Supply Chain Management

INTRODUCTION

 In my Management Thesis, I am going to make “Effective Supply Chain
Management as ...
Supply Chain Management

Statement of the problem:-


       The co-operative society in India has a significant role to p...
Supply Chain Management

Objectives of the study:-


    To study the supply of arecanut to the customers.
    To study ...
Supply Chain Management

Types of Research Design


1. Exploratory research design.
2. Descriptive research design
3. Expe...
Supply Chain Management


Questionnaire


       In this method, pre printed list of questions arranged in a sequence whic...
Supply Chain Management


Sampling Design


       A Sample design is a definite plan for obtaining a sample from a given ...
Supply Chain Management




HR Institute of Higher Education, Hassan                     Page 7
Supply Chain Management

2.1 INDUSTRY SCENARIO

       Co-operative movement took its birth in England for the first time ...
Supply Chain Management

2.1.1 Arecanut Marketing:
       Arecanut (Areca catechu L.) is one of the important commercial c...
Supply Chain Management

2.1.2 General Characteristics
   1. Arecanut (Areca catechu L) is an important commercial crop in...
Supply Chain Management

    2.1.5 A Bird View of Arecanut Market:
           Arecanut is a commercial crop which is also ...
Supply Chain Management


                                    Graph No.2.1
                   India‘s Share in the World A...
Supply Chain Management


                                        Table 2.2
             Showing share Of Karnataka in Tot...
Supply Chain Management



                                         Graph No.2.2
               Share Of Karnataka In Tota...
Supply Chain Management


                                       Table No. 2.3
              The table showing Uttara Kann...
Supply Chain Management



                                       Graph No.2.3
           Graph Showing Uttara Kannada sha...
Supply Chain Management

2.2 PROFILE OF THE TSS AS AN ORGANISATION

        Sirsi was and is the main trade centre for agr...
Supply Chain Management

2.2.1 Marketing:
        In our country agriculture is the main occupation of 67% of its populati...
Supply Chain Management

2.2.2 Agricultural Marketing:


       ―Agricultural marketing is the performance of all the busi...
Supply Chain Management

Committee. Even though some form of regulation of markets prevailed in the country
from as far ba...
Supply Chain Management

 xii. To undertake all other activities required to further the objectives mentioned in(i)
      ...
Supply Chain Management




                                    Table No.2.4
                      Table containing partic...
Supply Chain Management


2.2.6 Competitors Information
       The society facing a stiff competition from the Campco,TMS ...
Supply Chain Management


      Organization Structure:



                                            Chairman




      ...
Supply Chain Management



Board of Directors:

           Mr. Shantaram Hegde – Chairman
           Mr. Devendra D. Vishw...
Supply Chain Management




                                    Chairman




                                Board of dire...
Supply Chain Management


2.2.10 Sales and Marketing Department:
           TSS has sold both in local market as well as i...
Supply Chain Management


2.2.11 Human Resource Department:
               Human resource management means managing the fu...
Supply Chain Management

2.2.13 Inventory and Purchasing Department:


           The Arecanut are purchased by the farmer...
Supply Chain Management

2.2.14 Products and Services of TSS:

2.2.14.1 Procurement and Marketing of Arecanut
            ...
Supply Chain Management


2.2.14.3 Marketing Operation:
              The activity of the T.S.S. is in 3 taluks of Uttara ...
Supply Chain Management


        Commission earned by TSS shows an increasing trend during the period of study
from 11.68...
Supply Chain Management

the market share by 4.3% in the year 2003-04 to 57.36% in the year 2007-08. The
increasing is aro...
Supply Chain Management




HR Institute of Higher Education, Hassan                    Page 34
Supply Chain Management


III.   Cold Storage Unit:
               The cold storage unit is under construction to strength...
Supply Chain Management


IV.   Grading:


             The arecanut purchased by TSS directly is graded before they are s...
Supply Chain Management


                                    Table No.2.7:
                      The table shows differen...
Supply Chain Management

2.2.14.7 Market Extension:

            Arecanut of this region has gained popularity in the mark...
Supply Chain Management

2.2.14.9 Strengthening Supply Channel:

             The TSS bears special relationship with the ...
Supply Chain Management

2.2.14.10 Other Services provided by TSS

1) The supply of medicines at competitive price:
      ...
Supply Chain Management

6) Providing Credit Facility to Member Co-operative Societies:
             Facility extended to ...
Supply Chain Management

advances against the produce which are brought to the TSS but not sold. In this way it has

earne...
Supply Chain Management

2.3 ACHIEVEMENTS:


           Since 1923, when the Totagar‘s Co-operative Society was establishe...
Supply Chain Management

2.4 SWOT ANALYSIS
STRENGTH:


1. Highly influenced by Agriculture as it‘s the back bone of this s...
Supply Chain Management


3.1 SUPPLY CHAIN –


       When we speak of a ‗supply chain‘ we are focusing on different actor...
Supply Chain Management



      Planning:

             The requirement triggered by the customer‘s sales order will be c...
Supply Chain Management

        received by the customer, the company will send an invoice for the delivered
        prod...
Supply Chain Management


Distribution strategy: Centralized Vs decentralized, cross docking, direct shipment, pull
or pus...
Supply Chain Management


Process
      The supply chain business processes will need to be revamped in line with
      ch...
Supply Chain Management

      Supply chain chart




HR Institute of Higher Education, Hassan                    Page 50
Supply Chain Management

3.1.5 Inventory management:

       Quantity and location of inventory including raw material, wo...
Supply Chain Management

3.1.7 Developments in Supply Chain Management

       Six major movements can be observed in the ...
Supply Chain Management

organizations with the goal of increasing their competitive advantage, value-adding, and
reducing...
Supply Chain Management

Supply chain specialization enables companies to improve their overall competencies in
the same w...
Supply Chain Management

Transportation:
Assistance is provided in selection of mode and transport, service selection, fre...
Supply Chain Management

Innovations in Transportation Logistics


          The logistics service providers have been inn...
Supply Chain Management


       The trend in India is such that usage of the electronic medium for business
purposes and ...
Supply Chain Management

Besides knowing what was purchased and by whom, information on softer issues such as
demographics...
Supply Chain Management

4.1 TYPE OF RESEARCH:

        Descriptive method has been used in this research for the collecti...
Supply Chain Management

    Statement of the problem.
    Identification of information needed to solve the problem.
  ...
Supply Chain Management


4.1.5 Sampling:


       Sampling is a process of learning about the population on the basis of ...
Supply Chain Management

The modes of data collection:
       Interviewing face-to-face
       Interviewing by telephone
 ...
Supply Chain Management

Profile of the respondent


        1.    Are you a?
             a. Sole trader         b. Gener...
Supply Chain Management

Customer of TSS brand Arecanut


        2. Are you a customer of TSS brand Arecanut?
           ...
Supply Chain Management

Willingness to buy TSS brand Arecanut


      3. If no, are you ready to buy TSS brand Arecanut?
...
Supply Chain Management

Usage of TSS brand


 4. Have you used TSS brand before?
                  a. Yes ( )            ...
Supply Chain Management

Reason for not using TSS brand


5. Why you are not dealing with TSS currently?
a. Quality       ...
Supply Chain Management

Variety preferred


6. Which variety of Areca do you prefer most?
   a. Red            ( )       ...
Effective supply chain management as a strategic advantage conducted at tss ltd., sirsi
Effective supply chain management as a strategic advantage conducted at tss ltd., sirsi
Effective supply chain management as a strategic advantage conducted at tss ltd., sirsi
Effective supply chain management as a strategic advantage conducted at tss ltd., sirsi
Effective supply chain management as a strategic advantage conducted at tss ltd., sirsi
Effective supply chain management as a strategic advantage conducted at tss ltd., sirsi
Effective supply chain management as a strategic advantage conducted at tss ltd., sirsi
Effective supply chain management as a strategic advantage conducted at tss ltd., sirsi
Effective supply chain management as a strategic advantage conducted at tss ltd., sirsi
Effective supply chain management as a strategic advantage conducted at tss ltd., sirsi
Effective supply chain management as a strategic advantage conducted at tss ltd., sirsi
Effective supply chain management as a strategic advantage conducted at tss ltd., sirsi
Effective supply chain management as a strategic advantage conducted at tss ltd., sirsi
Effective supply chain management as a strategic advantage conducted at tss ltd., sirsi
Effective supply chain management as a strategic advantage conducted at tss ltd., sirsi
Effective supply chain management as a strategic advantage conducted at tss ltd., sirsi
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Effective supply chain management as a strategic advantage conducted at tss ltd., sirsi

  1. 1. Supply Chain Management INTRODUCTION In my Management Thesis, I am going to make “Effective Supply Chain Management as a strategic advantage at TSS” (The Totagar‘s Co-operative Sale Society Ltd, Sirsi‖.) TSS was established in 1913 and since then it has been in Sirsi. The products have got their own brand image and also customers. Based on the service provided by TSS to its customers we can know how the organization considers its customers and its products to the customers. A study Effective supply chain management as a strategic advantage at TSS is undertaken for assessing the supply towards the customers and to understand the expectations of the customers towards arecanut and its products which will in turn help to take appropriate action by the management for removing the loop holes. To interrogate customer‘s area-sampling system was adopted, since the population is undefined so 50 customers were interrogated to elicit the information, which are analyzed, interpreted and placed under with comments, charts and findings. The idea that customers prefer one product or one service over another is not new. The ability to identify and measure the elements of such preference decisions with any accuracy and reliability has only recently become available. Most importantly, we have come to realize that high customer satisfaction does not assure continued customer Preference. Satisfaction research over the past fifteen years demonstrates that high satisfaction scores, while a measure of organization performance on a set of important criteria, do not adequately explain the composition of preference formation and therefore often serve as insufficient predictors of sustained preference or what is normally referred to as customer loyalty. HR Institute of Higher Education, Hassan Page 1
  2. 2. Supply Chain Management Statement of the problem:- The co-operative society in India has a significant role to play in the economy. Enormous intermediaries are dependant for managing supply chain in the sector, like wholesalers and retailers. Due to this, the sector is engulfed with unhealthy cut throat competition among themselves and because of this its being cumbersome task for the marketers to create awareness about their product, brand and to induce consumers. The TSS has its business presence across Karnataka and the consumers are scattered among various elements like geographical, religion, age, occupational, economic etc. Hence the statement of problem is, “Effective supply chain management as a strategic advantage at TSS” Need For the Study Management needs to know the supply chain information in order to make sound decisions. Surveys on customer, retailers, and wholesalers can produce favorable or unfavorable result, but brings a number of benefits to management. A study on supply chain helps to understand the performance of the organization and the behavior of the customers and the merchandisers. The study of supply chain indicates the expectations of the firm. Customer preference helps to understand the loyalty of the customer towards the products. The management finds a possible way to fulfill the expectations of customers and wholesalers and attracts new customers and wholesalers. Scope Of The Study The study aims to find how the supply chain management plays its important role at TSS. The study has been carried out for a period of 3 months and has focused on all type of customers. HR Institute of Higher Education, Hassan Page 2
  3. 3. Supply Chain Management Objectives of the study:-  To study the supply of arecanut to the customers.  To study the brand awareness of TSS.  To analyze the branding system.  To assess the perceptional factors of customers. Research Design 1. Research is an art of scientific investigation. 2. Research is a process of systemic study. 3. Research is a search of knowledge. 4. Research is an area of investigation which includes collection, analysis and Interpretation of data. Research has to proceed systematically in the already planned direction with the help of a number of steps in sequence. To make the research systemized the researcher has to adopt certain methods. The method adopted by the researcher for completing the project is called Research Methodology. Research Design A Research design is the arrangement of conditions for collection and analysis of data in a manner that aims to combine relevance to the research purpose with economy in procedure. A Research is purely and simply the framework and plan for the study that guides the collection and analysis of data. It is a blue print that is followed in completing a study. HR Institute of Higher Education, Hassan Page 3
  4. 4. Supply Chain Management Types of Research Design 1. Exploratory research design. 2. Descriptive research design 3. Experimental research design. Data Collection Method Data refers to information or facts. It not only refers to numerical figures but also includes descriptive facts. The method of data collection includes two types of study, such as primary data and secondary data. Primary Data Collection Method It was collected directly from executives and customers. The information collected from executives through personal and direct interview to collect primary data, a detail and structured questionnaire was formed to suit the objectives of the study which contain definite and predetermined questions, containing information relating to arecanut and its products. Primary data is the data that is collected for the first time by the researcher. The Primary data are collected with specific set of objective to assess the current status of any variable studied. Primary data is useful only for particular period. Methods of Primary Data Collection The Main three methods used in primary data collection are: a. Questionnaire b. Schedule c. Interview In this study questionnaire method have been used HR Institute of Higher Education, Hassan Page 4
  5. 5. Supply Chain Management Questionnaire In this method, pre printed list of questions arranged in a sequence which is used by the researcher for collecting data. The questionnaire is filled by the respondents. The questionnaire is considered as the heart of the survey. Secondary data:- It was used mainly to support the primary data. Secondary data was collected through books, annual reports, significant, literature from the organization and previous reports, magazines, vouchers etc. Research Design Tool:- To make research various surveys are conducted they are as follows: The various data are collected from primary and secondary source through the questionnaires; books, journals, old reports and annual report were used. Sampling Scheme:- A sample is a portion of the whole on which the study is based. Here a sample size of 50 respondents were chosen from different areas of Sirsi(U.K.), and the questionnaires were duly filled data relating to the objectives of the study is obtained by meeting customers, consumers, retailers in area like Sirsi town. HR Institute of Higher Education, Hassan Page 5
  6. 6. Supply Chain Management Sampling Design A Sample design is a definite plan for obtaining a sample from a given population. It refers to the technique or the procedure that the researcher would adopt in selecting items for the sample. Sample design may as well lay down the number of items to be including in the sample i.e., the size of the sample. Sample design is determined before data are collected. There are many sample designs from which a researcher can choose. Some designs are relatively more precise and easier to apply than others. Sample Procedure Sampling is a procedure by which the respondents are selected. There are basically two types of sampling methods are: 1. Probability sampling methods. 2. Non-Probability sampling methods. In this study area sampling method was adopted (Probability Sampling) the required number of customers were not selected according to area sampling procedure but the required number of sample (sample size 50) were selected. Limitations of the Study  The responses given by the respondents may not be true.  The respondents may be careless in responding to the questionnaire.  The respondents may be illiterate.  This study limits to the geographical area of Sirsi. HR Institute of Higher Education, Hassan Page 6
  7. 7. Supply Chain Management HR Institute of Higher Education, Hassan Page 7
  8. 8. Supply Chain Management 2.1 INDUSTRY SCENARIO Co-operative movement took its birth in England for the first time in 18th century. Robert Oven, a labour leader introduced co operative movement to the world. Then in Germany, Denmark, Japan co operative movement was started. In India co-operative movement came into existence in 1904.the first ever Credit Co-operative Societies Act facilitated to make credit available to the farmers and artisans from the clutches of local money lenders. In order to provide further strength to the base level co operatives in the spheres of marketing, consumers, textiles, housing etc. Co operative movement which started with enactment of Co operative Credit Societies Act of 1904 has already completed 100 years of its eventful existence During this long period co operative have struggled hard and diversified manifold in terms of numbers, membership, deposits and working capital and have extended its reach to credit banking, fertilizers, sugar, dairy, marketing, consumers, housing, labour, fisheries and handlooms etc. They have done commendable work for the upliftment of downtrodden and weaker sections of the society. HR Institute of Higher Education, Hassan Page 8
  9. 9. Supply Chain Management 2.1.1 Arecanut Marketing: Arecanut (Areca catechu L.) is one of the important commercial crops of India. It plays a prominent role in the religious, social and cultural functions and economic life of people in India. The economic produce is the fruit called “betel nut” and is used mainly for masticator purposes. Arecanut has uses in ayurvedic and veterinary medicines. The habit of chewing arecanut is typical of the Indian sub- continent and its neighborhood. It is estimated that nearly ten million people depend on arecanut industry for their livelihood in India (Rethinam 2001).The quality, variety and types of arecanut vary from one place to another. Betel nut, also known as Pinang or Arecanut. Arecanut palm (Areca catechu L.) is cultivated primarily for its kernel obtained from the fruit which is chewed in its tender, ripe or processed form. Arecanut belongs to the family Palmae. It is native of Malayan Archipelago, Philippines and other East Indian Islands. Commercial cultivation is confined only in India, Bangladesh and Sri Lanka. Kerala, Karnataka and Assam account for more than 90 per cent of the total area and production in our country. Arecanut production in India has now almost reached a level of self-sufficiency. Uses for Arecanut other than chewing are negligible. Its export prospects are also very much limited. Therefore, the present policy is not to expand the area under arecanut, but to adopt intensive cultivation and take up replanting of the aged and unproductive gardens. Inter and mixed cropping in arecanut gardens is advocated to augment the income from the existing arecanut garden. Betel nuts are often chewed for their helpful effects, which are caused by the relatively high levels of alkaloids in the seed. Chewing betel nuts is an important and popular cultural activity in many Asian countries. It is also used as an offering in Hinduism. HR Institute of Higher Education, Hassan Page 9
  10. 10. Supply Chain Management 2.1.2 General Characteristics 1. Arecanut (Areca catechu L) is an important commercial crop in India. Arecanut is the seed of the arecanut palm. 2. There are two varieties of arecanut, called white Supari and Red Supari. White variety supari is prepared by harvesting fully ripe arecanut and by sun drying for 40 to 50 days. Red variety supari is prepared by harvesting the tender (green) arecanut, boiling it and peeling off the husk. 3. Mainly used in gutkha industry and in religious, social and cultural functions. It is also used in Ayurvedic and veterinary medicines. 4. It is estimated that nearly ten million people depend on arecanut industry for their livelihood in India. 5. The quality, variety and types of arecanut vary from one place to other. 2.1.3 Major Indian Markets TSS is the main nodal agency for procuring arecanut. Mumbai, Ahmadabad, Indore, Jaipur, Delhi, Nagpur, Patna, Calcutta, Cuttack, Bangalore, Rajkot, and Chennai are the important marketing centers of arecanut in India. 2.1.4 Market Influencing Factors 1. Weather condition during the growth period. 2. Demand from overseas consuming centre like Nepal and Pakistan. 3. Quantum and timing of imports from Indonesia, Thailand and Burma. 4. Government intervention through MSP purchase. 5. Carryover stocks. 6. Growth of the Gutkha industry HR Institute of Higher Education, Hassan Page 10
  11. 11. Supply Chain Management 2.1.5 A Bird View of Arecanut Market: Arecanut is a commercial crop which is also known as garden crop. The other crops produced along with arecanut are pepper, card mum vanilla, banana by the farmers of this region. The arecanut is the backbone of the economic activities of this region. The price fluctuation makes its impact on the whole economic, social, cultural activities of this region. So our study of agricultural produces concentrates on the marketing of arecanut. The arecanut (Areca Catechu Linn) is a commercial crop in India, and is popularly known as ―Betel nut‖ or ―Supari‖. Philippines is supposed to be the origin of arecanut mainly because of the presence of larger number of varieties. Table No. 2.1 The table showing India‘s Share in the World Arecanut Production. Sl.No. Countries Percentage in Arecanut Production 1 India 59% 2 Indonesia 16% 3 China 10% 4 Bangladesh 7% 5 Myanmar 6% 6 Other Countries 2% (Source Annual Report of TSS) The India‘s share in the global market accounts for 59% of the total production. So India is having a most of the arecanut producer in the world. HR Institute of Higher Education, Hassan Page 11
  12. 12. Supply Chain Management Graph No.2.1 India‘s Share in the World Arecanut Production. Production India Indonasia China Bangladesh Other Countries, 2% Myanmar, 6% Bangladesh, 7% China, 10% India, 59% Indonasia, 16% HR Institute of Higher Education, Hassan Page 12
  13. 13. Supply Chain Management Table 2.2 Showing share Of Karnataka in Total Domestic Arecanut Market: Sl.No. States Percentage in Arecanut Production 1 Karnataka 46% 2 Kerala 24% 3 Assam 16% 4 West Bengal 4% 5 Meghalaya 3% 6 Other states 7% (Source Annual Reports of TSS) Karnataka leads the Arecanut production having 46% of the India‘s total arecanut production. It is followed by kerala having 24% and Assam with 16%. HR Institute of Higher Education, Hassan Page 13
  14. 14. Supply Chain Management Graph No.2.2 Share Of Karnataka In Total Domestic Arecanut Market: Production Karnataka Other States, 7.00% Meghalaya, 3.00% kerala West Bengal, 4.00% Assam West Bengal Assam, 16.00% Karnataka, 46.00% Meghalaya Other States kerala, 24.00% HR Institute of Higher Education, Hassan Page 14
  15. 15. Supply Chain Management Table No. 2.3 The table showing Uttara Kannada Share in Karnataka State Sl.No. States Percentage in Arecanut Production 1 South Canara 20% 2 Chitradurga 18% 3 Shivamogga 17% 4 Uttara Kannada 11% 5 Chikkamagalore 8% 6 Bangalore Rural 7% 7 Udupi 7% 8 Tumkur 6% 9 Other districts 6% (Source Annual Reports of TSS) South canara leads the arecanut production share by 20% of the Karnataka‘s production. Followed by Chitradurga 18%, Shivamogga 17%, Uttara Kannada‘s share is 11% of the Karnataka‘s production and next is Chikkamagalore 8%, Bangalore Rural and Udupi 7% each, Tumkur 6% and other districts accounts for 6% of the total production of Karnataka. The Uttara Kannada district has two main geographical regions. The costal land comprising karwar, Ankola, kumta, Honnavar, and Bhatkal talukas and upperghat section having Sirsi, Siddapur, Yellapur, Joida, Haliyal, and Mundgod taluks. The Uttara Kannada district economy revolves around agriculture and majority of the people drive their livelihood from arecanut cultivation. It is one of the major centers of arecanut cultivation and marketing in Karnataka. Here arecanut is grown over an arecanut of 9013 hectors constituting around 11% of total production in the state for the year 2007-08. HR Institute of Higher Education, Hassan Page 15
  16. 16. Supply Chain Management Graph No.2.3 Graph Showing Uttara Kannada share of Arecanut in Karnataka : Other districts Tumkur 6% 6% South canara 20% Udupi 7% Banglore rural 7% Chikkamagalore Chitradurga 8% 18% Uttara kannada 11% Shivamogga 17% HR Institute of Higher Education, Hassan Page 16
  17. 17. Supply Chain Management 2.2 PROFILE OF THE TSS AS AN ORGANISATION Sirsi was and is the main trade centre for agriculture produces particularly commercial crop like arecanut, pepper and cardamom in Uttara Kannada District. For a long time, the planters, particularly with small holding, were exploited by private merchants and dalals. There were no institutions either to provide finance for agricultural operation or to supply fertilizers, seeds and agricultural equipment etc. These dalal cum merchant cum money lenders provided credit during rainy season, supply groceries etc, at exorbitant prices and purchased garden produce in return at low rates. Besides they manipulated the accounts of theirs Customers (Assamese). To put and to this oppressive practices and exploitation some local leaders and selfless co-operative organizers started the Sirsi Totagar‘s Co-operative purchase, distributive and Credit society Ltd. on 12-11-1913. But due to lack of adequate funds to make advance on produce, the lack of loyalty of the members and non involvement of the rural credit societies in the production and sales process there was an initial set back. As a result to separate the credit and sales function, the new society was born and was registered as the Sirsi Totagar‘s Co-Operative Sale society on 21-9-1923 with a share capital of Rs. 280 and membership of 28 individuals. In its long journey the TSS has weathered money storms and passed through the period of trial and turbulence. Late, Shripad. R. Hegde Kadave was one of the main founders of the T.S.S. Now, T.S.S. is major Co-operative Society in Karnataka state, the head office is incorporated at Sirsi. It has two branches, one at Siddapur started at 1947 and another at Yellapur started in 1955 which are 35 and 50 kms away from Sirsi. HR Institute of Higher Education, Hassan Page 17
  18. 18. Supply Chain Management 2.2.1 Marketing: In our country agriculture is the main occupation of 67% of its population. The importance of agriculture is obvious. Marketing is a comprehensive term which includes capacious functions like, assembling, storing, financing, insuring, standardizing, selling, transporting, and after sales services. The market is derivative of Latin word ―Marcatus‖, meaning thereby merchandise were, traffic trade or place where business is conducted. ―A market is a center about which or an area in which the forces leading to exchange or title to a particular product operate and towards which the actual goods tend to travel‖. (Memoria CB and Joshi. R.L. principles and practice of marketing in India 1997-P.5) According to American Marketing Association ―Marketing is the performance of business activities that direct the flow of goods and services from the producer to the consumer‖. It is an atmosphere or a region in which forces of demand and supply operate directly or indirectly to bring about transfer in the title of goods and services. It is an arrangement that provides opportunity of exchanging goods and services for money or money‘s worth. ―Therefore a market consists of a group of persons on one side holding the goods which they want to sell and on the other side a group of prospective buyers who want to pay for and buy‖. ( Sontakki. C. N. marketing management P.1) To use economic jargon, marketing is nothing but creation of utilities, i.e. place, time and ownership. Therefore, marketing is the center point around which production activities revolve. Marketing is of paramount importance in modern business activities which make the commodities meaningful and raise the consumer‘s standard of living. It is a bridge between producers and consumers and provides employment to middlemen and other functionaries engaged in. Actually, marketing is the foundation stone of National Prosperity. Its activities like market research, publicity, salesmanship, product promotion, innovation, improvement in life value lend wonderful dimension to the produce which contributes to the growth of a dynamic society. HR Institute of Higher Education, Hassan Page 18
  19. 19. Supply Chain Management 2.2.2 Agricultural Marketing: ―Agricultural marketing is the performance of all the business activities involved in the flow of goods and services from the point of initial agricultural until they are in the hands of ultimate consumer‖ (Kohl‘s L. Richards and UHL N.J. marketing of agricultural products, New York 1980 P- 8.) Agricultural marketing has been an important subject matter of stud in developed countries, but in developing countries like ours it has been some what neglected though a strong foundation of agriculture is necessary for to sustainable and rapid development of the country. The development of agriculture depends on smooth flow of out puts of the farmers to consumers to consumers. Marketing of agricultural produce forms an integral part of the over all agricultural development strategy. Marketing of agricultural produce is a specialized job since there are certain peculiarities involved in it, and it must be understood and attended to accordingly. The green revolution was the outcome of successful efforts in the front of agricultural production and indeed the agricultural marketing could be called the second generation problem of green revolution. Indeed the very purpose of production is not complete unless and until it reaches the ultimate consumers. The process of production ends only with final consumption and marketing which provides a link between production and consumption. In a subsistence economy, where agricultural surplus does not exist, marketing is not an important problem, but it emerges as a major problem as soon as surplus develops in the agricultural economy. It is in the context of growing agricultural surplus that the problem of marketing becomes all the more important. The importance of improving marketing of agricultural products was brought to the limelight with the publication of the report of the Royal Commission on Agriculture, and subsequently b the publication of the report of the Central Banking Equity HR Institute of Higher Education, Hassan Page 19
  20. 20. Supply Chain Management Committee. Even though some form of regulation of markets prevailed in the country from as far back as in 1897, the movement gained momentum only after the second world war, when some of the states like Bombay, Madras enacted legislation to organize regulated markets in the country, the five year plan emphasized the need for improving the conditions of marketing of agricultural products by the establishment of more regulated markets particularly by encouraging co-operative marketing societies. 2.2.3 Objectives: The objectives of TSS are stated below - i. Proper marketing of agriculture products of the members to the possible best advantage. ii. To advance loans to members on the security of their produce. iii. To rent or own godowns, own warehouses and also undertake warehousing business. iv. To undertake processing activities with the prior sanction of the registrar. v. To export agriculture products or processed materials and to open sales depots in the consuming centers. vi. To arrange for pooling, packing and grading of the agricultural produce of the members. vii. Supply to member through their local society manure, seeds and implements required for their farm business and essential domestic requirements and to appoint societies as their agents. viii. To encourage thrift, self-help and co-operation among its members. ix. To encourage members to grow pure and high grade agricultural produce. x. To act as agents of primary credit societies for recovery production loans given by them to the members and also to act as agent of the federal Co-operative Institution in marketing of agricultural requisites and consumer goods. xi. To open branches, depots, godowns, sale-shops and show-rooms if necessary in the areas of operation of the society or to close them with the previous approval of the Registrar and to undertake manufacture of Agricultural Implements and to establish work-shops. HR Institute of Higher Education, Hassan Page 20
  21. 21. Supply Chain Management xii. To undertake all other activities required to further the objectives mentioned in(i) to (xi) above and to promote, disseminate education and to undertake any activities for the betterment of the agriculturists. The society has been able to achieve many of these objectives. Since the objectives laid are comprehensive in nature, some of them are yet to be achieved. 2.2.4 Quality Policy ―We are committed to provide quality service through TQM approach to ensure satisfaction of member and society on a sustained basis‖ 2.2.5 Membership: The membership of the society consists of four types. They are, I. ‗A‘ class consisting of Agricultural Co-operative Institution. II. ‗B‘ class consisting of individuals residing in area of operation. III. ‗C‘ class consisting of traders, commission agents, merchants, depositors and others, having dealings with the society. They will not have any right to vote or participate in this management. The conditions to be fulfilled to become a member are specified in no. 4(2), 4(4), and 4(5) of the byelaws of the society. Conditions to withdraw the membership of a member and seizer of membership are contained in no. 4(5), 4(6), and 4(7) of the byelaws of society. HR Institute of Higher Education, Hassan Page 21
  22. 22. Supply Chain Management Table No.2.4 Table containing particulars of members:- Sl.No. Year Membership Primary Societies Individuals 1 1923-24 - 28 2 1932-33 18 172 3 1941-42 19 151 4 1950-51 23 1200 5 1959-60 29 2393 6 1968-69 53 3740 7 1977-78 65 7359 8 1986-87 65 4047 9 1995-96 63 3490 10 2007-2008 67 2965 HR Institute of Higher Education, Hassan Page 22
  23. 23. Supply Chain Management 2.2.6 Competitors Information The society facing a stiff competition from the Campco,TMS (Sirsi) and TMS (Siddapur) and by private companies. 2.2.7 Infrastructure Facility Society having a good infrastructure facility, all the departments are computerized, and having a vehicles for the transportation of goods namely, Tractors with two trailors of capacity 4 tones only for self use especially for trading section. Ace with 1 tone capacity: Hire charges Rs.8/- per k.m. within 20kms minimum Rs150/- Hire charges Rs10/-per km. TATA 207 DI- With 2.5 Tones , Within 20 kms minimum Rs200/- Hire charges Rs 15/- per km. TATA 608 - Within 20 k.m minimum Rs 300. Hire charges Rs 20/- per km. HR Institute of Higher Education, Hassan Page 23
  24. 24. Supply Chain Management Organization Structure: Chairman Manager Secretary Branch Internal Sectional Accountant Cashier Godown Manager Auditor Heads Superintendent or secretary Junior Mill Grader Cashier Godown Accountant Superintendent Keeper Senior Clerk Clerk HR Institute of Higher Education, Hassan Page 24
  25. 25. Supply Chain Management Board of Directors: Mr. Shantaram Hegde – Chairman Mr. Devendra D. Vishwamitra – Managing Director Mr. Sitaram S. Hegde Mr. Gajanan V. Joshi Mr. Mahabaleshwar V.Hegde Mr. Ganapati M. hegde Mr. Vishwanath V. Hegde Mr. Mahabaleshwar S. Hegde Mr. Shripad V. Bhat Mr. Ramakrishna R. Hegde Mr. Raveendra J. Hegde Mr. Raveesh Hegde – General Manager Mr. Manjunath Hegde – Assistant Managing Director Mr. Balakrishna L. Hegde – Internal Auditor Mr. Rajendra G. Joshi – Finance Manager 2.2.8 Administration Department: Mr. Shantaram Hegde is the Chairman and Mr. Manjunath Hegde is the Managing Director and including them, TSS is having twelve in Board of Directors. All the major policies and decisions are framed by administration department. TSS‘s policies (top to bottom), intake of new employees, market policies is taken by Administration Department. The department is having the strength of highly intelligent twelve members forming a cutting edge team. Presently TSS is trying to increase its business in foreign market and as well as capturing more shares of domestic market. HR Institute of Higher Education, Hassan Page 25
  26. 26. Supply Chain Management Chairman Board of directors General Manager Employees 2.2.9 Finance and Accounting Department: All the financial transactions of the society are maintained by Finance and Accounting department personnel. TSS‘s financial policies like receivable management, payment management are done by this department. Financial borrowings, salaries and wages to employees etc are maintained. This department is headed by Mr. Rajendra V. Joshi with a group of twelve personnel. Finance Manager Sectional head Asst. Finance Cashier Manager OFFICE BOYS OFFICE BOYS OFFICE BOYS HR Institute of Higher Education, Hassan Page 26
  27. 27. Supply Chain Management 2.2.10 Sales and Marketing Department: TSS has sold both in local market as well as in foreign market. Around 80% of sales are from local market and left 20% are exported. MARKETING MANAGER SALES MANAGER ASST. MANAGER MARKETING SALES MAN BRANCH MANAGER ASST. SALES MAN Sales: SALES LOCAL SALES EXPORTING HR Institute of Higher Education, Hassan Page 27
  28. 28. Supply Chain Management 2.2.11 Human Resource Department: Human resource management means managing the function of employing, developing and compensating and human resource resulting in the creation and development of the human relations with a view to contribute to the organizational, individual and social goals. The HR department in TSS is taking care of employee details, salary records, paying bonus to workers, managing industrial relations, providing other facilities to employees, Employee Sate Insurance Scheme (ESIS) etc. General Manager HUMAN RESOURCE MANAGER H.R. ASSISTANT HELPERS HELPERS HELPERS 2.2.12 Quality Management Department: This department is situated scattered in all departments. Main function is to maintain the quality of the goods, which prescribed by the customers. This department maintains every process of the Arecanut quality. After the arecanut grading and brandings are ready they are checked for their sizes and quality with the help of sophisticated measuring instruments which includes observation. HR Institute of Higher Education, Hassan Page 28
  29. 29. Supply Chain Management 2.2.13 Inventory and Purchasing Department: The Arecanut are purchased by the farmers. In inventory department raw materials are stored in bulk for export and sales. Arecanut are packed as per packing standards and stored in inventory department before they are dispatched. General manager PURCHASE & STORES INCHARGE STORES ASSISTANTS HELPERS HELPERS HELPERS HR Institute of Higher Education, Hassan Page 29
  30. 30. Supply Chain Management 2.2.14 Products and Services of TSS: 2.2.14.1 Procurement and Marketing of Arecanut TSS started procurement initially in 3 centers and now it operates through 96 procuring centers through the district of Uttara Kannada in Karnataka. During the year 2000-01 up to February 2001 TSS procurement and sales of arecanut 30,320 tones and 31,565 tones valued at Rs. 286.35 Crores and Rs.311.28 Crores respectively. There TSS is able to procure only 10% of the produce available in the country and the rest is handled by the private traders and others. 2.2.14.2 The Sirsi Market: The Sirsi is a leading producer of arecanut in the Uttara Kannada district. Sirsi is a main commercial center of Uttara Kannada district. It is also a major Co-operative center of the district. The reports of agriculture produce marketing committee SIRSI (APMC) given some interesting figures. Various agricultural produce are brought and sold in the market. It includes arecanut, pepper, paddy, rice, dry chillies, banana, pineapple, ground nut, coconut, cotton, card mum. The following table gives the details of arrivals and sales of various agricultural products. HR Institute of Higher Education, Hassan Page 30
  31. 31. Supply Chain Management 2.2.14.3 Marketing Operation: The activity of the T.S.S. is in 3 taluks of Uttara Kannada District of Karnataka State. The Head Office is situated at SIRSI which is also a commercial centre of the district. The T.S.S. has two branches in the neighboring talukas SIDDAPUR and YELLAPUR. The T.S.S. has two types of members. ‗A‘ class and ‗B‘ class members. Theirs total share capital as at 31-3-2008 is from - A Class – 3, 56,000, B Class – 14, 23,700. Around 225 purchasers are registered as purchasers in the T.S.S. The purchaser is to make deposit of Rs. 30000/- as safety deposit. The purchaser is given godown facility. The grading and sorting of arecanut facility is also available. Some charges are levied for these facilities. The transportation facility is also available for the purchaser. The VAT, Market Cess, commission, Association fees are included in the purchasers bill. 2.2.14.4 As a Commission Agent: The T.S.S. gives the marketing facility to its members. The farmers will become nominal members by paying nominal fees and they can transact in the society. The T.S.S. act as a commission agent. The commission earned by the T.S.S. is shown in the following table. Table No.2.5 The table shows percentage of increase in commission earned by T.S.S. Year Percentage of Increase in Total Commission Earned Commission Annually Annually (in Rs.) 2003-04 - 1,17,48,969 2004-05 11.68 1,31,22,408 2005-06 11.95 1,31,52,990 2006-07 43.87 1,69,04,054 2007-08 0.89 1,04,57,063 (Source Annual Report of TSS The percentage calculated 2003-04 year is taken as base year) HR Institute of Higher Education, Hassan Page 31
  32. 32. Supply Chain Management Commission earned by TSS shows an increasing trend during the period of study from 11.68% in 2004-05 to 0.89 in 2007-08 recording an average growth of about 17.63% per year. It reflects upon the increase in sales through TSS, as commission is levied at a fixed percentage in sales. 2.2.14.5 Direct Purchase By TSS In The Market: The TSS purchases the arecanut, and vanilla, in its sale yard. It has resorted to direct market intervention to scuttle the attempt of private traders to browbeat farmers by charging lower prices. Such a move has a big impact on the market. The artificial fluctuation in the market price is the main reason for TSS to enter in to the market as a purchaser which ensures price stability. It is a noble attempt to ensure remunerative price for agriculture produce of its members. The following table shows direct purchase made by the TSS during 2003-04 to 2007-08. Table No.2.6 The table showing direct purchase made by TSS and its share. Year Value of the Total purchase in TSS share in purchase by TSS the market (in Rs.) percentage (in Rs. Crores) (To values) 2003-04 3.00 69 4.3 2004-05 5.79 77 7.52 2005-06 11.25 71 15.84 2006-07 23.33 63 37.03 2007-08 39.01 68 57.36 (Source Annual Reports of TSS) The TSS has purchased 4505 quintals of arecanut and the TSS share is 4.3% in the year 2003-04. Likewise 8232 quintals in 2004-05, 16261 quintals in the year 2005-06, 23098 quintals in year 2006-07, and 30968 quintals in the year 2007-08. TSS direct purchase share in the market is 7.52%, 15.84%, 37.03%, and 57.36% in the respective years. The purchasing initiative by TSS in the study period has grown in HR Institute of Higher Education, Hassan Page 32
  33. 33. Supply Chain Management the market share by 4.3% in the year 2003-04 to 57.36% in the year 2007-08. The increasing is around 13 times compared to year 2003-04. The TSS has purchased Rashi, Old chali, the type of varieties of arecanut.The year 2003-04 the value of purchaser during the year Rs. 3.00 crores where as it has grown up to Rs.39.01 crores. There is a significant rise in the volume and value of the arecanut purchased by TSS. 2.2.14.6 The Marketing Strategies Adopted By TSS: Effective marketing strategies are adopted by TSS dynamic management in recent years which had great effect on better price realization. I. Export: As a part of trade negotiation with Pakistan and other Asian countries keen interest is shown to purchases arecanut from TSS. But due to political reasons arecanut trade has not grown as per the expectation. However TSS has continued to explore the possibility of entering into international market. II. Branding: The management of TSS showing special interest in creating the brand to its product. The packing, the quality of the produce, labeling, the trade mark logo, and the competitive price are also contributing to the growing popularity of the TSS arecanut brand. The branding results are very positive. TSS is hopeful that in the days to come market expansion will take place and fetch better price. HR Institute of Higher Education, Hassan Page 33
  34. 34. Supply Chain Management HR Institute of Higher Education, Hassan Page 34
  35. 35. Supply Chain Management III. Cold Storage Unit: The cold storage unit is under construction to strengthen the holding capacity of planters which will eventually help price stabilization. The unit will be available to arecanut growers shortly. HR Institute of Higher Education, Hassan Page 35
  36. 36. Supply Chain Management IV. Grading: The arecanut purchased by TSS directly is graded before they are sent to outside markets. The grading of whole arecanut is done by hand picking, by skilled labors. While making different sizes, circular services with octagonal holes or big sieves are used. Specification of grading generally varies depending upon market and merchant to merchant. Following are the different varieties sold in the terminal markets Moti, Sini, Hindi, Pooja, Borli, Jamabarada,Nagarabarada,etc. HR Institute of Higher Education, Hassan Page 36
  37. 37. Supply Chain Management Table No.2.7: The table shows different arecanut grades. RED – VERIETY (KEMPU) WHITE – VARIETY (CHALI) Sl. No. Number Trade Name Sl.No. Number Trade Name 1 A-51 Marvadi Bar 1 A-1 Moti 2 A-55 Marvadi Bar 2 A-2 Vajras 3 A-35 Nani-Aapi 3 A-3 Jamnagar 4 A-32 Nani-Aapi 4 A-4 Jini 5 A-25 To- Aapi 5 A-5 Barali 6 A-23 Dappa 6 A-6 Lindi 7 A-21 Dappapi 7 AA-6 Charminar Lindi 8 A-20 Gundu Barada SECOND 9 A-8 Ramuda Borada 1 A-114 Moti 10 A-7 Vajras Barada 2 A-115 Vajras 11 A-11 Jam Barada 3 A-116 Jamnagar 12 A-9 Nagar Barada 4 A-117 Jini HR Institute of Higher Education, Hassan Page 37
  38. 38. Supply Chain Management 2.2.14.7 Market Extension: Arecanut of this region has gained popularity in the marketing centers of Maharashtra, Gujarat, Uttara Pradesh, West Bengal and Karnataka. The important marketing centers in the state are Dharwad, Hubli, Bijapur, Gulbarga, Belgaum, Raichur, Haveri, Gadag, Bangalore, and Mysore. Other important marketing centers out of state include Ahmadabad, Jamnagar, Nagpur, Mumbai, Salgaon, Indhore, satna, Jabalpur, Banaras, Lucknow, Kanpur, Ranchi, Patna, etc. However TSS does not have any sort of direct link with the ultimate consumers. It is through middlemen at different levels that arecanut is delivered to final consumers. 2.2.14.8 Measures to popularize TSS brand of arecanut: To popularize branded arecanut consumption and to expand market the following measures are initiated by the TSS. 1) TSS is planning to give advertisements for its branded products in North Indian states so that the branding will become popular through different media of mass communication. 2) Release arecanut in small attractive packages of different sizes to make the retail sale easy and convenient. 3) TSS is planning to allow quantity discount to dealers to improve sales. 4) There is plenty of export opportunities. TSS is also making efforts to explore foreign market particularly in South Asia and Arab Countries. HR Institute of Higher Education, Hassan Page 38
  39. 39. Supply Chain Management 2.2.14.9 Strengthening Supply Channel: The TSS bears special relationship with the service Co-operatives, Shri N.P.Gaonkar (N.P.Gaonkar, ―The role of Totagar‘s Sale Society in Co-operating marketing system Golden jubilee souvenir of TSS 1977‖) wrote, ―Totagar‘s Sale Society has played an important role in the development of many co-operative institutions in Sirsi, Siddapur, and Yellapur taluks‖. It is only because of the help and support of the TSS that these service Co-operatives could grow and could function with good measure of success. In that way it has cultivated a regular supply channel to Sirsi market and ensured perennial supply of arecanut and other agricultural produce. Marketing of product through primary societies is a precondition for advancing loan to their members. The TSS has helped service Co-operatives in achieving this goal. In the name of each society separate Assami Account is opened. Whenever a member of the society brings produce to the TSS the sales proceeds are credited to the concerned society‘s Assami Account and he is requested to receive payment from the concerned society only. On the other hand, such society credits the Assami Account of such members with the amount of sale proceeds. The society make advances to members on the produce marketed through them. This arrangement has helped these societies to achieve high recovery rate in case of Assami loan advanced to members and has reduced over dues. HR Institute of Higher Education, Hassan Page 39
  40. 40. Supply Chain Management 2.2.14.10 Other Services provided by TSS 1) The supply of medicines at competitive price: Medicine store was started by TSS on 8-10-1962 to supply medicine to members and general public at competitive price. The turn over of medicine for the year 2007-08 is Rs. 218866/-. 2) Supply of Agricultural inputs and Groceries: The TSS is providing the agricultural equipments, chemicals, groceries to its members at competitive price. The cattle feeds, fertilizers, pesticides are the other products which are made available to the members for their agricultural activities and also for day to day life. All these products available the credit facilities for the members. There are two separate sections, one for Groceries and another for Agricultural equipments. Both are worked in only one department. In these department‘s turn over for the year 2007-08, Agricultural Department – 2,00,14,469/- and Grocery Department – 51,09,722/- . 3) Lodging facilities through Hotel Samrat: The Samrat Guest House was acquired and lodging is made available to the members of TSS and other tourists at a competitive charges. In this hotel and lodging facilities net profit for the year 2007-08 is Rs. 546339/- 4) Rice Mill to process paddy: On 9-5-1965 Rice Mill was opened by TSS. This paddy processing facility is available to the members at the concessional rate. In 2006 mill has modernized improve quality of milling. For the year 2007-08 net profit in this section is Rs. 1, 58,710/- 5) Transportation Facility: TSS is offering the transportation facility to its members for transporting the agricultural produces from plantation to the sale-yard at the concessional rate. There is separate van section maintained to provide the above said facility. HR Institute of Higher Education, Hassan Page 40
  41. 41. Supply Chain Management 6) Providing Credit Facility to Member Co-operative Societies: Facility extended to member credit primary co-operative for their various operations so that they can serve their members better. 7) Other Facilities to the members by TSS: Cash payment facility all throughout working day in the office. The availability of ATM to its members. The free storing in godown to the members for their produce. When the same is not Sold. Scholarship to poor and meritorious students. The arecanut grading facility to the members produce. The transfer of funds from branches to Head Office or Head Office to branch at free of cost. Office work fully computerized for speedy service. Bonus is given to members on the basis of value of produces sold. Dividend is given on members share. The availability of conference hall for agriculture related function. The library is opened on 6-6-2006 to enhance the knowledge base of Agriculturists. 12 .Health cards has been given to members to get medical facility from the Hi- tech Hospital opened with financial assistance from TSS 2.2.14.11 Credit Facility to Maintain Loyalty: Each member and member societies can avail the loan from the TSS. Farmers need not borrow from money lenders now because they get the amount required in the form of Assami loan for consumption purpose from the TSS easily at a reasonable rate of interest. TSS acts as a friend in need to these members and members‘ societies by liberally providing credit to them, at a reasonable rate of interest. It is also giving HR Institute of Higher Education, Hassan Page 41
  42. 42. Supply Chain Management advances against the produce which are brought to the TSS but not sold. In this way it has earned goodwill and retained the loyalty of its members. In fact it has helped to have big market share for the TSS. 2.2.14.12 Linking of Credit with Marketing: All members of societies in SIRSI, SIDDAPUR, and YELLAPUR taluk have borrowed from the KDCC Bank for advancing crop and medium term loans their members. There dependence on the KDCC Bank has been increasing year by year. At the direction of the societies the TSS has directly credited the amount of their loan accounts maintained at the KDCC Bank out of sales proceeds of produce marketed by their members at TSS. Necessary adjustments are made by the societies against the individual loan accounts of members on receipt of information. In this way, the TSS has not only helped societies in their loaning operations but also served its members in facilitating prompt payment of loan borrowed from other sources. HR Institute of Higher Education, Hassan Page 42
  43. 43. Supply Chain Management 2.3 ACHIEVEMENTS: Since 1923, when the Totagar‘s Co-operative Society was established, up to 2008, it made various achievements in different fields. These are:- a. In 1923, establishment of T.S.S. for protecting the interest of farmers. b. In 1947, it opens a branch office in Siddapur Taluk. c. In 1955, another branch office opens in Yellapur Taluk. d. In 1962, Medical stores and petrol bunk were also set up in the same year. e. In 1965, Paddy processing unit (Rice Mill) has been opened. f. Uttara Kannada District Printing Association has been started by the request of T.S.S. g. K.S.R.T.C. divisional office started its operation with the co-operation of T.S.S. h. Soil Testing and Research Centre has opened by the K.D.C.C. Bank at premises of T.S.S. i. In 1970, T.S.S. repaid the Government loan and shares. j. In 1973, promoting member of CAMPCO. k. Financial aid to various educational institutions, meritorious students and agriculture research. l. Loans to members and another financial aids from the own funds. m. In 2005, the T.S.S. started A.T.M. facility to the members. n. Computerization of all departments. o. In 2005, Livestock Development Center was started with the Co-operation of BIFE. p. In 2006, T.S.S. started the Public Library. q. In 2007, T.S.S. has been started in High-tech tss hospital. r. In this year T.S.S. has sent to many branded Areca‘s to other states. HR Institute of Higher Education, Hassan Page 43
  44. 44. Supply Chain Management 2.4 SWOT ANALYSIS STRENGTH: 1. Highly influenced by Agriculture as it‘s the back bone of this society. 2. Government funding to the agriculture has improved recently. 3. Low cost of production. 4. Less usage of chemicals. 5. Ever lasting demand. WEAKNESS: 1. Un-recognized sector. 2. Monsoon/Weather Dependent. 3. Less attention given in production of quality goods. 4. Inadequate usage of new technology. 2.4.3 OPPORTUNITY: 1. Government and bank will aid financial help to improve agriculture. 2. Opportunity to adopt modern techniques. 3. Government will provide local market facility to the producer. 4. TSS has got huge untapped markets, where brand areca is in demand. 5. TSS has also got the opportunity to enter the retail areca packs at national level. 2.4.5 THREATS: 1. Commission by other country. 2. Price fluctuation. 3. Natural calamities. 4. New entrants from the foreign markets. HR Institute of Higher Education, Hassan Page 44
  45. 45. Supply Chain Management 3.1 SUPPLY CHAIN – When we speak of a ‗supply chain‘ we are focusing on different actors who are linked from ‗farm to fork‘ to achieve a more effective and consumer-oriented flow of products. This project focuses on agri-supply chains that incorporate actors from developing and developed countries. This supply chains may include growers, pickers, packers, processors, storage and transport facilitators, marketers, exporters, importers, distributors, wholesalers, and retailers. Supply chain development can thus benefit a broad spectrum of society, rural and urban, in developing countries. 3.1.1 Introduction to Supply Chain Management If your company produces a product where the raw materials or inputs are purchased from suppliers, those converted products are sold to end users or customers, the process underwent are called as ―Supply Chain‖. Some supply chains are simple, while others are rather complicated. The complexity of the supply chain will vary with the size of the business and the intricacy and variety of products they manufacture. 3.1.2 Elements of the Supply Chain A simple supply chain is made up of several elements that are linked by the movement of products along it. The supply chain starts and ends with the customer. Customer: The customer starts the chain of events when they decide to purchase a product that has been offered for sale by a company. The customer contacts the sales department of the company, which enters the sales order for a specific quantity to be delivered on a specific date. If the product has to be manufactured, the sales order will include a requirement that needs to be fulfilled by the production facility. HR Institute of Higher Education, Hassan Page 45
  46. 46. Supply Chain Management Planning: The requirement triggered by the customer‘s sales order will be combined with other orders. The planning department will create a production plan to produce the products to fulfill the customer‘s orders. To manufacture the products the company will then have to purchase the raw materials needed. Purchasing: The purchasing department receives a list of raw materials and services required by the production department to complete the customer‘s orders. The purchasing department sends purchase orders to selected suppliers to deliver the necessary raw materials to the manufacturing site on the required date. Inventory: The raw materials are received from the suppliers, checked for quality and accuracy and moved into the warehouse. The supplier will then send an invoice to the company for the items they delivered. The raw materials are stored until they are required by the production department. Production: Based on a production plan, the raw materials are moved inventory to the production area. The finished products ordered by the customer are manufactured using the raw materials purchased from suppliers. After the items have been completed and tested, they are stored back in the warehouse prior to delivery to the customer. Transportation: When the finished product arrives in the warehouse, the shipping department determines the most efficient method to ship the products so that they are delivered on or before the date specified by the customer. When the goods are HR Institute of Higher Education, Hassan Page 46
  47. 47. Supply Chain Management received by the customer, the company will send an invoice for the delivered products. 3.1.3 Supply Chain Management To ensure that the supply chain is operating as efficient as possible and generating the highest level of customer satisfaction at the lowest cost, companies have adopted Supply Chain Management processes and associated technology. Supply Chain Management has three levels of activities that different parts of the company will focus on: strategic; tactical; and operational. Strategic: At this level, company management will be looking to high level strategic decisions concerning the whole organization, such as the size and location of manufacturing sites, partnerships with suppliers, products to be manufactured and sales markets. Tactical: Tactical decisions focus on adopting measures that will produce cost benefits such as using industry best practices, developing a purchasing strategy with favored suppliers, working with logistics companies to develop cost effect transportation and developing warehouse strategies to reduce the cost of storing inventory. Operational: Decisions at this level are made each day in businesses that affect how the products move along the supply chain. Operational decisions involve making schedule changes to production, purchasing agreements with suppliers, taking orders from customers and moving products in the warehouse. 3.1.4 Supply Chain management must address the following problems: Distribution Network Configuration: Number and location of suppliers, production facilities, distribution centers , warehouses and customers. HR Institute of Higher Education, Hassan Page 47
  48. 48. Supply Chain Management Distribution strategy: Centralized Vs decentralized, cross docking, direct shipment, pull or push strategies, third party logistics. Information: Integrate systems and processes through the supply chain to share valuable information, including demand signals, forecasts, inventory and transportation. Unshackling of the Supply Chain Officiating of the supply chain can happen on many fronts Physical Fiscal Process Technology Physical As the length of the chain is reduced, each player has to do more Work. The resultant crashing of the link(s) will enable economies of scale to build up. For this consolidated chain to be competitive, their procurement costs must decrease. Large players are most likely to be able to service this requirement. The big players in the process will bring in systematic ways of working and better practices and improved infrastructure like cold chain. Fiscal Acts of Law that do not offer a level playing field will need to be Re-looked at (e.g. The APMC Act). Introduction of uniform tax rates will encourage the disbanding of ‗Artificial‘ and fragmented links like C&F Agents in each state. Impact of issues relating to subsidies will need to be studied for relevance in current context. HR Institute of Higher Education, Hassan Page 48
  49. 49. Supply Chain Management Process The supply chain business processes will need to be revamped in line with changing or improving practices Adversarial relationships (e.g. with the wholesalers) will need to be converted into one of genuine ‗partnerships‘ Technology Farm production technologies will need to be modernized Usage of IT in agri-business will need to be enhanced. Linkages between farmers and the other players in the chain will need to be strengthened and IT offers this opportunity. HR Institute of Higher Education, Hassan Page 49
  50. 50. Supply Chain Management Supply chain chart HR Institute of Higher Education, Hassan Page 50
  51. 51. Supply Chain Management 3.1.5 Inventory management: Quantity and location of inventory including raw material, work-in-process and finished goods service providers and customers. Thus Supply chain management (SCM) can also be described as the oversight of materials, information, and finances as they move in a process from supplier to manufacturer to wholesaler to retailer to consumer. Supply chain management involves coordinating and integrating these flows both within and among companies. It is said that the ultimate goal of any effective supply chain management system is to reduce inventory (with the assumption that products are available when needed). As a solution for successful supply chain management, sophisticated software systems with Web interfaces are competing with Web-based application service providers (ASP) who promise to provide part or all of the SCM service for companies who rent their service. 3.1.6 Activities/functions Supply chain management is a cross-function approach including managing the movement of raw materials into an organization, certain aspects of the internal processing of materials into finished goods, and the movement of finished goods out of the organization and toward the end-consumer. As organizations strive to focus on core competencies and becoming more flexible, they reduce their ownership of raw materials sources and distribution channels. These functions are increasingly being outsourced to other entities that can perform the activities better or more cost effectively. The effect is to increase the number of organizations involved in satisfying customer demand, while reducing management control of daily logistics operations. Less control and more supply chain partners led to the creation of supply chain management concepts. The purpose of supply chain management is to improve trust and collaboration among supply chain partners, thus improving inventory visibility and the velocity of inventory movement.. Organizations increasingly find that they must rely on effective supply chains, or networks, to successfully compete in the global market and networked economy. In Peter Drucker's (1998) new management paradigms, this concept of business relationships extends beyond traditional enterprise boundaries and seeks to organize entire business processes throughout a value chain of multiple companies. HR Institute of Higher Education, Hassan Page 51
  52. 52. Supply Chain Management 3.1.7 Developments in Supply Chain Management Six major movements can be observed in the evolution of supply chain management studies: Creation, Integration, and Globalization (Lavassani et al., 2008a), Specialization Phases One and Two, and SCM. 1. Creation Era The term supply chain management was first coined by a U.S. industry consultant in the early 1980s. However, the concept of a supply chain in management was of great importance long before, in the early 20th century, especially with the creation of the assembly line. The characteristics of this era of supply chain management include the need for large-scale changes, re-engineering, downsizing driven by cost reduction programs, and widespread attention to the Japanese practice of management. 2. Integration Era This era of supply chain management studies was highlighted with the development of Electronic Data Interchange (EDI) systems in the 1960s and developed through the 1990s by the introduction of Enterprise Resource Planning (ERP) systems. This era has continued to develop into the 21st century with the expansion of internet- based collaborative systems. This era of supply chain evolution is characterized by both increasing value-adding and cost reductions through integration. 3. Globalization Era The third movement of supply chain management development, the globalization era, can be characterized by the attention given to global systems of supplier relationships and the expansion of supply chains over national boundaries and into other continents. Although the use of global sources in the supply chain of organizations can be traced back several decades (e.g., in the oil industry), it was not until the late 1980s that a considerable number of organizations started to integrate global sources into their core business. This era is characterized by the globalization of supply chain management in HR Institute of Higher Education, Hassan Page 52
  53. 53. Supply Chain Management organizations with the goal of increasing their competitive advantage, value-adding, and reducing costs through global sourcing. 4. Specialization Era—Phase One: Outsourced Manufacturing and Distribution In the 1990s industries began to focus on ―core competencies‖ and adopted a specialization model. Companies abandoned vertical integration, sold off non-core operations, and outsourced those functions to other companies. This changed management requirements by extending the supply chain well beyond company walls and distributing management across specialized supply chain partnerships. This transition also re-focused the fundamental perspectives of each respective organization. OEMs became brand owners that needed deep visibility into their supply base. They had to control the entire supply chain from above instead of from within. Contract manufacturers had to manage bills of material with different part numbering schemes from multiple OEMs and support customer requests for work -in-process visibility and vendor-managed inventory (VMI). 5. Specialization Era—Phase Two: Supply Chain Management as a Service Specialization within the supply chain began in the 1980s with the inception of transportation brokerages, warehouse management, and non-asset-based carriers and has matured beyond transportation and logistics into aspects of supply planning, collaboration, execution and performance management. At any given moment, market forces could demand changes from suppliers, logistics providers, locations and customers, and from any number of these specialized participants as components of supply chain networks. This variability has significant effects on the supply chain infrastructure, from the foundation layers of establishing and managing the electronic communication between the trading partners to more complex requirements including the configuration of the processes and work flows that are essential to the management of the network itself. HR Institute of Higher Education, Hassan Page 53
  54. 54. Supply Chain Management Supply chain specialization enables companies to improve their overall competencies in the same way that outsourced manufacturing and distribution has done; it allows them to focus on their core competencies and assemble networks of specific, best-in-class partners to contribute to the overall value chain itself, thereby increasing overall performance and efficiency. The ability to quickly obtain and deploy this domain-specific supply chain expertise without developing and maintaining an entirely unique and complex competency in house is the leading reason why supply chain specialization is gaining popularity. 6. Supply Chain Management (SCM ) Building on globalization and specialization, the term SCM has been coined to describe both the changes within the supply chain itself as well as the evolution of the processes, methods and tools that manage it in this new "era" is defined as a trend in the use of the World Wide Web that is meant to increase creativity, information sharing, and collaboration among users. At its core, the common attribute that brings is to help navigate the vast amount of information available on the Web in order to find what is being sought. It is the notion of a usable pathway. SCM follows this notion into supply chain operations. It is the pathway to SCM results, a combination of the processes, methodologies, tools and delivery options to guide companies to their results quickly as the complexity and speed of the supply chain increase due to the effects of global competition, rapid price fluctuations, surging oil prices, short product life cycles, expanded specialization, near-/far- and off-shoring, and talent scarcity. Supply Chain Planning & Optimization Successful business operation resolve around getting the right amounts of the right products to the right markets at the right time in most economical way.TSS assists clients in doing so by working in the following areas directly related to the efficient functioning of the supply chain. Customer Service Standardization: Determining customer needs and wants related to logistics, recording of the response to the service and finally benchmarking the service levels. HR Institute of Higher Education, Hassan Page 54
  55. 55. Supply Chain Management Transportation: Assistance is provided in selection of mode and transport, service selection, freight consolidation, carrier routing, vehicle scheduling etc. Warehousing Supply chain planning assists in space determination, stock layout, warehousing, material handling, equipment selection etc. 3.1.8 EMERGING TRENDS Likely Transformation of the Supply Chain: To counter the unbeatable advantages of convenience of a hop, skip and a jump access and home delivery, organized retailers seem to have just one option - offer attractive prices to the consumer. A successful retailer's winning edge will therefore come from sourcing - how best it can leverage its scale to drive merchandise costs down, increase stock turns and get better credit terms from its vendors. There are obvious and hidden areas where costs can be pruned and the benefits of this lower cost of retailing can be passed on to customers as lower prices, which in turn should fuel demand. One way of trimming costs is if the pressure points in the long, often unnecessary, supply chain for produce and staples can be identified and suitably dealt with. The supply chain in India is full of inefficiencies - a result of inadequate infrastructure, too many intermediaries, complicated laws and an indifferent attitude. Corporate and NGO interventions at the farm end in the form of Farm Management Services are emerging to ensure quality and timely supply of produce for the operations. HR Institute of Higher Education, Hassan Page 55
  56. 56. Supply Chain Management Innovations in Transportation Logistics The logistics service providers have been innovating several interesting formats and models for the retail sector. As of now, organized retail chains in India do not, by far, outsource logistical requirements, they develop their own network. This was due to the fact that the supply-chain was still in its infancy stage, which has begun to mature and the systems are being well defined. As retail chains begin to focus more and more on the retail end, the logistics support would begin to get outsourced. The logistics service providers have begun to come out with innovative customized solutions for the retail chains. Online Retailing The single most important evolution that took place along with the retailing revolution was the rise and fall of the dotcom companies. A sudden concept of `non-store' shopping emerged, which threatened to take away the potential of the store. More importantly, the very nature of the customer segment being addressed was almost the same. The computer-savvy individual was also a sub segment of the `store' frequenting traffic. Internationally, the concept of Net shopping is yet to be proven. In addition, the poor financial performance of most of the companies offering virtual shopping has resulted in store-based retailing regaining the upper hand. Other forms of nonstore shopping including various formats such as catalogue/mail order shopping, direct selling, and so on are growing rapidly. However, the size of the direct market industry is too limited to deter the retailers. For all the convenience that it offers, electronic retailing does not suit products where `look and see' attributes are of importance, as in apparel, or where the value is very high, such as jewellery, or where the performance has to be tested, as of consumer durables. The most critical issue in electronic retailing, especially in a country such as ours, relates to payments and the various security issues involved. However, using the internet to be able to source products and check for availability of stock among stores of retail chains has been proven effective and cuts down on wastage by a vast amount. It makes logistical support very easy and efficient. HR Institute of Higher Education, Hassan Page 56
  57. 57. Supply Chain Management The trend in India is such that usage of the electronic medium for business purposes and integrating it into the systems is increasing. This would slowly spread into the retailing sector as well. It has already started in the case of some large retail houses where the affects are here to see. This again would result in the supply chain getting leaner and vertically integrated. Though the initial costs to implement these systems are high, in the long run it results in cost reduction where this privilege can be passed on to the final consumer. Impact of Technology The other important aspect of retailing relates to technology. It is widely felt that the key differentiator between the successful and not so successful retailers is primarily in the area of technology. Simultaneously, it will be technology that will help the organized retailer score over the unorganized players, giving both cost and service advantages. Retailing is a `technology-intensive' industry. It is quoted that everyday at least 500 gigabytes of data are transmitted via satellite from the 1,200 point-of-sales counters of JC Penney to its corporate headquarters. Successful retailers today work closely with their vendors to predict consumer demand, shorten lead times, reduce inventory holding and thereby, save cost. Wal-Mart pioneered the concept of building a competitive advantage through distribution and information systems in the retailing industry. They introduced two innovative logistics techniques - cross-docking and electronic data interchange. Today, online systems link point-of-sales terminals to the main office where detailed analyses on sales by item, classification, stores or vendor are carried out online. Besides vendors, the focus of the retailing sector is to develop the link with the consumer. `Data Warehousing' is an established concept in the advanced nations. With the help of `database retailing', information on existing and potential customers is tracked. HR Institute of Higher Education, Hassan Page 57
  58. 58. Supply Chain Management Besides knowing what was purchased and by whom, information on softer issues such as demographics and psychographics is captured. Retailing, as discussed before, is at a nascent stage in India. Most organized players have managed to put the front ends in place, but these are relatively easy to copy. The relatively complicated information systems and underlying technologies are in the process of being established. HR Institute of Higher Education, Hassan Page 58
  59. 59. Supply Chain Management 4.1 TYPE OF RESEARCH: Descriptive method has been used in this research for the collection of data .As the research is related to the study of supply chain management, which can more effectively be studied through direct question, experimental research will not be much effective. Also, considering the constraint, descriptive research is the most suitable design for this research. 4.1.1 Qualitative research Qualitative research allows you to explore perceptions, attitudes and motivations and to understand how they are formed. It provides depth of information which can be used in its own right or to determine what attributes will subsequently be measured in quantitative studies. However, it relies heavily on the skills of the moderator, is inevitably subjective and samples are small. Techniques include group discussions/workshop sessions, paired interviews, individual in-depth interviews and mystery shopping (where the researcher plays the role of a potential student, etc in order to replicate the overall experience). 4.1.2 Quantitative research Quantitative research is descriptive and provides hard data on the numbers of people exhibiting certain behaviors‘, attitudes, etc. It provides information in breadth and allows you to sample large numbers of the population. 4.1.3 Descriptive research: Descriptive research is used to obtain information concerning the current status of the phenomena to describe "what exists" with respect to variables or conditions in a situation. The methods involved range from the survey which describes the status quo, the correlation study which investigates the relationship between variables, to developmental studies which seek to determine changes over time. HR Institute of Higher Education, Hassan Page 59
  60. 60. Supply Chain Management  Statement of the problem.  Identification of information needed to solve the problem.  Selection or development of instruments for gathering the information.  Identification of target population and determination of sampling procedure.  Design of procedure for information collection.  Collection of information.  Analysis of information.  Generalizations and/or predictions. 4.1.4 Source of Data: Data which is collected for the first time is called primary data. In the study primary data includes the data which is collected from the customer directly with interaction. The study includes data got with personal interaction. 4.1.4.1 Primary and secondary data: The market analyst must know what they are and what affects them. All data used in market studies should be current, relevant, reliable, accurate, and conceptually correct. This article presents a discussion of each of these terms and their significance in the context of the data and in the analysis. The article then discusses the nature of potential errors that can affect primary and secondary data. Several categories of errors can exist. The analyst needs to be able to recognize the error, understand its significance and evaluate the applicability of that data in the analysis. Secondary data--Information from secondary sources, i.e., not directly compiled by the analyst; may include published or unpublished work based on research that relies on primary sources of any material other than primary sources used to prepare a written work. Secondary data has been gathered by others for their own purposes, but the data could be useful in the analysis of a wide range of real property. In general, secondary data exists in published sources. HR Institute of Higher Education, Hassan Page 60
  61. 61. Supply Chain Management 4.1.5 Sampling: Sampling is a process of learning about the population on the basis of which sample is drawn. A sample is a subset of a population unit. Sample Design: Sampling is a practice a researcher uses to draw data on people, places, or things to study. Sampling allows statisticians to draw conclusions about a whole by examining a part. It enables us to estimates characteristics of a population by openly observing a portion of the entire population. The whole that the researcher wants to know something about is the population is called a sample. Sampling Technique: The sampling technique used in the study includes both simple random sampling as well as judgment sampling. Respondent Size: 50 Tool for data collection: Structured questionnaire Geographical area: Sirsi. Data collection instrument The primary data collection instrument for the survey is self administrated and structured questionnaire which consists of preference and scaling questions. This method of data collection is quite popular, particularly in case of big enquires. The questionnaire consists of close-ended and open ended questionnaire. The study includes questionnaire of 15 questions to determine the supply chain management of TSS. HR Institute of Higher Education, Hassan Page 61
  62. 62. Supply Chain Management The modes of data collection: Interviewing face-to-face Interviewing by telephone Remote self-completion e.g. postal, internet. The amount The complexity The quality of the data they can collect Interviewing is the most powerful mode in all these respects. But interviewing, particularly in the field, is also by far the most expensive. Choosing modes of data collection is a fundamental survey design decision. When survey aims are being defined in detail, strengths and limitations of modes must be kept in mind. HR Institute of Higher Education, Hassan Page 62
  63. 63. Supply Chain Management Profile of the respondent 1. Are you a? a. Sole trader b. General Merchant b. Agent d. Processor Table No 5.1 Profile of the Respondent Frequency Percent Sole trader of Areca 30 60% General merchant 02 4% Agent 16 32% Processor 02 4% Total 50 100 Graph No5.1 Profile of the respondent processor 4% Agent 32% Sole trader of Areca 60% General merchant 4% Interpretation: Of the 50 respondents surveyed 60% are sole trader, 4% are general merchants, 4% processors and 32% agents of Arecanut. HR Institute of Higher Education, Hassan Page 63
  64. 64. Supply Chain Management Customer of TSS brand Arecanut 2. Are you a customer of TSS brand Arecanut? a. Yes ( ) b. No ( ) Table No 5.2 indicates the percentage of actual and potential customers of TSS brand arecanut. Frequency Percent Yes 34 68% No 16 32% Total 50 100 Graph No 5.2 Customer of TSS brand Arecanut Interpretation: 68% of the surveyed are customers of TSS brand arecanut and remaining 32% are potential customers who show their interest to buy TSS brand. HR Institute of Higher Education, Hassan Page 64
  65. 65. Supply Chain Management Willingness to buy TSS brand Arecanut 3. If no, are you ready to buy TSS brand Arecanut? a. Yes ( ) b. No ( ) Table No 5.3 depicts the customers interested in buying TSS brand. Frequency Percent Yes 06 38% No 10 62% Total 16 100 Graph No 5.3 Willingness to buy TSS brand Arecanut Yes 38% No 62% Interpretation: Among the 16 customers 06 show willingness to buy the TSS brand and others have their own firm working in areca growing area participating in direct auction. So they feel this to be costly and others mainly try to avoid taxes by purchasing the areca without bill so they can‘t opt for the TSS brand which supply only with bill. (Note: Total of 16 Respondents was considered from the Question 2 where the selected respondents were not the customers of TSS.) HR Institute of Higher Education, Hassan Page 65
  66. 66. Supply Chain Management Usage of TSS brand 4. Have you used TSS brand before? a. Yes ( ) b. No ( ) The table indicates the respondents who have used the TSS brand Areca nut. Table No 5.4 Usage of TSS brand Total Percent Yes 32 64% No 18 36% Total 50 100 Graph No 5.4 Usage of TSS brand No 36% Yes 64% Interpretation: 64% of the surveyed customers have used TSS brand and 36% have not used but are potential customers where TSS can concentrate. HR Institute of Higher Education, Hassan Page 66
  67. 67. Supply Chain Management Reason for not using TSS brand 5. Why you are not dealing with TSS currently? a. Quality ( ) b. Price ( ) c. Delivery time ( ) d. Other ( ) Table No 6.5 shows the Reason for not using TSS brand Arecanut Frequency Percent Quality 2 04% Price 15 30% Delivery time 3 06% Other 30 60% Total 50 100 Graph No 6.5 Reason for not using TSS brand Arecanut Quality 4% Price 30% other 60% Delivery time 6% Interpretation: Among 50 respondents 4% are not using TSS brand for quality and 30% are not using TSS brand for high price. 6% are not using because of delivery time and 60% are not using TSS brand because of other reasons like to avoid taxes by purchasing the areca without bill so they can‘t opt for the TSS brand which supply only with bill. HR Institute of Higher Education, Hassan Page 67
  68. 68. Supply Chain Management Variety preferred 6. Which variety of Areca do you prefer most? a. Red ( ) b. White ( ) Table No 5.6 shows the Variety preferred Frequency Percent Red 22 44% White 28 56% Total 50 100 Graph No 5.6 Variety preferred Interpretation: 56% of the customers preferred white variety and 44% of the customers preferred red variety. HR Institute of Higher Education, Hassan Page 68

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