Food Security Supply Chain Design - NPTELnptel.ac.in/courses/110108056/module5/Lecture34.pdf ·...

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Food Security Supply Chain Design Opportunity for Eradicating Hunger & Malnutrition in India

N. Viswanadham

Indian Institute of Science Bangalore- 560012

[email protected]

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Agenda l  What is food security? l  Current Efforts by Various Stake Holders: Governments,

NGOs, Hawkers, etc l  Food Security Indices by the World Organizations l  Our Approach

–  Our Diagnosis

l  Food Security Supply Chain Design –  The Business Processes –  Governance of FSSCN –  Supply Chain Network Coordination –  The Supply Chain Risks

l  Conclusion 250708

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What Is Food Security?

l  The World Food Summit of 1996 defined food security as existing “when all people at all times have access to sufficient, safe, nutritious food to maintain a healthy and active life”.

l  Thus food security implies both physical and economic access to food that meets their dietary needs, nutritional requirements and food preferences.

l  Nutritious food providers have three functions: Making it Available at Affordable prices and creating Awareness to the consumers

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Current Efforts by Various Stake Holders: Governments, NGOs, etc

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Government Programs for Food & Nutrition Security

l  Major Programs to Augment Availability of Food –  National Agricultural Development Program –  Accelerated Irrigation Benefit Program –  Fertilizer Subsidy –  Bank loans, Free Electricity

l  Major Programs to Improve Economic Access to Food –  Public Distribution System –  Mahatma Gandhi National Rural Employment Guarantee Scheme –  National Food Security Bill

l  Major Programs & Partnerships to Improve Nutrition Security –  Mid Day Meal Scheme –  Integrated Child Development Scheme (ICDS) –  Annapurna Scheme (Ministry of Rural Development) for senior citizens –  The Nutritional Program for Adolescent Girls –  Emergency feeding program ( in eight districts in Orissa)

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Performance of the Food Security Schemes has been far below the Mandates.

l  The food security programs as envisioned are too narrow & equate food security with grain security

l  These have become classic examples of corruption, diversion, adulteration .

l  Food Adulteration(Milk, Fruits, Fish) with chemicals such as calcium carbide getting deadlier by the day

l  The cost of implementation of the PDS program is high (6 rupees for each rupee of rations delivered and 4 rupees for each litre of kerosene)

l  Suggestions for improvement include –  Replacing ration cards with food coupons or UID. –  Using IT for monitoring and visibility.

l  Neither of them can stop corruption or improve the performance


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Efforts by Foundations

l  Naandi runs several automated central Midday Meal Kitchens across the country which prepare and deliver high-nutrition noon meals (in consultation with National Institute of Nutrition) to 8 lakh underprivileged children every day including in tribal areas .

l  Akshaya Patra reaches out to 13lakh children in more than 8,200 schools in 8 states of India, providing them with freshly cooked meal packed in stainless steel containers.


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Cuisines by the Sidewalks http://openthemagazine.com/article/business/cuisines-by-the-sidewalks

l  Hawkers in several major cities, (Mumbai 250 000, Delhi

200,000 ,Calcutta 150,000 ,Ahmadabad 100,000) serve the food needs of millions of urban poor. (considered illegal by municipalities)

l  Kolkata’s 150,000 street food vendors cater to nearly 10 million people with 230 types of food. –  Vendors wear aprons, gloves and face masks; cover their heads,

serve food in thermocol or bio-degradable plates, serve bottled water and prepare food as per a manual published by the AIIHPH.

–  Initiating a micro-credit scheme, from banks, for purchase kiosks

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Food Security Indices by the World Organizations

l  Global Hunger Index (GHI) Published by IFPRI In 2011, India ranks 67 of the 81 countries. The GHI is composed of three equally weighted indicators - proportion of the population that is undernourished, proportion of children who are underweight and under-five child mortality

l  Human Development Index(HDI) India ranks a low 134 among 187 countries HDI is a comparative

measure of life expectancy, literacy, education and standards of living.

l  Malnutrition:Integrated Child Development Services 47% children below the age of three years are malnourished

(underweight). Also, 47% of Indian children under five are categorized as moderately or severely malnourished.


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Our Approach

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Our Diagnosis

l  Food security need to be properly defined and the delivery processes need to be well designed and their executions monitored. l  Need articulated Changes in Consumption Patterns

–  In both urban and rural areas % cereals in food is declining & high value products such as fruits, vegetables, meat, dairy products, and fish is on the rise

l  Not treated as a supply chain problem. Recent advances in technologies and in the food vertical: Logistics, Raise of Supermarkets, Food Processing & Packaging, Wireless, Traceability using RFID are ignored.

l  Coordination and Execution are absent


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Food Security Supply Chain Design Making Nutritious Food Available at Affordable Rates

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Consumers

Vocational Training

Processed Food Products

Meat & Diary Products

PDS Mid Day Meals

Households

Hawkers

Kitchen

Kitchen

Distribution Center

Distribution Center

Distribution Center

Food Security Solution: To Serve 100M Urban Poor

IT Backbone on Cloud

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Food security Supply Chain Strategy l  Orchestration of the food supply chain in urban areas as

Food Value chains to Hawkers, Schools, Outlets which are ISO certified

l  The strategic partners include –  Warehouses and distribution centers, Kitchens –  Hawkers –  Governments & School managements –  Vans to carry food packets to schools, hawkers –  Waste disposal –  IT monitoring and call centers –  Micro-finance companies –  Vocational Training Institutes –  Hawker vehicle manufacturers –  Electrical equipment innovators: Solar , gas enabled heaters/

refrigerators, Automated Kitchens N.Viswanadham

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The Business Processes

l  Creating awareness on Food, nutrition and health relations l  Preparation of the menu by crowd sourcing l  Procure the food material from suppliers (Government or

private parties), the processed food manufactures and meat and milk vendors and store in the distribution center.

l  Certification of quality at each stage in the chain l  Transfer the materials from the distribution center to the

kitchens on a daily basis or as required or as ordered. l  The delivery of the food packets from the kitchens to the

hawkers, schools and other outlets using delivery vans. l  Return of unsold food for disposal l  Financial supply chain


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Execution using Smart Technologies

l Streamlined execution of food security chain for urban poor is through Smart business network that uses GPS, RFID, UID, Sensor networks, mobile, call centers etc.

l Brainstorming and discussions with stakeholders would certainly lead to an Executable Food security system to replace the currently corruption ridden inefficient system

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Food Security Ecosystem

N.Viswanadham

Food Security Ecosystem

Municipality & Ra7on shops

Ci7zen Groups, NGOs

Ins7tu7ons

Regula7ons – APMC act, Min Support Price, Ra7on

cards

Quality Control & Hygiene

Service Delivery Technologies & M

echanisms

Voca7onal Training through NREGS

Logis7cs and Transporta7on

Food Courts, Schools

Cloud :Data records and Audit

Communica7on and Informa7on Technology

Hawker carts with GPS and

Sensor Networks

Service Chains

PDS, Meat , Dairy Fruits and Vegetables Consumer Kitchens Distribu7on

Centers

Hawkers Schools

Food courts

Resources

Water, Energy & Power

Resources

Food processing Industry & Dairy Clusters

Human Resources

Financial Resources: Govt., Banks, Micro

Finance Hawker Push Carts Manufacturing, Kitchen Design

Farmers & Land

Resources

Food Research Labs

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Ecosystem Enabling Processes l  Changing the delivery process to supplying nutritious food

rather than grains –  Legalizing current stake holders such as hawkers and other private

food suppliers –  Obtaining grains through open markets –  Identification using biometric schemes –  Crowd sourcing the menu from the customers –  Certification of quality at each stage in the chain –  Vocational training for all business participants –  Micro Finance for small businesses such as hawkers

l  Designing as cooperative or orchestrated smart business network of public private partners in place of government supported welfare scheme managed by bureaucrats .

l  Monitoring and control by cloud based control room that has data collection, mining and fraud detection capabilities


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Performance

l Quality l Sales l Customer satisfaction l Stake holder happiness


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Nutritious Food Manufacture & Delivery

l  Design of nutritious food for children, pregnant women and working young population is a well researched topic.

l  Manufacturing processed food as per these norms can be easily done following the practices in other countries.

l  The scale of 600 million customers provides incentive for food manufacturing companies for developing a highly agile adaptive nutritious food supply chain to produce the products at affordable prices and make them accessible.

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Supply Chain Costs

Other stake holder Margins

Material Costs in Distribution Centers

Total Cost of Food Processing

Shipping Cost

Kitchen costs

Hawkers margins

Total Cost

Product Cost including Tax

Total Transport Costs

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Governance of FSSCN l  The management challenge in a FSSCN is the coordination of

its activities sourcing, food production, distribution and variety of services such as vocational training, transport, ICT

l  Also the following are the daily activities –  Selection of Menu for the kitchens and suppliers; what will they

supply how it is used in cooking(e.g., product tastes and quality); the production and delivery schedules (how much to produce and when) of the kitchens , capacity and upgradation of kitchen equipment, new recipes.

–  Special foods for children, mothers and pregnant women and delivery in their location

–  Quality assurance across the chain and its maintenance –  Mitigation of adulteration, pilfering etc.


Governance of Food Security System Industry CEOs/Technology Officers

Restaurant Chains

Government

City Governance Advisory Board

Business Development

Execu7ve Director

Quality Control Board

Manager Sourcing

PDS Meat

Diary Vegetables and Fruits

Data Monitoring & Execu7on Call Center

Stakeholders

Manager Services

ICT

Hygiene, Quality

Waste Management

Voca7onal Training

Manager Food

Prepara7on

Warehouses

Kitchens

Food Processing

Manager Distribu7on

Hawkers School

Food Courts Transporta

7on

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Supply Chain Network Coordination

l  The network consists of half million stake holders in big cities. Majority of them are hawkers who are small entrepreneurs.

l  The asset intensive part of the network are the Kitchens and the Distribution Centers.

l  The Distribution centers can be a shared service with the big retailers but the Kitchens have asset specificity.

l  The Governance model can be an orchestrator type i.e. the governance is managed by a third party such as an NGO or One of the lead players such as the Kitchen owners can manage the supply chain.


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Areas of Skill Training l  Warehouse Distribution and retail staff l  Processed Food outlets staff and managers l  Cooks, chefs and managers of Kitchens l  Hawkers l  Call centers IT workers for monitoring l  Transporters l  Trained managers for Execution l  Food Inspection and Hygiene

Total numbers needing training may add up to several lakhs in big cities

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The Supply Chain Risks

•  Political/social pressures for permissions •  Creating nutrition awareness among consumers •  Compromise on quality and hygiene •  Misunderstanding by the hawkers •  Resistance by other organized restaurant and

Kirana shop owners •  IT/ technology adoption barriers •  Waste disposal & Recycling

Talent needed to convince all the stakeholders including government


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Is there for Proof of Concept through a Pilot Project ?

l  We put together all the best practices from various earlier implementations and organized them to create a high impact food security solution that generates millions of jobs.

l  Our concept is already implemented in parts very successfully by NGOs Naandi, Akshaya Patra for the mid day meal program and by more than one Million Hawkers cater food to millions of people in various cities .


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In Summary •  We presented a well Orchestrated food security supply

chain network design for urban poor as a resilient network of alliances by streamlining and enhancing the food value chains to Hawkers, Schools, and other Food outlets, while ensuring certification of the quality of the food at each stage in the chain and also providing opportunities for vocational training and micro financing to all the stake holders.

•  Supply Chain Coordination and Governance are of fundamental importance to attain the objectives of the food security SCN.


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Conclusions l  Our suggestion is streamlined execution of food security

chain for urban poor which is a business network made smart using GPS, RFID, UID, Sensor networks, mobile, call centers etc.

l  For Rural poor district-wise distribution centers and kitchen with MacDonald's type outlets or Food courts may be a good solution.

l  Warehouse locations should be based on population statistics and location specific needs

l  Brainstorming and discussions with stakeholders would certainly lead to an Executable Food security system to replace the currently corruption ridden inefficient system

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Finally

l Apply same thinking in –  Health care –  Education –  Hospitality & Tourism

N.Viswanadham

Food Security Supply Chain Design - NPTELnptel.ac.in/courses/110108056/module5/Lecture34.pdf ·...

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