Stellenbosch-based fruit exporter EXSA has slashed its turnaround time for fruit producer payments in half by updating its export software to cope with the demand for real-time information feedback from foreign markets. This is important in light of the recent downturn in the fortunes of South African fruit exporters, which have forced numerous producers to bankruptcy and coincided with an oversupply situation of exported fruit abroad.
With a projected turnover of three million cartons in the current season, EXSA is a major player in the grape export market, supplying varieties of Hex River, Trawal and Oranjerivier grapes to UK, European, US and Far East markets. The company ramped up production from 1.8 million to 2.6 million cartons in 2000, with similar growth expected this year.
EXSA spokesman Eddie Richard says the core of the company`s business is based on three fundamentals: procuring, marketing and paying the producer.
"Since deregulation of the fruit export industry in 1997, some 150 exporters have flooded the previously protected market with little sense of common practices or system standards. The result was almost as many systems - manual and electronic - as there were exporters, and no consistent way of passing information from one point in the supply chain to another for the purpose of tracking or tracing the product to and from its destination.
"In some cases the results were disastrous, with exporters waiting months for payments on their shipments, and producers in turn having to wait for payment. With no control over their information, there was no control over queries for rejected shipments, downgrading of pallets or almost any other condition that could stall payment from abroad."
In 1999, EXSA began investigating options for upgrading its producer payment system from a manual process (using only a spreadsheet to calculate payments) to an automated system that calculated payment based on information gathered from different points in the supply chain. Several products were available at the time, but only one - the PQ Agriculture Fruit Exporter System, developed locally by PQ Africa`s Agriculture and Software Factory divisions in Cape Town - was designed for the local fruit exporter.
"The PQ Fruit Exporter System was setting a standard among other medium-to-large exporters in the Western Cape for its simplicity and integration with other locally-available information systems," says Richard.
"Essentially it`s allowed us to hasten the process of accurate intake information that, among other things, greatly speeds up the process of calculating and effecting producer payments once their consignments have been sold. Without the producer - the grower - we have no business, so a 100% improvement in the advance payment system we employ has helped us cement the good dealings we have with our producer network."
The PQ Fruit Exporter System captures and stores information from the time produce is packed at the farm, transported to the coldstore or packhouse, stored and shipped, received by the foreign agent and sold to market.
"With this information at hand, shipments can be tracked to their destinations, quality of transport, storage and receipt assessed, type and quantity of produce by market analysed, and any queries from abroad traced back to the point of origin of the product," says PQ Africa`s Agriculture division manager Johan Mostert.
"The system was designed so once information on a pallet is captured at source, it doesn`t need to be recaptured," he adds. "This automates the tracking and tracing process to the point where an exporter need only query the system for any product- or payment-related information and the system does the rest. It even generates formatted documentation for customs officials.
"An often overlooked benefit," according to Richard, "is the PQ Fruit Exporter System user group, which doubles as a co-development product forum. Every month administrators and users from the various exporters using the system are invited to get together and discuss any issues they may have, share tips on the system from their own experience, and put forward suggestions for improvements to the development team.
"The biggest benefit to the exporter - and the producer in turn - is that development costs are shared equally by the exporters participating in the forum, so that the product is kept current at minimal cost," he says.
"This is not a typical forum, given that most of the members are also competitors, but because IT is not our core business, co-operation at an administrative level makes sure the systems we use help us collectively overcome the more pressing problems of getting our processes right in an otherwise very competitive and demanding global industry," concludes Richard.
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