Subscribe / Unsubscribe Enewsletters | Login | Register

Pencil Banner

How Omniactive curbed losses and saved costs using a mobile app

Ershad Kaleebullah | April 29, 2013
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.

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.

 

1  2  3  4  Next Page 

Sign up for CIO Asia eNewsletters.