Issue link: https://read.dmtmag.com/i/724263
68 tobaccoasia / Issue 4, 2016 September / October International Farmers Accounting System Contracts, Purchases, Payments, Deliveries, Crop Loans, Advances, Debt Management Tobacco Processing System Purchases, Receiving, Green Inv Mgmt, Blend Definition, Production Runs, Production Costing, Finished Goods Inventory, Labeling SAP - Non-Tobacco Procurement, Factory Spare Parts Inv, Capital Projects Acctg, Tobacco FG Inv Mgmt, Sales Order Mgmt, Agent Commissions, Logistics, Invoicing, Accounts Receivable, Accounts Payable, Treasury, Fixed Assets, General Ledger images courtesy of Alliance One International must be approved by the company's compliance department. To the extent possible, these reviews establish that customers are legal entities and reputable enterprises engaged in the autho- rized manufacture of tobacco products. The measures imple- mented during this process may include, among others, site vis- its, inspection of business registration records and background checks on the customer, their principals and key contacts. Addi- tionally, all customers are subject to periodic reviews to reaffirm information collected during the initial due diligence process. CNT: German thoroughness While rigorous T&T is obviously taken very seriously by gi- gantic, globe-spanning organizations such as AOI, somewhat smaller players are not less meticulous in ensuring that their merchandise is fully trackable and traceable from source to end customer. Germany's family-owned Contraf-Nicotex-Tobacco GmbH (CNT) has been engaged in international tobacco trad- ing since 1982, primarily purchasing its leaf in Argentina, India, Zambia, and Zimbabwe. The company also maintains a large sales office in Singapore. A system of our own "We implement our own internal T&T system as part of our organization's operating standards or client requirements", says Marcus McKay, CNT's head of corporate responsibility and communications. Besides bale barcoding and digital data collec- tion on growers including GPS coordinates of farm locations, the company internally utilizes a bespoke data management and reporting tool, but McKay declined to elaborate on the details. "But all leaf that we purchase is identified by a unique farmer ID number," said McKay. "During processing it is again associ- ated with a unique internal ID, which forms the basis of a final unique ID code once the processed merchandise is shipped [to the customer]." This well thought-out system guarantees seam- less tracking and tracing from source to end client in terms of leaf integrity and quality, accountability and identification of po- tential problems or weak points within the supply chain. "In fact, the entire chain benefits from it, from the farmers all the way to the end consumers", McKay insists. Continuous improvement to combat weaknesses Furthermore, the merchant is currently developing an RFID tagging system, which will add further T&T security once it is introduced in the near future. McKay adds that his company, which in one form or another has deployed T&T measures from its very start, is "very happy" with its current system "as it satis- fies not only all of our own requirements and internal opera- tional standards but also those of our clients." Currently avail- able T&T systems and technology, he asserts, have advanced to the point of being able to address weakness areas, including the allocation of unique farmer identification codes. "After all, our roster [of suppliers] can include tens of thousands of farmers in any given season." BTGCA: active at the source Speaking of the grower end of things, grower associations are putting an equally strong focus on practicing fully transparent T&T. Based in Lexington, Kentucky (USA), the Burley Tobacco Growers Cooperative Association (BTGCA) represents about 4,000 burley farmers in Kentucky and four neighboring states. Ensuring Global Traceability: AOI's Proprietary GMS Christened growers management system (GMS), AOI's award- winning in-house software tool provides the company with real- time visibility into its grower base. The tool allows the company to build a profile of each contracted farmer, including informa- tion such as the GPS position of the farm, type of tobacco be- ing grown, curing equipment being used, labor data, as well as GAP and/or ALP training conducted. The data ensure that AOI can lend the best support to all its contract farmers, ultimately helping to secure leaf supply and at the same time meet sus- tainability goals. AOI began developing its GMS in 2011 and has since then continually focused on improving the system. For further information about GMS visit: http://www.aointl.com/ sustainability/one-vision/growers-management-system-gms. integrated into the merchant's proprietary growers management system (GMS), which in turn tightly ties in with other internal tracking systems (see graphic 1) and used to build a profile of each grower and track data related to the crop and environmen- tal and labor practices throughout the season. "Through integration of what we agreed to during contract signing, and what we see on the farm during the season, we can identify any potential red flags related to the growers' practices," Purvis adds. During procurement AOI issues barcoded tags to identify the grower at the time of purchase. Bales are scanned by the original bale ID assigned at the time of purchase for tracking of the inventory movement in AOI's tobacco processing system (ToPS). That ID remains with the bale throughout processing and up until it has been transformed into finished goods. As the finished cases are produced, the inventory record is then immediately sent to the company's SAP systems (systems, appli- cations, and oroducts) for further downstream documentation. Indispensable buyer scrutiny "On the customer side," continues Purvis, "we focus on under- standing the nature of the entity that is purchasing our leaf to minimize risk that it will end up in illegal products." In 2010, AOI introduced its "Know Your Customer" program, which placed additional emphasis on this aspect of the supply chain. All new customers are subject to a due diligence review and System Integrated landscape Integration of AOI's GMS with its other T&T Systems