How Modern Farming (Group) Co., Ltd is revolutionizing dairy farming

Established in 2005, Modern Farming (Group) Co., Ltd continues to expand its enterprise across the country and industry chain, acquiring numerous subsidiaries and business units. Until recently, many acquired groups operated with rudimentary management systems.

Those independent processes impacted the efficiency and cost-effectiveness of Modern Farming as a whole, especially in cost and supply chain management. In addition, the rise in prices of raw materials like feed made reducing costs and increasing efficiency an even higher priority.

Modern Farming (Group) Co., Ltd faced challenges due to the lack of unified management standards, which resulted in complex accounting efforts, limited visibility, and slower work and response times. The use of multiple financial systems, often requiring manual processing, further exacerbated these issues by introducing repetitive data entry tasks. 

Additionally, the company’s siloed supplier management systems hindered effective communication across the organization and the supply chain. The disjointed procurement and warehouse management processes necessitated manual recording of inbound and outbound items. Furthermore, manual processes were required for generating reconciliation statements, which slowed down work and increased the risk of errors. 

The presence of multiple systems for procurement and production caused delays in receiving critical market, supplier, and worker/operations updates. Moreover, the lack of traceability made it challenging to swiftly identify and resolve procurement and production issues as they arose.

“To transform from ‘experience-based farming’ to ‘digital farming,’ it is essential to integrate all business data within the company and along the value chain,” says Zhao Zhicheng, CIO of Modern Farming. “Thanks to RISE with SAP S/4HANA Cloud, Private Edition, Customer Data Center, a stable and flexible digital foundation, Modern Farming has achieved seamless interconnectivity throughout the entire industry chain.”

Building a new unified model

Modern Farming (Group) Co., Ltd wanted a unified digital management system that could:

• Achieve precision management to handle rising feed costs
• Offer an integrated finance platform to reduce manual processing time and related costs and data risks
• Enhance procurement collaboration, communication, and efficiency, connecting data systems across the supply chain
• Expand the industrial chain upstream and downstream and provide a platform for innovation through information sharing in the global dairy industry 

Modern Farming (Group) Co., Ltd. implemented SAP S/4HANA, Private Edition, Customer Data Center (PE CDC) to create a unified, digital operation. 

Recognizing the benefits

With SAP S/4HANA PE CDC, Modern Farming (Group) Co., Ltd now has end-to-end digital management, integrating the various enterprise resource planning (ERP), open account (OA), and supplier relationship management (SRM) systems and equipment. Processes have been automated and streamlined, eliminating redundant data entry and offering visibility across the workflow. That has helped the company reduce its monthly closing time by 50%.

Modern Farming has achieved greater precision in cost control for cattle feeding and medications, resulting in a 9.8% decrease in feeding/medication cost per animal within six months of implementing the SAP solution.

Additionally, the solution has resolved supply chain issues by enabling seamless online operations, real-time interaction from order to reconciliation – all on a single platform.

The automation of procurement, purchase plans, order creation, and supplier coordination has saved time and effort, reduced inconsistencies and errors, and contributed to a monthly cash flow increase of 15 million RMB. Furthermore, warehouse management and invoicing time have been reduced by 15% in both cases. These improvements have transformed Modern Farming (Group) Co., Ltd operations into an even more lucrative venture.

For its achievements and ongoing innovation in agribusiness, Modern Farming (Group) Co., Ltd. was named a finalist in the SAP Innovation Awards. You can read more about what they did to earn this coveted award in their pitch deck.