February 27, 2017
India, the second largest producer of fish in the world (both in aqua culture and inland capture fisheries) is blessed with a coastline of 8118 Km. Starting from a purely traditional activity in the fifties, fisheries and aquaculture has now transferred into a significant commercial enterprise. Marine sector plays an important role in the socio-economic development of India as it contributes significantly to the national food security, livelihood, agriculture diversification and enhanced foreign exchange earnings.
Frozen shrimp holds the major share in India’s export earnings. India has a potential area for shrimp farming of around 1.2 million hectare of which 14% is used for farming. About 6% of the global aquaculture supply is done by India. According to MPEDA’s (Marine Products Export Development Authority) report, in the financial year 2014-2015, shrimps earned 3.08 billion US dollars to India’s economy. MPEDA targets a goal of US $ 10 Billion for the year 2020.
As the seafood and aquaculture industries in India are becoming the top players in the world, the responsibility for keeping the accountability of each process is becoming a mandatory requirement.Developing an effective Performance Management system is one way for creating accountability from the bottom of the pyramid of an industry.
Due to the heavy increase in order and to meet the deadlines, one of the major seafood and aquaculture products exporters was unable to account their wastage in terms of product, time and inventory. They are more into aquaculture shrimps. The organization is aware that something is wrong in their system but was not able to point out due to production pressure.As the product comes in bulk and goes in bulk, the losses were realized only after a month especially when stocks were taken.
Greenmilehad conducted a fifteen-day pilot study by establishing a software dashboard to address the accountability issue. Each activity is compared with the available industry benchmarks. Greenmile team designed a yardstick tool, so that the data will get registered for accountability. The process suggested for increased accountability has four stages.
- Setting up a dashboard
- Realizing the domains to be measured
- Building Accountability
- Integrating Performance Management System (PMS)
The data from the dashboards gave the team some core insights about the problems:
- Yield loss: Loss of occurring at the time of removing the shell of shrimps.
- Time required to freeze the shrimp (block freezing)
The industry benchmark of yield is 70%. But the organization’s is only 67%. One may think that it is only 3 percentage difference, but the real number shows the amount that is getting wasted.
The weekly procuring of shrimps is found to be 40,000 Kg.
Present state yield = 67%
Shrimps after processing = 0.67 x 40,000 = 26,800 Kg
Available Industry standard after processing = 0.7 x 40,000 = 28,000 Kg
Difference = 1200 Kg
Average price of 1 Kg of Packed frozen shrimp = `500
I.e. the amount lost = 1200 x 500 = 6 lakh INR per week
The amount wasted in a month = 24 lakh INR
Freezing time = 1 hour
1 lot = 800 Kg
Filling and Loading to the freezer = 1 hour
Unloading from the freezer = 30 minutes
Loses (Non Value Addition) = 30 minutes
Therefore, total freezing time = 3 hours
i.e a total of 8 lots can be frozen at a time
So freezing capacity at a time = 8 x 3 = 24 lot = 24 x 800 = 19,200 Kg
But in actual practice,Greenmile team did not see this 24 lots per day. On one week observation, Greenmile witnessed an average of 18 lots per day.
Total loss = 6 lots per day.
Therefore, loss for one month = 30 x 6 = 180 lots = 180 x 800 = 14, 4000 Kg
Therefore, potential money that could have gained = 14, 4000 x 500 = 7.2 Crores INR per month
As we started mirroring the data gathered and its following inferences, the process owners started realizing the importance of accountability. Followed by this, a training workshop was given to the supervisors. After the training, without much intervention from Greenmile team, the performances of the next 15 days were collected. Soon the company started monitoring supervisor’s performance; the yield got increased from 67% to 68.3%.Just in 15 days, the company has started realizing the benefit of increased accountability.
Even though seafood industry is a $5 billion Industry, it is not as matured like FMCG industry. High attrition rate and lack of skilled man power are the major challenges the industry is facing. HR practices in these Industries are almost nil. Focusing on more skill development and integrating PMS to the core practices of the organization will make seafood industry as shining as any other food industry.
At Greenmile, We are committed to provide solutions for organizations in achieving excellence in every business process. We are passionate in networking with diverse industry professionals and utilizing their expertise in bringing excellence. Our highly energetic strategic team has professionals having decades of experience in Chemical, Pharma, FMCG, Automotive, Oil & Gas, IT and ITES. Also our network has access to numerous functional experts. This model works very effectively for us to provide cost effective solutions for any kind of challenges faced in business.