ITC-e Chaupal

A Unique approach in
Supply Chain
TEAM: 2
SHASHANK SHEKHAR
HIMANSHU JAIN
SHASHANK PUSHP
VIVEK ANAND SRINIVASAN
SURVESH CHAUHAN

ITC : A small introduction

Started as imperial tobacco company on : August

24,1910 renamed ITC Limited in 1974.

From tobacco to hotels one of the giant Indian

conglomerate.

Made its way in Forbes 2000 list as only Indian FMCG.

Ranked No 4 in India listed private sector companies

and no 1 in FMCG.

More than 25000 employees.

More than 100 years of relationship with farmers only

based on tobacco.

Chaupal

: A time honoured tradition

Chaupal is a cemented podium

usually beneath a tree in Indian
villages.

Usually on the way to fields or to

town where farmers gather to
chat, gossip or share stories from
the day.

ITC Limiteds International

Business Development (IBD) in
Hyderabad with chief executive
S. Sivakumar pondered upon it.

ITC e chaupal

Started in 2000

Target area as of now 38000 villages across 9 states.

Reasons for its success

First one to take initiative to mould services industry in an effective

business model successfully with the help of technology.

Issues e chaupal handled

Smaller fragmented farms (on an average 9 acres in case of MP

soya)

Traditional unfriendly business model (Farmers had to wait for

money)

Information Asymmetry (Farmers never got best possible rate)

Traditional Supply Chain in Soya

business

Money
Lending
Institution

Farmer

Mandi with
CA(Comisson
Agents)

Factory
(ITC
proces
sing
Centre)

Explanation & Disadvantages

Explanation

Disadvantages

The farmer used to carry soybean to

Mandi in tractors/bullock carts.

Commission Agents (CA) used to

decide the price based on auction
and set the initial prices.

The farmers had a long waiting period

in Mandi.

CA used to pay farmers on the spot

price.

No transparency in the system

regarding prices offered by ITC.

CA used to transport goods to the ITC

depot.

CAs used to skim on weights(0.5%).

Farmers had to wait long for their

payment.

ITC had to segregate different quality of

soybeans at its centres.

ITC paid back CA and CA used to pay

back farmers.

e-chaupal supply chain

Advisory & Information Services

Money
Lending
Institution

Farmer

Various

E chaupal with
Sanchalak &
Samyojak(CA)

Factory
(ITC
proces
sing
Centre)

e chaupal benefits
Benefits to farmers

The farmers were well aware of the

prices because of transparency.

The farmers earned $8 per tonne on

an average.

The cash transaction was made

instant.

E chaupal page appears in Hindi so

that farmers can understand it.

Farmers waiting in Mandi was well

eliminated.

The transport cost was refunded by

ITC.

Benefits to Company

ITC saved $5 per tonne on the freight

expenses.

A potential rural market was well captured

with its products.

Relationship with farmers strengthened.

The relation with CA was improved as they

were given the post of Samyojak where
their margin was more than of CA.

Challenges in implementing

On an average the $3762(Rs. 170000) was spent in creating per e

chaupal.

Minimum requirements per e chaupal:

A pc with minimum software, platform and multimedia kid.

Connection lines (either telephone or more commonly VSAT.

A power supply consisting of UPS & solar powered battery back up.

A dot matrix printer.

Training of the Sanchalak with Computers.

Negotiate with Indian Meteorological Department for area wise report.

Making e chaupal farmer friendly.

ITCs additional benefits of e-chaupal

Farmers started getting area wise weather prediction due to ITC

negotiation with Indian Meteorological Department.

Seeds, Fertilizer availability made easier by e-chaupal.

Soybean oils were sold to farmers at cheaper price as the supply was
shortened.

ITC started pushing its other products through the new supply chain.

Expert opinion was made available to the farmers regarding various

issues like soil testing.

Credit & Insurance facilities were promoted via e chaupal.

Additional employment of Samchalak making him/her entrepreneur.

Legacy Continues & expanded

Moved from Soybeans to various other commodities like wheat,

coffee & seafood.

E chaupal to mandi procurement ratio increased to 80:20 from 50:50.

Moved out from MP and presently expanded to 9 states.

Also evolved as a marketing channel what started as a supply chain

innovation.

Helping farmer in many ways rather than just procurement easiness

by making available various products like fertilizers, seeds ,
agrochemicals, insurance, credit etc.