Table of Contents
Abstract
As time is passing, Indian poultry chain industry has started to see a positive trend. As people are being readily supplied with the right kind of knowledge, the modern etiquette and the healthy way of living has been growing rapidly. Indian population is now shifting from a carbohydrate, based diet to a protein dense diet. This rise in demand of protein rich diets has hugely impacted the poultry industry. The main aim of the paper is to portray the existing supply chain model and the optimized version that is proposed. There are two key areas the paper focusses on: Hardships that a farmer faces while selling his product and secondly how the retailers perceive the whole scenario. The lack of a transparent supply chain model which is the current scenario leads to huge yield loses, bad demand patterns and lack of a constant supply.
The return the poultry farmer receives as compared to what the consumer in the market pays is substantially low. The lack of support groups and financial support makes it harder for the poultry farmers. To deal with this scenario our paper introduces the agile based supply chain model for the poultry products in India. This model focusses on bringing an equilibrium through transparency between all the stakeholders in the poultry supply chain portfolio. The details of all the farmers is sent to the electronic-commerce domain from which the retailers receive the respective information via the agile teams. There are support groups that co-ordinate between all the nodes in the supply chain model.
Keywords- Supply chain, Agile, Farmer support groups, Research support groups, Layer, Electronic-commerce domain.
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Introduction
Indian poultry supply chain has noticed a massive growth in the past two decades. The poultry production has seen a massive rise which is now estimated to produce an annual turnover of US$7 500 million. According to the nutritional advisory committee, The recommended annual per capita is 180 eggs and 10.8 kilograms of meat respectively. In India the annual per capita is at a bare minimum of 42 eggs and 1.6 kilograms of poultry meat respectively. The two main sectors of the poultry industry are the layer and the meat. The layer segment in India Has been growing rapidly and is estimated at 100 billion (INR). The ministry of agriculture has pointed out that India is producing 47.3 billion eggs per fiscal year. India now ranks third in the world as per Food and agricultural organization of United nations. The Indian meat sector is estimated to be at the nineteenth position during 2004-2005 (FAOSTAT).
The poultry industry accounts for close to 100 billion (INR) to the Gross National product. In contrary to these statistics, In the Fiscal year 2000, the average per capita in India for eggs was at a minimum of 28 eggs and 0.8 kilograms of meat while according to FAOSTSTAT the world average was 147 eggs and 11.1 kilograms of meat. The Business portal of India states that the rate has increased and is estimated to be at an average of 55 eggs and 2.8 kilograms of meat. The supply chain model of the poultry industry in India is explained and the disadvantages are portrayed in this paper. The food sector plays a huge role in contributing to the GNP in India. The consumer in the Indian poultry supply chain is paying close to 1 rupee 30 paisa when the product leaves the farmer at a rupee.
This increase in the price is due to the presence of intermediaries. The tables below depict the country’s production and the changes in the demand patterns of the supply chain in India. Even-though, there is a lot of demand for the poultry products the lack of a good supply chain is the sole reason why the nation continues to fail in fulfilling the demand. The first table depicts the year wise consumption rate while the second table depicts the year wise meat and egg production in India. (All India Poultry Year Book (2003–2004)).
The Role of Supply Chain and the Agile Supply Chain Model in the Indian Poultry System
The traditional workers in the villages of India rely on the slower modes of communication like telephones or going in person for obtaining valuable information or keep the supply chain running. The poultry farmers in the villages don’t have access to the knowledge of internet and it is extremely crucial to equip them with the right resources. The use of Information technology can help optimize the transparency in the supply chain model. It could also help in the production of a rich database that could further be used to deal with similar scenarios. Information regarding factors such as feed selection, weather report, demand patterns of different poultry products from different locations can be obtained which in-turn can turn very crucial for the farmer. Firms like Suguna poultry and Vencobb Chicken, have invested heavily in their research and development teams which aid the farmers in storing their produce by integrating information technology in the supply chain.
An agile based supply chain system in the poultry industry
Agility could be defined as the model that could adapt to a continuous change while dealing with all the associated constraints. An agile supply chain model could be defined as the model where all the stakeholders in a portfolio work together to enable the model to deal with continuously changing and fragmenting environment. The drivers behind the agile supply chain are the dynamics of structures, relationship configuration, end-to-end visibility of information and the event-driven and event based management (Agarwal et al., 2007). In the poultry product industry in India, speed, responsiveness, quality and flexibility are the key components of agile capabilities (Vonderembsc et al., 2006). The main principle that is proposed in this model are is known as process integration. When the buyers and sellers work together for a joint product development using shared systems and information is known as process integration.
The current supply chain model in the Poultry industries
The supply chain industry in India is greatly flawed when compared to its global competitors. As shown in the figure below the number of intermediaries present in the supply chain network. Due to these intermediaries in the network there can be a lot of post produce loss and the loss of the quality of the farm product by the time it reaches the consumer. As the intermediaries increase the final cost of the product drastically increases while giving very little benefit to the Poultry farmer.
Along with farming poultry logistics are a crucial aspect that have to be taken into account. Purchasing, storage and handling, distribution, retail and product related information are the different levels of logistics present (Mo Lianguang, 2014). The biggest disadvantage of the Indian poultry supply chain system is bad storage and transportation facilities. A huge amount of poultry meat and eggs are being wasted every year in India due to lack of proper storage facilities. Due to the lack of a proper source of information regarding the demand supply patterns of farm products there is a lot of non-rationale production of poultry products by the poultry farmers.
The Role of Suguna Food’s Limited in India
India has a lot of farmers that produce poultry by taking credit. A lot of farmers fail to pay back the credit on time and fall into a crisis. Suguna saw this as a potential business benefit and helped all the farmers clear their dues. The farmers were given feed and health support by the company and in return for eggs. Suguna has supported close to 20,000 farmers. This has also improved the lives of many farmers in the underdeveloped villages. This model was known as poultry integration and contract farming model which spread to 16 states and 8000 villages.
Having providing quality product as the objective function Suguna has started to invest heavily on their research and development teams. Suguna over time has mastered cost and productivity optimization. Efficient Training programs and supply chain management, highly optimized hatcheries and development pants are a few of the features which shows the stability in the supply chain model. This model would aid the farmer to gain trust over the organization. In 1996 there was another egg processing plant known as the SKM egg products. It grew to become the largest egg processing plant in Asia which (according to SKM, 2014) was producing 6500 tones of egg powder annually and 1.8 million eggs per day. In addition, the governmental body NECC (national egg coordination committee) is trying to increase the number of poultry organizations.
NECC tries to bring a level of transparency between all the stakeholders involved in the supply chain portfolio. This program started by Suguna was to take out all the intermediaries and try to stay in balance with the countries global competitor’s standards. Another governmental body TPFA (Tamilnadu poultry farmers association) combining with NECC gives all the poultry farmers valuable information like the current market prices, optimized farming methodologies, weather forecast. NECC uploads all of this information from various sources and post in on their respective websites.
The Reason for Agile Supply Chain in Indian Farms
The demands in the Indian poultry supply chain have been changing drastically. The most appropriate system would be one that adapts to a continuous change. Agile methodology can be used in the same context in the poultry scenario in India. The agile methodology mainly arose from the software development process. The agile process developed in this industry could be used to deal with a problem which requires a system solution that adapts to a continuously changing environment. In the Indian supply chain scenario, farmers are producing poultry products on a random basis which gives the farmer an inconsistent result as the demand keeps changing over time. Due to this randomness and lack of good storage facilities, poultry farmers are not able to make the optimal amount of money for their yield. In desperation the farmers although receiving only a minor return, rely on intermediaries in the supply chain model.
Another issue is due to the variety of products that could be produced the area wise knowledge of demand patterns is not readily available, In such a scenario the farmer would have to rely on multiple retailers. Agile methodology could be very helpful to overcome scenario’s similar to this. The project management’s tool scrum is helpful in addressing a lot the issues with the difficulties in the transparency in the portfolio. The various entities of scrum are product owner, scrum master and various members of the respective teams. In the prosed model below all these entities are represented by bankers, poultry research and development teams and poultry officers. The team is addressed to work in short spans of 2 weeks called sprints where all the demand patterns across the country are discussed. The retailers receive their respective shipments according to the demand patterns obtained.
The Proposed Model
The model uses scrum for the poultry supply chain in India. The two main issues that the model was meant to address were, one was to eliminate the different intermediaries present in the current supply chain so that the farmers could get the optimized return for their yield. The agile team in the model depicted below will try to maintain an equilibrium in the entire supply chain by trying to maintain transparency in the model.
The scrum master in the team keeps the entire team motivated towards achieving the goal (Mohammed Abdul Bari, 2011; Cristal et al., 2008). The scrum master also makes sure that poultry farmer support group and the retailer support groups are constantly updated in the supply chain network. The retailer support groups aid in delivering all the poultry products of the farmers to the retailers while the poultry farmer support groups helps the farmers in the matters of obtaining credit and other information regarding the demand patterns. The scrum master tries to resolve any issues that arise in the upcoming sprint session to ensure a continuously improving model. In a sprint session information regarding demand supply patterns of various poultry products are discussed.
Information regarding the loans that have to be obtained from the banks by the farmer support groups and information related to yield, weather, packaging and handling, warehousing, etc are discussed. Both the retail and poultry farmer support groups try to ensure a balance in the agile system by making sure there is appropriate coordination between the farmers and the retailers. The objective function of the whole agile supply chain model was to maximize the profit for the farmer. The objective was aimed to be met by reducing the various intermediaries in the poultry supply chain, while providing the farmer with direct access to all the information in the market through poultry farmer support groups.
There are poultry farmer support groups, where the farmer can get all the information from the poultry farmer research group through the agile team. The agile team analyses all the demand patterns across the country for various poultry products. They have a base where all the farmer information is stored product wise. The information is sent out to the knowledge base. The knowledge base system can be defined as the method where historical data is used to over the current or potential future problems. The historic data could be manipulated in numerous ways to obtain various results. The knowledge system looks out for the demand and by which farmer the demand could be met. The potential retailers are also weighed out and all the information is passed to the agile team.
The Retailer’s View
The retailer support groups help all the retailers to feed in all their details to their electronic help portal. The group is specifically made for the retailers. The demand patterns are analyzed from by the retail support groups and the demand is diverted to the agile teams. The farmers meet the respective demand with the guidance of the poultry farmer support group. The poultry farmer support group updates the agile team with the different kinds of poultry products available. The agile team updates the knowledge base with all the information which is used to present of future scenarios.
There are various government bodies like metrological department, ministry of agriculture etc which send data to the knowledge base. Due to this wide range of farmers being able to supply their product without relying on intermediaries. The picture below also shows that the retail support groups take aid from other logistics and freight forwarding firms. The information about the poultry moves from the poultry farmer support group to the retail support group via the agile team. The agile teams plan on implementing the PDCA (plan-do-check-act) cycle approach. Activities are segmented into each domain of the listed activities. The planning phase involves geographical wise demand analysis of all the poultry products and send out the demand to the retail groups though the information in the electronic portal and poultry farmer support groups. The retailers can then sell their products using the help of the third party logistics and research support groups. The sprints ensure a sense of transparency in the model, while trying to maintain a continuous improvement in the supply chain network.
The third party logistics tries to make sure that the product is delivered to the customer as the customer would demand for it. The required specifications are taken care of by the third party logistics. The data from this source also acts as a valuable source of information to the knowledge base. The retail support groups also organized separate messaging platforms where the farmers have access to the poultry products. Short codes are sent via mobile phones seeking information about specific product. The system gathers the relevant information using the application servers from the knowledge base. Once the farmer sends the code the related demand patterns and product related information is sent in their respective language via a text message.
Conclusion
In the Indian poultry supply chain, integrating all the stakeholders in the portfolio is considered the major challenge. The reduction various intermediaries present in the current supply chain model, positively correlates with the poultry farmer’s profit. Various crucial factors like demand supply patterns. Weather forecasts, warehousing facilities, post yield loses and logistics support are the aspects that ought to be addressed to maintain a healthy supply chain network. The agile supply chain model proposed addresses all these listed issues. A successful agile supply chain network is one that maintains transparency between the stakeholders while adapting to any king of a non-linear change occurring in the supply chain model.
References
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- Rajesj Mehta and R.G Nambiar, The poultry industry in India.
- S. Nallusamy, (2015).A agile based supply chain model for poultry products in India.
- Agarwal, A., R. Shankar and M.K. Tiwari, 2007. Modeling agility of supply chain. Industrial Marketing Management,
