STUDY OF SUPPLY CHAIN MANAGEMENT PRACTICES OF INDIAN PROCESSED FOOD INDUSTRY TO ENHANCE DOMESTIC DEMAND AND EXPORT POTENTIAL

Abstract

India is the second largest producer of fruits and vegetables. Despite the huge produce available in India, food inflation and food security issues are major concerns for policy makers in the country. It may affect the basic need for Indian citizens to have sufficient, healthy and affordable food. In India, post harvest food was close to 50,000 crores annually (US $ 81.97 billion annually) processing and storage of fruit and vegetables. The fruit and vegetable loss is highest up to 18% of total production. agriculture and food processing sector. It can be only possible if major impediment of PFS are firmly tackled. Therefore, the motivation behind the research is to study the benefits, impediments, logistics, information technology and quality issues of processed food sector (PFS), which is very important for Indian economy. Such studies may help, on one side to reduce the food wastages and on other side to ensure food security. PFS has the potential to increase the income available food products, throughout the year and across geographies. Due to the changes in the demography, the demand of processed food is expected to rise and nuclear families, working women and high disposable income are the drivers to boost the demand. The extensive literature review has been performed to identify the research issues and define the objectives of the present research. The literature review pertaining to subject matter was classified into nine sections: supply chain, food processing and manufacturing food, cold supply chain, food distribution and retailing food quality and food safety, traceability in food supply chain management of food supply chain include few studies on food safety standards implementation, limite application of IT in food sector, and implementation of effective Food Supply Chain Management (FSCM), conducted mostly in foreign settings and need for Performance Management System for process food supply chain management (PFSCM) viii EXECUTIVE SUMMARY India is the second largest producer of fruits and vegetables. Despite the huge in India, food inflation and food security issues are major concerns for policy makers in the country. It may affect the basic need for Indian citizens to have sufficient, healthy and affordable food. In India, post harvest food was 50,000 crores annually (US $ 81.97 billion annually) processing and storage of fruit and vegetables. The fruit and vegetable loss is highest up to 18% of total production. There is a need of developing a bridge between riculture and food processing sector. It can be only possible if major impediment firmly tackled. Therefore, the motivation behind the research is to study the benefits, impediments, logistics, information technology and quality issues of processed food sector (PFS), which is very important for Indian economy. Such studies may help, on one side to reduce the food wastages and on other side to ensure food security. PFS has the potential to increase the income of the farmers and make e food products, throughout the year and across geographies. Due to the changes in the demography, the demand of processed food is expected to rise and nuclear families, working women and high disposable income are the drivers to boost ensive literature review has been performed to identify the research issues and define the objectives of the present research. The literature review pertaining to subject matter was classified into nine sections: sourcing of agri products for food ood processing and manufacturing, logistics management of processed food, cold supply chain, food distribution and retailing, integrated IT with logistics, food quality and food safety, traceability in food supply chain of food supply chain. The gaps were identified in the literature ew studies on food safety standards implementation, limite application of IT in food sector, and implementation of IT at grass route level for, an Supply Chain Management (FSCM), standalone studies on FSCM conducted mostly in foreign settings and need for Performance Management System for process food supply chain management (PFSCM). India is the second largest producer of fruits and vegetables. Despite the huge fresh in India, food inflation and food security issues are major concerns for policy makers in the country. It may affect the basic need for Indian citizens to have sufficient, healthy and affordable food. In India, post harvest food wastages are 50,000 crores annually (US $ 81.97 billion annually) due to lack of processing and storage of fruit and vegetables. The fruit and vegetable loss is highest There is a need of developing a bridge between riculture and food processing sector. It can be only possible if major impediments firmly tackled. Therefore, the motivation behind the research is to study the benefits, impediments, logistics, information technology and quality issues of processed food sector (PFS), which is very important for Indian economy. Such studies may help, on one side to reduce the food wastages and on other side to ensure the farmers and make e food products, throughout the year and across geographies. Due to the changes in the demography, the demand of processed food is expected to rise and nuclear families, working women and high disposable income are the drivers to boost ensive literature review has been performed to identify the research issues and define the objectives of the present research. The literature review pertaining to sourcing of agri products for food management of processed integrated IT with logistics, food quality and food safety, traceability in food supply chain and performance . The gaps were identified in the literature that ew studies on food safety standards implementation, limited literature on IT at grass route level for, an tandalone studies on FSCM conducted mostly in foreign settings and need for Performance Management System ix

The objectives of research were to identify the key issues related to PFS, to determine the relative importance of key issues in PFS, to study the quality and food safety dimensions of PFS; the logistics issues related to PFS; the importance of Information Technology (IT) in PFS and to propose the matrices for PMS of PFSCM. To achieve the above objectives, questionnaire was designed keeping in view the literature and experts’ opinion. It has four parts Part A- Advantages, constraints, counter measures of PFS Part B- Food quality and safety issues and promotional efforts, Part C- Logistic issues and performance measures for PFSCM and Part D- Profile of the respondents. It was administered in Delhi, Faridabad, Gurgaon, Kundli and Noida by sending emails with a cover letter to the relevant and identified respondents. The personal interviews were also scheduled and conducted to collect the data. The respondents were asked to rate the intensity of each factor on a five point likert scale (1-Strongly disagree, 5-Strongly agree for example). The respondents from corporate were selected from the directories of All India Food Processors Association (AIFPA), Confederation of Indian Industries (CII), Associated Chambers of Commerce and Industry of India (ASSOCHAM) etc. In order to collect data, 1000 supply chain professionals were contacted to seek their response to the questionnaire and 252 responses were collected making the response rate to be 25.2%. The collected data was analysed using SPSS version 21 and statistical tools like descriptive statistics, correlation, regression, ANOVA and binary logistic regression applied. Three case studies of processed food sector were conducted to get insights. The first case study is of Indian frozen peas market and food processing technique known as individual quick freezing technique. The second case study explains the implementation of Hazard Analysis and Critical Control Points (HACCP), food safety controls and its status in India using a case study of Deli Processed Food Products Ltd. The third case study built on a situation-actor-process (SAP), learning-action performance (LAP) model which is an approach to analyze quantitative and qualitative issues of supply chain performance initiatives in a single model and its impact on the performance of the supply chain. A performance measurement system (PMS) is also proposed by taking quality, cost, flexibility, dependability and innovations as five perspectives to measure the x

performance of the Processed Food Supply Chain Management (PFSCM). These perspectives represent an aggregation of the most common approach used in the study of performance management. A holistic PMS for PFSCM has been proposed. The research indicates a vast scope for the processed food sector in India and a great potential for researchers to study and develop the right policies and strategies.