Akshaya Patra A Supply Chain Study

Submitted to Prof.Devanath Tirupati

Submitted by Group 9
1311361 ASHWIN RAVIKUMAR
1311066 VENKATESH NALLI
1311053 SHREYAS B R
1311030 NAVEEN PRASHANTH
10
th
Mar 2013
IIM 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 Scope
Akshaypatra- Vasanthapura kitchen, Bangalores 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 facility Dhall/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 stock
1-2 days lead time
Kitchen cold storage
facility
Mapping of the Supply Chain Vasanthapura Kitchen
Pre 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
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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
Medium
Big 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
Containers
collection during
return trip
Kitchen
Day 0; 7.00 Am
Day 0; 9.00 Am
Efficiency Measure 5S system
Shitsuke
- Sustain /
Discipline
Seiri- Sort
properly
Seiton-
Set in order
Seiso -
Shine/Clean
liness
Seiketsu
Standardized
Clean-up
Keep 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 2.27
Cost 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 organization
II. Reduce manual effort across supply chain
III. Efficient complaint gathering mechanism
IV. Scaling up - where to open next
V. Education & improved awareness of school authorities and
students

1. Improving financial position of the organization
Issue
40% of APs 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 APs 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 APs idle
kitchen capacity -
1. Office catering services
2. Supply packaged, mass food
consumer like Railways
3. Supply to other in-city mass
demand centers like hospitals
4. 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 11.0
Total 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
Recommendation
Internet/Mobile application at school

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

An app can be installed on principals 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 implementation
1 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 Patra
4. Akshaya Patras homepage: http://www.akshayapatra.org/board-of-trustees#Advisors

.