Sustainability at Scale - A Tobacco Giant’s Success Story

Problem: 

Implementing the Sustainable Tobacco Program (STP) presents considerable hurdles for tobacco companies, encompassing stringent adherence to environmental sustainability and labor standards, intricate negotiations of contractual agreements with farmers, and surmounting technological obstacles in implementing digital solutions such as mobile apps. Moreover, navigating procurement workflows adds another layer of complexity, requiring efficient management of sourcing and purchasing processes, accurate grading of tobacco leaves, and seamless coordination with farmers and buying points.  

Solution: 

TraceX provides traceability solutions designed to tackle these challenges by delivering transparency, accountability, and efficiency throughout the tobacco supply chain. Leveraging digital platforms and mobile applications, TraceX empowers companies to monitor and ensure compliance with STP standards, streamline contractual agreements with farmers, and optimize procurement process workflows. By enhancing data accuracy, transparency, and seamless data sharing, TraceX traceability solutions enable companies to overcome obstacles associated with implementing sustainable tobacco programs while also facilitating streamlined procurement processes. 

Result: 

As a result of implementing TraceX traceability solutions, tobacco companies experience improved adherence to stringent sustainability standards, streamlined contractual agreements with farmers, and enhanced efficiency and scalability in procurement workflows. These solutions enable companies to overcome challenges related to environmental sustainability, labor practices, and technological barriers, ultimately fostering greater transparency and accountability throughout the tobacco supply chain. 

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In today’s global landscape, businesses are confronted with a multitude of challenges, from the impacts of climate change to resource constraints, population growth, and shifting demographics. Businesses need to acknowledge their duty to actively participate in the creation of an environmentally conscious, socially inclusive, and well-governed society.  

Commitment to transforming into a more ESG-compliant business environment is unwavering. Sustainable strategy is the key to long-term value creation. Recognizing the interests and societal needs of stakeholders, fostering a sustainable, resilient economy and fostering collaborative initiatives to contribute to the realization of the United Nations Sustainable Development Goals (SDGs) are imperative for businesses. 

Cultivating a future where every leaf signifies sustainability, and the program is a commitment to responsible practices and a greener planet. 

The Sustainable Tobacco Program (STP)

Sustainable tobacco production refers to the effective cultivation of high-quality tobacco while minimizing adverse environmental effects, and simultaneously enhancing the socioeconomic well-being of individuals and communities in the tobacco production regions. It is a collective effort within the industry, involving collaboration among various manufacturers to amalgamate optimal practices, fostering ongoing enhancements. 

The Sustainable Tobacco Production initiative plays a pivotal role in establishing benchmarks for agricultural practices, environmental stewardship, and addressing crucial social and human rights concerns. 

The program framework comprises four essential pillars: Crop, Environment, People, and Facilities. Additionally, it includes overarching Governance, which encompasses the necessary management processes required for the effective implementation of Sustainable Tobacco Production (STP). 

Why do major tobacco giants need to adhere to STP?

Participation in the Sustainable Tobacco Program allows major tobacco companies to address environmental, social, and regulatory challenges while meeting the expectations of a more conscious consumer base, ultimately contributing to a more sustainable, responsible and export-ready industry. 

All leaf suppliers to BAT are required to participate in the STP program. Through participation, suppliers gain the opportunity to continually enhance their practices by adhering to STP Guiding Principles, ensuring sustainable interactions with the tobacco farmers they engage with, and fostering positive relationships with various stakeholders. These stakeholders include, but are not limited to, employees, governments, and local communities. Participation in the STP program is a mandatory condition for supplying tobacco to BAT( British American Tobacco), and the outlined requirements must be met for inclusion in the program.

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Traceability Solutions from TraceX

tobacco traceability, sustainable tobacco traceability, tobacco supply chain

Traceability solutions serve as a powerful tool to ensure compliance with sustainable tobacco programs by providing a transparent, accountable, and efficient means of monitoring and managing the entire supply chain. This not only helps in meeting the specific requirements of the program but also contributes to building trust with consumers and other stakeholders. 

Traceability solutions offer valuable tools for tracking, verifying, and reporting on sustainability practices. By promoting data accuracy, transparency, and efficient data sharing, traceability solutions can play a pivotal role in addressing the challenges associated with implementing sustainability programs. 

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Challenges Faced by the Tobacco Company

  • Fragmented Systems: The company utilizes separate Grower Management and Farmer Procurement Systems, leading to disjointed data management and inefficiencies in tracking and monitoring the entire supply chain. 
  • Lack of End-to-End Visibility: The existing systems may not provide comprehensive visibility from sowing/plantation to the export of tobacco leaves, making it difficult to ensure traceability and transparency throughout the entire process. 
  • Farmer Management Complexity: Managing a large number of farmers and their farmlands can be challenging, especially without a centralized system to streamline communication, data collection, and farmer engagement. 
  • Limited Procurement Efficiency: Procuring tobacco from farmers involves multiple processes and stakeholders, including field technicians and procurement teams. The absence of an integrated system may lead to inefficiencies in procurement operations and delays in the supply chain. 
  • Data Accuracy and Integrity: Maintaining data accuracy and integrity across disparate systems poses a risk of errors, inconsistencies, and inaccuracies in critical information related to crop cultivation, procurement, and processing. 

TraceX Solution Workflow

Hierarchical Setup and Role Management 

The system allows for a hierarchical setup and role management, offering multiple levels of hierarchy such as Organization, Depot, Buying Point, Section, and Village for access control. Users can create and customize roles like Admin, Accountant, Operator, etc., and assign specific application functionalities to each role. Furthermore, the platform provides control over user visibility based on their hierarchy levels, ensuring efficient management and access control throughout the system. 

Grower Management 

The system facilitates efficient crop and variety configuration, allowing users to create and configure crop varieties with multiple grades while ensuring compatibility with tobacco crop varieties. It streamlines farmer management and agreement creation processes by enabling the profiling of farmers with ID proof and bank details, inputting farmer data, and creating crop agreements for active crop years. Accountants validate farmer ID proof and bank details while maintaining a history log of farmer data changes. Additionally, the platform manages input distribution to farmers based on agreements, accounts for input transactions, and provides cash advances to farmers for agreed crop years. Nursery activities for seed-to-sapling conversion are managed effectively, with the ability to geo-map nursery plots and update activities, as well as perform sapling sales to leaf tobacco farmers. The Grower Management System (GMS) enables field technicians to track nurseryman and leaf tobacco farmer activities via a mobile application, updating crop activities and survey details for individual farmers. 

Leaf Tobacco Farmer Workflow 

The agreements are created for the crop year with the concerned farmers. Geo-mapping of farm plots is carried out. Crop variety details are added with growing area, sowing date and expected harvest. Planting activities like Seedbed management, ALP, Transplanting, CPA, Early field activities, Topping, Curing, harvest, Bulking, Bailing and Marketing are updated. 

GMS surveys are updated. 

This comprehensive solution streamlines farmer management, agreement creation, input distribution, and crop lifecycle tracking for tobacco cultivation. Through efficient data management and process automation, it enhances operational efficiency and ensures compliance with industry standards and regulatory requirements. 

Procurement Process Workflow 

Field Technicians (FT) play a crucial role in the procurement process by issuing Procurement Tokens/Gate Passes to individual farmers. These tokens contain vital information such as Token ID, Farmer ID, Crop-Variety/Agreement ID, QR Code, and other relevant attributes. At the buying point, graders enter box-wise grading, reclassified grade, and price, applying configured Crop-Variety wise Farm Grade and Reclassified Grade during grading. Integration with Bluetooth-enabled weighing scales ensures accurate box weight data, crucial for precise inventory management and payment calculations. The system also generates token-wise Leaf Purchase Vouchers (LPV) for procurement transactions and facilitates the export of farmer outstanding balances for consolidated payment processing. Token print formats include essential details like Token ID, QR Code, Farmer ID, and Crop-Variety/Agreement ID, ensuring easy identification and tracking throughout the procurement process. This efficient utilization of token modules, integration with weighing scales, and streamlined LPV and payment processes enhance the efficiency and accuracy of procurement operations, facilitating smooth transactions and transparency. 

Key Takeaways

The tobacco leaf supply chain centres around the crucial role of farmers. Farm level traceability and centralized management system for the supply chain ensures a responsive, streamlined and dependable supply of top-notch tobacco leaf to fulfil consumer needs. It also contributes to the sustainability of rural communities and agriculture. This collaboration between tech providers and tobacco giants contributes to a more sustainable and responsible industry. 

Benefits of Grower Management Systems

The Grower Management System (GMS) is integral to the success of agricultural operations, particularly in industries like tobacco farming where precise management and oversight are essential. Here’s why the GMS is important: 

  • Comprehensive Farmer Management: 
  • Enhanced Communication and Coordination 
  • Crop Monitoring and Planning 
  • Compliance and Accountability 
  • Data-Driven Insights 
  • Risk Mitigation 
  • Long-Term Planning and Decision Support 

In summary, the Grower Management System plays a crucial role in optimizing agricultural operations, promoting compliance with regulations, enhancing communication and collaboration, and driving continuous improvement in farming practices. By leveraging technology and data-driven insights, it empowers farmers to achieve greater productivity, sustainability, and success in their operations. 

Benefits of Farmer Procurement Systems

The farmer procurement system plays a pivotal role in the agricultural supply chain, particularly in industries like tobacco farming where traceability and accountability are paramount. Here’s why it’s important: 

  • Efficient Procurement Process 
  • Data Management 
  • Compliance and Traceability 
  • Grading and Quality Control
  • Payment and Settlement 
  • Inventory Management 

In summary, a robust farmer procurement system serves as a crucial component of the agricultural value chain, promoting efficiency, transparency, and sustainability in the procurement process. By leveraging technology and best practices, it facilitates the fair and responsible sourcing of agricultural produce while ensuring compliance with industry standards and regulatory requirements. 

This partnership has demonstrated the powerful impact that technology can have on the agriculture industry and its ability to drive sustainable change and benefit farmers and communities around the world.

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