An armed forces personnel shopping at a CSD outlet. (Source: CSD)

Defence Canteens Plan To Track Orders, Inventory Online To Curb Corruption

The Canteen Stores Department, a non-profit retailer that’s also India’s largest, has one big problem: pilferage. The Defence Ministry-operated chain is now betting on a central database and online retail to beat rampant corruption.

“If I can remove human touch from decision making as far as inventory management or ordering is concerned to a large extent, [corruption] will get resolved,” Air Vice Marshal M Baladitya, chairman and general manager of CSD, told BloombergQuint in an interview. The aim is to monitor stock at all its warehouses from its Mumbai headquarters, he said.

The retailer with yearly sales of Rs 18,000 crore has 4,500 outlets across length and breadth of India, selling everything from toothpaste to cars at lower tax rates to defence personnel. It even runs mobile stores for those deployed at forward locations. Pilferage is such a big problem that Army Chief General Bipin Rawat sought help of consumer goods makers that supply to the retailer, the Economic Times reported on April 3. The national auditor had in its 2016 report cited examples to point out the the retailer’s failure to curb corruption.

The Canteen Stores Department wants to connect 34 warehouses online to automate inventory management. It has already submitted its proposal to the Ministry of Defence and has already short-listed software services providers, Baladitya said.

The outlets keep 5,500 stock-keeping units and Baladitya wants to prune the list. The focus is not on increasing inventory but filling shelves with fast-moving items, he said.

Apart from automating inventory management, the retailer is also looking to start an e-commerce website. Only armed forces personnel with smartcards that are used at canteens will be used.

Also Read: Why India’s Consumer Firms’ Fortunes Are Tied To This Non-Profit Retailer

“I have a three-stage verification to ensure that the cards are not misused. We will have the necessary firewalls built in the system,” said Baladitya.

“If a jawan is at the border but wants a product delivered at residence, he should be able to do so by logging online.” Online ordering and inventory management will leave an audit trail, he said. “There is a trail for future audit to know if a particular decision was correct or incorrect. The answer for all this [corruption] lies with automation.”

Online ordering and inventory management will leave an audit trail, he said.

There is a trail for future audit to know if a particular decision was correct or incorrect. The answer for all this [corruption] lies with automation. 
M Baladitya, Air Vice Marshal & Chairman, CSD
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