Kitameraki’s engagement with a client working in the palm oil industry has brought many interesting insights and results. Today, in the last part of our three-part series, we discuss the uses of analytics to improve loose fruit collection and ultimately bring an additional 12M USD impact in our client’s turnover.
Business Analytics 101
In short, business analytics is the use of a company’s data that allows them to find efficiencies, discover relevant information and make better decisions. There are many types of business analytics. For example, descriptive analytics tracks key performance indicators to understand the present state of a business while predictive analytics analyzes the likelihood of future outcomes.
In the real world, business analytics is seen as a strategic investment that many companies have started to adopt. For example, Coca-Cola uses business analytics to automate their sales reporting processes which saves 260 hours (about 1 and a half weeks) a year. While, REI uses business analytics to track membership metrics which helped the operations teams to determine next steps that lead to greater customer satisfaction.
What is “Loose Fruit” and Why is Its Collection Important?
In the process of palm oil production, it is important to note that the oil comes from fruit bunches that have been processed in the mills. The term loose fruit, quite self-explanatory, is used for parts of the fruit bunch that have been dislodged during the harvesting process.
Most interestingly, these loose fruits are the ripest parts of the fruit bunch. Thus, it is particularly important to collect these fruitlets as it contains extremely high amounts of oil. Moreover, in standard estimations, loose fruit could be up to 10% of the total weight. Thus, it would be a big loss to palm oil producers if they weren’t able to collect these loose fruits.
Loose Fruit Analytics in the Palm Oil Industry
Tying the two main topics together, we now dive deep on how Kitameraki uses business analytics to help a palm oil production company; Loose Fruit Analytics. Before our engagement with the client, loose fruit collection was not tightly monitored. As a result, our client never knew which teams and regions were underperforming. More so if any of them were underperforming at all.
To solve for this loose monitoring, we started counting the amount of loose fruits collected per harvester. These numbers were then collected from handheld devices and make available in the analytics platform for our clients. Thus, our client was able to drill down the performances of each harvester, each team, each block, each division, and each estate. This was important because it allowed our client to conduct multiple comparisons: 1) comparison vs other teams, 2) trend comparison over time, and 3) comparison of usual ratio harvested.
How Did This Help Our Client?
Due to the tight monitoring of loose fruit collection, our client was finally able to see which estate in which division by which team was underperforming. This allowed our client to take next-step measures that can encourage underperforming teams to increase their loose fruit collection. As a result, we can slowly increase loose fruit collection closer to the standard which is at 10-12% (previously, it was at less than 8%).
Logically, increasing loose fruit collection also increases the yield of fruits that will be produced into palm oil. This means that oil extraction rate also increases. This proves to be true as our client was able to increase oil extraction rate by 2% which ultimately gave our client an extra 12 million dollars, i.e., increasing profits and company’s bottom line.
How Can Business Analytics Help You?
From our case example, it is evident that business analytics were able to increase profits by tightly monitoring only one aspect of that company’s business. There are many ways to adopt business analytics to one’s company. And as always, Kitameraki can help adjust solutions to your company’s needs. Feel free to contact Kitameraki for our services; we will be your technology and digital transformation partner!