IT SOLUTION IMPROVES SUPPLY CHAIN FOR KYRGYZ DAIRY FARMERS

Kant Sut(link is external) LLC is one of the largest dairy producers in the Kyrgyz Republic, producing and exporting more than 60 dairy products – including kefir, yogurt, cottage cheese, and butter – under its Belaya Reka product line. The company is committed to using only whole milk, which means that it relies on an extensive network of local farmers. Over 3,000 small and medium-sized farmers from 94 villages across the Chui region provide fresh milk to Kant Sut each day. 

“Every day, we travel up to a hundred kilometers collecting milk and bringing it to the Kant Sut factory," says Maksat, a milk collector for the company. Maksat and his colleagues are not only responsible for milk pick-up, but also document all transactions and monitor milk quality. "Every day, we have to report on the milk volumes collected in each village to the plant. All this takes up a lot of time. In addition, there is a  risk of making mistakes when filling out documents."

The company used to rely heavily on manual data collection, says Kant Sut Director John Dzhambul. “It was the so-called ‘semi-paper-semi-digital’ process. We gathered all the information manually and processed it in Microsoft Excel. Sometimes there was a duplication of information, while some other parameters would be missing.” As a result, key output and performance indicators were distorted and often late to reach management.  

With funding from USAID, Kant Sut has implemented state-of-the-art digital solutions designed to make its raw milk supply chain more efficient. 

“Establishing a supply chain is a complex task, and we’ve found a simple IT solution on smartphone, which has become an integral part of our lives,” says Tolegen Sayakbaev, director of production at Kant Sut. “The Mobi-C(link is external) application for milk collectors’ smartphones maps out milk collection routes, gathers information (with primary milk indicators) on the volume of milk collected in each village and from each milk supplier, and monitors and analyzes the efficiency of the milk collectors.” 

Data collected through the app  are then aggregated into Kant Sut’s online database. The company has also started using the business intelligence and interactive reporting software Microsoft Power BI, which helps analyze large data sets from different sources and converts the numbers into reports, graphs, and analytics for use by management. The new data system allows managers to monitor major performance indicators and analytics in real-time via a smartphone, tablet, or computer. 

Maksat says he saw the benefits of the new system immediately. “The workflow was simplified, as I no longer had to do paperwork. It takes me a few clicks to transfer all the data to the plant on milk volumes collected.”

The new system also supports product quality by analyzing farmer performance, identifying and mitigating potential problems before they escalate and providing support for advance payments, veterinary advice, training, and access to credit, says John Dzhambul. The new processes have streamlined the jobs of 31 people, including five milk collectors.

The software has also simplified processes for collecting raw milk for production, purchasing raw materials and managing production records, which has improved a further l30 jobs. 

Traditionally, the costs of milk spoilage are high for the company, yet mitigating the risk of spoilage can be challenging using manual methods. “Farmers have to cool the milk mechanically  while waiting for the arrival of the milk collector, which is a difficult and troublesome process required for maintaining milk quality. There is a risk of spoiling all the milk in milk trucks - a liter of spoiled milk can spoil five tons of good milk,” says Tolegen. 

Now, the data collected through new software makes it possible to identify the most suitable locations for cooling equipment, which can cool and store milk at a constant temperature, maintaining its quality until delivery to the factory. Such a decision will have a positive effect on all participants in the supply chain, reducing the risk of spoilage and associated costs and contributing to higher profits for both farmers and milk collectors. 

John says the technology transfers responsibility back to farmers. “The introduction of coolers into the chain of tanks will restrict the collectors' responsibility to milk delivery only, and the farmers will now become responsible for the quality of milk," says John. Ultimately, digital solutions create new possibilities and strengthen every link in the supply chain.

USAID’s Future Growth Initiative spurs productive economic activity across Central Asia to increase local competitiveness, create new jobs, and improve incomes for Central Asia’s growing workforce.

Author: Tatyana Uteuliyeva, FGI Regional Communications Specialist, USAID’s Future Growth Initiative