Descriptive Standardization of Materials for Agribusiness

In the agribusiness sector, efficient master data management plays a crucial role in ensuring the accuracy and consistency of information.  

In this article, we will explore the importance of standardization in agribusiness and how it contributes to optimizing processes and reducing the acquisition costs of parts, vehicles, equipment and basic inputs.  

Master Data in Agribusiness 

Master data consists of fundamental, stable information that describes essential entities in a system, such as customers, suppliers, products, materials, among others.  

Here are some examples of master data related to agribusiness: 

Product Master Data: 

• Detailed description of each type of agricultural product, such as seeds, fertilizers, crop protection products, animal feed, etc. 
• Information on physical characteristics, chemical composition, application method, origin, certifications, among other relevant aspects. 

Supplier Master Data: 

• Registration information of agricultural input suppliers, such as name, address, contacts, CNPJ/CPF, among other identification data. 

Customer Master Data: 

• Registration information of agribusiness customers, such as name, address, contacts, CNPJ/CPF, among other identification data. 

Location Master Data: 

• Registration of rural properties, planting areas, storage units, silos, among other locations relevant to agricultural activities. 

Why apply descriptive standardization (PDM) in agribusiness? 

The descriptive standardization of materials in agribusiness offers a series of significant benefits. First, it ensures uniformity in the naming and description of materials, avoiding ambiguities and inconsistencies. This makes it easier to accurately identify products, minimizing errors and improving operational efficiency. 

In addition, descriptive standardization of materials contributes to the correct classification of products, enabling more accurate and reliable analysis. This proper classification of materials supports strategic decision-making, such as purchasing planning, inventory management and product pricing. 

Furthermore, descriptive standardization enables more efficient management of the material life cycle, from creation to discontinuation. With clear, well-structured information, it is possible to track histories, monitor changes and perform performance analyses. 

What is Descriptive Standardization of Materials (PDM)? 

Descriptive standardization of materials refers to the practice of establishing a consistent set of attributes and description criteria for the materials used in agribusiness. 

An example of descriptive standardization of materials in agribusiness would be defining a specific format for describing the crop protection products used in the fields.  

This standardization could include attributes such as trade name, active ingredient, concentration, application method, withdrawal period, among others.  

By adopting this standardization, agricultural companies can ensure that all relevant information about crop protection products is recorded consistently across all systems, making it easier to search, analyze and use this data in different processes, such as purchasing, inventory and pesticide application. 

 

Tax calculation and descriptive standardization. 

Descriptive standardization supports tax classification by providing detailed and consistent information about the materials used in agribusiness. This information is essential for determining the correct classification of products under tax legislation, which can have a direct impact on the company's tax burden. 

An example related to agribusiness is the tax classification of agricultural products, such as seeds. The descriptive standardization of the master data for these products, including information such as variety, origin, seed treatment, weight, among others, enables accurate classification in accordance with tax rules and regulations.  

With correct classification, the company avoids errors in issuing invoices and calculating taxes, and can also benefit from possible tax incentives or rate reductions, where applicable to certain categories of seeds. 

In this way, the descriptive standardization of materials in agribusiness not only helps with correct tax classification, avoiding problems with the tax authorities, but can also result in tax savings by identifying specific tax benefits for certain types of agricultural products.  

How to use technology to standardize descriptions and reduce inventory costs? 

An MDM (Master Data Management) software plays a key role in standardizing materials, offering a series of features and functionalities that facilitate this process.  

• Data centralization: MDM software allows you to centralize and consolidate all material master data in a single place, eliminating the dispersion of information across different systems and spreadsheets. This makes it easier to access, update and manage data, ensuring greater consistency and integrity. 
• Definition of standardization models and rules: It allows you to create data models and establish standardization rules that define the attributes and description criteria for materials. This ensures that all information is entered in a standardized and consistent way, avoiding errors and ambiguities. 
• Data validation and enrichment: It can integrate with external data sources, such as supplier databases, regulatory agencies or product catalogs. This makes it possible to validate and enrich existing data, automatically filling in additional information and ensuring greater accuracy and completeness of material master data. 
• Approval workflow and data governance: It can implement workflows for data approval and governance. This means that updates and modifications to material master data go through a review and approval process, ensuring compliance with the company's internal policies and maintaining data quality. 
• Data monitoring and auditing: It allows you to monitor and audit changes and activities related to material master data. This makes it possible to track who made which modifications, when and why, ensuring the transparency and traceability of information. 

O 4MDG lets you create powerful workflows with multiple parameterization rules and automatic data population; it is fully integrated with your company's ERP and uses more than 200 public and private sources to ensure secure approval. 

Where to learn more about PDM? 

Learn the step-by-step process of material standardization by watching the video below.