Rahul
Agenda
1
ITC e-Choupal : An Introduction, Stake holder Analysis
Comparison of status of Supply Chain before and after ITC e-Choupal Critical Analysis, and Comparison with HKB Future Scope
2
3
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 Indias Most Respected Companies (IMRB-Businessworld Survey 2006) Diversified conglomerate with interests ranging from Tobacco to Hospitality
Rural Indias largest Internet-based intervention Over 40,000 villages linked through 6500 e-Choupals servicing over 4 million farmers
Low Margins
Low Investment
Low Productivity
ITC e-Choupal
Started in the year 2000 Target Area so far 38,000 villages, 6500 kiosks, 9 states Wholly owned by ITC
Why it become a success ? Only initiative to attempt to combine Services and an Effective Business Model successfully
Trader
Broker
ITC-IBD
Agril University, Met Dept, Insurance Co.
VLW (of Dept of Agriculture)
Processor
Money Lender
Farmer
Pricing Previous days 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
Pricing
Inbound Logistics
Inspection Grading
Hub Logistics
Inbound Logistics Farmer proceeds to the nearest ITC procurement hub with the note Some procurement hubs are ITC factories, others are purely warehouse operations ITCs aim is to have a processing centre within 30-40 km radius of its farmers
Pricing
Inbound Logistics
Inspectio n Grading
Hub Logistics
Inspection and Grading At the ITC procurement hub, laboratory tests are conducted on a sample of farmers produce To change farmers attitude and appreciating produce quality, ITC is developing lab tests to reward farmers with reward points for better quality supply
Pricing
Inbound Logistics
Inspectio n Grading
Hub Logistics
Inspection and Grading At the ITC procurement hub, laboratory tests are conducted on a sample of farmers produce To change farmers attitude and appreciating produce quality, ITC is developing lab tests to reward farmers with reward points for better quality supply
Pricing
Inbound Logistics
Inspectio n Grading
Hub Logistics
Weighing and Payment Farmers 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
Pricing
Inbound Logistics
Inspectio n Grading
Hub Logistics
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
Pricing
Inbound Logistics
Inspectio n Grading
Hub Logistics
Technological
support
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
A win-win Deal
Farmers gain Better information Content Better info timing Less transportation Cost Transaction duration Weighing accuracy Professionalism ITC gains Disintermediation savings Freight costs Quality control Risk management
F A R M E R S
M A R K E T S
Branded Foods
Lifestyle retailing
Education Stationery
Farmer Community
ITC
Market near Mandi Small processors Problem of Power and internet connectivity
Other companies
Extension service
ICICI Bank
Farmers
Produce procurement
DSCL
E-chaupal
Main Procurement
objective
Benefit to the computer application to provide farmers Synergies market information Synergies with products which ITC is manufacturing provide better method of cultivation by trained agronomist Synergies with what DSCL is selling(inputs to agriculture plus other
services
Economies of 25-30 km area coverage scale Procurement centre near small town Strategically placed near petrol pump mainly 20-25 km area coverage
Future of e-Choupal
e-Choupal 2.0