Professional Documents
Culture Documents
Dissertation Report
Submitted in partial fulfillment of requirements for Bachelor of
Business Administration (Logistics Management) July, 2017-20
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University of Petroleum & Energy Studies_ Dissertation _2019
‘
STUDENT DECLARATION
I hereby declare that this submission is my own work and that, to the best of my knowledge and
belief, it contains no material previously published or written by another person nor material
which has been accepted for the award of any other degree or diploma of the university or other
institute of higher learning, except where due acknowledgment has been made in the text.
(Keshav Goyal)
SAP ID- 500063348
Enrollment No:-R380217013
2017-20
School Of Business, UPES
University of Petroleum & Energy Studies_ Dissertation _2019
ACKNOWLEDGEMENT
I would like to express my special thanks of gratitude to my project mentor Mr. Shantanu
Trivedi for his continuous motivation and support throughout the project.
The completion of this project report largely depends on the encouragement, supervision and
guidance of my mentor who has been a constant source of inspiration for me.
I am indebted for the cooperated and guidance given to me during my dissertation as well as for
providing necessary information regarding the project and supporting me in completing it.
This report would remain incomplete and would not be possible without the help from him.
Keshav Goyal
BBA (Logistics Management)
University of Petroleum & Energy Studies_ Dissertation _2019
TABLE OF CONTENTS
Food processing is basically transformation of the agricultural products into one form into another
form of food through various value additions in the agricultural products. Food processing industry
include many forms of Processing foods, from Grinding Grain to making flour to home cooking to
complex industrial methods used to make convenience foods
Food Processing Supply Chain: A food processing supply chain can be defined starts from the
production of the food items at farm level and that has undergone some value addition. The first
level is chopping, cleaning and packaging fresh fruits and vegetables and marketing them under a
brand name is an example of primary food processing supply chain.
The process usually involves the use of harvested crops or butchered meat to produce attractive,
branded, marketable food with long self-life. Food processing industry is playing a very vital role
in modern era in the field of space, welfare, geological exploration etc. with increase in
urbanization; many are living far away from the place where the food is originally produced. This
creases food wastage and the cost of food is sky rocketing. The food processing industry helps
reduce the wastage and satisfy the demand of people.[ CITATION Dri19 \l 1033 ].
University of Petroleum & Energy Studies_ Dissertation _2019
It is a process (involving employees, power, machines or money) in such a way that its original
physical properties undergo a change and the transformed product has commercial value and is
suitable for human and animal consumption[ CITATION Dri19 \l 1033 ]
It also includes the process of value addition to produce products through methods such as
preservation, addition of food additives, drying etc. with a view to preserve food substances in an
effective manner, enhance their shelf life and quality[ CITATION Dri19 \l 1033 ]
Food processing is any activity that changes the raw food stuff or semi-finished food into a
suitable form for the use of shopper. The food processing industry has grown considerably in the
last few decades India. The increase in the incomes of the working class has led to increase in the
disposable income to be spent on processed foods. The change in the food habits of the working
class who prefer readily available convenient foods is another important factor. India is considered
as one of the top producers of fruits and vegetables and other food stuff. Henceforth availability of
raw material makes it favorable for the development of this sector[ CITATION Mee19 \l 1033 ].
India has good status in producing numerous food products like milk, ginger, banana, guava,
papaya, and mango. It has second rank in the production of rice, wheat, potato, sugarcane, cashew
nut, tea. India is among the top 5 countries in producing coffee, tobacco, spices, and seeds. With
such a huge raw material base, it can be assessed that India become the leading supplier of food
items around the globe. News reports indicated that there are more than 30 companies listed in
BSE/NSE in food processing sector. However, the major companies are Dabur India, Gitz, Godrej
industries, Haldiram, MTR foods, Parle agro, HUL, Britannia Industries, ITC, Nestle, Pepsi and
Cadbury India. There is still a lot of scope for products related to meat, poultry; fisheries, milk
products, beverages, grain processing[ CITATION Mee19 \l 1033 ].
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Consumer
Figure 1 Mentions the food processing supply chain Diagram which starts from Suppliers like
farmers or aggregators, other intermediates then, Processing plant, Wholesaler, retailer and then
finally the consumer.
The food supply chain can be divided further into two parts:
Upstream supply chain -: Upstream supply chain is basically it start from the farmer growing the
crop and the giving those produce to the manufacturing units. Upstream supply chain it is the stage
of production process in which the searching of the raw material and extraction of that raw
material in this the processing of the food does not take place in upstream supply chain.
6. Transport facilities.
Downstream supply chain -: Downstream supply chain which start with the production for
making finished food products till supplying that product to customers and Downstream Supply
Chain it is the stage in production process take place in which the processing of the material are
done that are extracted at the upstream supply chain into finished product. It also involves the sale
of the good to customers, government, business and private individuals. It establishes the direct
contact with the customer thorough direct selling of the goods.
Requirement for Downstream Supply Chain is when actually the food is processed and is ready to
sell into markets to make it successful these are required:-
In India, there is huge land for food production. It is estimated that more than 50% of Indian
population work in Agriculture related actions. If there are good food processing industries in
India, raw materials such as grains or meat can be converted into food for domestic and foreign
consumption. Food processing units acts as a linkage between agriculture and industries. Food
processing industries can absorb a major share of workers from the agriculture sector, who face
disguised unemployment. It can result in better productivity and GDP growth. Reports indicated
that Food processing averts food wastage and help in attaining food security. Processed food
requires less space for storage. Processed food can be exported. This may assist government to get
foreign exchange reserves. The Indian food processing industry has remarkable capability to grow,
considering the still promising levels of processing currently. Though India's agricultural
production base is practically strong, wastage of agricultural produce is large. [ CITATION Mee19 \l
1033 ]
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Food processing is any activity that changes the raw food stuff or semi-finished food into a
suitable form for the use of shopper. The food processing industry has grown considerably in the
last few decades India. The increase in the incomes of the working class has led to increase in the
disposable income to be spent on processed foods. The change in the food habits of the working
class who prefer readily available convenient foods is another important factor. India is considered
as one of the top producers of fruits and vegetables and other food stuff. Henceforth availability of
raw material makes it favourable for the development of this sector.India has good status in
producing numerous food products like milk, ginger, banana, guava, papaya, and mango. It has
second rank in the production of rice, wheat, potato, sugarcane, cashew nut, tea. India is among the
top 5 countries in producing coffee, tobacco, spices, and seeds. With such a huge raw material
base, it can be assessed that India become the leading supplier of food items around the globe.
News reports indicated that there are more than 30 companies listed in BSE/NSE in food
processing sector. However, the major companies are Dabur India, Gitz, Godrej industries,
Haldiram, MTR foods, Parle agro, HUL, Britannia Industries, ITC, Nestle, Pepsi and Cadbury
India. There is still a lot of scope for products related to meat, poultry; fisheries, milk products,
beverages, grain processing.[ CITATION Mee19 \l 1033 ]
Food Processing Industry in India: Challenges and Potential Infrastructure: To address small size
of enterprises involved in food processing, the Government promotes a cluster approach which
brings together farmers and entrepreneurs through well-equipped supply chains and aims at
development of modern infrastructure and common facilities to set up food processing units.
Under the scheme, each agro-processing cluster will have two basic components, i.e., Basic
Enabling Infrastructure (roads, water supply, power supply, drainage, effluent treatment plan, etc.),
and Core Infrastructure/ Common facilities (warehouses, cold storages, individual quick freezing,
tetra pack, sorting, grading, etc.) and at least 5 food processing units with a minimum investment
of `25 crore (Government of India, 2017). Implementation of Mega Food Parks (MFP) scheme in
2008, Modern Terminal Markets (MTM) and bulk storage facilities as well as modernisation of
markets, quality control laboratories are some of the efforts in this regard. Further, financial
support and fiscal incentives are given for creation of common supply chain infrastructure, like
cold chain, dry storage, packaging, logistics, back and front-end infrastructure, expansion of
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processing capacities, etc. to reduce cost of investment, enhance viability and ensure higher
conformity to regulatory standards. Under project imports, all goods relating to food processing are
charged a uniform customs duty of 5 per cent irrespective of their tariff classification.
Standardisation of Food Safety Norms: Due to legacy issues and infrastructural challenges, the
Indian states have different levels of implementation of food quality standards and procedures.
Over time, awareness about food quality and safety standards have increased due to the growing
middle-class population, globalisation and health awareness, etc. For uniform implementation of
food quality standards, Food Safety and Standards Authority of India (FSSAI) launched “One
Nation, One Food Law” initiative. Availability of credit: To boost credit disbursement at
affordable rates to the food processing sector, a special fund of ` 2000 crore has been set up in
National Bank for Agriculture and Rural Development (NABARD). Under this, loans are extended
up to 95 per cent of the project cost for setting up, modernisation and expansion of food processing
units and development of infrastructure in designated food parks. Human Resource and Skill
Development: The Government has taken up the initiative to develop sector specific skills of the
workers with support from the National Institute of Food Technology, Entrepreneurship and
Management (NIFTEM) and the Indian Institute of Food Processing Technology (IIFPT). In 2017,
merging seven major schemes under one umbrella scheme, i.e., the Pradhan Mantri Kisaan
Sampada Yojana, has been implemented. This is expected to boost efficiency of infrastructure
investment as well as of farmers.
The India market size for food is expected to reach USD 544 billion by 2020-21² whereas the food
industry output is expected to reach US $ 535 billion in 2025-26³. Within the Indian food and
beverage industry, there are certain segments that are gaining increasing acceptability and thereby
creating immense opportunities for increasing domestic consumption as well as exports. [ CITATION
CII19 \l 16393 ]
The segment provides a snapshot of key trends in some of the processing sub segments with the
idea to highlight key opportunities and growth prospects.[ CITATION CII19 \l 16393 ]
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The packaged food segment has been reporting double digit growth in 2018 with edible oils and
dairy products accounting for a major share. Other segments supporting this growth are -
Chocolate confectionery, sweet biscuits, snack bars, savoury snacks, spreads, sauces, dressings and
condiments, baby food and baked goods. The growth in the segment is also supported by shift in
consumer preference for branded packaged products, amid rising awareness of healthy living. The
growth is further fuelled by increasing competition in the segment with new product launches and
new entrants leading to increased choices for consumers and the strong growth is expected to
continue till 2023 Demand towards branded packaged food is also driving the convenience seeking
urban consumers to shop online or in hypermarkets and supermarkets[ CITATION CII19 \l 16393 ]
As evident food processing industry is expanding sales in every category of processed foods, both
in volume and value terms. Industry sources estimate that over 400 million Indians regularly
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consume some type of processed food. Urban areas account for over 75 percent of sales, as
consumers seek convenience and quality thus it offers market for higher - value frozen and
refrigerated foods.[ CITATION CII19 \l 16393 ]
Further, more than two thirds of our 1.3 billion populations are young with growing incomes also
create a large market for convenience food products. All these factors lead to growing
consumption of food which is expected to reach US $ 1.2 trillion by 2025-26¹. [ CITATION CII19 \l
16393 ]
Apart from convenience the young population is placing higher importance on physical and
emotional wellbeing, and thus swiftly moving towards healthier alternatives. As, a result,
companies are today aiming at expanding product portfolio to include nutrition-based food
categories to cater to the growing demand.[ CITATION CII19 \l 16393 ]
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In spite of a large production base, the level of processing is low (less than 10%).
Approximately 2% of fruits and vegetables, 8% marine, 35% milk, 6% poultry are
processed. Lack of adequate procesable varieties continues to pose a significant challenge
to this sector.[ CITATION Dri19 \l 1033 ]
India's livestock population is largest in the world with 50% of the world's buffaloes and
20% of cattle, but only about 1% of total meat production is converted to value added
products.[ CITATION Sha19 \l 1033 ]
More than 75% of the industry is in unorganized sector.[ CITATION Mon10 \l 1033 ]
Processing can be delineated into primary and secondary processing. Rice, sugar, edible oil
and flour mills are examples of primary processing. Secondary processing includes the
processing of fruits and vegetables, dairy, bakery, chocolates and other items. [ CITATION
Dor19 \l 1033 ]
Most processing in India can be classified as primary processing, which has lower value-
addition compared to secondary processing. There is a need to move up the value chain in
processed food products to boost farmer incomes. For instance, horticulture products, such
as fruits and vegetables, carry the potential for higher value-addition when compared to
cereal crops.[ CITATION Dri19 \l 1033 ]
At present, India’s agricultural exports predominantly consist of raw materials, which are
then processed in other countries, again indicating the space to move up the value
chain[ CITATION Dri19 \l 1033 ]
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The purpose of the study is to analyses food industry supply chain and identify issues and
challenges in downstream supply chain that cause losses to food processing industry and to find
out the various solution that can help the downstream supply chain to reduce the losses.
This research will tell us the major challenges and issues faced by the food processing industry due
to inefficient downstream supply chain and this research is also important because food processing
downstream issues and challenges has never been studied and India is a land famous for food
production. More than 50% of Indian population works in Agriculture related activities. If there
are good food processing industries in India, raw materials like fruits and vegetables can be
converted into food for domestic and foreign consumption
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CHAPTER- 2
LITERATURE REVIEW
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amalgamated slaughtering,
fermenting, sun drying,
preserving with salt etc.
Currently, food processing
adopts newest technologies
and practices.
9. Supply chain [ CITATION The aim of this Supply chain management This study
management Cat17 \l study was to problems were identified in shows
problems in 1033 ] investigate seven areas, namely implications for
the food supply chain human resource business
processing management management, technology, performance in
industry: Problems in the facilities, supplier the food
Implications food processing relationship management, processing
for business industry and Customer relationship industry but
Performance their influence management, regulatory there is the gap
on business factors and logistics and between study is
performance. transportation. Except that no
The for regulatory factors, all downstream
study was supply chain management supply chain
motivated by problems negatively issues challenges
the need to use predicted business and solutions of
supply chain Performance. food processing
management industry are
practices as a discussed here.
tool to
improve
business
performance in
the food
processing
industry
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10. Food [ CITATION The aim of this When company’s backward Research gap in
Processing MUR13 \l study was to and forward integration is so this research is
Supply Chain 1033 ] investigate the good that it practically runs that this research
Management, Upstream and everything from making raw basically focuses
Upstream downstream material to selling final more on the
Downstream supply chain product to final customer. fruits and
requirements requirement for Example Oil giants such as vegetables
for Fruit & fruits and Shell/BP have their own oil supply chain and
Vegetables, vegetables, wells (supply), refineries there is nothing
Confectionery confectionery (processing) and petrol mentioned for
industries industries in pump (retail). whole food
India and In other words, Vertical processing
discuss how we integration is achieved when industry
can improve the Single firm absorbs several
supply chain of firms involved in all aspects
the fruits and of a product’s manufacture
vegetables from raw materials to
supply chain distribution.
11. Supply chain [ CITATION This Study is an Indicate that logistics and This study only
management Dha15 \l attempt to supply chain management is focuses on the
in food 1033 ] explore the still in its infancy in food entire supply
processing status of supply processing sector. There is chain of food
sector: chain considerable scope processing in
Experience management in improving supply chain Punjab region
from India food processing management practices industries but
industry of especially in context of there is no
Punjab. Fifty information quality, and research
food processing postponement. conducted on the
units were downstream
included in the chain of food
study. Survey processing
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University of Petroleum & Energy Studies_ Dissertation _2019
Majority of the study conducted in the area of food processing Supply chain discuss losses
incurred the upstream supply chain of the food processing industry and there is dearth of study
that can suggest the supply chain issues and challenges in downstream supply chain of food
processing industry in India.
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CHAPTER- 3
Issues and challenges of food processing industry due to inefficient downstream supply chain in
India through which food processing industry is having an opportunity loss.
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2. To find out factors for major losses in food processing industry in downstream supply chain.
3. To suggest the probable solution for improving downstream supply chain of food processing
industry in India.
The Research methodology followed in this study will be having an exploratory research method it
is used to investigate a problem which is not clearly defined. It is conducted to have a better
understanding of the existing problem, but will not provide conclusive results in which qualitative
and quantitative data will be collected and analysis has been done. Random sampling is done to
various stake holders and interviews are conducted with various industry experts and professionals
who all are working in the food processing industry.
Data will be collected from primary as well as secondary sources. Primary data will be collected
through the observations and interviews will be made which will be done of professionals working
in food processing industry to collect the data related to the problem.
Secondary data will be collected from various peer reviewed journals and articles, government and
industry reports have been collected to understand and assess the issues challenges and factors for
losses and wastage in food processing industry downstream supply chain in India.
This research will enable us to find out the issues and challenges faced in the food processing
downstream supply chain and to find out the probable solution for this research. Exploratory
research requires investigating different sources such as published secondary data, data from other
surveys related to food processing industries supply chain , observations, and interviews of the
working professional already in organization(Food processing Industries) to get better
understanding of the problem and to reach out the proper solution to the problem.
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University of Petroleum & Energy Studies_ Dissertation _2019
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Qualitative data collection with the help of online sources such as articles journols,
newspapers etc.
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University of Petroleum & Energy Studies_ Dissertation _2019
The Research design for this study will only include exploratory research it is conducted for a
research problem when the researcher has no past data available with him as the name suggest
intended to explore research and This research is conducted in order to determine the nature of the
problem and helps to develop a better understanding of the issues and challenges in downstream
supply chain of food processing industry based on primary as well as secondary data both
quantitative as well qualitative data analysis will be used to find the conclusion. The prime
objective of this research is to figure out the issues and challenges in food processing downstream
supply chain and related solution for those issues and challenges faced by the industry.
Emphasis is being given on studying a situation or a problem (relating to loss to the food
processing industry due to inefficiency in downstream supply chain).
Data will be collected from primary as well as secondary sources. Primary data will be collected
through the observations and interviews will be made which will be done of professionals working
in food processing industry to collect the data related to the problem.
Secondary data will be collected from various peer reviewed journals and articles, government and
industry reports have been collected to understand and assess the issues challenges and factors for
losses and wastage in food processing industry downstream supply chain in India.
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Problem identification
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University of Petroleum & Energy Studies_ Dissertation _2019
Data was collected from both Primary and Secondary sources. Secondary data was collected from
the online Sources such as journals, industry and association reports blogs etc. Additional data was
also collected by interaction with working professional people from the department. Some
important data was also collected with the help of various resources such as Internet sources,
previous reports etc.
Primary data was collected through the observations and interviews will be made which will be
done of professionals working in food processing industry to collect the data related to the
problem.
Secondary data was collected from various peer reviewed journals and articles, government and
industry reports have been collected to understand and assess the issues challenges and factors for
losses and wastage in food processing industry downstream supply chain in India.
The study used primary data and as well as secondary data. Primary data that was collected
through self-administered interviews. Structured telephonic interviews and personal interviews
consisting of both open ended and closed ended with the working professional in the food
processing industry interviews are recorded over the phone call and on the notepad during oerosnal
interview and then the questions and answer of the interviews are typed down in in the excel to
analyze the data In this no qualitative analysis tools were used like NVIO, Atlas etc.
The research questions that were asked from the interviewees are:-
1. What are the issues and challenges in the food processing downstream supply?
2. Factor that lead to damage of goods in the downstream supply chain?
3. How to overcome these issues and challenges faced in downstream supply chain of food
processing industry?
4. How do you handle the handling damages that happen due to unskilled workforce?
In spite of huge development in this industry, there are several constraints that hinder the
development of food processing industries. Major constraints are that this industry is capital
intensive. It creates a strong entry barrier and allows lesser number of companies to enter the
market. It means there is not tough competitions among industry players which can reduced efforts
to improve the quality standards.
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University of Petroleum & Energy Studies_ Dissertation _2019
Another hindrance is small size companies. Indian food processing companies are small and
cannot compete with bigger players which invest heavily on R & D.
Issues and challenges in the downstream supply chain of food processing industry are collected
from secondary data sources:-
1. Skilled work force issues. There are only a few graduates in Food Technology. The food
manufacturing and processing sector is currently dealing with a serious shortage of skilled
workers
2. Transport facilities issues. Roads are overburdened. poor road infrastructure, Transportation
related challenges are very high in the India because of unavailability of well transportation
mode, high cost of transportation, lack of temperature controlled vehicle for the movement of
goods etc. Storage facilities issues Limited availability of cold storage gives rise to a monopoly
in the sector and vulnerable to unilateral price hikes
3. The state process about only 1-2 % of total F&V’s produce and there is a very low level of
value addition due to lack of processing units and no closest proximity of processing units
4. Lack of quality standards to meet international quality for export, Poor hygiene and safety
standards, high quality degradation etc.
5. Without proper packaging it is very difficult to maintain their shelf life. Cost is very important
factor for these issues.
6. Old processes the food are usually inspected manually. This should be not done in order to
reduce human error and time wastage
7. Ignorance and human error many food items
CHAPTER- 4
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University of Petroleum & Energy Studies_ Dissertation _2019
4.1. Issues and challenges in the food processing downstream supply chain are
through primary data:-
1. Transportation Freight Rate: - transport freight rate is the major issue faced in the
downstream supply chain as the freight rate is dynamic factor which changes point to
point due to change in the diesel prices.
2. Self-life of the product is the major challenges in the food processing industry this
whole industry works on the self-life of the product the product should be dispatched
form the manufacturing units to warehouses within time.
3. Due to self-life of the product the product gets damaged.
4. In transit damage to the product due to accident of the transport, inadequate road
infrastructure due to poor state of roads quality.
5. Improper handling of the goods or boxes by the unskilled workforce due to which
goods got damaged not following the stacking norms
6. Issues due to improper inventory management
7. Without proper packaging it is very difficult to maintain their shelf life. Cost
minimization is very important factor for these issues.
Major Factors that are leading to loss in revenue identified in the food processing downstream supply
chain through primary research are:-
4.3. Suggestions
4.3.1 Probable solution to the issues and challenges faced in food processing
downstream supply chain:-
1. Providing the proper training and workshop to the workforce regarding the inventory
management and stacking norms.
2. SOP (Standardized Operating Procedure) is to be made regarding the handling of the goods
3. To manage the self-life of the good follow the FIFO Model (first in First out) model this will
ensure that the goods do not get expired.
4. OTIF( on time in full) this model should be followed so that there should not any damage to
the goods during the I transit
5. Proper storage facility should be there for the perishable items like milk and curd etc.
6. Proper demand forecasting should be made of the goods so that there should not be stock out
and no excess good in their warehouse or at the every level of the downstream supply chain.
CHAPTER- 5
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University of Petroleum & Energy Studies_ Dissertation _2019
CONCLUSION
5.1. Conclusion:-
The Food Processing Industry sector in India is one of the largest in terms of production,
consumption, export and growth prospects. The government has accorded it a high priority, with a
number of fiscal reliefs and incentives, to encourage commercialisation and value addition to
agricultural produce. This sector is having ample sector to prosper in future years ahead. The study
and research conducted on the analysis of downstream supply chain of food processing in India
suggest that there is an improper supply chain management, lack of cold chain infrastructure and
food processing units which are leading to maximum inefficiencies and resulting to losses and
damage to the food that is processed and India as a whole. This identifies the issues and challenges
in the downstream supply chain of food processing industry, further research can be done to in this
area with a lager sample and models can be developed to overcome the issues and challenges in the
processed food sector.
Time availability and traveling is the limitation as deeper research requires visiting manufacturing
plants located different destinations. Because of the lockdowns some of respondents were not able
to discuss as their products were coming under essential category and their work shift were more
than 12 hours, many respondents didn’t as the people were not picking up the phone they were
busy many of them note even replied over email. In this study the researcher haven’t used any
qualitative analysis tool as that software was not available with me so all analysis are done on the
excel itself.
Efforts will be for the best comprehensive exposure with topic and the issues/outcomes will be
elaborated in the final report submission.
Bibliography
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University of Petroleum & Energy Studies_ Dissertation _2019
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Annexure
For this purpose I am interviewing the working professional who is associated with the Food
processing industry. The findings of this interview will be used for preparing the final dissertation
report. I hope you will help me out by being the part of this interview as your participation is
extremely important for the study. It will only take 10minitues oe less to complete the interview.
Please spare the time form your precious hours for this interview and help me out to complete my
dissertation report
Thank You!!
Q1:- May I start the interview now or later if you are not free?
1- Respondent agree
2- Respondent does not agree
Q2:- What are the issues and challenges in the food processing downstream supply?
Q3:- Factor that lead to damage of goods in the downstream supply chain?
Q4:- How to overcome these issues and challenges faced in downstream supply chain of food
processing industry?
Q5:- How do you handle the handling damages that happen due to unskilled workforce?
36