Its E Choupal

A CASE STUDY

ON

ITC -e- CHOUPAL

SUPPLY CHAIN MANAGEMENT

What is a choupal?

An informal assembly of village people where they used to chat, gossip, share stories, information and views

It was of importance because through this gathering knowledge could be shared and captured.

Inefficient agricultural Supply Chain: Input as well as Output

Input side:

Ð'* No access of quality inputs such as sowing seeds, herbicide, pesticides etc. to farmers

Ð'* No access to information like weather report, market trends etc.

Ð'* Agricultural yield only a 3rd to a quarter of global standards.

Ð'* Over-dependence on monsoon

Ð'* Poor farming practices.

Ð'* Poor Credit systems

Ð'* Vicious cycle formed due to low incomes resulting in low risk taking ability resulting in low investment resulting in low productivity again leading to low income.

Output side:

Farmers have to do long road journey with load of crops to mandi without getting paid their transportation cost.

Ð'* It affects the price the farmers should get.

Ð'* Using manual balance beam erroneous measure of weighing occurs and it incurs some losses to farmers.

Ð'* Unofficially farmers are not paid just after the transaction in mandi.

Ð'* There was no storage for unsold crops in mandi.

Ð'* Farmers were unaware of market activity so they accordingly plan their harvest.

Ð'* Above inconveniences has resulted lack of interest among farmers to invest more in crops.

Ð'* Bidding price often used to be much less than spot prices and CAs often capitalized the difference which ideally should be farmers' return.

Need of e-Choupal:

 To cut this middleman controlled mandi system between farmers and processor like ITC.

 To empower farmers with all information required for best agricultural practices and selling their produce at true market price

 To convert the farmers into viable consumers.

 To give them access to direct selling market.

 To secure the competitiveness of the supply chain.

 To enhance the competitiveness of Indian agriculture on global standard.

 To reach the target of Rs 2000 crore ($ 442.6 million) sales by ITC IBD.

e-Choupal Model in action:

ITC supplied a computer kit to every village

 A PC with a windows/ Intel platform, multimedia kit, and connectivity interface

 connection lines, either telephone (with bit rate between 28.8 and 36 kbps) or, more commonly, VSAT12 (in 75% of echoupals; 2003 usage 64 kbps inbound, 1 Mbps outbound)

 A power supply consisting of UPS13 and solar-powered battery backup.

 A dot-matrix printer.

Total setup cost for ITC was Rs. 170000 per choupal. Another Rs. 100000 was spent on people , travel, software and training.

Computer Kit:

Ð'* Internet connectivity

Ð'* Site dedicated to farmers

Ð'* Weather Page

Ð'* Best practices