E Farm Tnau Scm Conference Technologyin Agri Scm

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E Farm Tnau Scm Conference Technologyin Agri Scm

  1. 1. eFarm : A Farmer To Consumer Agri Supply Chain Network ICT tools to empower the Agri supply chain eFarm – an Introduction Vegetable and Fruit Supply Chain in India – Current Issues and Status Supply Chain Management – What is it ? Why is it important ? Technology in SCM : Key segments •Data collection / communication – Voice and Mobile •Customer Relationship Management tools – Order Management •Supplier Relationship Management tools – Resource Planning •Demand forecasting & aggregation •Pricing analysis using indg/tnau data •Data analysis / MIS •Logistics Management tools – Supply chain management & simulation •Social networking tools - Forums, Blogs (text / video) •Data exchange : XML Venkata Subramanian Founder/ Managing Director , eFarm M.S (Comp. Science) , SUNY Albany, Newyork (2003) B.Arch , IIT Kharagpur (1995)
  2. 2. Our Vision •Bring people together through creative use of technology platforms ('connecting the dots' ) to form socio- economic-webs •Create successful entrepreneurial, social enterprises which are profitable and sustainable •Make corporate social responsibility our core business model and differentiator •Measure success not just in financial growth , but also in the social growth in the areas we serve • Venkata Subramanian • Founder & Managing Director: (venky@matchboxsolutions.in ) MS (Computer Science), University at Albany, NY , B.Arch , IIT Kharagpur (1995) , India 12 years of experience in IT industry in leading Global Software development and consulting firms Very strong expertise in analysis & design of complex systems , portal development , back office operations in BFSI segment Responsible for overall strategy , technology and public relations Combination of different background ,skills and experience to provide creative perspectives to solving key problems in the supply chain area
  3. 3. IT enabled Annachee !!! HiTech Sabjeewallah ;-)
  4. 4. Harvesting of Vegetables • Unorganized, unregulated, unprofessional & Terminal markets to unprofitable - A Middlemen’ dominated market neighborhood wholesalers • Lack of demand/supply data 1 • No reliable sales, distribution, marketing channels • Poor logistics and storage management 5 • No IT/ERP usage – decisions are adhoc and arbitrary Regional mandi to Wholesalers to Retailers 4 Terminal markets near A local mandi large cities auctioning 2 Local to Regional mandis for Auction 6 Loss in transit 40% Price hike Retailers to Dining Table 3 End to end > 400% 7
  5. 5. 42/kg Eg: Ooty Carrots (As of 29th 32/kg 28/kg June 2009) 24/kg 22/kg 20/kg End customer 5/kg 12/kg price Farmer’s Regional Metro Terminal Neighbourhood Kirana Branded Premium market mandi Market market stores, Retailers Grade (In Ooty/ (Mettupala (Chennai) (Thiruvanmiyur Push (Export) Kothagiri) yam) Chennai) carts 500 % Price hike Source : Ooty market traders, Chennai traders, indg.in  Over 500% Price hike on average to customer , but no value addition  Changes hands several times: 40-50% is wasted – which adds to the costs  Prices set at each intermediate point arbitrarily by brokers/agents without any planned demand/supply data  Farmer typically operates at 25% loss , End retailer less than 5% net margin
  6. 6. High cumulative wastages across the supply chain varied from 24% (for potato) to 40% (for tomato) Description Cumulative Wastage Potato 24% Cauliflower 24% Banana 30% Cabbage 36% Tomato 40%
  7. 7. Market Scenario Data Value Notes ITC, Nilgiris, Fruits & Vegetables (Total market) 668800 Cr Organised + Unorganised Reliance, More, Big bazaar etc all put Organised segment 8216 Cr < 1.2% of total market together !!! Total Volume of fruits & vegetables 100 Million produced Tonnes India is a World leader in PRODUCTION but still Amount processed 1% World avg ~ 40% IMPORTING our food to Amount exported 1% Not in top 25 in world exporters meet local demand Wastage in transit & handling 40% ~ Rs 40000 Crores lost revenue Even a 1% reduction in wastage will Average per person monthly 68 Rs 11% of monthly expenses on food generate additional expenditure in F&V (Urban) 5 crores in profit to Avg. per person monthly 8 kgs farmers !!! consumption of F&V Over 60% involved in agriculture & related Typical scenario for a metro city in India with 5 Million activities, but contributes less than 20% to population : GDP. Growth rate Y-O-Y is just 2% owing to Daily demand : 1250 tonnes lack of professional management & focus Daily sales : Rs 1.2 Crores Source : IMAGES F&R Research Study , Govt of India , Dept. of Agriculture
  8. 8.  The Farmer :  Mandi system does not offer stable , sustainable price realization  Organised retailers don’t pick lower grades , have long credit periods  The Lorry drivers :  Lorry booking agents/brokers take 40% of cut. Fluctuating rates and high stress work  The Sellers :  Organized retail : High investment , Poor supply chain, Low volumes  Unorganised retailers : Sabjeewallah/push cart vendors : ▪ Missing link and unsung heroes of the supply chain. (Over 90% of volume retailed here) ▪ No proper benefits / finance / support  The Buyers :  Housewife : Fluctuating costs, Poor quality  Hotels / Food processors : High costs, Unreliable suppliers  Exporters : Poor standards / quality , High logistics cost
  9. 9. Supply Chain Management What is it ? Why is it important ? Value added resellers Sorting , Grading , Processing, Packing Storage Warehouses Bulk buyers Exporters Farmers eFarm Cooperatives Collection centers Kiranas Self Help Groups Hawkers Village ICT kiosks Phone booths Logistics Fleet Small Independent transporters Mobile operators operators Intra-city small tempos
  10. 10. •IT Systems usage : NIL •Management team : Illiterate and average age of 55 •Age of company : Over 150 years •Customer Segment : From slumdwellers to crorepathis •Operational efficiency : Six sigma !!! The Mumbai Dubbawallahs !!! •Key success factors : •Highly decentralized operations – agile, flexible , scalable •Use of low cost transport medium – trains •Use of human power for last mile delivery – No Fuel related hikes •Strong customer relationship – personal , localised •Simple coding, routing, labelling system – operates even without electricity ! •Delivery excellance – fixed time , professionalism
  11. 11. Fix the process first And THEN Implement technology Otherwise will be a failure …..
  12. 12. Cleaning / Packing Financial Success Social Progress Quality Routing Inspection/ Grading An untapped , niche Organizing the large market with very few Long haul unorganized agri sector of organized, entities Transportation India – bottom of pyramid Revenue generation More income to farmers , through better truck operators and small optimization, value Rural Produce Local vendors vendors owing to profit addition across the chain Collection Centres Small retailers sharing across the network Reduced wastage in transit = more revenue Farmers Support to traditional , eco Urban area Distribution centre friendly farm practices , Has potential to jumpstart Local Distribution organic farming through other agri-dependent better marketing ventures Convert waste to compost A professional ly Compost/Manure Food Processing , providing low cost managed supply chain is from waste units manure back to farmers. vital for tapping international markets Bulk buyers Revival of agriculture (Hotels / Caterers / Retailers) Exports dependent livelihoods , Potential to scale across empowering villagers eFarm Common Services India as core problem is Planning & Call centre / Training & wide spread Coordination Research Communication Technology Support Under privileged/Disabled and urban poor get ‘Pull factor’ from rural employment opportunities India for other services and products
  13. 13. Open source Tools & technologies AgriXML As a dataXchange format
  14. 14. Collaboration and B2B trading platform •Content : Daily pricelists, Schedules, Trends , Buyers guides •Order management •Search / Track items •Delivery tracking •Agri specific social networking Backoffice Systems •Customer relationship management •Supply chain management •Mobile/SMS gateway interface •Voice based interface •MIS & Data mart
  15. 15. eFarm Registers the farmers, 1 transporters and other intermediaries with basic details such as produce type, volume, expected price range etc., Advance amounts are collected from buyers 4 .Payments are made to farmers and - 2 eFarm Retail co-coordinators (ie.,NGO intermediaries upon delivery. /small retailers) consolidate the Orders from buyers received through phone, email and walk-in to make one consolidated demand list 5 The vegetables are sorted and graded at the eFarm Distribution centers across the city by members of women’s self help groups of the area.. - 3 eFarm sourcing managers track prices across different areas and feed in the data. The central order matching system determines best source, location and logistics channel for The orders are delivered immediately through 6 delivery vans,push carts etc to end fulfillment. customers Lessons learnt, feed back and data analysis conducted on the order received is shared with 7 the members in the chain. This helps to optimize the operation continuously and increase the value creation across the chain.
  16. 16. Cooperatives Hub and Spoke Model For Catering/Hotels Producer Scalability and Organic Growth Corporations Exporters Rural Urban SHGs Collection Forward Logistics ( Fresh Produce) Distribution Centres Centers Food Processors Reverse Logistics ( Manure , Farmer supplies) Bulk buyers Small & mid sized farmers Retailers / Mom & Pop stores … organic growth and expansion
  17. 17. ICT Technology and the BOP segment : Challenges • High illiteracy • Even amongst educated – Mostly local language skills only • Low computer skills , Low internet penetration Technology Adoption amongst BOP segment • Highest and fastest penetration : The mobile phone eFarm Interface points • Self taught the phone interfaces , usage • Pay full price for new models , talk time • Voice call centres / BPOs (local language ) • Natural language IVRS ( 2 way – automated messages) • SMS
  18. 18. Production data • Produce name, variety • Grade • Typical yield at harvest • Harvest cycles • Cost price at farm gate Farmer information • Name • Address • Contact number • Preferred mode of payment • Bank / Post office details • Photo • Attestation
  19. 19. Tools and calculators to assist farmers in determining their Sale price Click to open ->
  20. 20. Koyambedu nadu tomato (data courtesy : TNAU-INDG market information portal) Where to sell ? At what price ? Head to head comparisons across Markets Ottanchatram Insight - Support level prices and nadu tomato inflection points High / Low variations Identifying ‘hoarding’ and ‘cartelisation’
  21. 21. (data courtesy : TNAU-INDG market Koyambedu : Sambar onion information portal) What is the demand for a particular product variety in Koyambedu : Nagar Onion specific market? What variety to produce ? When to harvest ? How much ? Koyambedu : Tamilnadu Onion Example using onion in Koyambedu
  22. 22. NENDRUM IN COIMBATORE MARKET NENDRUM IN CHENNAI MARKET 60 60 50 50 40 40 30 30 20 20 10 10 0 30/06/2… 26/06/2… 29/06/2… 27/06/2… 28/06/2… 01/07/2… 03/07/2… 02/07/2… 0 Nendram in Bangalore market 60 Customer : A major chips manufacturer In 50 40 chennai 30 20 Problem : Nendran variety availability & 10 quality was poor and price was very high 0 Identified alternate markets for viable bulk sourcing from alternate markets
  23. 23.  Screen cam video  Technology_Videoscustomer.avi  Technology_VideosFarmer.avi.avi  Technology_VideosInventory Check.avi
  24. 24.  Screen cam video  Technology_VideosMS_CRM_whole.avi
  25. 25. Demand / Supply Forecasting and aggregation Strategic Forecast Stocking Sales & Plan marketing COLLABORATION FOR PLANNING COLLABORATION Farmer FOR OPERATIONS Purchase Order Sourcing Confirmations Purchase manager Orders
  26. 26. Retail outlets End customer : material flows Distribution locations : information flows Center (DC) Farmer / Supplier Retailer regional HQ – supply chain functions across stores are managed here Collection centre/ Rural hub Distribution Center (DC) Retail outlets Tier 1 Suppliers Tier 2 : Distribution Tier 3 : End customer centresCollection and drop locations
  27. 27.  Simulation  Technology_Videossc_1.avi  Technology_Videossc_2.avi
  28. 28. Drill down to details Highlight Dashboard summary potential For senior management problems and issues for immediate action
  29. 29. Agri India – LinkedIn Group ( > Link ) •Operational since Jan 2009 •connecting farmers, buyers , social agencies, agri professionals , academicians , press reporters & students •Leads on key demands , info about agri expos/conferences , trade news , job announcements , new ideas , discussions … •Articles on key topics : •Agri business & entrepreneurship •Organic farming •Video clippings on key technologies & processes •Buyer’s guide to various fresh produce (for e.g. detecting carbide mangoes, health benefits of keerai , selecting brinjal without insects etc)
  30. 30. May’08- Jun’08 : Website launched, Initial prototype system June 07 – May 08 : Information gathering , discussions, solution proposals to focus groups development Aug’08- Oct’08 : Concept pitching to pilot customer base/SHGs. Pilot launched with weekly deliveries. Different retailing options such as push carts, stores, mobile trucks tried out. User feedback has been positive from all strata. Avg. weekly delivery = 2 tonnes Oct’08 – till date : Distribution centre and retail outlets. established . Daily operations launched to cater to wider customer base . Promotional events, publicity drive. Core Concept and processes constantly being upgraded and evolved based on trial run results.
  31. 31. •TATA NEN Hottest startup 2009 nominee •IIM Kozhikode Whiteknight 2009 Business Plan contest winner •IIM Ahmedabad Leverage 2009 Showcase shortlisted startup •In the press •The Hindu magazine’s Ergo tabloid (Mar 2009) •Times of India , May 2009 •NDTV News , June 2009 •Featured in leading e-zines – yourstory.in, startups.in •Featured in Tamil press- Kumudham , Dinakaran •Outlook Money , June 2009 •JADE , June 2009 •Academic •Faculty for Food SCM course, MOP Vaishnava college •Key note speaker – TNAU conferences
  32. 32. Venkata Subramanian , MD eFarm Ph : 044-43577236 M : 98847 61354 Email : venky@matchboxsolutions.in Web : www.efarm.in 11 Loganathan colony , Mylapore, Chennai PIN 600004

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