Akshaya patra- a supply chain study

THE Akshaya patra FOUNDATION - a supply chain study

Submitted by Section 2 Group 4Venkatesh Parimella 1311108Abhilash Mulakala 1311142Visweswar Animela 1311149B Kiran Maruthi 1311154Gyanendra Singh 1311160Ravi Kiran Gottipamula 1311395

AgendaIntroductionScale of OperationsSupply ChainValue ChainVasanthapura KitchenCost Breakup AnalysisIssues Recommendations

Introduction- akshaya patraAkshaya Patra is a Non Profit Organization headquartered in BangaloreThe organization strives to fight issues like hunger and malnutrition in IndiaIntroduced the Mid-Day Meal Scheme in the Government schools and Government aided schoolsIn partnership with the Government of India and its respective State Governments, and support from many businesses, philanthropic donors and well-wishersEnvisioned in 2000, the organization started by catering to 1500 children across 5 schoolsMission : To Feed 5 Million children by 2020Vision : No child in India shall be deprived of Education because of Hunger

Source: http://www.akshayapatra.org/vision-and-mission,http://www.akshayapatra.org/about-us

Scale of OPerations

Source: Redesigning Midday Meal Logistics for the Akshaya Patra Foundation: OR at Work in Feeding Hungry School Children by B. Mahadevan, S. Sivakumar, D. Dinesh Kumar, K. Ganeshram

Current Reach:1.4 Million children23 locations 10 states24 KitchensSupply chainCentralized Kitchen (20)De-centralized Kitchen (2)Local Mandi SuppliersValue ChainProcurementFood PreparationDistributionRiceDal / PulsesGroceriesVegetables & FruitsMilk & Milk ProductsStoragePre-processingCookingPackagingSelf Owned FleetDelivery to SchoolsVasanthapura kitchenRiceDal / PulsesGroceriesVegetables & FruitsMilk & Milk ProductsKitchen StorageKitchen Cold StorageProcurementDistrict Level ProcurementProcured One Day beforeProcured One Day beforeMonthly SilosCaters to 568 schools with around 99K+ childrenVasanthapura kitchen

3-tier kitchens based on gravity flowPre-Processing & Food PreparationDay -1; 10:00 PMDay 0; 2:30 AM to 7 AMDay 0; 8:30 AM onwardsVasanthapura Distribution

A Self Owned Fleet of 35 delivery vans of varying capacities, having 3 tier racks for the 3 types of containersLoading done in a LIFO patternCaters to around 568 schools with 99,326 childrenOn an average the schools are 17km awayVasanthapura fleet covers 1400km/dayUses Route Optimization Softwares

Cost breakup analysisParticularsCost (%)Direct costs73%Cost of food56%Distribution Expenses17%Indirect costs14%Administration Expenses6%Fund raising and communication expenses1%Apportionment of HO expenses7%Notional costs13%Depreciation13%Cost per mealINR 6 to 8Less subsidy receivedINR 4 to 6Cost borne by TAPFINR 2 to 4Source: Exhibit 13: Expentidure Details of TAPF, Akshaya Patra, Gandhinagar:Supply Chain Challenges by Shravanti Mitra, G Raghuram, and Atanu GhoshProblem 1- Financial sustainability & Idle CAPACITYNet loss during financial year 2013Operating income is just positiveExpansion plans has to be kept on hold to maintain sustainabilityGovernment Subsidy and funding from other sources insufficientGovernment cash subsidy receivables payment takes around 60-120 days Abridged Income & Expenditure Statement ( ` in Lakhs)2012-132011-12Total Income15,888.17 13,626.27 Total Expenditure17,347.3213,420.52Excess of Incomeover Expenditure(1,459.15) 205.75PROBLEMSOLUTIONTotal capacity utilization of cooking equipment is around 8 hours dailyIdle capacity can be outsourced to vendors for usage by themIdle capacity can be used to prepare food and sell through network of vendorsExisting human resources and economies of scale can be leveragedThis will cross subsidize the existing operations Challenges: Legal and regulatory issuesPerception of donors might change

Rajajinagar KitchenVasanthpura KitchenBangalore East30 kms43 kmsProblem 2 Kitchen to handle Bangalore eastHeavy traffic restricts Vasanthapura kitchens reach Cook to eat time increases due to the distance which is further accentuated by traffic congestionsNeed to cater to schools in and around Bangalore East

PROBLEMSOLUTIONNew kitchen in Bangalore East to cater to this regionQuality of food maintained as cook to eat time reducedMore number of schools reached in Bangalore EastA step towards reaching 5 million childrenProblem 3 Growth with low InvestmentNeed for Expansion Target of reaching 5 million students by 2020 through MDMCooking-to-consumption time > 6 hours if existing kitchens are usedHigh Capital expenditure if new kitchens installed for more schoolsBudget constraints - Not many corporate donors Hub and spoke model3142Kitchen3142MiniKitchen3142MiniKitchen3142MiniKitchen3142MiniKitchenMiniKitchenHSOCOLMiniKitchenProduct Postponement strategy with Hub and spoke modelTransferred to mini kitchen after preprocessing of food cleaning, cutting and sorting into necessary quantitiesSOLUTIONFeasibility - advantages of Hub and spoke modelHigh flexibility cooking closer to consumption centreHigh quality food Cooking to consumption time is very lessCapital expenditure required is very less Better capacity utilization in existing kitchens Machinery idle time can be usedVans idle after delivery can be used for transport from kitchen to Mini KitchenLogistic savings delivery from Mini Kitchen to school can be given to third partyMore corporate donors Smaller investment and closer to businessesMore women can be employed through Self Help Groups (SHG)Additional fixed costs Machinery, labourLosing on economies of scale More cooking costsBiogas usage may not be possible Cost per meal will increase

ChallengesThank You