COMMUNICATION SYSTEM BARLEY-MALT-BEER CHAIN

ir. Conny A.M. Graumans Agricultural Telematics Centre (ATC), Agro Business Park 58, 6708 PW Wageningen, phone:0031-317-479658, fax:0031-317-421722, E-mail:[email protected] Abstract: An approach for improving the performance of an agricultural production chain is presented. Communication within the barley-malt-beer chain is analyzed from four different angles: feed backwards, feed forwards, product integrity/safety and financial transactions and settlements. For each of these views specific administrative procedures and information flows are defined. Information flows are then translated into one or more informationcarriers (standard forms, EDI-messages). A Tillage Information System (TIS) is implemented to support information exchange between farmers and collectors and to process and analyze tillage data. Management information systems for arable farming and a mailbox system are used tot collect and exchange relevant data. Keywords: tillage information system, barley-malt-beer chain, chain management.

1 Introduction In the Netherlands about 50.000 tons of brewing barley is grown on a yearly base. To meet the demands of the Dutch malting industry an additional 170.000 tons is imported. The 220.000 tons of brewing barley is processed by the maltsters into 175.000 tons of malt, of which 135.000 tons is exported and only 40.000 tons is used by the Dutch breweries. An additional 180.000 tons of malt is imported to meet the demands of the 17 Dutch breweries. So, less then 20 percent of the annual demand for malt is produced in the Netherlands. In the course of years, the share of Dutch barley in the national beer production has declined structurally [Van den Berg, 1996]. In answer to these developments the barley-malt-beer project is carried out. In this project an integral chain care model for the production and processing of barley into beer is developed. An important part of the project is to introduce a system of cultivation regulation to improve the quality of brewing barley. A second important item is to develop a system for tracking and tracing of batches of barley and malt throughout the chain. The overall aim of the project is to optimize the output of the production chain, in terms of better quality of barley, malt and beer and in terms of financial output for all parties involved. The backbone of this quality care system is an information system for collecting, exchanging and processing product related information within the chain. In this paper an approach is described to model the current information flows and to stepwise implement the information system to support the barley-malt-beer chain.

2 The project

First European Conference for Information Technology in Agriculture, Copenhagen, 15–18 June, 1997

The project is carried out in the context of a special program called Agro Chain Management. The program is initiated by the government and the private sector to stimulate integral chain care. The Agricultural Telematics Centre (ATC) is involved in several of these projects. In this project the ATC takes care of the information analyses and produces a handbook containing specifications for the use of standard forms and EDI-messages, as the backbone for a chain information system that supports total quality management. Furthermore the ATC takes care of the implementation of part of the chain information system. The ATC is a non-profit organization, financed by farmers and agri business. In the project all main Dutch breweries, maltsters and collectors are involved. The project is carried out under supervision of the foundation Agro Chain Competence. The project started early 1996 en will end in 1998. 2.1 The actors in the barley-malt-beer chain The barley-malt-beer chain is, compared to other food-chains, a relatively simple chain, involving: farmers - collectors - maltster(s) - brewer. In the Netherlands a brewer may be part of one or more (up to 6) of these chains. Retailers are not (yet) participating in the project. An important part of the project is to improve the communication between the chain members. To get an overview of the current ways of communicating, and to find the bottlenecks and pitfalls in communication, the project started with interviewing all chain members. The interviews focused on the volume, the frequency and the contents of the exchanged information and on the media used (telephone, fax, forms, electronic data interchange, etc.). The interviews resulted in a list of conclusions and recommendations and in a so called chain information model. 2.2 Chain communication, the current situation The most important conclusions from the interviews concerning chain communication are mentioned below. 6 Dutch farmers will only grow barley if the financial results are better than for growing wheat. This was not the case during the recent years so the area of barley declined rapidly. 6 Dutch breweries are in favour of using a larger percentage of Dutch barley (at the moment it is nearly 20 percent) under the conditions that prices are competitive to the European level and that the quality is guaranteed. The prices of Dutch barley may even be a little higher because of the lower costs of transportation. 6 Issues that are very important to all chain members are product integrity and product safety. To meet these demands a system of tracking and tracing is needed as well as a system to specify and register product handling and an auditing system to check if all chain members are acting according to the agreements. 6 What happens on the farm and on the collectors site, is considered a grey area. The information about crop handling and the handling of the barley by the collectors is incomplete and not always reliable. 6 A few of the bigger collectors (often cooperatives) experienced that by collecting data about crop handling (cultivation data) and relating this to the quality of the produced barley, a lot can be learned about improving the way of growing barley. For instance, relations are found between the use of fertilizer and the percentage of protein in the barley, or between the preceding crop and the quality of the barley. Also information about what varieties do best in a certain region on a specific kind of soil was found. So there is a potential win-win situation for farmers and collectors by improving crop management through analyzing cultivation data and relating it to product quality data. 6 There is not a real chain-leader. Breweries, for instance, don't consider themselves chainleaders. They don't feel responsible for organizing and steering the chain all the way down to the farmers. They don't feel the need to do so because there is a surplus of brewing barley on the world market so they, or the maltsters, can go shopping on the world market. A system of closed chains is only interesting when the foodprocessing industry (brewers) need warranties

for a sufficient supply of the demanded quality of basic products. In the beer industry this is not (yet) the case, there is enough supply of good quality barley. However, this can change rapidly when the end-consumers and retailers set higher demands concerning product integrity and product safety. For instance concerning the use of pesticides, herbicides and fertilizer. Then there will be a shortage of barley for which it can be certified that it is grown in the proper way. If such a shortage will arise, then breweries will have to take control, resulting in closed chains with certified cultivation of barley. Because non of the chain members is willing (or able) to dictate and organize the chain, win-win situations have to be created on a bilateral level between chain members, for instance between farmers and collectors. 2.3 The Information Model The information model is produced using Information Engineering (IE) as a method and the casetool KEY (Sterling Software) for support. IE was originally developed as a methodology for step-wise development of complex information systems for big enterprises, but is used successfully by the ATC to develop reference information models as a means of standardization in the development of information systems in Dutch agriculture. In the information model all relevant objects are described in detail, starting with the process model in term of actors and data flows. The data flows then are worked out in further detail, up to the level of entity types, attributes, information types, codelists en relations between entity types, together forming the datamodel. The result is a reference information model, describing all relevant processes that take place in the chain and all relevant data used for communication within the chain. The process model is a useful basis for defining procedures for data handling. The data flows will be translated into information carriers (e.g. standard forms, EDI-messages) and are used for defining database structures. The Information Engineering technique proved very useful for structuring the information but lacked the modelling of the aspect of time. IE does not support the modelling of the sequence of processes to be carried out nor a way to specify the urgency of procedures or the triggers that start a range of procedures. So this part of the information was described using so called time sequence diagrams.

2.4 Structuring the information Chain communication means more than data exchange, it covers the wide area of specifying the quality characteristics of malt and barley, of settling supply contracts between brewers and maltsters, maltsters and collectors and collectors and farmers. It also covers the registration of product handling, etc. By analyzing the data flows it became clear that for this specific production chain there are four major reasons to communicate as chain members. The four reasons are: 1) feed backwards, 2) feed forwards, 3) product integrity/safety, 4) financial transactions and settlements. 1) feed backwards Information about the handling of the crop, barley and malt is collected as well as information about the resulting quality of the barley and the malt. This information is analyzed, searching for relations between crop and product treatment and quality of barley and malt. In this way new expertise is created that is made available for the preceding member in the chain, in order to improve the quality and/or to reduce costs of the production. 2) feed forwards Information about the history and the quality of the product is provided with the delivered batches of barley or malt. This information is used for processing the product in the right way. 3) product integrity, product safety

This view focuses on the information, relevant for guaranteeing the integrity and safety of the product. Integrity covers less touchable aspects like environmental friendly production, production in a specific region, etc. Product safety has to do with residues of pesticides, mycotoxines, bacteria, etc. 4) financial transactions and settlements These information flows cover all financial transactions concerning the trading of barley and malt (invoices, delivery specifications, orders, e.a.). Each of the four views has a specific set of data flows (data carriers) attached and procedures to go with it. For instance, for the feed back from collector to farmer the following data flows are needed: specifications to register crop handling (cultivation); registration form for collecting crop handling information, or standard EDI-message: standard ADIS-file to send crop information towards collector; procedures to collect and analyze the crop information; standard form to report to the farmer the results of analyzing the crop information. Structuring the information this way, a matrix is made that shows what processes and data flows are relevant for each of the four chain communication views. The procedures and data flows are described in a handbook. As such, the handbook offers buildingstones for setting up a chain communication system according to the level of ambition of a specific barley-malt-beer chain. As mentioned before, in the Netherlands there are at least 10 different barley-malt-beer chains. They all set different priorities, for instance in supporting the farmers in the area of crop cultivation or concerning food safety or product integrity. Therefore it is important to have this handbook. The chain members are offered a blueprint to set up, in there own pace and according to there own priorities, a communication system as an instrument to support total quality management in their specific chain. The reference information model is used to keep the whole set of procedures and data flows consistent and to make stepwise implementation possible.

3 Standards for chain communication The biggest bottleneck in chain communication proved to be the information handling capacity of the collectors. To meet the demands of chain communication concerning feed backwards, feed forwards, product integrity/safety, financial transactions and settlements, as mentioned before, an advanced information system is needed, especially to support the collectors. In general, collectors are rather small enterprises with a rather low state of automation. They now are confronted with high demands on data collection and data processing. Compared with the other actors in the chain, the collectors have to deal with a large numbers of suppliers (the farmers) and have to report product information to quite a number of buyers. So in the project, first priority is given to solving the data collecting and data processing problems of the collectors. 3.1 Collector - farmer communication In order to meet the demands of the beer chain the relation between farmers and collector has to be further formalised. This is done by introducing four standardized information carriers. These are: 1) growers contract. This contract is offered by the collector to the farmer. In the contract regulations concerning how to grow the crop (what variety is to be used, what kinds and amounts of fertilizer and pesticides are allowed, etc.) and how to handle the product (how to store the product, what moisture contents is allowed, etc.) are mentioned. In the annex to the contract the levels of quality bonuses and cuts are mentioned. The contract is signed by the farmer and sent back to the collector. 2) growers guidelines. A booklet with guidelines concerning the cultivation, the harvesting and the storage of barley are given to the farmers to improve product quality and, what is even more important, to improve the gross margin for the farmers for growing barley.

3)

4)

crop registration forms. Standardized crop registration forms are supplied to the farmers. These forms are composed of a selection of relevant sub-sets. There are predefined sub-sets for registering the use of nutrients, the use of pesticides and herbicides, for drilling, irrigating, harvesting, etc. The farmers are obliged to fill in the forms correctly and to send them to their collector. The collector then checks if production took place according the growers contract. suppliers certificate. In order for the collector to sort by quality the batches of barley supplied by the farmers, the collector provides the farmer a set of suppliers certificates. One certificate to go with each batch that is being delivered. The certificate shows the variety and the quality in terms of pre-harvesting measurable parameters like variation in grain size and shape and non measurable quality like environmental friendly use of nutrients and insecticides, pesticides and herbicides.

For all of these four items standard documents are defined and made available to all collectors in all chain members. The data used on the standard forms are consistent with the data defined in the chain information model. 3.2 Tillage Information System (TIS) In order to support the extensive administration of the collectors a so called Tillage Information System is being developed. The information system has to be able to: 6 store all data collected with the standard crop registration forms; 6 store all data concerning the quality of each batch delivered by the farmers; 6 process these data into farmers comparison overviews that can be given back to the farmers; 6 check on the basis of the crop registration if it meets the condition of the growers contract; 6 store information about the farmers contract; 6 support the use of suppliers certificates; 6 supply aggregated information, concerning product integrity and product safety, towards the buyers of brewing barley; 6 handle the financial information flows with farmers and buyers. A pilot project is carried out with one of the biggest collectors to implement such a system. The software developed in this project will also be available for the smaller collectors. 3.3 The use of management information systems for arable farming In the Netherlands there are about 13.000 arable farmers. About 50 percent has a PC and about 18 percent uses (?) a management information system (MIS). The basis of such a MIS is crop registration. So it becomes very attractive to use these MIS's to collect and supply crop information to the collectors as a more efficient alternative to the use of registration forms. In order to achieve this, a standard electronic message is defined, called EDI-crop. This EDI-message is specified according to the ADIS-syntax. ADIS is an acronym for Agricultural Data Interchange Syntax and is an ISO accepted international standard for data communication (as is Edifact). The market leader in management software for arable farming (has a market share of about 80 %) is participating in the project and will adapt it's MIS to support EDI-crop. The EDI-crop standard, of course, is also available for other suppliers of management information systems. The EDI-crop standard message is defined in a flexible way so it can also be used to exchange crop information for other crops than barley (for instance for potatoes, wheat, vegetables, etc.). To exchange the information between the farmers' MIS and the collector, a mailbox system is used. In the Netherlands there is a special mailbox system for agri business. At this moment about 10.000 farmers make use of this mailbox to exchange information with suppliers, buyers and service agencies.

4 Conclusions The approach to develop a chain information model to structure and specify information flows in the barley-malt-beer chain proved very successful. The reference model was of great use to define standard documents, forms and EDI-messages to be used for chain communication. Also the idea of looking at chain communication from four different angles, feed backwards, feed forwards, product integrity/safety and financial transactions and settlements, proved very helpful in discussing the matter with the chain members and setting priorities. Standardization is a key word in improving chain communication. Not only where EDI is involved but also in the use of paper documents and forms. Improving chain performance, creating a win-win situation for all parties involved, is a matter of business redesign and is mainly an issue of motivation of parties involved in changing the old way of doing business. Information and communication technology offers the instruments to improve chain performance.

5 References Berg, R. van den. Integral chain care in the barley-malt-beer chain. Proceedings of the 2nd International Conference on Chain Management In Agri- and Food Business, Department of Management Studies, Wageningen Agricultural University, May 1996 (495-496 pp.) Buck, J. de e.a. Ketendraaiboek ten behoeve van het Proefproject Integraal Ketenbeheer (IKB) Brouwgerst. Produktschap voor Granen, Zaden en Peulvruchten, Den Haag, 2 maart 1994 (5 pp.) Dibbits, A.A., e.a. Projectaanpak en Organisatie in het kader van het Proefproject Integraal Ketenbeheer (IKB) Brouwgerst. Een overzicht van de taken en taakverdeling van de bedrijven en instanties die bij dit proefproject betrokken zijn, Produktschap voor Granen, Zaden en Peulvruchten, Den Haag, 2 maart 1994 (11 pp.) Duijnhouwer, I.D.C. Integrale ketenorganisatie van de Heineken-Albert-Agrarische Unie-Telers Flevoland bier-mout-gerstketen, versie 01. 19 juni 1995 (25 pp.) Graumans, C.A.M. AKK-project Brouwgerst, Informatieanalyse. Agrarisch Telematica Centrum (ATC), Wageningen, december 1996 (62 pp.) Kraakman, J. e.a. Stimulering van de teelt en verwerking van brouwgerst in Nederland, Fase 1: Ontwikkeling van een integraal ketenorganisatiemodel, eindrapportage fase 1. November 1993. Ruissen, H.J.A. Stimulering van de teelt en verwerking van brouwgerst in Nederland, Fase 2. Toepassing van het ontwikkelde integrale ketenorganisatiemodel op kleine schaal in de praktijk, Uitwerking van de enquête voor telers die meedoen in de demonstratieketen met: Grolsch, Cargill en Buys en van Iperen, TNO-voeding, oktober 1994 (17 pp.) Ruissen, H.J.A. & S.A.G.F. Angelino. Analyse van het eiwitgehalte in het veld als basis voor de gescheiden oogst en opslag van brouwgerst. TNO Voeding, Agro-NIBEM, 1995 (15 pp.) Ruissen, H.J.A. PIEK: Meerwaarde voor de kwaliteit. TNO Voeding, juni 1995 (67 pp.)