SIMSR Global SCM Conference

RESEARCH PAPER
(RURAL SUPPLY CHAIN)

December
11, 2015

SIMSR Global SCM Conference

December
11, 2015

Table Of Contents
Abstract

1. INTRODUCTION
2. CORPORATIZATION OF RURAL INDIA

3
5

3. RURAL SUPPLY CHAIN TRANSFORMATION

4. ICT AND SUPPLY CHAIN RELATION

5. FEASIBILITY AND ACCEPTABLE MODELS

OF RURAL SUPPLY CHAIN IN INDIA

11

6 DRISHTEE: AN ORGANISATION WORKING

22

TO IMPROVE RURAL SUPPLY CHAIN

7. CONCLUSION
8. REFERENCES

23
24

SIMSR Global SCM Conference

December
11, 2015

Scope Of ICT In Rural Supply Chain : Feasibility And Challenges

1*

Mudit Kansal1,Riddhima Kartik2

School of Petroleum Management, PanditDeendayal Petroleum University, Gandhinagar, India

School of Petroleum Management, PanditDeendayal Petroleum University, Gandhinagar, India

Abstract:In rural areas like in India and china where about 70% population resides availability
of effective supply chain becomes of utmost importance .As we know in rural areas there are
many constraints like poor infrastructure, lack of skilled labor and many more so providing
optimal supply chain becomes a great challenge. Trade-off between cost and quality of supply
chain is critical factor in rural supply chain due to above mentioned constraints and poor
economic conditions. Innovation in every layer product, process, service and business models is
required to tap the potential rural market. In rural supply chain for agriculture products it has
been observed that significant amount (million tons) is being wasted annually due to
misinterpretation of demand by farmers which leads to storage of food crops for excessive time
in warehouses . Also farmers are not able to get precise data regarding the market price of their
crops and also they are not able to know the area where their crop is in maximum demand. As
farmers are not able to analyze the cost manipulation by intermediaries and cost implications of
their chain they are not able to add value to their chain. Processes like data integration,
financial flow management, supply-demand matching, collaborative forecasting, information
sharing with farmers and goods movement synchronization through efficient transport
scheduling is required to develop a quality rural supply chain.ICT model which is constantly
undergoing rapid transformation has moved to the scenario of strategic collaboration of
different software and hardware devices like the presence of smartphones and laptops which can
easily receive Wi-Fi signals also and can integrate with GPS system easily to track position of
vehicles across supply chain. Finally importance of strategic collaborations of different institutes
like Drishtee will be seen to combat different constraints. For analysis emphasis will be on rural
supply chain in Andhra Pradesh.
.

Keywords:Optimal supply chain, Trade-off, Rural supply chain for agriculture, ICT
(Information and communication technology), Drishtee

N Viswanadham

SIMSR Global SCM Conference

December
11, 2015

1. INTRODUCTION

After US, India holds the largest cultivable land, and all the seasons for production of a large
variety of vegetables and fruits. It nurtures a great agribusiness, which though needs to be
improved a lot. The prime factor affecting the Agri-sector is the Highly Inefficient Supply
Chain. Due to lack to proper supply chain infrastructure, about 20% of the total produced food
is wasted. Though it is a fault that can be covered by using state-of-the-art-techniques and
improvising the supply chain management, which makes it possible to serve the consumers with
value added food while maintaining remunerative prices to farmers. The surplus of these foods
also can be served as value added food products. For achieving gains in this sector,
Investments, Installations & Applied Research in Food Harvest & Processing Technologies
become mandatory.
According to the facts, in India, 52% of the total land is cultivable as against the 11% in world.
The conditions available in India are so varied, which makes it possible to cultivate a huge
variety of crops. As there are 20 agro-climatic regions and nearly 46 out of 60 soil types spread
over the country. Day length and sunshine hours cycle are perfectly suited for around the year
cultivation in the form of technically known terms Khariff and Rabi crops. As mentioned in
FICCI report of October 2004, India is the:

Second highest producer of fruit and vegetable in world

Second highest producer of Milk with storage capacity of 70,000 tonne.

Although having huge agricultural produce and abundant volume of natural resources, India
still ranks below 10th in the export of food products. Currently, the food processing sector,
though in nascent stage, constitutes 14% of manufacturing GDP; it also employs 130 lakh
persons which is supposed to increase at an annual rate of 7%. This low ranking even after
having a major hand on resources and processing reflects the inadequacy of proper supply chain
management.
Rural supply chain management can be viewed as an emerging field in the context of world
economics as it has always been observed as a supply chain which has great potential but has
remained untapped. Due to the involvement of intermediaries the existing rural supply chain is
4

SIMSR Global SCM Conference

December
11, 2015

very complex and also has been non profitable to farmers. In a country like India where 1.252
billion people reside and 53% of their expenditure is on food products the scope of rural supply
chain specifically in India in terms of profitability is very high. AP (Andhra Pradesh) in India has
always been important for rural supply chain as 70% people in AP reside in rural areas and rely
on agriculture. Due to the improper management in rural supply chain in AP the agriculture
sector has been declining at a steep rate here.
ICT (Information and Communication Technology), the latest technological development, has
tremendous power to manage rural supply chain in an efficient way. ICT which comprises of
computer, LAN networks, mobiles and communication satellite signals coverage integrates
together to provide opportunity to get access to real time data and helps in managing database in
a structured way. As many processes are involved nowadays in rural supply chain it has become
difficult for farmers to understand its flow which provides susceptibility to manipulation in data
by intermediaries. ICT hinders the manipulation of data and allows smooth flow of information
across supply chain.
Organizations like Drishteeare working at national level to augment ICT in rural supply chain to
have better decision making and faster response from farmers to adapt to continuous change in
market needs and demands.

1.1

OPPORTUNITIES FOR RESEARCH IN INDIAN SCENARIO

In an emerging economy like India, one may find many significant research issues. Agribusiness though looks low on tech front, yet numerous innovations are possible which may
boost up economy. At the Strategic Level; India has abundant resources and Surplus fresh food
that are being presently wasted. Government can bring in Food Manufacturers to set up
production houses. Secondly at, Operational Level; Instead of Cropping, if crops are produced
according to the demand, leading to contractual farming which ensures the quality of produce
and the quantity as well, which shall help in answering the issue of wastage.

CORPORATIZATION OF RURAL INDIA

SIMSR Global SCM Conference

December
11, 2015

A need for Transforming Rural India into a vibrant activity center has been well noted. Rural
business transformation involving series of creating an efficient and effective supply chain
network, which shall be facilitated by orderly flow of goods & finance and making a better
connectivity network. Improving the standard of living in rural India becomes a subset of this
overall development initiative by the creation of a value added supply chain of food products
and services for the farmers. A typical rural economy we find shall be agri-based and the quality
of life has always been an issue of concern for India and the World. The Poor standards of
living are visible in the form of lack of basic amenities, such as Safe drinking water, Education,
Balanced Diet, Healthcare etc. All these issues are particularly evident in the developing nations
like India which is still in its developing phase. These issues arise mainly due to under
utilization of available resources in a planned manner. The penetration of development
programs and strategies by the government agencies are far below expectations.
India is ranked in the top 5 list of the agricultural produce, but the revenue generated from
these resources does not match its optimal potential. Many initiatives have been undertaken in
the past and present in order to reap the benefits of Rural Supply Chain Management and also
help develop the nation as a whole with its rural part:

AMUL Cooperative Movement

ITC e-Choupal Empowering Farmers

Drishtee Nationwide Rural Supply Chain

The rural sector is facing a multitude of problems and we need initiatives for the improvement
in the literacy rate, agricultural productivity, healthcare, infrastructure and standards of living.
The rural areas have different kind of constraints which can be categorized as:
a. Infrastructural Constraints

i.

Communications

ii.

Efficient Transportation

iii.

Knowledge Process

iv.

Availability of Materials

SIMSR Global SCM Conference

December
11, 2015

b. Social Constraints
i.

Improper governance

ii.

Traditional Mindsets

iii.

Illiteracy

c. Economic Constraints
i.

Competitive Marketing

ii.

Availability of Inputs

iii.

Utilization of resources

A village can be viewed as a business system with an efficient Supply Chain. Transforming
inputs into value added demand driven products. For this understanding of the products, the
production process and demandis necessary.

RURAL SUPPLY CHAIN TRANSFORMATION

The rationale behind the Rural Business Transformation lies in creation of an efficient Rural
Supply Chain by bringing all the market players into the same scenario. In the following sections
we present a brief of the Rural Supply Chain Management (RSCM).
Procurement Process
It is one of the Important Value Delivery Process in RSCM. It serves as the tail-end of the
Supply Chain as it includes the most important part of the Supply Chain. The basic need of the
farmer community is a fair deal and remunerative prices. The resources available in rural India
are:

Farmers

Farm Lands

Irrigation Sources

Cultural Resources

Post-Office

Road Transportation Corporation

SIMSR Global SCM Conference

December
11, 2015

The target market here is the Processing Industries, Retail Chains, Kirana Stores and the
Cooperatives for all agri-based products. In current system there is no proper linkage between
the demand and supply side. Few companies such as HLL, AMUL and ITC are working in the
rural areas benefitting all.

Figure1: Demand and Supply gap in the Rural Supply Chain

To manage the above constraints, it is important to necessitate the use of technology where ever
possible. Employing innovative means to handle such constraints implies the breaking of
conventional barriers.

SIMSR Global SCM Conference

December
11, 2015

ICT AND SUPPLY CHAIN RELATION

Supply chain deals with flow of products and information and ICT bolsters the supply
chain by adding smooth flow and sharing of information among farmers which benefits
farmers as well as consumers. Many ICT models have been suggested by researchers and
some have already been implemented experimentally acrosscountries like Kenya, the
Philippines and Sri Lanka. Development of M-ARD Apps (Mobile Agriculture and rural
development apps) is one such innovative model which has been implemented in some
African countries. The M-ARD app was tested considering following objectives to be
achieved as shown in fig 2.

Figure 2: Objectives Inspected Of Mobile Applications for Agriculture andRural

Development (Source : ICT in agriculture, Media Lab Asia)
9

SIMSR Global SCM Conference

December
11, 2015

Among M-ARD apps Drum Net has been widely used in African countries and it has been
observed that net income of farmers have increased by a third due to the comprehensive system
of price negotiation, contracting and other value chain support.M-ARD apps also gradually
extending to insurance and finance products in rural areas. M-ARD apps have been successful in
African areas due to lack of commercial information providers. Some M-ARD app providers are
generating or have generated market research units to provide users with valuable information.
Many software are also being generated or has been developed to enable proper sharing,smooth
transfer of data and also facilitating easy and effective storage of database which helps in present
and future market dealings. One such software is AgriManagr software which has been
implemented in some developing countries. This software runs on mobile phones
orPDAs.Integrating Bluetooth mechanism, measurement devices, transaction receipts and
central data collection centre helps to generate data of transaction of farmers along with crop
production status of different areas. All these data are made available at the same time to
compare areas effectively which is not only helpful to Agriculture processing firms but also to
farmers to compete with other areas in an effective way. The model can be viewed as shown in
fig 3.

Figure 3: Agri Manager System (Source:IMPORTANCE OF

INFORMATION TECHNOLOGY FOR EFFECTIVE SUPPLY CHAIN MANAGEMENT
by Prof. Himanshu S. Moharana1, Dr. J.S. Murty, Dr. S. K. Senapati, Prof. K. Khuntia1)

10

SIMSR Global SCM Conference

December
11, 2015

Also nowadays the software is being enabled to track exact location of warehouses along with
amount of payload unloaded from trucks to warehouses to know the amount of losses by
comparing data of amount loaded and amount unloaded which helps to analyze cost
effectiveness of rural supply chain. Thishelps in keeping records of errors and to analyze cost
implications of rural supply chain. To track duration of various individual activities and to track
the transactions which decides the quality of any supply chain and helps to identify the
bottlenecks of any rural supply chain advanced GPRS communication techniques are
implemented along with certain strategic processes to store data of transactions at various points
of rural supply chain.

Figure 4: GPS system to track exact location of vehicle on road

(Source: INTEGRATION OF GPS AND GSM FOR DETERMINATION
OF CELLULAR COVERAGE AREA: Osmania University)

11

SIMSR Global SCM Conference

December
11, 2015

Figure 5: Strategic process to track and share data of transactions(Source: ICT in

agriculture, Media Lab Asia)
Thus ICT can help us to know value of different steps and persons like travelling trader,
wholesaler, retailer and many more depending on complexity of rural supply chain involved.

FEASIBILITY AND ACCEPTABLE MODELS OF ICT IN RURAL

SUPPLY CHAIN IN INDIA

ICT utilizes various technological devices which require prerequisite infrastructure and strategic
collaboration between different departments. The technological devices which are required to be
installed to implement ICT in rural supply chain in INDIA are following:
1. GSM system for mobile
2. WIFI or Net connectivity
3. RFID Tags
12

SIMSR Global SCM Conference

December
11, 2015

4. Different Integration Module

5. Application Software
6. Central Server room
7. Signal Connectivity for mobiles
8. Proper Banking Services
ICT in earlier days used to implement Television, Radios, newspaper etc as a major source of
information for improvement in agriculture. According to 2011 reports published by censusinfo
India following is the statics for usage of old ICT infrastructure:

Old ICT Users

Radio Users
11%
Landline services
34%

Television

Availing banking services

Television
21%

Availing banking
services
34%

Landline services

Radio Users

Figure 6: Percent of rural people using Old ICT in 2011

Nowadays ICT has developed a lot by using various technological devices. According todata
published by Internet and mobile association of INDIA there has been about 138 million rural
users of mobile internet services in INDIA in June 2015. This data clearly shows that there has
been significant increase in internet users in rural INDIA which provides scope for development
13

SIMSR Global SCM Conference

December
11, 2015

of modern ICT model in rural INDIA. One such ICT model has been developed in Madhya
Pradesh with the help of ITC Ltd. ITC has started e-choupal with the following model:

Figure 7: e-choupal model in Madhya Pradesh (Source: Developing a Rural

Market e-hub : The case study of e-Choupal experience of ITC )

ITC has developed a backup physical service support at village level called Sanchalak.
Sanchalak is controlled by a head farmer of that area and all data like current market price,
availability of transportation services, market demand etc get loaded in this e-portal. Each echoupal setup cost was around 40-60 thousand in Madhya Pradesh. E-choupal was setup by a
strategic collaboration of different institutes like ITC, Met department, agri universities, input
Cos, Samyojak to add value to have smooth flow of information and goods. E-choupal was
developed within 5km radius serving 10 villages. Processing center were developed within 25-30
km radius. ITC has invested amount of about Rs 50 million till 2006 for development of echoupal in various areas. ITC has managed to earn revenue of Rs 20 million which accounts to
40% of the total investment made before.

E-choupal concept has managed to eliminate

intermediaries up to some limit but at the same time has leveraged intermediaries to sustain their
skill of storage, transportation, quality assessment which cannot be replicated and which adds
14

SIMSR Global SCM Conference

December
11, 2015

value to supply chain. Thus intermediaries are disinter mediated from the information flowing to
farmers. The financial report over different years can be observed for E-choupal model which
will help us to know the monetary profits after implementation of E-choupal model:

2001-02

2002-03

2003-04

2004-05

2005-06

Total outflows

52.1

123.7

3.9

3.9

3.9

Total Inflows

15

32

47

60

65

Tax add backs 2

on
depreciation
Net inflow

34

85

52

65

70

cumulative

34

119.5

66

69

inflow
Table 1: Monetary Data (All values in millions)
Also we can observe one well-structured organization i.e. Amul which has strategically
implemented ICT platform to improve the value of its existing rural supply chain:
Amul is also working to develop e-supply chain model which is also a new step to development
of rural supply chain efficiency. Traditional conventional methods are not able to encounter
problems like poor health of cattle, improper quality of fodder and inadequate transportation and
storage facilities. Division of procurement units on the basis of societies and thus leading to
amalgamation of villages. Strategic collaboration of automatic milk collection units and
GCMMF (Gujarat cooperative of milk manufacturing federation) helps to provide low pricing
strategy in market. Dual strategy of simultaneous development of the market and member
farmers helped attain sustainable competitive advantage. IT and TQM have significantly
optimized operations of Amul.Following are the objectives Amul desire to achieve by
implementation of ICT platform:

15

SIMSR Global SCM Conference

Stages

AS-IS

To- be

Process

Inflexible to expansion

Flexible

,minimum

December
11, 2015

wastage

,instant payments
Product Analysis

Decentralized applications, No online Easy information flow

access

IT infrastructure

Disparate systems

communication systems like email

Competitive analysis

availability of branded milk

increased availability

Strategic analysis

Demand supply mismatch

Match demand

Table2: Expected outcomes from ICT

(Source: Developing a Rural Market e-hub : The case study of e-Choupal experience of
ITC )

In order to address the scalability and integration issues, Amul started implementing a collection
of Technical and IT initiatives. The following systems were introduced:
1. AMCUS
2. Disk
3. VSAT
4. GIS
5. Amul Cyber Store

The IT model has been implemented in the following manner:

1. Training Management : ChiragBanas Internet Seva in Gujarat
2. Quality management : TQM model through internal consultant development
3. Change Management : Diffused IT system in villages
4. Risk Management : By knowing changing Demands and tracking transactions in
supply chain

16

SIMSR Global SCM Conference

December
11, 2015

The virtual team structure that has been implemented by Amul can be seen as follows:

Retail B2B and B2C

Wholesaler and Retailer

Connect with Direct Customer

Portal

collaboration

Base

EIAS and GIS

GCMMF and distributors

Interface between suppliers and

internet
ERP Disk

retailers
Union members ,village people and

Connection of farmers and

suppliers

village societies

Table 3: Virtual team structure of Amul

Private company like IBM is also strategically supporting AMUL in various ways:
1. Helped implement SAP ERP system which enabled to have a complete view of
supply chain and integrate GCMMF and district unions Business intelligence
system which gave them an insight on all its products all over the country and
generated reports to manage the supply chain.
2. C2C model was developed i.e. (Cow to consumer model was developed )
considering following objectives :
1. Automated milk collection system
2. Distributor managed solution
3. Retail managed solution
A profit of 1159.4 million dollar was achieved by Amul within a year by strategic
implementation of ICT platform. Reduction in processing time and better distribution along with
better advertisement campaigns has been possible due to strategic ICT model. Thus the above
two examples of E-choupal and Amul ICT model implementation gives us the better feasibility
to implement ICT model for different rural supply chains in India.
Now focusing on scope of ICT in AP we will first be knowing the status of existing agriculture
supply chain in Andhra Pradesh. AP (Andhra Pradesh) is a major rice producer of India. AP has
8% of the countrys net sown area and involves 62% of the total workforce. Farming contributes
only 12.9% of the state GDP which is very small when compared to workforce employed. AP is
17

SIMSR Global SCM Conference

December
11, 2015

also able to accelerate in horticulture sector but contributes only 10-15% of state GDP with
second largest contributor to food and beverage industry of India. E-Sagu is one of the IT plan
which has been operating as an advisory firm for farming in AP. This IT plan provides cost
effective methods for farming which ultimately helps to reduce cost of production. E-Sagu
includes main control lab which is generally located in urban area and this lab includes few
computers which controls 10 villages. This lab is being supported by agriculture information
system .E-Sagu maintains database of individual farmers of area assigned to that particular
control lab and data of laboratory tests of soil, seed, water are being given to farmers in the form
of CD. Benefits accrued to farmers wereRs. 3820/- per acre in 2004 and Rs. 3874/- per acre in
2005. These data shows the effect of improvement at one level of rural supply chain in Andhra
Pradesh. Aaqua.org is also one initiative at national level where farmers can post their problems
and get their response in a very short time through internet only. All these initiatives cater to only
successful methods for farming but does not provide market details to farmers which is also the
major part for rural supply chain to be effective. Literacy rate of AP has been found to be
67.41% which is good for a particular state. In 2013 according to data published by Telecom
Regulatory Authority of India there were 6.5 crore wireless subscribers in Andhra Pradesh which
is one of the largest in number for any state and also it has been observed that there has been 40
% penetration rate in rural areas of Andhra Pradesh .All the above data i.e. existing IT systems in
Andhra Pradesh, literacy Rate, mobile and internet users in Andhra Pradesh show the scope of
development of ICT in Andhra Pradesh. Recently TCS has also taken initiative to help Andhra
Government in NREGA scheme (National Rural Employment Guarantee Scheme). Due to this
TCS has managed to develop database of unemployed workers of rural areas and has also
managed to develop their id in vernacular languages along with real time tracking of payment of
wages to unemployed workers. Thus strategic collaboration of TCS along with E-Sagu can be of
great help to farmers by generating real time data of transaction of intermediaries with fruit
processing and wholesalers. These real time data can be shared easily with farmers by slight
interventions in existing system like shifting of some control centers of E-Sagu to rural areas and
maintaining database of all intermediaries and farmers by TCS. The collaboration of model can
be viewed as shown in fig:

18

SIMSR Global SCM Conference

December
11, 2015

Figure 8: Showing strategic collaboration of two existing IT models

The challenges that will be faced during this development of new model will be the sharing of
data on net in their native languages, making them aware of the complexity of rural supply
chains, benefits of new model to them, managing extended database and cost implications of
development of new model. As we know that food processing industries are growing at an
19

SIMSR Global SCM Conference

December
11, 2015

unprecedented rate and huge investments are being made in these industries so investments will
automatically flow to improvise the existing infrastructure in rural areas of Andhra Pradesh to
build an IT model which will add more value to rural supply chains. For this PPP models (Public
Private Partnership Models) will work a lot and will help us to get smooth financial and
technological support to build a robust model in Andhra Pradesh. Many different strategic
collaboration models are already working in Andhra Pradesh like the collaboration of HLL and
ICICI and many others with assured market but with the concept of contract farming where type
of farming to be done and methods to be adopted will be governed by terms of contract. So
different models can function according to requirements of farmers, corporate and finally the
demand in market. All these models can definitely overcome post-harvest loss which is currently
being observed to be 25% in Andhra Pradesh of the total grains harvest only due to improper
amount of storage.Many companies Like IBM, Deloitte, HSBC banks etc... are currently
working together to get smooth flow of operation in export of food products from Andhra
Pradesh and which will help to improve infrastructure and provide path for development of
domestic supply chains to get flow of benefits up to farmers and not only up to intermediaries.
Osmania University is currently working on integration of GSM and GPS in Andhra Pradesh and
has developed model and observed results in particular local areas as can be seen in fig:

Figure 9: Expected Model and Coverage area identification in different areas of AP

20

SIMSR Global SCM Conference

December
11, 2015

From the figure it can be clearly seen that satisfactory results have been found and thus
experimentally tracking of vehicle was done and graph was plotted on reference GIS map which
can be seen in fig:

Figure 10: Real time position of Vehicle superimposed on GIS Map

(Source: INTEGRATION OF GPS AND GSM FOR DETERMINATION
OF CELLULAR COVERAGE AREA: Osmania University)

Thus only strategic collaboration of different institutes is only required to have augmentation of
ICT in existing rural supply chains. IASL (Indian Agribusiness Systems Pvt. Ltd.) a private
company in Noida is providing online services to farmers by providing information of farming
practices and also some details of supply chain which takes place up to selling of final food
products to consumers. It has a network base of 5 lakh farmers and 25000 of traders in all states.
IASL has client list of 500 organizations. IASL has divided its services into three categories like
designing of supply chain,restructuring of existing supply chains (warehousing and
transportation strategies) and risk management strategies. Due to this IASL has gained
knowledge up to some extent of providing right solution to different rural areas. So this
organization can help a lot to develop new improved ICT models at local level to improve the
21

SIMSR Global SCM Conference

December
11, 2015

value of rural supply chain substantially especially in Andhra Pradesh where rate of suicide of
farmers is one of the highest as published by government reports. .Many different ICT models
are also operating at different levels of supply chain. Some of them are:
1. E-Krishi: It provides solutions through internet to small and medium sized farmers. Also
it provides fostering relations between farmers and traders and each one of them can
contact third party directly through net as e-krishi also supports advertisements posting
on internet by third party. E-payment is also being supported .This system is active
mostly in Kerala.
2. ISAP (Indian Society of Agriculture business Professionals): ISAAP is a kind of NGO
organization which has global networks and has answered 3000 queries raised by
agriculture community. ISAAP is one of the largest organization in this field and plans to
extend to network of 100000 members and to have presence at grassroots levels with
50000 experts.
3. HUL Project Shakti:In this model HUL has managed to empower woman and men by
providing them internet enabled smartphones. This initiative has been taken by HUL as
an Enterprise Resource Package .This helps farmers and other rural people to increase
their income by using latest technology to meet their requirements. HUL has till now
covered 165000 villages.

All the above mentioned examples provide their level of development till now and their
plan to expand in future in terms of skill development in different fields and in terms of
expansion in different geographical areas.Technology constraint can be met up to some
limit only because after one point technological development adds significant cost to
supply chain and thus financial risk management becomes utmost important. Thus each
project mentioned above has financial challenges which sometimes become difficult to
tackle in spite of strategic collaborations and restrict their expansion in some way or the
other. Thus in these cases understanding the major factors contributing towards high cost
becomes very important. Financial cost implications for implementing the system will
majorly depend on no. of transports deployed, no. of journeys performed by vehicle each
day and the distance covered along with the sophistication of software and hardware
22

SIMSR Global SCM Conference

December
11, 2015

used. Thus necessity of solution is different for different areas.Identifying the correct
requirement and empowering people to utilize latest ICT model has been core objective
of many institutions nowadays. One such Organization like Drishtee is working to
improve rural supply chains and thus taking every strategic action possible.

DRISHTEE: AN ORGANIZATION WORKING TO IMPROVE RURAL

SUPPLY CHAIN

Drishtee has been working since long and has successfully been able to provide required
network to 14000 rural enterprises till now. Drishtee provides required network to sell
products in open market and also provide services of storage and financial support.
Drishtee provides kiosk based platform to provide education, banking, micro finance
services along with rural BPOs to provide access to market and linkages for physical
products like Mobile Phones. For each franchisee Drishtee provides various components
for successful integration of modules which include community sensitization, needs
assessment, service customization, promoting and initiating transactions and setting up
back end processes and infrastructure.
This provides path to strong route of supply chain. Drishtee itself includes people of
different academic backgrounds which helps to provide strength to its working abilities.
Drishtee also gains assistance from various other institutes like IITs, IIMs etc. to
provide suitable models for that area. Development of required infrastructure for that
particular area is one of its core competency. SamaajShilpi, Saamahit immersion, rural
supply chain etc. are some of its strategic solutions which it provides according to
requirement. Among these solutions in rural supply chain solution specifically it provides
entry barrier to organized retail stores of urban areas and promote rural manufacturers to
bargain with urban manufacturers of similar product categories.Due to the development
of sustainable model in rural area it enables sharing of profit among rural manufacturers
also rather than accumulation of wealth among few urban manufacturers only. ICT model
is also being promoted by Drishtee to have access of rural people to urban manufacturers
23

SIMSR Global SCM Conference

December
11, 2015

and to track market demand in urban areas. Drishtee plans to have network of 3000
RRPs (Rural Retail Points) in 3 states and to touch 100,000 villages in India in next 10
years. These working strategies of Drishtee is empowering rural people financially and
thus enabling Drishtee to expand in different areas of India rather than limiting to north
Indian areas only like Mathura, Punjab etc... Only. To expand its area of operations and
to improve its operations it has recently collaborated with different organizations like:
1. SBI (State Bank of India), Acumen fund and IFC (International Finance corporation):
To improve its financial base
2. Nestle, ACC cement and telecentre: To improve its market network and have better
marketing strategy
3. NSDC (National Skill development Corporation), Ministry of Rural development: To
have the power to empower rural people financially and by honing skills of farmers
4. Novartis: To improve health services to rural people
All these strategic collaborations will help Drishtee to achieve its mission and vision
which will ultimately add value to rural supply chain.ISCM (Institution of supply chain
management) is an organization similar to Drishtee which is working at global level.
ISCM conducts summit and thus bring problem of logistics and credit financing among
CEOs to develop a strategic solution. So presence of these organizations at different
levels can help each other to have flow of information from bottom to top levels and vice
versa which will provide a new dimension to rural supply chains.

CONCLUSION:

Providing right kind of ICT model to different rural areas is very important to add value to
supply chains. Development of different ICT models in India has fostered many private
companies to strategically collaborate with different public and research institutions to develop
software in a cost effective way and to manage fund allocation together in a strategic manner.
Availability of required infrastructure, lower literacy rate and risk management can be
summarized as the major hindrances to be managed to augment ICT with existing supply chains.
24

SIMSR Global SCM Conference

December
11, 2015

Understanding the amount of money to be invested and the amount of intervention required to
have proper flow of information across supply chain and to share revenue generated among
farmers and investors requires a great skill. Collaboration with different companies is required
time to time to meet dynamic challenges of rural supply chain in a cost effective manner. Access
of farmers to market demands, cost implications at each step of supply chain and pre and post
harvesting methods to be adopted are the elements of information that need to be transmitted to
farmers. Institutions at local and global level have to come together to flow the information
related to challenges in upward direction too to get strategic solutions from CEOs of different
companies. Thus tapping proper resources is utmost required to make a rural supply chain
beneficial to farmers also and not only to intermediaries.

REFERENCES
[1] Goyal, A. 2010. Information, Direct Access to Farmers, and Rural Market
Performance in Central India. American Economic Journal: Applied Economics
2(3):2245.
[2] Jensen, R. 2007. The Digital Provide: Information (Technology), Market
Performance, and Welfare in the South Indian Fisheries Sector. Quarterly Journal of
Economics 122(3):879924.
[3] Lio, M., and Meng-Chun Liu. 2006. ICT and Agricultural Productivity: Evidence
from Cross-country Data. Agricultural Economics 34(3):22128.
[4] Aarti Shetty & BV Mahalaxmi, dated 8/4/2002 Corporates Enter to Cash in on the
Agri
[5] Potential The Financial Express.
[6] Dated 4/2/2002, ITC e-choupal, Businessworld.

25

SIMSR Global SCM Conference

December
11, 2015

[7] S. Sivakumar, CEO of ITC-IBD, dated 8/4/2002, Collaboration Works

Businessworld.

[8] National Horticulture Mission: Action Plan for Andhra Pradesh, Prepared by Rabo
India Finance Pvt. Ltd for Ministry of Agriculture Government of India (September
2005).

[9] VeenaGoel, Motives and Concerns in Supply Chain Management for Wheat Industry
in India. (http://www.runetwork.de) (2006).
[10]Surjeet Das Gupta, dated 5/3/2002, The choupal as a meta market Business
standard, Strategist.
[11] ICT in Agri: e source book
Websites
[1] ITC e-Choupal: www.e-choupal.com
[2] http://www.slideshare.net/arunkumarss/mobile-eagriculture?related=1
[3] http://www.slideshare.net/FARAInfo/innovations-in-ict-use-in-agriculture?related=3

26