A mobile-based rural distribution network

Ahmedabad: Ramilaben Parmar, a farm labourer in Rasnol village in Gujarat’s Anand district, is elated. She has just bought a new sewing machine worth ₹ 10,000 for her daughter so she can start her own business. Forty-year-old Parmar, a micro-entrepreneur, earned this money as part of her two months’ commission for selling farm produce under the brand name RUDI.

RUDI is short for Rural Distribution Network, an agricultural cooperative business where its members, called RUDIbens, procure raw agricultural produce from marginal farmers at market prices, add value to that stock by cleaning and processing it before packaging and selling it at affordable prices through a network of over 3,000 RUDIbens.

The business is owned and operated collectively by a group of women from the Self Employed Women’s Association (SEWA), an Ahmedabad-based non-governmental organization. The RUDI Multi-Trading Company was set up in 2004 and has now grown to a point where it reaches over a million households annually with its high-quality, affordable, brand RUDI products.

To increase efficiency of the stock ordering process, the company introduced a mobile management information system (MIS), called RUDI Sandesha Vyavhar (RSV or RUDI information exchange in Gujarati). The application went live in Gujarat in January 2013. With this, women like Parmar who used to earn ₹ 4,000-5,000 a month are now able to earn ₹ 8,000-10,000 a month.

Parmar, who can barely read or write, shows the app on her mobile phone—it’s a simple phone with simple features and not a smartphone. She says she has been selling RUDI products for the past eight years, but in the last one-and-half years her income has almost doubled, changing her life.

SEWA partnered with the Cherie Blair Foundation for Women and the Vodafone Foundation in India to develop the MIS and has roped in Delhi-based Ekgaon Technologies as the technology partner and platform service provider. The Vodafone Foundation provided a grant of £305,000 (around ₹ 3.05 crore today) for the development and pilot of an application to support the RUDI network and provide training to RUDIbens on how to use the application and more broad-based capacity building to improve their business skills. The MIS was formally launched at the Vodafone Mobile for Good Summit in London on 10 December 2012, with the application going live in Gujarat in January 2013.

Prior to the application, RUDIbens had to visit processing centres in person or send their orders via intermediaries, which often resulted in orders being lost or delayed. In some cases, RUDIbens had to travel for hours together to place their order, and hence a lot of time that could be more productively spent in the field, generating more sales, was lost, says Reema Nanavaty, director, SEWA. The RSV application enables a RUDIben to place an order for new stock on her handset, which is transmitted to the RUDI head office via SMS. The information is received by RUDI management in real time and managed via a web-based back-end at the appropriate processing centre.

The application is JAVA-based and can be transferred or installed by using bluetooth or by connecting the mobile phone through USB. Besides enabling the saleswomen to order stock from the field, the application has facilities like receiving important updates from RUDI Company, such as price changes or marketing schemes, in real time. The application has also made the entire management system paperless.

The incorporation of mobile technology into the business was prompted by the growing scale of RUDI’s operations, which led to high inefficiencies in managing inventories and processing orders at RUDI Company level. “The volume of orders could no longer be managed by informal supply chain management systems. We estimated that there were inefficiencies of 20-30%, with the major impact of these inefficiencies not only directly affected the RUDIbens’ sales and income, but also the livelihoods of farmers selling their produce to the RUDI Company,” said Nanavaty.

According to her, there seems to be no other rural supply chain to have developed its own bespoke MIS tool that runs on simple-feature mobile phones. RUDI has about 202,000 farmers as shareholders of the company. “RUDI could not afford laptops, smartphones or tablets. Also, many women are illiterate but most of them can read numbers. Bearing all this in mind, we had to develop this tool on our own because we could not find an off-the-shelf product in the market to meet the RUDI channel’s information,” said Rushi Lehari, who heads the IT division of SEWA.

Another significant advantage of this technology is that it enables RUDIbens to manage their own business and customer records more accurately. When a RUDIben receives her new stock, she can enter the information into her phone and update her stock inventory. This module also enables her keep track of which customers have bought stock on credit and the amounts owed. When payments are received, the RUDIben can update the specific customer information and the new outstanding amount is updated. This has enabled the micro entrepreneurs to manage and keep track of their businesses in a much more efficient manner, greatly reducing chances of mistakes that were prevalent earlier when they relied on memory or scraps of paper to record this type of information.

The positives are reflected in the company’s financial performance as well. Compared to a turnover of ₹ 6 crore and net profit of ₹ 17 lakh for 2012-13 financial year, RUDI Company posted a turnover of ₹ 9.13 crore and profit of ₹ 32 lakh in fiscal 2013-14. Nanavaty attributes this to the technology change. By January 2015, the company aims to further increase the turnover by 30%.

“This mobile application has made life much easier for us. We were threatened by local shopkeepers who cheated poor people by getting them into a debt trap. Today they are shutting shops. For all the marriages held in Rasnol village in the last one year, we have supplied RUDI products. We have more than doubled our business target in the area (Anand district) this year,” said Kapilaben Vankar, a tobacco grower and president, SEWA.

Next month, RUDI plans to enter Rajasthan before Uttar Pradesh and Assam. In December 2013, RSV Vyavhar received a $140,000 innovation grant from the GSMA mWomen team to further develop the application and support the integration of the M-pesa mobile money platform.

By January 2015, SEWA aims to double the reach and number of employed women besides also doubling the number of farmers who supply to the RUDI network. An advisory service using this application for farmers is also on the cards.

Mint has a strategic partnership with Digital Empowerment Foundation, which hosts the mBillionth Awards.