Amul Supply Chain Management by Krupesh Shah!!

Presented By:• Krupesh Shah• Prashant Deshmukh• Nasir Rafiq

• Hardikk Solankki• Grishma Sarangdhar

Faculty : Prof. Sundar Natraj

Infinitum Digital Pvt. Ltd.

• Based in the Anand district of Gujarat

• Initially referred as Anand Milk Federation Union Limited

• Triggered by exploitative trade practices & local trade cartel

• Kaira District Co-operative Milk Producers Union Ltd, formed in 1 December, 1946.

The Birth of Amul


Initial Challenges

• Milk producers has to travel long distance to deliver milk to Polson Dairy in Anand

• Agents decided the prices off-take by the season

• Kaira District Cooperative was established to collect and process milk

• Village level cooperatives organized the marginalmilk producers

• AMUL dairy, first modern dairy of the Kaira Union was established at Anand.


Product Range

• Bread Spreads• Cheese• Milk / Milk Powders• Beverage Range• Amul PRO• Ice Cream & Chocolates• Paneer

• Dahi• Ghee• Nutramul• Mithai Range & Mithai Mate• Fresh Cream• Pouch Butter Milk• Amul Cattle Feed




Amul Brand

• GCMMF (AMUL) has the largest distribution network for any FMCG company

• World's largest vegetarian cheese & pouched-milk brand

• Largest exporter of dairy products in the country

• Presence in over 40 countries of the world

• Most Trusted brand in Food & Beverages sector

• World Dairy Innovation Awards in 2014 for Best Marketing Campaign.


The Amul Model


• Farmers are organized into cooperatives called Village Dairy Cooperative Societies (VDCS).

• VDCS supply milk to different dairy cooperatives, called Unions

• The milk or milk products made at district unions are supplied toState Cooperate Milk Marketing Federation

• GCMMF is the marketing entity for the products of all the unions in the state of Gujarat

• GCMMF is India's largest food product marketing organization.


Functions of VDCS

Collect Milk from farmers

Provide support services to the members

Sell milk to local consumers

Supply milk to the District Milk Union

16,914 VDCS in Gujarat

1,44,500 VDCS across India


Functions of Federation

• Marketing of milk and milk products

• Arrange for transportation

• Support service to milk union

• Establish feeder-balancing dairy plants

• Decide the prices of milk and milk products

• Decide on the products to be manufactured

• Milk production, procurement and processing

• Arranging finance for the Milk Unions


Procurement Process

• 15 Million Milk Producers, 1,44,500 Dairy Cooperative Societies, 184 District Co-operative Unions and 22 State Marketing Federations

• Pre-defined routes & precise timetable

• Amul Co-operative dairy collects milk from 800 points

• Milk collection from village societies happens twice a day

• After testing, milk containers are sent to the storage unit

• 40,000 liters of milk are dispatched everyday


Distribution Network

• 53 sales offices

• 10,000 wholesale dealers

• 10 Lakh retailers

• 47 depots with dry and cold warehouses

• GCMMF transacts on an advance demand draft

• Just-in-time inventory strategy improves dealer‘s ROI

• Route scheduling and dedicated vehicle operations


Supply Chain Efficiency

The strategy, design and practices in AMUL’s network are strongly driven by the objective of establishing and operating an efficient supply chain from milk production and procurement to product delivery to customers.

Elements:

• Inter-locking Control

• Technology for Effectiveness


Inter-locking Control

• Robust coordination

• VDCs elects a chairperson and a secretary amongst its member farmers

• Nine chairpersons elected to form the Board of Directors of the Union

• One of the directors elected as the Chairpersonof the Union

• Chairpersons of all the Unions form the Board of Directors of GCMMF


Technology for Effectiveness

• Better and new products and right time

• TQM proved to be a strong movement

• IT usage include B2C Portals, ERP, KIOSK, GIS based data network and Automated milk collection centres

• One of the directors elected as the Chairpersonof the Union

• GCMMF delivers Amul products in 125 cities in India



E-Supply Chain Management

• 3000 automatic milk collection system units

• Identification card for members

• Value of milk calculated on the basis of fat content

• 5000 trucks used on daily basis

• ERP system covers promotion & distribution operations

• Daily sales report and inventory report to main system


Impact of the "Amul Model"

• Increase of India’s milk production by 40 million metric tons (MMT)

• Incremental return of Rs. 400 billion annually

• Milk production tripled between 1971 and 1996

• Per capita milk consumption doubled from 111 gm per day in 1973 to 222 gm per day in 2000


Impact of the "Amul Model"


Success Factor• Quality products, economic

pricing, belief instilled in customers

• The farmers owned the dairy

• Elected representatives managed VDCS and Union

• Professionals operate the dairy and manage business

• Sensitive to the needs of farmers and responsive to their demands.

