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NW Illinois | I worked for what was about a 350 million dollar annual sales coop in 2016. I just think everyone miss reads where pricing and policies are set.
Here’s the scenario I will run you through. You have 160 acres that you want Map and Potash broadcast on by the coop.
Using my former company in this example.
Board of directors gives guidance to CEO on yearly goals including profitability and volumes.
CEO himself doesn’t actually price anything in agronomy. CEO has a head of agronomy, operations, feed, grain, petroleum and finally a CFO reporting to him. He gives guidance to head of agronomy on what is desired for profitability.
Head of agronomy in my company bought and priced all fertilizer, but didn’t price chemistry or seed. He had a seed lead, chemistry buyer, and 2 regional sales managers reporting to him. His price for your P & K is passed on to the sales managers.
Sales managers had their group of salesmen they were in charge of. They didn’t sell directly to customers, they managed the salesmen by monitoring performance and coaching.
Salesman is the one who gives you pricing, terms, and would take your order and turn it into operations.
Now to spread, that is done through operations division
Operations division is large in retail ag. That man was essentially the right hand man of the CEO. He had regional managers based not only areas but also business units(grain,feed,agronomy). This man set the price for your application charge. Price is based on his information on costs of employees,equipment. He also gives the head of agronomy the cost need in margin of fertilizer to pay for facilities and repairs and transportation.
Agronomy division manager has several location managers under him. His job is to pass down safety directives, monitor employee hours, performance and report to head of operations of repairs and upgrades needed. He doesn’t touch the fertilizer,loader, tender truck or spreader.
Facility manager runs local facilities and in charge of day to day operations. His job is to pass directives down also. Many locations (not mine) the facility managers also didn’t touch your fertilizer,tender truck or spreader.
Finally last leg, customer level. Applicator and tender drivers. The ones you see.
Not done yet. Finally you have to be billed and pay.
This is the CFO division. He has comptroller, IT, HR, and marketing reporting to him.
comptroller has several regional leads watching individual facilities secretaries work. They don’t bill directly to customers most generally.
Local secretary is who generally bills it. Remember she has nothing to do with pricing or spreading.
I sat at facility management level. In the end I ran multiple locations and divisions (grain,feed,agronomy).
At my agronomy facilities I had a secretary I was not in charge of, and salesmen I was not in charge of.
Play find Waldo on where pricing is coming from. | |
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Just some thoughs on COOP's
