Efficient Information Management – a key to agribusiness...

Efficient Information Management –a key to agribusiness supply chain

success

How ITC leveraged information management thru e-Choupal and transformed the Agri supply chain

By Sachin Sharma

ITC Limited

© ITC ltd

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Flow of the presentation

• e-Choupal– Background and concept– Information Management thru e choupal– other details of e-Choupal

• e-Choupal and Nokia Life Tool– A beginning in to leveraging mobile technology – A beginning in to leveraging mobile technology

• Information management in Agri extension activities• Choupal Saagar- an Agri business center• Reach and scale• A glimpse of some studies and awards to e-Choupal

© ITC ltd




Information Management across Agribusiness value chain

Crop production

• Input and Weather information• Productivity enhancement thru agri extension• Scientific Package of practices • Desired quality of production by inputs and varieties

Crop Procurement

• Market information• Direct farm purchase information• Geographical quality mapping• Identity preservation

Storage and Logistics

• Scientific storage maintaining quality specks• Efficient logistics ensuring identity preservation• ERP solution for WH and logistics and Handheld devices for capturing data at point of transaction

Other RM procurement

• Tracking of Global markets across clock• Decision making considering geographical arbitrage

Manufacturing

• Efficient manufacturing• Outbound logistics • ERP catering to manufacturing and outbound logistics

Manufacturing with product

differentiation

Domestic and global commodity exchanges

© ITC ltd




Crop Production and Crop Procurement

• Input and Weather information

Crop production

• Productivity enhancement thru agri extension• Scientific Package of practices • Desired quality of production by inputs and varieties

Crop Procurement

• Market information• Direct farm purchase information• Geographical quality mapping• Identity preservation

© ITC ltd




The Potential & The Constraintsof Indian Agriculture are well known

8 Fragmented farm sizes

8 Heavy dependence on Monsoon

8 Poor extension work at the

4 Large arable land

4 Rich & Diverse Agro-climatic Zones

4 Strong institutional base in R&D 8 Poor extension work at the farm level

8 Numerous intermediaries

8 Weak infrastructure & inconsistent quality

4 Strong institutional base in R&D

4 Large domestic consumption base

4 Attractive export markets

© ITC ltd




Story of the Indian Farmer

• Because most of them are small (1.5 ha average holding) …they do not have bargaining power

• Because all of them live in hinterlands (600,000 villages) …they do not have access to real time information (prices, weather)

• Because the circumstance of each one is very different (agro-ecological conditions, resources)… …they cannot get customized knowledge advise (on farm practices, risk management)

• Further compounded by weak infrastructure– Physical, Social, Institutional

© ITC ltd




The Making of

ITC e-ChoupalITC e-Choupal

© ITC ltd




The Value Chain (Farm to Factory Gate)

Agri Input R

etailer

Pakka

AdatTrader

Broker

InputCosSeed

FertilisersChemicalsPractices

Stockist

Mandi A W P

Agri Input R

etailer

Farmer

Processor

Money Lender

Kaccha

Adat

Trader

Broker

Dept of A

gri VLW

GovtUniv.

Met DepMSP

InsurancePracticesWeather

© ITC ltd




The Insight - 1

4 Actually, these numerous intermediaries makeup for weak infrastructure, and deliver critical value in each leg at very low cost7 But their aggregate cost makes the chain uncompetitive7 And many times, by blocking flow of information & market 7 And many times, by blocking flow of information & market

signals, they are able to extract more profits for themselves than the value they are delivering

4 A more effective business model must be able to leverage the physical transmission capabilities of these intermediaries, yet disintermediate them from the flow of information and market signalsü Answer : Leverage the power of Information Technology

© ITC ltd




The Insight - 2

Low Risk Taking Ability

Low InvestmentLow Margin

Low ProductivityLow Value Addition

Weak market Orientation

ü Answer : Leverage the power of collaborative business models© ITC ltd




The Insight - 3

4 Information Technology and Collaborative Business Models gave us the power to design a new model 7 But physically reaching the nook & corner of India, and facilitating

Net access to the largely illiterate farmers at low cost, and delivering effective service is still a challenge…

4 The only historical success stories we could rely on were cross-industry !

4 Wide & Deep penetration of the FMCG retail channel4 Rapid scale-up of Public Telephone Booths4 Low cost reach & effective customer servicing by Cable TV

Operators

4 Answer: Unleash the power of small scale entrepreneur

© ITC ltd




Farmer

Mandi

Price Discovery@ Sell Transaction

PRODUCTMarketTransaction

Traditional Transactions

Sell: sunk costs, inconvenience,other losses

VILLAGE

TOWN

PRODUCT&

SERVICEPROVIDERS

MoneyLender

Financing

Market

InputDealer

Knowledge (Use)

Buy:

Middleman

high prices, spurious goods, information not timely

Information(Aggr)

© ITC ltd




What is e-Choupal ?

The e-choupal Infrastructure

Tier 1: An ICT kiosk with Internet Access•In the house of a trained farmer Sanchalak•Within walking distance of target farmers

•Additional investments in Solar Power & VSATs to overcome weak infrastructure

© ITC ltd




e-Choupal structure

e-Choupal(40/hub)Tier 2

Tractorable HUB/

Choupal Saagar

e-Choupal(40/hub)

Catchment village

(5/choupal)

Tier 1

distance

© ITC ltd




e-Choupal Infrastructure

V-Sat

Solar Panel

Battery

PrinterComputer

© ITC ltd




Topology of e-Choupal

Power Socket

V-Sat Hub

Choupal Site

DW

Power Socket

UPS1

Battery1UPS2

Battery2

Solar Panel 1Solar Panel 2

eChoupal ComputerDMP Printer

© ITC ltd




Service panel

e-Choupal Website- How it looks like

Announcement panel

News-ticker

Event Panel

Banner Ad

Choupal Radio

Pop-up

© ITC ltd




The Web Portals also have

Localised and customised weather information…© ITC ltd




…Best Practices in Farming

Farmers across villages can interact among themselves© ITC ltd




Choupal Radio

Dr. Bhatnagar

Agri Expert

Dr. JP Tandon

Agri Expert *

Remixed with Pro VO in Studio

Server20 minutes of Infotainment:

Mp3 to

Flash Serverl ITC’s Jingle l Topical, customised

knowledge from Agri Expertl Q & A

l Health Segmentl Ads / Promotions l News wrap “The Week

that was…”l Feedback /Contribution

Flash Audio

Online streaming audio file

© ITC ltd




Sanchalak oath – a social bonding between Sanchalak and ITC

© ITC ltd




One Typical Transaction

• Choupal TransactionPrice InformationMoisture TestingQ & A

• That bundled• That bundled– Knowledge (what to use) and– Information (when to use), with– Transaction (ordering an input)to deliver unique value to the farmer

© ITC ltd




The e-Choupal Infrastructure

• IT Infrastructure -ICT Kiosk with Internet Access– In the house of one trained farmer- the Sanchalak– Within walking distance of target farmers

• Physical Infrastructure - Warehousing Hub / Store– Within tractorable distance of target farmers– Within tractorable distance of target farmers– Managed by the Sanyojak

• Human Infrastructure– Sanchalak at e choupal and sanyojak at hub

• Virtual Infrastructure- Collaborative Network of Companies– Orchestrated by ITC– With a Pan-Indian presence

© ITC ltd




The e-Choupal Services

• Relevant & Real-time Information– Commodity prices, Local Weather, News

• Customized Knowledge– Farm Management, Risk Management

• Direct Marketing Channel for Farm Produce– Lower Transaction Costs, Better Value through Traceability

• Supply Chain for Farm Inputs– Screened for Quality, Demand Aggregation for Competitive Prices &

Efficient Logistics• Agri Extension Services

• CPK and IT based extension services• Financial services

– KCC• Employability

A unique rural Job portal© ITC ltd




e-Choupal-Business Principles

• All information and knowledge is available free of cost– This makes it easy for the customer (farmer) to be an active

participant

• The farmer is not obligated to transact with us• The farmer is not obligated to transact with us– The farmer will transact only if he sees value (good price, correct

weighment, full payment)

• Sanchalaks earns only if there is a transaction– If the farmer does not see value, Sanchalak pushes us to improve.

© ITC ltd




Key Success Factor

Power ConnectivityTraining

© ITC ltd




Mandi

Choupal Saagar

Farmer

Transactions through ITC e-Choupal

Sell:

Information(e.g., Price Discovery)

Knowledge (Customized)

PRODUCT&

SERVICE

Price discovery @ village, choice, efficiency

TOWN

Samyojak

Choupal Saagar

VILLAGE

Sanchalak

Transactions

Buy:

PAN-INDIA

SERVICEPROVIDERS

Information + Customized Knowledge @ village, high quality,competitive prices, superior service © ITC ltd




Communication at e-Choupal

Farmer meetings

IT infrastructure for communication

© ITC ltd




Leveraging AV Vans for village communications

© ITC ltd




Execution Wasn’t Easy…

• Convincing farmers (Weighment, Mandi Prices)

• Aligning Middlemen (Cost, Effort, Risk Vs Margin Equation)

• Sanchalak Capability Building (IT, Communication, Entrepreneurial)

• Changing Government Regulations (APMC)

• Dealing with Poor Infrastructure (Power, Connectivity)

© ITC ltd




E Choupal and Nokia Life Tool

Leveraging the mobile power

© ITC ltd




Mobile model : Nokia Life Tool + e Choupal

Fertilizerprices

Seed prices

Sow

Grow and Harvest

Advise

Comprehensive database of

categories and crops

Pesticide prices

WeatherMarket prices

Sell

Daily detailed weather

Daily price information

© ITC ltd




Agri extension thru e choupal

Enhancing productivity and quality

© ITC ltd




Agri extension: Delivery Mechanism & Information Management

S.NoS.No.. Information Information ManagementManagement

Knowledge TransferredKnowledge Transferred ToolTool CoverageCoverage

1 Web based 1. Scientific package of Practices2. Queries thru website/mail3. Crop Alerts4. On Field Demo thru Experts

(Scientists/Consultant/Farmer Meeting Videos)

Website/Webcasting

e-Choupals

2 PC Aided 1. Important topics related to Best Practices CDs/Manuals e-Choupals & PC Aided 1. Important topics related to Best Practices2. Computer Operating Manuals

CDs/Manuals e-Choupals & Hubs

4 Farmer/SanchalakMeetings

1. Inputs –Target/ Usages/Methodology2. Pre-Season Orientation

Agri-Experts/ Managers

e-Choupals

5 A/v Vans 1. Movies on Crop Tech2. Awareness on best practices

CDs & Staff e-Choupals

6 Farm based activities

1. Scientific package of practices thru demonstration

2. Farmer self reliance in seed production

FLD(CPK), Field days

e-Choupals, registered farmers

7 Farmer scientist interaction

1. Meetings of agri experts2. Field visits of Agri experts/Govt officials

One to one interaction

At Choupalsaagar/Hub and e choupal

© ITC ltd




Glimpse of Agri extension activities

Village meetings Expert- farmers interaction

Registration process Scientist interaction Dr Tandon Interaction with farmers

Package of practices sharing© ITC ltd




Key Paddy interventions

Green manuring Proper Land preparation

Transplanting with Rope

Use of hybrid seeds

Regular Scientist interaction Harvesting at CPK plot© ITC ltd




Key Wheat Interventions

scientific Land preparation Accurate sowing rate Zero Tillage

Proper weed management Right variety Scientific yield estimation© ITC ltd




Village Meetings – communication of best farm practices

© ITC ltd




Introduction of latest equipments for productivity and quality enhancement

© ITC ltd




A Happy CPK Farmer

© ITC ltd




Connecting partners for latest practices and inputs

Agriculture department Industry experts

Agriculture University and institutes © ITC ltd





• Scientific storage maintaining quality specks• Efficient logistics ensuring identity preservation


• Efficient logistics ensuring identity preservation• ERP solution for WH and logistics and Handheld devices for capturing data at point of transaction

© ITC ltd




Choupal Saagar- An Agri Business Hub

© ITC ltd




Typical Layout of a Choupal Sagar

Parking

Grain Warehouse

Dispensary

Weigh Bridge

Fuel Station

Future Expansion(Cold Storage / Silos)

Hypermarket

Food Court

Training Centre

Total Land Area: Five Acres © ITC ltd




Choupal Saagar

• The Facility– An eight-acre farmer facility complex

• Includes:– ITC procurement center:

• Complete with an electronic weighing platform, Immediate Cash Payment facility– Retail Mall

• Apparels, footwear, groceries, electronic durable from TVs to microwaves, cosmetics and other accessories, farm consumption products like seeds, fertilisers, pumps, generators and even tractors, motorcycles and scooters

– Facility Center: • Cafeteria and Kitchen, Corridor, Training center, Agri Advisory Services (Storage and

sale area), Doctor’s clinic and waiting area, Bank and Insurance– Utilities:

• Parking area, Toilets, etc.– Petrol Pump

© ITC ltd




© ITC ltd




Hypermarket @ Choupal Saagar bringsworld-class shopping experience to rural India

© ITC ltd




Identity Preserved storage

© ITC ltd




Online data tractions thru ERP and Handheld devices

© ITC ltd




E Choupal competitive advantage

Trust – Helps Building Deep Rural

Linkages

Infrastructure -Commitment to Infrastructure -Physical Digital & Human, provides access and reach

Scale - Critical for all players to come

together

Experience - In delivery of products

and services

Commitment to work with farmers; capturing value for all

stakeholdersE-

Choupal

© ITC ltd




Collaborative network of partners

UP Seed & TDC

NFL

Farm Inputs Public sector institues

•Met department• IARI• NRCS• DWR• Agriculture department•IISR•IISS•IISS•NRC-Sorghum

Durables Services

© ITC ltd




Resulting in…

• Higher Incomes for farmers through– Increased Yields– Improved Quality– Reduced Transaction Costs– Reduced Transaction Costs

© ITC ltd




New Value Added Foods

© ITC ltd




Bottomline for ITC

• Better supply chain for ITC’s Food & Agri Businesses– Costs, Quality, Traceability

• Access to the Underserved Rural Markets– a significant business opportunity while serving society

• New Information Technology driven Business Opportunities– Employment, Health, Education, Entertainment, e-Governance

• Shareholder Value through Serving Society– Reliable delivery mechanism for development initiatives

© ITC ltd




Reach and Scale

Wheat

Soybean

Soybean& Wheat

Coffee

Aqua

Wheat

Soybean

Soybean& Wheat

Coffee

Aqua

© ITC ltd




ITC ABD

BRANCH OFFICES

LucknowJaipur

GurgaonKarnal

Supply chain infrastructure

PROCESSING PLANTSSEA PORTS

ORGANIC PROJECTS

Bhopal

Nagpur

Jaipur

HYDERABAD Vishakhapatnam

Kolkata (Aqua)

Kakinada

Mumbai

Jamnagar

Kandla

ChennaiChikmangalur

Kushalnagar

Nellore

© ITC ltd




Studies on e-Choupal

• Itc's e-choupal and profitable rural transformation by Kuttayan annamalai Sachin rao World Resource Institute, Wharton Business School

• Echoupals: A Study on the Financial Sustainability of Village Internet Centers in Rural Madhya Pradesh by Richa Kumar Science, Technology & Society Program MIT E51-070

• The ITC echoupal Initiative by DAVID M . UPTON, Harward Business School• Learn from Them - A Compilation of Best Practices Govt of India Penguin Enterprise• Empowering the Poor - A Study of Rural Development Projects in India Author: Roger Harris

& Rajesh Rajora UNDP - APDIP ICT4D Series Publication• The Fortune at the Bottom of the Pyramid Author: C.K. Prahalad Wharton School

Publishing• Developing a Rural Market e-hub the case study of e-Choupal experience of ITC, B.

Bowonder, Vinay Gupta and Amit Singh, Tata Management Training Centre Pune and Administrative Staff College of India, Hyderabad.

• Bridging the rural digital divide: community based information systems, India e choupal, FAO • Fileds of online dreams, by Mohanbir Sawhney , McCormick Tribune Professor of

Technology at Northwestern University's Kellogg School of Management.• E choupal has been selected by Monitor group for break-through innovation. E choupal

achieved 8 out of 10 innovation levels in monitor framework. • E choupal has featured in outlook business featuring the m choupal.

© ITC ltd




Awards and recognitions

• Appreciated by President of India during the national symposium to commemorate 60th year of independence 'agriculture cannot wait: new horizons',

• United Nations Industrial Development Organisation (UNIDO) Award at the international conference on Sharing Innovative Agribusiness Solutions 2008

• The Ashoka - Changemakers ‘Health For All’ Award 2006 for the Rural Health Services model for delivery of health services through the e-Choupals.

• The Stockholm Challenge 2006. This award is for using information technology for the economic development of rural communities.

• Innovation for India Award 2006 for ITC e-Choupal in the Social Innovations category for • Innovation for India Award 2006 for ITC e-Choupal in the Social Innovations category for business organizations. e-Choupal was declared as one of ‘India’s Best Innovations’.

• The Development Gateway Award 2005 (previously known as the Petersberg Prize) ITC is the first Indian company and the second in the world to win this prestigious award.

• The 'Golden Peacock Global Award for Corporate Social Responsibility (CSR) in Emerging Economies for 2005'.

• The inaugural 'World Business Award', instituted jointly by the International Chamber of Commerce (ICC), the HRH Prince of Wales International Business Leaders Forum (IBLF) and the United Nations Development Programme (UNDP)

• The ‘Enterprise Business Transformation Award’ for Asia Pacific (Apac), instituted by Infosys Technologies and Wharton School of the University of Pennsylvania.

• The Seagate Intelligent Enterprise of the Year 2003 Award, for the most innovative usage of Information Technology.

• The Corporate Social Responsibility Crown Award for Water Practices from UNESCO and Water Digest for its distinguished work carried out in the water sector in India.

© ITC ltd




Change in Mindset

From

Fortune

At the bottom of pyramidAt the bottom of pyramid

To

Fortune

For the bottom of pyramid© ITC ltd




Change in Perspective

From

Social opportunities in a business contextin a business context

To

Business opportunities in a societal context

© ITC ltd




Business cannot succeed succeed

in societies that fail

© ITC ltd




Thank you

© ITC ltd




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