"Detected Theft of 2.7 Million Rubles": How Farm Management Systems Save Businesses

A very interesting firsthand account of the infamous problem of theft by mechanics in agricultural enterprises and how this negative trend was stopped. Is it a relevant topic? Then read on for the details!

Launch and Confirmation of Effectiveness

In 2015, our holding was just being formed, and it included 13 production sites scattered from Balashov to Pugachev. We needed to centrally and systematically collect information from all of them. People on the ground were handling this, but the speed, reliability, and quality left much to be desired. So the task was to structure it, speed it up, and minimize the human factor.

At that time, we got to know the AgroSignal team, learned about how we could automate our processes, and decided to initially test equipping machinery with satellite tracking and fuel level sensors. We installed them on tractors, trucks, cars, and fuel trucks — a total of 22 units of machinery on one site to cover the chain from sowing to harvesting.

The first thing we discovered in about a month and a half was that the machinery was not operating for the full required time. For example, a tractor would start sowing not at 8 a.m., but at 9. This immediately raised questions about output: we realized there was a problem with inefficient use of working time. Then we noticed that machinery was sometimes used for personal purposes, and the fuel sensors showed discrepancies between refueling and consumption.

By the end of 2015, we already understood our weak points, and with that in mind, we developed an action plan to equip all machinery for the 2016 season — about 800 units at that time. By the end of the year, we had equipped all harvesters with satellite tracking sensors and immediately identified a theft of finished products. It turned out that the harvesters were working in the field at night, harvesting sunflowers, unloading, but into an unknown vehicle! We recorded the volume of these operations in hectares, converted it to tons, and then to rubles. The result was 2.7 million rubles — the damage for 3 days. This happened literally a week to a week and a half after we installed the sensors. According to the mechanics, they didn't believe the sensors were really working, thinking they were installed just to scare them.

As a result, a criminal case was filed, the guilty parties were dismissed, and they compensated the damage. This case gained publicity, and after that, we no longer faced such incidents. I believe people began to realize their responsibility and stopped attempting such actions.

In a sense, we were lucky: this example helped us convincingly explain to the management why investing in automation is necessary. So by the new season, we got approval for the full equipment of all agricultural and cargo machinery.

Worker Boycott

In 2017, we equipped all machines with satellite tracking devices and gradually accustomed people to the idea that their work was being monitored.

Of course, at first there were problems, engineers and mechanics put obstacles in our way: the tractor couldn’t approach — it was occupied in the fields, the mechanic wasn’t available, no one to open it. Then they started disconnecting and breaking the devices, and we had to conduct investigations, deducting damages from their salaries.

By the end of the year, the system had been integrated and started functioning almost seamlessly. There were some malfunctions, but they were minimal.

Gradually, people began to understand that the system was not working against them, but for them.

For example, sowing operations are evaluated based on several specific parameters, which determine the mechanics' salaries. Usually, two mechanics work on one field with one tractor in two shifts. Previously, they would receive one evaluation for both, even though one might work better, while the other had downtime, violated speed limits, etc.

The system allows tracking all these parameters for each worker separately and accordingly assigning different bonuses based on this — from 100% to 50%.

If we translate this into rubles, a good worker can earn 35-40 thousand rubles more than a colleague who is slacking off.

The difference is even bigger for combine operators. Their salary depends on the number of tons they unload. Some fill the whole hopper, others only half. Previously, they were combined and split between two workers, but now everything is individual.

Conscientious workers quickly understood that it was to their advantage for the sensors to remain in good working order.

The harder part was with the local managers. The system was supposed to help them monitor the situation in the fields: track the progress, speed, downtime, etc. Their motivation shouldn’t be salary, but simplifying their work duties and paperwork.

However, there are many conservatives among agronomists who simply refuse to adapt to new processes. They are used to driving around the fields, not sitting behind a computer, and convincing them is still very difficult. This affects the timeliness of data. Manually collecting information from all fields is difficult and time-consuming, and our Monday morning meetings are at 10 a.m. By that time, all data must be provided to the director. If they don’t manage, sometimes they guess or add things, which raises doubts about the reliability. In the system, everything is much easier. Literally, we open a table and look at the data for each day and field in real-time. It might seem that there should be no doubts, but with people, it’s always like this, especially in agri-business: when they’re used to something, transitioning to new processes may take more than one or two seasons.

How to Measure Efficiency

There are certain difficulties in calculating the economic benefit of an agri-business management system. First and foremost, it prevents losses from theft and inefficient use of time and resources, making all processes more transparent and convenient. But turning this effect into rubles is almost impossible. For example, we know we saved 2.7 million rubles from the theft of sunflower seeds, but how many similar situations have we prevented?

Or how exactly do we calculate the economic benefit from speeding up work and improving the reliability of data? Now, in real-time, we can get any information for any period, which means we don’t need to hire additional specialists, wait, or rely on possibly erroneous indicators.

Also, it’s important to understand that investments in an agri-business management system can vary greatly from farm to farm.

For example, we have been very cautious in scaling up, and we still use a limited set of functions — this includes automated payroll calculation based on work completed, a weight program for tracking finished goods, and machinery monitoring. The sensors have cost us about 10 million rubles over time. Otherwise, the only ongoing costs are for subscription services, which are minimal. However, we understand that with the desire and capability, the system's functionality can be expanded for a long time. In the near future, we plan to implement a system for tracking fuel and lubricants — until now, we’ve only done test implementations.

For each company, for each farm, everything is very individual, with different pains and problems. Accordingly, the economic effect of implementing the system will be different. This is why tests are necessary.

How to Implement

Automation is very much needed in agriculture. Because its driving force is the agro-holdings. And agro-holdings are on a serious scale. It's good if the fields are at least in one region, but usually, they are spread all over the country. And here, digital technologies are essential, as they allow us to collect and analyze all the necessary data much more efficiently, and then make the right management decisions based on it.

Unfortunately, only 10% of companies in Russia are digitized. This means that the vast majority of agricultural producers are not yet looking towards precision farming. Based on our experience, I can give several recommendations on where to start and what mistakes to avoid.

Monitoring. You should always start by identifying all the weak points in your company. Visible results will appear after the test implementations: you can first focus on a specific area that raises doubts, such as fuel theft, inefficient use of resources and time, or mechanics working off-site. If you have any suspicions, they can be easily verified using the system.

Consistency. One of the main problems we faced at the outset was the lack of consistency between the various reference books used at the enterprise — seeds, plant protection products, machinery, people, positions. And the more sites you have, the more difficult it gets. So first, everything needs to be unified — in 1C, the management system, the document circulation system. The more uniform the regulatory accounting at the enterprise, the easier it is.

Pre-work with people. Now I understand that it's necessary to explain to people at the local level, step by step, how, why, and what we are implementing innovations, and only then start. Appeal to economic benefits, process simplification, incentives, etc. Otherwise, any new developments will be met with resistance — that's just the way this business works.

Interest. Perhaps the key ingredient in this process. Don’t be afraid of innovations, experiment, and always strive for the best results: global experience shows that we are all inevitably heading towards digitization, there’s no other way. So it’s better to be among the first than to catch up later!

Alexander Shepelev works as the head of the dispatch department at "Agroinvest," a farming company managing about 60,000 hectares in the Saratov and Volgograd regions. He oversees the implementation of technological maps and payroll calculations. Since 2015, "Agroinvest" has been using the AgriBusiness Management System AgroSignal.

Alexander shared how the system impacted the company's work and offered advice on automating agri-business operations.