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RFID: A Facilitator for Public Distribution System Dr. Rajesh Rajaguru
With a network of more than 4.99 lakh fair price shops (FPS), distributing annually products worth more than Rs. 33,000 crore, the public distribution system (PDS) in India is perhaps the largest distribution network of its type in the world. PDS promises basic food to over 330 million poor people living in India. Though PDS provides benefits to a vast majority of the Indian population, its performance is questionable in the grounds of efficiency and effectiveness. PDS supply chain failed to achieve its prime objectives due to the malpractices, mismanagement, corruption, black market and anti social elements. However, the shortfalls of the PDS supply chain can be overcome by the Information and Communication Technologies (ICT) such as on line communications, Global Positioning Systems (GPS) and radio frequency identification (RFID). Introduction Public distribution system (PDS), a major instrument of the Indian government’s economic policy, procure and distributes major commodities such as wheat, rice, sugar and kerosene to a large number of people living in India through Fair Price Shops (FPS). It also ensures the availability of food to the general public at affordable price. It helps in eradicating poverty and intends to serve as a safety net for the 330 million Indian poor people, who are nutritionally at risk. PDS is one of the largest supply chain networks in the world with 4.99 lakh Fair Price Shops (FPS) and is operated under the joint responsibility of the central and the state government. PDS supply chain: An overview PDS supply chain consists of several central and state government bodies,
private industries, farmers, warehouses and transportation agencies. Central and state government is responsible for procurement, storage, transportation and distribution of products. Issuing ration cards and distributing food items to the end consumers through fair price shops (FPSs) are responsibility of the state government. Though the PDS supply chain provides food to vast majority of the Indian population, we should accept the fact that the whole chain is exploited by mismanagement, corruption and antisocial elements. Corruption is well rooted and spreaded along the whole PDS supply chain. The chain of corruption in PDS begins at the procurement stage itself. Some of the produce that is procured by the government for the public distribution finds its way into the open/ black market. Though enough produce are procured and distributed by PDS, the beneficiaries often find difficulties in getting what they are entitled to. This mismanagement and corruption is the indicator of inefficiency in PDS supply chain and distribution systems. Long supply chain and the large number of intermediaries’ involvement in the PDS is another reason for inefficiency and corruption. When the produce moves at each stage of PDS supply chain, there is a higher opportunity/chance for mismanagement, corruption, wastage and poor quality products. It was estimated that total value of corruption in PDS is Rs. 358crores/ year. Differences in distribution and subsidy systems followed by the state governments encourage trafficking of produce between states. Subsidised rice policy (Rs.1/ kg) announced by the Tamil Nadu state government encourages the trafficking of rice to the neighboring states; Kerala, Karnataka, Pondichary and Andhra Pradesh. Indian government and general public is longing for solutions to control the above mentioned malfunctions. The
use of advanced ICT could help PDS to curtail. Technological Advancement and PDS Supply Chain Technological advancement and major break through in (ICT provide huge opportunities for streamlining supply chain processes and minimizing mismanagement and corruption. Organisations’ are increasingly using ICT to facilitate supply chain processes, to maintain relationships with supply chain partners and to satisfy customer needs and wants effectively and efficiently. It is surprising that the utilisation of ICT by the Indian central and state government bodies is negligible compared to other developed and developing nations. However, Indian government bodies are recognising the use and importance of ICT and consider implementing such systems in PDS supply chain. Maharastra state government is pioneer in the initiative and collaborated with Spanco to computerize PDS supply chain. The project is expected to complete in the year 2012. The project use locationing technology such as GPS to identify and monitor the movement of the produce and streamline PDS activities. Research indicates that the combination of RFID and GPS technologies help organisations’ to streamline supply chain processes. RFD is considered as one time solution to all supply chain related problems. How RFID works? RFID system includes tag, reader software and a computer. Tag consists of barcode, antenna and a small chip to store data and information. Tags are designed to attach with product lots. Reader usually attached with a mobile egov
march 2010
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