Rural Supply Chain Management

GROUP 1 (LSCM) -PGDM-A (2016-18)

SAHIL AGARWAL (01)NEHA GOYAL (13)

VAIBHAV MOHAN (22)ROHIT RADHAKRISHNAN (35)

SANYA SINGLA (50)SHIKHAR SODHANI (53)

Rural Area

NSSO and RBI Definition

Population density 400/km^2

75% involved in Agriculture and allied activities

Surveyed boundaries but no municipal board

Population of less than 49,000

tier -3 to tier-6 cities

Rural Market in India

6.1 Lakhs of villages

Per Capita income Rs 40,772

Income expected to grow twice

Rural expenditure 55% of total national monthly expenditure

13% of India’s GDP on logistics

RURAL SUPPLY CHAIN MANAGEMENT

Critical aspect for developing nation

Constitute about 68% of total population i.e about 800 million people. Estimated size of about US$ 53 billion.

An integrated rural supply chain network(IRSN) is a group of independent companies, often located in different regions, forming a strategic alliance with the common goal of designing, manufacturing and delivering right quality products and services to customer groups faster than others.

Supply chain management flows can be divided into three main flows: The Product Flow, The Information Flow, and The Financial Flow

Sectoral distribution of RSCM

Ecommerce FMCG Medical Automobile

Small means for customer Affordable Less investment reduced risk of buying For companies Large volumes, helps address divers

customer segment, Attracts Non user %Sales in rural areas of small packets -

28percent

Sectoral distribution of RSCM

Potential in RURAL INDIA

60% of the population is in rural area

India with a GDP of about 31,297 billion is estimated to spend 13 per cent of its GDP on logistics.

Double digit growth rate since 2002

Large Consuming Class

Why Not Target Bottom of the pyramid

Case Studies

Parle G

why rural markets ? size of market rural market is having 60 percent of demand income levels have increased

rural penetration - 50 - 65 %

e-Commerce and Rural SCM

Amazon and Flipkart floated pilot projects  Local men from the village Number of deliveries per hour is much more than

Urban, due to less traffic Flipkart, got native entrepreneurs to sell Motorola

phones to rural consumers  Training Programs, promoting small city sellers,

outsourcing

e-Chaupal Initiative by ITC

To overcome weak infrastructure and involvement of intermediaries

Directly linked farmers with ITC for procurement of soybeans, coffee, and prawns

Traditional Agricultural Supply Chain

Problems in existing Chain Lack of warehouses

Fruits and vegetables wastage as high as 45%

Planning Commission estimate 35 mn MT

Limited reach of mandis 12 km to 50 km travel

Too many intermediaries Inflate cost by 250%

Lack of collateral management options

Gramco Supply Chain

Commenced operations in 2010

Received 2.3 Million $ funding

Provides infrastructure near farm areas

Acquired land at Binjal, Nanded, Titwas, Atut and Pipliyanath in 2013

Service Provider for RURAL SUPPLY CHAIN

MANAGEMENT

An Initiative by India’s Logistics veteran – Sh. L R Shridhar

AboutConnect India

VisionTo create a pan India last mile delivery network covering 25000 pin codes by leveraging the existing economic assets such as the brick and mortar retailer and the digital India platform by engaging in a robust mobile first technology.

TargetTo appoint 50,000 last mile delivery entrepreneurs as Connect India Centres (CICs), who in turn will provide employment to 200,000 plus delivery associates from their local communities in the next 3 years.

Point of ContactThe company will leverage existing under-utilised economic assets, such as kirana stores, pharmacies, department stores, and boutiques to develop a last-mile entrepreneurial-based distribution network.

Reverse Logistics Gridding the country into a 1 x 1 Sq Km layout and creating optimal routes for every city,

town and district Small and medium scale industries, small-scale farmers, SHGs, artisans remained largely

unconnected to the mainline markets with the middlemen as the only source of connectivity and income

Logistics cost of supplying directly to the market is exorbitant With advent of Digital Era, rural entrepreneurs and producers are getting connected

through e commerce portals and other platforms Reverse logistics service will bridge the gap between urban and rural markets at a fair cost Will help the rural producer ship directly to the mainline urban markets and also to the

direct end user not just in India, but also across the world

Thank You

Queries ?