ITC e-Choupal | Information systems Presented by : Group 2 AS ITC LimitedAbout mc IBD What we will cover convention al business Model = CBM + Challenges E-choupal + Services + E-choupal Model + why E- choupal Channel Flow Old and new physical flows ‘and information flows in the channel Principles Barriers & used in the value SCM creation Principles used in building the newly fashioned supply chain Challenges to e- choupalDe + Indian tobacco company. + Chairman: Y.C. Deveshwar * Presence in tobacco, hotels, paper boards, * foods, fashion retailing and commodity export. + Annual sale of $ 2 billion. International Business Di ** Started in 1990. + Division of ITC engaged in exports of range + of agricultural commodities. *+ Contributes over 60% of foreign exchange earning.uM). Conventional Business Model eae) eres Occ es bcc err eg is Sg A ITC LimitedChallenges 01 Intermediaries - mandi 02 High procurement costs for ITC and in lost profit opportunities for the farmers. 03 Long supply chain - very time- consuming system, results in deterioration in the quality of the products.E-choupal + Choupal is @ Hindi word which means a Village meeting place, and "E" here stand for electroni it is @ village meeting on an electronic platform. * Itis a virtual marketplace where vendors and customers come together to do transactions. The E-Choupal Services © Relevant & Real-time Information + Commodity prices, Local Weather, News © ‘Supply Chain for Farm Inputs + Screened for Quality, Demand Aggregation for Competitive Prices & Efficient Logistics © Customized Knowledge ‘+ Farm Management, Risk Management © Direct Marketing Channel + Lower Transaction Costs, Better Value through Traceability + Products access @ door step @ reasonable pricesE-Choupal Model ccc Intermed atl Cone FarmerWhy E-choupal ? Due to lack of technological resources in India, there is constrained know-how in rural farming community and hence farmers has to face loss of 60-70% of potential value of their crop. r] I The middleman (Commission Agents) had created many problems for both the farmers and the purchasers like ITC like delayed payments, incorrect weighing of produce. % & ITC wanted to provide a one-stop solution to address all the issues. Hence, they came up with e-Choupal so that both ITC and farmers could make informed decisions and hence valuable profit. Another main concern was defects supply chain. in current© _ ola Physicat Flows * Farmers hauled produce on a 1-day journey to mandi for auction * Often had to wait 2-3 days to get into market 1700 farmers per day + Farmers at mercy of CA's offer + No way to store unsold produce * Manually operated scales resulted in 0.5% loss. * Cash payment delayed after unofficial credit period * CA brought produce to ITC processing facility * CA receives reimbursement for soybeans Old and new physical flows and information flows in the channel © _ New Physical Flows * Eliminate the “middle-man” - the mandi + Farmers sold directly to one of 44 ITC hubs: * Same distance as mandi * ITC hubs serve as “one-stop shop” * ITC saved $5/ton on freight cost + In return, reimbursed farmers for travel time, resulting in $8/ton increase fore farmer.© Old Information Flows Choupal served as primary source of information for farmers Due to isolation of farmers, no market price information other than word of mouth Farmers hauled to market in hopes of receiving enough to cover their costs of transport Forced to settle for whatever they could get No access to weather report Poor access to crop education © New Information Flows + Transparency of Information + Access to information via eChoupal ‘Weather Reports Global crop standards Best Practices Market prices from around the world Demand, production, prices: highs & lows 7-10 day market outlook on Chicago Board of Trade Q&A forum + News pagePrinciples used in building the newly fashioned supply chain FD) rc adopted fair practices as website is accessible to anyone, one can cross check sat anytime. So that made government accept trading outside the mandis and QS__ this further strengthened farmer's trust. ah To gain trust from farmers and to keep them well informed, Sanchalaks were trained so ‘Samyojaks served as link to connect the ITC and the farmers, they are given a identity and given transaction fees which ensured that they worked honestly‘+ No contract bound farmers to sell to ITC once they use the website BH, * ITC got control over quality of product it sourced.Barriers & ‘= As Sanchalaks replaced om + Ina rural area, it middlemen, there was a the farmers so that was not easy £0 risk of the dominance of they can shift from have proper power Sanchalaks in the method using the mandis to and internet supply eChoupal Ei commeattartayetans + Checking the was expensive and ‘+ Making aware the rural authenticity of the had a limited and illiterates farmers information provided lifespan about the eChoupal by the farmers,Value Creation 01 Improving access to markets ‘+ Formers in remote places were able to reach customers all around the country because to eChaupal * This meant they could sell to a larger audience and, theoretically, command a better price for their goods. + Formers’ incomes rose as a result, and their living ‘conditions improved. ™~ 03 Supply chain optimization * With eChaupal, the supply chain became more streamlined and fewer middlemen were needed, * Supply chain speed and efficiency were both improved by eChaupal’s elimination of transaction fees, + For the advantage of everyone involved, this meant lower consumer casts and more profits for farmers. 02 Enhancing information access being able to make more educated decisions about when and what to plant. = 04 Promoting financial inclusion + Loans and insurance were formery inaccessible to formers in rural areas, but eChaupl changes that. + Farmers! ability to save ond make investments in ‘hei feids ond enterprises benefited from this, and 1 a result, farmers’ incomes and standard of living improved.Way Ahead Access to Farming Experts & Best Practices Introducing a = One stop Application the farm needs Improving Reducing soil & c eS Access to various weather product testing“ Financing options forecasts time ° Expanding to Accessto te veges od Provide sats 8 veotee Lie 8 | crops other than farm analytics Crop Insurance| soyabean, wheat, coffeea y vs Alec i Conclusion / + E-Chaupal created value by leveraging technology to address key challenges faced by rural farmers in India + Issues like restricted entry to critical resources like markets, data, and financial information * The platform strengthened the agricultural supply chain, which boosted farmers! incomes and made food more readily available across the country * The supply chain intermediaries are not removed but provided with alternate roles & responsibilities, + Improved the crop quality & efficiency by providing information on weather & scientific farming methodsThank you Adarsh Kumar Jha (M121-22) Babaria Shailja Ranchhodbhai (M133-22) Debashree Mallick (M136-22) Hritik Chawla (M150-22) Kumari Nidhi (M155-22) Yedla Surya Vamsi (M178-22)