THE AKSHAYA PATRA FOUNDATION - A SUPPLY CHAIN STUDY Submitted by – Section 2 Group 4 Venkatesh Parimella Abhilash Mulakala Visweswar Animela B Kiran Maruthi Gyanendra Singh Ravi Kiran Gottipamula

AGENDA  Introduction  Scale of Operations  Supply Chain  Value Chain  Vasanthapura Kitchen  Cost Breakup Analysis  Issues  Recommendations

INTRODUCTION- AKSHAYA PATRA  Akshaya Patra is a Non Profit Organization headquartered in Bangalore  The organization strives to fight issues like hunger and malnutrition in India  Introduced the Mid-Day Meal Scheme in the Government schools and Government aided schools  In partnership with the Government of India and its respective State Governments, and support from many businesses, philanthropic donors and well-wishers  Envisioned in 2000, the organization started by catering to 1500 children across 5 schools Mission : To Feed 5 Million children by 2020 Vision : No child in India shall be deprived of Education because of Hunger Source:

SCALE OF OPERATIONS Source: Redesigning Midday Meal Logistics for the Akshaya Patra Foundation: OR at Work in Feeding Hungry School Children by B. Mahadevan, S. Sivakumar, D. Dinesh Kumar, K. Ganeshram Current Reach: 1.4 Million children 23 locations 10 states 24 Kitchens

Raw Material Suppliers Akshaya Patra District Warehouse Self Help Groups- School Kitchen (1247) Schools SUPPLY CHAIN Raw Material Suppliers Akshaya Patra Kitchen (9532) Schools Centralized Kitchen (20) De-centralized Kitchen (2) Local Mandi Suppliers

VALUE CHAIN ProcurementFood Preparation Distribution Rice Dal / Pulses Groceries Vegetables & Fruits Milk & Milk Products Storage Pre-processing Cooking Packaging Self Owned Fleet Delivery to Schools

VASANTHAPURA KITCHEN Rice Dal / Pulses Groceries Vegetables & Fruits Milk & Milk Products Kitchen Storage Kitchen Cold Storage Procurement District Level Procurement Procured One Day before Monthly Silos Caters to 568 schools with around 99K+ children

VASANTHAPURA KITCHEN 3-tier kitchens based on gravity flow Pre-Processing & Food Preparation Day -1; 10:00 PM Day 0; 2:30 AM to 7 AM Day 0; 8:30 AM onwards

VASANTHAPURA DISTRIBUTION A Self Owned Fleet of 35 delivery vans of varying capacities, having 3 tier racks for the 3 types of containers Loading done in a LIFO pattern Caters to around 568 schools with 99,326 children On an average the schools are 17km away Vasanthapura fleet covers 1400km/day Uses Route Optimization Softwares

COST BREAKUP ANALYSIS Particulars Cost (%) Direct costs 73% Cost of food56% Distribution Expenses17% Indirect costs 14% Administration Expenses6% Fund raising and communication expenses1% Apportionment of HO expenses7% Notional costs 13% Depreciation13% Cost per mealINR 6 to 8 Less subsidy receivedINR 4 to 6 Cost borne by TAPFINR 2 to 4 Source: Exhibit 13: Expentidure Details of TAPF, Akshaya Patra, Gandhinagar:Supply Chain Challenges by Shravanti Mitra, G Raghuram, and Atanu Ghosh

PROBLEM 1- FINANCIAL SUSTAINABILITY & IDLE CAPACITY  Net loss during financial year 2013  Operating income is just positive  Expansion plans has to be kept on hold to maintain sustainability  Government Subsidy and funding from other sources insufficient  Government cash subsidy receivables payment takes around days Abridged Income & Expenditure Statement ( ` in Lakhs) Total Income15, , Total Expenditure17, , Excess of Income over Expenditure (1,459.15) PROBLEMSOLUTION  Total capacity utilization of cooking equipment is around 8 hours daily  Idle capacity can be outsourced to vendors for usage by them  Idle capacity can be used to prepare food and sell through network of vendors  Existing human resources and economies of scale can be leveraged  This will cross subsidize the existing operations  Challenges:  Legal and regulatory issues  Perception of donors might change

Rajajinagar Kitchen Vasanthpura Kitchen Bangalore East 30 kms 43 kms

PROBLEM 2 – KITCHEN TO HANDLE BANGALORE EAST  Heavy traffic restricts Vasanthapura kitchen’s reach  Cook to eat time increases due to the distance which is further accentuated by traffic congestions  Need to cater to schools in and around Bangalore East PROBLEMSOLUTION  New kitchen in Bangalore East to cater to this region  Quality of food maintained as cook to eat time reduced  More number of schools reached in Bangalore East  A step towards reaching 5 million children

PROBLEM 3– GROWTH WITH LOW INVESTMENT  Need for Expansion – Target of reaching 5 million students by 2020 through MDM  Cooking-to-consumption time > 6 hours if existing kitchens are used  High Capital expenditure if new kitchens installed for more schools  Budget constraints - Not many corporate donors Hub and spoke model Kitchen Mini Kitchen Mini Kitchen Mini Kitchen Mini Kitchen Mini Kitchen H S O C O L Mini Kitchen  Product Postponement strategy with Hub and spoke model  Transferred to mini kitchen after preprocessing of food – cleaning, cutting and sorting into necessary quantities SOLUTION

FEASIBILITY - ADVANTAGES OF HUB AND SPOKE MODEL  High flexibility – cooking closer to consumption centre  High quality food – Cooking to consumption time is very less  Capital expenditure required is very less  Better capacity utilization in existing kitchens – Machinery idle time can be used  Vans idle after delivery can be used for transport from kitchen to Mini Kitchen  Logistic savings – delivery from Mini Kitchen to school can be given to third party  More corporate donors – Smaller investment and closer to businesses  More women can be employed through Self Help Groups (SHG)  Additional fixed costs – Machinery, labour  Losing on economies of scale – More cooking costs  Biogas usage may not be possible – Cost per meal will increase Challenges

Thank You