ITC E-Choupal Review
1. What was ITC's motivation for creating the eChoupal?
ITC's main motivation behind creating eChoupal was to generate more sales in agriculture. The International Business Division (IBD), which was the agricultural division of ITC, was lagging behind other divisions (tobacco, retail, etc.) of the company. IBD had grossed Rs. 450 crore, while other ITC's other divisions had a total of Rs. 7701 crores in sales.
ITC also wanted to increase efficiency in various aspects of the agricultural business. For example, farmers did not have access to appropriate tools that may help them achieve the maximum financial benefits. Farmers did not have access to quality inputs (pesticides, herbicides, etc.), or information on weather reports that may help improve their crop quality as well as the process of bringing it into the market. Because of this, farmers lost 60-70% of the potential value of their crop and the yield was only about a third to a quarter when compared to the global standards.
ITC wanted to address the entire issue by helping the farmers earn their fair share, and improving the trading service. ITC wanted the farmers to have access to all the information, and have them make decisions on how they wanted to sell their crop. ITC enabled this by creating a Hub is each village which enabled them to attain information relating to weather, crops, best practices, and all their questions could be answered by an expert in the field.
2. What are the old and new physical flows and information flows in the channel?
In the old system, the main source of physical flow and information flow in the channel was via the Mandi, where the farmers and villagers would gather to discuss information on various topics. In the old system, farmers would go to the market (often a day's worth of travel), and then try to sell their crop to the CA. At any given day, there would be atleast 1,000 farmers in the market, which made it very demanding for the farmers to sell their crop.
In the new system, information flowed into the channel via the eChoupal. This system gave farmers access to information relating to their local network (i.e., activities around their area with respect to crop selling), and also information on weather, best practices etc. This was a more reliable source of information they could receive, when compared to Mandi. The information provided farmers with risk management and risk mitigation tools to maximize the growth of good quality crops. The ITC eChoupal helped the farmers market their products better and also raised awareness of competitive pricing of their crops.
3. What principles did ITC employ as it built the newly fashioned supply chain?
ITC's main platform was to ensure that all the systems and information are kept transparent to the end user. They also wanted to build trustworthy and confident relationship with the farmers and the Sanchalaks. ITC ensured that the farmers are given a good platform to make an informed decision. To do this, ITC ensured all the Sanchalaks and properly trained, since the Sanchalaks are the people who would enable eChopal network to function properly. The Sanchalaks served as a link to connect the ITC and the farmers. Hence, ITC ensured that the Sanchalaks were honest. The Sanchalaks had to take an oath that they would not engage in any wrongful activities.
ITC also believed in equal access of their system to everyone, and again, keeping the whole process transparent. The web site was accessible to anyone, including the government, to cross-check ITC's prices at any time. To make the farmers and people more confident about the system, they ensured the government also buys into the system. By having the government accept the initiative, ITC ensured that the eChoupal was a legitimate tool that the people could use and trust.
The ITC never made the farmers enter a contact or try to persuade them into a "deal". They left the final decision to be made by the farmers, which also gave the people freedom to think and act. ITC's philosophy was to be honest and gain the trust of the people and they will eventually come back and gain their business and maintain a good working relationship with the farmers and the people.
What barriers did ITC face in embarking on this project?
ITC faced three important barriers in embarking this project. They are:
1. ITC had to attain the trust of the farmers who would be using the eChoupal. Many of the farmers had not been exposed to computers and the World Wide Web. Having the farmers placing their trust and using this system would be a hard task. The farmers may look upon this initiative suspiciously. However, with time, the farmers became more familiar with the eChoupal and their benefits (e.g., information on increasing crop yield, etc.) and started to trust the system.
2. ITC was trying to undertake a big initiative to develop a different means of selling the crop. They were trying to ensure the buying and selling becomes more efficient and easier for the farmers by creating more options. In doing so, they were replacing the Mandis. The initiative would have received some opposition from the government.
3. Setting up the proper infrastructure in the villages would have been a difficult task for the ITC. Most of the villages may not have even carried phones, which would mean ITC would have to undertake all the construction work involved with creating and setting up computer stations at each of the villages.
As Mr. Sivakumar, how do you plan to proceed to develop this platform for the future? The eChoupal platform developed has helped both the farmers and the ITC create a more organized means of conducting agricultural business. There are several steps Mr. Sivakumar can take in the future to further develop this platform.
1. The platform can be transformed into a consultancy service where experts can offer good opinions and reasonable solutions to questions raised by the farmers. This would be made an exclusive service where farmers who are richer will be paying for the service. This plan would enable the platform to become more substantial and professional.
2. With more and more farmers joining this platform in India, the platform can become a national pride and can used as a central database to store and communicate information. This methodology can be applied to other agricultural practises in India (i.e., in other states) for different crops.
3. The input from the farmers can be used to develop the platform. Based on regional/ local information collected on the system from each community, distinctive practises could be adopted in the system to make the system more effective in that particular region. An added benefit to this would be that the community would become closer and would trust the system even more.
Which of the structured interview techniques for information requirements determination would work best in your organization? Why?
One of the techniques for information requirements determination that can be used in my organization (Weston Foods) is Critical Success Factors. This technique can be used is because one of the drivers of success is accurate forecasting based on upcoming promotions. Better forecast means supply chain can tune plants so they are able to easily meet capacity and reduce the amount of cuts in the order. To be able to forecast, history and knowledge of the product can be used, as well as the market appeal of the product in various regions.
What are the advantages and disadvantages of RFID?
Advantages
• There are cost savings potential - by implementing RFID, there is less labour involved
• At the customer end, there are faster checkouts and potentially fewer stock-outs
• It’s a fully automated data capture that keeps track of valuable assets and equipment
• When compared to a bar code, the RFID does not need to be in the line of sight. The tag can withstand harsh environments and has a long range reading ability
Disadvantages
• There are physical limitations when using a RFID - it can only be read though liquid or metal
• The RFID systems are typically more expensive and larger than barcode systems
• The RFID systems can be harder to understand