Food supply channel in

India
Introduction

 India is one of the largest food and grocery markets in the world and a large consumer of
food products. Despite having a rich raw material base for food supply chain is
fragmented and only seven per cent of the perishable products are being processed. To
counter this, the Indian government is offering several incentives to private and foreign
investors in the food processing sector reflecting the government’s intention to attract
investment. The large and unsaturated Indian market has attracted a number of foreign
companies yet the country has not been able to be a part of their global production
networks. There is a need for reforms in the food supply chain to enable India to reach out
to its unrealised potential.
What Food supply channel in India ?

 ■A food supply chain or food system refers to the processes that describe how food from a
farm ends up on our tables. The processes include production, processing, distribution,
consumption and disposal.

 ■ The food we eat reaches us via food supply chains through which food moves
systematically in domino-like motion from producers to consumers while the money
consumers pay for food goes to people who work at various stages along the food supply
chain in the reverse direction.

 Because a food supply chain is domino-like, when one part of the food supply chain is
affected, the whole food supply chain is affected, which is often manifested through
changes in price.
The India Food processing Industry

 India with its billion-plus population provides a large and growing market for food
products. Food products are the single largest component of private consumption
expenditure, accounting for as much as 49 per cent of the total spending. Furthermore,
the upward mobility of income classes and increasing need for convenience and hygiene
is driving demand for perishables, non-food staples and processed foods. Though
companies like HLL, ITC, MTR have introduced some innovative heat dishes with
reasonably good packaging, hygiene and quality issues remain since there is a fair
amount of manual handling. While domestic companies like Dabur, MTR, ITC, Godrej and
Amul are aggressively entering the food chain, multinationals are also gradually making
their presence felt-Cargill and Conagra in agri-inputs, Tropicana in food processing and
Metro in wholesaling. However, the pace is slow in the food sector when compared to IT
and pharma. India is still to get its share of billion-dollar players in the food industry like
China and Philippines where the companies are achieving sales exceeding US $ 1 billion.
Introduce Supply Chain expretise

 There is need to embrace the Efficient Consumer Response (ECR) concept, which was
introduced in the US in the nineties and is now followed worldwide in grocery supply
chains. ECR refers to a set of strategies that aim to get companies across a supply chain to
work closely to serve their customers better and at a lower cost. Consumers benefit from
improved product availability and choice, while distributors and suppliers derive better
efficiency and cost savings. Also collaborative planning, forecasting and replenishment
have yielded substantial savings. For retailers. Relationship between the stake holders in a
supply chain is of paramount importance for ECR, CPFR and other relationship paradigms
to work.
Food processing industry
This is one sector where 100 per cent FDI is allowed. Incentivesare also offered to
those interested in setting up processing plants either in Agri-Export Zones or
outside them. Given the diverse population and religions found in India, there is
scope for creating zones meant for specific communities. Thus, a "halal hub" could
export its products to South-East Asia and the Middle East. Likewise, a "vegetarian
hub" could reach out to vegetarians in India and abroad. Same way, there could
F
also be "organic food zones" and "sea food hubs".

Retail revolution

Retail, one of the largest sectors in the global economy, is going through a
transition in India. While globally, more than 72 per cent of food is sold through
supermarkets, Indian consumers buy most of their food products from the 12 million-
plus outlets which include handcarts, wet markets and neighbourhood kirana stores.
The kirana stores usually have small spaces, lack cold storage facilities and have
restricted capital. The Indian retail sector is estimated to have a market size of over
$180 billion; but the organized sector represents only 2 per cent of this market
 The Eight Components of Supply Chain
Management

1. Planning

This is one of the most important stages. Before the beginning of the entire supply chain, it is essential to
finalise the strategies and put them into place. Checking the demand for the product or service, checking
the viability, costing, profit, and manpower etc., are vital. Without a proper plan or strategy in place, it will be
well-nigh impossible for the business to achieve effective and long term benefits

2. Information

The world today is dominated by a continuous flow of information. In order to be successful, it is essential that
a business stays abreast with all the latest information about the various aspects of its production. The market
trends of supply and demand for a particular product can be best understood if the information is properly
and timely disseminated through the many levels of the business.
3. Source

Suppliers play a very crucial role in supply chain management systems. Products and services sold to the
end user are created with the help of different sets of raw materials. It is therefore necessary that suitable
quality raw materials are procured at cost effective rates. If a supplier is unable to supply on time, and within
the stipulated budget, the business is bound to suffer losses and gain a negative reputation.

4. Inventory

For a highly effective supply chain management system it is essential that an inventory is kept and thoroughly
maintained. An inventory means the ready list of items, raw materials and other essentials required for the
product or service. This list has to be regularly updated to demarcate available stock and required stock.
Inventory management is critical to the function of supply chain management,

5. Production

Production is one among the most important aspects of this system. It is only possible when
all the other components of the supply chain are in tandem with each other. For the process of
production to start it is essential that proper planning and supply of goods, as well as the inventory, are
well maintained. The production of goods is followed by testing, packaging and the final preparation
for delivery of the finished product
Advantage of food supply in India

Better communication between the producer and the consumer

Effective negotiations for the farmers with the retailers

Increases transparency in dealings

Reduces costs of transportation

Increase the level of quality and reduces risks.

Greater profits
Disadvantage of food supply in India

Lack of infrastructure facilities

Low income for the farmers

Lesser value addition due to low processing

Poor quality and standards of safety.

Inability to maintain the safety and quality of your products

Inadequate communication between parties

Rising supply chain costs

Failure to track and control inventory in warehouses and stores

High Performance Supply Chains:

Tension between Weak and Strong Ties among Supply Chain partners.

New technologies are creating disruptive innovations

Globalization has created long supply chain which are fragile and need monitoring.

Governance which involves partner selection, coordination and execution takes center
stage.