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1 Dr.Harsev Singh CEO Reliance Dairy Foods Ltd. Supply Chain & Infrastructure Bottlenecks.

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Presentation on theme: "1 Dr.Harsev Singh CEO Reliance Dairy Foods Ltd. Supply Chain & Infrastructure Bottlenecks."— Presentation transcript:

1 1 Dr.Harsev Singh CEO Reliance Dairy Foods Ltd. Supply Chain & Infrastructure Bottlenecks

2 A supply chain can be looked into as set of agribusiness activities and products that lead to a produce that reaches the final consumer

3 The Indian agricultural sector is witnessing a major shift from traditional farming to horticulture, meat and poultry and dairy products, all of which are perishables. The demand for these products are increasing owing to change in consumption habits of the consumers Due to this increase in demand, diversification and value addition are the key words in the Indian agriculture today. Major Shift from Traditional Farming

4 In India, the infrastructure connecting these partners is very weak. Each stakeholder: farmers, wholesalers, food manufacturers, retailers all work in silos. Demand forecasting is totally absent and the farmers try to push what they produce in to the market. Data integration, financial flow management, supply- demand matching, collaborative forecasting, information sharing, goods movement synchronization through efficient transport scheduling are lacking. Weak Infrastructure

5 Inefficient price signals Limited reach of mandis Too many intermediaries, information asymmetry: Inadequate infrastructure for storage Lack of cold storage infrastructure Weak Infrastructure

6 AreaCauseEffect Ports Inadequate capacity at major ports Untapped potential of non-major ports Outdated equipment Lack of warehousing Heavy congestion at most major ports leading to higher vessel turnaround time Inefficient handling Long waiting time Airports Few busy airports (Delhi, Mumbai, Kolkata, Chennai, Bangalore, Hyderabad) Numerous unused airstrips & relatively less used Airports Lack of equipment for odd-sized packages, professional packers, etc Congestion at main airports Inefficient handling resulting in pilferage/damage High cost of alternate arrangements (prices quoted by individual loaders) RoadsBad quality of roads Inadequate lanes / lack of maintenance Inadequate hinterland connectivity Do not support the axle weight of the trucks & cause the roads to break and cave in Bad road quality leading to poor speeds, accidents and high vehicle maintenance Inconvenience due to limited access to neighboring ports Infrastructure Bottlenecks

7 AreaCauseEffect Railways Too many level crossings / minimal electronic controls / priority to passenger trains over cargo trains Limited network and terminals of private players (container movement) Inadequate capacity / connectivity Choked rail network & resultant lower speeds of cargo trains Transportation delays & cost overruns Transportation delays Cold Chain Unreliable infrastructure / uneconomical size Inexperienced staff Less integrated services, inefficiency & resultant inconvenience Inefficient handling Infrastructure Bottlenecks

8 The total value of Indias cold chain industry is currently estimated at USD 3 billion and reportedly growing at an annual rate of per cent. The total value for the industry is expected to reach at USD 8 billion by 2015 It can be achieved through increased investments, modernization of existing facilities, and establishment of new ventures via private and government partnerships. India has 5,400 cold storage facilities, with a combined capacity of million metric tons that can store less than 11% of what is produced. Cold Storage

9 Customers are demanding a single point of contact for all logistics services and are looking for one-stop logistics shopping unable to cope with complexities across their supply chains Logistics

10 Appreciation of high logistics cost and opportunities for major savings Increasing competition for both users and providers of logistics, who have to continually improve operations to remain competitive New types of operations, which can force changes to logistics – such as just-in-time, total quality management, flexible operations, time compression etc. Need for improved technology for identifying locating and tracking materials Logistics

11 Country Logistic Cost as a % of GDP Share of 3PL India13-14 %Less than 10 % China18 %Less than 10 % USA9.9 %34 % Europe7.1 %54 % National logistics cost vis-à-vis the share of 3PL in the logistics market Logistics Source : Compiled from Various Sources

12 Pre-cooling facilities Cold Storages Refrigerated Carriers Packaging Warehouse and Information Management systems Traceability Financial and Insurance Institutions Areas Requires Strengthening

13 Way Forward Partnership should be in areas of Infrastructure creation / utilization Processing R&D Technology Transfer / Skill up gradation Creation of Cold Chain Development of a Robust & Effective Supply Chain

14 Conclusion Although its still early days, these solutions should lead to better supply chain management in Indian agriculture, reducing inefficiencies and increasing farmer realizations, as well as curbing food waste

15 Thanks !!! End


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