2A supply chain can be looked into as set of agribusiness activities and products that lead to a produce that reaches the final consumer
3Major Shift from Traditional Farming 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 consumersDue to this increase in demand, diversification and value addition are the key words in the Indian agriculture today.
4Weak InfrastructureIn 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.
5Weak Infrastructure Inefficient price signals Limited reach of mandis Too many intermediaries, information asymmetry:Inadequate infrastructure for storageLack of cold storage infrastructure
6Infrastructure Bottlenecks AreaCauseEffectPortsInadequate capacity at major portsUntapped potential of non-major portsOutdated equipmentLack of warehousingHeavy congestion at most major ports leading tohigher vessel turnaround timeInefficient handlingLong waiting timeAirportsFew busy airports (Delhi, Mumbai, Kolkata,Chennai, Bangalore, Hyderabad)Numerous unused airstrips & relatively less usedLack of equipment for odd-sized packages,professional packers, etcCongestion at main airportsInefficient handling resulting in pilferage/damageHigh cost of alternate arrangements (prices quotedby individual loaders)RoadsBad quality of roadsInadequate lanes / lack of maintenanceInadequate hinterland connectivityDo not support the axle weight of the trucks & cause the roads to break and cave inBad road quality leading to poor speeds, accidents and high vehicle maintenanceInconvenience due to limited access toneighboring ports
7Infrastructure Bottlenecks AreaCauseEffectRailwaysToo many level crossings / minimal electronic controls / priority to passenger trains over cargo trainsLimited network and terminals of private players(container movement)Inadequate capacity / connectivityChoked rail network & resultant lower speeds of cargo trainsTransportation delays & cost overrunsTransportation delaysCold ChainUnreliable infrastructure / uneconomical sizeInexperienced staffLess integrated services, inefficiency & resultantinconvenience Inefficient handling
8Cold StorageThe total value of India’s 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 2015It 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.
9LogisticsCustomers 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
10LogisticsAppreciation of high logistics cost and opportunities for major savingsIncreasing competition for both users and providers of logistics, who have to continually improve operations to remain competitiveNew 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
11in the logistics market Logistic Cost as a % of GDP National logistics cost vis-à-vis the share of 3PLin the logistics marketCountryLogistic Cost as a % of GDPShare of 3PLIndia13-14 %Less than 10 %China18 %USA9.9 %34 %Europe7.1 %54 %Source : Compiled from Various Sources
12Areas Requires Strengthening Pre-cooling facilitiesCold StoragesRefrigerated CarriersPackagingWarehouse and Information Management systemsTraceabilityFinancial and Insurance Institutions
13Way Forward Partnership should be in areas of Infrastructure creation / utilizationProcessingR&DTechnology Transfer / Skill up gradationCreation of Cold ChainDevelopment of a Robust & Effective Supply ChainMproving market share
14ConclusionAlthough it’s 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