SUPPLY CHAIN MANAGEMENT

GROUP NO. 2

 AMIT RAI – 10
 SHUBHANGI CHOUHAN – 61

 KULVINDER PATHANIA – 27

 PRATEEK CHHABRA – 16

 ASHISH SONAWARE – 29

 GAURAV CHOUHAN – 57
 AMU
L
 Type Cooperativ
- e
 Industry Dair
- y
 Founded 194
- 6
 Key people Dr. Verghese
- kurien
 Revenue INR 67.11billion (2008-
- 2009)
 Employee Marketing arm:
- 735
Milk producers: 2.8
million
 KEY
FACTS
 AMUL means priceless in Sanskrit “Amoolya”

 Brand name managed by an apex cooperation organization –

GCMMF

 World’s biggest vegetarian cheese brand

 World’s largest pouched milk brand

 Largest food brand in India

 Spurred the white revolution in India

 Accreditation with 9001 and HACCP certification by QAS, Australia.

 GCMMF: AN
OVERVIEW
 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 liters per day
CONT…
 Milk collection (Total - 2008-09): 3.05 billion liters.

 Milk collection (Daily Average 2008-09): 8.4 million

liters

 Milk Drying Capacity: 626 Mts. per day

 Cattle feed manufacturing Capacity: 3500 Mts. per day

VALUE CHAIN
PROCESS
 AMUL PRODUCT’S
DIVERSIFICATION

Dairy
• Cheese Products
• Bread Spreads Non-Dairy
• Milk Drinks & Desserts
• Instant Food
• Fresh Milk
• Snacks
• Veg. Oils
 PRODUCTS

 Bread Spreads

 Milk Drinks

 Powder Milk

 Fresh Milk

 Cheese

 For Cooking

 Chocolate
MARKET
SHARE
PRODUCT
SHARE
 Amul butter - 86%

 Ice cream - 36%

 Chocolate - 10%

 Ghee - 20%

 Skimmed milk powder -

40%
 PROBLEMS TO BE
ADDRESSED
I. Logistics in collection –

 6 million liters of milk per day

 From about 10,600 separate village cooperative
societies.
 Approximately 2.8 million milk producing member.

II. Logistic in coordination of –

 Storing the milk.

 Processing the milk.
 Distributing the milk.
CONT
….
III Supplier logistics
.
–
 Weighing the milk.
 Determining of fat content.
 Calculation of the purchase
price.
 EVOLUTION OF
“IT”
 The evolution of IT in AMUL was took place in the guidance
of DR.B.M Vyas.

 The milk collection center at village cooperative societies,

were first automated.

 Application and utilization of GIS.

 Data analysis software utilization for milk production

estimation and increasing productivity.

 VATS network between all the level of distribution network

and GCMMF.
 SHIFT
PROCESS
 The company zeroed in on ERP as means to keep
pace with dynamically changing business
environment.

 TCS was hired to guide them in its implementation.

 The project was named as Enterprise wise integrated

application system (EIAS)
 IMPLEMENTATIO
N
 Amul start implementation of ERP in phases.

 Automatic milk collection system units(AMCUS) at

village society were installed in the first phase to
automate milk production logistics.

 AMCUS facilities to capture member information, milk

fat content, volume collected, and amount payable to
each member electronically.
CONT
….
 Amul also connected its zonal offices, regional
offices and member’s dairies through VSATs.
 The customized EIAS has
been
ERP-implemented across the
organization
integrating various operational departments.
 Amul is also using Geographic Information
Systems (GIS) for business planning and
optimization of collection processes.
CONT
… Indian Institute of Management – Ahmedabad supplemented


Amul’s IT strategy by providing an application software – Dairy

Information System Kiosk(DISK) to facilitate data analysis and
decision support in improving milk collection.
 The kiosk would also contain an extensive database on the
history of cattle owned by the farmers, medical history of the
cattle, reproductive cycle and history of diseases.
 Farmers can have access to information related to milk
production, including best practices in breeding and rearing
cattle.
 As a large amount of detailed history on milk production is
available in the database, the system can be used to forecast
milk collection and monitor the produce from individual sellers.
CONT
…
 The kiosk would also contain an extensive database
on the history of cattle owned by the farmers, medical
history of the cattle, reproductive cycle and history of
diseases.

Farmers can have access to information related to
milk production, including best practices in breeding
and rearing cattle.

As a large amount of detailed history on milk
production is available in the database, the system
can be used to forecast milk collection and monitor
the produce from individual sellers.
AUTOMATIC MILK COLLECTION SYSTEM
UNITS (AMCUS)
 REAPING
RETURNS
 Radical changes in business processes -
eliminating middlemen .
 Improved delivery mechanisms and transparency of
business operations.
 Due to this process, AMUL is able to collect six million litres
of milk per day.
 Huge reduction in processing time for effecting payments to
the farmers from a week to couple of minute.
 Processing of 10 Million payments daily,
amounting to transactions worth USD 3.78 million in
cash.
CONT
..
Movement of 5000 trucks to 200 dairy processing plants twice a day
in a most optimum manner.
 Practicing just in time supply chain management with six
sigma
accuracy.
 Online order placements of Amul’s products on the web.

 Distributors can place their orders on the website.

 Amul exports products worth around US$ 25 million to countries in

West Asia, Africa and USA.
 TOTAL QUALITY MANAGEMENT
MODEL
 There is improvement in quality of milk in term of acidity and
sour milk.

 Sabor milk union records show 2% reduction in the amount of

the sour milk received from the union.

 Improved microbiological quality of

upcoming raw milk in the form of methylene
blue reduction.

 This gives better shelf life to the product.

 Program like Red Tag Day was launched for cleaning the milk
 AMUL
PATTERN
A three tier cooperative structure:

 Dairy cooperative society at village

level

 Milk union at district level

 Milk federation at state level

 ORGANIZATION
LEVEL STRUCTURE
MEMBERS DECISION-MAKING
District level • Price paid to district
State Chairpersons, Registrar unions (fixed across
of Co-operatives,
Federation NDDB Representative,
unions)
Technical Expert, CEO
• Product mix and
quantity

Chairpersons of Village • Price paid to village

District Dairy Co-operative
co-operative societies
Societies, BOD, MD

• Membership
Milk Producers, •Price paid to milk
Village Managing Committee suppliers
 VILLAGE DAIRY COOPERATIVE SOCIETY
(VDCS)
 Collection of surplus milk & payment based on quality
& quantity.

 Providing support services to the members.

 Selling liquid milk for local consumers of the village.

 Supplying milk to the District Milk Union

DISTRICT COOPERATIVE MILK PRODUCERS’
UNION
(MILK UNION)
 Procurement of milk from the Village Dairy Societies of
the District.

 Arranging transportation of raw milk from the VDCS to

the Milk Union.

 Providing input services to the producers.

 Conducting training on Cooperative development

CONT
..
 Providing management support &
regular supervision to the VDCS.

 Establish Chilling Centers & Dairy Plants for processing the

milk.

 Selling liquid milk & milk products within the District.

 Process milk into various milk & milk products.

 Decide on the prices of milk to be paid to milk producers.

 STATE COOPERATIVE MILK FEDERATION
(FEDERATION)
 Marketing of milk & milk products
 Establish distribution network

 Arranging transportation from the Milk Unions to the market.

 Creating & maintaining a brand

 Providing Technical Inputs, management support & advisory services.

 Decide on the products to be manufactured at various Milk Unions

(product-mix)
 Conduct long-term Milk Production, Procurement,
Processing & Marketing Planning
 Conflict Resolution & keeping the entire structure intact
GCMMF’S SUPPLY
CHAIN
 DISTRIBUTION
PROCESS
Company
Dealer
Franchisee
Wholesaler

Retailer

Shopkeep
THE CHANNEL
NETWORK

 Procurement channel- upstream flow

 Distribution channel- downstream

flow
 PROCUREMEN
T
 Activities at the village level comprised developing and servicing the
VCSs.

 Increasing milk collection, procuring milk, and transporting it to the

chilling and processing units twice a day.

 The VCSs provided the farmers with good qualityanimal

feed, fodder, and other services like veterinary first aid.
PROCURNMENT
CHANNEL
 On an average around thousand farmers come to sell milk at
their local co-operative milk collection center.
 Each farmer has been given a plastic card for identification.
 At the milk collection counter, the farmer drops the card into a
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.
 Both these details are recorded in the PC. The computer then
calculates the amount due to farmer on the basis of the fat
content.
 The value of the milk is then printed out on a slip and handed
over to farmer who collects the payment at adjacent window.
 COLD STORAGE
NETWORK
 Chillers in proximity of villages

 Prompt transport to district facilities for further dispatch

to consumers/ processing units.

 Chilled trucks to transport processed products

 Delivery to local chillers by insulated rail tankers and

chilled trucks.

 Refrigerators and freezers with retailers and departmental

stores to retain freshness.
 DISTRIBUTIO
N
 GCMMF coordinated with various unions to get a regular supply of milk
and dairy products.

 The processed milk and dairy products were procured from district
dairy unions and distributed through third party distributors.

 To ensure quality and timely deliveries, GCMMF and the district unions
had several mechanisms in place.

 The unionsmonitored the supplies of milk and the

distribution of
finished products.
 DOWNSTREAM
FLOW
 First leg
 Manufacturing units to company depots using 9 and 18
MT trucks
 Frozen food-below 18C

 Dairy wet-0-4C

 Second leg
 Depots to WDs
 Transport through insulated 3 and 5 MT TATA 407’s

 Third leg
 WDs to retailers
 Transport through rickshaws according to the beat plan
 REVERSE
LOGISTICS

MILK CHURN
 from dairy to VCS

POUCH MILK TRAY

from retailer to dairy

BOTTLE
from retailer to dairy

DAMAGED PRODUCTS
from customer to retailer then to
dairy
 LESSONS FOR MANAGING LARGE
NETWORKS
 Long term perspective

 Simultaneous development of markets and

suppliers.

 Network partnership Vs. ownership

 Cost leadership and value for money

 Technology and Information Sharing

 DIRECT
RETAILING
 Amul has recentlyentered into direct retailing through
"Amul Utterly Delicious" parlors created in major
cities.

 Amul has plans to create a large chain of such

outlets to be managed by franchisees throughout the
country.

 More than 2000 parlor with a turnover of 200 crore.

 EXPANSION
PLAN
 Tie up with the Wal Mart

 Export is in 15 countries.

 Plan to open 10000 Amul parlor by the end of the

2010.
 MISSION
2020
Very ambitious future plan –

 Turnover of 27000 crore.(three fold increase in the group turn

over.)

 Milk production 33.1 million liter/day.

 Milk drying capacity 200 mt/day

 AMUL (RECENTLY IN
NEWS)
 Milk via milk train.

 Tie up with Adani Logistics.

 50 wagon each capacity 24k liter.

 Initial transport cost was 40 crores ,reduce it to

half.
THANK YOU………..