Case 5 P.No.

578
Q1. Map the supply chain network and explain the role of supply chain drivers for the fruits and
vegetable market operations.

The supply chain network for the fruits and vegetable market at Koyambedu in Chennai can be
mapped as follows:

1. Suppliers: The suppliers in this network are the farmers and producers of fruits and vegetables from
various places in Tamil Nadu, Kerala, Karnataka, Andhra Pradesh, Maharashtra, Gujarat, and Delhi.
They supply their produce to the wholesale dealers and commission agents at the Koyambedu market.

2. Wholesale Dealers and Commission Agents: These are the intermediaries who purchase the fruits
and vegetables from the suppliers and sell them to retailers, exporters, and individual customers. They
play a crucial role in the supply chain by handling, packing, unloading, and loading the produce for
transportation to various places. They also provide services such as storage and cold storage facilities.

3. Retailers: The retailers in this network are the small and large retailers who purchase fruits and
vegetables from the wholesale dealers and commission agents at the Koyambedu market. They then
transport the produce to their own shops or destinations using pre-arranged mini-vans, vehicles, autos,
etc.

4. Exporters: The exporters in this network are the traders/merchants who have their shops in the
Periyar Vegetable Market at Koyambedu. They collect fruits and vegetables from the market and pack
them at the market premises before moving them to air cargo for exports by air. They also handle the
handling, packing, unloading, and loading of the produce for transportation.

5. Importers: The importers in this network are the traders/merchants who have their shops in the Anna
Fruit Market at Koyambedu. They import fruits from countries like the USA, Austria, Australia, and
China. They also handle the handling, packing, unloading, and loading of the imported fruits.

The role of supply chain drivers in the operations of the fruits and vegetable market at Koyambedu can
be explained as follows:

1. Facilities: The market provides facilities such as cold storage, parking space, and common amenities
for the merchants, dealers, and the public. These facilities enable efficient storage, handling, and
transportation of the perishable goods.

2. Inventory: The market maintains inventory of fruits and vegetables from various suppliers. This
ensures a continuous supply of fresh produce to meet the demand of retailers, exporters, and individual
customers.

3. Transportation: The market is strategically located with proximity to bus terminals and road
facilities. This makes transportation easy and minimizes disturbance to city traffic. Vehicles carrying
goods can easily move in and out of the market premises.
4. Information: The market operates on competitive pricing methods based on the freshness of goods
and information collected by the representatives of the traders/merchants. This information helps in
determining the unit price of the produce and facilitates efficient pricing and decision-making.

5. Sourcing: The market sources fruits and vegetables from various states and countries. This ensures a
diverse range of produce and enables the market to cater to the demands of different customers,
including exporters and importers.

6. Pricing: The unit price of vegetables is fixed by a group of merchants based on competitive
methods. The price varies based on the quantity of goods, with larger quantities resulting in lower unit
prices. This pricing strategy helps in maximizing sales and minimizing wastage.

Overall, the supply chain drivers in the fruits and vegetable market at Koyambedu play a crucial role in
ensuring efficient operations, timely delivery, and customer satisfaction.

2. 'Intermediary cooperative like merchant association can lead to supply chain efficiencies'.
Elucidate.
The document mentions that the Koyambedu market in Chennai operates under the structure of a
merchant association. This association plays a crucial role in facilitating the supply chain operations of
fruits and vegetables in the market. Here are a few ways in which an intermediary cooperative like a
merchant association can lead to supply chain efficiencies:

1. Centralized Distribution: The merchant association serves as a centralized distribution center for
perishable goods. This allows for better coordination and control over the movement of goods,
reducing the chances of delays or disruptions in the supply chain.

2. Standardized Guidelines: The association provides guidelines for traders in terms of trading in
different types of products, such as fruits and vegetables. These guidelines ensure consistency and
standardization in the trading process, making it more efficient and streamlined.

3. Infrastructure Support: The association ensures that necessary infrastructure, such as cold storage
facilities, is provided within the market premises. This helps in maintaining the quality and freshness
of the perishable goods, reducing wastage and improving overall supply chain efficiency.

4. Labor Support: The association facilitates the availability of organized laborers for handling,
packing, unloading, and loading of goods. This ensures that these tasks are carried out efficiently and
effectively, minimizing the chances of damage or spoilage during transportation.

5. Pricing Mechanism: The association plays a role in determining the pricing of goods based on
competitive methods and information collected from various sources. This helps in ensuring fair and
competitive pricing, which can lead to better market efficiency.

6. Information Sharing: The association serves as a platform for information sharing among traders,
exporters, and other stakeholders in the supply chain. This helps in improving coordination, reducing
information asymmetry, and making informed decisions, leading to better supply chain management.
Overall, an intermediary cooperative like a merchant association can bring together various
stakeholders in the supply chain, provide necessary infrastructure and support, and facilitate
coordination and information sharing. These factors contribute to improved supply chain efficiencies,
reducing wastage, and ensuring the timely and efficient movement of goods.

3. What are the key logistical perspective for export and import operations of merchants from
koyembedu market? Would they be doing better if they procure directly from source for export?
Justify their operations from a market like the one in koyembedu.
From a logistical perspective, the key considerations for export and import operations of merchants
from the Koyambedu market are as follows:

1. Transportation: Merchants need to ensure efficient transportation of goods to and from the market.
This includes arranging trucks, mini lorries, and vans for the movement of perishable goods. They
need to consider factors such as distance, road conditions, and timing to ensure that the goods reach
their destination in a fresh and timely manner.

2. Handling and Packaging: Proper handling and packaging of fruits and vegetables are crucial to
maintain their quality during transportation. Merchants need to employ organized laborers or contract
laborers to handle, pack, unload, and load the goods. This ensures that the goods are protected from
damage or spoilage during transit.

3. Storage/Warehousing: Merchants may need to utilize cold storage facilities within the market
premises to store perishable goods before export or import. This helps in maintaining the freshness and
quality of the goods, especially for imported fruits that require customs clearance and storage.

4. Customs Clearance: For imported goods, merchants need to go through the customs clearance
process, which involves documentation, inspections, and payment of duties. This requires coordination
with customs authorities and compliance with import regulations.

Now, regarding the question of whether merchants would do better if they procure directly from the
source for export, it depends on various factors. Here are some justifications for their operations from a
market like Koyambedu:

1. Market Access: The Koyambedu market serves as a centralized distribution center for perishable
goods, attracting a large number of wholesale dealers, commission agents, and exporters. This
concentration of buyers and sellers creates a competitive market environment, making it easier for
merchants to find suitable suppliers and buyers for their goods.

2. Infrastructure Support: The Koyambedu market provides necessary infrastructure such as cold
storage facilities, parking space, and amenities for merchants and the public. This infrastructure
support helps in streamlining operations and ensuring the quality of goods.

3. Information Sharing: The merchant association and the market environment facilitate information
sharing among traders, exporters, and other stakeholders. This helps merchants stay informed about
market trends, pricing, and demand, enabling them to make informed decisions and optimize their
export operations.

4. Supply Chain Coordination: The merchant association and the market act as intermediaries, bringing
together farmers, wholesale dealers, commission agents, and exporters. This coordination helps in
streamlining the supply chain, reducing inefficiencies, and ensuring a steady supply of goods for
export.

5. Risk Mitigation: By operating within a market like Koyambedu, merchants can mitigate certain risks
associated with direct procurement from the source. They can rely on the market's infrastructure,
quality control measures, and established relationships with suppliers and buyers. This reduces the
risks of dealing with unknown suppliers, transportation challenges, and market uncertainties.

In conclusion, while direct procurement from the source for export may have its advantages, operating
within a market like Koyambedu provides merchants with access to a competitive market,
infrastructure support, information sharing, and supply chain coordination. These factors contribute to
the efficiency and effectiveness of their export operations, making it beneficial for them to continue
operating within the market.

4. What kind of information management system would you propose for merchants’ associations
to improve supply chain efficiency and customer satisfaction?
To improve supply chain efficiency and customer satisfaction, a merchants association can implement
an information management system that integrates various aspects of their operations. Here are some
key features and functionalities that can be included in such a system:

1. Inventory Management: The system should provide real-time visibility into inventory levels,
allowing merchants to track the availability of different products. This helps in optimizing
procurement, reducing stockouts, and ensuring that customers' demands are met.

2. Order Management: The system should enable efficient order processing, allowing merchants to
receive and process orders from customers in a streamlined manner. It should automate order
confirmation, invoicing, and tracking, reducing manual errors and improving order fulfillment.

3. Supplier Management: The system should facilitate effective supplier management, allowing
merchants to maintain a database of suppliers, track their performance, and manage contracts and
agreements. This helps in ensuring a reliable and consistent supply of goods.

4. Transportation Management: The system should include features for managing transportation
logistics, such as route planning, vehicle tracking, and delivery scheduling. This helps in optimizing
transportation operations, reducing costs, and ensuring timely deliveries.

5. Quality Control: The system should incorporate quality control mechanisms, allowing merchants to
track and monitor the quality of goods throughout the supply chain. It should enable the recording of
quality inspections, certifications, and compliance with regulatory standards.
6. Pricing and Billing: The system should support pricing management, allowing merchants to set and
update prices based on market conditions and other factors. It should also automate billing processes,
generating accurate invoices and facilitating seamless payment transactions.

7. Reporting and Analytics: The system should provide robust reporting and analytics capabilities,
allowing merchants to generate insights and make data-driven decisions. It should offer customizable
dashboards, performance metrics, and trend analysis to identify areas for improvement and optimize
supply chain operations.

8. Collaboration and Communication: The system should facilitate collaboration and communication
among different stakeholders in the supply chain, including merchants, suppliers, and customers. It
should include features such as messaging, document sharing, and notifications to ensure smooth
information flow and coordination.

9. Integration Capabilities: The system should have the ability to integrate with other relevant systems,
such as accounting software, CRM systems, and marketplaces. This enables seamless data exchange
and eliminates manual data entry, improving overall efficiency.

By implementing an information management system with these features, a merchants association can
enhance supply chain visibility, streamline operations, and improve customer satisfaction. It enables
better decision-making, reduces manual errors, and promotes collaboration among stakeholders,
leading to a more efficient and customer-centric supply chain.

5. The presidents of fruit and vegetables associations are considering a plan to set up retail chain
stores in Chennai under their cooperative brand. How would you advise them to go ahead?
Setting up retail chain stores under their cooperative brand can be a strategic move for the presidents of
fruit and vegetable associations. Here are some recommendations to advise them on how to proceed:

1. Feasibility Study: Conduct a comprehensive feasibility study to assess the market potential,
competition, consumer preferences, and profitability of retail chain stores in Chennai. This study
should also consider factors such as location, target market, pricing, and operational costs.

2. Branding and Marketing: Leverage the existing cooperative brand and reputation to create a strong
brand identity for the retail chain stores. Develop a marketing strategy to promote the cooperative
brand, highlighting the benefits of buying from the association's stores, such as freshness, quality, and
fair pricing.

3. Store Location: Identify strategic locations for the retail chain stores, considering factors such as
proximity to residential areas, accessibility, and visibility. Conduct market research to understand the
demand for fresh fruits and vegetables in different areas of Chennai and select locations accordingly.
4. Product Assortment: Offer a wide variety of fresh fruits and vegetables to cater to the diverse
preferences of customers. Ensure a consistent supply of high-quality produce from reliable sources,
including the association's members and other trusted suppliers.

5. Pricing Strategy: Develop a competitive pricing strategy that offers value for money to customers
while ensuring profitability for the retail chain stores. Consider factors such as procurement costs,
operational expenses, and market dynamics to determine optimal pricing.

6. Store Layout and Merchandising: Design the store layout in a way that enhances the shopping
experience for customers. Implement effective merchandising techniques, such as attractive displays,
signage, and product placement, to encourage impulse purchases and increase sales.

7. Customer Service: Prioritize excellent customer service to differentiate the retail chain stores from
competitors. Train store staff to provide knowledgeable assistance, personalized recommendations, and
a friendly shopping environment.

8. Supply Chain Management: Strengthen the supply chain management system to ensure a steady
supply of fresh produce to the retail chain stores. Establish strong relationships with farmers,
wholesalers, and other suppliers to maintain a reliable and consistent supply.

9. Technology Integration: Implement technology solutions, such as point-of-sale systems, inventory

management software, and customer relationship management tools, to streamline operations, improve
efficiency, and enhance the overall customer experience.

10. Continuous Improvement: Regularly evaluate the performance of the retail chain stores and seek
feedback from customers to identify areas for improvement. Continuously adapt and refine strategies
based on market trends, customer preferences, and changing business dynamics.

By following these recommendations, the presidents of fruit and vegetable associations can establish
successful retail chain stores under their cooperative brand in Chennai. This will not only provide a
direct channel for their members' produce but also enhance customer satisfaction and contribute to the
growth and sustainability of the association.

Case 3 P.No.563

1. Map supply chain drivers of HFGM perishables and their key factors for the success of
HFGM operations.
The key supply chain drivers for HFGM perishables are sourcing, pricing, sorting and grading,
packing, warehouse management, and transportation management.

1. Sourcing: The success of HFGM operations relies on effective sourcing of perishable goods. This
involves negotiating prices with manufacturers, drawing up contracts, and sourcing produce directly
from farmers and mandis. Key factors for success include strong relationships with suppliers, efficient
consolidation points, and the ability to handle shortages effectively.

2. Pricing: HFGM sets prices based on factors such as market prices, quantity and quality
requirements, and the need for standardized weights. Key factors for success include accurate pricing
based on market conditions, providing fixed prices to farmers to ensure revenue certainty, and
maintaining loyalty from farmers through standardized weights.

3. Sorting and Grading: HFGM ensures that produce meets quality standards through sorting and
grading processes. This involves categorizing produce as per HFGM quality norms and accepting or
subsidizing produce that does not meet the standards. Key factors for success include maintaining
quality standards, building strong relationships with farmers, and ensuring proper packing and
protection of produce.

4. Packing: HFGM uses crates for packing both FMCG goods and perishables. Color coding is
followed to differentiate between different types of products. Key factors for success include proper
handling and packing of goods, adherence to color coding standards, and ensuring visual appeal and
protection of perishable items.

5. Warehouse Management: HFGM's warehouse, known as the Distribution Centre (DC), plays a
crucial role in managing inventory and ensuring efficient operations. Key factors for success include
choosing the right location for the DC, maintaining strict discipline and adherence to rules, using
advanced technology for inventory management, and achieving high levels of stock accuracy and
despatch accuracy.

6. Transportation Management: HFGM's transportation function is responsible for the movement of

goods from sourcing locations to the DC and from the DC to stores. Key factors for success include
effective routing and scheduling, maintaining fixed routes, ensuring security measures to prevent theft,
and leveraging technology for transaction management.

Overall, the success of HFGM operations in perishables relies on efficient sourcing, accurate pricing,
maintaining quality standards, proper packing, effective warehouse management, and well-managed
transportation.

2. Discuss in detail warehouse operations of perishables and how it is different from dry goods
stores management.
Warehouse operations for perishables, such as fruits and vegetables, have some key differences
compared to the management of dry goods stores. These differences primarily arise due to the
perishable nature of the products and the need to maintain their freshness and quality. Here are some
key aspects of warehouse operations for perishables and how they differ from dry goods stores
management:

1. Storage Conditions: Perishable goods require specific storage conditions to maintain their freshness
and quality. This includes temperature control, humidity control, and sometimes even gas chambers for
ripening certain fruits. Cold storage facilities are essential for perishables to prevent spoilage. In
contrast, dry goods stores do not have such stringent storage requirements and can be stored at room
temperature.

2. Sorting and Grading: Perishable goods need to be sorted and graded based on quality standards. This
ensures that only the best quality products are sent to stores. Sorting and grading are typically done at
the warehouse itself, whereas dry goods stores may receive pre-packaged products that do not require
sorting and grading.

3. Packaging: Perishable goods are often packed in crates or specialized packaging to protect them
during transportation and storage. Packaging for perishables may include additional measures to
enhance visual appeal and safeguard the items. In contrast, dry goods stores may use standard
packaging or pre-packaged products that do not require additional protective measures.

4. Handling and Staging: Perishable goods require careful handling to prevent damage and maintain
their freshness. Warehouse staff need to be trained in proper handling techniques to minimize product
spoilage. Staging areas within the warehouse are used to sort, grade, and tag the perishable goods
before they are loaded onto trucks for transportation. In dry goods stores, handling and staging may be
less critical as the products are not as sensitive to damage or spoilage.

5. Inventory Management: Inventory management for perishables is more complex compared to dry
goods stores. Perishable goods have shorter shelf lives, and their inventory needs to be closely
monitored to prevent wastage and stockouts. First-in-First-out (FIFO) methods are typically used to
ensure that older stock is sold first. In dry goods stores, inventory management may be less time-
sensitive and can follow different methods such as Last-in-First-out (LIFO).

6. Transportation: Transportation of perishable goods requires specialized vehicles, such as refrigerated

or frozen trucks, to maintain the required temperature during transit. The timing of transportation is
crucial to ensure that perishable goods reach stores while still fresh. In contrast, transportation for dry
goods stores may not require temperature-controlled vehicles and may have more flexibility in terms
of timing.

Overall, warehouse operations for perishables require stricter temperature control, specialized
handling, sorting and grading, and more precise inventory management compared to dry goods stores.
The focus is on maintaining freshness, quality, and minimizing product spoilage throughout the supply
chain.

3. Explain the role of transportation, sourcing, IT and pricing on managing perishables supply
chain objectives of HFGM.
Transportation: Transportation plays a crucial role in managing the perishables supply chain objectives
of HFGM. It is responsible for ensuring that perishable goods are transported from sourcing locations
to the distribution centres (DCs) and from the DCs to the stores in a timely and efficient manner. The
transportation function needs to consider factors such as temperature control, handling requirements,
and delivery schedules to maintain the freshness and quality of the perishable goods. Efficient routing,
scheduling, and coordination with vendors and stores are essential to meet the objectives of on-time
delivery, minimizing spoilage, and reducing transportation costs.

Sourcing: Sourcing is another critical aspect of managing the perishables supply chain for HFGM.
Sourcing involves procuring perishable goods from farmers, mandis, and other suppliers. The sourcing
function needs to ensure a consistent and reliable supply of high-quality perishable goods to meet the
demand from stores. This includes negotiating prices, establishing contracts, and maintaining strong
relationships with suppliers. Effective sourcing helps HFGM achieve its objectives of maintaining
product quality, minimizing shortages, and ensuring a steady supply of perishable goods.

IT: Information technology (IT) plays a significant role in managing the perishables supply chain
objectives of HFGM. IT systems, such as Warehouse Management Systems (WMS) and Enterprise
Resource Planning (ERP) systems, are used to automate and streamline various processes, including
inventory management, order management, and transportation management. These systems help in
tracking and managing perishable goods, generating accurate forecasts, optimizing inventory levels,
and improving overall supply chain visibility. IT also enables efficient communication and
coordination between different stakeholders, such as vendors, DCs, and stores, leading to improved
efficiency, reduced errors, and better decision-making.

Pricing: Pricing is a critical aspect of managing the perishables supply chain for HFGM. The pricing
function determines the prices at which perishable goods are sold to customers. It involves considering
factors such as market prices, quality requirements, and the need for standardized weights. Effective
pricing helps HFGM achieve its objectives of balancing freshness and price, maximizing revenue, and
maintaining customer satisfaction. By setting competitive prices based on market conditions and
ensuring fixed prices for farmers, HFGM can achieve revenue certainty and build loyalty among both
suppliers and customers.

In summary, transportation, sourcing, IT, and pricing all play crucial roles in managing the perishables
supply chain objectives of HFGM. Efficient transportation ensures timely delivery and maintains the
freshness of perishable goods. Effective sourcing ensures a steady supply of high-quality perishable
goods. IT systems automate and streamline various processes, improving efficiency and visibility.
Pricing strategies help balance freshness and price, maximize revenue, and maintain customer
satisfaction. By effectively managing these aspects, HFGM can achieve its objectives of maintaining
product quality, minimizing shortages, and ensuring a smooth and efficient supply chain for perishable
goods.