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AMUL

Business Model

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In a recent survey,

GCMMF ranked amongst the top ten FMCG firms in

the country

AMUL rated the second most recognized brand in

India amongst all Indian and MNC offerings

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What makes AMUL successful???

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Unique Characteristics

Inter-linkages between various environments that governedthe lives of marginal milk farmers and the unmet needs of theconsumers

Combined market and social development

Reduce the cost to the consumer while increasing the returnto the supplier

To be successful benefit of large number of consumers andsuppliers

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Goal long term development

Developing values in people and processes that were robust,

replicable and transparent.

Long term cost containment, world class deployment of 

technological resources and

R&D and better leveraging of scarce resources.

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Business Model

Objective :

 ± Deliver profitable and equitable returns to a large

number of farmers for a long period of time

Additional objective

 ± Develop the supplier over the long term through

social change.

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Success depends on

High collection rate of milk

Required increasing membership with more village societies

Better Cattle management- Better milk yield

Ensure cost to farmers and high quality to customer at lowprices

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Values

Charge for eachservice providedto the supplier

Purchase all milkthat memberfarmersproduced

Professional

managers, to runthe federationand unions

Upliftment of rural poor

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Developing Demand

Consumers- Limited Purchasing power

Modest consumption levels of milk

Low cost price strategy

Products affordable & attractive

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Distribution Network

Dry and cold warehouses to buffer inventory

Transactions on an advance demand draft basis

Just-in-time inventory strategy improves dealers'

return on investment (ROI)

All branches -dedicated vehicle operations.

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Umbrella brand

Common brand for most product categories

produced by various unions: liquid milk, milk

powders, butter, ghee, cheese, cocoa products,

sweets, ice-cream and condensed milk

Avoided inter-union conflicts

Opportunity for the union members to cooperate in

developing products.

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Third Party Service providers

Unions' core activity -milk processing and the production of 

dairy products.

Marketing efforts , brand development - By GCMMF

Logistics of milk collection, distribution of dairy products, sale

of products through dealers and retail stores, provision of 

animal feed, and veterinary services By Third Parties

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Co-ordination

Large number of organisations and entities in the supply chain

GCMMF and the unions play a major role in achieving control

Interlocking control - The board is drawn from the heads of all theunions, and the boards of the unions comprise of farmers electedthrough village societies

The federation handles the distribution of end products andcoordination with retailers and the dealers.

The unions coordinate the supply side activities.

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Best practices

Small group activities or quality circles at the federation

TQM program at the unions

Improvement programs across to a large number of membersand the implementation rate is consistently high

For example, every Friday, Meeting without fail, between

10.00 a.m. and 11.00 a.m to discuss quality concerns

Village societies becoming individual improvement centres