eFarm : A Farmer To Consumer Agri Supply Chain Network
Venkata SubramanianFounder/ Managing Director , eFarm
M.S (Comp. Science) , SUNY Albany, Newyork (2003)
B.Arch , IIT Kharagpur (1995)
ICT tools to empower the Agri supply chain
eFarm – an Introduction
Vegetable and Fruit Supply Chain in India – Current Issues and Status
Supply Chain Management – What is it ? Why is it important ?
Technology in SCM : Key segments
•Data collection / communication – Voice and Mobile
•Customer Relationship Management tools – Order Management
•Supplier Relationship Management tools – Resource Planning
•Demand forecasting & aggregation
•Pricing analysis using indg/tnau data
•Data analysis / MIS
•Logistics Management tools – Supply chain management &
simulation
•Social networking tools - Forums, Blogs (text / video)
•Data exchange : XML
• Venkata Subramanian
• Founder & Managing Director: ([email protected] )
MS (Computer Science), University at Albany, NY , B.Arch , IIT
Kharagpur (1995) , India
12 years of experience in IT industry in leading Global Software
development and consulting firms
Very strong expertise in analysis & design of complex systems ,
portal development , back office operations in BFSI segment
Responsible for overall strategy , technology and public
relations
Combination of different background ,skills and experience to provide creative perspectives to solving key
problems in the supply chain area
Our Vision •Bring people together through creative use of technology platforms ('connecting the dots' ) to form socio-economic-webs•Create successful entrepreneurial, social enterprises which are profitable and sustainable•Make corporate social responsibility our core business model and differentiator •Measure success not just in financial growth , but also in the social growth in the areas we serve
HiTech
Sabjeewallah
;-)
IT enabled
Annachee !!!
Wholesalers to Retailers
Terminal markets to neighborhood wholesalers
Regional mandi to Terminal markets near
large cities
Harvesting of Vegetables
A local mandi auctioning
Local to Regional mandis for Auction
• Unorganized, unregulated, unprofessional &
unprofitable - A Middlemen’ dominated market
• Lack of demand/supply data
• No reliable sales, distribution, marketing
channels
• Poor logistics and storage management
• No IT/ERP usage – decisions are adhoc and
arbitrary
1
2
3
4
5
6
Retailers to Dining Table
7
Loss in transit 40%
Price hike
End to end
> 400%
Eg: Ooty Carrots (As of 29th
June 2009)
5/kg
20/kg
28/kg32/kg
Farmer’s
market
(In Ooty/
Kothagiri)
Metro Terminal
Market
(Chennai)
Kirana
stores,
Push
carts
Branded
Retailers
500 % Price hike
Over 500% Price hike on average to customer , but no value addition
Changes hands several times: 40-50% is wasted – which adds to the costs
Prices set at each intermediate point arbitrarily by brokers/agents without
any planned demand/supply data
Farmer typically operates at 25% loss , End retailer less than 5% net margin
Regional
mandi
(Mettupala
yam)
12/kg
Neighbourhood
market
(Thiruvanmiyur
Chennai)
24/kg22/kg
End customer
price
Premium
Grade
(Export)
42/kg
Source : Ooty market traders, Chennai traders, indg.in
Description Cumulative Wastage
Potato 24%
Cauliflower 24%
Banana 30%
Cabbage 36%
Tomato 40%
High cumulative wastages across the supply chain varied from 24% (for potato) to 40% (for tomato)
Market Scenario
Data Value Notes
Fruits & Vegetables (Total market) 668800 Cr Organised + Unorganised
Organised segment 8216 Cr < 1.2% of total market
Total Volume of fruits & vegetables produced
100 Million Tonnes
Amount processed 1% World avg ~ 40%
Amount exported 1% Not in top 25 in world exporters
Wastage in transit & handling 40% ~ Rs 40000 Crores lost revenue
Average per person monthly expenditure in F&V (Urban)
68 Rs 11% of monthly expenses on food
Avg. per person monthly consumption of F&V
8 kgs
ITC, Nilgiris, Reliance, More, Big bazaar etc all put together !!!
Even a 1% reduction in wastage will generate additional 5 crores in profit to farmers !!!
Typical scenario for a metro city in India with 5 Million population :Daily demand : 1250 tonnesDaily sales : Rs 1.2 Crores
India is a World leader in PRODUCTION but still IMPORTING our food to meet local demand
Over 60% involved in agriculture & related activities, but contributes less than 20% to GDP. Growth rate Y-O-Y is just 2% owing to lack of professional management & focus
Source : IMAGES F&R Research Study , Govt of India , Dept. of Agriculture
The Farmer : Mandi system does not offer stable , sustainable price realization Organised retailers don’t pick lower grades , have long credit periods
The Lorry drivers : Lorry booking agents/brokers take 40% of cut. Fluctuating rates and
high stress work The Sellers : Organized retail : High investment , Poor supply chain, Low volumes Unorganised retailers : Sabjeewallah/push cart vendors :
▪ Missing link and unsung heroes of the supply chain. (Over 90% of volume retailed here)
▪ No proper benefits / finance / support The Buyers : Housewife : Fluctuating costs, Poor quality Hotels / Food processors : High costs, Unreliable suppliers Exporters : Poor standards / quality , High logistics cost
Supply Chain ManagementWhat is it ? Why is it important ?
Farmers
Cooperatives
Collection centers
Village ICT kiosks
Phone booths
Mobile operators
Storage
Warehouses
Value added resellers
Sorting , Grading , Processing, Packing
Small Independent transporters
Intra-city small tempos
Kiranas
Self Help
Groups
Hawkers
eFarm
Bulk buyers
Exporters
Logistics Fleet
operators
•IT Systems usage : NIL•Management team : Illiterate and average age of 55•Age of company : Over 150 years•Customer Segment : From slumdwellers to crorepathis•Operational efficiency : Six sigma !!!
The Mumbai Dubbawallahs !!!
•Key success factors :
•Highly decentralized operations – agile, flexible , scalable •Use of low cost transport medium – trains•Use of human power for last mile delivery – No Fuel related hikes•Strong customer relationship – personal , localised•Simple coding, routing, labelling system – operates even without electricity !•Delivery excellance – fixed time , professionalism
Fix the process first
And THENImplement technology
Otherwise will be
a failure …..
Farmers
Rural Produce
Collection Centres
Quality
Inspection/ Grading
Cleaning / Packing
Routing
Long haul
Transportation
Urban area
Distribution centre
Small retailersLocal vendors
Food Processing
units
Exports
Bulk buyers
(Hotels / Caterers /
Retailers)
Compost/Manure
from waste
eFarm Common Services
Planning &
CoordinationResearch
Call centre /
CommunicationTechnology
Training &
Support
Local
Distribution
Financial Success
An untapped , niche market with very few organized, entities
Revenue generation through better optimization, value addition across the chain
Reduced wastage in transit = more revenue
Has potential to jumpstart other agri-dependent ventures
A professional ly managed supply chain is vital for tapping international markets
Potential to scale across India as core problem is wide spread
‘Pull factor’ from rural India for other services and products
Social Progress
Organizing the large unorganized agri sector of India – bottom of pyramid
More income to farmers , truck operators and small vendors owing to profit sharing across the network
Support to traditional , eco friendly farm practices , organic farming through better marketing
Convert waste to compost , providing low cost manure back to farmers.
Revival of agriculture dependent livelihoods , empowering villagers
Under privileged/Disabled and urban poor get employment opportunities
Open source
Tools &
technologies
AgriXML
As a dataXchange
format
Collaboration and B2B trading
platform
•Content : Daily pricelists,
Schedules, Trends , Buyers
guides
•Order management
•Search / Track items
•Delivery tracking
•Agri specific social networking
Backoffice Systems
•Customer relationship
management
•Supply chain management
•Mobile/SMS gateway interface
•Voice based interface
•MIS & Data mart
-
-
eFarm Registers the farmers,
transporters and other intermediaries
with basic details such as produce
type, volume, expected price range
etc.,
1
eFarm Retail co-coordinators (ie.,NGO
/small retailers) consolidate the Orders
from buyers received through phone,
email and walk-in to make one
consolidated demand list
2
eFarm sourcing managers track prices
across different areas and feed in the
data. The central order matching
system determines best source,
location and logistics channel for
fulfillment.
3
Advance amounts are collected from buyers
.Payments are made to farmers and
intermediaries upon delivery.
4
The vegetables are sorted and graded at the
eFarm Distribution centers across the city by
members of women’s self help groups of the
area..
The orders are delivered immediately through
delivery vans,push carts etc to end
customers
5
6
7Lessons learnt, feed back and data analysis conducted on the order received is shared with
the members in the chain. This helps to optimize the operation continuously and increase the
value creation across the chain.
Small & mid sized farmers
Rural
Collection
Centres
Urban
Distribution
Centers
Retailers /
Mom & Pop stores
Bulk buyers
Exporters
Hub and Spoke Model For
Scalability and Organic Growth
… organic growth and
expansion
Cooperatives
Forward Logistics ( Fresh Produce)
Food Processors
Catering/Hotels
SHGs
Producer
Corporations
Reverse Logistics ( Manure , Farmer supplies)
ICT Technology and the BOP segment : Challenges
• High illiteracy
• Even amongst educated – Mostly local language skills only
• Low computer skills , Low internet penetration Technology Adoption amongst BOP segment
• Highest and fastest penetration : The mobile phone
• Self taught the phone interfaces , usage
• Pay full price for new models , talk timeeFarm Interface points
• Voice call centres / BPOs (local language )
• Natural language IVRS ( 2 way –automated messages)
• SMS
Production data
• Produce name, variety
• Grade
• Typical yield at harvest
• Harvest cycles
• Cost price at farm gate
Farmer information
• Name
• Address
• Contact number
• Preferred mode of payment
• Bank / Post office details
• Photo
• Attestation
Click to open ->
Tools and calculators
to assist farmers in
determining their
Sale price
Koyambedu
nadu tomato (data courtesy : TNAU-INDG market
information portal)
Ottanchatram
nadu tomato
Where to sell ?
At what price ?
Head to head comparisons
across
Markets
Insight - Support level prices and
inflection points
High / Low variations
Identifying ‘hoarding’ and
‘cartelisation’
(data courtesy : TNAU-INDG market
information portal)
What is the demand for a
particular product variety in
specific market?
What variety to produce ?
When to harvest ? How much
?
Example using onion in Koyambedu
Koyambedu : Sambar onion
Koyambedu : Nagar Onion
Koyambedu : Tamilnadu Onion
0102030405060
NENDRUM IN COIMBATORE MARKET
0102030405060
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NENDRUM IN CHENNAI MARKET
0102030405060
Nendram in Bangalore market
Customer : A major chips manufacturer In
chennai
Problem : Nendran variety availability &
quality was poor and price was very high
Identified alternate markets for viable bulk
sourcing from alternate markets
Screen cam video Technology_Videos\customer.avi Technology_Videos\Farmer.avi.avi Technology_Videos\Inventory Check.avi
Screen cam video Technology_Videos\MS_CRM_whole.avi
Stocking Plan
Purchase Orders
Sales & marketing
Sourcing
manager
Farmer
Purchase Order Confirmations
Strategic Forecast
Demand / Supply Forecasting and aggregation
COLLABORATION
FOR PLANNING
COLLABORATION
FOR OPERATIONS
Tier 3 : End customer drop locations
Tier 2 : Distribution centresCollection and
Tier 1 Suppliers
Farmer / Supplier
Retail outlets
Retail outlets
Distribution
Center (DC)
Distribution
Center (DC)
Collection
centre/
Rural hub
Retailer regional HQ –
supply chain functions
across stores are
managed here
: material flows: information flows
End customer
locations
Simulation Technology_Videos\sc_1.avi Technology_Videos\sc_2.avi
Drill down to details
Dashboard summaryFor senior management
Highlight potential problems and issues for immediate action
Agri India – LinkedIn Group ( > Link )
•Operational since Jan 2009
•connecting farmers, buyers , social agencies, agri professionals
, academicians , press reporters & students
•Leads on key demands , info about agri expos/conferences , trade
news , job announcements , new ideas , discussions …
•Articles on key topics :
•Agri business & entrepreneurship
•Organic farming
•Video clippings on key technologies & processes
•Buyer’s guide to various fresh produce (for e.g. detecting carbide
mangoes, health benefits of keerai , selecting brinjal without
insects etc)
June 07 – May 08 : Information gathering , discussions, solution proposals to focus groups May’08- Jun’08 : Website launched, Initial prototype system
development
Aug’08- Oct’08 : Concept pitching to pilot customer base/SHGs. Pilot launched with weekly deliveries. Different retailing options such as push carts, stores, mobile trucks
tried out. User feedback has been positive from all strata. Avg. weekly delivery = 2 tonnes
Oct’08 – till date : Distribution centre and retail outlets. established . Daily operations launched to cater to wider customer base . Promotional events, publicity drive. Core
Concept and processes constantly being upgraded and evolved based on trial run results.
•TATA NEN Hottest startup 2009
nominee
•IIM Kozhikode Whiteknight 2009
Business Plan contest winner
•IIM Ahmedabad Leverage 2009
Showcase shortlisted startup
•In the press •The Hindu magazine’s Ergo tabloid
(Mar 2009)
•Times of India , May 2009
•NDTV News , June 2009
•Featured in leading e-zines –
yourstory.in, startups.in
•Featured in Tamil press- Kumudham
, Dinakaran
•Outlook Money , June 2009
•JADE , June 2009
•Academic•Faculty for Food SCM course, MOP
Vaishnava college
•Key note speaker – TNAU conferences
Venkata Subramanian , MD eFarm Ph : 044-43577236 M : 98847 61354Email : [email protected] : www.efarm.in11 Loganathan colony , Mylapore, Chennai PIN 600004
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