Transforming Farmer & Vendor-Centric Procurement
A Case Study aiming to disrupt the traditional farming practices of the agriculture industry.
Overview
Imagine a world where traditional farming practices are transformed, where farmers and everyone involved in the agriculture ecosystem thrive. This was the inspiring vision of DeHaat, a pioneering agricultural platform.
As the Lead Designer on this project, my mission was to immerse myself in the heart of the problem. I delved deep into the challenges faced by farmers, vendors, and the operations team, seeking to identify the precise pain points that hindered profitability and efficiency in the procurement (a process of obtaining goods) ecosystem.
This case study presents the positive outcomes achieved through our innovative approach, empowering end users and driving the overall success of the business.
Users Introduction
Before I start our story let me introduce you to the main characters and what they do in the procurement (a process of obtaining goods) space.
Objective
What we want to do for the users:
Farmers and Vendors - Encouraging and enabling them to participate in a transparent and optimized procurement ecosystem. This involves improving supplier reach and enhancing communication channels.
Procurement Managers (PMs) - Empower by providing them with a streamlined and efficient system to procure agri commodities.
State Heads - Support them in achieving their procurement goal on time, maintaining quality parameters and average price.
What we want to achieve as a business:
1. Want to expand the supply reach by leveraging our large network of farmers and vendors on the ground.
2. Identify the opportunities and execute them to increase the profitability of the procurement system.
Discovery Phase
The first step towards this transformation is to gain a deep understanding of the current procurement landscape on the ground. To gather invaluable insights, we have connected with multiple stakeholders, including state heads, procurement managers (PMs), vendors and farmers in Bihar.
Through immersive field visits and engaging discussions, we aim to uncover the challenges and opportunities that lie within the existing procurement system.
We conducted the field visit in Bihar at Sasaram & Purnia locations
By analysing the field visit insights and observations. We documented the current procurement process to identify further challenges.
As we have a clear understanding of the procurement process on the ground the next phase is to strategically improve the process as per our objective.
Brainstorming Session with Key Stakeholders
We have done a few brainstorming sessions with the product and business team.
The Aim:
To draft a solution overview by making practical changes to the procurement process considering the pain points and needs of the users.
Brainstorming Session
Key Insights:
On average, we have 200 to 250 connections including farmers and vendors per location (Node) like Sasaram in Bihar - huge potential to expand supply reach.
With an understanding of the user's pain point and needs we are able to define the problem statement.
Solution Overview
On the bases of the above insights, we come up with a solution called RTPO (Real-Time Procurement Optimizer). It empowered the procurement team to efficiently broadcast commodity requirements to a broader network of vendors and farmers and invite competitive bids which will allow the procurement managers (PMs) to negotiate better. The solution allowed for real-time evaluation of bids and It will significantly improve the supply reach as per requirement.
As we have an understanding of the proposed solution. We created an updated procurement flow which we need to validate going forward.
Understanding the RTPO solution which caters to user needs and business goals enabled us to create the RTPO Solution Workflow.
As we have an understanding of the RTPO solution workflow, the next phase is the execution.
Farmers and Vendors are facing the problem of Real-Time Buyer Connectivity due to their limited network reach where they face difficulties in reaching potential buyers in the market at the right time.
As a part of the RTPO solution now the demand from the buyer (DeHaat) will be broadcasted to the large network of farmers and vendors.
Note - On average, we have 200 to 250 connections including farmers and vendors per location (Node) like Sasaram in Bihar
Selecting Communication Channel
We have multiple channels where we communicate with farmers and vendors regarding the demand details:
1. Vendor App
2. WhatsApp
3. IVR (Interactive voice response) calls
1. Vendor App
2. WhatsApp
3. IVR (Interactive voice response) calls
Why we selected the WhatsApp channel to broadcast the demand details to farmers and vendors:
1. Mostly 80% of the farmers & vendors use WhatsApp channel to finalise the deal.
2. More cost-effective.
3. Easy to iterate.
4. Faster to build.
2. More cost-effective.
3. Easy to iterate.
4. Faster to build.
Designing Communication Experience on WhatsApp
During our research, we focused on the communication between our users and we got to observe an important fact that the Farmers and vendors always disclose commodity quantity in MT (metric tons) but when it comes to revealing price they use Qt (quintal). This is standard market practice.
So if we are communicating using only one UOM (unit of management) like MT (metric tons) or Qt (quintals) for both the variables price and quantity the user needs to put extra effort to convert at least one variable into their desired UOM (unit of management).
To avoid this friction in our communication with farmers and vendors we did the following:
1. Asked for price in quintal Qt (quintal)
2. Asked for quantity in MT (metric tons)
1. Asked for price in quintal Qt (quintal)
2. Asked for quantity in MT (metric tons)
Exploring Feature Ideas for Procurement Solutions
Before creating the solution we did a behavioural study of procurement manager (PM) interaction with vendors and farmers to leverage the existing behaviour, with the aim to explore feature ideas and shortlist them to create an enhanced user experience which can address the problems of procurement manager (PM).
All the shortlisted features are implemented into the designs.
The first problem that the procurement managers (PM) are facing is Limited Supply Reach, where they can reach only a handful of potential farmers and vendors (10 to 15) due to time constraints to procure demand.
As per the RTPO broadcasting step, the demand reach will extend to a large network of farmers and vendors, which will invite numerous offers (bids) on the procurement app. So the experience of analysing and shortlisting offers (bids) becomes very critical and it needs to be highly efficient.
Highlighting a few impactful features and scenarios that our team ideated and converted into designs successfully.
Efficient Bid Management: Segregating Offers for Prioritization
Simplifying Bid Analysis and Price Comparison by categorizing vendor offers into three tabs: New Offers, Interested, and Not Interested. This will help the procurement managers (PM) to streamline decision-making, save time, and focus on the most promising bids, as with this functionality they will be able to segregate New offers into the Interested and Not Interested tabs.
Maximizing Profit Margins: Streamlined Bid Evaluation with Quick Filters
To cater for the outreach at an effective timeline we introduced quick filters on price and quantity which will make the offer (bids) selection efficient. This will empower procurement managers (PMs) to streamline their bid evaluation and save valuable time. This feature enables PMs to swiftly identify the most promising bids, facilitating faster deal closure and maximizing profit margins.
The second problem that the procurement managers (PM) are going through is Time-Consuming Negotiations.
Real-Time Negotiation: Streamlining Deals with Calling Feature
On vendor offers (bids) we have kept a calling feature so that PM can instantly call and negotiate with the vendor as the chances for creating a PO on the first level of bids are very rare. As per our research insights and observations, we know a manual intervention will be highly required while closing the deal and for that we designed a calling flow which allows the PMs to instantly mark their interest in real-time.
State Heads are not getting real-time visibility of the demand procurement which is affecting their decision-making to create high profits.
Empowering Procurement Decisions by Data-Driven Visibility
We added an overview of the demand containing a few critical data points like average price and total quantity. These data points offer valuable insights that empower state heads to make informed decisions.
Average price data aids in negotiating better deals, while the total quantity information provides an understanding of commodity supply in the market.
Additionally, the visibility into demand progress through intuitive data representations eliminates manual record-keeping, enabling state heads to track the completion and pending status of demands. With access to these vital data points, state heads stay updated on demand progress, ultimately enhancing their procurement outcomes.
Impact
In the month of April till mid of May 2023, we started the WhatsApp campaign to broadcast the demand for Wheat to the farmers and vendors at the Sasaram (node) location in Bihar.
Demand Reach
The total number of offers (bids) we revise is 216 including farmers and vendors. Out of which 84 are the potential offers (bids) containing both variables, price and quantity.
Improvements
The demand reaches approximately from 15 users to 216 users which is significantly a large number. This provides equal opportunities for all farmers & vendors to place bids on the Sasaram (node).
Also for the procurement manager (PM), the potential offers (bids) are 84 earlier it use to be 15 max as they can reach only a handful of potential farmers and vendors due to time constraints. This provides them with the opportunity to evaluate more bids and book a high margin.
Purchase Order (PO) Conversions
Out of potential bids (84), 44% of them converted into purchase orders (37 POs are created). This shows the potential of the RTPO feature as the 44% conversions are a good start.
Conclusion
In conclusion, Real-Time Procurement Optimiser (RTPO) has great potential to transform the agricultural procurement landscape, empowering vendors, farmers, procurement managers and state heads alike.
With increased supply reach and improved bid analysis capabilities, procurement managers (PMs) can now create purchase orders (POs) with higher margins, ultimately boosting profitability for all stakeholders.
As we look ahead, we are excited to further refine and expand the RTPO platform. Improving a product according to the user's needs and business requirements is a never-ending process.
