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How Kancor curbed losses and saved costs using a mobile app

Ershad Kaleebullah | April 11, 2013
When inaccurate data began to eat at Omnikan’s profits—the marigold managed farming arm of Kancor Ingredients—the company turned to a mobile app and weeded out losses.</p><p>&nbsp;</p>

If someone told you that the fortunes of one of India's largest nutraceutical companies rest on the tiny petals of marigold flowers, you'd probably rubbish their claim. Not if it were true. Ask Jawed Ahmed, GM and group IT head, Omniactive Health Technologies and Kancor Ingredients. "Yes, it can make our company either a profitable or a loss-making venture," he says.

That's because the tiny petals of the marigold flower hold a chemical called xanthophyll--which, when converted to lutein, protects the vision of the human eye--that wields tremendous power. Power so intense that this chemical can spin the fortunes of companies that manufacture it.

That's why, for nutraceutical companies, like Omniactive the timely availability of superior quality xanthophyll is critical. Otherwise pharma companies that use lutein would shift their loyalties to other producers, taking Omniactive's business away.

Despite having its destiny tied to the availability of xanthophyll, the company had outsourced its production.

As a result, procuring the required amount of quality xanthophyll wasn't satisfactory. So, the company decided to take control of the process of producing lutein. To do that, the company decided to float a new organization called Omnikan, with the objective of producing lutein through managed farming of marigold. It identified 3,000 acres of land in three towns of Karnataka: Hassan, Halebidu, and Gundlupet.

The farmers in these districts were then asked to cultivate marigolds at four-day intervals. Similarly, when the cultivation cycle was over, they had to harvest at four day intervals so that the company could control and time the produce. "The plan was to regulate the flow of supply. We wanted to keep it going at a steady rate," says Ahmed.

As this was the first time farmers were cultivating marigolds on their farms, they lacked expertise. So, Omnikan appointed agents--and assigned farms to them--who would meet farmers, and ensure that the schedule was adhered to, and report it back to the company. But instead of subtracting the problem, the agents only multiplied it.

Croppy Situation

Producing lutein is a tricky business. This is compounded by the fact that marigolds are sensitive and need to be handled with care. For instance, if the flower is exposed to very cold temperatures or not watered at regular intervals, its lutein levels will fall. Also, after the flower is harvested, it has to be processed within four to five hours. Any delay would pull down the ideal yield percentage of the flower--which is between 2 to 2.5 percent--and anything below 2 percent is detrimental to the business. "This is why we have to handhold farmers and create a robust solution to track the entire lifecycle of marigolds."

This was hard because the company had a large acreage under cultivation and needed to control its supply chain. To make matters worse, the company used ruddy Excel sheets to track the cycle of marigolds. The agents would go to the field, note down the stage that a particular farmer's marigold was in, and the amount of time it would take for him to harvest it. The agent would then go to the office and update it on Excel sheets which would then be viewed by agricultural scientists who would provide inputs on the maturity of a farmer's marigolds. For instance, at the end of six weeks, marigolds should have turned a certain shade of yellow. If they haven't, scientists would input their suggestions on the Excel so that the agents can then inform farmers to take corrective action to get the cycle back on track. Because this process wasn't real-time, it led to erratic harvesting schedules. For example, the company would witness weeks without any produce and the very next week it would have to deal with 25-30 tonnes of marigolds.

 

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