Report on :
“amul’s supply
chain management”
Presented by :
1. ABHIJIT SIDHARTH (18202001)
2.ABHILASHA
MOHANTY(18202002)
3.ABHIPSA MISHRA (18202003)
4.ABHISEKH DAS(18202004)
5.ADITYA KUMAR RATH(18202005)
INTRODUCTION :
Amul is a dairy cooperative based in the Anand district of
Gujarat, India.
The word amul is derived from the Sanskrit word amulya, meaning
invaluable. The co-operative was initially referred to as Anand Milk
Federation Union Limited and hence the name AMUL.
Amul is that it is an organization that achieves economies of scale
through its simple supply chain while it thrives to redistribute wealth in
the society and creating many opportunities for the rural and weaker
sections of India.
Initially, the 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 milk in
individual containers.
These agents decided the prices and the off-take from the farmers by
the season. In winter, the producer was either left with surplus unsold
milk or had to sell it at very low prices.
With a turn over of $3.2 billion (2013), Amul is the largest food brand in India. Also,
Amul is the largest producer of milk and milk products in India.
The model of Amul is such that it benefits small producers like farmers, who
together form an integrated approach to form an economically large scale
business.
The model eliminates middlemen, bringing producers in direct contact with the
customers.
ABOUT AMUL :
Type Cooperative
Industry Dairy
Founded 1946
Rs 28000 Crores
Employees 750 ( Marketing employees)
3.6 million ( milk producing members)
SUPPLY CHAIN MANAGEMENT OF AMUL :
As shown in the figure, the supply chain of Amul consists of farmers who
produce milk from their cattle.
The farmers are organized into cooperatives called Village Cooperative
Societies (VCS).
These VCSs supply milk to thirteen different dairy cooperatives, called
Unions, of which Amul is one.
The milk or milk products made at these unions are supplied to the
Gujarat Cooperative Milk Marketing Federation (GCMMF).
The GCMMF is the marketing entity for the products of all the unions in
the state of Gujarat. GCMMF has 42 regional distribution centers in
India, serves over 500,000 retail outlets and exports to more than 15
countries.
All these organizations are independent legal entities yet loosely tied
together with a common destiny.
The ultimate goal of the GCMMF is to benefit the farmers through this
hierarchical supply chain that includes different kinds of entities ranging
from small suppliers to large fragmented markets.
The success of Amul can be attributed to the quality of products, the
economic pricing and the belief that it has instilled in its customers.
Inventory management is a challenge for this model because the product is
perishable.
Yet, Amul is regarded as having one of the best supply chain systems in the
world.
With over 3,500 distributors in the network, there are also 47 setups with
dry and cold warehouses for the range of products.
SUPPLY CHAIN PROCESS:
Production: Amul has a multi-tier model known as the Amul Model:
Milk collection happens at the Village Dairy Society
Milk procurement and processing at the District Milk Union
Milk and milk products marketing at the State Milk Federation.
This helps in eliminating not only internal competition but also ensuring
that economies of scale are achieved.
Milk collection from the village societies happens twice every day, in the
morning and evening.
This is then stored in chilling centers and sent to the laboratory for
testing.
After going through several rounds of testing, pasteurizing and
standardizing, separation, quality checks and packing, the milk
containers are sent to the storage unit.
STORAGE:
Milk is sent to the cold storage of the dairy, where it
is stored until it is dispatched.
About 40,000 litres of milk are dispatched from the
cold storage of the dairy plant everyday. The
damaged pouches are kept aside, while the milk is
once again sent to the storage tank.
Distribution: The product changes hands several times before reaching
the consumer. They are stored with
Distributors
Who sell it to wholesalers
Who sell it to retailers
Who sell it to the consumer
At the supply end, a computerized database has been setup for details of
the farmers and their cattle, and the quality and quantity of milk
collected.
Amul has installed over 3,000 automatic milk collection system units at
village societies to store farmer information, milk fat content and
amount payable to each farmer. Each farmer is given an ID card.
The amount payable to the farmer is calculated on the basis of the fat
content.
The value of the milk is printed out on a slip, so that the farmer can
collect the payment from the adjacent window.
Thus, the farmer gets the payment instantly. More than 5,000 trucks
transport milk from the source to 200 dairy plants twice a day.
Each Amul office sends daily reports on sales and inventory to the main
system at Anand.
Distributors are connected to Amul's network, so that they can place
their orders through the system. This is an apt example of Just-in-Time
system.
The establishment has come a long way: innovating, winning accolades
and even transitioning into the use of technology.
Amul is the largest producer of milk and milk products in the world.
It has set world best practices for dairy producers.
Amul’s wide success can be attributed to its robust supply chain
network, low cost policies, strong distribution network, and service
availability.
Every day, Amul collects 447,000 litres of milk from 2.12 million farmers,
converts the milk into branded, packaged products, and delivers goods
worth US$ 1 million to over 500,000 retail outlets across the country.
The establishment of Amul is popularly known as White Revolution. It
serves as the inspiration for the notable Indian film Manthan, which was
financed by over five lakh rural farmers in Gujarat who contributed Rs 2
each to its budget.
E-SUPPLY CHAIN MANAGEMENT :
Amul has installed over 3000 automatic milk collection system units(
AMCUS) at village societies to capture member information, milk fat
content and amount payable to each member.
Each member is given plastic card for indentification.
Computer calculate amount due to the farmer on the basis of the fat
content.
The value of the milk is printed out on the slip and handed over to the
farmer, who collects the payment.
Thus with the help of it farmer gets the payment within the minutes.
On the logistics, more than 5000 trucks move milk from the villages to
200 dairy processing plants twice a day according to a carefully planned
schedule.
Everyday Amul collects 7 million litres of milk from 2.6 million farmers,
converts the milk into branded, packaged products, and deliver goods
to over 5 lakh retail outlets across the country.
ERP software named as enterprise wide integrated application system
covers the operation like planning advertisements, promotion and
distribution network planning.
Each Amul office are connected via internet and all of them send daily
reports on sales and inventory to the main system at Anand.
