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Itc e - choupal-ppt-final

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Rated as one of India’s Most Respected Companies worked for Indian farmers.

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Itc e - choupal-ppt-final

  1. 1. ByPriyankka Chaurasia IT, UIT-RGPV
  2. 2. Agenda ITC e-Choupal : An Introduction, 1 Stake holder Analysis Comparison of status of Supply Chain 2 before and after ITC e-Choupal Critical Analysis, and Comparison 3 with HKB 4 Future Scope Company Logo
  3. 3. ITC e-Choupal : An Introduction Company Logo
  4. 4. ITC :An Overview Incorporated on August 24, 1910 under the name of Imperial Tobacco Company Company rechristened ITC Limited‘ in 1974 One of the 8 Indian Companies to feature in ‘Forbes A-list’ for 2004 Only Indian FMCG Company to feature in Forbes 2000 List Among top in :  Sustained value creation (BT-Stern Stewart survey)  Operating profits  Cash Profits Ranks No. 4 among Indian listed Private Sector Companies by market cap. (@ April 09)  No. 1 in FMCG Sector Rated as one of India’s Most Respected Companies (IMRB-Businessworld Survey 2006) Diversified conglomerate with interests ranging from Tobacco to Hospitality Company Logo
  5. 5. ITC’s Agri Commodity Divison  Farm linkages in 14 states covering Soya, Wheat, Marine products, Coffee etc. Focus on value added agri commodities  Unique CRM programme in commodity exports  Leveraging IT for the transformational ‘e-Choupal’ initiative Rural India’s largest Internet-based intervention Over 40,000 villages linked through 6500 e-Choupals servicing over 4 million farmers  Distinctive sourcing capability for ITC’s Foods business
  6. 6. The predicament of Indian Farmers Low Risk Appetite Low Margins Low Investment Caught in a vicious cycle of underdevelopment Low Value Addition Low Productivity Weak Market Orientation
  7. 7. ITC e-Choupal Started in the year 2000 Target Area so far 38,000 villages, 6500 kiosks, 9 states Wholly owned by ITCWhy it become a success ? Only initiative to attempt to combine Services and an Effective Business Model successfullyDesigned to address the issues such as:1. Fragmented farms2. Weak institutions3. Involvement of intermediaries4. Information Asymmetry
  8. 8. ITC’s Supply chain of Soya bean before e-Choupal Initiative Company Logo
  9. 9. Pakka Adtiya (Registered Dealer)Agri-Input Dealer/ RetailerCompanies Stockiest Trader Money Farmer Processor Lender Broker ITC-IBD Agril University, VLW (of Dept of Met Dept, Agriculture) Insurance Co. Kaccha Adtiya (Un-Registered Dealer) Company Logo
  10. 10. Why ITC thought of e-Choupal The Tactical The Strategic The Social Imperative Imperative Imperative ITC’s distance Horizontal from Farmer spread Daily price inflation Vertical presence Capture of Intra- day Price shifts Risk Seasonal price management Inflation Company Logo
  11. 11. ITC’s Supply chain of Soya bean after e-Choupal Initiative
  12. 12. Supply chain post re-engineering Weighing Technolog Inbound Inspection Hub Pricing and ical Logistics Grading Logistics Payment support Pricing  Previous day’s closing price used as benchmark price for next day  Mandi prices communicated to sanchalak through e-Choupal portal  Sanchalak inspects the sample, assesses quality and gives farmer a conditional quote and a note (name/village/quality tests/approx. quantity/conditional price), if farmer decides to sell to ITC Company Logo
  13. 13. Weighing Technolog Inbound Inspection Hub Pricing and ical Logistics Grading Logistics Payment support Inbound Logistics  Farmer proceeds to the nearest ITC procurement hub with the note  Some procurement hubs are ITC factories, others are purely warehouse operations  ITC’s aim is to have a processing centre within 30-40 km radius of its farmers Company Logo
  14. 14. Weighing Technolo Inbound Inspectio Hub Pricing and gical Logistics n Grading Logistics Payment support Inspection and Grading  At the ITC procurement hub, laboratory tests are conducted on a sample of farmer’s produce  To change farmer’s attitude and appreciating produce quality, ITC is developing lab tests to reward farmers with reward points for better quality supply Company Logo
  15. 15. Weighing Technolo Inbound Inspectio Hub Pricing and gical Logistics n Grading Logistics Payment support Inspection and Grading  At the ITC procurement hub, laboratory tests are conducted on a sample of farmer’s produce  To change farmer’s attitude and appreciating produce quality, ITC is developing lab tests to reward farmers with reward points for better quality supply Company Logo
  16. 16. Weighing Technolo Inbound Inspectio Hub Pricing and gical Logistics n Grading Logistics Payment support Weighing and Payment  Farmer’s produce is weighed on electronic weighbridge  He is then given full cash payment  Freight expenses are reimbursed  Appropriate documentation at each stage and farmer is given a copy of that  Samyojaks handle cash operations Company Logo
  17. 17. Weighing Technolo Inbound Inspectio Hub Pricing and gical Logistics n Grading Logistics Payment support Hub Logistics  Farmer transports his produce to the nearest processing centre or storage hub  ITC incurs the transportation cost  The farmer bears the risk of transportation until produce is delivered and the sale is completed Company Logo
  18. 18. Inspectio Weighing Technological Inbound Hub Pricing n and Logistics Logistics support Grading Payment Technological support  Nodal platform catering to commodity blending, agricultural trading, e-choupal &rural distribution  24,000 personalized business function points  110,000+ pre-built business function points  Integrated Business Systems for Direct Agriculture Procurement, Rural Distribution, e-Choupal Management, Exports, Insurance, Aqua Processing & Commodity blending  Support for 8 local languages Company Logo
  19. 19. A win-win Deal Farmers gain ITC gains • Better information • Disintermediation Content savings • Better info timing • Freight costs • Less transportation • Quality control Cost • Risk management • Transaction duration • Weighing accuracy • Professionalism Company Logo
  20. 20. Transaction cost in Mandi Chain (before e-Choupal)Source: Seminar on Bottom of the Pyramid and CSR, IIM-K, Sept. 24, 2008
  21. 21. Transaction cost in Mandi Chain (after e-Choupal) Source: Seminar on Bottom of the Pyramid and CSR, IIM-K, Sept. 24, 2008
  22. 22. Synergies for ITC Company Logo
  23. 23. Generation of Goodwill & positive public opinionBetter supply chain for ITC’s Food & Agri Businesses  Costs, Quality, TraceabilityAccess to the Underserved Rural Markets  Through a Virtuous Cycle created by “Larger Incomes”, and founded on “Trust” that is builtNew ITES Business Opportunities  Health, Education, Entertainment, eGovernance Company Logo
  24. 24. Synergy Redefined :The Future VPN providing SCM, ERP & CRM capability F M A e-choupal rural two-way fulfillment A R capability R M Cigarette Trade Marketing capability K E E R Expanded FMCG distribution capability T S S Branded Lifestyle Education Matches & Foods retailing Stationery AgarbattisA basis for strategic partnerships with other FMCG brand owners Company Logo
  25. 25. Other e-Choupal Initiative Company Logo
  26. 26. Companies using e-ChoupalnetworkSource: Seminar on Bottom of the Pyramid and CSR, IIM-K, Sept. 24, 2008
  27. 27. Critical Analysis of ITC’s Supply Chain Company Logo
  28. 28. Stake holder Analysis Primary Interest Stakeholders Access to information – Empowered decisions – Improved agriculture Economic benefits through lower transaction costs andFarmer Community process efficiencies Served with dignity Knowledge bundled sale of goods and services Co-opted in product design Hope for a brighter future Lower procurement costs Direct interaction with farmers - Control on quality &ITC supply security Low cost distribution channel Access to market intelligenceCommission Agents Gain access to global markets through ITC and commission to compensate some of the loss revenue(Kachha & PakkaAdatiyas)
  29. 29. Efficiencies in e-Choupal network Last mile low cost solution Full Service approach Demand aggregation Third party seller Extensive use of technology Access to information about customers Pull based strategy
  30. 30. Drivers of Who are in Risk associatedSupply Chain problems with e-Choupal Information Local Mandi Eroded dominance of Commission agent Logistics at hub Mandi laborers Authenticity of information Transportation Market near Mandi Problem of Power Storage facilities at and internet Small processors hub connectivity Company Logo
  31. 31. Comparison with Haryali Kisan Bazar Company Logo
  32. 32. Hariyali Kisaan Bazaar Hariyali Other companies kisaan Loan for pass bazaar through to farmers Extension service ICICI Bank Farmers Repayment of loan with interest Produce procurement DSCL
  33. 33. E-chaupal Haryali Kisaan BazaarMain Procurement Rural RetailobjectiveBenefit to the computer application to provide provide better method of cultivation byfarmers market information trained agronomistSynergies Synergies with products which Synergies with what DSCL is ITC is manufacturing selling(inputs to agriculture plus other servicesEconomies of 25-30 km area coverage 20-25 km area coveragescaleProcurement near small town Strategically placed near petrol pumpcentre mainly
  34. 34. Future of e-Choupal Company Logo
  35. 35. e-Choupal 2.0 Cmpany Logo
  36. 36. Version 1.0 v/s Version 2.0Parameters Version 1.0( the start) Version 2.0( the scale-up)Idea The concept gave a power of scale to By 2006, 40,000 villages covering 4 million the small farmers by aggregating them as people. sellers ( of produce) and as buyers (of farm inputs)Farmer’s gain The farmers get bargaining power and a Information on weather, price etc opportunity of have choice Knowledge on farming methods, soil testing etc Purchase of seed, fertiliser to insurance Farmers sell crops to the ITC centres cattle care, water harvestingITC’s gain Access to inputs for its agri business; ITC was able to procure offer the use of network to fresh commodities with other companies reasonable prices from the farmers
  37. 37. e-Choupal 3.0. The Deepening NEW BUSINESSES: 1) Rural jobs and employability 2) Personalised agri services. MORE INTERACTION: Through Choupal Saagars and Haats and via mobile phones NEW TECHNOLOGY: Use of especially enabled mobile phones, analytics, new partnerwww.themegallery.com Company Logo
  38. 38. ITC e-Choupal Footprint Company Logo

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