A project Report on
“LOGISTICS AND SUPPLY CHAIN MANAGEMENT OF AMUL MILK” Submitted by AKANSHA JAISWAL AT AMUL GUJARAT COOPERATIVE MILK MARKETING FEDERATION LIMITED
A report submitted in partial fulfillment of the degree of MBA program of the
SCHOOL OF ECONOMICS, DAVV INDORE
MESSAGES:FUTURE INDIA A DREAM OF SHRI SHRI MAHATAMA GANDHIJI, SHRI SARDAR VALLABHAI PATEL, SHRI LAL BAHADUR SHASTRI & KARMA YOGI DR.V.KURIEN The main priority of every nation is to ensure food security for its citizens. The best way to achieve this goal in a harmonious and sustainable manner is by ensuring economic wellbeing of the men and women who feed our nation. The founding fathers of our nation had clearly elucidated that farmers are the backbone of India and unless they prosper, our nation cannot realize its growth potential. Sardar Vallabhbhai Patel knew that India will achieve true independence only when economic welfare of its farmers is assured.To achieve his vision, he inspired creation of institution like AMUL, which are responsive to the genuine needs of rural India. Shri Lal Bhadur Shasrti strongly believed that our farmer will make our country self sufficient in terms of foodrequirement provided they are adequately supported with appropriate public policies with respect to input ant output pricing and marketing. Shastriji repeatedly emphasized the fact that our food security systems should be largely based on domestic production, since agriculture provides livelihood to a vast majority of our population. During his tenure as Prime minister he inspired creation of institutional structures which enabled India to achieve self-reliance in the dairy sector. Mahatma Gandhi had repeatedly asserted that ‘REAL INDIA” lives in its VILLAGES. He stressed emphatically on leveraging the ‘cooperative form of organization’ as an effective instrument of rural development. Sardar Vallabhbhai Patel had great faith in co-operation as means of promoting farmer’s well being. He was the prime source of inspiration behind “AMUL” condition of rural India.
“India is on a passage to prosperity. Health, Wealth and Knowledge are the three vehicles for his growth. People of India have started feeling an inner strength and hope to make this dream a reality by year 2020”
DECLARATION I hereby declare that the information given herein after , statements and related papers enclosed along with this report , are to the best of my knowledge and belief, true and correct in all respects.
ACKNOWLEDGEMENT With immense pleasure , I would like to present this project report for GUJARAT COOPERATIVE MILK MARKETING FEDERATION LIMITED,ANAND. It has been an enriching experience for me to undergo my summer training at AMUL which would not have been possible without the goodwill and support of the people around. As a student of Master of Business Administration ,Devi Ahilya vishwa vidyalaya ,Indore I would like to express my sincere thanks to all those who helped me during my practical training programme. Words are insufficent to express my gratitude to my company guide Mr.Dinesh Mehrotra(Milk Marketing Manager, AMUL) who inspite of his busy schedule has co-operated with me continuously and indeed his valuable contribution and guidance have been certainly indispensible for my project work. I would like to give my heartiest thanks for his invaluable support and guidance which helped me to do the project I am also grateful to my parents and friends for giving me moral support and constant encouragement. However. I accept the sole responsibility for possible error of omission and would be extremely grateful of this project report if they bring such mistakes to my notice.
CONTENTS •
INTRODUCTION AND HISTORY
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FMCG PRODUCTS
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INDIAN FMCG SECTOR
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COMPANY’S PROFILE- An Overview
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GCMMF: An Overview
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STRUCTURE OF AMUL
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GCMMF VALUE CHAIN
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AMUL PATTERN
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SUPPLY CHAIN OF AMUL POUCH MILK: MARKET RESEARCH DISTRIBUTERS SURVEY ANALYSIS ON AMUL POUCH MILK RETAILER SURVEY ANALYSIS ON AMUL POUCH MILK CUSTOMERS SURVEY ANALYSIS ON AMUL POUCH MILK
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MAJOR FINDINGS RELATED TO: PLANT DISTRIBUTERS RETAILERS CUSTOMERS
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SUGGESTIONS AND FEEDBACK
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QUESTIONNAIRE
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BIBLIOGRAPHY
PREFACE
The M.B.A programme is well structured and integrated course of business studies. The main objective of practical training at M.B.A level is to develop skill in student by supplement to the theoretical study of business management in general. Industrial training helps to gain real life knowledge about the industrial environment and business practices. The M..B.A programme provides student with a fundamental knowledge of business and organizational functions and activities, as well as an exposure to strategic thinking of management.
In every professional course, training is an important factor. Professors give us theoretical knowledge of various subjects in the college but we are practically exposed of such subjects when we get the training in the organization. It is only the training through which I come to know that what an industry is and how it works. I can learn about various departmental operations being performed in the industry, which would, in return, help me in the future when I will enter the practical field. Training is an integral part of M.B.A and each and every student has to undergo the training for in a company and then prepare a project report on the same after the completion of training. During this whole training I got a lot of experience and came to know about the management practices in real that how it differs from those of theoretical knowledge and the practically in the real life. In todays globalize world, where cut throat competition is prevailing in the market, theoretical knowledge is not sufficient.
INTRODUCTION AND HISTORY
The Kaira District Cooperative Milk Producers’ Union Limited was established on December 14, 1946 as a response to exploitation of marginal milk producers in the city of Anand (in Kaira district of the western state of Gujarat in India) by traders or agents of existing dairies. Producers had to travel long distances to deliver milk to the only dairy, the Polson Dairy in Anand – often milk went sour, especially in the summer season, as producers had to physically carry in individual containers. These agents decided the prices and the off-take from the farmers by the season. Milk is a commodity that has to be collected twice a day from each cow/buffalo. In winter, the producer was either left with surplus unsold milk or had to sell it at very low prices. Moreover, the government at that time had given monopoly rights to Polson Dairy (around that time Polson was the most well known butter brand in the country) to collect milk from Anand and supply to Bombay city in turn(about 400 kilometers away). India ranked nowhere amongst milk producing countries in the world in 1946. The producers of Kaira district took advice of the nationalist leaders, Sardar Vallabhbhai Patel (who later became the first Home Minister of free India) and Morarji Desai (who later become the Prime Minister of India). They advised the farmers to form a Cooperative and supply directly to the Bombay Milk Scheme instead of selling it to Polson (who did the same but gave low prices to the producers). Thus the Kaira District Cooperative was established to collect and process milk in the district of Kaira. At the initial stage only 250 litres of milk was collected every day . But with the growing awareness of the benefits of the cooperatives, the collection of milk increased. Today AMUL Collects 8.4 millon litres per day.
Since milk was a perishable commodity it becomes difficult to preserve milk flora for a longer period. Besides when the milk was to be collected from the far places,there was a fear of spoiling the milk. To overcome this problem the union thought to develop the chilling units at various junctions, which would collect the milk and cool chill it , so as to preserve it for a longer period.
Village level cooperatives were established to organize the marginal milk producers in each of these villages. The first modern dairy of the Kaira Union was established at Anand (which popularly came to be known as AMUL dairy after its brand name). Indigenous R&D and technology development at the Cooperative had led to the successful production of skimmed milk powder from buffalo milk– the first time on a commercial scale anywhere in the world. The foundations of a modern dairy industry in India had just been laid as India had one of the largest buffalo populations in the world. We move to year 2000. The dairy industry in India and particularly in the State of Gujarat looks very different. India for one has emerged as the largest milk producing country in the world .Gujarat emerges as the most successful State in terms of milk and milk product production through its cooperative dairy movement. The Kaira District Cooperative Milk Producers’ Union Limited, Anand becomes the focal point of dairy development in the entire region and AMUL emerges as one of the most recognized brands in India, ahead of many international brands.
PHOTOGRAPH OF BHUMI PUJAN OF AMUL
Looking back on the path traversed by Amul, the following features make it a pattern and model for emulation elsewhere. AMUL has been able to: 1. Produce an appropriate blend of the policy makers farmers board of management and the professionals 2. Bring at the command of the rural milk producers the best of the technology and harness its fruit for betterment. 3. Provide a support system to the milk producers without disturbing their agro- economic systems, 4. Plough back the profits, by prudent use of men, material and machines, in the rural sector for the common good and betterment of the member producers 5. Even though, growing with time and on scale, it has remained with the smallest producer members. In that sense. Amul is an example par excellence, of an intervention for rural change. The Union looks after policy formulation, processing and marketing of milk, provision of technical inputs to enhance milk yield of animals, the artificial insemination service, veterinary care, better feeds and the like – all through the village societies. Basically the union and cooperation of people brought Amul into fame i.e.AM UL a name which suggests THE TASTE OF INDIA.
FMCG PRODUCTS Products which have a quick turnover, and relatively low cost are known as Fast Moving Consumer Goods (FMCG). FMCG products are those that get replaced within a year. Examples of FMCG generally include a wide range of frequently purchased consumer products such as toiletries, soap, cosmetics, tooth cleaning products, shaving products and detergents, as well as other non-durables such as glassware, bulbs, batteries, paper products, and plastic goods. FMCG may also include pharmaceuticals, consumer electronics, packaged food products, soft drinks, tissue paper, and chocolate bar
INDIAN FMCG SECTOR The Indian FMCG sector is the fourth largest in the economy and has a market size of US$13.1 billion. Well-established distribution networks, as well as intense competition between the organised and unorganised segments are the characteristics of this sector. FMCG in India has a strong and competitive MNC presence across the entire value chain. It has been predicted that the FMCG market will reach to US$ 33.4 billion in 2015 from US $ billion 11.6 in 2003. The middle class and the rural segments of the Indian population are the most promising market for FMCG, and give brand makers the opportunity to convert them to branded products. Most of the product categories like jams, toothpaste, skin care, shampoos, etc, in India, have low per capita consumption as well as low penetration level, but the potential for growth is huge. The Indian Economy is surging ahead by leaps and bounds, keeping pace with rapid urbanization, increased literacy levels, and rising per capita income.
THE TOP 10 COMPANIES IN FMCG SECTOR S. NO. Companies 1. Hindustan Unilever Ltd. 2. ITC (Indian Tobacco Company) 3. Nestlé India 4. GCMMF (AMUL) 5. Dabur India 6. Asian Paints (India) 7. Cadbury India 8. Britannia Industries 9. Procter & Gamble Hygiene and Health Care 10. Marico Industries
NETWORK ADOPTION MODEL BY AMUL FOR ITS SUCCESS
It is interesting to note that AMUL has adopted the network model in early 1950s in a broader context and more complex environment, well before the approach was recognized in Western Europe and North America. In the following sections we describe the AMUL story and elaborate on its practices. Every day Amul collects 8.4 millon litres of milk from 2.6 million farmers (many illiterate), converts the milk into branded, packaged products, and delivers goods worth Rs 8crore (Rs 80 million) to over 12 millon retail outlets across India .Its supply chain is easily one of the most complicated in the world. Its motto is never forget your customer. If you don't, success is certain. The proof? A unique, Rs 8,000crore (Rs 80 billion) enterprise.
Organisation structure It all started in December 1946 with a group of farmers keen to free themselves from intermediaries, gain access to markets and thereby ensure maximum returns for their efforts.Based in the village of Anand, the Kaira District Milk Cooperative Union (better known as Amul) expanded exponentially. It joined hands with other milk cooperatives, and the Gujarat network now covers 2.12 million farmers, 10,411 village level milk collection centers and fourteen district level plants (unions) under the overall supervision of GCMMF. Markets are primitive and poor in infrastructure. Amul and GCMMF acknowledged that development and growth could not be left to market forces and that proactive intervention was required. Two key requirements were identified.
1. The first, that sustained growth for the long term would depend on matching supply and demand. It would need heavy investment in the simultaneous development of suppliers and consumers. 2. Second, that effective management of the network and commercial viability would require professional managers and technocrats.
To implement their vision while retaining their focus on farmers, a hierarchical network of cooperatives was developed, which today forms the robust supply chain behind GCMMF's endeavors. The vast and complex supply chain stretches from small suppliers to large fragmented markets. Management of this network is made more complex by the fact that GCMMF is directly responsible only for a small part of the chain, with a number of third party players (distributors, retailers and logistics support providers) playing large roles. Managing this supply chain efficiently is critical as GCMMF's competitive position is driven by low consumer prices supported by a low cost system.
Introducing higher value products Beginning with liquid milk, GCMMF enhanced the product mix through the progressive addition of higher value products while maintaining the desired growth in existing products . Despite competition in the high value dairy product segments from firms such as Hindustan Lever, Nestle and Britannia, GCMMF ensures that the product mix and the sequence in which Amul introduces its products is consistent with the core philosophy of providing milk at a basic, affordable price.
Managing the supply chain Even though the cooperative was formed to bring together farmers, it was recognised that professional managers and technocrats would be required to manage the network effectively and make it commercially viable.
Establishing best practices A key source of competitive advantage has been the enterprise's ability to continuously implement best practices across all elements of the network: the federation, the unions, the village societies and the distribution channel. In developing these practices, the federation and the unions have adapted successful models from around the world. It could be the implementation of small group activities or quality circles at the federation. O
Technology and e-initiatives GCMMF's technology strategy is characterized by four distinct components: new products, process technology, and complementary assets to enhance milk production and e-commerce. Few dairies of the world have the wide variety of products produced by the GCMMF network. Village societies are encouraged through subsidies to install chilling units. Automation in processing and packaging areas is common, as is HACCP certification. Amul actively pursues developments in embryo transfer and cattle breeding in order to improve cattle quality and increases in milk yields. GCMMF was one of the first FMCG (fast-moving consumer goods) firms in India to employ Internet technologies Today customers can order a variety of products through the Internet and be assured of timely delivery with cash payment upon receipt. Another e-initiative underway is to provide farmers access to information relating to markets, technology and best practices in the dairy industry through net enabled kiosks in the villages. GCMMF has also implemented a Geographical Information System (GIS) at both ends of the supply chain, i.e. milk collection as well as the marketing process.Farmers now have better access to information on the output as well as support services while providing a better planning tool to marketing personnel.
Gujarat Cooperative Milk Marketing Federation GCMMF: An Overview . Distribution Network of GCMMF: Most producers work with marketing intermediaries to bring their products to market. The marketing intermediaries make up a marketing channel also called distribution cannel. Distribution channels are sets of interdependent organizations involved in the process of making a product or service available for use or consumption. The Head Office of GCMMF is located at Anand. The entire market is divided in 5 zones. The zonal offices are located at Ahmedabad, Mumbai, New Delhi, Kolkata and Chennai. Moreover there are 49 Depots located across the country and GCMMF caters to 13 Export markets.
Gujarat Cooperative Milk Marketing Federation (GCMMF) is India's largest food products marketing organisation. It is a state level apex body of milk cooperatives in Gujarat which aims to provide remunerative returns to the farmers and also serve the interest of consumers by providing quality products which are good value for money. CRISIL, India's leading Ratings, Research, Risk and Policy Advisory company, has assigned its highest ratings of "AAA/Stable/P1+" to the various bank facilities of GCMMF. Members:
13 district cooperative milk producers' Union
No. of Producer Members:
2.79 million
No. of Village Societies:
13,328
Total Milk handling capacity:
11.22 million litres per day
Milk collection (Total - 2008-09): 3.05 billion litres Milk collection (Daily Average 2008-09):
8.4 million litres
Milk Drying Capacity:
626 Mts. per day
Cattlefeed manufacturing Capacity:
3500 Mts per day
Sales Turnover
Rs (million)
US $ (in million)
1994-95
11140
355
1995-96
13790
400
1996-97
15540
450
1997-98
18840
455
1998-99
22192
493
1999-00
22185
493
2000-01
22588
500
2001-02
23365
500
2002-03
27457
575
2003-04
28941
616
2004-05
29225
672
2005-06
37736
850
2006-07
42778
1050
2007-08
52554
1325
2008-09
67113
1504
LIST OF PRODUCTS MARKETED Breadspreads: • • •
Amul Butter Amul Lite Low Fat Breadspread Amul Cooking Butter
Cheese Range: • • • • • • • •
Amul Pasteurized Processed Cheddar Cheese Amul Processed Cheese Spread Amul Pizza (Mozarella) Cheese Amul Shredded Pizza Cheese Amul Emmental Cheese Amul Gouda Cheese Amul Malai Paneer (cottage cheese) Utterly Delicious Pizza
Mithaee Range (Ethnic sweets): • • • • • •
Amul Shrikhand (Mango, Saffron, Almond Pistachio, Cardamom) Amul Amrakhand Amul Mithaee Gulabjamuns Amul Mithaee Gulabjamun Mix Amul Mithaee Kulfi Mix Avsar Ladoos
UHT Milk Range: • • • • • • •
Amul Amul Amul Amul Amul Amul Amul
Shakti 3% fat Milk Taaza 1.5% fat Milk Gold 4.5% fat Milk Lite Slim-n-Trim Milk 0% fat milk Shakti Toned Milk Fresh Cream Snowcap Softy Mix
Pure Ghee: • • •
Amul Pure Ghee Sagar Pure Ghee Amul Cow Ghee
Infant Milk Range: • • •
Amul Infant Milk Formula 1 (0-6 months) Amul Infant Milk Formula 2 ( 6 months above) Amulspray Infant Milk Food
Milk Powders: • • • •
Amul Full Cream Milk Powder Amulya Dairy Whitener Sagar Skimmed Milk Powder Sagar Tea and Coffee Whitener
Sweetened Condensed Milk: •
Amul Mithaimate Sweetened Condensed Milk
Fresh Milk: • • • • • •
Amul Amul Amul Amul Amul Amul
Taaza Toned Milk 3% fat Gold Full Cream Milk 6% fat Shakti Standardised Milk 4.5% fat Slim & Trim Double Toned Milk 1.5% fat Saathi Skimmed Milk 0% fat Cow Milk
Curd Products: • • • •
Yogi Sweetened Flavoured Dahi (Dessert) Amul Masti Dahi (fresh curd) Amul Masti Spiced Butter Milk Amul Lassee
Amul Icecreams: • • • • • •
Royal Treat Range (Butterscotch, Rajbhog, Malai Kulfi) Nut-o-Mania Range (Kaju Draksh, Kesar Pista Royale, Fruit Bonanza, Roasted Almond) Nature's Treat (Alphanso Mango, Fresh Litchi, Shahi Anjir, Fresh Strawberry, Black Currant, Santra Mantra, Fresh Pineapple) Sundae Range (Mango, Black Currant, Sundae Magic, Double Sundae) Assorted Treat (Chocobar, Dollies, Frostik, Ice Candies, Tricone, Chococrunch, Megabite, Cassatta) Utterly Delicious (Vanila, Strawberry, Chocolate, Chocochips, Cake Magic)
Chocolate & Confectionery: • •
Amul Milk Chocolate Amul Fruit & Nut Chocolate
Brown Beverage: •
Nutramul Malted Milk Food
Milk Drink: • • •
Amul Kool Flavoured Milk (Mango, Strawberry, Saffron, Cardamom, Rose, Chocolate) Amul Kool Cafe Amul Kool Koko
•
Amul Kool Millk Shaake (Mango, Strawberry, Badam, Banana)
Health Beverage: •
Amul Shakti White Milk Food
Achievements of GCMMF •
2.8 million milk producer member families
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13,759 village societies
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13 District Unions
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8.5 million liters of milk procured per day
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Rs. 150 million disbursed in cash daily
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GCMMF is the largest cooperative business of small producers with an annual turnover of Rs. 53 billion
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The Govt. of India has honoured Amul with the “Best of all categories Rajiv Gandhi National Quality Award”.
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Largest milk handling capacity in Asia
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Largest Cold Chain Network
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48 Sales offices, 3000 Wholesale Distributors, 5 lakh retail outlets
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Export to 37 countries worth Rs. 150 crores
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Winner of APEDA award for nine consecutive years
GCMMF (AMUL) has the largest distribution network for any FMCG company. It has nearly 50 sales offices spread all over the country, more than 3,000 wholesale dealers and more than 5,00,000 retailers.
EXPORTS OF AMUL
GCMMF is India's largest exporter of Dairy Products. It has been accorded a "Trading House" status. GCMMF has received the APEDA Award from Government of India for Excellence in Dairy Product Exports for the last 11 years. The major export products are: Consumer Packs • • • • • • •
•
Amul Pure Ghee Amul Butter Amul Shrikhand Amul Mithaee Gulabjamun Nutramul Brown Beverage Amul Cheese Amul Malai Paneer • Amul UHT Milk (Long Life) • Amul Gold Milk • Amul Taaza Double Toned Milk • Amul Lite Slim and Trim Milk Amul Fresh Cream
Bulk Packs • •
Amul Skimmed Milk Powder Amul Full Cream Milk Powder
Many of our products are now available in the USA, Gulf Countries and Singapore
Amulya have made Amul a leading food brand in India. (Turnover: Rs. 80 billion in 2009-10). Today Amul is a symbol of many things. Of high-quality products sold at reasonable prices. Of the genesis of a vast co-operative network. Of the triumph of indigenous technology. Of the marketing savvy of a farmers' organisation. And of a proven model for dairy development.
STRUCTURE OF AMUL 2.79 millon milking farmers 13000 village co-operaive societies 13 District Co-operative Milk producers Union+1 Mother dairy Amul Dairy ,Anand Dudhsagar Dairy,Mehsana Sabar Dairy,Himmatnagar Banas Dairy,Palanpur Baroda Dairy,Baroda Sumul Dairy,Surat Panchamrut dairy,Godhra Uttam Dairy, Ahmedabad Rajkot Dairy, Rajkot Vasudhara Dairy, Valsad Dudhdhara Dairy, Bharuch
Gandhinagar Dairy, Gandinagar Cheese Plant, Khatraj Vidya Dairy, Anand Poly film plant, Gandhinagar Mother Dairy , Gandhinagar GCMMF LTD.(State level apex body - Gujrat Co-operative milk marketing Federation) Plants of Amul in Delhi/NCR region 1.Manesar plant(Gurgaon)- 10 lakh litres per day 2.Goga plant(Baghpath, U.P)-3 lakh litres per day 3.Kwality plant(Palwal)- 3 lakh litres per day 4.Nagar dairy(Hapur)-3.75 lakh litres per day Nagar dairy has 150 distributers in NCR region and 60 distributers in Noida and Ghaziabad region
GCMMF VALUE CHAIN IN NOIDA AND GHAZIABAD : 1. Production of milk
2. Milk collection
3. Milk processing
4.GCMMF(Marketing) 5.Distribution
6.Retailing
7.customers
The above figure describes the hierarchical nature of the cooperative structure. It presents the Supply chain linking farmer-suppliers of milk with the millions of consumers. Gujarat Cooperative Milk Marketing Federation or GCMMF is the marketing entity for the State of Gujarat..
AMUL PATTERN
3 tier structure of Amul 1.Village Dairy Cooperative Society (VDCS) The milk producers of a village, having surplus milk after own consumption, come together and form a Village Dairy Cooperative Society (VDCS). The main functions of the VDCS are as follows: •
Collection of surplus milk from the milk producers of the village & payment based on quality & quantity
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Providing support services to the members like Veterinary First Aid, Artificial Insemination services, cattle-feed sales, mineral mixture sales, fodder & fodder seed sales, conducting training on Animal Husbandry & Dairying, etc.
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Selling liquid milk for local consumers of the village
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Supplying milk to the District Milk Union
Thus, the VDCS in an independent entity managed locally by the milk producers and assisted by the District Milk Union
2.District Cooperative Milk Producers’ Union (Milk Union) The Village Societies of a District having surplus milk after local sales come together and form a District Milk Union. The main functions of the Milk Union are as follows: •
Procurement of milk from the Village Dairy Societies of the District
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Arranging transportation of raw milk from the VDCS to the Milk Union.
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Establish Chilling Centres & Dairy Plants for processing the milk received from the villages.
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Selling liquid milk & milk products within the District
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Process milk into various milk & milk products as per the requirement of State Marketing Federation.
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Decide on the prices of milk to be paid to milk producers as well on the prices of support services provided to members.
3. State Cooperative Milk Federation (Federation) The Milk Unions of a State are federated into a State Cooperative Milk Federation. The Federation is the apex tier under the three-tier structure. The main functions of the Federation are as follows: •
Marketing of milk & milk products processed / manufactured by Milk Unions.
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Arranging transportation of milk & milk products from the Milk Unions to the market.
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Pooling surplus milk from the Milk Unions and supplying it to deficit Milk Unions.
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Arranging for common purchase of raw materials used in manufacture / packaging of milk products.
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Decide on the prices of milk & milk products to be paid to Milk Unions.
STEPS INVOLVED IN SUPPLY CHAIN OF AMUL POUCH MILK: A)Logistics in collection: a)8.4 million liters of milk collected daily. Procurement Channel •
Milking is done every morning and evening. On an average around 2.79 million milking farmers come to sell milk at their local-co-operative milk collection centers.
•
Each farmer has been given a plastic card for identification.
•
In this whole process the time consumed is about 3-4 hrs.
b) 13,000 village co-operative societies. • •
Collection of surplus milk from the milk producers of the village and paying them on the basis of quality & quantity. The Village Societies ( Milk Union in Gujarat) having surplus milk after local sales come together and gives the surplus milk to District Milk Union.
•
At the milk collection counter , the farmer drops the card into the box and the identification number is transmitted to a personal computer attached to the machine
•
The milk is then weighed and the fat content of the milk is measured by an electronic fat testing machine.
Cow milk fat-3-4% Buffalo milk fat -6-8% Fat rate- Rs.350 per Kg If the milk contains 6% then( for 1Kg 350* 0.06 =Rs.21) Lesser the fat in the milk , lesser will be the price paid to them. •
All the details are recorded in the computer. The computer then calculates the amount due to the farmers on the basis of the fat content given above.
•
The value of the milk is then printed out on a slip and handed over to the farmers.
•
The time consumed in this whole process is 5-6 hrs
B) Logistics in co-ordination of-
a) Storing the milk in chillers
The milk is stored in large chilling centres of the village co-operative societies. Around 43 chilling
centres.are present.
Then the milk is supplied to the 13 District Cooperative Milk Producers’ Union (Milk Union) through tanks having capacity of about 20,000L .After the whole demand of 13 unions are fulfilled the surplus milk is supplied to the Mother Dairy , Gandhinagar The district Union supplying milk in the Ghazianad and Noida region is Sabarkantha Dairy, Himmatnagar.
b) Processing of the milk at the milk Union(Sabarkantha Dairy)
Milk Processing Chart: Collection of Raw-Milk Electronic Milk Test Methyline Blue Reduction Test Purchasing And Standardizing Process Separation Process Quality Check Packaging Process Cold Storage
• • • • • • • • •
•
Tankers are received at the reception Dock
•
Tankers are checked whether they are sealed properly or not and a small amount of sample is taken for Quality check
•
If there is any quality deviation like acidity is above 0.135 and milk is
adulterated with urea, glucose, starch, vegetable oil then the whole tank is rejected .
1) After this further lab testing is done with the help of these two types of tests: i)Electronic milk test ii) Methyline blue reduction test Electronic Milk Test : Before pasteurizing the milk the samples are taken to the laboratory. In the laboratory with the help of machine called electronic milk tester, the proportion of SNF & FAT is checked with phosphate solution. When the colour of the milk becomes yellow, it is sent for pasteurisation. Methyline blue reduction test: Another test, which is taken in the laboratory, is called methyline blue reduction test.This test is conducted for checking for how long the milk will remain fresh. To check this, 10 ml of milk is taken and 1 ml of methyline blue solution is added to it. It is then kept under water at 57-degree C. After one hour, if the solution losses its colour than it is called raw milk. If the solution remains the same even after 5 hours than it is considered as fresh milk, which remains constant for a long period of time. The dairy fixes the proportion of FAT & SAF.
•
M
• •
Buffalo Cow
LK
•
•
F
• •
6% 4.5%
AT
•
S
NF • •
9% 4.5
%
After laboratory gives green signal and confirming the raw milk at the reception dock Gross weight of the tankers are taken and then the tankers are unloaded and their tare weight (empty weight) is taken. Net weight of the milk received = Gross weight - Tare weight
•
Then the milk is brought in to the house connected with the pump is sent to the milk processing plant for filtration.
• •
This is than chilled below 4 degree C in chillers and then stored in milk silos. After that milk is processed which has two steps i.e. pasteurizing and standardizing.
2. Pasteurizing & standardizing: After collecting and checking and conducting laboratory tests, the pasteurizing process is conducted. To pasteurized the milk means to kill all the germs in the milk by a particular method which was invented by a scientist called James Pasteur and so the name pasteurization. In pasteurizing, the milk is first heated at 80C to 82 C for 30 seconds and then it is immediately cooled below 4 C. By this method they destroy the pathogenic bacteria present in the raw milk. But if the right degree of temperature is not provided there are chances that the milk might still contain germs. After pasteurization the milk is again send to the chilling units (temp below 3 degrees) and then to the pasteurized Milk tank. After this process some milk goes to separator machine and remaining is proportionately sent for standardization.
Diagrammatic representation of Pasteurizer milk process
•
Standardization process is known such as it bifurcates the milk in 3 categories varying according to that FAT & SNF contents. The equipment named OSTA. Autostandardization adjusts the fat directly. The computer is just ordered whether gold or ,Taaza milk is to be rationed and the same will be received with appropriate contents.
Ready Milk = Pasteurised + Standardized. 3. Separation process: Separator machine separates two kinds of products, skimmed milk & cream, through channels. There are 100 disks fixed in separator machines, which revolve at 5000 rpm (revolution per minute). It is taken to the tanks, which has the capacity of 20000 litres. Whenever the milk is needed from the tank, it is tested in the laboratory and the deficit proportion fat is added by mixing cream. This process continues for 24 hours.
4. Quality Check Pasteurized milk is sent for a quality check in the Quality Assurance laboratory of the dairy plant. Within 14 seconds FAT and SNF proportion is received
5. Packing Process After this the milk is sent for packing to the milk packing station in the dairy plant. At the milk packing station(Nagar dairy) this whole process of processing of milk is again repeated . In the milk packaging station there are huge pipelines and behind each of them there is polyfill machine from which the material to pack milk comes out. The pouches are kept in the crates and stored in the cold room stores. 6. Storage Then the milk is sent to the cold storage of the dairy where the milk is stored until it is
dispatched. Here the milk is stored at temperature ranging from 5 C to 10 C, it is maintained with the help of exhaust fans having silicon chips. The damaged pouches are kept a side and the milk is once again put to the tank. • In the cold room the crates are stacked on the lorry and brought to the dispatch dock . From the dock they are loaded in the milk vans and finally dispatched to the distributers who supply it to the retailers and then the milk finally reaches the customers.
7 .Distributing and marketing of milk BY GCMMF. The marketing and distribution of milk processed and manufactured by milk unions is done by GCMMF. •
Distributers supply it to the retailers and then the milk finally reaches the
customers. • Arranges transportation of milk & milk products from the Milk Unions to the market. • GCMMF takes the daily demand from the distributers and accordingly inform it to the packing plant(Nagar
dairy)
A zero level of channel also called A direct marketing channel consists of a manufacturer selling directly to the final customers. A one level channel; contains one selling intermediary such as retailer to the final customers. A two level channel two intermediaries are typically wholesaler and retailer. A three level channel are typically wholesaler, retailer and jobber in between.
GCMMF has an excellent distribution. It is its distribution channel, which has made it so popular. GCMMF’s products like milk and milk products are perishable. It becomes that much important for them to have a good distribution.
Distribution Chart of GCMMF: • Milk • ADA • Wholesaler • Retailer • Customers We can see from above figure that GCMMF distribution channel is simple and clear. The products change hands for three times before it reaches to the final consumer. First of all the products are stored at the Agents end who are mere facilitators in the network. Then the products are sold to wholesale dealers who then sell to retailers and then the product finally reaches the consumers.
AMUL PARLORS Amul has come out with a unique concept of Amul Parlors. They have classified them under four types namely: · Center for excellence · On the Move · Amul Parlours · Amul Preferred Outlets
1.Center for Excellence: These Amul Parlours are specifically at a place, which has a class of excellence of its own. We can find such parlors at the Infosys, IIMA, NID Ahmedabad etc. 2.On the Move: These parlors are at the railway stations and at different state bus depots across different cities.
3.Amul Parlours: These parlors can be seen at different gardens across different cities. These are fully owned by Amul.
Amul Preferred Outlets: These are the private shops that keep the entire of product range of Amul. They also agree not to keep any competitor brands in the outlets. They can keep other brands that are in the non-competitor category.
MARKET RESEARCH
DISTRIBUTERS SURVEY ANALYSIS ON AMUL POUCH MILK This study attempts to find out the distributers supply chain of AMUL fresh milk to the retailers based on various key factors. The study was conducted as follows :
Sampling technique: Non- probability sampling Sample Unit: Distributers who are selling fresh milk Sample size: 20 respondents Method: Direct interview and questionnaire Data analysis method: Graphical method Area of survey: Noida and Ghaziabad
Q1. Mode of transport from the plant.: VEHICLE TATA 209 TATA 407 TATA 709 TATA 1109
CAPACITY(in crates) 260 360 664 900
INFERENCE:
Q2. Temperature of the milk at the time of delivery to the distributers:
INFERENCE: Average Temperature of the milk at the time of delivery to maximum no. of distributers is 7-9 degrees . This temperature is very close to the cold room storage temperature(6 degrees).
Q3. Time of delivery:
To the ADA:
To the retailers:
INFERENCE: Among the 20 distributers surveyed it was found that the 12 distributers (ADA) receive the milk from the Plant in the morning between 1:00am-3:00am and 8 0f them receive the milk at around 3:00pm-5:00pm in the evening. The morning supply reach the retailers between 3:00am-5:00am and evening supply reaches between 4:00pm-6:00pm.
RETAILER SURVEY ANALYSIS ON AMUL POUCH MILK This study attempts to find out the retailers supply chain of AMUL fresh milk to the customers based on various key factors. The study was conducted as follows : Sampling technique: Non- probability sampling Sample Unit: Retailers/Wholesalers who are selling fresh milk Sample size: 30 respondents Method: Direct interview and questionnaire Data analysis method: Graphical method Area of survey: Noida and Ghaziabad Q1. Milk storage capacity
INFERENCE Among 30 retailers surveyed it was found that around 14 of them had the mik storage capacity of 720L(60 crates), 12 of them had around 480L(40 crates ) and 4 of them had 240L(20 crates) storage capacity
Q2. Time of delivery:
INFERENCE The Retailers receive the milk from the ADA in the morning at at 5:30am and at around 4:00pm-6:00pm in the evening.Most of them were unsatisfied with the evening supply of milk.
Q3. Temperature of milk at the time of delivery to the retailers:
INFERENCE Average Temperature of the milk at the time of delivery to maximum no. of retailers is 910 degrees . The quality of the milk does not get detoriated if milk is retained at this temperature even for two days.
Q4. Mode of delivery to the customers
INFERENCE The survey conducted shows that every retailer delivers the milk packets at the door steps of the customers i.e the home delivery system through prepaid coupons or post paid coupons and approx 67% of their expected sales is through home delivery system and only 33% is by counter sales. Q6 .Are you satisfied with the existing supply chain?
Inference Most of the dealers (approx 90%) felt that AMUL’s existing supply chain is working very efficiently as they get timely supply of milk in the morning except in very rare cases. Approximately 80% were unsatisfied with the timings of the evening supply of milk.
CUSTOMERS SURVEY ANALYSIS ON AMUL POUCH MILK This study attempts to find out that consumers perception and how they scale AMUL on various factors key factors.The study was conducted as follows: Sampling technique: Non- probability sampling Sample Unit: Customers who consume milk Sample size: 40 respondents Method: Direct interview and questionnaire Data analysis method: Graphical method Area of survey: Noida and Ghaziabad Q1. No. of family members
INFERENCE The survey results shows that no. of family members in the area surveyed are mostly 4 including the working couples and their children or in rare cases grandparents were also present.
Q2 Mode of delivery
INFERENCE Among the customers surveyed most of the families had working parents of the age around 25-50 and so they preferred purchasing the milk through home delivery system i.e through prepaid coupons 23 and 12 through post paid coupons sand rest 5 of them brought through counter sales. Q3. Time of purchase:
INFERENCE Most of the customers (60%) preferred buying i.e through counter sales or getting the home delivery of milk in the morning between 6:00am -9:00am and in the evening (40%) between 6:00 pm -9:00 pm.
Q4. Temperature of the milk at the time of delivery to the customers.
INFERENCE Average Temperature of the milk at the time of delivery to most of the customers is 10-14 degrees . The quality of the milk does not get detoriated if milk is retained at this temperature even for two days.
Q5.Quantity consumed daily
INFERENCE The survey results shows that in majority of households about 2litres of milk is consumed daily. Milk is a commodity which is required on daily basis and so company must take more steps to enhance the sale of milk. Q6.Type of milk you consume daily
INFERENCE Out of the survey conducted it was found that around 12 customers prefer consuming toned milk,3 preferred double toned,25 preferred full cream and demand for standard milk is nil. The customers are mostly demand for full cream milk type.
MAJOR FINDINGS: PLANT SURVEY( NAGAR,HAPUR) FINDINGS: •
Raw milk is received by the Nagar dairy from Himmatnagar-based Sabarkantha
District Co-operative Milk Producers’ Union Ltd •
Turnover of the NAGAR plant 183 crores.
•
Total milk handling capacity -3.9 lakh litres
• Distance of member union from Plant-1100km • Type of vehicle used for carrying milk- TATA 407,709,1109 • Storage Temp of milk during transit-2.5 degrees • Average time of transit(union to plant) -30 hrs •
Cold room capacity & storage temperature- 5lakh litres , 5-6 degrees
•
No. of vehicles being loaded at plant-
•
Average time of loading per vehicle-1-2 hrs.
•
...
Details of vehicle being loaded from the plant: VEHICLE TATA 209 TATA 407 TATA 709 TATA 1109 TATA 25-15
CAPACITY(in crates) 260 360 664 900 1500
MACHINEY REQUIRED a) Auxiliary equipments: -, i) Milk tanks – 20-22 milk tanks come daily from Sabar Dairy Milk handling capacity of each tank- 20,000L ii) Feed milk pumps – for filtering milk b) Equipment for processing: i) Plate heat exchangers for milk, ii) HTST pasteurizers for milk, Pasteurization time 30seconds Pasteurization temperature 80-82 degrees
c) Instant Milk Chilling Unit, 2 chillers Chilling capacity of 1st chiller- 10,000L/Hr Chilling capacity of 2nd chiller-20,000L/Hr Temperature of the chiller 3 degrees
d) Milk silo – for storage Milk handling capacity of each silo- 50,000L Temprature of the Silo- 3 degrees
e) Milk packing machine 12 machines Each machine has 2 heads From 1 head comes out -45 pouches/min Total no. of pouches produced daily- 70,000 Daily dispatch of various types of milk from the plant.
Type of milk Amul Gold(full cream) Amul Taaza(toned milk) Amul slim $ trim(double toned
Volume in litres 2,30,000 1,90,000 18,000
milk)
ADA (Area delivery agent )Survey: A Survey was conducted on the supply chain of AMUL pouch milk in certain sectors of NOIDA AND GHAZIABAD FINDINGS. •
Milk in this area is comes to the distributers from the Nagar Dairy,Hapur
•
Temperature of the milk at the time of delivery to maximum no. of wholesalers is 7-9 degrees
•
It was found that the 60% of the distributers (ADA) receive the milk from the Plant in the morning between 1:00am-3:00am and 40% of them receive the milk at around 3:00pm-5:00pm in the evening.
•
The morning supply reach the retailers between 3:00am-5:00am and evening supply reaches between 4:00pm-6:00pm.
•
Expected sales of the ADA is ranging between 400crates-1400 crates.
Retailers Survey: A Survey was conducted on the supply chain of AMUL pouch milk in certain sectors of NOIDA AND GHAZIABAD. FINDINGS:
•
Retailers store the milk crates outside their shops or the APO .It was found that around 47% of the retailers had the milk storage capacity of 720L(60 crates)
•
Expected sales of the retailers was around 30-40 crates.
•
The Retailers receive the milk from the ADA in the morning at at 5:30am and at around 4:00pm-6:00pm in the evening .Most of them were unsatisfied with the evening supply of milk. Most of them were of the opinion that timely supply and distribution channel are the two main things which affect the sales of milk .Distribution channel efficiency plays an important role in maintaining the stocks and delivering it to the customers.
•
Average Temperature of the milk at the time of delivery to maximum no. of retailers is 9-10 degrees.
•
Approx 67% of their expected sales of the retailers is through home delivery system and only 33% is by counter sales.
Customers Survey: A Survey was conducted on the supply chain of AMUL pouch milk in certain sectors of NOIDA AND GHAZIABAD. FINDINGS: •
Respondents surveyed were in between the age of 20-50 years and had mostly 4 family members including the working couples and their children or in rare cases grandparents were also present.
•
In the survey majority of the contribution was made by the housewives and professionals.
•
Approximately 87.5% of customers surveyed preferred purchasing the milk (which is a daily necessity in every household) through home delivery system i.e the prepaid coupons and post paid coupons rather than purchasing the milk on the counter(only 23.5% of the customers)
•
Most of the customers (60%) preferred buying or getting the home delivery of milk in the morning between 6:00am -9:00am and in the evening (40%) between 6:00 pm -9:00 pm.
•
Average Temperature of the milk at the time of delivery to 47.5% of the customers is 10-14 degrees . During summers Approx. 15% of the customers are receiving the milk above 16 degrees and have complain regarding the curdling of milk.
•
In Majority of households about 2litres of milk is consumed daily
•
It was found that around 30% of the customers prefer consuming toned milk, only 7.5% preferred double toned, 62.5% preferred full cream and demand for standard milk is nil. Consumers prefer buying toned milk for their own consumption and for their children, and for making ghee and curd they mostly prefer full cream.
•
Curd available is a bit loose when made by the toned and double toned milk.
Temprature loss During the supply between farmers and village co-operative society
27 degrees
During the supply between village cooperative society and union
7 degrees
Temprature gain
During the supply between union and plant
3 degrees
During the supply between distributers
3 degrees
During the supply between dustributers and retailers
1 degrees
During the supply between retailers and customers
Approx. 2 degrees
During this whole channel the temprature maintainance is the most important factor to maintain the quality of milk and prevent bacterial growth (higher the temprature more the bacterial growth.) Proper care should be taken, specially regarding the temprature gain between the retailers and the customers .
Time in hours Time taken by farmers for milking
4hrs
Kept in chilling centres at VCS
6 hrs
Milk Processing at the Union
18-20 hrs
Time taken to reach the NagarPlant
30 hrs
Milk Processing at the plant 12 hrs Time taken to reach the distributers
2hrs
Time taken to reach the retailers
2 hrs
Total time taken in the milk procurement channel in the NOIDA AND GHAZIABAD region is around 72-76hrs or around 3days.
SUGGESTIONS AND FEEDBACK: •
Temperature maintenance at all levels of supply chain is a must ,in order to maintain the quality of milk , specially between retailers and customers ,where there is maximum temperature loss
•
Measures must be taken to minimize the temperature loss between ,the distributers and the plant and for this purpose the insulation of TATA ACE must take care of, and the retailers should have proper refrigeration facilities.
•
There must be greater retailers and distributers co-ordination and integration ,as some of the retailers were of the opinion that the behavior of distributers towards them were not up to the mark.
•
Retailers must get better understanding of customers needs and demands. Along with the milk ,GCMMF must also pay heed to availability of other products of Amul at the Amul parlors.
•
In order to increase the sale of milk in NCR region, the supply of milk to the distributers must be increased, as the retailers were having the storage capacity much more than their expected sales.
•
The plant ser milk timely in the evening.
