so now I suddenly have some type of an average or a range, which looks, you know, normal. I can suddenly for the first time see not just, who is an outlier, but what is an outlier? What is a lie? What does a lie look like? What is the truth look like? And it's amazing to see how quickly you can get to that

Tom Raftery: 0:31

Good morning, good afternoon, or good evening, wherever you are in the world. This is the Digital Supply Chain Podcast, the number one podcast focusing on the digitization of supply chain, and I'm your host, Tom Raftery. Hi everyone and welcome to episode 375 of the Digital Supply Chain Podcast. My name is Tom Raftery, and it's fantastic to have you joining me today as I dive into the most current and exciting developments in the supply chain world. To all of this podcast's amazing supporters, I can't express my gratitude enough. Your involvement and backing are the lifelines that keep this podcast thriving. And for those of you who haven't yet joined our supporter community, here's your chance to be part of something special. Supporting the digital supply chain podcast is Easy and budget friendly with options starting from just three euros or dollars a month, less than the cost of your daily cuppa. This modest contribution can significantly impact my ability to continue delivering top quality content. To join, Simply click on the support link in the show notes on this or any episode or head over to tinyurl. com slash dscpod. Without further ado, I'd like to introduce my special guest today, Ofir. Ofir, welcome to the podcast. Would you like to introduce yourself?

Ofir Ardon: 1:58

Hi. Thank you, Tom. Thank you for having me. Yes, of course. My name is Ofir Ardon, based in Tel Aviv. I'm the CEO of Agritask. Agritask is a software company, focusing on unveiling, the blind spots of the food supply chain.

Tom Raftery: 2:13

Okay. That's very high level of Ofir unveiling the blind spots of the food supply chain. Could we dig a little deeper into that? What is it you're doing and who are you doing it for?

Ofir Ardon: 2:27

All right. So, uh, as I mentioned, we're a software company. Our offering, is basically an agronomic intelligence and analytics platform. Okay. We enable, eventually we enable food and beverage companies to be in better control over supply and better eventually secure supply. When I'm saying unveiling the supply chain blind spot, it can relate into two different aspects of, better controlling the supply chain. One aspect is better understanding the risks on time, which in turn enabling mitigation of some of the risks of shortages. And the other part is enhancing control over some of the practices that are being taken at the level of the field when we're talking about agriculture. So, this is, this is where we are coming from. We deal mostly with food and beverage companies. These are our major clients. And, as you can see, we work with, like hefty of them when we're talking about, some of them are tier one, some of them are tier two, but, mostly, very significant company. You can find in our portfolio, Nestle, Starbucks, AB InBev, McCain, General Mills, Richter Sports, et cetera. And this is us.

Tom Raftery: 3:35

I've heard of one or two of those. All right. Yeah, . So congratulations on that. That's a nice portfolio. Um, you say you're a software company and at the same time you talk about, working with people, in the field. So tell me, how does that work? Do you have sensors because you say you're a software company that would require hardware, or what kind of data are you collecting from the field and for what?

Ofir Ardon: 4:01

Excellent question. So. Think about it this way, eventually you have a supply chain, food and beverage company that up until recently, if we have to take it like few years back, it could count 10 more or less. Well, they bought from suppliers that eventually got the, the, the goods that they need from farmers, at the end of the day, you didn't really need to have anything to do with the farmers, directly between the food company and the growers themselves. You had all kind of middle layers that could take care of everything, which was mostly based for trading, sourcing, and eventually sometimes even logistics. But that was about it. Very quickly or during the last few years, we can call it this way, the need to get better understanding in order to get better control of the quantity of goods, because sometimes it's like very, varying, throughout the years because mostly this is increasing, mostly because of climate change. So you have variability both in the quantity and the quality that you can get. Second issues of quality that you needed to make sure that you get the right quality that you need. And as of very recently, quality got a bit extended into what is quality? Is it just what the fruit looks like and how it tastes and what it tastes like, or also how is it being grown? Basically, if I spread it too much, well, it doesn't comply with what I need. It's the same as not having the quality that I need. And all these types of, of requirements from food and beverage companies, made it very necessary for these food and beverage companies to get better control grip on the entire process, starting from the level of the farm. To some extent in some companies it became like more significant to some of them less, but I don't think there's any food and beverage company today that can allow itself not to have any type of visibility or control over where the supply's coming from. Now, when you take a look a closer look at agriculture. Consider that this is the last ever production floor, which is also the largest production floor in the world. It's the latest to be, digitalized. So, well, how do I get control over something which doesn't speak with the, the, the, you know, the world of the internet or the, the online world, something that doesn't even have data. How do you get control over something? So this is goes hand in hand with a process that is taking place on the ground, which is digitalizing, this production floor and, you know, it's a whole new world of what we call agritech today. Agriculture technologies. We're going into software and there is a lot of sources of data that you can, suddenly capture this data from. Okay? So you have human resources, okay, which is somebody that is out there in the field. It could be the grower, the owner, the agronomist, an auditor, a visitor, a representative of the supplier that need to collect some form of data. It could be anything. Could be from where the polygon or where the field is to what is being grown there. When was it being planted? If it's something that you need to plant on an annual basis, what is the stage? What processes did you do and all the way to when and what did you harvest? Okay. And you have to trace it all the way until it gets to wherever it gets to. So facility in the midway to the factory or to the gate of the factory, or even into the production floor of the food and beverage company. So you have to trace everything that happened beforehand, all the way until it gets to wherever it gets. So one source of data is of course, the, people on the field, but there are others. Data can come from satellites. Okay? You can get a lot of information from satellites if you know how to read it correctly. You can get it from virtual weather stations. We can get it from sensors on the ground if those are there. Okay. Not in all places you'll see. So, sensors on the ground. It could be tensiometers. It could be anything. And of course, machinery. Okay. So if you have a tractor, if you have a John Deere tractor, so you know, it communicates with the John Deere Operations Center, we can integrate with that as well. So whatever is available, we know how to integrate, we know how to work with a minimum that you have and we know how to aggregate everything else that you have over there. We are very agnostic to the source of the data. Okay. It could be anything. We just have to make sure that the data that we need is being collected and if it's not being collected today and we can't find a workaround together, so simply somebody will have to take care of that, send somebody to the ground and actually collect this data.

Tom Raftery: 8:33

Oh,

Ofir Ardon: 8:33

at the end of the day,

Tom Raftery: 8:34

go on.

Ofir Ardon: 8:34

we have the field. And all the layers of information that we can put like layers in terms of how many types or sources of data you have, and throughout time, covering the entire season, after season, before season, and sometimes even following or tracking the harvest. So, many sources.

Tom Raftery: 8:53

Okay. And. What kind of crops are we talking about? Is it a specific crop or is it a multitude of crops? You know, how, how does that break out?

Ofir Ardon: 9:09

Oh, we're also crop agnostic. We're focusing on the relevant processes for the supply chain and the relevant processes that are tied to it from the agronomic side. So we're, to some extent, agnostic to the type of crop or to the crop that, that we're handling because we get, I say that the skills that are relevant to that specific crop, we get it from the biggest experts. So that, which are usually the supply chains themselves or the people in the supply chain that have been buying for many years from specific farmers, or from the people on the ground or on the field, the agronomists that have this knowledge. So.. We take their knowledge, put it in the system in a way that we don't need to control the skill of that specific crop. Okay? We, we, we make sure that the processes are being done in a way that can be captured later digitally. that's the focus. The decisions can be taken faster that you document everything and that everything looks different like a factory.

Tom Raftery: 10:34

All right.

Ofir Ardon: 10:35

But there are some crops that we've managed to gain more, experience with. Of course, it's, it's starting with the big, you know, the major ones, which are the field crops, if it's soybeans, cotton, corn or maize, et cetera. So these are the large ones, but then again, there's some certain, supply chains that we went into more deep, so with beer companies, for example. So Barley, could go for coffee, cocoa and some others. But all in all, if you wanted me to give you a count, I would say around, 70 to 80 crop types that we have today on the system.

Tom Raftery: 11:09

Okay, and what are the main, challenges the food and beverage companies are looking to solve with this data? What are the main things that they're looking for?

Ofir Ardon: 11:22

Well, you can divide it into two, which we believe recently and more so going into the future are gonna be eventually combined. Into what we call you know, yield management, from the perspective of the supply chain manager at the end of the day. But there are two perspective to it. Each one of them, we have several solutions, addressing different pain points, but basically divided into two. There is the agronomic, or if you wanna call it the operational part, the part that you care and want to track and want to help or want to somehow control. Certain practices that are being done on the field. Certain practices could affect quality, could affect quantity, or, you know, compliance with something. So, this is one part. So we have solutions that are related to advisory, or like a digital advisor to the farmer himself, okay? To the level of digital recording of his processes that can be later documented. So this is one type of solutions that we have tightly managed in between the farmers, more to the farmers, but also to the supply chain that needs to somehow, control or to make sure that something is being done on the ground and on time. On the other hand, we have things that are more related to sustainability. And in the second I'll say how this, this is all connected. So these are things that could be related to mostly certification, or certification processes. You want to make sure that whatever is being done on the ground is compliant with something that you as a food and beverage company, need to be compliant with. It could be something that is related to, your own KPIs or your own sustainability KPIs or quality KPIs, but it could also be things that are related to the regulatory environment. Okay. As of recently, compliant with EUDR. Okay. This could be another example. So it's all area of solution that can help food and beverage companies or supply chain managers to manage this entire difficult process of compliance general, certification management, and everything else that is related to that. The other part, which we usually deal with or that we have a solution for is related to carbon. Okay? Everybody are talking about carbon. Some want to measure what is the current footprint. Some want to get to Net Zero, some want to sell credits. But this is a very hot topic today, and it also requires something which is very similar to the other solutions that we already provide, that you need to capture the data that later you can calculate into carbon on one hand, or to translate it later into processes that you want to change in the field that that farmers will follow. And in turn, you'll be able to measure it and show what is the impact that you have on carbon. So this is another type of solution. Bring this all together. Connect them.'cause we believe it should be like we manage it on the same platform because we believe that sustainability and agronomy should be one of the same. It's capturing almost the same type, or like you use the same data for both purposes. And one of them, you look at it in terms of, you know, quantity accounting, things that are more related to financing and agronomy, but the same data you can use to whether I did something that I should have or I did something that I shouldn't have. And, and calculate it or look at it differently. So eventually it's the same data that we collect today, but we take it in different routes. One of them impacts the agronomy and gets you some type of a vision into quantity and quality. And the other one gives you the same measurement. But for compliance purposes, as the manager of the supply chain, you gotta have both. Because if you want to manage your supply, expect what is coming? Is it what I expected? Is it coming in the form that I expected, in the quality that I expected? And is it compliant with my objectives, my KPIs? Some things, you know, you can just not accept. You have to look at all of them in order to say, what do I have coming and whether or not I'm gonna have shortages that I need to handle or address ahead of time. So that's why we call it all together. It's kind of like, yield management. This is how we call it.

Tom Raftery: 15:24

Okay. And you mentioned the EUDR. I had, an episode about that, about I dunno, month or two ago at this point. But for people who might have missed that episode, can you give a quick overview of what that is and how it impacts, and also mention as well some of the upcoming carbon regulations to kind of give some context as to why this compliance is important.

Ofir Ardon: 15:51

Okay. let me simplify EUDR because I can complicate it significantly, but I think that a lot of, a lot of the companies and you know, to some extent, even regulators, I believe that there are still miles to go until yo as a world get to some type of an understanding of what it is exactly and what are the exact requirements in terms of objectives and processes. The objective, the overall objective we all know of, which is basically we don't want deforestation. Okay? So the way, to deal with that is literally, and this is in the EU it's very recent, basically stating, well, if you deforested, we don't want the goods that have come from this location to come into Europe. This is our way, of making sure that we stop deforesting. Okay? So that's kind of like the basics of it. But the truth of the matter is that it requires whomever is importing agricultural goods. This is where we are focusing on, from abroad or, you know, you can have that also in Europe, but it mostly, focusing on countries abroad. You want to not just make sure, but like verify, document, and have the proof that whatever you're importing, you could show that it was not a result of deforestation or did not impact the level of forestation worldwide. So bringing it a long story short, the beginning of that means that you'll have to know who is the farmer, where is he located? Go some years back to make sure and verify that there was not a forest over there.

Tom Raftery: 17:23

Yep.

Ofir Ardon: 17:24

That suddenly is not there anymore. Okay. Sounds easy, but it's very complicated knowing how the supply chain is structured today

Tom Raftery: 17:32

Sure.

Ofir Ardon: 17:32

and where farmers are, where food and beverage companies are, and how well are they actually connected and on top of all, well, we're talking about a production floor, which is not digital. Well, and it's like saying it's a, it's a production floor that you know nothing about. Okay. So. It's, it's becoming a big, huge pain point for food and beverage companies that now have to align in terms of their supply chain all the way to the level of the farm, in order to address this pain point. It means I need to know where he is. And in most cases, in some countries, in many countries, which you buy from many small farm holders, you don't really know where they are because nobody needed to answer this question up until recently. Why do I care exactly where they're located? I'm getting coffee or the palm oil or whatever I need from them. Who cares where they are? But now you do. But nobody knows. Not all countries have this map, gigantic map of which farmer is located where, and even if they did, who am I buying from? Is it this guy? Is it that guy? So it's very difficult. Sometimes you buy from hundreds of thousands of farmers. Now you need to go and map all of them, and you need your supply chain to help you do that because you as a food and beverage company, don't have the resources on the ground to go and map. And you don't have the tight relationships with the farmers to map themselves. So it's kind of like, okay, now I have to get to know my supply chain for the first time. Really know them. And it's a huge issue. So everybody are now focused on, well, let's map them, know who we buy from, and then let's make sure if there was a forest there, which may be easier thing to solve. We still need some, you know, data like, Forest Watch or some other type of technology. But, then again, this is only one part of the problem, then you need to know, okay, so is everything that I imported came from those exact locations? How do I make sure that nothing else got there to the, you know, to the batch that I'm, I'm importing now. So I have to make sure that I actually mapped everybody and that nothing else is contaminating my supply chain that is coming from elsewhere place that I don't know where it came from. Okay. That only touches the first point. I believe that later points that were not so much addressed to up until now. Okay, so if it deforested, maybe I cannot import from him. Is it true? Is there something that we can do to accommodate that? And even if they're just at risk, what do I really need to do to verify what will be sufficient for me to show the regulators that it's sufficiently for them to say, okay, you did what you could. You did good. What you brought, you can import now and everything is okay. Kind of reminds me of a world that started 20 years back and maybe even more with anti-money laundering in banks. Okay. Banks have to make sure that people don't launder money. How do you track all the billions of people that, well, not all of them have bank accounts, but the people who have bank accounts, how do you make sure that what they do is not somehow related to money laundering? So that's kind of like starts all over again. There was a whole industry that started back then. This is what I believe is happening right now starting with EUDR, I have other coming up next, but

Tom Raftery: 20:39

And how do you fix that?

Ofir Ardon: 20:40

now, how do I fix the EUDR? Um,

Tom Raftery: 20:46

No.

Ofir Ardon: 20:46

well, I, I can explain

Tom Raftery: 20:48

you help your your clients be compliant?

Ofir Ardon: 20:53

well. There are actually, there are some leads that we have that we're discussing with client, or not yet clients that we're discussing with it. We're starting from discussing EUDR but we also have clients that, we already have clients that are now worried about also EUDR. But let's look at in a wider perspective, okay.

Tom Raftery: 21:10

Sure.

Ofir Ardon: 21:11

Almost all food and beverage companies have, to some extent, some type of a KPI or an objective that is related to sustainability. Some level of ESG you choose. Economics. It could be social, it could be anything. You have your KPIs. This could, you know, there is no standardization. Okay? So your guess is as good as mine what is the best objective to have there? But you have objectives. And these objectives by definition okay? Requires you to know more about your farmer. So this is part of a wider, ecosystem trend. Okay? It's not just coming from EUDR. EUDR is just a part of it. Okay. It's rushing. It makes like it's, you know, say it's okay to have an objective for yourself, but if you're about to be fined, so probably you'll follow these objectives even more so. Okay. EUDR will eventually have fines or some things that force companies to do that, not just voluntarily put an objective. But in any case, companies put objectives that are related to ESG and in order to track it. So you have an entire world of certifications, from types of sources. It could be internals, it could be like, you know, a standardized, you have many of sorts of types that, some of them you've probably heard about. If it's Rainforest Alliance, if it's Global Gap, it's could be anything. But it forces you, as I mentioned before, to get to know your farmer better and

Tom Raftery: 22:37

Sure.

Ofir Ardon: 22:38

to bring the data and to document what you need, throughout the supply chain. Trace it so that you can actually show that you're meeting your KPIs. Okay. That you're not, defaulting on your promises, whether it's to the consumers or to the governments. Okay. so the problem is not just about EUDR, it's the general problem of one, getting closer to the farmer to get the data. That's one. And the second one, which everybody, like, a lot of the companies that I see keep not, not forgetting, but not addressing it first is, okay, I need also to impact them, okay. Either to show that they did something differently or that I somehow impacted them in a way that they now work differently or do things in a more, in a way that more accommodates the objectives that I wanna reach. Okay, so one, let's measure, let's see, let's take a look, which requires a lot of, like a significant process that wasn't there up until recently, and two, affect them. Two different things. Okay.'cause to affect, I need their engagement also to some extent bring the data. I need the engagement, but for sure to affect them to do something differently. If you know farmers, it's one of the most difficult things to make them work differently. Why? They've been doing what they're doing forever, for generations sometimes. And they're experts. Okay? They're experts. They know how to work their ground, they know how to like, you know, produce the crops that they produce and they believe in their way and they're not wrong. Okay. You can say some of them are better than others, but they're the experts and now you're coming somebody that is far away from them and want to tell them how to grow differently.

Tom Raftery: 24:24

Hmm.

Ofir Ardon: 24:24

Okay. And that's an issue. Okay. Uh, it's, it's, it's, you can say it's kind of like, you know, it's a business. You can affect him somehow. But is it a business? Are small farm holders are the businesses that you and I know, are these like really factories? They act like factories? No, they're closer to consumers than they are to businesses.'cause a lot of them are small farm holders. It's family farms. Some of them are very, very small and it's not the same as you know, well now you have a regulatory environment that you'll need to work differently. Well, good for you. In some places it can work. Like, you know, in the US you can file your taxes won, but in other countries, they have to deduct it to you by the employer. Okay? So it depends where you are, but you won't affect them. And to affecting them, you have to tell them what they'll do next is better than what they've done for generations. That's one thing to, think about, which doesn't always work or in most cases. In most cases it doesn't work Second well, you know, some of them are not way above poverty line. Okay? Some of them are, some of them aren't. But they're making, let's call it zero profits, because it's not much more than that if they're profitable. And now you tell them, do something different and take all the risk on yourself if you're not gonna grow as much as you thought you were going to grow. Okay, so now I'm putting another risk on the farmer and I'm not covering it.

Tom Raftery: 25:47

Hmm.

Ofir Ardon: 25:48

Okay. In most cases, I never thought about I need to cover it. So this is, this is, this is another issue. And everything else, which is like, I just touched the, the major ones. But everything else is also a problem. I need to get to them. I need the mass media of communication to communicate with'em and collect the data from, I don't have the technology in place. I need to track that they do it. I need to somehow maybe create the incentives I need to create the knowledge, the know-how I need to align the entire supply chain with it. I need to make sure that what I tell them to do. Let's say I'm, I'm, I'm a one coffee buyer. Yes. I tell them one thing. Coffee buyer number two tells 'em something different and there's not some organization in it. So it's kind of like, okay, let's change the world, but let's not think about the tools yet. Yeah, you cannot do that. You have to think about the processes, the tools. Well, the incentives or the, the structures that you need to put in place in order for that to work. And it's not easy. And you know, you're coming from the top of the supply chain. Some of these challenges you meet for the first time. Some of the challenges you've been able to somehow, to some extent address in the past, but not in a continuous process that covers everybody. Okay? And that's an issue. So you need to put the right processes in place. and you need the technology to support it. Okay. And both things are new, so what we get is each company is trying its own way or program, okay? Which takes times time to implement. Each company can try different technologies. Some of them try to extend their own technologies. Some of them are trying to build it internally, which is good for day one. But when they find out that this thing is ever evolving and they need to ever evolve their let's say their technology. Not like adding a process once a year, but on steroids because this is how the, what you just learned today that you have to do with them suddenly changes and you need something else. It's hectic. You need to change it several times during the year, and you need technologies to support that. And food and beverage companies are not tech companies, so kind of like starting and then stopping because it doesn't work. You have to go back. Start from scratch, maybe change the process, maybe find a different technology. Sometimes it's very difficult to do, and, and this process takes time, takes resources. It doesn't succeed on the first day, uh, unless you're a company that will do it five years down the road. And everybody will have experience and it will learn from all the mistakes of the former ones. But, you know, it's a gigantic ship that is moving slowly and it's not easy to maneuver.

Tom Raftery: 28:19

Yeah. Yeah,

Ofir Ardon: 28:20

Accelerate the speed.

Tom Raftery: 28:22

yeah. I mean, changing technologies, and I've said this many times on the podcast is generally pretty straightforward, but changing people, is a lot more tricky because it's people fear change, it's change management, organizational development, they call it in some places. That's really tough, and particularly to your point when it's not employees. In this case it's suppliers. The farmers. If you're trying to get them to change, what to your point, has been done for generations? That's gonna be really, really tricky. So how do you do that? How do you change? how do you manage that change management issue, and how do you manage the change in technology? Because to your point, again, the technology is changing really quickly and has to

Ofir Ardon: 29:13

Let's, let's try to start with what we cannot do, okay? And I want to give you an anecdote here, okay. Factories 50 years ago, okay? If you want to reduce injuries in factories, you don't just require your employees to work more safely, okay? Let's start from there for a second. Think about that. And, and now let's look at the farmers. And I want to take an anecdote from the, like, you know, one piece of the pie from the, from dealing with the farmers, carbon. Okay? Now, there are a lot of issues with carbon and we can deep dive into them just a little bit to understand it. But at the end of the day, you either want to be net zero, okay? Like as a supply chain. Or I don't know, you want to sell credits, maybe because you're, you know, you're, you're absorbing more carbon than you are emitting and you wanna sell the credits and you know you'll have more money. One of the two. You can make your economics better at the end of the day, and I mean, you want to expect the farmers to do something different. Okay, so let's take a look at this process for a second. You gotta have the visibility that you need into the farmers in order to start documenting everything. Because if eventually you want to either sell credits or calculate at a massive scale, okay what you emit or, what you sequestrate, it doesn't matter. One of them, you have to measure and you have to, you need the technology and the processes in order to measure. Let's assume we got over it. We're a food and beverage company. We spend a lot of money on, you know putting a nice technology in place, getting the right people on the ground to help the farmers, and maybe even to teach them to collect this data so we can estimate, or we can have a constant flow of the data that will help us calculate what is the current carbon footprint. Okay. Let's assume that we have that, and even that is not easy. You want to make farmers report on a constant basis for things that maybe they don't know why they're reporting it, and even if they do, what do they get from it? Ok, now phase number two, you wanna show an impact, not just, okay, this is the current situation. Good, but what do we do about it? We want to change it. We want to show that we made a change. Unless we just need it for the sake of showing, okay, here we have a negative over that we have a positive in the factory and we're more or less on net zero. Maybe this is fine, maybe where this is part of the world is going, but they want to show impact. When you want to show impact, you need to show that processes have changed and when you wanna do that. First thing you think about is, okay, so if this is not the right process, what they're doing today, okay, and let's assume tilling versus not tilling. Okay? So we need to teach them not to till good. So let's tell them not to till. What is the impact of that beyond carbon?

Tom Raftery: 32:01

Mm-Hmm.

Ofir Ardon: 32:02

And think of you as a farmer that is now saying, okay, so you're telling me to do something different. You're telling me that it will have an impact and that I'll be able to sell credits and get some of the money. What is the, you know, what is the downside of it? What's gonna happen to my yield over what period of time? Sometimes you even need to invest in some things that will make you do these practices differently. It's not that easy, suddenly not to till you have to change other methods as well. And so it's not enough just to expect, say, please change your work methods. You're not even my employee, but change your work methods. I'm the buyer, I will tell you to do it. So you have to listen to me and they'll simply do it. No, they won't. Okay. What they can tell you is, alright, show me. Show me that it works. Show me that I'll get more money than what I'm making today. Or at least that I'll be like, you know, I'll, I'll, I'll, I won't have more risk. Okay, I'll be the same, but now I'm saving the world, which is okay. I'm okay with doing that. So you have to prove, and you're trying to prove to the expert because he is already an expert. Okay, over a certain period of time, and he's the one that is making almost zero profit. And you're the one as a food and beverage company that is making much more than that. So the way that we believe that this should be solving, and this is beyond technology, we can later talk about how technology can accommodate that. Put the money where your mouth is, give them the incentive. Well, if you're gonna get money for it, and if you can promise them that they'll get the money in the year from, also give it to them now. Who's gonna put the investment for them? Changing the methods. Okay.'cause changing methods also require an investment. Cover the risk. Okay? If they're gonna make less this year because of changing the practice, who's gonna, you know, who's gonna handle this? The, the, the, the insurance side of it. So there are a lot of things that we haven't thought about, but we have to think about them as employees. If we don't so we miss on the big opportunity to actually impact and, and make them do something different. Okay. So that's kind of a mindset that has to change. Alright? And then technology can accommodate it because think about the things that I just added. Give them new practices, show them what these practices are going to do, track it so you can give them ahead of time recommendations for handling the risk on time during the season because they work in a different way than what they were used to. Incentivize them. So now you have to put a whole incentive scheme, a new incentive scheme in your supply chain to implement it. And to track it and to measure it and to be able to pay to sometimes hundreds of thousands of farmers. And so think about the new things that you've just implemented. Oh, sorry. You also need all the, the, the, the middle layers to be aligned. So it's the suppliers, it's the cooperatives. It's sometimes you have another layer in between that need to be aligned with it. Okay. Everybody have to have some visibility'cause you need them in order to push for this practices to happen. So you suddenly need to put a whole new digital platform for everybody to align on based on the new processes that you're right now trying to implement. Okay, that's day one. That's just day one. Day two, you'll probably learn from many mistakes that happen and the second day you already have to make changes in the system, in the processes, in the incentives and in everything. So whatever you had in day one helped you to learn for day two. So hello, day two, now we have to implement half of it. Re-implement it. day three, another half, another half, and then it goes and load until you have some type of a constant process, which is a new process. Okay? it cannot take a year just to implement this process. These processes, for sure will take you more than one season of growing the crop. It's not just think about changing your mindset. It's about thinking your resources in a different way, calculating your resources that you will need to make this change in a much more longer term perspective. And at the same time, think of the technology that needs to accommodate that in order to be able to support it. So sometimes it's more than one technology. Okay? Not just one that you will need, but you need something to cover that. It's like thinking a new production floor. It's like thinking a new ERP. Okay? So that's a whole new world of solutions out there that you need to start, questioning, but thinking about, and. That's, that's kind of like my 2 cents on that.

Tom Raftery: 36:20

It's kind of daunting.

Ofir Ardon: 36:23

no, it's, it's, it's not daunting. It's just a, it's a realization that yes, we need to make these changes, it's not going to be like, one day work, you know, shooting the first arrow and I probably will aim right. And I'll hit and, and it shouldn't have been that difficult. No, it is. Because it's a change management. It's, it's, it's a whole process of changing your entire supply chain and rethinking it. The, you know, ways to do that is basically to work in, in, in steps to put like stages over time. Have a plan. Yeah. I want to get there. Let me put it five year in advance. I'm gonna get there in five years and let's take it back. Now in the first year, I want to be able just to measure. And the second day, I want to just be able to improve the ways that I measure and the processes or the the ways that I'm doing it. Okay. Add another technology, change my process a little bit. Year three, I want to implement a new process and see how it works on a subscale of farms. Year four, I want to increase that. Year five, I want to measure everything and think about the next step so you can think about it as a longer term plan. That would be an alignment of expectations. An alignment of expectation of how to do it. But it also has to be a rethinking of resources because what you have to put in advance has to take into account that, you can't treat farmers as your partners. You have to almost treat them as an employee in terms of what is the risk that you can enable them to take, that you will need to take upon yourself. And I think that this is a shift that I already see happening, in some cases.. Okay. The, the, the push, I cannot state names of who's doing it exactly like that, but you do see some that use these best practices and understand from day one, or maybe they've made a mistake before, but I wasn't aware of it and they learn from it. But when I see them today in their, for me, it's their day one. Some of them are actually taking a stand in this direction. Okay. Taking a step in this direction and actually understand that it's different levels of resources and perspective that they have to take into the supply chain. Most of them start from, okay, let's start with one country and just one layer of the farmers, not everybody, because we want to make sure that it works. And then you start seeing these things like work in a different way. And they're not looking for quick wins. They're looking for something that they can continuously measure and the investment that they put in this continuous measurement is going to add either to their ROI in terms of pure economics or to their ROI in different terms of meeting their KPIs, which have some other return on investment that is not necessarily measured just by money, but, you know, consumer respect. It could be a lot of other things that are not directly related to, you know, pure bottom line for the next year.

Tom Raftery: 39:09

And what, where's the logical conclusion for all this? Where is it all headed to?

Ofir Ardon: 39:17

Well, I think you have two very good examples today happening. Okay, we have three. Let's, let's look at the three examples happening. One example is, the world is giving you incentives, so, and this is the carbon market. Okay. So, you know, you do have stock exchange for carbon credits. It's not that advanced. It should be much more advanced and stable in order for you know, to have, a whole world working around it. Okay? It's not yet there, but it's gonna get there soon. So this is like the point of view of incentives. Here you have the example of incentives out there that could translate into bottom line that you could start using and harnessing in order to make a change, a long-term change in your supply chain. Okay? So take a look at it in a longer perspective, longer term perspective, and put the money according to that. And start building a whole plan that will eventually enable you both to show that you reduce the carbon or the carbon footprint, you changed it, and you have a way of capitalizing on it. Okay? That's one example. Coming from incentives. The other one is what we say, have the carrot in the stick. It's coming from a regulatory environment. The EUDR is one example.

Tom Raftery: 40:22

Yep.

Ofir Ardon: 40:23

I, I, I don't want to be, um, no. It's not about neg being a neg being negative or being pessimistic, but I do think that, fines work better than incentives in some cases. So EUDR is an example. Okay. So now you're being forced, you will no longer be able to work if you don't change a certain practice. Okay? So it would be interesting to see how this evolves. Okay. how fast will they actually be able now to do this change management? And obviously from the expectations of the regulator on steroids. So it's gonna be very quickly and they have to do something radically, now. Everybody are under pressure, so they're actually looking for solutions, process-wide solutions, you know, and working with the rest of the supply chain, but also looking for technologies. So this would be interesting to see how this affects, but these are like two extremes. Like one of them is pure incentives, like positive incentives. The other one is negative incentives. Fines, at the end of the day. The third one is the first one that started, but as you've seen, it moves slow. That voluntary KPIs and what am I willing to do? And yes, there is a whole world out there that started just to touch this one. So it's all the. Different types of certifications, standard types of certifications that are out there, that are made to, to, to, you know, to address this, this type of pain point or, or issue. And this is, well, the most mature type of, of, of evolution. Okay. When it's voluntary and what happens when it's voluntary and you see that it's different, it, it took longer to happen. Okay? It's not very standardized. You have many types of certifications whether it's self certifications and or something else. The processes around it are around documentation and self-reporting to the vast majority of cases. Sometimes it's very difficult to tell, okay? Is it the correct data that I have or is it something that I could find out that it's, you know, not reliable? So these are the issues that you see over there, which would be interesting to see if this type of mechanism is changing when you look at either carbon that is coming from positive incentives or negative incentives like such as coming in the EUDR, what's gonna be different in the evolution of the latter to them the first one that I just mentioned. But you can learn a lot from the most mature one. Okay, because the most mature one already made you as a supply chain manager, deep dive into the rest of the supply chains that before that you didn't have many reasons to go to. Now you have to go through that. So you either pay an external organization to start looking into the supply chain for you and report everything that you need, document it, have the proof that you'll be able to later show some, like, you know, your consumers, your investors, your internal employees, it doesn't matter, that you're following a certain, you know, level of like you are, you're going towards a certain objective. And so, so this is different, but in all of them you see the same thing. You have to shorten, not shorten the distance, but connect the dots in between the head of the supply chain and all the way to the level of the farm and all the processes you have to grow through within it. What changes is what data you need exactly to flow and in what level of reliability and in what, like timeframes do you need this data? How well do you need it to be documented? But it's following the same thing. Need to tighten the supply chain in terms of back and forth communication.

Tom Raftery: 44:06

Cool.

Ofir Ardon: 44:06

By the way, technology is like, it's, it's is, is a, you know, taken for granted. But it's a very key part, like the evolution of technology and the evolution of the capabilities of these companies to do that has to go together.

Tom Raftery: 44:18

Sure,

Ofir Ardon: 44:19

Okay.

Tom Raftery: 44:19

Sure, sure. Ofir, we're coming towards the end of the podcast now. Is there any question I haven't asked that you wish I had or any aspect of this we haven't touched on that you think it's important for people to be aware of?

Ofir Ardon: 44:34

Well. Yeah, we could, we, we could continue this discussion probably for like three hours if, if, if, if we could have the time. But, yeah, I, I want to take like a try of summarizing some, maybe some of the things that I said, but maybe beforehand, given very interesting example on that part. And one of the questions that I'm asked a lot from mostly, supply chain managers is, okay, let's assume that I put this process in place. Okay. And I use your technology and we start collecting data and we even figure out a way to put it very nicely that I can suddenly manage and for the first time see, what is the status of my supply towards the end of the year? Great. Can I trust this data? Okay, that's, that's a question.

Tom Raftery: 45:16

Yeah.

Ofir Ardon: 45:17

And it's interesting to see when that happens, how many ways you actually suddenly have when you digitize something on the right platform that you can actually verify this data. Okay. And I can talk about the obvious, the, the usage that we make of, you know, remote sensing technologies in order to, to verify this data, or the ways that we can put things together on the mobile app or on the other tools that we're using to make sure that, you know, nobody's lying, whether it's more difficult to lie. When you have a lot of data incoming from farmers, not just one point of data, but a lot of them, you can suddenly see something like, okay, so now I suddenly have some type of an average or a range, which looks, you know, normal. I can suddenly for the first time see not just, who is an outlier, but what is an outlier? What is a lie? What does a lie look like? What is the truth look like? And it's amazing to see how quickly you can get to that. Okay. So my answer would usually be, yeah, well you can't see this when you don't use technology. You don't, you can't even capture or understand how fast you'll be able to verify this data, how quickly it will happen. But that we really have examples that show within a season you can already start verifying things that you couldn't even imagine you would be able to verify in the future. And suddenly you see many opportunities to suddenly help farmers, you see pitfalls. Some of the farmers, whoa, they're doing something different. I can help them make do better, and I have the data to prove to them that they'll do better. Why? Because I'm showing them their neighbors.

Tom Raftery: 46:55

Right.

Ofir Ardon: 46:56

not by names, of course, it's like data privacy, but like I show them where they are versus everybody else. And you find new opportunities that you couldn't even imagine, that suddenly you can add value. When you add value, you get their engagement and suddenly this type of back and forth communication escalates, not escalates, but like, you know, intensifies and it happens rapidly. So that's just one thing that I wanted to give as like the, the, the, the, the positive side of it. Because we've talking, spoken a lot about the challenges, so. Yeah, eventually it happens and companies can get there and technologies we've seen have live examples that this actually works, helps and, and you have to try to, to, to, to, to really see it or just see it as an example. But if we go back to some of the things that we said, so trying to like, so. One, we have to really align the supply chain. So we have to put together the producers and suppliers, the, the, the cooperatives, the growers. We have to align all of them together. We have to understand, we have to have a mutual objective. Okay? So it's kind of like alignment across a very complex supply chain. Sometimes it's extremely complex, especially if it's global. Okay? And think about having even more than one crop, several crops. It's becoming very difficult to manage, but the alignment is key, which is the initial part. The second part is aligning the incentives throughout the supply chain. The incentives are key here. Okay, and then third thing, what I mentioned is that when you take into account that you want to do a change, you have to put the necessary resources in place and you have to probably put them upfront, uh, okay. Upfront and throughout the entire process, which is like a longer term view than what companies might think in day one. Okay. And the last thing then when we put like, you know, 50% of it is like putting the right processes in place and the right resources, then you can look at the technology that without it you'll not be able to support anything. But technology alone cannot solve your problem. So you have to have both. You gotta think about your technology, you gotta think about a platform. It's like, think about having a new factory. And if you don't think about a system, it's like building a factory without an ERP system. Okay. And now we're not talking about the usual ERP because regular ERPs are not I, I mean, they're not built to control this part of the supply chain. It's a bit different than what you're, they were used to. But like this is something that you seriously have to consider. And within the technology, you'll never get it right in day one. So consider a technology that you can actually change on a constant basis. Like, okay, I made a mistake in the processing, I need to change the processing, to do it quickly. Is this technology supporting the changes that they will have in the second day? Yes or no? This is something which is very important, but that also can grow with your requirements. If we started by covering the carbon perspective, now we have to car to cover other perspective because perspectives, because my, my, my sustainability needs are growing. It's not just around carbon. You have an entire three letters in the ESG, and each one of them could be anywhere from A to Z. So that's, that's kind of like thinking about the technology can evolve with the process, which is key. And, to some extent, it can work with internal IT systems of these companies, but this is not enough. Okay. I have to look also on the outside and it eventually has to be the right mixture of the two.

Tom Raftery: 50:14

Gotcha. Yep, yep. That makes sense. Ofir, if people would like to know more about any of the things that we discussed in the podcast today, where would you have me direct them?

Ofir Ardon: 50:25

Well, we have, our website, let's start with that. So it's at www.agritask.com. That would be one place to look. We have all of our, you know, material that we ever published in the past, some stories, success stories about our clients, a lot of data on our solutions. That you can see from that some of the processes, the challenges that you might have in the future if you're digitizing your supply chain towards sustainability and agronomy. Of course in our LinkedIn, look at Agritask on LinkedIn. A lot of the publications and things that we've published in the past are there. And this will be the main sources. Anything else you can speak to me directly if you really want to deep dive even more than that. In some cases we can even let, people speak directly to our clients but when that becomes relevant,

Tom Raftery: 51:12

Fantastic Ofir, that's been really interesting. Thanks a million for coming on the podcast today.

Ofir Ardon: 51:17

Thank you very much, Tom. It was a pleasure and uh, it was nice talking to you. Thank you very much for that.

Tom Raftery: 51:22

Likewise. Okay, thank you all for tuning in to this episode of the Digital Supply Chain Podcast with me, Tom Raftery. Each week, over 3, 000 supply chain professionals listen to this show. If you or your organization want to connect with this dedicated audience, consider becoming a sponsor. You can opt for exclusive episode branding where you choose our guests or a personalized 30 second mid roll ad. It's a unique opportunity to reach industry experts and influencers. For more details, hit me up on Twitter or LinkedIn or drop me an email to tomraftery at outlook. com. Together, let's shape the future of the digital supply chain. Thanks. Catch you all next time.