1. ByPriyankka Chaurasia IT, UIT-RGPV

2. AgendaITC e-Choupal : An Introduction, 1 Stake holder AnalysisComparison of status of Supply Chain 2 before and after ITC e-Choupal Critical Analysis, and Comparison 3with HKB 4 Future Scope Company Logo 3. ITC e-Choupal : An IntroductionCompany Logo 4. ITC :An Overview Incorporated on August 24, 1910 under the name of Imperial Tobacco Company Company rechristened ITC Limited in 1974 One of the 8 Indian Companies to feature in Forbes A-list for 2004 Only Indian FMCG Company to feature in Forbes 2000 List Among top in :Sustained value creation (BT-Stern Stewart survey)Operating profitsCash Profits Ranks No. 4 among Indian listed Private Sector Companies by market cap. (@ April 09)No. 1 in FMCG Sector Rated as one of Indias Most Respected Companies (IMRB-Businessworld Survey 2006) Diversified conglomerate with interests ranging from Tobacco to HospitalityCompany Logo 5. ITCs Agri Commodity Divison Farm linkages in 14 states covering Soya, Wheat, Marineproducts, Coffee etc. Focus on value added agri commodities Unique CRM programme in commodity exports Leveraging IT for the transformational e-Choupal initiative Rural Indias largest Internet-based intervention Over 40,000 villages linked through 6500 e-Choupalsservicing over 4 million farmers Distinctive sourcing capability for ITCs Foods business 6. The predicament of Indian FarmersLow Risk Appetite Low MarginsLow InvestmentCaught in a vicious cycle ofunderdevelopment Low Value Addition Low ProductivityWeak Market Orientation 7. ITC e-Choupal Started in the year 2000 Target Area so far 38,000 villages, 6500 kiosks, 9 states Wholly owned by ITCWhy it become a success ? Only initiative to attempt to combine Services and anEffective Business Model successfullyDesigned to address the issues such as:1. Fragmented farms2. Weak institutions3. Involvement of intermediaries4. Information Asymmetry 8. ITCs Supply chain of Soya bean before e-Choupal InitiativeCompany Logo 9. Pakka Adtiya (Registered Dealer)Agri-Input Dealer/RetailerCompanies Stockiest Trader Money Farmer Processor LenderBrokerITC-IBD Agril University, VLW (of Dept ofMet Dept,Agriculture)Insurance Co.Kaccha Adtiya(Un-Registered Dealer) Company Logo 10. Why ITC thought of e-ChoupalThe Tactical The StrategicThe SocialImperativeImperativeImperativeITCs distance Horizontal from FarmerspreadDaily price inflationVertical presence Capture of Intra-day Price shiftsRiskSeasonal price managementInflationCompany Logo 11. ITCs Supply chain of Soya bean after e-ChoupalInitiative 12. Supply chain post re-engineering Weighing TechnologInbound InspectionHub Pricing and icalLogisticsGradingLogistics Payment support Pricing Previous days closing price used as benchmark price for next day Mandi prices communicated to sanchalak through e-Choupal portal Sanchalak inspects the sample, assesses quality and gives farmer a conditional quote and a note (name/village/quality tests/approx. quantity/conditional price), if farmer decides to sell to ITCCompany Logo 13. WeighingTechnolog Inbound Inspection Hub Pricingandical LogisticsGrading LogisticsPaymentsupport Inbound Logistics Farmer proceeds to the nearest ITC procurement hub with the note Some procurement hubs are ITC factories, others are purely warehouse operations ITCs aim is to have a processing centre within 30-40 km radius of its farmers Company Logo 14. Weighing Technolo Inbound InspectioHub Pricing andgical Logistics n GradingLogistics Payment support Inspection and Grading At the ITC procurement hub, laboratory tests are conducted on a sample of farmers produce To change farmers attitude and appreciating produce quality, ITC is developing lab tests to reward farmers with reward points for better quality supplyCompany Logo 15. Weighing Technolo Inbound InspectioHub Pricing andgical Logistics n GradingLogistics Payment support Inspection and Grading At the ITC procurement hub, laboratory tests are conducted on a sample of farmers produce To change farmers attitude and appreciating produce quality, ITC is developing lab tests to reward farmers with reward points for better quality supplyCompany Logo 16. Weighing Technolo Inbound InspectioHub Pricing andgical Logistics n GradingLogistics Payment support Weighing and Payment Farmers produce is weighed on electronic weighbridge He is then given full cash payment Freight expenses are reimbursed Appropriate documentation at each stage and farmer isgiven a copy of that Samyojaks handle cash operationsCompany Logo 17. Weighing Technolo Inbound InspectioHub Pricing andgical Logistics n GradingLogistics Payment support Hub Logistics Farmer transports his produce to the nearest processingcentre or storage hub ITC incurs the transportation cost The farmer bears the risk of transportation until produce isdelivered and the sale is completedCompany Logo 18. Inspectio WeighingTechnological InboundHub Pricing n and LogisticsLogisticssupportGradingPayment Technological support Nodal platform catering to commodity blending, agricultural trading, e-choupal &rural distribution 24,000 personalized business function points 110,000+ pre-built business function points Integrated Business Systems for Direct Agriculture Procurement, Rural Distribution, e-Choupal Management, Exports, Insurance, Aqua Processing & Commodity blending Support for 8 local languagesCompany Logo 19. A win-win Deal Farmers gainITC gains Better information DisintermediationContentsavings Better info timing Freight costs Less transportation Quality controlCost Risk management Transaction duration Weighing accuracy Professionalism Company Logo 20. Transaction cost in Mandi Chain (before e-Choupal)Source: Seminar on Bottom of the Pyramid and CSR, IIM-K, Sept. 24, 2008 21. Transaction cost in Mandi Chain (after e-Choupal)Source: Seminar on Bottom of the Pyramid and CSR, IIM-K, Sept. 24, 2008 22. Synergies for ITCCompany Logo 23. Generation of Goodwill & positive public opinionBetter supply chain for ITCs Food & Agri Businesses Costs, Quality, TraceabilityAccess to the Underserved Rural Markets Through a Virtuous Cycle created by LargerIncomes, and founded on Trust that is builtNew ITES Business Opportunities Health, Education, Entertainment, eGovernanceCompany Logo 24. Synergy Redefined :The Future VPN providing SCM, ERP & CRM capabilityF MA e-choupal rural two-way fulfillment AR capabilityRM Cigarette Trade Marketing capabilityKE ER Expanded FMCG distribution capability TS SBrandedLifestyle EducationMatches &Foodsretailing Stationery AgarbattisA basis for strategic partnerships with other FMCG brand ownersCompany Logo 25. Other e-Choupal Initiative Company Logo 26. Companies using e-ChoupalnetworkSource: Seminar on Bottom of the Pyramid and CSR, IIM-K, Sept. 24, 2008 27. Critical Analysis of ITCs Supply Chain Company Logo 28. Stake holder AnalysisPrimaryInterestStakeholders Access to information Empowered decisions Improved agriculture Economic benefits through lower transaction costs andFarmer Community process efficiencies Served with dignity Knowledge bundled sale of goods and services Co-opted in product design Hope for a brighter future Lower procurement costs Direct interaction with farmers - Control on quality &ITCsupply security Low cost distribution channel Access to market intelligenceCommission AgentsGain access to global markets through ITC and commission to compensate some of the loss revenue(Kachha &PakkaAdatiyas) 29. Efficiencies in e-Choupal network Last mile low cost solution Full Service approach Demand aggregation Third party seller Extensive use of technology Access to information about customers Pull based strategy 30. Drivers ofWho are in Risk associatedSupply Chain problems with e-ChoupalInformationLocal MandiEroded dominance of Commission agentLogistics at hubMandi laborersAuthenticity of information TransportationMarket near MandiProblem of Power Storage facilities at and internetSmall processorshubconnectivity Company Logo 31. Comparison with Haryali Kisan BazarCompany Logo 32. Hariyali Kisaan Bazaar HariyaliOther companies kisaanLoan for passbazaarthrough to farmersExtension serviceICICI BankFarmersRepayment of loanwith interest Produce procurementDSCL 33. E-chaupalHaryali Kisaan BazaarMainProcurementRural RetailobjectiveBenefit to the computer application to provide provide better method of cultivation byfarmersmarket informationtrained agronomistSynergiesSynergies with products which Synergies with what DSCL is ITC is manufacturingselling(inputs to agriculture plus other servicesEconomies of 25-30 km area coverage20-25 km area coveragescaleProcurementnear small town Strategically placed near petrol pumpcentre mainly 34. Future of e-ChoupalCompany Logo 35. e-Choupal 2.0Cmpany Logo 36. Version 1.0 v/s Version 2.0Parameters Version 1.0( the start)Version 2.0( the scale-up)IdeaThe concept gave a power of scale toBy 2006, 40,000 villages covering 4 millionthe small farmers by aggregating them as people.sellers ( of produce) and as buyers(of farm inputs)Farmers gain The farmers get bargaining power and a Information on weather, price etcopportunity of have choiceKnowledge on farming methods,soil testing etcPurchase of seed, fertiliser to insuranceFarmers sell crops to the ITC centrescattle care, water harvestingITCs gainAccess to inputs for its agri business; ITC was able to procureoffer the use of network to fresh commodities withother companies reasonable prices from the farmers 37. e-Choupal 3.0. The Deepening NEW BUSINESSES: 1) Rural jobs and employability 2) Personalised agri services. MORE INTERACTION: Through Choupal Saagars andHaats and via mobile phones NEW TECHNOLOGY: Use of especially enabledmobile phones, analytics, new partnerwww.themegallery.com Company Logo 38. ITC e-Choupal FootprintCompany Logo