Cooperatives can be instrumental in ensuring robust goods distribution to the last mile by developing a supply chain framework. Such a model can help eliminate intermediaries in the supply chain and take effective steps towards controlling inflation. Whether it’s agriculture-based farmer cooperatives or consumer-based food retail cooperatives, supply chain and logistics services are supporting producers. Cooperatives are addressing gaps in supply chains and logistics across many economic sectors while strengthening businesses and enhancing quality. They ensure that the direct benefits of this reach their members. The main difference between cooperatives and other supply chain businesses is that cooperatives operate according to their core principles, not just for profit. They have a primary focus on group-centered welfare.

It is noteworthy that cooperatives have introduced better supply chain management (SCM) in the global economy. Cooperatives maintain a smooth supply chain from micro to marginal farmers, enabling small farmers to access large markets, information, technology, and financial resources that would otherwise have been out of their reach. Cooperatives include the implementation of supply chain plans, controlling product supply, gathering information from the point of origin, and compiling consumer-level data. Cooperatives are member-based organizations, where members are the owners, ensuring democratic values, equality, and solidarity.

Role of Agriculture in Improving the Supply Chain:

Agricultural cooperatives are seen as crucial for improving supply chains. They act as a key link in countries in Asia and Africa. While small farmers often face multiple challenges and a lack of resources in the market, the Ministry of Agriculture and Farmers’ Welfare in India has emphasized providing modern technologies, such as drones, to all farmers. Under the Sub-Mission on Agricultural Mechanization (SMAM), drones are being made available to farmers with full or up to Rs 10 lakh in subsidies, depending on the cost.

The role of institutions like Farm Machinery Training and Testing Institutes, ICAR, Agricultural Science Centers, and State Agricultural Universities is crucial in demonstrating technologies in farmers’ fields on a large scale. Through cooperatives, resources and logistics can be pooled together, reducing infrastructure and transportation costs. Cooperatives can partner with each other, working collectively to become part of larger businesses. Cooperatives can also address the last-mile supply chain challenges at the rural level. With the use of crowdshipping, drone deliveries, and autonomous vehicles, orders can be delivered to remote areas on time.

In India, cooperatives are seen as better operators of supply chains and logistics. Agricultural, dairy, consumer, and food cooperatives have delivered many successes. Amul Dairy, Indian Farmers Fertilizer Cooperative Limited (IFFCO), Krishak Bharati Cooperative Limited (KRIBHCO), and others have made a global mark by improving supply chains.

Technology Improving the Supply Chain:

The use of technology in cooperatives, such as Enterprise Resource Planning (ERP) and Internet of Things (IoT) systems, has streamlined operations. These systems enhance management in multiple ways, including purchasing, distribution, real-time tracking, and data analysis for informed decision-making. For example, the ERP system in Organic Valley Cooperative streamlines the supply chain, improving operational quality by up to 20% and reducing damage by up to 15%.

Blockchain Technology: Blockchain helps preserve secure, transparent, and error-free records. This is crucial for continuity and ethics. It ensures that every transaction is secure, reducing the possibility of fraud or errors and increasing trust among group members.

Comprehensive Logistics Network: Cooperative organizations partner for logistics and resources. For instance, using warehouse and transportation systems, these partnerships reduce costs and improve services.

Sustainable Processes: Cooperatives are adopting sustainable processes in their supply chains through green practices. Examples include selecting transportation routes based on ease, reducing fuel costs, using electric vehicles, and implementing zero-waste programs in warehouses—all contributing to cost reduction.

Data Analysis and Artificial Intelligence (AI): AI is being used in cooperatives’ supply chains to predict demand and supply needs in advance. This technology helps streamline supply based on observed patterns. For example, the Land O’Lakes Cooperative uses AI-based analysis tools to track demand and available stock, leading to a 20% improvement in accuracy and a 10% reduction in extra stock-related costs.

Decentralized Distribution Model: Cooperatives have adopted decentralized distribution models to reduce last-mile delivery costs. Micro-centers are established near consumers, ensuring that services and products reach them quickly and efficiently.

Innovations in cooperatives are essential for sustainable development, economic acceleration, and community growth. In the agricultural sector, the collective use of resources, risk-sharing, and collective market access reduce operational costs. With the use of technology, the scope of cooperatives is expanding, improving the supply chain of seeds and fertilizers and enhancing product quality. Partnerships are strengthening relationships between supply chain managers and improving stock services. Additionally, local-level training programs are boosting the confidence of cooperative members, empowering them to take bolder steps within the cooperative framework.