E Choupal

ITC is one of the Indian brands with a market capitalization of $4billion and revenue of $2billions. ITC has a diversified presence in hotels, tobacos, apparels etc. ITC established IBD (International Business Division) in 1990 as an agri trading company aiming to offer the world, Indias best produce. It used to do the trade off the traditional way which is via inefficient mandis and vicarious agents in between. There was a gap between farmer and the company also the agents those who used to trade on behalf of ITC were corrupt and used to manipulate with the prices and qualities of the produces traded. ITC in order to go deeper in the supply chain of collecting produces from farmers, strategized and developed an innovating online portal called as e choupal. About E Choupal: Choupal is a hindi word which means a gathering place. E Choupal initiative provides an online web portal which has various agricultural commodities at the village level prices for produce transaction. It also provides information on best farming practices. It provides information on weather and also supplies quality agricultural products like seeds, fertilizers etc. E Choupal is a kiosk with an internet connection. This kiosk is actually a house of the person who is given the responsibility to help farmers transact and trade. These caretakers are called Sanchalaks. A kiosk covers almost 600 farmers and any village in a radius of 5km. Finally there are Samyojaks who are the agents of ITC to take care of the operations, supply, revenues, finances and trades of produce from the farmers. By improving the efficiency of the procurement process, ITC was able to reduce costs on various processes.

E Choupal Processes:
INBOUND LOGISTICS INSPECTION GRADING WEIGHING PAYMENT HUB LOGISTICS

PRICING

ITC uses Pull based marketing technique where the farmers understand their need therefore are driven to these centres. Sanchalaks have many social contacts which help in building the network. Sanchalaks aggregates demands from individual farmers which helps in keeping down the logistics cost.

Pricing: In this stage a farmer brings produce to the e choupal . The sanchalak inspects the quality and quotes a price in accordance with the benchmark. Every measure is taken to maintain the transparency in the prices of benchmarks and the price quoted by sanchalaks. Inbound Logistics: After taking the bills from sanchalak a farmer goes to the procurement hub which is mostly a warehouse or factories which acts as a collection point. Inspection and Grading: First stage of inspection was done by sanchalaks where it measured the moisture level in the soya by its moisture indicators. The second level of testing is done at this procurement centre where the seeds are tested in laboratories for moisture content and is the last stage of testing before the sale. ITC is thinking of giving some rewards to the farmers whose quality of seeds are above expectations. Weighing and Payment: The farmers produce is weighed and then is payed accordingly. The farmer is also reimbursed for the freight expenses he or she incurred. Logistics and Storage: Samyojaks manage the responsibilities of all the activities at the procurement centres which include payment, handling, storage etc.

Hubs and Distribution Centres in Supply Chain: The hub where the farmers comes to sell his produce is also used for storing those produce as well as agricultural products which are there for sale. The farmer can easily buy any commodity such as seeds and can take it back in his empty trolley. The products are also offered through partners and for providing an order Sanchalak gets some commission. Their product is also put in the hub as samples. These hub also keep ITC products. The Samyojak is responsible for distribution of products from hub to Sanchalaks.

Strengths in the supply chain of E Choupal: The Samyojaks are given 0.5% commission which was 3.5% to 4% in the old supply chain of government. ITC has reduced it drastically. Reimbursement paid to the farmers is half of what was paid to the agents for transport to the ITCs factories. Quality of produce has improved and is under control where earlier it was manipulated by intermediaries. Risk of defaulting has reduced. Through this system there is at least a guarantee that these farmers will not default. Transparency in pricing, transportation and almost all of the processes involved has helped ITC developing better future plans. In the end the ultimate achievement is the reduction in the cost incurred in procuring these commodities.

The nearest mandi price is constantly monitored through which the company sets a benchmark called as Fair Average Quality (FAQ). The prices may or may not vary depending on the variations at Mandis. The Samyojaks are instilled with faith through regular trust building practice by ITC. These Samyojaks play a very important role and are fully integrated in supply chain of E Choupal.

Effect of E choupal: It has improved the condition of farmers. Removed the exploitation whci the farmers had to undergo in the earlier mandi system. It provides better price for the produce of a farmer. It has helped in improving the practice of agriculture. Helps In training the farmers. Provides cheaper and better agricultural inputs. It has helped ITC in developing a social image. Revenues of ITC increased. Through IBD it is providing the best products to the world from India and thus has helped in increasing the reputation of India in the world.