Akshaya Patra – A Supply Chain StudySubmitted to Prof.Devanath Tirupati

Submitted by – Group 91311361 ASHWIN RAVIKUMAR1311066 VENKATESH NALLI1311053 SHREYAS B R1311030 NAVEEN PRASHANTH

10th Mar 2013IIM Bangalore

Introduction

Akshaya Patra foundation is a non-profit organization headquartered in Bangalore.It commenced its mid-day meal operations in Bangalore in June 2000 by feeding 1500 children in 5 schools.

Vision: To feed school children so that no one is deprived of education because of hunger.

•1.3 million children every day •9 states in India. •20 kitchens in India. •Mid-day meals to the children of government schools and government-aided schools. •Public-private partnership model •Deliver school lunch at a minimal cost. •Cooked in a highly mechanized and hygienic environment maintained in Akshaya Patra kitchens. •Aim is to serve 5 million children by 2020.

Methodology

Project ScopeAkshaypatra- Vasanthapura kitchen, Bangalore’s Supply Chain

Primary Source: Interviews with•Mr.Arun Kumar, Operations Manager, Akshaya Patra Vasanthapura, Bangalore•IIMB FPM student K Kiran, who has worked extensively on Akshaya Patra•Prof. Anshuman Tripathy, IIMB Operations Dept. Asst. Professor

Secondary Source•Online case studies •News articles and videos •Akshay Patras website

Procurement from Suppliers

Rice

Dhall/Pulses

Vegetables & Fruits

Milk and Milk Products

Groceries

Spices & Oil

Cooking Activity

Distribution & Logistics

Pre-processing

Cooking

Packaging

School coverage

Mapping of the Supply Chain – Vasanthapura Kitchen Centralized 3 floor kitchen Capacity – 100,000 meals per day Caters – 568 schools & 86,000 children in South Bangalore

Mapping of the Supply Chain – Vasanthapura Kitchen

Procurement from Suppliers

Kitchen storage facilityDhall/Pulses

Vegetables & Fruits

Milk from Karnataka Milk Federation

Groceries

Spices & Oil – Palm oil from Mangalore refinery

Rice from Market & Govt sources (1:3 ratio)

7 tons safety stock1-2 days lead time

Kitchen cold storage facility

Order based on demand forecast

1 week lead time

Mapping of the Supply Chain – Vasanthapura KitchenPre processing & Cooking

Packaging

Rice, Dhall stored in silos

Pre processing of leafy & non leafy vegetables

Day -1; 9.30 PM Day 0; 5.00 Am

Cooking in cauldrons

Terr

ace

2nd &

3rd fl

oor

1st fl

oor

Gro

und

floor

Won the Tech Award Laureate 2009 from the San Jose, California-based Tech Museum

3-tier kitchens based on gravity flow

Mapping of the Supply Chain – Vasanthapura Kitchen

Small MediumBig Containers

School 1

School 2

School 3..

.

.School 3

School 2

School 1

Labelling with school name &

Route no

Loading was done in a sequence keeping in mind the order in which they need to deliver

Cover all schools no later than 6 hours after cooking

Transportation

Delivery

Return trip

Container’s collection during return trip

Kitchen

Day 0; 7.00 Am

Day 0; 9.00 Am

Efficiency Measure – 5S systemKeep only necessary material and discard the rest

Keep items in designated spot; organize by frequency

Problems are more visible when everything is neat and clean

Clean tools, equipment and job site after use

Use and follow standard procedures

Cost-Breakup Analysis Particulars Cost (%)

Direct costs 73% Cost of food 56% Distribution Expenses 17%

Indirect costs 14% Administration Expenses 6% Fund raising and communication expenses 1%

Apportionment of HO expenses 7%

Notional costs 13% Depreciation 13%

Cost per meal 4.69

Less subsidy received 2.42

Cost borne by TAPF 2.27Cost break up of meal in APF, Gandhinagar

Source: Akshaya Patra Gandhinagar case

Analysis and Identification of Issues

Key opportunities identified for Akshaya Patra. I. Improving financial position of the organizationII. Reduce manual effort across supply chainIII. Efficient complaint gathering mechanism IV. Scaling up - where to open nextV. Education & improved awareness of school authorities and

students

1. Improving financial position of the organizationIssue •40% of AP’s expenses are borne by the government, and lately the government has been delaying the release of funds

•Delayed payments to its suppliers, resulting in strained relationships

•Dire need to modify AP’s operating model so as to become self-sustaining

ISSUES & RECOMMENDATIONS

Recommendation•Use of idle capacity – Kitchen & Trucks are idle for long time after the service is done - Potential demand avenues for AP’s idle kitchen capacity -

1. Office catering services2. Supply packaged, mass food

consumer like Railways3. Supply to other in-city mass demand centers like hospitals4. Pooled buying: tie up with major government buyer like Defense

Potential profits from idle capacity usage

Number of factory clients 10 (Kanakpura road factories)Demand per factory 500

Demand per day 5,000 Days per year 250

Cost of meal INR 9.0 (as per Ops manager)Price charged to Buyer 20

Margin per meal INR 11.0Total contribution per year 13,750,000 1.37 Cr

2. Reduce manual effort across supply chain

Issue•Higher attrition problem since the labor attracted by heavy wages in nearby factory hub (Kanakpura road)

•Strenuous manual labor in terms of lifting cartons and loading on to trucks, given large number of cartons every day

ISSUES & RECOMMENDATIONS

Recommendation•Reducing manual labor at kitchen - Automatic stirring is a viable alternative; practiced at AP Gandhinagar

• Upgrade is possible at Vasanthapura• Would also increase process efficiency

due to lower escape of steam

•Reducing manual labor at loading/unloading - Forklifts may be used to lift and place the containers of food inside the truck

• Reduce dependence on manual labor

• Improve employee health & satisfaction

3. Efficient complaint gathering mechanism Issue•Current system is slow and subject to leakages.

•To cover one zone, zonal coordinator takes a little more than a month. This increases the time of flow of information

•Toll free phone lines at Vasanthapura limited, which results in the busy lines when teachers try to call in

ISSUES & RECOMMENDATIONS

RecommendationInternet/Mobile application at school –

•Principal complaining directly in an online portal. Teachers can also upload relevant pictures.

•An app can be installed on principal’s phone - Currently they use an application “Nokia Tej” for this purpose, but there are connectivity issues due to GPRS

4. Scaling up - where to open next

Issue •Government has mandated that kitchens be set up to serve a radius of 10 km around themselves, and not more

•Vasanthapura kitchen and the Rajajinagar together effectively cover Central and West Bangalore, but leave out East Bangalore, which includes Whitefield - the fastest expanding suburb of Bangalore.

ISSUES & RECOMMENDATIONS

10 km

Whitefield

AP Kitchen, Vasanthapura

AP Kitchen, Rajajinagar

4. Scaling up - where to open next

Issue •Government has mandated that kitchens be set up to serve a radius of 10 km around themselves, and not more

•Vasanthapura kitchen and the Rajajinagar together effectively cover Central and West Bangalore, but leave out East Bangalore, which includes Whitefield - the fastest expanding suburb of Bangalore.

ISSUES & RECOMMENDATIONS

Recommendation•With much construction in Whitefield, there is also a large population of at-risk children, AP should start a kitchen in East Bangalore

•Funding from large corporates in Whitefield through CSR space – AP can pitch to corporates based on 2% CSR mandatory requirement

•Alliances with Sai Baba Ashram in Whitefield. Tie up options could include procurement, to secure better deals, logistics sharing and for an advanced level of integration, even common kitchen.

5. Education of school authorities and students

Issue •Unawareness of dietary requirements in Schools & Students

•While AP nutrition mix is healthy; individual students might not consume food in right portions

• Students are not aware of their dietary requirements

• School authorities/food servers themselves unaware of quantum and variety of food to be served

.

ISSUES & RECOMMENDATIONS

Recommendation•TAPF shall prominently create Food Pyramids posters/leaflets, and put up in its schools, so that students and authorities are aware of the ideal consumption

•The importance of serving full meals and in the right mix should be emphasized upon

Recommendation - Investment and timeline

Capex

Time to start implementation1 year 3 years

High

Low

Renting out kitchen

Renting out trucks

Automatic stirrer

Forklift

Connectivity at school

New kitchen

Procurement tie-up

Educating stakeholders

References

1. Redesigning Midday Meal Logistics for the Akshaya Patra Foundation - B. Mahadevan, S. Sivakumar, D. Dinesh Kumar, K. Ganeshram

2. Akshay Patra, Gandhinagar: Supply Chain Challenges, Shravanti Mitra, G Raghuram, and Atanu Ghosh

3. Prof.Anshuman Tripathy, WIP Operations Case, Akshaya Patra4. Akshaya Patra’s homepage:

http://www.akshayapatra.org/board-of-trustees#Advisors

.