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ITC Choupal Case Review

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Case review of the ITC Choupal system implemented by the Indian Tobacco Company's (ITC) International Business Division under S. Sivakumar, the then CEO of that division, its advantages and how it helped to increase the overall turnover of the division and how it helped to diversify into many other divisions.
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  Aashish A. Gulanikar Case : ITC E-Choupal SCHM-6215-01 The case begins describing the important role of agriculture in the economic advent of India. It’s clear that the economic development of India is largely dependent on the agricultural development. The case describes a situation in a village named Dahod in the state of Madhya Pradesh, India. The primary source of income of most farmers in that  village was soya bean farming. Indian Tobacco Company, was one of the exporters of soya beans and the soya bean products to many countries like Pakistan, China, etc. Madhya Pradesh being one of the major producers of soya beans in the country (almost 4 million tons out of 5 million tons of India’s total produce), it was of primary importance to ITC to improve the overall value of the supply chain by developing a technology helping the farmers and indirectly themselves with their growth. With the target of achieving the target of 2000 crores by 2005, the chief executive of the ITC International Business Development (IBD) S. Sivakumar started to ponder on the role of choupal concept with the using of communication and information technology. The traditional process in the sale of soya beans and its path to ITC or any other processing company was as follows : Market The process was observed to be inefficient making only a situation of profit to only the CA’s who made huge profits on their sale of soya beans to ITC at market price which was much more than the auction price at  which they purchased soya beans from the farmers. This was one the main advantage to be observed with the implementation of ITC choupal. Farmers   Commission Agents (CA) ITC / IBD  Aashish A. Gulanikar Case : ITC E-Choupal SCHM-6215-01 The e-choupal : ITC provided each village with a pc set consisting of a  windows/intel platform based computer, Connection lines for internet  with a 28-36 Kbps speed, a UPS sys., a solar power battery backup and a dot matrix printer. A website named  www.soyabeanchoupal.com  was established in Bangalore by the ITC Infotech. To facilitate the same. All this was achieved by spending $3762 / choupal and an additional $2213/choupal was spent in order to install the same in every village. The e-chouplal provided the villages may facilities like providing information like the 1.   Weather updates : The farmers did not have the accurate source of  weather conditions, since the government Metrological Department  was the only source of accurate weather information and that was not accessible to the farmers die to poor electricity and communication channels. ITC with negotiations with the metrological department was able to deliver to the farmers an accurate weather estimate in their home district using their soyachoupal portal. 2.   Best practices for the farmers  : This page on the soyachoupal portal  was made in order to deliver to the farmers their traditional practices compared to the ideal practices which were useful for them to increase their productivity and thereby make more profit from the same existing conditions. 3.   Crop information page  : This page on the portal was basically meant to be a good source of information regarding the soil in which the farmer grew his crops and how soil testing is beneficial and  Aashish A. Gulanikar Case : ITC E-Choupal SCHM-6215-01 necessary for the farmers to be more profitable in cultivating the soya beans. 4.   Market information  : This page on the portal provided the farmers  with the four basic market related information namely exploring the  worldly demand, world production, mandi trading volume, mandi price listing. 5.   Q A  : The portal consisted of a page called the Q&A page which provided the farmers to ask any question which they had to the panel of experts which ITC had formed to help solve the farmers  with their doubts . 6.   News  : The news page on the portal updated the farmers with all the current affairs which affected the business of the farmers. It is one of the main pieces of information which was facilitated to the farmers by the installation of the ITC choupal The overall experience in introducing ITC e-choupal in SCM can be explained as follows : - 1.   It brought transparence to the entire financial aspect of trade. 2.   It provided a more legitimate source for the farmers to earn more money selling the same quantity to ITC rather than going through the CA’s and the mandi/ma  rket place. 3.   They were provided with good amenities at the delivery hubs like the restroom facilities, choice of purchasing soya bean oil which was directly brought to them by skipping the intermediate players in the supply. 4.   The processing center was equipped with the soil testing facility giving the farmers a better idea for the improvement and opportunity to increase their productivity.  Aashish A. Gulanikar Case : ITC E-Choupal SCHM-6215-01 5.   ITC could potentially generate more potential value by three other primary mechanisms namely traceability, ability to match farmers produce with the market demand and by facilitation of electronic marketplace. 6.    Additional revenue by selling chemicals, fertilizers, seeds, etc. through the portal.

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Jul 22, 2017

UNPAN028242.pdf

Jul 22, 2017
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