Professional Documents
Culture Documents
Gyanendra
Mahaboob Basha
Akshaykumar
Gagan Patil
Sachin Jain
Krishanu Barua
Agenda
1
3
4
ITC
Incorporated on August 24, 1910 under the name of 'Imperial Tobacco Company
Now, the ITC group is one of the Indias foremost sector companies, with a
diversified presence in tobacco, hotels, paperboards, speality papers, packaging,
agri-business, branded apparel, packaged foods, and other FMCG products.
ITCs Agri Commodity Divison
Its international Business Division (IBD) was created in 1990 as an agro-trading
company, which trades in commodities like food-grains, coffee, black pepper,
edible nuts, marine products and processed fruits.
Farm linkages acovering Soya, Wheat, Marine products, Coffee etc. Focus on value
added agri commodities
Leveraging IT for the transformational e-Choupal initiative
Over 40,000 villages linked through 6500 e-Choupals servicing over 4 million
farmers
ITC E-Choupal
Started in the year 2000
Target Area so far 40,000 villages, 6500 kiosks, 10 states
Wholly owned by ITC
Why it become a success ?
Only initiative to attempt to combine Services and an Effective Business
Model successfully
Designed to address the issues such as:
1.
Fragmented farms
2.
Weak institutions
3.
Involvement of intermediaries
4.
Information Asymmetry
Company Logo
The Tactical
Imperative
ITCs
ITCs distance
distance
from
from Farmer
Farmer
Daily
Daily price
price
inflation
inflation
Capture
Capture of
of
Intra-day
Intra-day
Price
Price shifts
shifts
Seasonal
Seasonal
price
price Inflation
Inflation
The
Strategic
Imperative
Horizontal
Horizontal
spread
spread
Vertical
Vertical
presence
presence
Risk
Risk
management
management
The Social
Imperative
Helps
Helps and
and
motivates
motivates
farmers
farmers to
to
bring
bring in
in
better
better quality
quality
Reduces
Reduces
conflicts
conflicts
among
among the
the
farmers
farmers
Company Logo
Pricing
Pricing
Inbound
Inbound
Logistics
Logistics
Inspecti
Inspecti
on
on
Grading
Grading
Weighin
Weighin
g
g and
and
Payment
Payment
Hub
Hub
Logistics
Logistics
Technolo
Technolo
gical
gical
support
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 ITC
Company Logo
Pricing
Pricing
Inbound
Inbound
Logistics
Logistics
Inspecti
Inspecti
on
on
Grading
Grading
Weighin
Weighin
g
g and
and
Payment
Payment
Hub
Hub
Logistics
Logistics
Technolo
Technolo
gical
gical
support
support
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
Pricing
Pricing
Inbound
Inbound
Logistic
Logistic
s
s
Inspecti
Inspecti
on
on
Grading
Grading
Weighin
Weighin
g
g and
and
Paymen
Paymen
tt
Hub
Hub
Logistic
Logistic
s
s
Technol
Technol
ogical
ogical
support
support
Company Logo
Pricing
Pricing
Inbound
Inbound
Logistic
Logistic
s
s
Inspecti
Inspecti
on
on
Grading
Grading
Weighin
Weighin
g
g and
and
Paymen
Paymen
tt
Hub
Hub
Logistic
Logistic
s
s
Technol
Technol
ogical
ogical
support
support
Company Logo
Pricing
Pricing
Inbound
Inbound
Logistic
Logistic
s
s
Inspecti
Inspecti
on
on
Grading
Grading
Weighin
Weighin
g
g and
and
Paymen
Paymen
tt
Hub
Hub
Logistic
Logistic
s
s
Technol
Technol
ogical
ogical
support
support
Hub Logistics
Farmer transports his produce to the nearest processing centre or
storage hub
ITC incurs the transportation cost
The farmer bears the risk of transportation until produce is delivered
and the sale is completed
Company Logo
Pricing
Pricing
Inboun
Inboun
d
d
Logistic
Logistic
s
s
Inspecti
Inspecti
on
on
Grading
Grading
Weighin
Weighin
g
g and
and
Paymen
Paymen
tt
Hub
Hub
Logistic
Logistic
s
s
Technologic
Technologic
al
al
support
support
Technological support
24,000 personalized business function points (information system)
110,000+ pre-built business functions
Integrated Business Systems for Direct Agriculture Procurement,
Rural Distribution, e-Choupal Management, Exports, Insurance and
Processing
Support for 8 local languages
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A Win-Win Deal
Farmers gain
Better information
Content
Better info timing
Less transportation
Cost
Transaction
duration
Weighing accuracy
Professionalism
ITC gains
Disintermediation
savings
Freight costs
Quality control
Risk management
Company Logo
Source: Seminar on Bottom of the Pyramid and CSR, IIM-K, Sept. 24, 2008
Source: Seminar on Bottom of the Pyramid and CSR, IIM-K, Sept. 24, 2008
Farmer Community
ITC
Commission Agents
Access to information
Empowered decisions
Improved agriculture
Economic benefits through lower transaction costs and
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 &
supply security
Low cost distribution channel
Access to market intelligence
Gain access to global markets through ITC and
commission to compensate some of the loss revenue
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
Drivers of
Supply Chain
Who are in
problems
Information
Local Mandi
Logistics at hub
Mandi laborers
Transportation
Storage facilities
at hub
Small processors
Risk
associated
with eChoupal
dominance of
Commission agent
Authenticity of
information
Problem of Power
and internet
connectivity
Company Logo
Parameters
Idea
Future of eChoupal
Version 1.0( the start)
Farmers gain The farmers get bargaining power and a Information on weather, price etc
opportunity of have choice
ITCs gain
other companies
Thank You !