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Efficient Information Management –a key to agribusiness supply chain
success
How ITC leveraged information management thru e-Choupal and transformed the Agri supply chain
By Sachin Sharma
ITC Limited
© ITC ltd
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Flow of the presentation
• e-Choupal– Background and concept– Information Management thru e choupal– other details of e-Choupal
• e-Choupal and Nokia Life Tool– A beginning in to leveraging mobile technology – A beginning in to leveraging mobile technology
• Information management in Agri extension activities• Choupal Saagar- an Agri business center• Reach and scale• A glimpse of some studies and awards to e-Choupal
© ITC ltd
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Information Management across Agribusiness value chain
Crop production
• Input and Weather information• Productivity enhancement thru agri extension• Scientific Package of practices • Desired quality of production by inputs and varieties
Crop Procurement
• Market information• Direct farm purchase information• Geographical quality mapping• Identity preservation
Storage and Logistics
• Scientific storage maintaining quality specks• Efficient logistics ensuring identity preservation• ERP solution for WH and logistics and Handheld devices for capturing data at point of transaction
Other RM procurement
• Tracking of Global markets across clock• Decision making considering geographical arbitrage
Manufacturing
• Efficient manufacturing• Outbound logistics • ERP catering to manufacturing and outbound logistics
Manufacturing with product
differentiation
Domestic and global commodity exchanges
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Crop Production and Crop Procurement
• Input and Weather information
Crop production
• Productivity enhancement thru agri extension• Scientific Package of practices • Desired quality of production by inputs and varieties
Crop Procurement
• Market information• Direct farm purchase information• Geographical quality mapping• Identity preservation
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The Potential & The Constraintsof Indian Agriculture are well known
8 Fragmented farm sizes
8 Heavy dependence on Monsoon
8 Poor extension work at the
4 Large arable land
4 Rich & Diverse Agro-climatic Zones
4 Strong institutional base in R&D 8 Poor extension work at the farm level
8 Numerous intermediaries
8 Weak infrastructure & inconsistent quality
4 Strong institutional base in R&D
4 Large domestic consumption base
4 Attractive export markets
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Story of the Indian Farmer
• Because most of them are small (1.5 ha average holding) …they do not have bargaining power
• Because all of them live in hinterlands (600,000 villages) …they do not have access to real time information (prices, weather)
• Because the circumstance of each one is very different (agro-ecological conditions, resources)… …they cannot get customized knowledge advise (on farm practices, risk management)
• Further compounded by weak infrastructure– Physical, Social, Institutional
© ITC ltd
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The Making of
ITC e-ChoupalITC e-Choupal
© ITC ltd
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The Value Chain (Farm to Factory Gate)
Agri Input R
etailer
Pakka
AdatTrader
Broker
InputCosSeed
FertilisersChemicalsPractices
Stockist
Mandi A W P
Agri Input R
etailer
Farmer
Processor
Money Lender
Kaccha
Adat
Trader
Broker
Dept of A
gri VLW
GovtUniv.
Met DepMSP
InsurancePracticesWeather
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The Insight - 1
4 Actually, these numerous intermediaries makeup for weak infrastructure, and deliver critical value in each leg at very low cost7 But their aggregate cost makes the chain uncompetitive7 And many times, by blocking flow of information & market 7 And many times, by blocking flow of information & market
signals, they are able to extract more profits for themselves than the value they are delivering
4 A more effective business model must be able to leverage the physical transmission capabilities of these intermediaries, yet disintermediate them from the flow of information and market signalsü Answer : Leverage the power of Information Technology
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The Insight - 2
Low Risk Taking Ability
Low InvestmentLow Margin
Low ProductivityLow Value Addition
Weak market Orientation
ü Answer : Leverage the power of collaborative business models© ITC ltd
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The Insight - 3
4 Information Technology and Collaborative Business Models gave us the power to design a new model 7 But physically reaching the nook & corner of India, and facilitating
Net access to the largely illiterate farmers at low cost, and delivering effective service is still a challenge…
4 The only historical success stories we could rely on were cross-industry !
4 Wide & Deep penetration of the FMCG retail channel4 Rapid scale-up of Public Telephone Booths4 Low cost reach & effective customer servicing by Cable TV
Operators
4 Answer: Unleash the power of small scale entrepreneur
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Farmer
Mandi
Price Discovery@ Sell Transaction
PRODUCTMarketTransaction
Traditional Transactions
Sell: sunk costs, inconvenience,other losses
VILLAGE
TOWN
PRODUCT&
SERVICEPROVIDERS
MoneyLender
Financing
Market
InputDealer
Knowledge (Use)
Buy:
Middleman
high prices, spurious goods, information not timely
Information(Aggr)
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What is e-Choupal ?
The e-choupal Infrastructure
Tier 1: An ICT kiosk with Internet Access•In the house of a trained farmer Sanchalak•Within walking distance of target farmers
•Additional investments in Solar Power & VSATs to overcome weak infrastructure
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e-Choupal structure
e-Choupal(40/hub)Tier 2
Tractorable HUB/
Choupal Saagar
e-Choupal(40/hub)
Catchment village
(5/choupal)
Tier 1
distance
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e-Choupal Infrastructure
V-Sat
Solar Panel
Battery
PrinterComputer
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Topology of e-Choupal
Power Socket
V-Sat Hub
Choupal Site
DW
Power Socket
UPS1
Battery1UPS2
Battery2
Solar Panel 1Solar Panel 2
eChoupal ComputerDMP Printer
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Service panel
e-Choupal Website- How it looks like
Announcement panel
News-ticker
Event Panel
Banner Ad
Choupal Radio
Pop-up
© ITC ltd
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The Web Portals also have
Localised and customised weather information…© ITC ltd
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…Best Practices in Farming
Farmers across villages can interact among themselves© ITC ltd
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Choupal Radio
Dr. Bhatnagar
Agri Expert
Dr. JP Tandon
Agri Expert *
Remixed with Pro VO in Studio
Server20 minutes of Infotainment:
Mp3 to
Flash Serverl ITC’s Jingle l Topical, customised
knowledge from Agri Expertl Q & A
l Health Segmentl Ads / Promotions l News wrap “The Week
that was…”l Feedback /Contribution
Flash Audio
Online streaming audio file
© ITC ltd
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Sanchalak oath – a social bonding between Sanchalak and ITC
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One Typical Transaction
• Choupal TransactionPrice InformationMoisture TestingQ & A
• That bundled• That bundled– Knowledge (what to use) and– Information (when to use), with– Transaction (ordering an input)to deliver unique value to the farmer
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The e-Choupal Infrastructure
• IT Infrastructure -ICT Kiosk with Internet Access– In the house of one trained farmer- the Sanchalak– Within walking distance of target farmers
• Physical Infrastructure - Warehousing Hub / Store– Within tractorable distance of target farmers– Within tractorable distance of target farmers– Managed by the Sanyojak
• Human Infrastructure– Sanchalak at e choupal and sanyojak at hub
• Virtual Infrastructure- Collaborative Network of Companies– Orchestrated by ITC– With a Pan-Indian presence
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The e-Choupal Services
• Relevant & Real-time Information– Commodity prices, Local Weather, News
• Customized Knowledge– Farm Management, Risk Management
• Direct Marketing Channel for Farm Produce– Lower Transaction Costs, Better Value through Traceability
• Supply Chain for Farm Inputs– Screened for Quality, Demand Aggregation for Competitive Prices &
Efficient Logistics• Agri Extension Services
• CPK and IT based extension services• Financial services
– KCC• Employability
A unique rural Job portal© ITC ltd
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e-Choupal-Business Principles
• All information and knowledge is available free of cost– This makes it easy for the customer (farmer) to be an active
participant
• The farmer is not obligated to transact with us• The farmer is not obligated to transact with us– The farmer will transact only if he sees value (good price, correct
weighment, full payment)
• Sanchalaks earns only if there is a transaction– If the farmer does not see value, Sanchalak pushes us to improve.
© ITC ltd
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Key Success Factor
Power ConnectivityTraining
© ITC ltd
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Mandi
Choupal Saagar
Farmer
Transactions through ITC e-Choupal
Sell:
Information(e.g., Price Discovery)
Knowledge (Customized)
PRODUCT&
SERVICE
Price discovery @ village, choice, efficiency
TOWN
Samyojak
Choupal Saagar
VILLAGE
Sanchalak
Transactions
Buy:
PAN-INDIA
SERVICEPROVIDERS
Information + Customized Knowledge @ village, high quality,competitive prices, superior service © ITC ltd
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Communication at e-Choupal
Farmer meetings
IT infrastructure for communication
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Leveraging AV Vans for village communications
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Execution Wasn’t Easy…
• Convincing farmers (Weighment, Mandi Prices)
• Aligning Middlemen (Cost, Effort, Risk Vs Margin Equation)
• Sanchalak Capability Building (IT, Communication, Entrepreneurial)
• Changing Government Regulations (APMC)
• Dealing with Poor Infrastructure (Power, Connectivity)
© ITC ltd
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E Choupal and Nokia Life Tool
Leveraging the mobile power
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Mobile model : Nokia Life Tool + e Choupal
Fertilizerprices
Seed prices
Sow
Grow and Harvest
Advise
Comprehensive database of
categories and crops
Pesticide prices
WeatherMarket prices
Sell
Daily detailed weather
Daily price information
© ITC ltd
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Agri extension thru e choupal
Enhancing productivity and quality
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Agri extension: Delivery Mechanism & Information Management
S.NoS.No.. Information Information ManagementManagement
Knowledge TransferredKnowledge Transferred ToolTool CoverageCoverage
1 Web based 1. Scientific package of Practices2. Queries thru website/mail3. Crop Alerts4. On Field Demo thru Experts
(Scientists/Consultant/Farmer Meeting Videos)
Website/Webcasting
e-Choupals
2 PC Aided 1. Important topics related to Best Practices CDs/Manuals e-Choupals & PC Aided 1. Important topics related to Best Practices2. Computer Operating Manuals
CDs/Manuals e-Choupals & Hubs
4 Farmer/SanchalakMeetings
1. Inputs –Target/ Usages/Methodology2. Pre-Season Orientation
Agri-Experts/ Managers
e-Choupals
5 A/v Vans 1. Movies on Crop Tech2. Awareness on best practices
CDs & Staff e-Choupals
6 Farm based activities
1. Scientific package of practices thru demonstration
2. Farmer self reliance in seed production
FLD(CPK), Field days
e-Choupals, registered farmers
7 Farmer scientist interaction
1. Meetings of agri experts2. Field visits of Agri experts/Govt officials
One to one interaction
At Choupalsaagar/Hub and e choupal
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Glimpse of Agri extension activities
Village meetings Expert- farmers interaction
Registration process Scientist interaction Dr Tandon Interaction with farmers
Package of practices sharing© ITC ltd
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Key Paddy interventions
Green manuring Proper Land preparation
Transplanting with Rope
Use of hybrid seeds
Regular Scientist interaction Harvesting at CPK plot© ITC ltd
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Key Wheat Interventions
scientific Land preparation Accurate sowing rate Zero Tillage
Proper weed management Right variety Scientific yield estimation© ITC ltd
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Village Meetings – communication of best farm practices
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Introduction of latest equipments for productivity and quality enhancement
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A Happy CPK Farmer
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Connecting partners for latest practices and inputs
Agriculture department Industry experts
Agriculture University and institutes © ITC ltd
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Storage and Logistics
• Scientific storage maintaining quality specks• Efficient logistics ensuring identity preservation
Storage and Logistics
• Efficient logistics ensuring identity preservation• ERP solution for WH and logistics and Handheld devices for capturing data at point of transaction
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Choupal Saagar- An Agri Business Hub
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Typical Layout of a Choupal Sagar
Parking
Grain Warehouse
Dispensary
Weigh Bridge
Fuel Station
Future Expansion(Cold Storage / Silos)
Hypermarket
Food Court
Training Centre
Total Land Area: Five Acres © ITC ltd
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Choupal Saagar
• The Facility– An eight-acre farmer facility complex
• Includes:– ITC procurement center:
• Complete with an electronic weighing platform, Immediate Cash Payment facility– Retail Mall
• Apparels, footwear, groceries, electronic durable from TVs to microwaves, cosmetics and other accessories, farm consumption products like seeds, fertilisers, pumps, generators and even tractors, motorcycles and scooters
– Facility Center: • Cafeteria and Kitchen, Corridor, Training center, Agri Advisory Services (Storage and
sale area), Doctor’s clinic and waiting area, Bank and Insurance– Utilities:
• Parking area, Toilets, etc.– Petrol Pump
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© ITC ltd
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Hypermarket @ Choupal Saagar bringsworld-class shopping experience to rural India
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Identity Preserved storage
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Online data tractions thru ERP and Handheld devices
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E Choupal competitive advantage
Trust – Helps Building Deep Rural
Linkages
Infrastructure -Commitment to Infrastructure -Physical Digital & Human, provides access and reach
Scale - Critical for all players to come
together
Experience - In delivery of products
and services
Commitment to work with farmers; capturing value for all
stakeholdersE-
Choupal
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Collaborative network of partners
UP Seed & TDC
NFL
Farm Inputs Public sector institues
•Met department• IARI• NRCS• DWR• Agriculture department•IISR•IISS•IISS•NRC-Sorghum
Durables Services
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Resulting in…
• Higher Incomes for farmers through– Increased Yields– Improved Quality– Reduced Transaction Costs– Reduced Transaction Costs
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New Value Added Foods
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Bottomline for ITC
• Better supply chain for ITC’s Food & Agri Businesses– Costs, Quality, Traceability
• Access to the Underserved Rural Markets– a significant business opportunity while serving society
• New Information Technology driven Business Opportunities– Employment, Health, Education, Entertainment, e-Governance
• Shareholder Value through Serving Society– Reliable delivery mechanism for development initiatives
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Reach and Scale
Wheat
Soybean
Soybean& Wheat
Coffee
Aqua
Wheat
Soybean
Soybean& Wheat
Coffee
Aqua
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ITC ABD
BRANCH OFFICES
LucknowJaipur
GurgaonKarnal
Supply chain infrastructure
PROCESSING PLANTSSEA PORTS
ORGANIC PROJECTS
Bhopal
Nagpur
Jaipur
HYDERABAD Vishakhapatnam
Kolkata (Aqua)
Kakinada
Mumbai
Jamnagar
Kandla
ChennaiChikmangalur
Kushalnagar
Nellore
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Studies on e-Choupal
• Itc's e-choupal and profitable rural transformation by Kuttayan annamalai Sachin rao World Resource Institute, Wharton Business School
• Echoupals: A Study on the Financial Sustainability of Village Internet Centers in Rural Madhya Pradesh by Richa Kumar Science, Technology & Society Program MIT E51-070
• The ITC echoupal Initiative by DAVID M . UPTON, Harward Business School• Learn from Them - A Compilation of Best Practices Govt of India Penguin Enterprise• Empowering the Poor - A Study of Rural Development Projects in India Author: Roger Harris
& Rajesh Rajora UNDP - APDIP ICT4D Series Publication• The Fortune at the Bottom of the Pyramid Author: C.K. Prahalad Wharton School
Publishing• Developing a Rural Market e-hub the case study of e-Choupal experience of ITC, B.
Bowonder, Vinay Gupta and Amit Singh, Tata Management Training Centre Pune and Administrative Staff College of India, Hyderabad.
• Bridging the rural digital divide: community based information systems, India e choupal, FAO • Fileds of online dreams, by Mohanbir Sawhney , McCormick Tribune Professor of
Technology at Northwestern University's Kellogg School of Management.• E choupal has been selected by Monitor group for break-through innovation. E choupal
achieved 8 out of 10 innovation levels in monitor framework. • E choupal has featured in outlook business featuring the m choupal.
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Awards and recognitions
• Appreciated by President of India during the national symposium to commemorate 60th year of independence 'agriculture cannot wait: new horizons',
• United Nations Industrial Development Organisation (UNIDO) Award at the international conference on Sharing Innovative Agribusiness Solutions 2008
• The Ashoka - Changemakers ‘Health For All’ Award 2006 for the Rural Health Services model for delivery of health services through the e-Choupals.
• The Stockholm Challenge 2006. This award is for using information technology for the economic development of rural communities.
• Innovation for India Award 2006 for ITC e-Choupal in the Social Innovations category for • Innovation for India Award 2006 for ITC e-Choupal in the Social Innovations category for business organizations. e-Choupal was declared as one of ‘India’s Best Innovations’.
• The Development Gateway Award 2005 (previously known as the Petersberg Prize) ITC is the first Indian company and the second in the world to win this prestigious award.
• The 'Golden Peacock Global Award for Corporate Social Responsibility (CSR) in Emerging Economies for 2005'.
• The inaugural 'World Business Award', instituted jointly by the International Chamber of Commerce (ICC), the HRH Prince of Wales International Business Leaders Forum (IBLF) and the United Nations Development Programme (UNDP)
• The ‘Enterprise Business Transformation Award’ for Asia Pacific (Apac), instituted by Infosys Technologies and Wharton School of the University of Pennsylvania.
• The Seagate Intelligent Enterprise of the Year 2003 Award, for the most innovative usage of Information Technology.
• The Corporate Social Responsibility Crown Award for Water Practices from UNESCO and Water Digest for its distinguished work carried out in the water sector in India.
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Change in Mindset
From
Fortune
At the bottom of pyramidAt the bottom of pyramid
To
Fortune
For the bottom of pyramid© ITC ltd
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Change in Perspective
From
Social opportunities in a business contextin a business context
To
Business opportunities in a societal context
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Business cannot succeed succeed
in societies that fail
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Thank you
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