Executive Summary
ITC’s International Business Division (IBD) deals with the export of agricultural products. While soybean and derivatives comprised two-thirds of ITC’s agricultural export business, growth was not up to par with the company’s other divisions. The primary reason was due to an inefficient supply chain that among other problems, lacked in providing timely and up-to-date information to farmers in remote Indian villages who still relied on age-old traditions and inefficient channels as information sources.
ITC sought to improve the communication channel and thereby attract farmers to do business directly with them instead of going to the traditional Mandi – a system that provided little value to all parties in the supply chain. ITC leveraged on the traditional Choupal concept of information sharing and created an eChoupal. Through this portal, farmers were able to get timely and up-to-date information about weather, commodity prices and better farming practices, thus equipping farmers to grow better quality crops and receive fair prices for their harvest. Furthermore, ITC created well-equipped hubs within close proximity to the farmers, providing them with greater convenience to sell their commodities to ITC directly. ITC hubs are operationally more efficient than the traditional Mandi and hence farmers spend less time selling their products. Through the new eChoupal supply chain, farmers also earned an average increase of $8/ton while ITC saved $5/ton. eChoupal also provided ITC with the avenue to sell their agricultural products back to the farmers at lower prices.
Question 1 | What was ITC’s motivation for creating eChoupal?
ITC’s primary motivation for the eChoupal initiative was to grow its revenue and reach its target of Rs 2,000 crore ($442.6m) by 2005 . They planned to achieve this by maximizing the potential value of the supply chain from the farmers to ITC. The key to achieve this was to make timely information readily available...