Case ITC

eChoupal
Federico Avendaño
Jorge Lopez
Nicolas Rojas
Angélica Urbina
 Context in which it is located
In order to understand better how is the case, we need to
focus on the activities that people in the rural zones of this
city does: It is (and it has been) produce and sell soybean to
ITC. They distribute it nationally and internationally this
product…

But what was the problem? It was in fact very simple,

production and distribution were not efficient at all, the
farmers lost 60-70% of the potential value of the crop. Also,
this was a problem because farmers were used to the
system, and think about a change was difficult

However, ITC did something to go against all the problems

On the picture Madhya
(culture, lack of knowledge…) through Choupals
Pradesh in India, where
all the events of the case
happen
 Variables that intervene
1. Government (ITC):Taxes/Tariffs
2. Farmers: Freedom of sale
3. ITC: Purchase of crops
4. Climate: Variant depending on the Area
5. eChoupal: The Platform
6. Physical resources (computers, software) and intellectual resources
(knowledge, people’s willingness to learn, communication skills)
 eChoupal: Clima: Variante Recursos físicos e
Plataforma dependiendo la ZONA intelectuales
Represents a key It is a variable that It is a controllable
variable, since it is cannot be variable but it
controllable; having controlled, however, generates high costs
a great impact and by means of the for its operation and
weight on the other other variables, can maintenance in
general variables of be prevented and medium and long
the system, mitigated the term periods. Being a
integrating the effects they have in key variable for
external and the process development
internal factors
 Gobierno (CCI) Agricultores ITC

Government is a It is a variable It is the variable that

variable that cannot where they have the takes the initiative for
be controlled but greatest integration the change in the
through the other with the other case, through it, the
variables, can have variables and can other variables like
high effects on it to have different that of resources and
be able to predict to behaviors that can that of the farmers
some extent its be controlled to a are provided for their
actions and certain extent correct functioning
interests
 Strengths and weaknesses
1. Strengths

a. Alliances between ITC and the government

b. Good planning, trying to be preventive with most of the possible risks that the initiative
could present
c. Improvements on crop practises
d. Knowledge about the market (prices, real demand)
 Strengths and weaknesses

2. Weaknesses

a. Lack of knowledge of the farmers

b. Lack of resources
c. Another possible disadvantage could be the Sanchalak, because a lot of responsibility is trust
to him, and there is a possibility that he would not be enough familiarized with technology or
that he just don't want the change
d. Disloyal behavior from the CA with the farmers
e. Mandis were so far from the fields (it was 5 to 30 kilometers) and they lost a lot of time during
the trips, also they lost more time because the CA did not pay to them sometimes on the
according date
 Roles that appear
According to Olaya, Gomez-Quintero (2016) we are able to classify the roles in an
artifact (in this case ITC eChoupal is the artifact) in 5 categories: Drivers, Suppliers,
Affected, Owners, Interviniers taking into account the actors who are present. Following
that classification we found this:

This company is
a driver and an The farmers are
owner at the considered as
same time, its affected (all
actions has a the situation
direct impact turns around
on the problem them and their
and they are possible
responsible to consequences)
solve it
 Roles that appear
The Sanchalak is in a
beginning an intervener
because this provides
opportunities and threats
to the drivers in order to
improve the artifact.
After some time it could
become in a supplier

The CA’s (after the initiative

India’s government is a Samyojak) are interveners
supplier (it gives the because it provides
resources), but in some information and resources
point (if they want they to the farmers. They are
could be the driver of really important (its
the situation) connection between farmers
and ITC improve the SupplY
Chain)
 Relationships between the
ITC & Agricultores: It isprotagonists
a relationship between the buyer and the seller. In
this relationship both parts hope for the biggest benefits

ITC & Gobierno: The relationship between taxes and the kind of crops,
making more profitable for both company and farmer

ITC & Samyojak: It is a distribution relationship, supporting the Logistics

(taking from one site to the other the products)

Samyojak & Sanchalak: It is a supply and support relationship to promote

the marginal increase per sale or product which is sell
 Relationships between the
Sanchalak & Farmers:protagonists
They have a committed relationship, since, through
the sanchalak, they train and improve the quality of the farmers' products,
help facilitate transactions and provide the necessary information that is
requested. generating greater profit in both parts.

CCI: They have a relationship that is totally transversal to the entire supply
chain, having the responsibility to control and regulate competition and
companies.
 Analysis of each problem
● Lack of knowledge of the farmers

The main problem here is that farmers production

were so precarious compared with the needs of
the Supply Chain, so it was affecting to the ITC too.
They were working as their predecessors, and they
did not know that they were losing a lot of the
potential value of the crop.

Besides, they did not have access to quality

information about prices, good crop practises
(how and when was the right time to do it)
 Analysis of each problem
● Lack of resources
This problem is very related with the last
one, because if you don't know anything
and also you don't have the resources to
do it, it is so probable that everything
goes wrong.

In this case, they did not have good

quality pesticides and herbicides, and of
course crops wasn't the best (just third of
a quarter in global standards)

Finally, the information between farms

were not useful (Choupals were for
gossip), and as it’s logical weather
information were not available
 Analysis of each problem
● The Sanchalak

This might not be one of the biggest problems, but

taking into account culture and predisposition to learn
new techniques that improve quality lives of people is
a risk.

Why?...Because Sanchalak has a great responsibility

sharing all the information that the website provides to
him, also is better be preventive than corrective
because every Sanchalak handle 20 people decisions.
It is extremely important the trust in that person, in
this part values and moral have to be mixed with
knowledge and good management
 Analysis of each problem
● Disloyal behavior from the CA

It was a really difficult situation for the farmers, because

they have to trust in price that CA puts in the auction for his
products

Furthermore, CA’s had a huge part of the control in this

case. Some of the reasons are: 1. If the product which
farmers took to the mandis were not sell the worst
consequences would be reflected in the same farmers, 2. At
the time of weight the product, 0,5% were lost ($2,22 per
lot), which is to much taking into account that farmers were
not rich people
 Analysis of each problem
● Distance from fields to mandis

This problem is connected with the last one, because CA’s do

whatever they want, they got the advantage in all the scenarios.

First that all, mandis were far from the fields (30-50 kilometers),
and they did not have any guarantee of how much they were
going to receive or even worst, when they were going to receive
that (CA’s did unofficial credit pays to farmers, they had to wait
for 2 or 3 days to pay, and that did not happen just to a few ones,
it was at least 1000 per day)
 Improvement alternatives
Alternative for problem # 1

● creating learning points for farmers, where innovation and changing

local practices are encouraged. promoting opportunities for
improvement within the supply chain to increase the value in the final
sale by ITC.
● Create a radio information network, which, by area, may have a
meteorological point supported by the government and by radio,
transmit the information quickly and updated, in addition to having
educational program times.
 Improvement alternatives
Alternative for problem # 2

● Train sanchalak in the design and prototyping of low cost technologies,

designing a system that integrates all local farmers to standardize and
generate a single product for land reinvestment.
● create a train route that crosses the main and secondary agricultural
points and villages, on a regular basis in order to be able to transport the
product and at the same time supply itself with inputs, reducing waiting
times and improving the response capacity of conventional transport
 Improvement alternatives
Alternative for problem # 3

● Create a quality management system that allows for constant internal

audit by Sanchalak, the JRC, farmers, and community members, so that
there is an integration from each point and thus generate more value to
the supply chain.
● Empower farmers who after the Sanchalaks have the most experience, to
train themselves to be Sanchalak in the future and to improve the
management of the current
 Improvement alternatives
Alternative for problem # 4

● create an external actor for farmers and mandis, which will make it
possible to collect a number of offers from several mandis and to agree
on an offer at the current price for farmers, and that they receive it every
given period of time so they can have clear what offer to take, improving
competition and reducing dead times and uncertainty.
● Generate small stimuli (transport, faster download, priority orders,
among others) so that certain Choupals are loyal to the Samyojak, thus
generating a stable relationship and that can be improved with the
increase of the sector.
 Improvement alternatives
Alternative for problem # 5

● Create a message communication system that allows farmers,

commanders or ITC to talk to, conduct negotiations at a distance, and
when there is an agreement, command or ICT, bear the cost of
transportation.
● A system of vendors who can go to every point to verify the product and
according to that, generate the offers which they could apply, and receive
a commission for the sale, to return in a short time with the transport and
the corresponding payment.
Comparative of alternative # 1

Advantages Disadvantages

● will allow people to have a constant ● a suitable equipment for weather

source of information on forecasting is needed to have a
agricultural and market issues highly reliable outcome.
● promoting local education, ● for its implementation it is
improving the quality of life of necessary to have a trained staff
villagers in the long term with the necessary knowledge and
● initiatives of control and quality, tools
improving the traceability of the ● high communication network costs
product and giving an added value (radio - system)
in the chain.
Comparative of alternative # 2
Advantages
● natural resources will be exploited
by means of low cost technologies,
generating a greater gain by
decreasing operating costs.
● the train will help to reduce
transport times without increasing
costs, this will allow to have the
necessary supply in the precise
place and in the correct time for
the farmers.
Disadvantages
● the training time can be very long
and there would be no capacity to
cover the entire village at the time.
● the train needs a very high cost for
its maintenance and
implementation, which would not
make it viable for a long term
return on investment.
● the land does not have the same
quality to generate a single product
in the short term.
Comparative of alternative #3
Advantages
● It will allow to have a traceability in
both directions of the supply chain
than of the information of origin,
management and transport that
was used, giving options of
improvement.
● allows for control through
management, providing indicators
that allow to meet minimum
standards that are necessary for
the international market.
Disadvantages
● Not having enough sanchalak in
the area, few would have the
opportunity to form as one.
● There are no institutions in place to
provide ongoing training and
certification at difficult rural areas.
● cultural customs that hinder
farmers' empowerment and
change.
Comparative of alternative #4
Advantages
● It will enable farmers to have a
wider selection with price options
that match their capacity.
● Will not lose product during the
purchase and sale process as
previously presented with 0.5%
● Have better programming in your
crops, as it diminishes the
uncertainty of the return of money
you will have.
Disadvantages
● The offers are limited and very
dynamic, which, affect several
farmers who do not have the time
to welcome the offer.
● unfair competition could be
generated in order to achieve the
incentives offered.
● The external player without a
regulator, or parameters to
consolidate offers, can generate
distrust and rejection by farmers.
Comparative of alternative #5
Advantages
● avoid unnecessary shifts by the
farmer, helping to invest the time
saved in other value chain tasks.
● Through the vendors, it will
improve the quality of the whole
system, as the intermediaries that
can affect the product are removed
and will allow farmers to have
peace of mind on the issue of
payment
Disadvantages
● the message system could not be
efficient since many of the soy
fields located in remote villages
with difficult transport access.
● the sellers, may have difficulties
going to each of the points since
there is no knowledge of the area
and what contingencies could
generate on costs.
Decision implemented by ITC
 DIAGRAMA DE
FLUJO
START

Analysis of the current

situation

Identification of problems in
the soybean market

Computer kit (Pc,

connection lines) cost $
sivakumar launches echoupal
3762 per chopal and $ 2213
initiative in 1695 points and
in training, etc
villages
 Use the national
meteorological service on the Department of meteorology
website

provides information on "ideal" allows to see the gap of local

and "real" crops and practices cultivation with the global

Interactive forum on topics of Resources: expert "panel"

the category of agriculture and database

Intellectual resources, basic

the sanchalak initiative as a
IT training from the CCI and
link between the CCI and
effective methods of
farmers
communication
ITC made 5 processing units
and 39 warehouses Resource: Infrastructure

CCI after Echoupal added 3

Computerized scales, infrastructure,
processing centers and 36
transport cost and soybean oil
warehouses

the Samyolak is integrated as

an intermediary between the
CCI and the sanchalak

The Echoupal migrates to

other products
 CCI was based on three primary
mechanisms: traceability, the ability to
adjust farmer production to consumer
demand, and the facilitation of an
electronic market

END
 Conclusions of the case
● Take into account all the Supply Chain increases the value of the product (in this case
soybean), but not just economical value, it also increases quality value; and this happen just
improving communication and really acting like one with the same purpose
● Take advantage of the culture (Choupals) was crucial to make that the strategy works, if we
are going to propose something it’s important to understand what culture means, you can
improve quality life without changing beliefs
● The lack of knowledge and resources should not be an excuse in a country which wants to
improve and become in a first world country, the technology (not necessarily high one, just
with apps is a good start) must be in our daily lifes
● Reliability between the two sides is an important issue, as this allows for greater efficiency and
quality in the processes.
 Similar initiatives in Colombia
According to Alfonso (2018), the use of
technology in Colombian fields is a priority
for its development, because according with
the last census 66,7% of people does not use
an irrigation system and 85,3% does not
receive any technical support on its crops

However, there is hope for all of them,

because some entrepreneurs have been
creating apps for the use of agricultures and
farmers in order to increase their
productivity
With the help of the MinTic and its platform
(apps.co), some good ideas has been
produced, a few examples of them are:
Kanpo is available in Play Store and
provides statistics to agricultors of its
progress with the harvest and it gives
recommendations to improve the
productivity. It helps a lot to control
the indicators of efficiency and efficacy
 Similar initiatives in Colombia

Agronet is a website (go here) which is divided in 4 modules that every farmer could visite
to get information in real time of a lot of topics (prices, weather, production,
performance of the crops, importation and exportation…)
 How the government has
Direct supports helped?
The Agriculture Minister,
represented by FINAGRO in all this
proposals, create some programs
to help (and in some cases to
promote the growing of small and
medium farmers and agricultures)

Those are really close to people

because you don’t have to be a
great productor to access to the,
however in most of the cases
these are just credits (except with
the ICR). To see that, click here
 How the government has
helped?
Desarrollo Rural con Equidad (Before
Agro Ingreso Seguro)

It was created by law 1133 from 2007. Its

budget is $500000 millions per year. It is
divided in 2 big components: Supports
through credit (explained in the previous
slide) and incentives to productivity who
focused its efforts in technical assistance
and fields adequation (the incentives in this
part of the program cover as far as the 80%
on the investment). To go to the website,
click here
Similar initiatives in Colombia
Similar initiatives in Colombia
 References
1. Upton, D., Fuller, V. (2004). The ITC eChoupal Initiative. Harvard Business School. Recuperado el 26 de Abril de:
https://www.usergioarboleda.edu.co/#SERGIOVIRTUAL
2. S.A. (2019). ‘Dulce plan’ de ayuda para el café anuncia el presidente Duque. Dinero. Recuperado el 1 de Mayo de:
https://www.dinero.com/economia/articulo/cual-es-la-ayuda-que-recibiran-los-cafeteros-en-el-gobierno-duque/269619
3. Alfonso,Katherin. (2018). Conozca las aplicaciones que están ayudando al desarrollo del sector agropecuario. La Republica.
Recuperado el 1 de Mayo de 2019 de:
https://www.larepublica.co/internet-economy/conozca-las-aplicaciones-que-estan-ayudando-al-desarrollo-del-sector-agropecua
rio-2593192
4. Olaya, C., Gómez-Quintero, J. (2016) Conceptualization of Social Systems: Actors First. Recuperado el 1 de Mayo de:
https://classroom.google.com/u/1/w/MzAyODM4Mjg1MTla/t/all
5. MinAgricultura.(2019). Apoyos Directos. Recuperado el 1 de Mayo de:
https://www.minagricultura.gov.co/atencion-ciudadano/preguntas-frecuentes/Paginas/Apoyos-Directos.aspx
6. MinAgricultura.(2019). Programa Desarrollo Rural con Equidad - DRE. Recuperado el 1 de Mayo de:
https://www.minagricultura.gov.co/ministerio/programas-y-proyectos/Paginas/Programa-Desarrollo-Rural-con-Equidad-DRE.as
px
7. https://www.larepublica.co/economia/minagricultura-lanzo-un-programa-para-ayudar-a-300000-agricultores-2803730