Ananda Budi Subagja / 29120574

YP64C
The Akshaya Nidhi Foundation Case Summary

Case Overview
Vinay Kumar, the Director Operations of The Akshaya Patra Foundation (TAPF) and CEO of
The Akshaya Nidhi Foundation (TANF) faces a dilemma on how to gain revenue as Akshaya
Nidhi biggest contract with Bengaluru Municipal Corporation was coming to an end.
To obtain alternative revenue streams and to support TAPF operations, they decided
to set up a profit organization called Akshaya Nidhi and the growth of Akshaya Nidhi in the
last 3 years has been extraordinary. This begs the questions, What should be the strategy and
vison of Akshaya Nidhi in the future? Should they expand or diversify? And should they change
anything at all?

Brief History and Operating Model Explanation of TAPF and TANF

TAPF was the world’s largest NGO who runs a mid-day meal program. The NGO was born
from the vision of Bhaktivedanta Swami Prabhupada, founder of International Society for
Krishna Consciousness (ISKCON). One of TAPF essential goal is that “no child in India shall
be deprived of education because of hunger”. On November 2001, he Supreme Court of India
passed an order directing states to implement Mid- Day Meal Scheme (MDMS). TAPF help to
implement MDMS with the help of subsidy from government and private donations. By 2017,
TAPF was able to provide mid-day meals for 1.7 million children in 34 locations across India.
What’s next for the foundation is to succeed in its ambitious mission of reaching 5 million
children.
TAPF operating model consist of:
• 23 centralized kitchen: Mega kitchen located in urban and semi-urban area to easily
reach schools, implement advance technology to prepare huge quantity of food as in
little as five hours.
• 2 decentralized kitchen: Small kitchen located in hard to reach remote area such as
Baran and Nayagarh, run by self-help groups (SHG’s), TAPF provided them with
utensils, recipes, and raw materials, typically serves one or two schools in the area,
monitored by supervisors from TAPF.
Hygiene was very important for TAPF to prevent food poisoning. To prevent such things, TAPF
had implemented ISO 22000:2005 (Food Safety Management System) in 12 of its kitchens,
and was in the process of receiving certification for the others. To ensure the food reach
schools by 10am-12pm and the delivery is less than 3 hours to keep the freshness of foods,
they use real time route optimization and no vehicle was allotted more than 30 schools.
TANF is a profit organization serves as an alternate revenue stream for TAPF. This is the next
step in reducing operation cost and maximize the organization financial sustainability after the
Hub and Spoke model only manage to tackle half of this problem. TANF has few profit
generating activities, beginning with small fast food counter in Bengaluru, pilot projects with
the government, provide meals for office, canteens, and other events (“eat for a cause”),
manufacture ready-to-eat food for iD Fresh Food and eventually involved in a program with
Bruhat Bengaluru Mahanagara Palike (BBMP) which was the breakthrough for TANF in
gaining massive profit thus lead to TANF rapid growth.
TANF operating model is mainly utilizing the free capacity of TAPF’s kitchen increase
asset utilization for TAPF. This benefited TANF in a way that their food quality is the same as
TAPF and also they didn’t have to spend money on their own kitchen or factory. But in the
case of tackling the industrial workers market in Haryana, TANF had to rent a third-party
kitchen from Epicurean Hospitalities Pvt. Ltd. since TAPF didn’t have any presence in
Haryana. Recently, in 2017 TANF received a proposed funding from a large donor to build
their own mega-kitchen which would support the organization whole operation but this would
weaken the operation ties between TANF and TAPF, and it would majorly act as a financial
sponsors. The current TANF’s operating model also sparks a problem. Using TAPF kitchen
means they are in the same supply chain, many of TAPF contributors were not comfortable
by the fact that TANF operated inside the premises of a non-profit, the concern is that their
money could be funneled for other activities through Akshaya Nidhi.

Case Problems
Based on this case explanation, here are problems that are need to be solved:
• Following its rapid growth and contributors concerns, should TANF function as an
extension of TAPF or create its separate brand?
• What strategy should TANF implement if it became a separate brand and what would
the operating model be like?
• If TANF become a separate brand, what should TAPF do to keep its financial
sustainability and should they improve their operating model to reduce further cost? Or
search for another alternate income?

Proposed Solutions
• TANF should create their own brand and completely detach itself from TAPF supply
chain to erase further negative perceptions on profit organization operated inside the
premises of a non-profit because it would harm TAPF image. TANF should optimize
their new mega-kitchen in Mumbai as their core to its operations for producing ready-
 to-eat/cook food because it could be their main source of income. Mumbai as a port
city also gave TANF the opportunity to penetrate the international markets. Delivery
for this products also isn’t as complicated as TAPF, because ready-to-eat/cook
products tend to last longer than fresh foods. For the catering services for area outside
Mumbai, I would suggest TAPF to rent a third-party kitchen because it would be cost-
efficient rather than directly opening their own kitchen in other areas. When the
organization is financially stable, they could open smaller kitchens across India to fulfill
clients demand. Considering the rapid growth of TANF and if they keep making huge
profit, they could still help TAPF with their operation in a form of CSR.
• For TAPF to keep its financial sustainability, they should evaluate the effectiveness of
their centralized kitchens and also further optimizing their hub and spoke model.
Relocating their centralized kitchen more effectively and closer to schools and in areas
which can cover a wider range could make it possible for TAPF to terminate centralized
kitchen that are not too strategic. This would help TAPF to reduce more of its operating
expense thus increasing their financial sustainability. TAPF should also find a new
alternative revenue stream as soon as possible to keep their operation running and
achieving their ambitious goal.