KSBCL (Karnataka State Beverages Corporation Limited) is a Government of
Karnataka Company. This 4-year old, young and enthusiastic organization is the
sole distributor of liquor in Karnataka. KSBCL allows manufacturers to stock
their products in its depots from where the retailer will have to procure them.
Manufacturers are not allowed to directly sell their products to retailers or
the end consumers. This is being enforced primarily to ensure that every sale
within the state is reported and the necessary taxes are paid.
Managing the liquor business has always been a challenge in our country where
liquor traditionally is a commodity that is frowned upon, at least in public.
In India, the liquor industry has been subjected to fierce moral policing in the
guise of regulation.
As in the other states of India, in Karnataka too the liquor business carried
the ugly stigma of being secretive, illegal, insensitive to society, and
corrupt. Black market in seconds and thirds far exceeded the white. While the
state government was being duped in crores, consumers were forced to drink
In this scenario, KSBCL being a government undertaking, was not supposed to
promote liquor. Yet KSBCL was expected to substantially increase the revenue for
the government through ever-higher targets for sale. To its credit, KSBCL was
able to achieve this successfully.
Sales have gone up from Rs 300 crore in 2002-03 to Rs 5,600 crore in 2007-08;
a jump by 1,700%, in just 4 years.
This has been largely possible because KSBCL adopted a business model that
encourages and incentivizes transparency. KSBCL has proved that transparency
actually enhances revenue, power, and status of all stakeholders. The
corporation is also non-capital intensive; in fact, KSBCL does not invest a
single paisa in its business turnover of Rs 5,600 crore. Though a monopoly, it
does not behave like one. It encourages free market: the market decides the
liquor price and manufacturers are free to change their prices every day; the
number of varieties of products/brands; the product/brand positioning; the
quantum of production; and the market is free to sell in any area.
Not only this, KSBCL is also industry friendly. It takes care of the concerns
of liquor consumers, retail sellers, manufacturers, and government revenue. This
has been achieved mainly by widely sharing the information almost on real time
basis. KSBCL has also been committed to payments to the suppliers on time, all
the time. Technology is another important aspect in the functioning of KSBCL.
The people at the depot and sellers are left to do their main task of selling,
rather than getting bogged down by procedures, compliances, etc. Technology has
equipped them to sell while the system takes care of procedure and
compliances. While these are some fundamentals that have pushed KSBCLs sales to
levels never heard before and our principal player, Agile Lab, has helped in
making all these possible.
Task at Hand
Agile Labs was asked to develop a system wherein data entry of receipts of
money, stocks, and stock-outs at depots by DEOs should be simple because they
have only an elementary knowledge of working on Word and Excel. They should
- Accurate operational and financial documents like receipt, MIS, sales
- Reports on the depot business in terms of sales and purchases (brand-wise,
manufacturer-wise, retailer-wise, period-wise, slab-wise, etc), inter depot
transfers, stock position for stock purchase order, stock report for physical
verification and audit
- Synchronize all the above data from all depots making it available
seamlessly at HO for operational and managerial decision-making
- Head Office should know at any given time what is happening in each depot
on hourly basis, about is its sales, procurement, etc
KSBCL had to switch its sales from just 183 wholesalers to 7,800 retailers,
on account of the orders of government abolishing wholesale trade. Consequently,
new databases needed to be created and new depots were to be opened along with
fresh business policies and new infrastructure. Not only did the system needed
development, it had to be made acceptable to the management as well as at
Meeting the Challenge
This was a huge challenge, but to our surprise, was met substantially by
Agile Labs. It has now been accepted and KSBCL feels proud to be working on the
system developed on this simple yet powerful technology.
The system is lending itself to new initiatives in e-governance and thereby,
increasing the comfort feeling at all levels in the company. The government
excise department, KSBCL (from MD to DEO), manufacturers, retailers, all have
access to the same data, which helps in taking their own decisions. There is no
fear of secrecy or holding back in any quarter. All the information is on the
table and so it is a fair and level play. The OFS or order for supply is being
generated online with digital signature. Manufacturers visiting KSBCL and
waiting for OFS is a thing of past.