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Mumbai Grahak Panchayat’s
Innovative Innovative Distribution ModelDistribution Model
Presented by:
Shirish Deshpande
Role Model for Sustainable Consumption
• Norwegian Environment Ministry highlighted MGP’s Distribution System as a Role Model for promoting Sustainable Consumption, at the conference organized by Commission on Sustainable Development at New York in April 1999.
Unfriendly Buying Environment
•Artificial shortages & scarcities
•Sky-rocketting prices
•Cheating in weights & measures
•Adulteration
Consumer-friendly Distribution Model
Of
Buying Groups
Philosophy
• Growth In Production
• Equity In Distribution
• Restrain On Consumption
How the Model operates
11 Families
Buying Group
Group Leader
MGP Distribution Model
IndentIndent
Consolidation
Total Order
Bargaining&
Negotiation
MGP HQ
Producers
Wholesalers
Market Price
Plus 7 to 7.5 %
FINAL PRICEFinal PriceFinal Price
Total Indents
PAYMENT
WAREHOUSE
Unpacking
Repacking
DELIVERY
PAYMENT
MGP Distribution Model
Purchase Committee
Profile of the MODEL• 90 products available every month.
• Delivery to 21,632 families through 1574 Buying Groups.
• Product range covers grains, cereals, edible oils, dry fruits, soaps and detergents, cosmetics, hosiery, stationery etc.
• Annual turnover: INR 250 million (US $6.09 million)
Economics of the MODEL
• System operates on ‘No Profit – No Loss’ basis.
• End price includes Procurement Cost, Transportation Costs and Administrative Expenses.
• Savings of 15-20 % in monthly grocery budget of the household.
Annual Sales Turnover
1997-98
1998-99
1999-2000
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07 S
1
165.15
193.21 196.05 198.29
211.88
236.31236.41
243.47245.71
285.35
0
50
100
150
200
250
300
350
10-year Growth Chart
19,931
21,358
19,789
18,92519,276
20,12019,841
18,86218,399
16,630
15,000
16,000
17,000
18,000
19,000
20,000
21,000
22,000
1997-98 1998-99 1999-2000
2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07
10-year Growth Chart
More & More Families Joining Buying Groups
Benefits to Members
• Products cheaper in price, better in quality and accurate in weights & measures
• Saving 15-20% in monthly Grocery Bills
• Delivery at Buying Groups’ Doorstep
• Saving of Members’ time & money on transportation
• Focus on Health & Nutrition
How the MODEL promotes Sustainable Consumption
• Discourages impulsive buying.
• Helps restrain unnecessary or extravagant consumption.
• Substantial savings in fuel consumption.
• Reduces transportation for delivery
• Saves 52,544 kms. transportation per month in Mumbai
How the MODEL promotes Sustainable Consumption (contd)
• Reduction in Greenhouse Gases• Employs re-usable cloth bags for wheat,
rice and sugar thereby cutting plastic usage.• Effectively dispenses use of 75,000 plastic
bags per month thus eliminates use of 2100 kgs. of plastic per month or 25,200 kgs. of plastic per year.
• Discourages wasteful, fancy packing
Environmental benefit• Delivery to 1178 Buying Groups in Mumbai
involves 4300 km running of delivery vehicles per month.
• In absence of such a Model, these consumers going to local markets would collectively incur 56,544 km of transportation per month.
• The Model thus effectively saves 52,244 kms. of transportation per month.
IndentIndent
Consolidation
Total Order
Bargaining&
Negotiation
MGP HQ
Producers
Wholesalers
Market Price
Plus 7 to 7.5 %
FINAL PRICEFinal PriceFinal Price
Total Indents
PAYMENT
WAREHOUSE
Unpacking
Repacking
DELIVERY
PAYMENT
Environment Friendly
MGP Distribution Model
Lesser Pollution
Fuel & Resource Optimization
Time Saver
Sustainable Consumer Movement
• Promotes Sustainable Consumer Organization
• Sustainable Consumer Movement.
KEY ELEMENTS OF MODEL
•Operates largely on voluntary efforts
•Based on Members’ faith & trust
•Driven by Collective Leadership
•Guided by Social Philosophy
•Promotes Sustainable Consumption
•Establishes Consumer Sovereignty
•Operates on ‘No Profit-No Loss’ basis
KEY ELEMENTS OF MODEL(contd)
• 15 to 20 % Savings in grocery bills• Service-oriented and not commercially-
oriented• No stocks, No Inventories• Discourages MNC Products• Special emphasis on Health & Nutrition• Predominant women participation &
empowerment• High satisfaction level
What is needed to start Buying Groups
• Service-oriented approach • Availability of dedicated voluntary activists coming
from local areas • Involvement of house-wives with their natural sense of
care and concern• Inspiring and trustworthy Leadership • Small team of ladies, good at tasting and selecting
household products• Sense of social responsibility• Sensitivity for environment
The GLOBAL WARMING may be “THE INCONVENIENT TRUTH”
But THE CONVENIENT WAY OUT is MGP’S
UNIQUE DISTRIBUTION MODEL
If you wish to replicate this model in your country
Contact:
Shirish Deshpande,Mumbai Grahak Panchayat
T H A N K Y O U
