Mahindra
Mahindra War Room 2013
Partners Sector - Logistics Business
MAHINDRA PARTNERS SECTOR LOGISTICS BUSINESS CASELET Mahindra Partners is the internal incubator of new businesses for the Mahindra Group, supporting a portfolio of existing ventures across Retail, Logistics, Boats, Energy and Media, while constantly exploring new ventures. This caselet pertains to Mahindra Logistics Business. BUSINESS BACKGROUND Mahindra Logistics began in 2000 to service the complex transportation needs of Mahindra’s Automotive Sector. Within a short span of time, Mahindra Logistics expanded capacity to service external clients, and today works with an extensive cross-section of major corporate clients, being the premier logistics service providers in Supply Chain Management and People Logistics. LIVE BUSINESS CHALLENGE: GOING BANANAS The Banana, is one of India’s popular fruits with over 3.70 Lac hectares under cultivation, second only to Mango. Among all states, Maharashtra contributes the maximum area of about 90,000 hectares, with farms concentrated in Jalgaon district. India is the world’s largest producer of Bananas, producing approximately 15 million metric tons annually. Only 0.05% of the domestic production is exported, and the rest is consumed within the country as a table fruit. Realizing the importance of the fruit, the Agriculture Marketing Board of Maharashtra has established ‘Mahabanana’, a farmers’ marketing organization, in 2002, with headquarters at Jalgaon. There are 26 co-operative societies registered under Mahabanana and each such member society has 300-350 small and marginal farmers. About 8000 farmers have enrolled themselves as members under the organization. The Logistics cost accounts for about 30-35% of the total cost in the Banana business. The chain from producer to customer is long, involving four to five intermediaries. This system has denied the producer a fair price, and by multiple intermediate margins also affected the price paid by the
Partners Sector - Logistics Business
MAHINDRA PARTNERS SECTOR LOGISTICS BUSINESS CASELET Mahindra Partners is the internal incubator of new businesses for the Mahindra Group, supporting a portfolio of existing ventures across Retail, Logistics, Boats, Energy and Media, while constantly exploring new ventures. This caselet pertains to Mahindra Logistics Business. BUSINESS BACKGROUND Mahindra Logistics began in 2000 to service the complex transportation needs of Mahindra’s Automotive Sector. Within a short span of time, Mahindra Logistics expanded capacity to service external clients, and today works with an extensive cross-section of major corporate clients, being the premier logistics service providers in Supply Chain Management and People Logistics. LIVE BUSINESS CHALLENGE: GOING BANANAS The Banana, is one of India’s popular fruits with over 3.70 Lac hectares under cultivation, second only to Mango. Among all states, Maharashtra contributes the maximum area of about 90,000 hectares, with farms concentrated in Jalgaon district. India is the world’s largest producer of Bananas, producing approximately 15 million metric tons annually. Only 0.05% of the domestic production is exported, and the rest is consumed within the country as a table fruit. Realizing the importance of the fruit, the Agriculture Marketing Board of Maharashtra has established ‘Mahabanana’, a farmers’ marketing organization, in 2002, with headquarters at Jalgaon. There are 26 co-operative societies registered under Mahabanana and each such member society has 300-350 small and marginal farmers. About 8000 farmers have enrolled themselves as members under the organization. The Logistics cost accounts for about 30-35% of the total cost in the Banana business. The chain from producer to customer is long, involving four to five intermediaries. This system has denied the producer a fair price, and by multiple intermediate margins also affected the price paid by the