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Dhirubhai Ambani Institute of Information and Communication Technology

Study the Supply Chain of Fruits and Vegetables of Reliance

Fresh

By

Vishal K. Patel (201013015)

201013015@daiict.ac.in

To
Dr. Girja sharan
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DECLARATION

I VISHAL K PATEL, Post Graduate student of Information and Communication

Technology in Agriculture and Rural Development 2010-11 batch, from Dhirubhai
Ambani Institute of Information and Communication Technology (DA-IICT),
Gandhinagar, Gujarat. Hereby declare that this project report titled, “Study the Supply
Chain of Fruits and Vegetables of Reliance Fresh” is an original study and has been
carried out by me as a part of winter project under the guidance of Mr. Mr. Shusilkumar
singh (Project Director cum zonal head) in Reliance Fresh Ltd

I further declare that no any part of this report has been copied from any source,
or if taken, the original source has been given due credit in the content. I have worked
for four months on our winter project as required under manual of policies of our
institute.

Place: Vishal K Patel

Date: Id: (201013015)
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CERTIFICATE

This is certifying that Mr. VISHAL K PATEL student of post graduate institute of
DA-IICT (Dhirubhai Ambani Institute of Information and Communication Technology),
Gandhinagar has satisfactorily completed his project work from 1/01/2012 to 30/04/2012
in Reliance Fresh Ltd.

He has undertaken the project of “Study the Supply Chain of Fruits and Vegetables of
Reliance Fresh” and has submitted the same to us. While during this project work we
found that he is a sincere, enthusiastic and practical student.

We wish him all success in his future professional carrier.

Mr. Shusilkumar singh

(Project Director cum zonal head)

Reliance Fresh Ltd

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ACKNOWLEDGEMENT

We owe a great many thanks to a great many people who helped and supported us
during the writing of this project report effectively and moreover on time.

It is our pleasure to acknowledge Dr. Ranendu Ghosh and Dr. Girja Sharan (DA-IICT,
Gandhinagar) who gave us such a brilliant opportunity to apply our best knowledge and
experience of supply chain management and procurement business in a practical way
as a part of information and communication technology in agriculture and rural
development course.

With great pleasure, we extend our deep sense of gratitude to Mr.Shushil kumar,
Project Director cum zonal head, Reliance Fresh Limited, for providing facilities and
valuable suggestion throughout the project work.

We are also thankful to Mr. Ilesh Pathak, Mr. Pankaj Singh and Mr. Dilip Dubey for
directing us at various stages of internship period.

We also extend our sincere thanks to Mr.Pragnesh Patel and Mr.Brijesh Patel for
providing us valuable information when needed and directing us at various situations.
Despite of their busy schedules, they gave us different ideas in making this project
unique.

Our deepest thanks to Mr. Prodyut pal, Head of Procurement department, Gujarat. He
has taken pain to go through the project and make necessary correction as and when
needed and for giving us very important guidelines for this project.
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INDEX

Title Page No.

1 Introduction 7

1.1 Collection centers 7

1.2 Supply Chain operations in reliance fresh 9

2 Objectives 10

3 Research methodology 10

3.1 Description of Study Area 10

3.2 Sampling Technique 11

3.3 Type of data 11

3.4 Sample size 12

3.5 Analytical tools and techniques employed 15

4 Data analysis 16

5 Conclusion 18
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LIST OF TABLES

Table No. Title Page no.

3.5.1 Tracking time of Tomato from Nenpur Collection Centre to 12

outlet store.

3.5.2 Different charges on mango from Naroda fruit market to 13

ripening chamber

3.5.3 Different charges on mango from ripening chamber to 14

Naroda central processing centre.

3.5.4 Different charges on mango from Naroda central processing 15

centre to outlet store.

4.1 Total time to reach tomato from collection centre to outlet 16

store.

4.2 Different added Cost on mango 17

4.3 APMC charge and Vendor charges on mango. 17

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1. Introduction

With a vision to generate inclusive growth and prosperity for farmers, vendor partners,
small shopkeepers and consumers, Reliance Retail Limited (RRL), a subsidiary of RIL,
was set up to lead Reliance Group’s foray into organized retail. Since its inception in
2006, Reliance Retail Limited (RRL) has grown into an organization that caters to
millions of customers, thousands of farmers and vendors. Based on its core growth
strategy of backward integration, RRL has made rapid progress toward building an
entire value chain starting from the farmers to the end consumers.

Reliance Fresh is the convenience store format which forms part of the retail business
of Reliance Industries of India. Reliance plans to invest in excess of Rs 25000crores in
the next 4 years in their retail division. The company already has in excess of 730
reliance fresh outlets across the country and 68 reliance fresh outlets in Gujarat. These
stores sell fresh fruits and vegetables, staples, groceries, fresh juice, bars and dairy
products.

A typical Reliance Fresh store is approximately 3000-4000 square feet and caters to a
catchment area of 2–3 km. Store’s main focus would be fresh produce like fruits and
vegetables at a much lower price. The main idea of the company was to source from
farmers and sell directly to the consumer, removing middlemen out of the way.

Preferred supplier arrangements involve higher (fixed and variable) production and
handling costs but save on governance costs and reduce exposure to risks from
substandard quality and out-of-time delivery (Dolan and Humphrey, 2000).

1.1 Collection centers:

It is the place where vegetables and fruits received from farmers and from other sources
are stored for a while and then goes through processing process. Processing of fruits
and vegetables means their cleaning; separating rotten ones and their packaging.
Usually fruits and vegetables maximum storing duration in collection centre is one day,
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means in one day the complete recycling of fruits and vegetables does complete. It is
easily understandable because in case of vegetables they start to rot after two or three
days under normal condition.

Objective of Collection Centre is to buy fresh and good quality of fruits and Vegetables
from farmers directly. Also company can save the vendor and mundi charge through
these practices.

In Gujarat they have three different collection centres for buying Fruits and Vegetables
like Nenpur, Padra and Majra. Now company is trying to establish more number of
collection centers in Gujarat. It is obvious they prefer to plant their collection center at
that place which is more market potent means reducing transportation cost and they
can buy the fresh produce in bulk at suitable prices.

Also other alternative of purchasing channels were used by Reliance Fresh.

1. They also buy Fruits and Vegetables from wholesale Market directly.
2. Wholesaler linked to farmers that deliver products under contract
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1.2 Supply Chain operations in reliance fresh.

 Visual quality inspection of bulk produces

 Sorting
 Crating of acceptable bulk produce
 Weighting
 Payment to Farmer
 Storage it under cooler environment.
 Loaded it in air Conditioning vehicle and sealed
it.
Operation perform at Nenpur Collection Center

Crated material is transferred

through air Conditioning
vehicle.
Distance is 31 kms.

 Weight of arrieved material and confirm with

weight which is taken at collection centre.
 Visual quality recheck of received bulk.
 Dump wastage or sell in market
 Stored(cooler or normal environment) it if
required.
 Crating of material according to requirement
of stores and dispatch it to different stores.

Central Processing Centre Naroda

4 km distance.
Transferred material through
referred vehicle.

 Received at Store.
 Keep it for sale.
 Payment receive from people who buy that
material.
 Wastage meterial dumps.

Naroda Reliance Fresh Store

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2. Objectives

I track the route of different vegetables so we can decide how fresh produce is provided
by reliance fresh to consumer.
1) To track vegetables from collection centre to store.

Extra added costs play an important role in the organization of procurement regimes.
While most attention is usually given to transport costs and labour cost, other aspects
related to information exchange and trust relationships between producers and
supermarkets in fact deserve far more attention (Ruben et al., 2003; Dorward, 2001).

2) To study cost estimation of supply chain of reliance fresh.

3. Research Methodology

This is a kind of descriptive research study because it describes what is going on or

what exists at collection centre.

3.1 Description of Study Area

Kheda district lies in middle of Gujarat state. Kheda is situated between 72.32º to 73.37º
East (Longitude) and 22.30º to 23.18º North (Latitude). Major part of this district is
covers by villages. Monsoon begins in July and carries till September. The average
annual rain fall of this region is 723 mm. The average minimum and maximum
temperature of this region is 14º to 41ºC.

Kheda District is located on Bank of river Vatrak and 35 kms from ahmedabad. It has 13
Talukas with Nadiyad, mahemdabad,kheda, Matar and kapadvanj. This district covers
23 % of Aonla production of Gujarat. It also covers 7 % to total production of Vegetables
in Gujarat. Mahemdabad taluka is our focus area. In this taluka study covers different
villages namely Nenpur, Ghodali, Makva, Modaj, Sansoli, Sojali, Dajipura, Sadra,
Vadadala, Jalampura, Lakshmipura, Amasaran and Malataj.
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Major Vegetables and fruits crop includes Spinach, tomato, Bottle Gourd, Sponge
Gourd, Methi Big, Bitter Gourd, Okra, Drumstick, Sugar baby melon, Cabbage, Aonla,
Corriander, Cocciniea, Amaranthus, Raddish White, Brinjal Black Big etc.

I also collected some data or take some observation from naroda fruit market, Naroda
central processing centre, ripening chamber and some store of reliance fresh.

3.2 Sampling Technique

As per objectives of the study; purposive and random sampling technique were
adopted. Here Nenpur collection centre of Mahemdabad Taluka is our focus area. Also
some observation was taken in Naroda fruit market, Naroda central processing centre
and Mother Ripening centre to study the component of supply chain.

3.3 Type of data

For 1st Objective

Here Primary data was collected through observation of tomato crate. Nishant record
time and place at Nenpur collection centre and put notebook in a crate after recording
time of dispatch. Vishal collect it at naroda CPC and note time and place in it. According
to routine that crate was move to a bunch of crates which was gone to outlet store.
Then vishal gave it to supervisor who was present in night duty. Supervisor recorded
time when crate send to store and put that notebook in that crate. According to bunch of
crates we could know that in which outlet store crates it will go. From that information
we contact store manager of that store. Store manager record time and place in that.
When it reaches to final point we collected it.
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For 2nd Objective

Here primary data was collected through observation of operation at Naroda fruit
market, Mother ripening chamber and central processing centre Naroda. Here all data
was collected by vishal.

Secondary data was collected from company database, web portals and literature
available from other sources.

3.4 Sample size

For 1st Objective

Ten different days was selected to observe movement of tomato.

Tracking Time for Tomato

Collecting Truck Truck send Truck Send it to Received at Open
at Centre load to CPC received at Store RF store Store
Day CPC
1 11:00 15:30 16:00 17:25 4:00 4:30 7:00

2 11:30 15:15 16 17:38 21:00 5:25 7:05

3 10:15 16:35 17:00 18:22 4:05 5:35 7:00

4 11:30 15:30 15:50 17:15 4:35 5:30 7:00

5 11:15 15:25 15:50 17:20 4:00 5:45 7:00

6
11:27 16:10 16:35 18:05 5:10 6:30 7:00
7
10:35 15:00 15:25 18:38 4:48 6:12 7:15
8
11:25 15:45 16:10 17:33 4:15 6:06 7:00
9 10:10 15:12 15:40 17:00 6:00 7:50 7:00
10 11:28 15:30 15:55 16:24 4:15 5:20 7:10

Table 3.5.1:- Tracking time of Tomato from Nenpur Collection Centre to outlet store.
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2rd objective

Five different observations were taken for Mango. Here I tried to work out all charges on
mango which was paid by company from source to customer hand.

Naroda Fruit Market to Naroda ripening Chamber

Variety Crates Quantity Purchase Amount Crating Loading Transport to APMC(0.8% Vendor
(kg) Rate(rs/kg) Charge Charge ripening of total Charge (6 %)
chamber amount)

Safeda 79 1521.5 46 69989 237 118.5 350 577.59 4317.51

Mango

Safeda 62 1240 45 55800 186 93 280 460.41 3441.06

Mango

Safeda 100 1980.5 48 95064 300 150 430 783.95 5852.64

Mango

Safeda 60 1200 45 54000 180 90 350 447.44 3334.80

Mango

Safeda 189 3617 45 162765 567 283.5 530 1340.96 10030.17

Mango

Table 3.5.2:- Different charges on mango from Naroda fruit market to ripening chamber
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Ripening Chamber to Naroda CPC

Sr. No. Ripening Labour Transport Weight at Weight loss

Charges Charges to Naroda CPC during
CPC ripening (%)

1 948 316 240 1437.7 5.51

2 744 248 200 1180 4.84

3 1200 400 450 1887 4.72

4 720 240 350 1146 4.50

5 2268 756 450 3450.5 4.60

Table 3.5.3:- Different charges on mango from ripening chamber to Naroda central
processing centre.
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Narod CPC to Store

Sr. No. Labour Final Cost of Labour Final Final

cost at weight Transportation cost at Amount rate
CPC(0.50 after to store store
rs/kg) sorting (0.30
rs/ kg)

1 718.85 1399 251.82 419.70 78483.97 56.10

2 590 1154 207.72 346.20 62596.39 54.24

3 943.5 1839 331.02 551.70 106456.81 57.89

4 573 1120 201.6 336.00 60822.84 54.31

5 1725.25 3317.5 597.15 995.25 182308.28 54.95

Table 3.5.4:- Different charges on mango from Naroda central processing centre to
outlet store.

3.5 Analytical tools and techniques employed

Detailed description of the analytical tools employed in the study is given below.

Simple conventional method of tabular analysis was used to study the different cost and
time in supply chain of fruits and vegetables in field. Average and percentage were also
worked out to analysis different cost added on mango.
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4. Data Analysis

For 1st Objective

Total Time
Day
1
20:00
2
19:30
3 20:45
4
19:30
5 19:45
6
19:33
7 20:40
8
19:35
9 21:40
10 19:42

Table 4.1:- Total time to reach tomato from collection centre to outlet store.
Company’s main objective is to provide fruits and vegetables to outlet store before 6AM
(Discussion with Dilip Dubey sir). We analyze crate tracking of tomato and see that
company provide different vegetable within 19 to 20 hours period to outlet store. On an
average it takes 19.82 hours from collection centre to outlet store.

For 2rd Objective

Different added Cost Different added

on mango per kg Cost on mango
from mundi to store (%)

10.10 21.96

9.24 20.54
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9.89 20.60

9.31 20.68

9.95 22.12

Table 4.2:- Different added Cost on mango

From this table we can say that average 21.18 % cost occurs for mango from Market to
outlet store.

SR. No. Different charges Extra APMC Extra APMC Extra Vendor Extra Vendor
from Market to charge (0.8%) charge per kg Charges charges per kg
mother

1 2209.5 17.676 0.012 132.57 0.09

2 1751 14.008 0.011 105.06 0.08

3 2930 23.44 0.012 175.8 0.09

4 1930 15.44 0.013 115.8 0.10

5 4854.5 38.836 0.011 291.27 0.08

Table 4.3:- APMC charge and Vendor charges on mango.

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Company gives 0.01rs/kg extra APMC charge and 0.09rs/kg vendor charges. Actually
APMC charge and vendor charges was paid on only actual rate which was given by
vendor. But company have not any separate facility for direct payment to labour in
market and other charges between market to ripening centre and ripening charge. So
these costs add in vendor bill and APMC charges and vendor charges pay on vendor
bill.

5. Conclusion

For objective 1:- We can say that reliance fresh ltd provide fresh product to consumer
within 24 hours period and during this period all the product keep in proper room and
temperature also try to maintain.

For objective:-2 In market company have any separate facility of payment to labour and
company have to arrange their own vehicle for transport in market or company have to
direct payment facility for vehicle which arrange from market. So company can save
extra charges.