ChangeCatalysers

Change Catalyzers

IIM Ranchi

<4.9

Low

• 41 COUNTRIES

5-9.9

Moderate

• 22 COUNTRIES

10.0-19.9

Serious

• 37 COUNTRIES

20-29.9

Alarming

• 17 COUNTRIES

>30

Extremely Alarming

• 3 COUNTRIES

India ranks 15th (from

bottom) overall and falls in

the alarming section

Triggers for poor GHI

• Proportion of undernourished

• Prevalence of underweight in children

• Infant Mortality rate

GLOBAL HEALTH INDEX

India’s Hunger Games

• 1/3rd of the world’s hungry live in India

• India has 212 million undernourished people only marginally below the 215 million estimated for 1990–92

• Over 25 lakh Indians die of hunger every year

Study of current PDS

Diagnosis Solutions Implementation Recommendations

Public Distribution System-Score Card

Key Performance

Metric

Evaluation Rating

Targeting Efficiency Only 10% of poor receive intended benefits on the

subsidies

offered by the Public Distribution System (PDS) in

India

Operating efficiency The central government spends three times the

intended cost on each kg of food grain

Reach only 10% of poor receive intended benefits on the

subsidies

offered by the Public Distribution System (PDS) in

India

Benefits to stake holders Around 23% of all Fair Price Shops (FPS) are not

viable and survive solely due to leakages

and diversions

Improving the food

consumption patterns

Poor Global Health Index indicators



Central Government-Purchasing food grains and

policy making

State government-Identifying the right targets (BPL/AAY)and

issuing ration cards

Food Corporation of India-warehousing of the food grains

Fair Price Shops-Last mile distribution to the customers

Diagnosing the PDS-identifying the touch points to be corrected

Lack of efficient

feedback systems

and transparent

purchasing

mechanism

Huge number of

bogus cards and

inefficient usage of

technology

lack of proper

storage

infrastructure

Appointment of

dealers and

commissions

paid(Wadhwa)



Contemporary approach to design an

efficient PDS

Preliminary Diagnosis of the problems and bottlenecks (Previous slide)

Research findings from various committee

reports

Best practices from successful

models elsewhere in the world

Inputs from the world of “Business

operations” in terms of supply chain efficiency

Our Approach



Dynamic because of

policy changes like Food

security bill

Measurement

and feedback

• Technology usage has been restricted only to identification of the targets alone which is just a part of the supply chain

• Integrating technology deep down to all levels optimise the whole process where 3 important objectives are achieved

– Movement of Goods

– Movement of Information

– Movement of Money

• Decentralisation of accountability and performance based incentives at as many levels as possible

• Performance metrics at each level should be in line with the overall final objective of the system(Reach and efficiency) and the contributions they are contributing to achieve them

• PDS should be approached from the view of a typical supply chain of a private FMCG company which can bring out information about any product at any level

Solution



Extra ordinary process+

ordinary personnel

ordinary process+ extra

ordinary personnel

• “Theory of constraints” is a concept in which analysing the existing

system leads to the bottleneck(most inefficiently managed

function)

• After identifying the bottleneck applying the quality frame work of

DMAIC to improve the current system

Implementing the Solution



Define - Defining the problem after studying

the process/system

Measure - Identifying the parameters to be

measured that can quantifiably explain the

impact of a solution

Analyse - Analysing the current process and

performing a root cause analysis to figure the

place where to exactly hit the nail

Improve - Proposing the possible solution and

picking the best possible one by weighing all the

parameters and consequences

Control – After implementing a solution it is very important to sustain the gains that

were available

• PDS is similar to supply chain of any big FMCG or manufacturing

company but differs in terms of volume as the volumes here are

way higher

• Commercial viability of the Fair Price shops is a big question mark

as there are no incentives for them to follow the ethical practices

which is at times leading to the diversion of stocks to the open

market

• Similar to that of a typical supply chain of a company PDS has to

have a efficient process in place rather thinking of volumes

• First option outruns the second as in the second option as extra

ordinary people may not be there at all levels and all the time

• While an extra ordinary process in place can take care of the

people in the system and help making informed and intelligent

decisions

PDS



• Central Government: Responsible for purchase of food grains, transporting

them to principal FCI go downs and fixing quantity and price of food grain

to be distributed to BPL families

• State Government: Responsible for identification of BPL families and

issuing ration cards

• Food Corporation of India: Responsible for warehousing the food grains

• Fair Price Shops: Last mile distribution to actual consumers

Stakeholders

Visibility

• The four stakeholders are independent bodies and that is why there is a

lack of coordination amongst them

• Mechanism to peep through from the top to the lowest possible level would

be the ideal level of visibility but that is near to impossible



• Variations in supply and demand are very common phenomenon

• In case of PDS the variations are caused by the off take demands as BPL

families may not have sufficient cash for doing the same

• APL families at times prefer to get their stock from the open market

leaving FPS’s with huge stocks

• Supply variations occur because of natural calamities and disasters so

system has to be robust enough to absorb such variations

Variability

Velocity

• Variations in supply and demand are very common phenomenon

• Reacting to them in the lowest possible time is where the system can be

differentiated



3V’s of supply chain-Visibility, Variability & Velocity could be applied in the above mentioned ways to improve the efficiency and effectiveness of PDS

• Launching a pan India Pilot project by selecting 1 district from

each state and probably 2 from larger states by population

• Existing system has to be inspected to find out the loopholes

– Upstream to Downstream

– Downstream to Upstream

• Downstream to upstream analysis would lead to a proper root

cause analysis and help us in identifying the exact location and

magnitude of the leakages

• Implementation our solution will help us measure the leakage and

reach of PDS to the public

• After the running the pilot project DMAIC framework is to be

applied which helps in continuously improvement as problems of

PDS cannot be solved by a single solution

Pilot Project



Thank You