ITC Supply Chain Analysis

One of the major constraints facing the supply chain of FMCG industry in general is the complex
distribution network and multiple layers of middlemen distorting the price of the final product being sold
by the firm. Also, ITC through Ashirwaad Atta wants to market fresh product that have been traditionally
handled by unbranded atta in each region. In these items, the freshness of the product is an important
requirement from the consumers point of view. Traditionally ITC has worked with centralized plants,
where they can manage quality and also enjoy big economies of scale. As freshness is one of the most
important criteria from the customers point of view, ITC will have to work with decentralized
manufacturing plants near consumer centres. Balancing quality, freshness and cost is a major issue for
ITC.

Current Supply Chain of ITC

ITC currently leverages its established supply chain through its e-choupal network ,which has helped ITC
quantum leap in its network. By bypassing fragmented and opaque mandi market for wheat sourcing and
minimal re-engineering, ITC achieved improved profit margins for both farmer and ITC.

Guiding Principles Barriers Solution Value Addition

Real time Weak Infrastructure IT enabled services Correct price Information and
information Introducing best agricultural practices
Developing relationship No direct interaction Employing middlemen Establishing Trust:Penetrating
with rural sector with the farmers as democratically Rural market.
chosen sanchalak. Securing required quality & quantity of
Dignified treatment of produce
farmers

Through e-choupal,ITC developed a new sourcing channel by unbundling two aspects of the supply chain
information (price discovery) and transaction (weighing and delivery). Simultaneously, ITC set up
warehousing hubs managed by the erstwhile middlemen, which reduced transaction costs, screened
products for quality, and created efficient logistics with clear traceability.

Digital Supply Chain of ITC

While the traditional supply chain has worked well for ITC over the years, given the rise of digital
consumer, there is a need for ITC to shift towards establishing a separate supply chain for e-commerce
firms like Grofers , Bigbasket, Amazon and Flipkart.

Since most of these firms operate on a hyperlocal model with lead time for deliveries typically between
two and four hours,ITC can leverage its network of 1,550 wholesalers and some of its two million retailers
that are part of ITCs direct distribution network into sourcing centres for companies such as Bigbasket.
ITC can also leverage analytics to automatically identify the closest distributor or dealer or retailer, and
the e-commerce company will be directed to pick up the product from that particular outlet for
delivery.Thus, online retailers will not have to invest in distribution centres and can reduce the time for
sourcing and delivery.
Secondly,to monetize on its warehousing space,ITC can rent out extra space in its warehouse to online
sellers to stock their products at a subsidized rate. In return, the sellers shall push ITC products on online
marketplace platforms.

Radio Ad Costs on World Diabetes Day

Time Spent No of Times to Cost Total Cost

be played
Radio Jockey 30-45 secs talking 6 6000/mention 36000
Mentions about the new
Aashirwad Atta
Ad Jingle 10 sec slot during 8 128/sec 10240
prime time
between 8am-
11am and 5pm-
8pm
Total 46240

BillBoard Prices

BillBoard Location Cost/Month

Basaveshwaranagar, Bangalore 82500
Mahadevapura 82500
Chandra Lay Out 82500
Nagarbhavi 82500
Gaviopuram Extension 82500
H.A.L II Stage 82500 Bus Shelter
NAL 82500
Indiranagar 55000
Indiranagar 55000
Jayanagar III Block 82500
Majestic Metro Station 130000
Yeshwantpur 72000
Lalbagh 65000 Metro Stations
Magadi Road 40000
Garuda Mall 250000
Total Mall 136000 Retail Malls
Phoenix Marketcity 220000
1683000
Bangalore,Delhi, Mumbai, Hyderabad, Kolkata, Chennai
Average Total Cost 1683000* 6 = 10098000