23421898 itc e choupal ppt final[1]

8/8/2019 23421898 ITC E Choupal PPT Final[1]

1/39

upply Chain Analysisupply Chain Analysis-f ITC e Choupal-f ITC e ChoupalBy

Shitansu

XIMB


2/39

Company Logo

AgendaITC e-Choupal : An Introduction,

Stake holder Analysis1

Comparison of status of Supply Chainbefore and after ITC e-Choupal2

Critical Analysis, and Comparisonwith HKB3

Future Scope4


3/39

Company Logo

- :ITC e Choupal An Introduction


4/39

Company Logo

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)l 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
http://www.itcportal.com/the_itc_profile/ads/ad.htmhttp://www.itcportal.com/the_itc_profile/ads/ad.htmhttp://www.itcportal.com/the_itc_profile/ads/ad.htm


5/39

Divison

Farm linkages in 14 states covering Soya, Wheat, Marineproducts, Coffee etc. Focus on value added agri

commodities

Unique CRM programme in commodity exports

Leveraging IT for the transformational e-Choupal

initiative

Rural Indias largest Internet-based intervention

Over 40,000 villages linked through 6500 e-Choupals

servicing over 4 million farmers

Distinctive sourcing capability for ITCs Foods business


6/39

Low Risk

Appetite

Weak MarketOrientation

Low InvestmentLow Margins

Low ProductivityLow ValueAddition

Caught in a vicious

cycle ofunderdevelopment

The predicament of Indian Farmers


7/39

ITC e-ChoupalStarted in the year 2000Target 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 successfully

Designed to address the issues suchas:

1.Fragmented farms2.Weak institutions3.Involvement of intermediaries

4.Information Asymmetry


8/39Company Logo

-ITC s Supply chain of Soya bean before e Choupal

Initiative


9/39Company Logo


10/39Company Logo


11/39

-ITC s Supply chain of Soya bean after e Choupal

Initiative


12/39

Company Logo

Pricing

Previous days closing price used as benchmarkprice for next day

Mandi prices communicated to sanchalak throughe-Choupal portal

Sanchalak inspects the sample, assesses qualityand gives farmer a conditional quote and a note(name/village/quality tests/approx.quantity/conditional price), if farmer decides to

sell to ITC


13/39

Company Logo

Inbound LogisticsFarmer proceeds to the nearest ITC procurement

hub with the note

Some procurement hubs are ITC factories, others

are purely warehouse operationsITCs aim is to have a processing centre within 30-

40 km radius of its farmers


14/39

Company Logo

Inspection and GradingAt the ITC procurement hub, laboratory tests are

conducted on a sample of farmers produce

To change farmers attitude and appreciatingproduce quality, ITC is developing lab tests toreward farmers with reward points for betterquality supply


15/39

Company Logo

Inspection and GradingAt the ITC procurement hub, laboratory tests are

conducted on a sample of farmers produce

To change farmers attitude and appreciatingproduce quality, ITC is developing lab tests toreward farmers with reward points for betterquality supply


16/39

Company Logo

Weighing and PaymentFarmers produce is weighed on electronic

weighbridge

He is then given full cash payment

Freight expenses are reimbursedAppropriate documentation at each stage and

farmer is given a copy of that

Samyojaks handle cash operations


17/39

Company Logo

Hub LogisticsFarmer transports his produce to the nearest

processing centre or storage hub

ITC incurs the transportation cost

The farmer bears the risk of transportation untilproduce is delivered and the sale is completed


18/39

Company Logo

Technological support

Nodal platform catering to commodity blending,agricultural trading, e-choupal &rural distribution24,000 personalized business function points110,000+ pre-built business function pointsIntegrated Business Systems for Direct Agriculture

Procurement, Rural Distribution, e-ChoupalManagement, Exports, Insurance, AquaProcessing & Commodity blending

Support for 8 local languages


19/39

Company Logo

A win-win Deal

Transact on cost n Man C a n e ore e


20/39

Source: Seminar on Bottom of the Pyramid and CSR, IIM-K, Sept. 24, 2008

Transact on cost n Man C a n e ore e-Choupal)

Transact on cost n Man C a n a ter e


21/39


Transact on cost n Man C a n a ter e-Choupal)


22/39

Company Logo

Synergies for ITC


23/39

Company Logo

qGeneration of Goodwill & positive publicopinion

qBetter supply chain for ITCs Food & AgriBusinesses

Costs, Quality, TraceabilityqAccess to the Underserved Rural Markets

Through a Virtuous Cycle created by LargerIncomes, and founded on Trust that isbuilt

qNew ITES Business Opportunities

Health, Education, Entertainment,eGovernance


24/39


25/39

Company Logo

Other e-Choupal Initiative


26/39


Companies using e-Choupal

network


27/39

Company Logo

Critical Analysis of ITC s SupplyChain

S k h ld A l i


28/39

Stake holder AnalysisPrimary Stakeholders Interest

Farmer Community Access to information Empowered decisions Improved agriculture

Economic benefits through lower transaction costs and processefficienciesServed with dignityKnowledge bundled sale of goods and servicesCo-opted in product designHope for a brighter future

ITC Lower procurement costsDirect interaction with farmers - Control on quality & supplysecurityLow cost distribution channelAccess to market intelligence

Commission Agents(Kachha & PakkaAdatiyas)

Gain access to global markets through ITC and commission tocompensate some of the loss revenue


29/39

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


30/39

Company Logo


31/39

Company Logo

Comparison with Haryali Kisan Bazar


32/39

Hariyali Kisaan Bazaar ther companies

oan for passhrough tofarmers

epayment ofoan withinterest roduceprocurement

xtensionservice


33/39

E-chaupal Haryali Kisaan Bazaar

Main objective Procurement Rural Retail

Benefit to thefarmers

computer application to providemarket information

provide better method of cultivation bytrained agronomist

Synergies Synergies with products whichITC is manufacturing

Synergies with what DSCL is selling(inputsto agriculture plus other services

Economies ofscale

25-30 km area coverage 20-25 km area coverage

Procurementcentre

near small town Strategically placed near petrol pumpmainly


34/39

Company Logo

-Future of e Choupal


35/39

Cmpany Logo

- .e Choupal 2 0


36/39

.2.0Parameters . ( )ersion 1 0 the start . ( - )ersion 2 0 the scale up

Idea The concept gave a power of scale tothe small farmers by aggregating them assellers ( of produce) and as buyers(of farm inputs)

By 2006, 40,000 villages covering 4 millionpeople.

armer s gain The farmers get bargaining power and aopportunity of have choice

Information on weather, price etcKnowledge on farming methods,soil testing etcPurchase of seed, fertiliser to insuranceFarmers sell crops to the ITC centrescattle care, water harvesting

TC s gain Access to inputs for its agri business;offer the use of network toother companies

ITC was able to procurefresh commodities withreasonable prices from the farmers


37/39

www.themegallery.com Company Logo

e-Choupal 3.0.The Deepening

qNEW BUSINESSES:1) Rural jobs and employability2) Personalised agri services.

qMORE INTERACTION: Through Choupal Saagars

and Haats and via mobile phones

qNEW TECHNOLOGY: Use of especially enabledmobile phones, analytics, new partner


38/39

Company Logo

-ITC e C h o u p a l Fo o tp rin t


39/39

!Thank You !Thank You

23421898 itc e choupal ppt final[1]

Documents