business plan for fertilizers distributors

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M/s. BioFields Impex Pvt Ltd.,

A detailed end term project report of the role of a Stockiest and use of IT for Fertilizer,

Pesticide, and Seeds Industry.

PGDM – IB,09-11 Term - II

Submitted by: Group no 5

Ankita (05), Deepak (17), Manas (29), Ranjan (41), Sourav (53)



Acknowledgement

First we would extend our honest thank to our faculty Prof. Rupesh

Kumar Sinha for giving us the opportunity to conduct this project.

We also thank one and all who have helped in making key decisions and

discussion which allowed us to complete this project in time successfully.

Last but not least our families for extending their support.

We also thanks for the help from Two another Groups, Mr. Vijay (Group no

-1) & Mr. Anoop (Group no- 9).

: Members of Group 5

Ankita Deepak Manas Ranjan Sourav



Table of Contents

Executive Summary ....................................................................................................................................... 4

Concept ..................................................................................................................................................... 4

Drivers ....................................................................................................................................................... 4

Business Proposition ..................................................................................................................................... 5

Business Structure ......................................................................................................................................... 6

Customer Profile ............................................................................................................................................ 7

Organizational Structure ............................................................................................................................... 8

Infrastructure requirements for Execution .................................................................................................. 12

Business Process Modeling & Execution ..................................................................................................... 12

Object Modeling ...................................................................................................................................... 13

IT Infrastructure Model ........................................................................................................................... 14

Financials .................................................................................................................................................... 17

Investment .............................................................................................................................................. 17

Assumptions ............................................................................................................................................ 18

Profit Margin ........................................................................................................................................... 18

Conclusion ................................................................................................................................................... 19

Bibliography ................................................................................................................................................ 20



Executive Summary

Concept

In the current climate, controlling IT costs is more important than ever - and yet, at the

same time, businesses need a rich, reliable, secure IT infrastructure to stay competitive, this has

inspired us to come up with an efficient business plan for stockiest, that would make them self-

sufficient and keep them engaged in success story of any manufacturing and selling company by

switching over to Intelligent-Business (IB) a new way of doing Business.

“The first thing to be recognized with respect to Intelligent-Business is that it is not

necessary only for generating more sales but it can be adopted to improve the efficiency and

effectiveness of an organization unlike the previous versions of doing Business.”

Right from the Start of Manufacturing to inventory, distribution and transportation to

the consumption at end users the requirement of Information technology plays a pivotal role so

the concept of this business plan as stated explains how to implement a new concept called

Intelligent-Business in managing business with the co-contracting type of relationship in supply

chain which would be an essential setup for starting the business.

Drivers

In our country over 70% of the total population live in villages. There are states like U.P,

M.P, Bihar, Rajasthan and Orissa where rural population varies from 80 to 90 per cent.

Agriculture and agriculture related activities contribute to about 75% of the income in rural

areas.

The general impression is that the rural markets have potential only for agricultural

inputs like seeds, fertilizers and pesticides, cattle feed and agricultural machinery. More than

50% of the national income is generated in rural India and there are opportunities to market

modern goods and services in rural areas and also market agricultural products in urban areas.

Infact it has been estimated that the rural markets are growing at five times the rate of urban

markets. About 70% of bicycles, mechanical watches and radios and about 60% of batteries,

sewing machine and table fans are sold in rural India. At the same time the sales of color

television, washing machines, refrigerators, shampoos, face cream, mosquito repellent and

tooth paste are very low and there is tremendous potential for such products in rural markets.

While rural markets offer big attractions to the marketers, it is not easy to enter the

market and take a sizeable share of the market within a short period. This is due to low literacy,

low income, seasonal demand and problems with regards to transportation, communication



and distribution channel. Further there are different groups based on religion, caste, education,

income and age. There is a need to understand the rural markets in terms of buyer behavior,

attitudes, beliefs and aspirations of people.

Business Proposition

In order to find the effective solutions from Information technology for stockiest in

fertilizer, seed and pesticide industry, The Basic expectations from IT would be with respect to

the following issues, based on the co-contracting type of relationship in supply chain.

Effective Executive Information Systems: A well designed executive information systems

that will ensure that the activities at all the levels of marketing function are directed at

achieving the goals of the organization. Necessary monitoring and decision making tools

are required to be provided.

Breaking Distance Barriers: The operations related to fertilizer marketing involve large

territories. I.T. should provide means of acquiring latest information from all parts so

that the managers have access to latest information.

Meaningful Information: The problem of too much data or too little data needs to be

addressed. Mere provision of access to a large volume of data can lead to confusion.

The decision makers should not be inundated with too much of raw data. The data

should be provided as meaningful information which contributes to proper judgment in

decision-making.

Raising Alerts: The systems should provide alerts to exceptions and achievements.

Projection and speculation reporting may also be provided.

Interactivity: Interactive communication with facts and figures between various layers of

management needs to be provided.

Online Support: Online support to sort out any problems along with dynamic

identification of an expert to assist in solving the problem, online access to policy guide

lines, etc. may be provided.

Transforming the present marketing activity to a new paradigm of conducting business

electronically by switching over to Intelligent-Business.



Business Structure

The business structure is based on the idea of Intelligent-Business - IB and a new way to

find each other’s areas of expertise, projects, and relationships when we are a stockiest, before

we can describe and find the exact way of managing a business for stockiest first we need to

understand the role and stockiest So we have classified the role of stockiest, in two

classifications i.e., Efficiency and Functions.

The Purpose of Stockiest is to obtain Efficiency of operations through integration of

1. Material Acquisition,

2. Material Movement, and

3. Material Storage.

Some Basic Functions of a stockiest are:

1. Shipping

2. Purchasing

3. Warehousing

4. Order Processing

5. Inventory Control

After knowing the proportion and basic role of a stockiest now we discuss the structure

which would be based on Co-contracting. Co-contracting is a term used to describe alliances

between organizations that have - Long term relationships but do not merge together, they

rather transfer some Equity (ownership), technology, Information, and People for maximizing

profit with service of efficiency. First we describe the Structure based on the relationship with

the manufacturing unit, Marketing Department, Stockiest, retailer, sales department and the

End users. So here is a brief diagram of a hierarchical structure.

Once the business structure is done and having the responsibilities describe in separate

departments and the above roles give a detailed description about the role of the stockiest,

now we focus on Customer profile and Organizational Structure for smooth flow of information

to have a clear and efficient operation within the organization so which proportionately have

an effect on other organization in supply chain. A Group of Companies right from Production

house (Bio-Utilitario Private Limited.,) and have a marketing Company, Later the owner ship is

transferred to Stockiest (BioFields Impex Private Limited., and the retails from different villages.



Customer Profile

The target customer would be based on the assumption that the

marketing team of the company has one stockiest for each district in a

state and as a Stockiest we focus on further sub divisional level with are

classified on the basis on taluk, to have a better information

management system.

The role of the stockiest is to allocate a retailer as per the

demographic availability and feasibility of a retailer. The retailer’s are

selected based on the following requirements when there is a

franchisee allocated, and the reason for allocating the franchise/retail

through distribution channel would be due to the better knowledge of

the market, improve the efficiency and maximize profit through operations.

What are the requirements to open a franchise/retail outlet?

Financial requirements

Business Experience

Good Management

skills

Good Credit history

Exceptional customer

experience



The selection of the retailer is at the sole discretion of the stockiest, as per the

fulfillment of the requirements by the applicant.

Financial requirements - An initial down payment is required when allotted a franchise;

since the total cost varies from place to place the minimum down payment will vary, the down

payment should come from non-borrowed personal sources. Individual with additional funds

may be better prepared for additional or multi-retail opportunity which we encourage.

Business Experience - Individuals who have demonstrated successful ownership or

management of multiple business units or have managed multiple departments.

Good management skills - Commitment to personally manage the day-to-day operations

of the retail business.

Good credit history - An acceptable credit history

Exceptional customer experience - The capability to effectively manage an organization

that recruits, trains, and motivates employees who deliver an exceptional customer experience

with an understanding of Indian farmer psychology.

Organizational Structure

The business model is based on the idea of Intelligent-Business – IB and we are focusing

on the role of stockiest who is M/s. BioFields Impex Pvt Ltd., who control the Distribution and

logistics of a district in Karnataka i.e., Udupi District, and the District is divided in to three taluk

which represent three zones based on the sales organization to get maximum flow of

information and we have further divided in to Three verticals based on the Products offered

also known as Product Verticals for better accountability and deep understanding of the

expertise area ;



1. Seeds Vertical

2. Fertilizer Vertical

3. Pesticide Verticals

Under the Operations department the different verticals will have a similar

Organizational structure, as we are focusing on one warehouse for the entire district to reduce

the cost of warehousing and the Human resource. The warehouse would be as mentioned in

the following diagram with a headcount of 43 employees.



The roles and responsibilities along with the qualifications required for the Designations

are as follows:

Roles and responsibly for Manager Operations

Qualifications

Manage Day to day Operations, Co-ordinate with different Verticals and should be one stop for all the Activities for the managing Director, Check the regular activities on a regular basis, and Decision making point for any immediate approach, Continuous interaction with all the People in all the verticals. Should report to the MD.

MBA/PGDM in Operations Prior work experience In Sales and Operations of around 5 Years.

Roles and responsibly for Manager HR Qualification

Manage and Forecast headcounts, Recruit, Develop Organizational development, policy Recommendation, Employee Relationship, Organization Building, and Salary Benefits.

MBA /PGDM in HR Prior work experience in HRD of around 3Years

Roles and responsibly for Manager IT Qualification

Work as Chief Operating Officer, Monitor Network Communication, Help in getting new ideas for the purpose of Managing the Companies essential needs from Information Technology with new ideas, Improve The IT success rate,

MCA Or PGDCA Prior 2 years work experience in Handling Business Intelligence.

Roles and responsibly for Asst Ops Manager Qualification

Manage Day to day Operations, Co-ordinate with different People, should be one stop for all the Activities in the vertical and report to the Operations manager, coordinate with other departmental Heads

MBA/PGDM in Operations Prior work experience In Sales and Operations of around 2 Years.

Roles and responsibly for HR Coordinator Qualification

Report to HR Manager, involves in daily Head count, Salary request to the Accountants, Getting information and reporting to the manager, Developmental activities

MBA in HR Prior work experience in HR Fresher



Roles and responsibly for IT Administrator Qualification

Manages Software packages, Administers Network Applications,

Microsoft Certification, B.Tech CS Prior Work experience in IT Admin for 2 years.

Roles and responsibly for Accountant Qualification

Preparing statements day to day transactions. Maintain Bank and Cashbook. Preparing Petty Cash vouchers, TDS, Service Tax, PF, ESI, Central Excise Returns, Sales Tax (VAT) returns, Filing monthly and annually. Reconciling of accounts.

B.Com Working knowledge on SAP ERP, Finance and Controlling (FICO), work exp with minimum of 3 years.

Roles and responsibly for IT D & M Qualification

Manages Software packages, Administers Network Applications,

Microsoft Certification, B.Tech CS Prior Work experience in IT Admin for 2 years.

Roles and responsibly for Logistic Controller Qualification

Working knowledge on SAP ERP Material management (MM). Forecast the requirement of Stocks and Manage the End to end Distribution

B.Com Working knowledge on SAP ERP Material management (MM), work exp with minimum of 3 years.

Roles and responsibly for Sales Executive Qualification

Need to co-ordinate with the Accounts and Logistic so to Identify and Organize & structure the requirements of sales and Report to the Asst ops Manager with the sales report.

Graduation Prior Work Experience in Sales and Marketing with min 4 years. Preferably in the same industry.

Roles and responsibly for Store Keeper Qualification

Need to maintain the required stock levels and intimate and coordinate with the Accounts and Logistic department to efficient and smooth flow of information, report to the Asst Ops Manager

B.Com Prior Work Experience in Store Keeping with min 2 years.



Infrastructure requirements for Execution

In the initial stages the plan is to start at a location which is well connected to all

the villages, with well connected road and a hub based on the hub and spoke model, the major

infrastructure requirement for starting this venture is the space for administration and the

warehouse, which would be at SEZ1, Padubidri of Udupi District which is well connected with

road, rail and sea and availability of water and also a Tier II city, Office and warehouse situated

at the same place, and Other requirements include furniture and computers, chairs warehouse

equipments and a server. The premises would be purchased so as to have a better application

of cash flow and better Fund flows. The approximate details of the quantities required have

been specified in the financials section.

Business Process Modeling & Execution

Business Process: A specific ordering of work activities across time and place, with a

beginning, an end, and clearly defined inputs and outputs. Business processes are the structure

by which the organization physically does what is necessary to produce value for its customers

and are broadly defined across functions/departments.

Process Model: A representation of one or more processes and their associations that

an enterprise performs. Process modeling is a mechanism for describing and communicating

the current or intended future state of a business process.

Business Process Model: A mechanism for describing and communicating the current or

intended future state of a business process.

A right blend of management and IT is used to comprehensively design, execute and

monitor all business process involving humans, machines, organizations and environments.

With the aid of Business Process Development, complex activities are broken down to

simple segments and then each segment is overhauled, a module put in place to get the best

out of the resources available along with a monitoring system for easy troubleshooting. Finally

all working segment are then synchronized to create renewed and efficient working model, for

this we have adapted to the implementation of SAP Business One ERP2 suite.

1 Special Economic zone

2 Enterprise Resource Planning



The Business process development and Execution is done through an intensive research

of how today’s business works and what are the factors considered to start a business with a

scope of improvement and Internal Audit control, The Basic Principle is “Intelligent-Business”

which is a focus on all the departments and are interlinked to one another through the

Information systems to indulge in better efficiency and Maximize Profit through Minimizing

cost through time taken for execution or Perform.

Object Modeling

Our work presents an approach to model resource dependencies among IT

infrastructure elements. Although our proposed attempt formalizing dependencies within IT

infrastructures is very basic we see many aspects of application. To understand the IT

infrastructure as a collection of related entities, we begin by constructing an object model of

the enterprise. Beginning with a traditional view of the IT infrastructure as a group of

technologies, the model should at least encompass all the IT assets which comprise the

enterprise IT infrastructure. These assets, from a company perspective, include the recesses

(documents), roles (human resources) and services. A service is a collection of IT resources that

is provided to a customer to enable them to operate their business on a day-to-day and long

term basis. The business process plan for execution of work from each department so as to

work towards the detailed business plan to support the successful delivery of the warm zone.

As stated earlier, our intent is to progress from the producer approach towards a service

centric approach with representation on infrastructure. To align the model more explicitly with

service representation, we can re-group the main entities so that the model reflects the

enterprise as a transaction between two roles – a Vendor and the Client.

Vendor

•Bio - Utilitario Private Limited.,

Middlemen

•BioFields Impex Pvt ltd

Client

•Biofer Enterprises

•Agronic Chemical & Fertilizers



IT Infrastructure Model

• Business Gateway Layer

• Interface Into Applications and Systems

• Partners, Employees, Suppliers, customers

• Application Layer

• Programs that implement and automate business processes

• CRM, ERP, PROJ MGMT, ACCOUNTING, INVENTORY MGMT

• Physical Layer

• Tangible Building Blocks.

• HARDWARE: - Desktops, Mid-Range Systems, Mainframes Systems.

• Operating System: - Windows XP, Linux, UNIX.

• Physical Plant: - Cabling.



• Services Layer

• Intermediate and general purpose services upon which applications are built.

• Email Management, transport, ID management, Data Warehouses, Data

Recovery, General Security.

• Telecommunication Layer

• Provides connectivity between all Layers.

• LAN\WAN, ISP, WIRELESS.

Some other factors can be considered to include to better the service with the Stock

handling capacity Sales order processing ,warehouse management using mobile phones,

Weather information relates to sales forecasting, inventory planning , reduction in logistics cost

Use Of SMS for Pull of information, Low cost - Technology solution, Use a template for sending

SMS on weather information . Template can be pushed to Mobiles depending on season.

Template to include, district, taluk, crop, acreage, crop condition, weather, dam water levels.

Farmer level, distributor level information can be used for inventory movement.

Advance knowledge of weather coupled with field data on acreage under coverage, will help

fertilizer companies in inventory management.

Lower inventory lower cost higher profitability



Mobile IWM3 for the Warehouse Manager

The Warehouse manager can view different orders placed by each of the dealers and

the corresponding payments created by the dealers for the same, Once the dealer arrives at the

warehouse with the physical DD and DDFL, the warehouse manager can verify the same and

acknowledge physical receipt so that the payment is parked into SAP. The WM can then create

a delivery and delivery challan to enable the dealer pick up material from the warehouse.

This Kind of Business Process modeling and execution can be called as “Intelligent-

Business” Here is a sample Diagram of How “Intelligent-Business” put into practice.

3 Internet Warehouse Manager



Financials

Investment

INVESTMENT

Particulars Per Unit Total

Land and Building (in Area and Amount)

Land from KIADB (2 acres - 8093.746Sq MTR) 160.00 1,350,000.00

Includes registration and Licensing to KIADB

(Source: http://www.indiaproperty.com/property/IP446871/)

Building (Construction)

Shed 1 500,000.00

Shed 2 500,000.00

Shed 3 500,000.00

Office Building 600,000.00

Total Building Cost (with Electrifications) 2,100,000.00

Specification of Shed's

Dimension

width (Ft) : 50

Length (ft) : 150

Height (ft) : 16

Roof Pitch : 2:12

(source : BuildingsGuide.com reference number 693852010-01-04)

Machinery & Equipments/Tools

DG Set (onsite with installation) 1 no caterpillar make 80Kv 750,000.00

(source: caterpiller.com)

Hydraulic Pallet Truck (9no's) 7,250.00 65,250.00

Hand Truck (3no's) 11,890.00 35,670.00

(Source : http://www.alibaba.com/buyeroffers/hand_pallet_truck/IN----------------.html)

Computers

Desktops (12 no's) 17,000.00 204,000.00

Laptops (7no's) 27,000.00 189,000.00

Printers (8 no's) 4,500.00 36,000.00

Computer Furniture 175,000.00

Setting up the Office 200,000.00

SAP Business One (software suite) 175,000.00

Aqua Guard Water Purifier (2no's) 10,000.00

Air Condition (2 no's) 50,000.00

Advertising and marketing 50,000.00

Miscellaneous 150,000.00

Total Investment 5,539,920.00



(Total Amount required in words: Fifty Five Lacks Thirty Nine Thousand Nine Hundred and

Twenty Rupees Only)

The figures relating to the associated costs are an average for one single unit (are

expected to operate on similar line estimated)

Assumptions

All figures are considered at current market rates.(Based on Quotations and References)

Basic market conditions are assumed to stay constant through factors like inflation.

Profit Margin

The prices for each of the mentioned products and enlisted below for which we have

also specified the cost price, selling price with the Profit margin for each product. The prices are

in INR4.

Specification Name Of the Products

Quantity per Bag

Cost Price

Selling Price

Profit

Seeds BIO paddy 12Kgs 190.00 225.00 35.00

BIO sunflower 2Kgs 75.00 95.00 20.00

BIO corn 2Kgs 75.00 95.00 20.00

Fertilizer BIO manure 50Kgs 200.00 260.00 60.00

Pesticides BIO zinc sulphate 10Kgs 190.00 230.00 40.00

BIO DAP 50Kgs 375.00 450.00 75.00

The variable cost for every month is assumed as follows, in INR

Particulars Amount

Salary 259,200.00

Electricity Charges 6,000.00

Telephone and Internet Charges 9,000.00

Housekeeping 4,000.00

Packing Materials 5,000.00

Stationery 3,000.00

Staff Welfare 10,000.00

Miscellaneous 3,800.00

Total Variable Cost Per Month 300,000.00

4 Indian Rupees



While ascertaining the prices we have considered the market price of the competitors

and how we can create a Profit value chain in the process. In the Process to break even the

stockiest must have sales of atleast INR 64,00,000.00 In Words (Sixty Four Lacks Rupees Only)

Conclusion

“Business is a Business to do Business “Is an usual Phrase on which we do business, But

what we have leverage through our Business Plan/Detailed Project report is “Business is a

Business to do business with Intelligent-Business” where we not only talk about the usual way

of managing business but an efficient way of having an help from IT5. The management of IT-

Infrastructures has gained increased relevance to business as business processes and thus the

business profit rely on IT services, which in turn depend on the underlying infrastructure, The

changing states of resources and resource dependencies manifest the behavior of the

infrastructure and is correlated with the behavior of a service facing the user and thus with the

service quality.

Our work presents an approach to model resource dependencies among IT

infrastructure elements. Although our proposed attempt formalizing dependencies within IT

infrastructures is very basic we see many aspects of application. As the relation and

dependency elements of our model may be flexible enhanced adding attributes, calculation,

rules, etc.,

The analysis have been made with continuous interaction with marketing personal to

cover the ground reality from their experience, At the time of final selection the location of a

town preference is judged on center of gravity basis and it’s accessibility to the local farmers.

This center of gravity simulation and accessibility features matched well from the Google Maps.

The potential of Information Technology is yet to be fully tapped in the major segment

of the fertilizer industry with respect to marketing activity, notwithstanding the need for quality

information for decision making. The fertilizer marketing activity involves flow of large volume

of information, movement of documents in addition to handling of millions of tones of fertilizer

material. Information technology can play an important role in improving the efficiency and

effectiveness.

5 Information Technology



Bibliography

Role of Information Technology in Fertilizer Marketing –S.c.Mittal & T.Sudhakar –IMSR

Fertilizer use by crop in India-Food & Agricultural Organization of the united nation-Rome 2005

Distribution Network analysis for marketing of fertilizer – Mapasia 2002 – New Delhi Modeling The Enterprise IT Infrastructure-David chi & D L Tsui http://www.mvdb.virginia.gov/ CDC- Capgemini -2004, New Delhi Modeling Dependencies of IT Infrastructure Elements- Klaus Scheibenberger, Ingo Pansa, Germany

2007

http://www.krishiworld.com/html/field_crops11.html http://www.sbsccsoftware.com/about.htm http://www.agriculture-industry-india.com/national-seeds-policy/seed-distribution-marketing.html http://www.agriculture-industry-india.com/agriculture-products/ http://www.kumbangalore.com/Htmlpages/policy/162/index.htm http://www.techno-preneur.net/technology/Project-Profiles/food/seed.htm http://www.fao.org/docrep/009/a0257e/A0257E07.htm#fig5 http://www.knowledgebank.irri.org/GRCmanuals/default.htm#Protocol_for_seed_distribution.htm http://www.fao.org/docrep/009/a0257e/A0257E07.htm http://www.mangalorechemicals.com/

http://www.mvdb.virginia.gov/

http://www.kumbangalore.com/Htmlpages/policy/162/index.htm

http://www.techno-preneur.net/technology/Project-Profiles/food/seed.htm

http://www.fao.org/docrep/009/a0257e/A0257E07.htm#fig5

http://www.knowledgebank.irri.org/GRCmanuals/default.htm#Protocol_for_seed_distribution.htm

http://www.knowledgebank.irri.org/GRCmanuals/default.htm#Protocol_for_seed_distribution.htm

http://www.fao.org/docrep/009/a0257e/A0257E07.htm

business plan for fertilizers distributors

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