Business Concept For Demand Supply Management Predictive Analytics Ict Solutions Using Cloud Assets
Business Concept to address Efficiency improvement in Agriculture supply chainmanagement by Private sectorBackgroundAgriculture food waste is reality that impacts the P&L of all stakeholders in the business. While thedeveloped economies have been far successful in using technology to improve efficiencies in theirsupply chains, developing economies have lagged behind because of institutional and structuralproblems.India is a case in point.India is the second largest producer of vegetables and fruit, and yet almost 35% of its production isreported to be lost to waste during its journey from farm to the retailer.80% of the trade in vegetables in fruit in India, estimated to be worth 20 billion USD per annum ismanaged by the private sector, of which 75% (15 Billion USD) is controlled by the unorganized retail and25% (5 billion USD) by the organized retail chains.An estimated 45% of the fruit and vegetables managed by the organized retail sector are lost to waste.This translates to 2.25 Billion USD per annum. (The organized retail business is growing at 20% perannum, and the wastage is growing in proportion)Major organized retail chains in India are….and more will follow as the FDI retail policy is in place overtime Reliance Fresh- RELIANCE INDUSTRIES BIG BAZAAR- The FUTURE GROUP MORE- ADITYA BIRLA Group SPENCERS- RPG Group FOODWORLD- Dairy Farm International (DFI) group GREAT VALUE- Bharti WALMART India METRO CASH and CARRY- Metro IndiaTop Reasons for wastage Lack of storage – cold chain storage capacity and scale Poor logistics management- poor planning, tracking, monitoring and control of logistic assets- OPPORTUNITY FOR THE CLOUD SERVICE PROVIDER AND INTEGRATOR. Demand –supply gaps- Poor demand supply management due to poor forecasting/predicting- OPPORTUNITY FOR THE CLOUD SERVICE PROVIDER AND INTEGRATOR.Driving efficiencies and profits in the value chain.The organized, corporate backed, retail chains have established systems that are geared to reduceefficiencies in existing supply chains and improve value across the farm- fork delivery. However thissystem still does not eliminate wastage that remains very high at 25-30%. Main reasons attributed tothis inefficiency are inability to improve the logistics management and improving its integration to thedemand supply model.Demand supply management is of poor quality because of poor forecasting capabilities of the buyersand the sales team on the ground, who go by “gut feel” over fact based analysis and conclusion.
ICT enabled solution and predictive data analytics provides a ray of hope to the organized retailer, with a business opportunity for the solution provider. The PROPOSED Solution Predictive CLOUD + Cloud based communication SUPPLY SIDE FARMER Field data MIS report – DATA Data mining Data Analytics SUPPLY SIDE REPOSITORY engine BUYER Field data Supply Chain Manager Supply chain LOGISTICS Logistics and Demand Demand supply transport tracking supply MIS and smart management predictive engine Predictive forecast Analytics Engine Retail outlet managerRetail Field data MIS report –outlet order DATA Data mining Data Analytics DEMAND SIDE REPOSITORY engineRetail POS Field data DEMAND SIDE
SOME QUICK NUMBERSThe Predictive cloud +CLOUD COMMUNICATION PLATFORM would be offered as a managed service tothe global agro food retail industry.If we take India as an example, and assume that by developing a better predictive analytics engine in theplatform, and providing seamless communication and tracking capability, we are able to improve thewastage figures from the 45% to 30%, saving the industry a total of 750 million USD per annum,VERIZON can deploy a suitable commercial model that can generate between 15-20 million USD permonth. (240 Million- 180 Million USD per annum)Supply chain inefficiencies lead to considerable losses in any economy where agro food retailing is amajor component of the GDP and this model has traction to be deployed globally, with significantrevenue gains for THE SOLUTION PROVIDER.PLEASE NOTE- other opportunities on the platformThe predictive analytics engine+ CLOUD communication model has applications in other industryverticals, where forecasting plays a major role in impacting the P&L. The global Pharma industry isdependent on their sales reps to forecast the demand for drugs in their respective territories, and at thesame time obliged to take back, unsold and expired drugs that done move off the shelf because theforecast (prediction) by the sales rep was of questionable quality. The global pharmaceutical market in2011 was 880 billion USD of which an estimated 2% (18 Billion USD) was returned back due to nodemand and expiry. The US pharma market with a size of 300 Billion USD and an estimated 2% return (6Billion USD) on account of poor forecasting can be a lucrative market for VERIZON Predictive analyticsengine+ CLOUD computing platform.