eFarm : A Farmer To Consumer Agri Supply Chain Network

ICT tools to empower the Agri supply chain

eFarm – an Introduction
Vegetable and Fruit Supply Chain in India – Current Issues and Status
Supply Chain Management – What is it ? Why is it important ?
Technology in SCM : Key segments
•Data collection / communication – Voice and Mobile
•Customer Relationship Management tools – Order Management
•Supplier Relationship Management tools – Resource Planning
•Demand forecasting & aggregation
•Pricing analysis using indg/tnau data
•Data analysis / MIS
•Logistics Management tools – Supply chain management &
simulation
•Social networking tools - Forums, Blogs (text / video)
•Data exchange : XML

Venkata Subramanian
Founder/ Managing Director , eFarm

M.S (Comp. Science) , SUNY Albany, Newyork (2003)

B.Arch , IIT Kharagpur (1995)
Our Vision
•Bring people together through creative use of technology platforms ('connecting the dots' ) to form socio-
economic-webs
•Create successful entrepreneurial, social enterprises which are profitable and sustainable
•Make corporate social responsibility our core business model and differentiator
•Measure success not just in financial growth , but also in the social growth in the areas we serve

• Venkata Subramanian
• Founder & Managing Director: (venky@matchboxsolutions.in )
MS (Computer Science), University at Albany, NY , B.Arch , IIT
Kharagpur (1995) , India
12 years of experience in IT industry in leading Global Software
development and consulting firms
Very strong expertise in analysis & design of complex systems ,
portal development , back office operations in BFSI segment
Responsible for overall strategy , technology and public
relations
Combination of different background ,skills and experience to provide creative perspectives to solving key
problems in the supply chain area
IT enabled
Annachee !!!

HiTech
Sabjeewallah
;-)
 Harvesting of
Vegetables
• Unorganized, unregulated, unprofessional & Terminal markets to
unprofitable - A Middlemen’ dominated market neighborhood wholesalers

• Lack of demand/supply data

1 • No reliable sales, distribution, marketing
channels
• Poor logistics and storage management
5
• No IT/ERP usage – decisions are adhoc and
arbitrary
Regional mandi to Wholesalers to Retailers
4 Terminal markets near
A local mandi large cities
auctioning 2

Local to Regional mandis

for Auction
6
Loss in transit
40%
Price hike Retailers to Dining Table

3 End to end
> 400%
7
 42/kg

Eg: Ooty Carrots (As of 29th 32/kg

28/kg
June 2009) 24/kg
22/kg
20/kg End
customer
5/kg 12/kg price

Farmer’s Regional Metro Terminal Neighbourhood Kirana Branded Premium

market mandi Market market stores, Retailers Grade
(In Ooty/ (Mettupala (Chennai) (Thiruvanmiyur Push (Export)
Kothagiri) yam) Chennai) carts

500 % Price hike

Source : Ooty market traders, Chennai traders, indg.in

 Over 500% Price hike on average to customer , but no value addition

 Changes hands several times: 40-50% is wasted – which adds to the costs
 Prices set at each intermediate point arbitrarily by brokers/agents without
any planned demand/supply data
 Farmer typically operates at 25% loss , End retailer less than 5% net margin
High cumulative wastages across the supply chain varied from
24% (for potato) to 40% (for tomato)

Description Cumulative Wastage

Potato 24%

Cauliflower 24%

Banana 30%

Cabbage 36%

Tomato 40%
 Market Scenario
Data Value Notes ITC, Nilgiris,
Fruits & Vegetables (Total market) 668800 Cr Organised + Unorganised Reliance, More, Big
bazaar etc all put
Organised segment 8216 Cr < 1.2% of total market together !!!

Total Volume of fruits & vegetables 100 Million

produced Tonnes
India is a World leader in
PRODUCTION but still
Amount processed 1% World avg ~ 40%
IMPORTING our food to
Amount exported 1% Not in top 25 in world exporters meet local demand

Wastage in transit & handling 40% ~ Rs 40000 Crores lost revenue

Even a 1% reduction
in wastage will
Average per person monthly 68 Rs 11% of monthly expenses on food generate additional
expenditure in F&V (Urban) 5 crores in profit to
Avg. per person monthly 8 kgs farmers !!!
consumption of F&V
Over 60% involved in agriculture & related Typical scenario for a metro city in India with 5 Million
activities, but contributes less than 20% to population :
GDP. Growth rate Y-O-Y is just 2% owing to Daily demand : 1250 tonnes
lack of professional management & focus Daily sales : Rs 1.2 Crores
Source : IMAGES F&R Research Study , Govt of India , Dept. of Agriculture
 The Farmer :
 Mandi system does not offer stable , sustainable price realization
 Organised retailers don’t pick lower grades , have long credit periods
 The Lorry drivers :
 Lorry booking agents/brokers take 40% of cut. Fluctuating rates and
high stress work
 The Sellers :
 Organized retail : High investment , Poor supply chain, Low volumes
 Unorganised retailers : Sabjeewallah/push cart vendors :
▪ Missing link and unsung heroes of the supply chain. (Over 90% of volume
retailed here)
▪ No proper benefits / finance / support
 The Buyers :
 Housewife : Fluctuating costs, Poor quality
 Hotels / Food processors : High costs, Unreliable suppliers
 Exporters : Poor standards / quality , High logistics cost
 Supply Chain Management
What is it ? Why is it important ?

Value added resellers

Sorting , Grading , Processing, Packing

Storage
Warehouses

Bulk buyers
Exporters

Farmers eFarm
Cooperatives
Collection centers

Kiranas
Self Help
Groups
Hawkers

Village ICT kiosks

Phone booths Logistics Fleet Small Independent transporters
Mobile operators operators Intra-city small tempos
•IT Systems usage : NIL
•Management team : Illiterate and average age of 55
•Age of company : Over 150 years
•Customer Segment : From slumdwellers to crorepathis
•Operational efficiency : Six sigma !!!

The Mumbai Dubbawallahs !!!

•Key success factors :

•Highly decentralized operations – agile, flexible , scalable

•Use of low cost transport medium – trains
•Use of human power for last mile delivery – No Fuel related hikes
•Strong customer relationship – personal , localised
•Simple coding, routing, labelling system – operates even without electricity !
•Delivery excellance – fixed time , professionalism
Fix the process
first
And THEN
Implement
technology
Otherwise will be
a failure …..

Financial Success
Inspection/ Grading
An untapped , niche
market with very few
organized, entities
Revenue generation
through better
optimization, value
addition across the chain
Reduced wastage in
transit = more revenue
Has potential to jumpstart
other agri-dependent
ventures
A professional ly
managed supply chain is
vital for tapping
international markets
Potential to scale across
India as core problem is
wide spread Coordination
‘Pull factor’ from rural
India for other services
and products
Cleaning / Packing
Social Progress
Quality Routing
Organizing the large
Long haul unorganized agri sector of
Transportation
India – bottom of pyramid
More income to farmers ,
truck operators and small
Rural Produce Local vendors
vendors owing to profit
Collection Centres Small retailers sharing across the
network
Farmers Support to traditional , eco
Urban area
Distribution centre
friendly farm practices ,
Local
Distribution organic farming through
better marketing
Convert waste to compost
Compost/Manure Food Processing
, providing low cost
from waste units manure back to farmers.
Bulk buyers Revival of agriculture
(Hotels / Caterers /
Retailers)
Exports dependent livelihoods ,
empowering villagers
eFarm Common Services
Planning & Call centre / Training &
Research
Communication
Technology
Support Under privileged/Disabled
and urban poor get
employment opportunities
Open source
Tools &
technologies
AgriXML
As a dataXchange
format
Collaboration and B2B trading
platform
•Content : Daily pricelists,
Schedules, Trends , Buyers
guides
•Order management
•Search / Track items
•Delivery tracking
•Agri specific social networking

Backoffice Systems
•Customer relationship
management
•Supply chain management
•Mobile/SMS gateway interface
•Voice based interface
•MIS & Data mart
 eFarm Registers the farmers,
1
transporters and other intermediaries
with basic details such as produce
type, volume, expected price range
etc., Advance amounts are collected from buyers
4 .Payments are made to farmers and
-
2 eFarm Retail co-coordinators (ie.,NGO intermediaries upon delivery.
/small retailers) consolidate the Orders
from buyers received through phone,
email and walk-in to make one
consolidated demand list 5 The vegetables are sorted and graded at the
eFarm Distribution centers across the city by
members of women’s self help groups of the
area..
-
3 eFarm sourcing managers track prices
across different areas and feed in the
data. The central order matching
system determines best source,
location and logistics channel for The orders are delivered immediately through
6 delivery vans,push carts etc to end
fulfillment.
customers

Lessons learnt, feed back and data analysis conducted on the order received is shared with
7 the members in the chain. This helps to optimize the operation continuously and increase the
value creation across the chain.
 Cooperatives Hub and Spoke Model For Catering/Hotels

Producer Scalability and Organic Growth

Corporations

Exporters

Rural Urban
SHGs
Collection Forward Logistics ( Fresh Produce) Distribution
Centres Centers
Food Processors
Reverse Logistics ( Manure , Farmer supplies)

Bulk buyers

Small & mid sized farmers

Retailers /
Mom & Pop stores

… organic growth and

expansion
ICT Technology and the BOP segment :
Challenges
• High illiteracy
• Even amongst educated – Mostly local language
skills only
• Low computer skills , Low internet penetration
Technology Adoption amongst BOP
segment
• Highest and fastest penetration : The mobile
phone
eFarm Interface points • Self taught the phone interfaces , usage
• Pay full price for new models , talk time
• Voice call centres / BPOs (local language )
• Natural language IVRS ( 2 way –
automated messages)
• SMS
Production data
• Produce name, variety
• Grade
• Typical yield at harvest
• Harvest cycles
• Cost price at farm gate

Farmer information
• Name
• Address
• Contact number
• Preferred mode of payment
• Bank / Post office details
• Photo
• Attestation
Tools and calculators
to assist farmers in
determining their
Sale price

Click to open ->

 Koyambedu
nadu tomato
(data courtesy : TNAU-INDG market
information portal)

Where to sell ?
At what price ?
Head to head comparisons
across
Markets
Ottanchatram
Insight - Support level prices and nadu tomato
inflection points

High / Low variations

Identifying ‘hoarding’ and

‘cartelisation’
 (data courtesy : TNAU-INDG market
Koyambedu : Sambar onion
information portal)

What is the demand for a

particular product variety in Koyambedu : Nagar Onion
specific market?

What variety to produce ?

When to harvest ? How much

?
Koyambedu : Tamilnadu Onion
Example using onion in Koyambedu
 NENDRUM IN COIMBATORE MARKET NENDRUM IN CHENNAI MARKET

60 60
50 50
40 40
30
30 20
20 10
10 0

30/06/2…
26/06/2…

29/06/2…
27/06/2…
28/06/2…

01/07/2…

03/07/2…
02/07/2…
0

Nendram in Bangalore market

60
Customer : A major chips manufacturer In 50
40
chennai 30
20
Problem : Nendran variety availability & 10
quality was poor and price was very high 0

Identified alternate markets for viable bulk

sourcing from alternate markets
 Screen cam video
 Technology_Videos\customer.avi
 Technology_Videos\Farmer.avi.avi
 Technology_Videos\Inventory Check.avi
 Screen cam video
 Technology_Videos\MS_CRM_whole.avi
 Demand / Supply Forecasting and aggregation

Strategic
Forecast Stocking Sales &
Plan marketing

COLLABORATION
FOR PLANNING

COLLABORATION
Farmer FOR OPERATIONS

Purchase Order Sourcing

Confirmations Purchase manager
Orders
 Retail outlets

End customer
: material flows Distribution
locations
: information flows Center (DC)

Farmer / Supplier Retailer regional HQ –

supply chain functions
across stores are
managed here

Collection
centre/
Rural hub

Distribution
Center (DC) Retail outlets

Tier 1 Suppliers Tier 2 : Distribution Tier 3 : End customer

centresCollection and drop locations
 Simulation
 Technology_Videos\sc_1.avi
 Technology_Videos\sc_2.avi
 Drill down to
details

Highlight
Dashboard summary potential
For senior management problems
and issues
for
immediate
action
Agri India – LinkedIn Group ( > Link )
•Operational since Jan 2009

•connecting farmers, buyers , social agencies, agri professionals

, academicians , press reporters & students

•Leads on key demands , info about agri expos/conferences , trade

news , job announcements , new ideas , discussions …

•Articles on key topics :

•Agri business & entrepreneurship
•Organic farming
•Video clippings on key technologies & processes
•Buyer’s guide to various fresh produce (for e.g. detecting carbide
mangoes, health benefits of keerai , selecting brinjal without
insects etc)
 May’08- Jun’08 : Website launched, Initial prototype system
June 07 – May 08 : Information gathering , discussions, solution proposals to focus groups
development

Aug’08- Oct’08 : Concept pitching to pilot customer base/SHGs. Pilot launched with weekly deliveries. Different retailing options such as push carts, stores, mobile trucks
tried out. User feedback has been positive from all strata. Avg. weekly delivery = 2 tonnes

Oct’08 – till date : Distribution centre and retail outlets. established . Daily operations launched to cater to wider customer base . Promotional events, publicity drive. Core
Concept and processes constantly being upgraded and evolved based on trial run results.
•TATA NEN Hottest startup 2009
nominee
•IIM Kozhikode Whiteknight 2009
Business Plan contest winner
•IIM Ahmedabad Leverage 2009
Showcase shortlisted startup
•In the press
•The Hindu magazine’s Ergo tabloid
(Mar 2009)
•Times of India , May 2009
•NDTV News , June 2009
•Featured in leading e-zines –
yourstory.in, startups.in
•Featured in Tamil press- Kumudham
, Dinakaran
•Outlook Money , June 2009
•JADE , June 2009
•Academic
•Faculty for Food SCM course, MOP
Vaishnava college
•Key note speaker – TNAU conferences
Venkata Subramanian , MD eFarm
Ph : 044-43577236
M : 98847 61354
Email : venky@matchboxsolutions.in
Web : www.efarm.in
11 Loganathan colony , Mylapore, Chennai PIN 600004