Bettering service supply relationships in Indian agro-food SME’s

8/14/2019 Bettering service supply relationships in Indian agro-food SMEs

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VIABLE AGRO-INDUSTRYMODELS FOR SMES ANDSUPPLY RELATIONSHIPS IN

THE INDIAN CONTEXT.Presentation by

Amarnath Govindarajan

Sandwalk Consultancy

UEL.


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PROBLEM STATEMENT

Indian agro-industrial SMEs have beenfinding it difficult to source products thatmeet international standards.

Seasonal variations, fluctuating demandissues are not suitably addressed at thesupply side.

Lack of communication channels, informationexchange between stakeholders. One enddoes not know the other!

(Rao, 2007)


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ACTION PLAN

Study prevalent models and identify a modelappropriate for an SME.

Identify factors/components on the supplyside of the model that need to becustomized.

Address academic issues involved withcustomization.

Identify tools and methodologies that can

help the process.


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EXISTING MODELS

Co-operative, government organization,private MNC contracting and VAC models areprevalent.

The co-operative and governmentorganization models are ruled out.

Both are top-heavy, very large scale models.Difficult to emulate at SME level.

(Gandhi, Kumar, & Marsh, 2001)


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THE MNC PARTNERING MODEL

PepsiCo introducedcontract farming inthe Indian state ofPunjab.

Used informalcontracts to buy backproducts fromfarmers.

Company invest inbuilding relationshipswith

suppliers.(producers)


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PEPSICO PARTNERING MODEL

Capable of absorbing losses for three yearsbefore profitable operations. ( Rs.40 millionper year). Mostly uni-product.

Heavy industrial backing, and marketinginfrastructure has been seen as importantfactors that led to success.

Ruled out for SMEs.


7/16ITC E-CHOUPAL OR VAC MODEL

Adapted from (Gandhi, Kumar, & Marsh, 2001)


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VAC MODEL KEY ENABLERS

Implementing agencyaccess to Information-Communicationtechnologies, and

infrastructure set-upat every village level.

Financial viability forlarge scaleprocurement moneysaved on intermediaryexpenses.


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ISSUES IN ADOPTING THE VAC MODELFOR SMES

Problems Costs incurred on setting up ICT infrastructure

is prohibitive at SME levels.

Intensive organizational skills and resourcesneed to be deployed to assure last mileconnectivity and mass-reach out.

Lead-in time before profitable operations isminimum 3 years.


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PROPOSED SOLUTION FORADOPTING THE VAC MODEL FOR SMES

Substitute market intermediaries for ICT. Deploylimited ICT for educating/informing theintermediaries.

The SMEs will begin working within the existingsystem and incrementally improve services.

Resource requirements are much lesser.


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THE CHALLENGE

Getting the intermediaries/suppliers to work oncompany requirements while a ready mademarket is available.

Appropriate Service System Design for suppliers andSupplier Development.

Evolving a framework/model that will assist

substituting mass ICT presence with intermediaries.


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ACADEMIC ISSUES

Adopting a two-level bi-directional supply chain.

Adapted from (Sampson, 2000)


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ACADEMIC ISSUES

Supply Relationships Supply base issues

Supply chainintegration

Partnering andVendor Development

Supply ChainApproach to

Service Design Service blueprinting

(Sampson, 2000)


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PROJECT DELIVERABLES

Overview of present models in Indian agro-industry and positioning VAC model as apt forSMEs with required changes. (750 words)

A brief review of academic issues involved(1500 words)

Methodology & Findings (1250 words) Supply Chain Management Tools

Appropriate Service System Design


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REFERENCES

Gandhi, V., Kumar, G., & Marsh, R. (2001).

Agroindustry for Rural and Small Farmer

Development : Issues and Lessons from india.

International Food and Agribusiness Management

Review , 331-344.

Rao, N. (2007). A framework for implementing

information and communication technologies in

agricultural development in India. TechnologicalForecasting & Social Change , 491-518.

Sampson, S. E. (2000). Customer-Supplier Duality

And bi-directional supply chains in service

organizations. International Journal of Service


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THANK YOUSuggestions/Questions/Comments.

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Bettering service supply relationships in Indian agro-food SME’s