Business Studies (Principles of Management) Project Class 12th CBSE
Business Concept For Demand Supply Management Predictive Analytics Ict Solutions Using Cloud Assets
1. Business Concept to address Efficiency improvement in Agriculture supply chain
management by Private sector
Background
Agriculture food waste is reality that impacts the P&L of all stakeholders in the business. While the
developed economies have been far successful in using technology to improve efficiencies in their
supply chains, developing economies have lagged behind because of institutional and structural
problems.
India is a case in point.
India is the second largest producer of vegetables and fruit, and yet almost 35% of its production is
reported to be lost to waste during its journey from farm to the retailer.
80% of the trade in vegetables in fruit in India, estimated to be worth 20 billion USD per annum is
managed by the private sector, of which 75% (15 Billion USD) is controlled by the unorganized retail and
25% (5 billion USD) by the organized retail chains.
An estimated 45% of the fruit and vegetables managed by the organized retail sector are lost to waste.
This translates to 2.25 Billion USD per annum. (The organized retail business is growing at 20% per
annum, and the wastage is growing in proportion)
Major organized retail chains in India are….and more will follow as the FDI retail policy is in place over
time
Reliance Fresh- RELIANCE INDUSTRIES
BIG BAZAAR- The FUTURE GROUP
MORE- ADITYA BIRLA Group
SPENCERS- RPG Group
FOODWORLD- Dairy Farm International (DFI) group
GREAT VALUE- Bharti WALMART India
METRO CASH and CARRY- Metro India
Top Reasons for wastage
Lack of storage – cold chain storage capacity and scale
Poor logistics management- poor planning, tracking, monitoring and control of logistic assets-
OPPORTUNITY FOR THE CLOUD SERVICE PROVIDER AND INTEGRATOR.
Demand –supply gaps- Poor demand supply management due to poor forecasting/predicting-
OPPORTUNITY FOR THE CLOUD SERVICE PROVIDER AND INTEGRATOR.
Driving efficiencies and profits in the value chain.
The organized, corporate backed, retail chains have established systems that are geared to reduce
efficiencies in existing supply chains and improve value across the farm- fork delivery. However this
system still does not eliminate wastage that remains very high at 25-30%. Main reasons attributed to
this inefficiency are inability to improve the logistics management and improving its integration to the
demand supply model.
Demand supply management is of poor quality because of poor forecasting capabilities of the buyers
and the sales team on the ground, who go by “gut feel” over fact based analysis and conclusion.
2. ICT enabled solution and predictive data analytics provides a ray of hope to the organized retailer, with a
business opportunity for the solution provider.
The PROPOSED Solution
Predictive CLOUD + Cloud based communication
SUPPLY SIDE
FARMER Field data MIS report –
DATA Data mining Data Analytics
SUPPLY SIDE
REPOSITORY engine
BUYER Field data
Supply Chain
Manager
Supply chain
LOGISTICS Logistics and Demand Demand supply
transport tracking supply MIS and smart
management predictive
engine Predictive forecast
Analytics
Engine
Retail outlet
manager
Retail Field data
MIS report –
outlet order DATA Data mining Data Analytics
DEMAND SIDE
REPOSITORY engine
Retail POS Field data
DEMAND SIDE
3. SOME QUICK NUMBERS
The Predictive cloud +CLOUD COMMUNICATION PLATFORM would be offered as a managed service to
the global agro food retail industry.
If we take India as an example, and assume that by developing a better predictive analytics engine in the
platform, and providing seamless communication and tracking capability, we are able to improve the
wastage figures from the 45% to 30%, saving the industry a total of 750 million USD per annum,
VERIZON can deploy a suitable commercial model that can generate between 15-20 million USD per
month. (240 Million- 180 Million USD per annum)
Supply chain inefficiencies lead to considerable losses in any economy where agro food retailing is a
major component of the GDP and this model has traction to be deployed globally, with significant
revenue gains for THE SOLUTION PROVIDER.
PLEASE NOTE- other opportunities on the platform
The predictive analytics engine+ CLOUD communication model has applications in other industry
verticals, where forecasting plays a major role in impacting the P&L. The global Pharma industry is
dependent on their sales reps to forecast the demand for drugs in their respective territories, and at the
same time obliged to take back, unsold and expired drugs that done move off the shelf because the
forecast (prediction) by the sales rep was of questionable quality. The global pharmaceutical market in
2011 was 880 billion USD of which an estimated 2% (18 Billion USD) was returned back due to no
demand and expiry. The US pharma market with a size of 300 Billion USD and an estimated 2% return (6
Billion USD) on account of poor forecasting can be a lucrative market for VERIZON Predictive analytics
engine+ CLOUD computing platform.