2. <4.9
Low
• 41
COUNTRIES
5-9.9
Moderate
• 22
COUNTRIES
10.0-19.9
Serious
• 37
COUNTRIES
20-29.9
Alarming
• 17
COUNTRIES
>30
Extremely Alarming
• 3
COUNTRIES
India ranks 15th (from
bottom) overall and falls in
the alarming section
Triggers for poor GHI
• Proportion of undernourished
• Prevalence of underweight in children
• Infant Mortality rate
GLOBAL HEALTH INDEX
India’s Hunger Games
• 1/3rd of the world’s hungry live in India
• India has 212 million undernourished
people only marginally below the 215
million estimated for 1990–92
• Over 25 lakh Indians die of hunger every
year
Study of current
PDS
Diagnosis Solutions Implementation Recommendations
3. Public Distribution System-Score Card
Key Performance
Metric
Evaluation Rating
Targeting Efficiency Only 10% of poor receive intended benefits on the
subsidies
offered by the Public Distribution System (PDS) in
India
Operating efficiency The central government spends three times the
intended cost on each kg of food grain
Reach only 10% of poor receive intended benefits on the
subsidies
offered by the Public Distribution System (PDS) in
India
Benefits to stake holders Around 23% of all Fair Price Shops (FPS) are not
viable and survive solely due to leakages
and diversions
Improving the food
consumption patterns
Poor Global Health Index indicators
Study of current
PDS
Diagnosis Solutions Implementation Recommendations
4. Central Government-
Purchasing food grains and
policy making
State government-Identifying
the right targets (BPL/AAY)and
issuing ration cards
Food Corporation of India-
warehousing of the food grains
Fair Price Shops-Last mile
distribution to the customers
Diagnosing the PDS-identifying the touch points to be corrected
Lack of efficient
feedback systems
and transparent
purchasing
mechanism
Huge number of
bogus cards and
inefficient usage of
technology
lack of proper
storage
infrastructure
Appointment of
dealers and
commissions
paid(Wadhwa)
Study of current
PDS
Diagnosis Solutions Implementation Recommendations
5. Contemporary
approach to
design an
efficient PDS
Preliminary Diagnosis
of the problems and
bottlenecks (Previous
slide)
Research findings
from various
committee
reports
Best practices
from successful
models elsewhere
in the world
Inputs from the
world of
“Business
operations” in
terms of supply
chain efficiency
Our Approach
Study of current
PDS
Diagnosis Solutions Implementation Recommendations
Dynamic because of
policy changes like Food
security bill
Measurement
and feedback
6. • Technology usage has been restricted only to identification of the
targets alone which is just a part of the supply chain
• Integrating technology deep down to all levels optimise the whole
process where 3 important objectives are achieved
– Movement of Goods
– Movement of Information
– Movement of Money
• Decentralisation of accountability and performance based
incentives at as many levels as possible
• Performance metrics at each level should be in line with the
overall final objective of the system(Reach and efficiency) and the
contributions they are contributing to achieve them
• PDS should be approached from the view of a typical supply chain
of a private FMCG company which can bring out information about
any product at any level
Solution
Study of current
PDS
Diagnosis Solutions Implementation Recommendations
Extra ordinary process+
ordinary personnel
ordinary process+ extra
ordinary personnel
7. • “Theory of constraints” is a concept in which analysing the existing
system leads to the bottleneck(most inefficiently managed
function)
• After identifying the bottleneck applying the quality frame work of
DMAIC to improve the current system
Implementing the Solution
Study of current
PDS
Diagnosis Solutions Implementation Recommendations
Define - Defining the
problem after studying
the process/system
Measure - Identifying the
parameters to be
measured that can
quantifiably explain the
impact of a solution
Analyse - Analysing the
current process and
performing a root cause
analysis to figure the
place where to exactly
hit the nail
Improve - Proposing the
possible solution and
picking the best possible
one by weighing all the
parameters and
consequences
Control – After
implementing a solution
it is very important to
sustain the gains that
were available
8. • PDS is similar to supply chain of any big FMCG or manufacturing
company but differs in terms of volume as the volumes here are
way higher
• Commercial viability of the Fair Price shops is a big question mark
as there are no incentives for them to follow the ethical practices
which is at times leading to the diversion of stocks to the open
market
• Similar to that of a typical supply chain of a company PDS has to
have a efficient process in place rather thinking of volumes
• First option outruns the second as in the second option as extra
ordinary people may not be there at all levels and all the time
• While an extra ordinary process in place can take care of the
people in the system and help making informed and intelligent
decisions
PDS
Study of current
PDS
Diagnosis Solutions Implementation Recommendations
9. • Central Government: Responsible for purchase of food grains, transporting
them to principal FCI go downs and fixing quantity and price of food grain
to be distributed to BPL families
• State Government: Responsible for identification of BPL families and
issuing ration cards
• Food Corporation of India: Responsible for warehousing the food grains
• Fair Price Shops: Last mile distribution to actual consumers
Stakeholders
Visibility
• The four stakeholders are independent bodies and that is why there is a
lack of coordination amongst them
• Mechanism to peep through from the top to the lowest possible level would
be the ideal level of visibility but that is near to impossible
Study of current
PDS
Diagnosis Solutions Implementation Recommendations
10. • Variations in supply and demand are very common phenomenon
• In case of PDS the variations are caused by the off take demands as BPL
families may not have sufficient cash for doing the same
• APL families at times prefer to get their stock from the open market
leaving FPS’s with huge stocks
• Supply variations occur because of natural calamities and disasters so
system has to be robust enough to absorb such variations
Variability
Velocity
• Variations in supply and demand are very common phenomenon
• Reacting to them in the lowest possible time is where the system can be
differentiated
Study of current
PDS
Diagnosis Solutions Implementation Recommendations
3V’s of supply chain-Visibility, Variability & Velocity could be applied in the
above mentioned ways to improve the efficiency and effectiveness of PDS
11. • Launching a pan India Pilot project by selecting 1 district from
each state and probably 2 from larger states by population
• Existing system has to be inspected to find out the loopholes
– Upstream to Downstream
– Downstream to Upstream
• Downstream to upstream analysis would lead to a proper root
cause analysis and help us in identifying the exact location and
magnitude of the leakages
• Implementation our solution will help us measure the leakage and
reach of PDS to the public
• After the running the pilot project DMAIC framework is to be
applied which helps in continuously improvement as problems of
PDS cannot be solved by a single solution
Pilot Project
Study of current
PDS
Diagnosis Solutions Implementation Recommendations
