Mother Dairy O.M

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MBA Batch 2009-11 Lovely Professional University

Overview Of The Company

Mother Dairy ± Delhi was set up in 1974 under the Operation Flood Programme, a wholly

owned subsidy of the National Dairy Development Board (NDDB), whose current chairman is

Dr. Amrita Patel. Currently, it is one of the largest milk (liquid/unprocessed) plants in Asia

selling more than 25 lakh liters of milk per day, thereby enjoying a market share of 66% of the

branded milk sales in Delhi. Other important markets include Mumbai, Saurashtra and

Hyderabad. Mother dairy ice-cream was launched in the year 1995 and has shown continuous

growth over the years, and today it boasts approximately 62% market share in Delhi and NCR.

Mother Dairy's range of products include the brands Mother Dairy (milk, milk products, curd, ice

cream, butter, etc), Dhara (range of edible oils) and Safal (range of fresh fruits and vegetables,

frozen vegetables, fruit juices).

Mother Dairy Fruit and Vegetable Pvt. Ltd. offers the following products: Mother Dairy markets

dairy products like Liquid Milk, Ice Creams, Flavoured Milk, Dahi, Lassi, Mishti Doi, Ghee,

White Butter, Table Butter, Cheese, UHT Milk, Dhara range of edible oils and the Safal range of

fresh Fruits & Vegetables, Frozen Vegetables and Fruit Juices at a national level, through its

sales and distribution networks, for marketing food items. Mother Dairy milk (Bulk Vended

Milk) is fortified with vitamin A @2000 IU per litre of milk as a part of social accountability.

This program was started with the Mother Dairy, Delhi, since February 1980and there after

Mother Dairy is continuing this program on their own as a social responsibility without having

any financial assistance from the Government as well as since it is felt that BVM is generally

consumed by the middle / lower middle / poor strata of the society. It is also found that thedietary practices adopted by these classes are deficient in Vitamin A. Mother Dairy sources

significant part of its requirement of liquid milk from dairy cooperatives. Mother Dairy sources

fruits and vegetables from farmers / growers associations. Mother Dairy also contributes to the

cause of oilseeds grower cooperatives that manufacture/ pack the Dhara range of edible oils by

undertaking to nationally market all Dhara products.



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At Mother Dairy, processing of milk is controlled by process automation whereby state-of-the-

art microprocessor technology is adopted to integrate and completely automate all functions of

the milk processing areas to ensure high product quality/ reliability and safety. Mother Dairy is

an IS/ ISO-9002, IS-15000 HACCP and IS-14001 EMS certified organization. Moreover, its

Quality Assurance Laboratory is certified by National Accreditation Board for Testing and

Calibration Laboratory (NABL)-Department of Science and Technology, Government of India.

Mother Dairy markets approximately 2.8 million liters of milk daily in the markets of Delhi,

Mumbai, Saurashtra and Hyderabad. Mother Dairy Milk has a market share of 66% in the

branded sector in Delhi where it sells 2.3 million liters of milk daily and undertakes its marketing

operations through around 14,000 retail outlets and 845 exclusive outlets of Mother Dairy.

The company¶s derives significant competitive advantage from its unique distribution network of

bulk vending booths, retail outlets and mobile units. Mother Dairy ice creams launched in the

year 1995 have shown continuous growth over the years and today boasts of approximately 62%

market share in Delhi and NCR. Mother Dairy also manufactures and markets a wide range of

dairy products that include Butter, Dahi, Ghee, Cheese, UHT Milk, Lassi & Flavored Milk and

most of these products are available across the country.

The company markets an array of fresh and frozen fruit and vegetable products under the brandname SAFAL through a chain of 400+ own Fruit and Vegetable shops and more than 20,000

retail outlets in various parts of the country. Fresh produce from the producers is handled at the

Company¶s modern distribution facility in Delhi with an annual capacity of 200,000 MT. An IQF

facility with capacity of around 75 MT per day is also operational in Delhi. A state-of-the-art

fruit processing plant of fruit handling capacity of 120 MT per day, a 100 percent EOU, setup in

1996 at Mumbai supplies quality products in the international market. With increasing demand

another state-of-the-art fruit processing plant has been set up at Bangalore with fruit handling

capacity of around 250 MT per day.



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Quality Standards

Mother Dairy is an IS/ ISO9002 15000 HACCP and IS 14001 EMS certified organization.

Mother Dairy, Delhi has been awarded ISO 9001:2000 (Quality Management Systems), HACCP,

2002 RvA (Food Safety Management Systems) and ISO 14001:2004 (Environmental

Management Systems) Certifications. Moreover, National Accreditation Board accredits its

Quality Assurance Laboratory as per ISO/IEC 17025:1999 for Testing and Calibration

Laboratories, Department of Science and Technology, Government of India.

Product Range

S.No. Product Name Brand Name Items1. Milk and its Products Mother Dairy Packaged Milk (Full Cream,

Standardised, Toned, Double Toned

Skimmed and Pro-biotic), Butter, Dahi,

Ghee, Cheese, Ice-Creams, UHT Milk,

Lassi & Flavoured Milk.

2. Edible Oils Dhara Refined Vegetable Oil, Refined

Soybean Oil, Refined Sunflower Oil,

Refined Rice Bran Oil, Kachi Ghani

Mustard Oil and Filtered Groundnut

Oil.



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3. Fresh and frozen fruit and

vegetable products

Safal Fruits, Vegetables, Rice, Processed

items (jams, juices, ketchup, pulp, etc.)

Mother Dairy¶s has a varied range of products. The different products categories are explained

below:

MILK:

Packaged Milk is available in 5 different variants:

1. Full Cream milk - milk fat 6%, SNF 9%

2. Standardised milk - milk fat 4.5%, SNF 8.5%

3. Toned milk - milk fat 3%, SNF 8.5%

4. Double toned milk - milk fat 1.5%, SNF 9%

5. Skimmed milk - milk fat 0.5%, SNF 8.7%

Other than packaged milk, Bulk Vended Token Milk is also available which is distributed

through vending machines installed in different regions of the city.

The high quality variant of milk is also available under the brand name ok µMILK¶. It is thick &

completely natural, containing no preservations. It is referred with name of UHT (Ultra Heat

Treatment) Milk.

Mother Dairy also manufactures flavoured milk under the brand name of µCHILLZ¶. It is

available in three flavours namely Kesar Elaichi, Vanilla and Chocolate flavour.



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Milk Products:

Various milk products of Mother Dairy are:

1. Mother Dairy Ghee

2. Mother Dairy Butter

3. Mother Dairy Cheese

4. Mother Dairy Dahi (Curd)

5. Mother Dairy Lassi

Except all these milk products Mother

dairy also manufactures Ice Cream under two categories namely CHILLZ and Mother

Dairy Ice Cream.

PROBIOTIC:

It is the latest product range launched by Mother Dairy. It mainly contains BB-12 friendly

Bacteria which results in better digestion and absorption of nutrients. It also contains

probiotic fibre which also results in better digestion. The various products in this category

are:



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1. b-Activ Probiotic Dahi

2. b-Activ Probiotic Lassi

3. b-Activ Curd

4. Nutrifit (Strawberry & Mango)

SAFAL: Range of fresh foods & vegetables, frozen vegetables, fruit pulps and fruit juices etc.

DHARA: It has a popular range of edible oils in different types as refined soya bean oil, refined

sunflower oil and filtered ground nut oil etc.

Transformational Process

Firstly, the milk is collected in the plant from all dairy owners who supply the milk.

Secondly, Clarification, in which milk is spun at very high speed, removing all dust particles that

are invisible to the naked eye.



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Thirdly, Standardisation which helps to milk maintains uniformity by raising or lowering its fat

and SNF (solid not fat) percentage to desired levels, so as to deliver milk to consumers as per

prescribed PFA norms.

Fourth, it is Homogenization which improves palatability of milk and

Finally, Pasteurization, which kills all pathogenic bacteria present in the milk and thus making it

safe for consumption.

In case of packaged milk, the processing goes through only three processes (excludes

homogenization).

Input Collection of Milk

Clarification of Milk

Standardization of Milk



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Processing

Output

Facility Layout

Plant layout is arrangement of facility inside the factory location. Plant layout basically deals

with arrangement of equipments and machineries inside the factory building in such a manner,

which ensures smooth movement of man and materials inside the factory as well as the minimum

Homogenization of Milk

Pasteurization of Milk

Packing of Milk



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movement of man and material. It is the designing of factory place in optimum manner so as to

fit the manufacturing process. There are basically three types of layouts namely.

Product layout.

Process layout.

Mix layout.

Mother Dairy is organization which is engaged the continuous manufacturing process of various

milk products. As a result, it has developed the product layout which follows the continuous

manufacturing system. Under the product layout, product is given more emphasis than process

and machineries are engaged in the order in which the product is prepared.

Formerly it has the old factory structure in which old machines were performing the production

operation. This was taking too much time. Therefore company adopted modernization and set up

a totally automatic plant. As result it has developed a new plant layout at its premises to adjust

the automatic equipments and machineries.



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Product Layout

Milk:-

Raw chilled milk in tankers

Filter

Chiller

Milk Clarifier

Cream separator

Raw Milk Silo

Skim Milk Cream Balance Tank

Pasteurizer Cream Pasteurizer



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For the Manufacturing of processed milk products, everyday milk is bought from 1028 village

societies through truck. Since several no of chilling centers have been allotted to the village

societies according the quality of milk being collected. Milk sourcing is eliminated further the

trucks have the containers, which are thermoses shaped and hence protected the milk from

getting spoiled. The milk comes twice a day. Generally about 85% of milk is the buffalo¶s milk

and rest is cows. The company have capacity of handling 15 lakh liter milk per day.

Milk is received first at the raw milk receiving dock. The cans of milk are smelt washed and

sample of milk is taken. Chemicals and hot air then wash the cans. While milk is brought to

Mother Dairy, its temperature is generally 8 to 9 degree C. So milk is pasteurized that means it is

first heated at 70 to 80 degree C. this process kills the germs and bacteria from milk. Then milk

is chilled at 3 to 4 degree to protect from getting spoiled. Then milk is stored in bullet like

containers. Company has 8 such containers having the capacity of maintaining 15 lacks liter of

milk each.

The processed milk is thus used for producing milk products and the surplus milk sent villages

and big cities in packing for sale. There is pouch machine for fulfilling this purpose, which packs

500 gm. of milk in pouches.

Butter:-

Cream Storage TankMilk Separator

Issued to Butter SectionIssued to Powder Section

Raw Milk



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Separation &Skimming

Clarification

Pasteurization

Skimmed Milk Cream

Blending

Pasteurization

Standardized Milk Churning

Ripening of cream

Storage in consumer packs

Consideration of Milk

Butter

White Butter

PackingHomogenizationDispatch

Spray Drying Storage

Packing Dispatch

Dispatch

Storage



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Butter:-

In the plant, there is a machine called separator vessel, which counts the fats of the milk and

separate the excess fats from the milk. This excess fat is used to manufacturing butter. Butter is

manufactured from the fresh cream of the milk. The raw milk is weighted and poured into cream

separator. Pure fat on cream gets separated from milk. Then colored salt is added in it to make

butter. The processing of butter takes 7 min. butter making is however a continous process.

Almost 30 tones of butter are packed each day. Butter is then moved on the conveyor belt to

pack it in 100 gms. packing. The butter packets are then automatically moved into a box, which

contain specific number of butter packets as specified by the computer program formally.

Ghee:- Flavored Milk:-

Melting Vat

Melted Butter Pump

Tank

White Butter Receiving Milk

Standardization

Pre ± Heating at

60 c

Addition of Sugar



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Ghee:-

Melted Butter

Tank in Pot

Open Butter

Valve for Heating

Sampling

Ghee Buffer Tank

Chilling at 5 c

Capping

Bottling

Addition of

flavors & colors

Sterilization

Storage

Dispatch



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Sour milk is used for the production of ghee. This milk is sent to the cream machine for

collecting cream. Cream is converted into butter and butter is heated to make ghee. Ghee is then

packed in tins or plastic bags in the packing of 1, 2, 3, 4, 5, and 15 kg.

Flavored Milk:-

Market milk form Mother Dairy is processed in this section marketed under the name of chillz.

It has four flavors i.e. Elaichi, Kesar, Cool Vanilla, Chocolate Swirl. The color is to different

flavors.

Milk Storing Vessels



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Facility Location

Plant location deals with the selection of optimum location for establishing industry. The

selection of location is affected by a variety of factors like:

Availability of raw material.

Proximity of market.

Availability of water, power etc.

Government policy.

Availability of finance.

Availability of labour.

Infrastructure facility.

Link with the transportation network.

Hence location decision should be taken with proper care and understanding after evaluating the

each of above factors.

As far as Mother Dairy is concerned, it has selected the best location. This is because it is based

on the availability of milk and it involves number of village surrounding an and which are main

sources of for getting milk since the villagers mainly depend on selling milk to earn income.

Further location is very near to milk to market since milk is prime requirement of every house.

Labor is cheaply available with various kinds of skills required. The location is linked with

national highways and railway, thus having good transportation facilities. Also it has a good



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market near where it could sell it products. Besides it has developed better infrastructure

facilities at its plants. Thus Mother Dairy has chosen best location for it.

Villages (from where the milk is collected)

Small Towns (Milk is also collected from there)

Labor is also cheaply available

(People come from nearby town & vill.)

Good market is also near

The location where it could

Sell its products.

Road transport is a convenience convenience of a railway is also

(National Highway is nearby Location) (Station is not so far from location)

Location

Mother Dairy



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Capacity Planning:

With the day by day increasing market and competition the organization has set its capacity

planning. Armed with a slew of launches and a fresh media campaign, one of the major players

in the branded milk segment is targeting to close the current year with a 50 per cent increase in

turnover.

"Looking at the market trend, it is expected that market will grow day by day. Currently the

market size for milk (sold in loose or packaged) is estimated to be 36 million MT valued at

Rs.470bn. Elaborating on the consolidation and restructuring exercise undertaken by the

company during the last few years the company is targeting to increase its market share by

increasing its capacity planning.

The market is giving great response to these milk products so company is planning to fully

utilize the capacity of its plants. Mother Dairy sells 14.5 lakh litres per day of branded packaged

milk, said a senior official. It is all set to achieve a growth of 20 per cent this fiscal year to touch

Rs 8000 crore sales turnover. Mother Dairy still enjoys largest share in overall liquid milk

market in Delhi with sales of 27 lakh litres per day. The liquid milk market in the capital is more

than 55 to 60 lakh litres per day. It is now charged up to strengthen its existing market share of about

55 per cent in the branded milk segment along with sprucing up its distribution and vending points. The

company currently has over 500 distributors and about 4,500 sub dealers. It has set up more than 300

vending machines across Delhi and NCR. "We want to increase our penetration in the semi-urban and

rural market. At present, we are available in over 700 towns. We propose to double this count," he said.

Commenting on the one new variant of flavored milk and ice cream that the company is set to launch, he

said, "A lot of research was done before launching these types of products. In fact, we have factored in

what the consumer wants in summers."

The company has a variety of products in its portfolio ranging from kids to adults.

The company is also thinking to increasing its milk capacity from 2.8 lakh million litres to round about

3.5 lakh million litres if the demand increases in the summer.



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Inventory Management

The organization that are engaged in the activity of production need to keep the stock of raw

materials as well as other part to support the uninterrupted production. At the same time, the

organization also has to store finished goods because it is not sure that the goods produced will

be sold immediately. Hence they have to be prevented against spoilage and breakage when they

are in stored in storage house.

Since milk is a perishable commodity, it has to be treated in a special manner in order to prevent

it from spoilage. Hence the milk is first of chilled at 3 to 4 C. Organization has developed the

bullet type storage towers which are implementing the concept of a thermos. It has 8 such

towers; each having the capacity of storing 1.5 lacks liters of milk. Thus the milk is stored in

such storage towers.

Quality Systems

In the year 2000, Mother Dairy Calcutta received ISO 9002 certification and in the year 2001

Mother Dairy received HACCP Certification. The certification agency is internationally

renowned D.N.V [DET NORSKE VERITAS, NETHERLANDS]. Mother Dairy has also

received Environment Excellence award [2000 - 2001]. In the year October'2003, Mother Dairy

received ISO 9001:2000 and the certification agency is SGS India Pvt. Ltd., a renowned London



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based Organization.ISO also revised to ISO 9001:2008. Mother Dairy was the first industry in

country to implement ISO-14031(Environment Performance Evaluation) project.

Stringent quality control methodologies are employed in Mother Dairy.

a) The milk is tested for adulterations and quality at the time of collection from the farmers.

b) The Milk that comes from the collection points to the Mother Dairy plant is ensured to have a

temperature of not more than 7°C and is subjected to 15 product and quality checks.

c) The Milk quality is checked repeatedly after each processing phase and the temperature is

judiciously maintained less than 5°C always.

d) Before the milk leaves the plant for the delivery/distribution outlets the milk is tested again.

e) The temperature of milk in the delivery trucks is always maintained less than 7°C.

f) All the trucks that deliver milk have specified guidelines to bring back 100 litres of milk after

distribution. This is done in order to test the delivered milk and to ensure that the tankers are

not adulterated during distribution.

g) Since all the employed processing procedures are automated, no contamination by human

hands takes place.

h)

To ensure milk freshness the collection and distribution points are always chosen such thatthe travel time between them is always less than 36 hours.



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Model Of Supply Chain Management

The organizations success also depends on how strong is supply chain management.

Below is a schematic display of Mother Dairy¶s Supply Chain Management.

With products being highly perishable, the supply chain ought to have to maintain correct temperature,

humidity etc and the chain should move fast.

To reach out its consumers more directly and let them the total brand experience, Mother Dairy has come

up with Milk Vending machines and its exclusive shop pies. They have come up in major cities like

Ahmadabad, Kolkata, Delhi, Delhi NCR, Mumbai, Hyderabad and Saurashtra already, and many more

starting up real soon. Till date there are about 400 parlours across the country. These parlours are set at



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prominent locations such as campuses of officies, temples, Metros etc.It has franchisee plans in regards to

open Mother Dairy parlours. This might start pretty soon, since the talk are almost at the end.

Now, going back to the supply chain of Mother Dairy, it has gone the e- commerce way. The 1st

initiatives taken for an ERP system was in ¶98. Consultancy Services was hired to guide in its

implementation. The implementation project was named as Enterprise- wise Integrated Application

System (EIAS). Automatic Milk Collection System units (AMCUS) at village societies were installed

in the first phase to automate milk producers logistics.It also connected its zonal offices, regional

offices and member¶s dairies through VSATs for seamless exchange of information. Mother Dairy is

also using Geographic Information Systems (GIS) for business planning and optimization of

collection processes.

References:

Documents

Mother Dairy O.M