Dudhsagar DairyRreport 2009,10

MEHSANA DISTRICT CO-OPERATIVE MILK PRODUCERS UNION LIMITED
MEHSANA DISTRICT CO-OPERATIVE MILK

PRODUCERS UNION LIMITED - MEHSANA.
N.R.VEKARIA INSTITUTE OF BUSINESS MAGAGEMENT STUDIES, JUNAGADH 1

PREPARED BY: PROJECT GUIDE:

SANDIP A. PATEL Prof. C.D.LAKHLANI
M. B. A. Sem.-III
SUBMITTED TO:
N. R. VEKARIA INSTITUTE OF BUSINESS MANAGEMENT STUDIES
JUNAGADH
SAURASHTRA UNIVERSITY – RAJKOT
ACADAMIC YEAR
2009-2010

PREFACE
As a part of my curriculum for M.B.A. , I am supposed to prepare a

report in to gain better insight to study the whole environment of
industries as well as organization.
So I have chosen MEHSANA DISTRICT CO-OPERATIVE MILK

PRODUCERS UNION LTD. It is one of the biggest Co-operative Dairy of
India in Procurement.
During preparation of this project report we came to know about various

aspect of the company .It is indeed a golden opportunity for us in the study
management and a matter of esteem by itself.
Due to making this report we came to know about various aspect of the
company, it is indeed a golden opportunity for us in the study management
and a matter of esteem by itself.

STUDENT DECLARATION
The undersigned Mr. PATEL SANDIP A., the student of M.B.A. - II

semester , here by declared that the project work in this report is my own
and have been carried out under the supervision of Prof. CHETAN D.
LAKHLANI of N. R. VEKARIA INSTITUTE OF BUSINESS
MANAGEMENT STUDIES – JUNAGADH.
I have collect data from the company from a different departments and
library and also from the internet. It is not a secondary data which is use in
this report. It is a fresh and primary data only. This is my responsibility to
submit this report to concern authority because it is part of our study.
At last, I submit this report to the college and complete my responsibility to

submit a SUMMER TRAINING REPORT on MEHSANA DISTRICT CO-
OPERATIVE MILK PRODUCERS UNION LIMITED, MEHSANA.
THANKING YOU
DATE: YOURS FAITHFULY
PLACE: JUNAGADH PATEL SANDIP A.

ACKNOWLEDGEMENT
With a deep sense of gratitude, I wish to express my sincere thanks to

all who supported me, given me their precious time, opinions and suggestions
to complete my project. First of all, I would like to thank Prof. NISHAR
MUNSHI sir, Director of our Institute for giving me this great opportunity to
undergo training at one of the most reputed dairies in India named
Dudhsagar Dairy.
The project report will be considered incomplete without acknowledging the

people who have helped me a lot to make it complete. First of all I am
thankful to management authorities for providing me with the opportunity to
carry out my training in the organization.
I am thankful to Mr. PULAK MUKHARJI sir of Sales dept giving us this

opportunity to under go training at “sales Department” in which we have
taken vital experience. I am thankful to Dr. JAYESH BODA sir. Also I have
thankful to Mr. JEORGE sir the Assistant Manager (account department)
and Mr. A.L.DASH Senior officer providing us Account Department of the
Organization.
I am thankful to Mr. B.K.RANA. AGM (Engineering), Mr. J G PATEL A.M

(H.R & Admin.) and Ms KINNARI Jr. Executive (H.R & Admin.) guided us
regarding our subject & providing us necessary information throughout our
training.
I am thankful to all respondents for their contribution & also co-

operation in making the project report successfully without which the
report has not been possible & completed.
SANDIP A.
PATEL

Sr. Pg.
no. PARTICULAR no.
GENERAL INFORMATION
1 Executive summary 10
2 Industry information 11
3 Company overview 17
4 Functional Area information 24
DEPARTMENTS
5 PART - A
PRODUCTION / OPERATION DEPARTMENT
1 Introduction 26
2 Organization structure 27
3 Types of production process 28
4 Types of plant layout 45
5 Selection of location 48
6 Types of raw material and procurement 49
7 Material handling system 50
8 Production planning and control system 51
9 Repair and maintenance 52
10 Introduction to material management 52
11 Purchase department 55
12 Inventory control 57
13 Quality assurance 59

6 PART – B
MARKETING DEPARTMENT
1 Introduction 61
3 Product 65
3.1 Product mix 65
3.2 Product life cycle 69
3.3 New product development 70
3.4 Branding and packaging 72
Pricing – Methods and strategies 73
4 Promotion mix 74
4.1 Advertising 74
4.2 Sales promotion 74
5 Channel management
7 PART – C
FINANCE / ACCOUNTING DEPARTMENT
1 Introduction 77
3 Capitalization and capital structure 81
4 Leverage analysis 82
5 Capital budgeting 83
6 Sources of finance 85
7 Working capital management 86
8 PART – D
HUMAN RESOURCE DEPARTMENT
1 Introduction 94
3 Human Resource planning 95
4 Recruitment sources 96
5 Selection methods 97
6 Placement 98
7 Training and development 100

8 Performance appraisal policy 102

9 Wage and salary administration – job evaluation 103
10 Promotion and Transfer 104
11 Role of Human Resource Development 105
12 Trade union and industrial relation 106
13 Dispute management 107
14 Social responsibility 107
9 General summary and findings 108
10 Bibliography 110

1. ECUTIVE SUMMARY

“Practice makes a man perfect”. A man can become perfect with a

perfect knowledge and experience. As a student of business administration, we
have studied many theories in the classroom but any professional degree is
incomplete without practical knowledge of concerned field.
And the same case is with management studies, management is

incomplete without knowing practical application of theories studied. I have
experienced and understood the practical importance of these theories on this
training. More books and theoretical knowledge can’t help you in any field
whether it is management or technical. Only thing can help you is practical
knowledge.
This training provides a golden opportunity to the students for getting a

perfect knowledge and experience. During the training I came to know how
actual is the world of marketing and we should have some extra skills to be the
leader.
As a part of my learning in management field and requirement of MBA

programme, I have been given an opportunity to grab practical knowledge in the
area of marketing and I had selected “MEHSANA DISTRICT CO-
OPERATIVE MILK PRODUCERS UNION LTD.”, MEHSANA. I have made
my best efforts to get knowledge and experience. During this training, I had
collected necessary information, and I present all the necessary information to
understand the until well.
2. INDUSTRY INFORMATION
INTRODUCTION
The dairy sector in the India has shown remarkable development in the past decade
and India has now become one of the largest producers of milk and value added milk
products in the world. The dairy sector has developed through co-operative in many
parts of the state. During 1997-98, the state had 60 milk processing plants with an
aggregate processing capacity of 5.8 million liters per day. In addition to these
processing plants, 123 government and 33 co-operative milk chilling centers operate
in the state.
Dairy is a place where handling of milk and milk products are done and technology
refers to the application of scientific knowledge for practical purposes. Today, the
dairy industry is focusing on the other products like ice cream, pizza, cheese, milk
powder etc. because of the excess milk available and availability of the potential
market, the Indian dairy industry has broken all the traditional boundaries of
producing only milk.
Today, India is 'The Oyster' of the global dairy industry. It offers opportunities galore
to entrepreneurs worldwide, who wish to capitalize on one of the world's largest and
fastest growing markets for milk and milk products. A bagful of 'pearls' awaits the
international dairy processor in India. The Indian dairy industry is rapidly growing,
trying to keep pace with the galloping progress around the world. As he expands his
overseas operations to India many profitable options await him. He may transfer
technology, sign joint ventures or use India as a sourcing center for regional exports.
The liberalization of the Indian economy beckons to MNC's and foreign investors
alike.
India’s dairy sector is expected to triple its production in the next 10 years in view of
expanding potential for export to Europe and the West. Moreover with WTO
regulations expected to come into force in coming years all the developed countries
which are among big exporters today would have to withdraw the support and
subsidy to their domestic milk products sector. Also India today is the lowest cost
producer of per litre of milk in the world, at 27 cents, compared with the U.S' 63
cents, and Japan’s $2.8 dollars. Also to take advantage of this lowest cost of milk
production and increasing production in the country multinational companies are
planning to expand their activities here. Some of these milk producers have already
obtained quality standard certificates from the authorities. This will help them in
marketing their products in foreign countries in processed form.
The urban market for milk products is expected to grow at an accelerated pace of
around 33% per annum to around Rs.43,500 crores by year 2005. This growth is
going to come from the greater emphasis on the processed foods sector and also by
increase in the conversion of milk into milk products. By 2005, the value of Indian
dairy produce is expected to be Rs 10,00,000 million. Presently the market is valued
at around Rs 7,00,000 million.
BACKGROUND
India with 134mn cows and 125mn buffaloes and has the largest population of cattle
in the world. Total cattle population in the country as on October'00 stood at 313mn.
More than fifty percent of the buffaloes and twenty percent of the cattle in the world
are found in India.
Indian dairy sector contributes the large share in agricultural gross domestic products.
Presently there are around 70,000 village dairy cooperatives across the country. The
co-operative societies are federated into 170 district milk producers unions, which is
turn has 22-state cooperative dairy federation. Milk production gives employment to
more than 72mn dairy farmers. In terms of total production, India is the leading
producer of milk in the world followed by USA. The milk production in 1999-00 is
estimated at 78mn MT as compared to 74.5mn MT in the previous year. This
production is expected to increase to 81mn MT by 2000-01. Of this total produce of
78mn cows' milk constitute 36mn MT while rest is from other cattle.
While world milk production declined by 2 per cent in the last three years, according
to FAO estimates, Indian production has increased by 4 per cent. The milk production
in India accounts for more than 13% of the total world output and 57% of total Asia's
production. The top five milk producing nations in the world are India, USA, Russia,
Germany and France.
Production of milk in India
Year Production in million MT

1988-89 48.4
1989-90 51.4
1990-91 53.7
1991-92 56.3
1992-93 58.6
1993-94 61.2
1994-95 63.5
1995-96 65
1996-97 68.5
1997-98 70.8
1998-99 74.7
2020(T) 240.0
T= target / expected
WORLD'S MAJOR MILK PRODUCERS
(Million MTs)

Countries 1998 1997 1996
India 74 71 68
United States 71 71 70
Russian Federation 33 34 36
Pakistan 22 21 20
Brazil 22 21 19
Ukraine 14 15 16
Poland 12 12 11
New Zealand 12 11 10
Australia 10 9 9
EMERGING DAIRY MARKETS
• Food service institutional market: It is growing at double the rate of

consumer market
• Defense market: An important growing market for quality products at
reasonable prices
• Ingredients market: A boom is forecast in the market of dairy products used
as raw material in pharmaceutical and allied industries
• Parlour market: The increasing away-from-home consumption trend opens
new vistas for ready-to-serve dairy products which would ride piggyback on
the fast food revolution sweeping the urban India.
India, with her sizable dairy industry growing rapidly and on the path of
modernization, would have a place in the sun of prosperity for many decades to come.
The one index to the statement is the fact that the projected total milk output over the
next 15 years (1995-2010) would exceed 1457.6 million tonnes which is twice the
total production of the past 15 years!
Market Size And Growth
Market size for milk (sold in loose/ packaged form) is estimated to be 36mn MT
valued at Rs470bn. The market is currently growing at round 4% pa in volume terms.
The milk surplus states in India are Uttar Pradesh, Punjab, Haryana, Rajasthan,
Gujarat, Maharashtra, Andhra Pradesh, Karnataka and Tamil Nadu. The
manufacturing of milk products is concentrated in these milk surplus States. The top 6
states Uttar Pradesh, Punjab, Madhya Pradesh, Rajasthan, Tamil Nadu and Gujarat
together account for 58% of national production.
About 75% of milk is consumed at the household level which is not a part of
commercial dairy industry. Loose milk has a larger market in India as it is perceived
to be fresh by most consumers. In reality however, it poses a higher risk of
adulteration and contamination.
The production of milk products, i.e. milk products including infant milk food, malted
food, condensed milk & cheese stood at 3.07 lakh MT in 1999. Production of milk

powder including infant milk-food has risen to 2.25 lakh MT in 1999, whereas that of
malted food is at 65000 MT. Cheese and condensed milk production stands at 5000
and 11000 MT respectively in the same year.
MAJOR PLAYERS
The packaged milk segment is dominated by the dairy cooperatives. Gujarat Co-
operative Milk Marketing Federation (GCMMF) is the largest player. All other local
dairy cooperatives have their local brands (For e.g. Gokul, Warana in Maharashtra,
Saras in Rajasthan, Verka in Punjab, Vijaya in Andhra Pradesh, Aavin in Tamil
Nadu, etc). Other private players include J K Dairy, Heritage Foods, Indiana Dairy,
Dairy Specialties, etc. Amrut Industries, once a leading player in the sector has turned
bankrupt and is facing liquidation.
MAJOR DAIRY PRODUCTS MANUFACTURERS
Some of the major dairy products manufacturers in the country:
Company Brands Major Products

Nestle India Limited Milkmaid, Cerelac, Sweetened condensed milk, malted
Lactogen, Milo, foods, milk powder and Dairy whitener
Everyday
Milk food Limited Milk food Ghee, ice cream, and other milk
products
Indodan Industries Indana Condensed milk, skimmed milk
Limited powder, whole milk powder, dairy
milk whitener, chilled and processed
milk
Gujarat Co-operative Amul Butter, cheese and other milk products
milk Marketing
Federation Limited
Britannia Milkman Flavoured milk, cheese, Milk Powder,

Ghee
Cadbury Bournvita Malted food
FUTURE PROSPECTS
India is the world's highest milk producer and all set to become the world's largest
food factory. In celebration, Indian Dairy sector is now ready to invite NRIs and
Foreign investors to find this country a place for the mammoth investment projects.

Be it investors, researchers, entrepreneurs, or the merely curious – Indian Dairy sector

has something for everyone.
Milk production is relatively efficient way of converting vegetable material into

animal food. Dairy cows, buffaloes, goats and sheep can eat fodder and crop by
products which are not eaten by humans. Yet the loss of nutrients energy and
equipment required in milk handling inevitably make milk comparatively expensive
food. Also if dairying is to play its part in rural development policies, the price to
milk producers has to be remunerative. In a situation of increased international prices,
low availabilities of food aid and foreign exchange constraints, large scale
subsidization of milk conception will be difficult in the majority of developing
countries.
Hence in the foreseeable future, in most of developing countries milk and milk
products will not play the same roll in nutrition as in the affluent societies of
developed countries. Effective demand will come mainly from middle and high
income consumers in urban areas.
There are ways to mitigate the effects of unequal distribution of incomes. In Cuba
where the Government attaches high priority to milk in its food and nutrition policy,
all pre-school children receive a daily ration of almost a litre of milk fat the reduced
price. Cheap milk and milk products are made available to certain other vulnerable
groups, by milk products outside the rationing system are sold price which is well
above the cost level. Until recently, most fresh milk in the big cities of China was a
reserved for infants and hospitals, but with the increase in supply, rationing has been
relaxed.
In other countries dairy industries have attempted to reach lower income consumers
by variation of compositional quality or packaging and distribution methods or
blending milk in vegetable ingredients in formula foods for vulnerable groups. For
instance, pricing of products rich in butter fat or in more luxury packaging above cost
level so as to enable sales of high protein milk products at a some what a reduced
price has been widely practiced in developing countries. This policies need to be
brought in Indian Dairy scenario.
DAIRY INDUSTRY IN GUJARAT
Gujarat Cooperative Milk Marketing Federation (GCMMF)

OVERVIEW
Gujarat cooperative milk marketing federation is India’s largest food products
marketing organization. It is a state level apex body of milk cooperative in Gujarat
which aims to provide remunerative returns to the farmers and also serve the interest
of consumers by providing quality products which are good value for money.
MEMBERS 12 DISTRICT CO-OPERATIVE

MILK PRODUCERS’ UNION
No. of producer members 2.41 million
No. of village societies 11,615
Total milk handling capacity 7.4 million liters per day
Milk collection (total- 2004-05) 2.08 billion liters
Milk collection (daily avg. 2004-05) 5.71 million liters
Milk drying capacity 511 metric tones per day
Cattle feed manufacturing capacity 2340 metric tones per day
3. COMPANY OVERVIEW
The Mehsana District Co-operative Milk Producers’ Union Limited, Mehsana is

one of the largest Co-operative Dairy in whole of Asia and is in existence for

more than last 40 years. The Union functions under a Co-operative setup wherein
1100 Village Dairy Co-operative societies in Mehsana district are members of
the Union. The Board of Directors, elected from Village Dairy Co-operative
Societies, governs the Union and the Managing Director looks after day-to-day
management of the Union.
The main plant of the union is situated at Mehsana in Gujarat, having processing
capacity of 20 lakh liters milk/day. It also has 5 chilling centers and 2 cattle feed
plants operating at various locations in Mehsana district. Union is also providing
other services such as animal health, artificial insemination, feeds and fodder etc.
to its societies. The current turnover of the union is more than Rs. 1200 crores
per annum. It has employee strength of 1600.
Dudhsagar, in its quest for excellence, wants to streamline and integrate its
processes in the areas of Finance, Sales, Purchasing and Manufacturing. To
achieve this, Dudhsagar has invited TCS to aid them in this business and IT
initiative by providing, installing and configuring Oracle Application 11i. The
proposed Oracle Apps modules for implementation are Oracle Financials, Oracle
Purchasing, Order Management, Oracle Process Manufacturing, and Oracle
Enterprise Asset Management.
HISTORY AND DEVELOPMENT
The dairy was established on 8th November 1960. The dairy has been registered
under the leadership of shri. Mansihbhai Pruthviraj Patel in April 1961. He was
the founder of the “DUDH SAGR DAIRY”.

Late Shri. Mansihbhai Pruthviraj Patel – (1919-1970)
A visionary step initiated 50 years ago, against all odds, with only 1125 producer
members to start with, by our founder Chairman Shri. Mansinbhai Pruthviraj
Patel has grown to become Asia’s largest co-operative society, an Institution that
epitomizes the economic & social empowerment of about 5 LACS milk
producing members.
Late Shri. Motibhai R Chaudhary – (1923-2005)
As an able Leader & Administrator, Shri. Motibhai R Chaudhary was Chairman of

our Union continuously for a period of about 34 years. He has taken the Mission
forward to very high peaks of achievement. His contributions for the progress of the
Union, his ideas and beliefs in simple living and high values are unforgettable.
PROGRESSIVE JOURNEY OF DUDHSAGAR DAIRY
Mehsana largest milk producing district of Gujarat is famous since long for cattle
breeding & animal husbandry practices. Large, small & marginal farmers & landless
labourers are engaged in the practices of animal keeping & milk production. The high
yielding well known “Mehsani” buffalo breed is native of the district & is known for its
potential of economical milk production.
The union makes use of most advanced technologies for manufacture of various milk
products, for providing better animal health care services & for building socio-
economic strength.
AWARDS:
The Union has been awarded National

Productivity Award for two consecutive years
of 2004-05 and 2005-06 for the second best
productivity in the large unit’s category of
Dairy Processing Industry.
HISTORICAL BACKGROUND INAUGURATION
1960 - Establishment of the MDCMPU Ltd.

1961 - Started milk supply to Ahmedabad Municipal dairy.
1963 - The MDCMPU ltd Inaugurated
1964 - Inauguration of the Vihar chilling center.

1966 - Establishment for the animal husbandry by the Union.
1967 - Innogration of the Kheralu chilling center.
1968 - Milk supply to the Delhi started.
1969 - Inauguration of the cattle feed in Boriavi.
1970 - Establishment of new processing section.
1971 - Vihar chilling center established unit with capacity 60,000L.
1972 - Loan for purchasing cows & buffaloes.
1973 - Inauguration of the Hansapur chilling center.
1974 - Hansapur chilling center has started colleting milk.
1975 - Inauguration of the Harij chilling center
1976 - Harij chilling center has started collecting milk.
1977 - Animal insurance policy has started.
1978 - Kadi chilling center has started.
1979 - Wireless radio telephone facility for animal Husbandry has provided.
1980 - Liquid nitrogen plant & artificial insemination at Jagudan has started.
1981 - Cattle feed plant at Ubkhal has started.
1982 - Government thanks Dudhsagar dairy for collecting large quantity of milk.
1983 - State awarded for high milk producing animal.
1984 - N4 powder plant has inaugurated.
1985 - Celebration of silver jubilee.
2005- Established Dudhmansagar Dairy
2009- Celebration of Golden jubilee.
BASIC INFORMATION OF THE COMPANY

NAME OF THE COMPANY:-
MEHSANA DISTRICT CO-OPERATIVE MILK PRODUCERS UNION LIMITED.
(DUDHSAGAR DAIRY)

ADDRESS OF THE COMPANY:-

Dudhsagar dairy
Mehsana District co-operative milk producers union limited.
Mehsana – 384002
Gujarat state,
India.
REGISTERED OFFICE:-
Dudhsagar dairy
Mehsana – 384002
Gujarat state, India.
DATE OF ESTABLISHMENT:-
Dudhsagar dairy was established as on 8th November 1960.
The starting date of union is 2nd April 1961.
ANNUAL SALES TURN OVER:-

Rs.1750 corer (Appro.) (2008-2009)
MAIN BUSINESS:-
Dudhsagar Dairy is engaged in producing and selling milk product.
RAW MATERIALS:-
Milk is the main raw materials.
PLANT:-
Dudhsagar Dairy is situated at Mehsana is producing market milk, Butter, Ghee,
Milk powder, and sweetened condensed milk.
CATTLE FED PLANTS:-

Boriavi , Ubkhal [ Capacity 300 mt.]
ANIMAL BREEDING STATION:-

Jagudan village, district mehsana
BANKERS:-

The Mehsana District central co-operative bank ltd. Mehsana

Bank Of Baroda, Mehsana.
State Bank Of India.
U.T.I. Bank, Mehsana.
H.D.F.C. Bank, Mehsana.
AUDITORS:-
Special auditor(MILK)
Milk audit office
Gujarat
Mehsana
Provide maximum customer satisfaction by quality of milk product

diversification.
DUDHSAGAR DAIRY has a mission to save the surplus milk and give
employment to village people. DUDHSAGAR DAIRY sells their items at MRP
price and their mission to provide healthy and happy life.
ORGANISATIONAL STRUCTURE
BOARD OF DIRECTORS

In present condition the chairman of the dairy is Shri. Vipulbhai M

Chaudhary and the vice chairman is Shri. Harjivanbhai Devabhai Patel and other are
member.
Board Of Directors
1 Shri. Vipulbhai M Chaudhary Chairman
2 Shri. Patel Harjivanbhai Devabhai Vice Chairman
3 Shri. Patel Rambhai Baldevbhai Member
4 Shri. Desai Khengarbhai Bijalbhai Member
5 Shri. Chaudhary Ramjibhai Savjibhai Member
6 Shri. Desai Ramjibhai Karamshibhai Member
7 Shri. Vihol Chandanji Ravaji Member
8 Shri. Patel Mafatlal Manganlal Member
9 Shri. Patel Prahladbhai Prabhudas Member

1
Shri. Chaudhary Becharbhai Jeshingbhai Member
0
1
Shri. Nardolia Ahemadbhai Aliji Member
1
1
Shri. Thakor Divanji Javanji Member
2
1
Shri. Patel Kalabhai Dwarkadas Member
3
1
Smt. Shah Rajeshriben Naileshbhai Member
4
1
Smt. Chaudhary Vakhatben Haribhai Member
5
1
Smt. Chaudhary Daliben Hirabhai Member
6
1
Shri. Dist. Registrar Member
7
1
Shri. Bharat M. Vyas Member
8
1
Shri. K.C. Verma Managing Director
9


5 PART – A
PRODUCTION / OPERATION DEPARTMENT
1 Introduction
2 Organization structure
3 Types of production process
4 Types of plant layout
5 Selection of location
6 Types of raw material and procurement
7 Material handling system
8 Production planning and control system
9 Repair and maintenance
10 Management of industrial safety
11 Introduction to material management
12 Role of material management
13 Purchase department
14 Inventory control
15 Quality assurance

1. INTRODUCTION
Meaning of PRODUCTION is simply that “To use material which is not in form to
use but through systematically process- it converts into finish products which can be
use. Production Department plays a vital role in the industry. In this department
different kinds of milk products are prepared from their raw material. It is called as
input output process of the product.
A production means creation of utilities and entails the procurement and utilization of
factors of production which includes manpower, material, building and equipments.
“Production management deals with decision making related to production process so
that the resulting goods or service is produced according to specifications in the
amount and by schedule demanded and at minimum cost”
E. S. Buffa
Production must be operated in an economic and efficient manner because cost of
production is vital factors in market competition and in ensuring normal profit or
return on investment.
INPUTS OUTPUTS
Material PRODUCTION Products
Labour PROCESS Services
Capital Information
Energy
The production process at Dudhsagar Dairy is responsible for

manufacturing all the products as per the specified product
requirements. These include Dairy products such as pasteurized milk,
milk powder, butter & ghee, SCM etc and cattle feed. The production
process includes planning, production, scheduling, monitoring and
management of all the production activities. It is also responsible for
managing resources such as men, machinery and material, for
production, reducing wastages and for cost control measures.
There are four manufacturing plants, at Mehsana, Vihar, Ubhkal

and Boriavi. The Mehsana Plant manufactures all the Dairy products.
The Vihar Plant manufactures Sweetened Condensed Milk. Cattle feed
is manufactured at the Ubhkal and Boriavi Plants. Besides the above
mentioned manufacturing facilities, there are five chilling centres at
Vihar, Kadi, Kheralu, Hansapur and Harij. These chilling centres are
responsible for milk collection, chilling and dispatch to dairies. The

Mehsana Plant is also a milk collection centre.
The objective of this document is to explain the manufacturing

process at Dudhsagar dairy. The study was carried out at the Mehsana
Plant, the Vihar Chilling Center & SCM Plant and the Ubhkal Cattle Feed
Plant. For the milk collection activities, the process followed at the
Vihar Chilling Centre has been taken as the standard. Similarly, for
cattle feed manufacturing, the processes followed at the Ubhkal Cattle
Feed Plant has been taken as the standard.
2. ORGANIZATION STRUCTURE
PRODUCTION DEPARTMENT
PRODUCTION MANAGER
ASSISTANT MANAGER
SENEOR OFFICER
JUNIOR OFFICER
SUPER VISOR
WORKER

3. TYPES OF PRODUCTION PROCESS
PRODUCTS MANUFACTURED BY DUDHSAGAR DIARY
MAIN PRODUCTS
1. Milk:-
► Standardized Milk 4.50 fat/ 8.5 SNF
►Toned Milk 3.0 fat/ 8.5 SNF
►Double Toned Milk 1.5 fat/ 9.0 SNF
►Whole Milk 6.0 fat/ 9.0 SNF
2. Flavoured Milk:-
►Elaichi Flavor
►Kesar Flavor
►Rose Flavor
3. Butter:-
►Table Butter (yellow butter)
►White Butter
4. Ghee:-
►Pure Ghee
5. Powder:-
►Whole Milk Powder
►Infant Milk Powder
►Skimmed Milk Powder
6. SCM:-
►Sweetened Condensed Milk

7. Cattle Feed:-
►Sagardan
►Sagarhypro dan
►Sagar purak dan
MILK PROCESSING DEPARTMENT
MILK FLOW PROCESS
Milk Farmers
Village Milk Co-Op Soc.

(Collection Center)
Chilling Center
Raw Milk Reception

Dock (RMRD)
Milk Processing Plant
Powder Section Butter & Ghee Section Milk Packing Section
Storage
Dispatch Federation
Distribution Channel
Consumer

TYPES OF MATERIAL HANDLING EQUIPMENT
• Balance Tank
• Pasteurizer
• Bottle Filling Machine
• Milk Preparation Tank
• Cream Separator
• Sour Separator
• Hot Water Pump
• Filter
• Vertical Balance Tank
TYPES OF PRODUCTS
• Pasteurized Milk
• Pasteurized Cream for Butter and Ghee

PROCESS OF STERILIZED FLAVORED MILK
Pasteurized Milk
Standardization
Pre heating
Sugar addition
Homogenization
Heating
Chilling
Addition of color
Bottling Room
Batch Sterilization
Cooling through fans
Labeling
Wrapping
Storage
Flavored milk is recognized as beverage product containing milk to which has been
added flavoring materials such as Chocolate, Fruit flavors (Strawberry, Pineapple,
Apple, Banana etc) or Syrups & possibly coloring materials. The milk product is
usually skimmed or partially skimmed milk with a reduced fat content. For longer
shelf life here sterilized flavored milk is manufactured. SFM is marketed under the
brand name of Amul cool & Sagar sfruti.
MAINLY THREE FLAVORS ARE PREPARED HERE:
○ Kesar Flavor
○ Elaichi Flavor
○ Rose Flavor
THE COLOR & FLAVOR ADDITION PERCENTAGE VARIES WITH

FLAVOR
Kesar flavor
Flavor: - Kesar milk masala @0.5ml/lit

Color: - Kesari powder 20.25gm/lit
Elaichi flavor
Flavor: - Spice drop cardmon @0.25ml/lit

Color: - Apple Green powder @0.25gm/lit
Rose flavor
Flavor: - Rose special @0.18ml/lit

Color: - Erythrosine 20.022gm/lit
The specific amount of color & flavor for respective flavored milk is taken into 10 lit
milk 7 mixed. Followed by filtering the mix using cloth & then adding it in the bulk
tank & agitated.

BUTTER SECTION
There are two butter sections in this plant. The butter is produced by continuous
butter making machines and packed semi-automatically. Butter produced is marketed
in Mehsana district by “Mehsana District Co-Operative Milk Producers Union Ltd.”
and outside Mehsana district by “Gujarat Co-Operative Milk Marketing Federation.
“The capacity of butter production is approximately 120 tons per day. Nowadays
approximately 40 tons per day is produced. Contimab process of continuous butter
making is followed in contimab machine. Butter is packed in 100 gms, 500 gms, 500
gms institutional packing, and 9.1 gm chaplets packets. The selling price of 100 gms
is Rs.16, 500 gms is Rs.72, 500 gms & Rs.200 per Kg. for chaplets packing.
PRODUCTION PROCESS OF WHITE BUTTER
Raw Milk
Heated on 82 degree
Celsius
Machine through Raw Milk has
been separated in two different
items
Milk
Raw Cream
Cream use in
Contimab Machine
Add Anato Color and

Salt
Butter will be ready
Packaging

Store on 0 degree
Celsius
Dispatch
EXPLANATION:
First of all milk has heated on 80 to82 degree Celsius and after raw milk separated
from the two different items one is milk other is cream. Cream has use in contimeb
zone. Under contimeb zone cream has been separated and after butter will be ready.
Then butter will go on packing department and hear butter finally packs. Then butter
goes on cold storage below 4 degree Celsius.
PRODUCTION PROCESS OF YELLOW BUTTER
Cream has separated on the

milk
Cream has been cooled down

on 8 to 10 degree Celsius
Stored 4 hours
After cream have been uses in

contimb zone
Then cream has churned and

adds anato color and salt
Butter ready and packing
Store on 0 degree Celsius
Dispatch
EXPLANATION:
First of all milk has heated on 80 to82 degree Celsius and after raw milk separated
from the two different items one is milk other is cream. Cream has use in contimb
zone and added anato color and salt. Under contimb zone cream, anato color and salt
has mixed and yellow butter will be ready. Then yellow butter will go on packing
department and here butter finally packs. Then butter goes on cold storage below 4
degree Celsius.
COMPOSITION (Characteristic or Specification of Butter)
Yellow (Salted Butter):-
Fat 80% (min)

Moisture 16.3% (max)
Salt 2.5% (max)
Curd 1% (max)
Coliforms Negative
Yeast&Moulds 10 per gram
Texture Close and no free moisture
Flavor Clean
Salt Absence of gift
Color 0.3 ml/kg
White Butter:-
Fat 80-84%
Moisture 16% (max)
Curd 1% (max)
Coliform Negative
List of Equipments
1. Continuous Butter Making Machines

a. Contimab
b. West falia
2. SIG Packing Machine

a. 100 gm.
b. 500 gm.
3. Chiplet Packing Machine
4. Carton Sealing Machines
5. Butter Analyzer

GHEE SECTION
This is a very important section of the dairy. Here ghee is made by cream butter
method i.e. first cream is converted to white butter through continuous butter making
machine and then butter is melted and heated to make ghee. Buttermilk and serum are
again issued to process section. There is a wide variety of packaging of ghee. Ghee is
sold in 1 litre, 2 litres, 5 litre tin, 15 Kg. tin, 1 litre refill pack, 500 ml and 500 gm
pouch pack. Average ghee production of this dairy is 20 ton per day in two shifts. The
ghee is packed under two brand names Sagar and Amul, but the Sagar is mainly
produced. Ghee is marketed under Gujarat Cooperative Marketing Federation Ltd,
Anand.
PRODUCTION PROCESS OF GHEE
Receive Ghee in the

tank
Process in Serum Separator
Milk
Butter
Butter is passing on
hot exchanger
Butter receives in butter
Malting Vat on 55 degree
Celsius
Butter receives in Ghee Kettle

and on 112 degree Celsius at
heating an one hour.
Ghee is stored in cold tank and

ghee cold on only 35 degree
Celsius
PackingINSTITUTE OF BUSINESS MAGAGEMENT STUDIES, JUNAGADH

N.R.VEKARIA 36
EXPLANATION:
Ghee is prepared by making white butter from continuous butter making machine.
Cream after ageing of 4 hours is taken for butter making and white butter is made on
BUC-1500 Westfalia Separator Machine. This white butter is worked in machine and
an another worker and then passed through a Spiral flow Heat Exchanger for melting
via a pump. The melted butter is stored in an elevated tank. Serum is separated from
butter by a serum separator and separated melted butter is taken in a butter-melting
vat. Melted butter is pumped to ghee kettle via a pump. In ghee kettle this melted
butter is heated at 108-110 c for two hours or till the end point of ghee is obtained.
The ghee kettle is a simple jacketed kettle in which heating is done by steam at a
pressure 2-3 kg/cm. The butter is held in this kettle for another two hours for settling.
Then ghee is pumped to the storage tank via clarifiers. The ghee is then packed in
different packages via the packaging lines provided for different types of packaging.
There should not be any clash between lines, so this is a critical points in ghee
packaging. The sample is tested from two tanks i.e. two storage together constitute a
single batch of ghee. Tins are seamed by a seamer and then packed in cardboard
boxes. Packaging of ghee takes place at 36-45 C. There are heaters on the packing
pipelines of ghee for keeping ghee hot while packing. The balance tanks of ghee
packing are pneumatically controlled and filling is gravimetric.
LIST OF EQUIPMENTS
CBM :1
Serum Separator :5
Settling Tanks :4
Butter Melting Vats :3
Ghee Kettles : 11
Ghee Storage Tanks : 10
Ghee Clarifiers :2
Electric Embossing Machine :1
Packaging Machine
½ kg pouch filling :2
Rollatainer refill pack :1
Rollatainer tin pack (1 lit) :2
Mether Platt ghee tin pack (5lit) :1
15 kg tin packing machine :1
SPECIFICATION
Continuous Butter Making Machine:-
Type : BUC-1500
Capacity : 1300-2100 kg/hr

Use : Pasteurized white butter manufacturing for ghee making.
Ghee Kettle:-
Capacity : 1000 kg (9), 500 kg (2)

Working pressure : 3 kg/cm
Tested pressure : 6 kg/cm
Working Temperature : 108-110 C
1 Batch Time : 2 hrs
Settling Time : 2 hrs
Ghee Storage Tanks:-
Type : Alfa Level

Capacity : 2700 kg/tank
Pouch Filling Machine:-
Type : Nichrome Fill pack

Speed : 10-24 pouch/minute
Filling Temperature : 36-45 C
Pouch Thickness : 80 Micron (min)
Air Pressure : 5.5-6.0 kg/cm
Empty Pouch Weight : 4-5 gm
Sealed Wear Temperature : 5-7 C
Ghee Tin Packing Machine:-
Type : Mather plat

Speed : 3-5 tins/minute
Filling Temperature : 36-45 C
Weight : 5 + - 0.010
Ghee Tin Packing Machine:-
Type : Rollatainer
Parameter : 1 kg : 2 kg
Speed : 8-13 Tin/min : 7-10 Tin/min
Air pressure : 3.5-6 kg/cm : 3.5-6.0 kg/cm
Ghee Temperature : 36-45 C : 36-45 C
Ghee Weight : 1 + 0.005 kg : 2 + 0.005 kg

POWDER SECTION
Powder is the best way of preserving milk solids. The main objective in processing it
is to achieve good storing stability, low production costs & a product that resembles
as much as possible the original after reconstituting. The production of concentrated
& dried milks has the advantage of processing & storing all market surpluses
especially fluid milks, as well as at by products. Due to the preserving effect of low
water activity, dry milk products are desirable in regions with unfavorable climate
conditions. Even infant formula is designed as a substitute for human milk when
mother can not best feed their babies. Powder section has a paramount importance in
itself, a large proportion of milks are diverts to this section for manufacturing
different types of powder.
PRODUCTION PROCESS OF POWDER
Pasteurized chilled Milk
Milk evaporating plant high

heating
Concentrated milk tank
Spray drying
Vipro Fluidizer Filter air 20-30

degree Celsius
Filling bags / powder silo
Packing
Storage
Dispatch

In Dudhsagar, four powder plants are manufacturing powder. The types of powder
manufactured are Whole milk powder (for army), Skim milk powder, Baby food, and
Dairy whitener. All plants are having two stages drying; two plants are manually
operated while two are automated. The brand names of powder are Amul for whole
milk powder, Amul spray for baby food, Amulya for dairy whitener and Sagar for
skim milk powder.
Skimmed Milk Powder - Amul / Sagar / Dudhsagar SMP
Infant Milk Powder – Amulspray
Dairy Whitener-Amulya

Whole Milk Powder - Amul WMP
NO. PRODUCT BRAND NAME TYPES OF PACKING

25 kg Bulk pkg.
1. SMP Sagar SMP 500 gm pouch
2. IMP Amulspray 200 gm pouch

200 gm refill
500 gm refill
500 gm tin
500 gm pouch
1 kg tin
1 kg refill
1 kg pouch
10 kg tin
3. SWMP Amulya 200 gm refill
1 kg refill
1 kg pouch
500 gm pouch
500 gm tin
1 kg tin
10 kg tin

4. WMP Amul 10 kg tin
CATTLE FEED MANUFACTURING PROCESS
Cattle Feed (Sagar Dan) is manufactured at the Ubhkal and Boriavi Cattle Feed
Plants. The manufacturing process at both the cattle feed plants are the same. The
study was carried out at the Ubhkal cattle feed plant.
CATTLE FEED
• Sagar Dan is the primary product being produced at the Cattle Feed Plant.
• As per Animal Husbandry Department requirements, de-worming doses are
manufactured twice in a year. The medicated pellets are packed in 400 gm
plastic packets.
• Other than Sagar Dan, the following cattle feed are also manufactured at the
Boriavi Plant – Purak Dan, Rahat Dan, Calf Starter and Pashu Poshak.
• The average shelf life of Sagar dan is about 6 months.
• Generally production and dispatch of the production takes place on a day to
day basis.
• The formula for Sagar dan keeps on changing from month to month. It may
also vary within a month. This is because of the variations in the nutritional
values/prices of the raw materials from season to season.
• Production Planning for cattle feed is carried out on the basis of the sales
orders placed for each of the products, the capacity of the plant, the
availability of the plant and the storage capacity of the finished product
store. Production in-charge considers the storage capacity of the finished
products and readiness of the plant during the planning process. Impact of
material non-availability (major ingredients and alternate ingredients) is also
considered during production planning. Other parameters considered for
planning include requirement of raw materials, buffer stock, stock
information, etc.
• SAGAR HY PRO DAN is the best product for animals which is introduced by
dairy in April 2009.

PRODUCTION PROCESS OF SAGAR HY PRO DAN
Grain Storage Silos Separate Storage Good

down for each Raw
material
Storage Bins
Batch Hopper
Batch Mixer
Hammer Mills
Pellet Mill Bins
Molasses Mixer MOLASSE Molasses Tank

S
Stream
Pellet Mills
Cooler
Shieve
FG Storage Bins
Weighing and Packing

Finish
Dispatch
Goods Store
INGREDIENTS OF SAGAR HY PRO DAN:
(1) Grains:
Jowar
Maize
Millet
Barley
(2) Rice Polish Fine Grade Two
(3) De-oiled Rice Bran
(4) Mustard Rape Seed Extraction
(5) Cotton Seed Extraction
(6) Guwar Meal
(7) Molasses
(8) Vitamins
(9) Minerals
(10) Salt
(11) Ani Feed
(12) Urea
(13) Calcite Powder
(14) Protein

4. TYPES OF PLANT LAYOUT

“A good layout is one which allows material rapidly and directly
for processing this reduces transport, handling, clerical and cost down per
unit. Space requirement are minimized and it reduces ideal machine and
ideal man time” - F.G.MOORE
"Plant layout means physical arrangement or machines equipment's and other

industrial facilities on the factory floor in such manner that they may be handle
efficiently."
In “MEHSANA DISTRICT CO-OPERATIVE MILK PRODUCERS UNION LIMITED.” unit

is located at Mehsana has very well arranged plant layout. In this plant layout all
departments’ machines and equipment are well arranged.
According to F.G. Moore, A good lay out is one which allows materials rapidly and
directly for processing.
1. Economical use of production, storage and service space.

2. Reduction in material handling cost and the amount of work in process
due to minimum different process.
3. Efficient utilization of machinery and labour by avoiding delay and
bottlenecks.
4. Effective planning supervision and control of manufacturing operations.

5. High safety and improve work condition for worker.

6. Larger Capital Investment in plant equipment tooling and other physical
facilities.
Plant layout is also the physical arrangement or appearance of the plant. If the plant
layout is well arranged according to convenient of organization it will be beneficial
by many ways.
There are 4 broad categories of plant layout.
1) Product layout
2) Fixed position layout
3) Group layout
4) Process layout
1) Product Layout (or) Line Layout :

In product layout machines and equipment or arrange in the sequence of the
manufacturing operations require for the product. The materials move form one
workstation to another workstation sequentially (in order wise) without any
backtracking or Deviation of materials. It is called line layout because machines are
arranged in strait line. The raw materials are fed at one land and taken out as finished
product on the other land. It is a grouping of machines in one sequence a product lay
one may be a straight-line shape or (circular) [U] shape. The layout can be presented
as order.
Advantages
 Low cost of material handling due to strait and shorter part and animating
 Smooth and uninterested operation free from optical
 Continuous flow of work
 Special purpose equipment can be operated by semi skilled labour
 Optimum use of floor
 Shorter processing time and quicker output simple and effecting work
 High initial capital investment in special purpose machine
 Heavy overhead charges and less flexibility of operation
 Suitability of product
2) Fixed Position Lay Out :

In this type of lay out the major product been product fixed and a particular locating
equipment labour and components are moved to that particular location. This layout
is applied when materials been process are large very heavy have and difficult to
move ship builds locomotive manufacturing wagon manufacturing and Altar
manufacturing are the products where this layout is apply.
3) Group Lay-out (or) Combined Layout :
In most industrial establishment plants are rarely laid out. It either pure from and a
combination of product or process layout is apply. It is possible to have both types of
layout in an efficiently combined from if the product manufactured on same what
similar and not complex. This layout is combination of both product and process lay-
out.
4) Process lay-out (or) Functional Lay Out :
In this type of lay-out machines of similar type on located together according to their
function products move between the machinery equipment in order of the operations
require.
Advantages
 Lower initial capital investment in machinery

 Overhead cost is low
 Change in product design and volume
 Supervision can be more effective and specialize
 Greater flexibility
 more time taken in production
 more skilled worker required
 production planning and control difficulty
Factor influencing to plant layout
(1) Location of plant

(2) Nature of product
(3) Availability of floor spare
(4) Types of industry
(5) Nature of manufacturing
(6) Types of production
(7) Policies of management
From the above stated four types of plant layout, DUDHSAGAR DAIRY uses
product layout system.

MANUFACTURING SYSTEM AND LAYOUT

LAYOUT PRODUCT MFG. SYSTEM
Ghee Continuous
P R O D U C T Flavoured Milk Batch
Milk Powder Continuous
Amul Spray Powder Continuous
Butter Continuous
Butter Milk Batch
Milk Batch
Sagar Sfurti Batch
L A Y O Y T
Formerly, DUDHSAGAR had the old machines were performing the production
operation. This was taking too much time. Therefore DUDHSAGAR adopted
modernization and set up a totally automatic plant. As a result it has developed a new
plant layout at DUDHSAGAR to adjust the automatic equipment and machineries.
5. PLANT LOCATION
Site selection is an important activity, which decides the fate of the business. A good
location may reduce the cost of production and distribution to the considerable extent.
“It is an ideal location where all types of cost of business activities are
minimum.”
- John Shubin
Meaning:
Location is a geographical place or area were plant factory, company, unit firm or
industry is situated or established or located or setup or started or commence or
existed.
Factors determining the location of industry there are two types of factor that
determine the location.
A) Primary Factor (Or) Economic Factored in That :

1) Availability of raw materials.

2) Availability of transportation and communication facilities.
3) Availability of labour → Skill → skill or skill.
4) Nearest to market
5) Power, Fuel, Water supply.
B) Secondary and Non Economic Factor :

1) Climatic Condition
2) Availability of financial facilities
3) Personal factors
4) Assistance from the govt.
5) Scope for expansion
6) Industrial atmosphere
7) Existence of ancillary (supported) industries
8) Availability of facilities to employees
 Aspects of Location Planning (Process) :

At the time selection of industry the following point should be consider.
1) Selection of Region that Include :

1) Availability of raw material
2) Nearest to market
3) Nearest to the sources of motive power
4) Availability of transportation facility
5) Suitability of climate
2) Selection of the Locality :

1) Supply of Labour
2) Existence of complimentary and competitive industry
3) Banking and research facilities
4) Local taxes
3) Selection of Exact Site :

1) Availability of cheap land to start factory.
2) Cost of land development L - the land should be flat and strong enough to
sustain heavy machine installation.
3) Repair facility
4) Housing facility
5) Social and De-creation (entertainment Tool) facilities
6) Post and telegram facilities
7) Cost of water supply drainage and disposal of west.
8) Any restriction imposes by town planning dept. or local by - laws
9) Tax, fire fighting police protection facility
The “MEHSANA DISTRICT CO-OPERATIVE MILK PRODUCERS UNION

LIMITED.” has select the location as -
Dudhsagar dairy


Mehsana – 384002
Gujarat state,
India.
6. TYPES OF RAW MATERIAL AND PROCUREMENT

Purchasing to a manufacturing concern is of extreme importance because it has
its bearing on every vital factor concerning the manufacture, i.e. quantity,
quality, cost efficiency, economy, prompt delivery, volume of production etc.
It is the scientific purchasing that can save much money, time and efforts of the
management.
The task of purchasing is related to going to open marketing, finding the desired
materials at the lowest possible price and selecting the supplier who offers it at
that price having the quality of the materials in mind. It is indeed, a specialist
activity calling for the commercial rather than the technical training and outlook
In case of Dudhsagar dairy the main product of raw-material is milk & milk get
lowest price from near villages. So, transportation & other raw-material
handling cost is lower.
7. MATERIAL HANDLING SYSTEM
In highly materialized countries, we have to automated material handling has

been practically eliminated. New concept of packaging, containerization and
polletisation has contributed to cost reduction appreciably. Containerization is
the packing and transporting of goods in standard sized containers. These
containers are unopened during entire transport from the forwarding point to
the destination point. Material handling and packaging services have also
speeded up the order processing and movement or consignment.
Comprehensive Material Handling Programme
• Type of the product

• Plant layout
• Type of production system
• Factory building
• Production planning and control
• Packaging
• Material handling equipment

Advantages of Material Handling
Minimize movement of material, moves them continuously and at maximum

rate which advantageous as under:
 Shorter operating cycle

 Reduction handling cost
• It eliminates unproductive handling of materials like back tracking,

re-handling
• It reduce ideal machine capacity
• It reduce the ideal time of labour
• It eliminates the factory hazards and thus increase the safety of the
operator
• Reduce operation cost
• Better qualitative product
• Timely production
• It helps in maintaining effective production control
In DUDHSAGAR DAIRY there are following types of material handling

equipments-
• Milk Tankers
• Tempos
• Carates
• Cans
• Trolley
• Gravity Roller
• Portable Belt
• Pedestrian-Led-Powered Truck.
8. PRODUCTION PLANNING AND CONTROL SYSTEM

“The act of packing and supervision of the search, screening, development and
commercial is a action of new products the modification of existing lines and the
discontinuance of marginal or unprofitable item.”
American Marketing Association

Production Planning and control are 2 important aspect of production. Production

planning is prerequisite of production control. Production control cannot be imaged
without production planning.
Production planning is the function of management to look ahead, anticipate

difficulties and take steps to remove obstacles before they are materialized. Where n
unit is constantly evaluated and compare with the standards set in advance.
Product planning has assumed front rank importance in the modern market oriented
business. In addition product planning invites an intelligent, appropriate and
scientific approach. The case history of the successful companies has proved that
product planning calls for the highest degree of top management ability and effort.
"PPC refers to the co-ordination of a series of functions according to plan facilities

and regulate the orderly movement of goods through their manufacturing cycle
from the procurement of all materials to the shipping of finished goods at a
predetermined rate."
Charles A. Keopke
9. REPAIRS AND MAINTENANCE

Repairs & maintenance is carried out to have the optimal use of capital
equipments through actions such as replacement, repair, service & modification
of the components or machinery so that this will continue to operate as long as
it is beneficial to do so.
The efficiency of the production function solely depends on the functional

reliability of the production facilities which are nothing but a package of land,
building, plant, and equipment, tools, and plant service such as material
handling, power plant gas and streamlines, water supply, fire fighting facilities
etc. all the facilities are subject to wear and tear either simply by elapse of time
frequency of their use. For the maintenance of the functional reliability of all
this facilities, plant maintenance is considered as an important service function
of modern production management.
Objectives of Repairs & Maintenance
o To obtain maximum capacity of plant by avoiding breakdown.

o To keep the machines in proper condition so as to maintain the quality of

Product
o By minimizing the wear & tear pressure, the plant value is increased.
o To ensure the safety of workers.
o To keep the plant at the maximum efficient levels.
o To achieve all the productive objectives at an economical level
10. MATERIAL MANAGEMENT
INTRODUCTION
All types of organization whether manufacturing, trading or even net profits are
continuously involved in procurement, storage and stock replacement of
different types of material. At different point of time many of the items are
bought stored and stocked either for immediate or future use.
Purchasing to a manufacturing concern is of extreme importance because it has

its bearing on every vital factor concerning the manufacture, i.e. quantity,
quality, cost efficiency, economy, prompt delivery, volume of production etc. It
is the scientific purchasing that can save much money, time and efforts of the
management.
The task of purchasing is related to going to open marketing, finding the desired
materials at the lowest possible price and selecting the supplier who offers it at
that price having the quality of the materials in mind. It is indeed, a specialist
activity calling for the commercial rather than the technical training and
outlook.
The function of buying or stocking is a result or decision making process which

may be simple or complex initiative or analytical, hasty, or deliberated.
Inventory includes all the activities related to raw material

management, finished goods management, reprocess and scrap
management, dispatching the finished goods, sales reject and
return management and stock management. Activities include
storage, management and issue of goods or material.
Store Structure
Stores are located at Mehsana Plant, Chilling Centre (CC) and

Cattle Feed Plant (CFP).
There are five types of stores:
1. General Store
2. Finished Product Store
3. Ghee Store
4. Society Store
5. Veterinary Store
6. Milko tester Store
A) MEHSANA PLANT
Mehsana plant has five stores. General Store and Finish Product
Stores are main store and Society Store, Veterinary Store and Milko
Tester stores are sub store. General Store also receives material for
three sub-stores and material is delivered directly at the sub stores.
Functional overview of each store is detailed as under:
1. General Store
General store maintains inventory of:
• Packaging Material
• Engineering Material
• Raw Material
• Consumable
• Lab Material
• Power and Fuel
Material is issued to internal section of the Mehsana Plant and also

some time to Chlling Centre Store.
2. Finish Goods Store
Finished goods store at Mehsana handles all the milk products

except Pouch Milk, Flavored Milk and Chass. The physical storage
for the finished goods (White butter,
Table Butter) is maintained in seven cold storage godowns. There
are also other godowns used for storing SCM, Ghee, WMP, SMP etc.
Depending on the need, external agency cold stores are used on
hire basis.
3. Society Store
Material in Society Store is received through the main store. Society

Store maintains approximately 86 items used by about 1200 co-
operative societies. Society store sales these items to co-operative
societies. Society store items include Visit books for doctors, Milko
tester parts, Order Books etc. for the co-operative societies.
4. Veterinary Store
Medicines and medical instruments are received in the Veterinary

Store through the General Store. Veterinary Store at Mehsana is
main store responsible for purchasing and distributing the material
to veterinary sub stores under Dudhsagar dairy. Doctors registered
under Mehsana sub store and Co-operative Societies under
Mehsana District takes medicines from Mehsana Veterinary Store.
There are total 85 doctors registered under Dudhsagar Dairy.
5. Milko Tester Store
Milko tester machine is used by Co-operative Societies to measure

FAT content of milk. These machines are sold and maintained by
Dudhsagar Dairy as and when requested by the Co-Operative
Societies. Maintenance of machine is carried out at Milko tester
workshop. To carry out maintenance, Milko Tester store maintains
inventory of 500+ Milko Tester spare parts. There are Milko Tester
workshops at each chilling centre. Cooperative societies go to
nearest workshop for Milko Tester repair. If repair is not possible at
any Chilling centre workshop, it is brought to Mehsana workshop for
repair.
B) CHILLING CENTRE (CC)
Following three stores are at the Chilling centers:

1. General Store
2. Veterinary Store
3. Society Store
General Store issues material to various sections in the chilling

center, where as society and veterinary stores issues material to
the co-operative societies under the chilling centre. General Store
and Veterinary store receive material directly from the vendors but
society store receives material from Mehsana Society store.
C) CATTLE FEED PLANT (CFP)
The Stores operation at Cattle Feed Plant is divided into two

sections. One section is responsible for the Engineering Items and
the other section is responsible for the Cattle Feed Raw Materials.
Stores Engineering
The Engineering Store maintains inventory of:

• Packing Material
• Repair and Maintenance Material
• Laboratory Item
• Power and Fuel
• Consumables
Raw Material Store
The Cattle Feed Plant production store basically maintains the raw
materials required for the Cattle Feed Production and the Finish
Goods. There are different varieties of raw materials used in cattle
feed production, which includes Jowar, Rapseed, Grains, Oil Seeds,
Rice Bran, etc. Along with the raw materials this store also handles
Finish Goods (Cattle feed), Cromy Dan (De-worming Material
Pouches), Mineral Mixture, Empty Gunny Bags etc.
11. PURCHASE DEPARTMENT

The main objective of purchase dept is to ensure availability of right kind & quality of
materials, services as per indents of user dept at competitive prices in time. Dudhsagar
Dairy has a centralized Purchase dept at Mehsana which caters to the needs of various
dept, chilling centers & cattle feed plants.
Shri S.Palit, Sr. Manager (Purchase) is in-charge of Purchase department. The dept. is
functioning through the set defined rules and regulations of the society. The
procurement of cattle feed, engineering goods, raw materials and packing materials and
other general goods are being handled from this department. The raw milk procurement
is being handled by Co-operative Service dept. under MPO department. in-charge. The
purchase dept. negotiates the rates with the supplier, but some times the user dept. also
negotiates especially for the engineering goods. Purchase dept. makes sure for the
timely payment to the supplier as per the terms and conditions decided at the time of
PO. Before making the payment pre-audit inspection is being worked out by the
Internal Audit department. The following number of activities which are performed by
Purchase department of Dudhsagar dairy.
 General purchase which includes purchase of Packaging materials, Sugar,

Furnace oil, Lignite, Chemicals & Cement, stationary & printing items, Human
medicines, etc.
 Raw material purchase cattle feed plant,
 Engineering item purchase,
 Capital items purchase,
 Computer equipment purchase,
 Other miscellaneous items,
 Petty case purchase,
 Annual rate contracts,
 Contracts----- Transport contract,

Labor contract
Maintenance contract
FUNCTIONS
 Select suppliers on base of their ability, for purchase goods.

 Obtain raw material at the most competitive prices from the market.
 Attend to complaints of user department.
IDENTIFICATION OF SUPPLIER
Suppliers are selected on the basis of their ability to meet the specified requirements
of Dudhsagar Dairy. These suppliers communicate directly with Dudhsagar Dairy.
New suppliers send an introductory letter along with the data on firm (supplier
facility) to Dudhsagar Dairy. The data on firm contains information relating to
supplier’s factory, machinery used, production and turnover. If found necessary, they
are called for a discussion or a person from Dudhsagar Dairy may visit the supplier to
verify the areas mentioned in the data provided on the firm. Based on satisfactory
evaluation and commercial offer, the supplier is asked to supply the samples. On
satisfactory compliance of the sample, the supplier is approved for regular supplies
and is included in approved list of suppliers.
THE PURCHASE ACTIVITY
1. Engineering Purchase
2. Cattle Feed Purchase
3. General Purchase
1) ENGINEERING PURCHASE
This section purchases all electrical & mechanical items.
ACTIVITIES
 Get requisition letter from concerned department.

 Create purchase inquiry and request for quotation.
 Receive quotation. (in 7 to 8 days)
 Open quotation. (On week days Monday – Wednesday – Friday)
 Preparative comparative statement (within 2 days)
 Give comparative statement for approval to user department.
 Comparative statement approval by Asst. Mgr. (Purchase Department)
 General purchase order in system.
 At the end dispatch it to selected parties.
2) CATTLE FEED PURCHASE

This section purchase cattle feed ingredients. The items are as follow;
Juwar
Maize
Damage Wheat
Rice Bran Ext.
Sun Flower Ext.
Mango Extract
3) GENERAL PURCHASE
In this department buy common items which are mostly used by all departments like
Sugar, Stationary, Packing material etc. Items are classified as follow:
1. Purchase of Packaging Materials

2. Purchase of Scheduling Items
3. Purchase of Sugar
4. Purchase of Furnace Oil
5. Purchase of Lignite
6. Purchase of Lab Chemicals and Cleaning Agents
7. Purchase of Chemicals and Glassware
8. Purchase of Caustic Soda
9. Purchase of Cement and Construction Material
10. Stationery Purchase
11. Purchase of Human Medicines
13. Purchase of Society Material
14. Purchase of Veterinary Medicines through GCMMF
15. Direct Purchase of Veterinary Medicines by Dudhsagar Dairy
16. Purchase of Kerosene
12. INVENTORY CONTROL
“Inventory is defined as a usable resource which is physical and tangible such

as materials. “
Inventory constitutes the largest component of current assets in many

organizations. For management of inventories therefore may result in business
failure. A stock-out creates an unpleasant situation for organizations.
• ABC :-
ABC Analysis is the basic analytical management tool, which enables top
management to place the efforts, where the results will be greatest. This
technique popularly known as “always better control” has universal application
in many areas of human endeavor. The technique tries to analyze the
distribution or any characteristic by money value of importance in order to

determine priority. In this method 20/80 ratio use and it is very useful concept
in business where it can be used to solve some production control, quality
control, inventory control and similar other management problems. So the
golden rule is to keep an eye on this 20% and you will cover 80% of the effect.
• EOQ :-
Economic ordering quantity deals with two basic issues
1) When to order and

2) How much to order
The problem of when to order is decided by prescribing the reorder level of

each of the inventory item. The other incidental issue is how much order i.e.
what should be the size of each order. The issue of how much to order is
decided on the basic of “economic ordering quantity
The other side of the scene is the inventory carrying cost when inventories are
stored, it involves following types of cost.
 Invest cost
 Cost of storage space
 Cost of insurance and tax
EOQ formula:-
Where:-
R = Annual requirement (unit)

D = ordering cost per order.
C = cost per unit.
S = storing cost as percentage of value of materials store.
3) Re order level
4) Value Analysis
In DUDHDSAGAR DAIRY use perishable product milk. It is collected

from near villages, so it is collected everyday.

13. QUALITY ASSURANCE
In a competition age, every manufacturer would like to maintain the quality of

his products so that it may be liked by the users in preference to products of his
competitors. Reputation for uniformity & dependability of the quality of a
product is one of the most important assets which a manufacturing concern
should try to acquire or not to lose if already acquired.
There is an old saying that,
“One is reminded of quality long after price is forgotten.”
The DUDHSAGAR DAIRYgets the three certificates as follows-
For Quality : ISO 9001

For Safety : HACCP 9000
For Environment : ISO 1401

6 PART – B
MARKETING DEPARTMENT
1 Introduction
3 Product
3.1 Product mix
3.2 Product life cycle
3.3 New product development
3.4 Branding and packaging
4 Promotion mix
4.1 Advertising
4.2 Sales promotion
5 Channel management

1. INTRODUCTION
The marketing is very broad concepts for the business. We can distinguish between
social and a Managerial definition of Marketing. Asocial definition saw the role
Marketing plays in society. One market said that Marketing’s role is to “Deliver a
higher standard of living.” Here is a social definition that serves our purpose
Marketing is a societal process by which individuals and group obtain of what they
need and want through creating, offering and freely exchanging products and services
value with others. For Managerial definition, Marketing has often being described as
“the art of selling products”.
Marketing deals with identifying and meeting human and social needs. One of the
shortest definition or marketing is “Meeting needs profitably”. Marketing is a process
by which individuals and groups obtain what they need and want by creating and
exchanging and values with others.
“A market may be considered as a convenience meeting place where buyers and
sellers gather together for exchange of goods and services”.
Marketing is typically seen as the task of creating, promoting and delivering goods
and services to consumers and businesses. Marketing people are involved in
marketing 10types of entities:
1. Services
2. Experiences
3. Events
4. Persons
5. Places
6. Properties
7. Organizations
8. Information
9. Ideas
Marketing has often been described as “The Art of Selling Products”
Essentials of Marketing
• Focus on brand name

• Effective Differentiation
• Effective public relations
• Price differentiation
• Strong distribution network
Marketing is the vast term. It includes most of departments like H.R.M.,
Finance, and Production, Purchase departments.

DEFINITION:
“Marketing is a social and managerial process by which individuals and groups
obtain what they need and want by way of exchanging things for mutual
benefits”.
PURPOSE & SCOPE
• To supply milk & milk products

• To review customer requirement, resolving any requirements differing from
established norms.
• To meet customer requirement.
RESPONSIBILITY & AUTHORITY
• Sales coordination of liquid milk, Chas & flavored milk within Mehsana milk
shed area.
• Sales coordination of milk products to various GCMMF depots & their bulk
parties
• Sales coordination of milk products to Defense
• Liasioning with Government & legal agencies as & when required
• Liasioning with National Co-operative Dairy Federation of India Ltd
(NCDFI), GCMMF Ltd.
• Complaints redressal.
ACTIVITIES
 Milk, chhash, flavoured milk sales:
The liquid milk is sold in pouches, in cans & tankers. The pouch milk will be
supplied as per the requirement of milk distributing agents. The loose milk in
tankers will be supplied to Mother Dairy, Gandhinagar, other member union other
parties & to individual customer as per their requirement. Mother dairy 7 other
member unions are lifting milk as per the monthly milk dispatch program decided
in GCMMF, Anand. Chhash is also sold in pouches & in cans. Flavoured milk is
sold in bottles as per the requirements of GCMMF, milk distributors &approved
parties.
 The appointment of milk distributing agent:
The sales process of dudhsagar dairy invites applications from the parties of
potential areas, who are interested in selling milk, chhash, flavoured milk. The
area may be fixed while appointing the milk-distributing agent, whenever
required.
In case of an individual customer, milk, chhash, chilled water is given in union's

cans vessel against cash payment basis.
 Product sales within district including village co-operative societies:
The demand for ghee, chhash, chilled water etc, within the district is being met by
selling the products to the individual customer or institutional customers. The sale
may be done against cash payment or cheque or DD or credit sales depending
upon the party.
 Export orders:
The export dept of GCMMDF Ltd. Anand sends the copy of export order for the
various products to the managing director, production process, QA process,
purchase process & sales process. On the receipt of the same, the order details are
examined. Production planning is done as it done as it is mentioned in production
process. The dispatch of different products is made by dairy against GCMMF
Ltd's Dispatch instruction letter, to its various depots.
Whenever there is demand for products, which is specific & special requirement
from customers, it is received by sales process. Sales process in turn reviews the
requirements with top management & concerned personal. Detail of the reviving
and meeting customers requirement are explained in customer satisfaction sub
process.
 General house keeping:
Housekeeping is maintained at sales process as per the work instruction of

general housekeeping.

GUJARAT CO-OPERATIVE MILK MARKETING FEDERATION
Gujarat Co-operative Milk Marketing Federation (GCMMF) is India's largest food

products marketing organization. It is state level apex bodies of milk co-operative in
Gujarat which aim to provide remunerative returns to the farmers & also serve the
interest of consumers by providing quality products which are good value for money.
SABAR AMUL
BANAS
VASUDHARA
DUDHSAGAR
MADHUR
“GCMMF”
UTTAM
Brand name UTTAM
SURSAGAR “AMUL” & SAGAR”

BRODA
PANCHRMRUT
DUDHDHARA
SUMUL GOPAL
In all thirteen dairies the marketing is done by Gujarat Co-operative

Milk Marketing Federation with brand name of “AMUL”.

2. ORGANIZATION STRUCTURE
MARKETING
DEPARTMENT
GENERAL MANAGER
SALES MANAGER
SENIOR MANAGER
JUNIOR MANAGER
OTHERS
3. PRODUCT
3.1 PRODUCT MIX

Product mix is the set of marketing tools that firm uses to pursue its marketing
objectives in the target market. It consists of everything the firm can to influence the
demand for its product. The many possibilities can be collected into 4 groups of
variable known as the four Ps:
Product
Price
Place
Promotion
Product mix which is also called as product assortment is the set of all product and
items that a particular seller offers for sale. A company’s product mix has certain
width, length, depth and consistency.

PRODUCT
Marketing is a comprehensive term and it includes all resources and a set of activities
necessary to direct and facilities the flow of goods and services from producers to
customers in process of the distribution. Business regards marketing as a management
function to plant promote and delivered product to the clients or customers.
PRODUCT PLANNING
Product is a key element in the market offering. Marketing-mix planning begins with
formulating an offering to meet target customers need and wants. The customer will
judge the offering by three basic elements.
Product feature
Service mix and quality
Price
A product is anything that can be offered to satisfy a want or need. Products that are
marketed include physical goods, services, experience, events, persons, places,
properties, organization, information and ideas.
In planning its market offering, the marketer needs to think through five level of the
product. Each level adds more customer value and the five constitute a customer
value hierarchy. The most fundamental level is the core benefit; the fundamental
services or benefits that the customer is really buying. A patient is buying cure for his
disease not medicines.
PRODUCT CLASSIFICATION
Marketers have traditionally classified products on the basis of characteristic.
Durability
Tangibility
Use (Customer or Industrial)
PRICE
“Price is the only element in the marketing mix that creates sales
revenue; the other elements are costs.”
- Philip Kotler
• It is the value, usually in monetary terms that sellers ask in-exchange for the
products they are offering.
• The prices of products of DUDHSAGAR are also decided by the GCMMF.

The GCMMF conducts the market survey to check the validity and feasibility
of prices in the market and accordingly decides the prices of DUDHSAGAR

products. However, the price is inclusive of several elements like:
 Cost of Milk
 Raw Material Cost
 Labour Cost
 Processing Cost
 Packaging Cost
 Advertising Cost
 Transportation Cost
 Sales Promotion Cost
 Taxes etc.
The GCMMF considers all these cost aspects and set them up in pricing
structure to decide the jelling price of milk and milk products.
• DUDHSAGAR decides prices for the product Milk, Butter Milk and Curd.
For that they mainly focus on commission of retailers.
PLACE
DUDHSAGAR dairy is classified into large scale industry. Dairy is producing its
various products like milk, ghee, butter and milk powder etc. it is very necessary to
have strong distribution channel. The DUDHSAGAR dairy has its own sales office
which is organized by DUDHSAGAR dairy him self and Gujarat state milk
marketing federation company distributes 70% products through GCMMF and 20%
through local marketing and remaining 10% to the Army.
DUDHSAGA
R DAIRY
Local G.C.M.M. Army

Sales F Sales Sales
Wholesale ALL
r INDIA
Retailer
Customer

1) LOCAL SALES
It is the sales made in the boundaries of Mehsana milk shed area consisting of
Mehsana, part of Gandhinagar and part of Patan Districts. The products mainly sold
are Sager Milk, Sager Ghee, Sager Butter Milk, Amul Butter and Amul Milk
Powder. This local sale is done through distributors.
On special occasions like marriage, party big orders are taken directly from party.
Average milk sold locally is 7500 liters, per day.
2) GCMMF SALES
The sale of organization is mostly made by Gujarat Co-operative Milk Marketing

Federation (GCMMF).
3) ARMY SALES
It is very special selling to Army. There is no intermediate between two. Only Butter,
Sweetened Condensed Milk and Skimmed Milk Powder sold to army. From this,
Powder is negotiated by federation and Sweetened condensed Milk by Dairy.
Powder is supplied by main three centers
a) Mehsana District Co-operative Producers Union Ltd.

b) Amul Dairy
c) Saber Dairy (Sabarkantha)
Whole milk powder is given to Army’s supply depot as per their demand. There total
47 Army supply depot in India. Skimmed milk powder is gives to Army’s Military
farm.

3.2 PRODUCT LIFE CYCLE
Product Life Cycle is an important concept that applies product Items. A company
has to change differentiating & positioning strategy with changes in the product,
market, economic condition & competitors over time.
The Product concept comes from the fact that a product sales volume & amount of
profit. Profit rise & fall at different stages of the product life cycle. Products
required different marketing, Financial, Manufacturing, Purchasing & Human
resource strategies in each of their life cycle.
Product Life Cycle has commonly four stages
 Introduction
A period of slow growth as the product is introduced in the marker. Here
heavy expenses incurred with product introduction.
 Growth
A growth is a period of rapid market acceptance and profit improvement.
 Maturity
A maturity is a period of slowdown in sales growth and profit stabilized of
decline because of increase competition.
 Decline
A decline is a period when sales show a down ward profits.

3.3 NEW PRODUCT DEVELOPMENT
Company’s that fail to develop new products are putting themselves at great
risk. Their existing products are vulnerable to changing customer needs &
tastes, new technologies, shortened product life cycles & increased domestic &
foreign competition. New technologies are especially threatening. Market
established company’s focus on incremental innovation. Newer companies
create disruptive technologies that are cheaper & more likely to alter the
competitive space.
New product development process includes the following steps.
Idea generation
Idea screening
Concept development and

testing
Marketing strategy
development
Business analysis
Product development
Market testing
Commercialization

1) Idea Generation:-
The generation of new product idea contains the sources of all ideas relating to the
new product. Whether they can be from employees, R & D, marketing experts,
public, government etc..
2) Screening of Idea :-
The idea will be scrutinized after its collection. All the ideas collected may not be
acceptable. Ideas with product policies & objectives of the film may be dropped
out lightly.
3) Concept Development & Testing :-
All the ideas that survive the process of screening will be studied in details. They
will be developed into mature product concepts. Concept testing helps the
company to choose the best among the alternative product concepts. A product
idea can be turned into several product concepts.
1) Who will use the product?
2) What primary benefits should this product provides?
3) When will people consume this product?
4) Marketing Strategy development :-
The manager, at this stage should develop the marketing strategies.
5) Business Analysis :-
Under this stage, selected ideas are studied in detail manner, determining is
desirable market feasibility & features of the product.
6) Product Development & Programme :-
The product must be developed by,

a) Developing models
b) Consumer reference testing
c) Brand
d) Packaging
7) Market Testing :-
The segment will be selected to test the product & its sustainability will be
decided from its performance.
8) Commercialization :-

If the product proved successfully in testing, a decision to produce it on

commercial basis may be taken & it will be launched fully into the market.
3.4 BRANDING & PACKAGING
BRANDING
“A name, term, sign, symbol or design or a combination of them intends to identify
the goods or services of one seller or group of sellers and to differentiate them from
those of competitors”. Thus brand identifies the sellers or makers.
The American Marketing Association
There are mainly two names are use for the product and that are AMUL and SAGAR.
These are two brand names which are mainly use for the product.
PACKAGING
Milk:-
Pouch milk – 500 ml
Ghee:-
Pouch packing – 500 ml
Refill packing – 1 litter
Tin packing – 1 litter, 2 litter, 5 litter, 15 kg
White butter:-
Only 15 kg cartoon packing
Yellow butter:-
Packing brand name “Amul Pasteurized butter”
Packing on 500 gram, 100 gram and 10 gram
Butter use name table butter
One chip lets weight 90 gram
One packet 110 chiplets pack and under 1 cartoon 12 packets
Amul spray:-
Tin pack – 500 gram & 1 kg
Refill pack – 200 gram, 500 gram & 1 kg
Polythin – 200 gram & 1 kg
Amulya:-
Tin pack – 500 gram
Refill pack – 200 & 500 gram
Pouch pack – 500 gram & 1 kg
Sagar skin milk powder spray dried (non fat)

Refill – 500 gram

3.5 PRICING – METHODS AND STRATEGIES
The aim of each and every company is the maximum of profit and customer
satisfaction. The level of profit is generally depending on the pricing policy of the
company. Prices of the product are decided evaluating the return of factors of
production i.e. interest, rent, wage, and profit. Also other such as direct and indirect
taxes etc is also considered while deciding the price.
The factors affecting the pricing are as follow.
 Cost of production.
 Competition
 Quality of product
 Payment period
There are five types of price setting methods.
 Value pricing
 Target return pricing
 Mark-up pricing
 Group Pricing
 Going rate pricing
In DUDHSAGAR DAIRY, prices are not fixed for the products; there are some
regular changes in price of some products, just like milk and ghee. Prices are more
and less depends upon the cost of the raw materials and other expanses. They can also
adjust the price according to the market price and demand of product.

4. PROMOTION MIX
Promotion refers to marketing activities used to communicate positive information
about an organization, its product and activities to directly or indirectly expedite
exchange in a target market.
DUDHSAGAR promotes its products through newspaper, hoardings etc. The

GCMMF however uses hoarding for advertising in local areas. Hoarding designed on
the creative basis attract the customer more.
4.1 ADVERTISEMENT
“Dudhsagar dairy” is do advertisement of its product many different ways, which

are under
- Advertisement through Newspaper
- Advertisement through Board and Hoardings
- Advertisement through Posters
- Advertisement through Internet
The sales of organization mostly make by Gujarat Co-operative Milk

Marketing Federation (GCMMF).
4.2 SALES PROMOTION
Sales Promotion consists of short term incentives to encourage Purchase and Sales of
a product or services where as advertising offer reasons to by a product or services,
sales promotion offers reason to buy it. Advertising is joined by two other mass
production tools, sales promotion and public relation. Two tools of the sales
promotion (a) Consumer sales promotion tools and (b) Trade promotion tools. The
main consumer sales promotion tools include:
 Samples
 Coupons
 Cash refund
 Price pack
 Premium
 Advertising specialties
 Contents and games
 Patronage reward

For the sales promotion, in the Dudhsagar some stapes are taken like in dipavli
festival some discount is given to the customers. For increase the morale of agent
some benefits are given like bonus, increase commission etc.
5. CHANNEL MANAGEMENT
“Dudhsagar Dairy” Mehsana is producing various products like Milk, Butter, Ghee,
Milk powder and Sweetened condensed milk etc. Distribution channel is important
for business.
It has two types of Distribution channel like:
1) Local Distribution channel: -
The Dudhsagar dairy has its own sales office, which is organized by Dudhsagar
dairy itself. It has different sales office in different cities like Kalol, Kadi, Mehsana
and other places.
E.g. Wholesale dealer Retailers Customer
2) Nationally Distribution Channel: -
Federation dairy union Federation Depot
Wholesale dealer Retailer Customer
This Distribution channel decided by Gujarat Coop Milk Marketing Federation Ltd

7 PART – C
FINANCE / ACCOUNTING DEPARTMENT
1 Introduction
3 Capitalization and capital structure
4 Leverage analysis
5 Capital budgeting
6 Sources of finance
7 Working capital management

1. INTRODUCTION
Finance Management is the part of the Managerial activity, which is concerned with
planning, and controlling of the firms financial resources. It is an applied branch of
general management it has to plan to organize and control the finance of the
enterprise. Chief duties of financial management are planning and control of
corporate finance. Financial Management is called upon to take three major decisions
viz. Investment decision, financial decision, and dividend decision. Financial
Management involves the implementation of these three major decisions it is an
integral part of overall management rather than merely a staff activity concerned with
fund raising operations without sound management of financial resources, business
can not achieve its objective and may occur heavy losses, Thus financing
management in charge of efficient planning and control of the cycle of flow of funds
inflow and outflow of funds.
Financial management, as an academic discipline, has undergone fundamental

changes in its scope and coverage. In early years of its evolution it was treated
as synonymously with the raising of funds. In current literature pertaining to
financial management, a broader scope so as to include, in addition to
procurement of funds, efficient use of resources is also characterized by a
change over the years. Financial management, as an integral part of overall
management, is not a totally independent area. It draws heavily on related
discipline and fields, such as economics, accounting, marketing, production and
quantitative methods.

Importance of finance can not be measured. It is really a key for business

operation money is universal lubricant which keeps enterprise dynamic. It has
gained lots of importance over time. Success of every business largely depends
upon the financial position of the business. It is said, “Finance is the arms and
legs of business “. A potential and capable management can run the department
very effectively. In finance department each and every decision should be taken
in such way that every pie of money should be utilized in adequate manner
“Financial management is the activity concerned with the planning, raising,

controlling & administrating the funds used in business.”
The financial management involves critical decisions on which the very

survival of the organization depends. The main financial decisions are as follows:
 Investment Decision.
 Financing Decision.
 Dividend Decision.
Financial decisions are thus very crucial and important, decisions for the firm.
The main function of finance department is to tackle The day to day financial
requirement and other short term and long term expenses, which an organization
incur quite often.
All the other department of the organization strongly depends upon the
finance department to carry on their departmental activity efficiently. Hence it is the
responsibility of the finance manager to manage the finance function with proper
care. Adequate financial availability in time in the organization would lead to
organizational success and the failure to manage finance will thus lead to inefficiency.
• IMPORTANCE OF FINANCE MANAGEMENT :-
Proper finance is the real key to the success of any business enterprise.
Without proper finance a business neither survives nor expands and
modernizes. It is the finance, which works like a lubricant, which keeps the
organization dynamic. Keeps men and machine at work. The following are the
points highlight the importance of finance.
 Finance for business promotion.

 Finance management for optimum use of firm.
 Use for co-operation in business activities.
 Useful in decision-making.
 Determinant of business success.
 Measurement of performance.
 Basis of planning, co-operation and control.

• SCOPE OF FINANCE MANAGEMENT :-
1. Investment or long term asset mix decision.

2. Dividend decision / profit allocation decision.
3. Liquidity decision / short - term asset mix decision
INTERNAL AUDIT DEPARTMENT
Shri. George Samuel is the in-charge of Internal Audit. Department handles the
internal audit functions in various parameters as Financial, Operational, Special
Assignments & Propriety areas. Internal audit dept. is broadly divided into pre-audit of
payments; post audit of books, post audit stock, continuous physical verification, 100%
purchase procedure, P&L & B/S audit. The internal audit procedure is defined in depth
in Internal Audit Manual. The whole audit programme is well defined in advance and
respective personnel are being responsible for the distributed work area.
Any queries are being seriously vouched and highlighted to the management to take
rigorous steps for the same. After finalizing the internal audit workings, same set of
books are being given to Government auditors for their audit purpose. Government
auditors vouch the books and puts query (if any) for the clarification with the Union’s
management and ask for the explanation of the query. Once the Government auditors
are satisfied with the explanation of the query, the same is being freeze and cleared.
2. ORGANISATION STRUCTURE
The accounting function covering the Mehsana office and plant, the five Chilling
centers at Vihar, Kadi, Harij, Hansapur, and Kheralu and two cattle feed plants at
Boriavi and Ubkhal are performed by the Accounts Department at Mehsana head
office of Dudhsagar dairy. All the purchase and sales for Dudhsagar dairy are
executed from the Mehsana head office centrally. The purpose and scope of Account
process are Management of Financial resource of the union accurate and timely
payment to societies and supplies, maintain proper books of the union and advise
Dudhsagar dairy’s management of the performance of the union based on accounting
records, finance process includes the accounting functions of payables, Receivable,
Cash Management, Asset Management, and General Accounting & Reporting
functions including Budgeting. It also covers Costing activities performed at
Dudhsagar dairy. The Audit Budgeting and Costing process are performed by the
internal Audit department in closeness with Accounts Department.
Chairman
Managing
Directors
General Manager
Deputy General
Manager
Assistant
General Manager
Senior Manager
Managers
Deputy Manager
Assistant
Manager
Sr. Executive
Executive
Asst. Executive
Jr. Executive
Sr. Assistant
Jr. Assistant
Sr. Clerk

Jr. Clerk
FINANCIAL PLANNING
A firm needs to manage its resource effectively and efficiently to achieve its
objective. The managing of resources in an a effective manner is possible only when
the management work out the future course of action in advance and take decision in
professional manner and rational manner that’s why financial planning is very
important.
Financial planning is a statement estimating the amount of capital and determining its
composition. It includes;
 Determination the amount needed for implementing the business plans.

 The determination form and proportionate amount of securities.
 Laying down the policies as to administration of financial plan.
STEPS FOR FINANCIAL PLANNING
Analysis of past performance
Establishing objective
Determine investment need
Forecasting cash flow
Financing
Consequences of financial plan
3. CAPITALIZATION & CAPITAL STRUCTURE

CAPITALIZATION
Sources of capital for DUDHSAGAR are:
• Federation gives them daily amount decided by union.

• Fix deposit of society is major source of finance.
• Interest of fix deposit of bank like SBI, BOB, etc is one of the sources of
finance.
• Share capital of DUDHSAGAR. (Share of DUDHSAGAR is not for public
but only for the society members.)
CAPITAL STRUCTURE
Capital is one of the most important factors of production without capital organization
cannot production or other type of the activity. Capital includes share capital reserve
and surplus and long term liabilities. The authorized share capital of the dairy is
2500,000 shares of Rs. 100 each and the capital is 2500, 00,000.
4. LEVERAGE ANALYSIS
Leverage is used for getting higher work don by putting lesser efforts i.e.
mechanical advantages is achieved is achieved. For example, leverage helps us
in log objective, which may not be otherwise possible. Leverage has been
defined as “the mechanical advantages gained by the use of levers.”
• Operating Leverage
• Financial Leverage
• Combined Leverage
The leverage associated with investment activity is referred as operating

leverage while leverage associated with financial leverage associated with
financial activity is called as financial leverage.
• OPERATING LEVERAGE
The operating leverage many are define as firm’s ability to use fixed cost to
magnify the effects of chances in sales on “Earning Before Interest & axes
(EBIT). The operating leverage takes place when a change in sales producer a
greater change in EBIT. A firm will not have operating leverage if its fixed
operating cost is zero. For such firm a given percentages change in same
percentages in the level if sales would lead to the same percentages change in
the level of EBIT.
Contribution
Operating Leverage = ---------------
EBIT
Where, EBIT = Earning Before Tax & Interest
= Contribution - Fixed Cost
Contribution = Sales - Variable Cost
• FINANCIAL LEVERAGE :-
Financial leverage is also known as “Trading on Equity”. The financial leverage

is the ratio of long – term debt to total funds employed. It may be defined as the
tendency of the residual net income to change disproportionately with operating
profit.
EBIT
Financial Leverage = ---------
EBT
Where,
EBIT = Earning Before Tax & Interest
EBT = Earning Before Tax
• COMBINED LEVERAGE :-
It is also known as “composite leverage”. Operating leverage measures

percentage change in sales & financial leverage measures percentage change in
taxable profits or earnings per share (EPS) due to percentage change in
operating profit. i.e. EBIT. Their combined effect will measure the company’s
financial revenue & taxable income or EBT.
Operating Leverage
Combine Leverage = -----------------------
Financial Leverage
5. CAPITAL BUDGETING
Capital budgeting will show the future expenditure on fixed assets over a period
of years. Capital budgeting represents a scheme for investing resources which
can be analyzed & appraised reasonably independently. The basic characteristic
of a capital expenditure is that it typically involves a current outlay of funds in
the expectation of a stream of benefits extending for into the future.
“Budgeting is the financial and quantitative statements prepare and

approved priority to a definite period of time of the policy to be perceived during
that period for the purpose of attaining given objective.”
“Budgeting is the process of planning all flow of finance resources into

within and information during some specified period.”
Currently the budgeting activities are restricted to annual preparation of budget and
monitoring of budget versus actual cost quarterly. Budget is made annually by
manually obtaining the amount from each department against the several budget head
description in a form. Dudhsagar wants to track and implement budgetary controls
while making expenditure.
Dudhsagar has limited exercise towards allotment and structuring of cost code, sub
code and purpose code according operation classification. As sales are more or less
regulated, a more system orientation is adhered to in drafting cost budgets. The code
allocation practice is on to allot the codes based on direct cost and than to the sub
division or activity the codes are both all allotted to process and product.
In case of finance and accounts, situation is different in case where the tally accounts
and budget codes are same and in circumstance where they are different. In case
where they are different the budget accounting system codes are input against each
account automatic conversation to BAS codes occur where they same.
Budget is tracked against the cost centers and sub centers are defined with the
responsibility center but currently the responsibility centers are not in use the stores
consumption tracked till the cost center and sub center level at the time of
consumption itself for other expenses like repairs and maintenance travel expense and
other office expenses the cost center and sub centers are entered to categories the
expenses after exporting them into an oracle based system from the tally system for
the purpose of tracking. A quarterly budget review report is prepared depicting the
quarterly budget amount actual expense and variance figures along with the
cumulative figures.
For following essential element of Budget Company prepare and control

successful budget system.
Objectives
Knowledge
Accurate forecasting or business activity
Co-ordinating business activity
Communicates the budget

Education, co-operation
Flexibility
Providing frame-work for evaluation
“DUDHSAGAR DAIRY,” Prepares following budget in terms of time, nature and

capacity is given below.
• TIME BASED BUDGET:
• Long Term Budget (5 to 10 year)

• Short Term Budget (1 to 2 year)
• Current Budget (up to 1 year)
• ACCORDING TO NATURE:
• Operating Budget
• Financing Budget
• ACCORDING TO THE CAPACITY:

• Fixed Budget
• Flexible Budget
• ACCORDING TO FUNCTION:
• Sales Budget
• Production Budget
• Personnel Budget
• Direct Labour Budget
• Cash Budget
• Capital Expenditure Budget
6. SOURCE OF FINANCE
Where money comes in company is important because this financial facility useful for
company activity. There are two types of source of collecting money in market first
one is short term source and second is long term source long term source of finance is
useful for fixed assets and short term finance source is useful for company day to day
activity.
a) Long Term Source of Company

• Equity share capital
• Reserve & surplus
• Secured loan
• Unsecured loan
•
b) Short term sources of company
• Deposit
• Bank loan
7. WORKING CAPITAL MANAGEMENT

INTRODUCTION
Every business concern irrespective of its, nature and needs of working capital. Funds
are needed to carry out business operations such as purchase of raw materials,
payment of wages and other day-to-day expenses, these funds are known as working
capital the key difference between long term financial management and working
capital management is in terms of the timing of cash. While long-terms financial
decisions like buying capital equipment or issuing debentures invoice cash however
an extended period of time, short-term financial decisions typically involves cash how
within a year or within the operating cycle of the firm. The concept of working capital
has been a matter of great controversy among the financial wizards. There are two
concept of working capital-gross & net.
Gross working capital refers to the funds invested in current assets. Current assets
are the assets, which can be converted into cash within one year and includes stocks,
debtors, cash, short-term securities and bills receivable.

The gross working capital concept focuses on two aspects of current assets
management. How to optimize investment in current assets? How should current
assets financed?
The consideration of the level of the current assets should avoid two danger points -
excessive and inadequate investment in the current assets. Investment in the current
assets should be just adequate to the need of the business firm. Excessive investment
in the current assets should be avoided since it impairs firm's profitability, as idle
funds generate nothing. On the other hand inadequate investment in the current assets
can threaten the solvency of the firm because of its inability to pay the current
obligations. Another aspect of the gross working capital points to the need of
arranging to finance the current assets. Whenever the need for working capital rises
for any reason, financing arrangement should be made quickly. Similarly some
surplus funds arise they should be invested in the short-term securities.
Net working capital refers to the difference between current assets and current
liabilities. Current liabilities are those claims of creditors that are expected to mature
for payment within one year and include creditors, bills payable and outstanding
expenses.
Net working capita; is the qualitative concept. In indicates the liquidity position of the
firm. The good liquidity means maintaining current assets in excess of current
liabilities. A weak liquidity poses a threat to the solvency of the company.
Net working capital also covers the question of judicious mix of long-term and short-
term funds for financing current assets.
CATEGORY OF WORKING CAPITAL
[A] Permanent working capital:-
The need for the working capital arises due to operating cycle. The operating cycle is
the continuous process so the need for working capital is felt constantly. Thus a
minimum level of the current assets is continuously required by the firm, which is
referred as permanent working capital.
[B] Temporary working capital:-
The firm has to maintain extra inventory of finished goods to support the peak periods
of sales activities and investment in receivable may also increase during such period.
On the other hand investment in raw material, work-in-progress and finished goods
will fall if the market slack. Thus the extra working capital need to support the
changing production and sales activities is called temporary working capital. It may
be financed by short terms sources.
In the figure-1 it is shown that working capital is stable over time, while temporary
working capital is fluctuating-sometime increasing and sometime decreasing.
However the permanent working capital line need not be horizontal if the firm's
requirement for the permanent working capital increasing or decreasing over a period
of time.
NEED FOR WORKING CAPITAL
Need for working capital arises in order to run day-to-day business activities. The
firm should aim to maximize the wealth of the shareholders. In it endeavor to do so, a
firm should earn sufficient return from it operations. Earning steady amount of profit
requires successful sales activity hence firm has to invest enough funds in current
assets for generating funds. Current assets are required because sales do not convert
into cash instantaneously. There is always an operating cycle involved in the
conversion of sales into cash.
OPERATING CYCLE
There is difference between current assets and fixed assets in terms of their liquidity.
A firm requires years to recover the initial investment in fixed assets. On the contrary,
investment in the current assets such as debtors and inventory is realized during the
firm's operating cycle that is usually less than one year.
Operating cycle is the time duration required to convert sales, after the conversion of
resources into inventories into cash. The operating cycle of manufacturing firm
involves three phases: Acquisition of resources such as raw material, labor, power
and fuel etc...
Manufacturing of the product which includes conversion of raw material into work-
in-progress into finished goods. Sales of the product either for cash or on credit.
Credit sales create account receivable for collection.
OPERATING CYCLE
WORKING PROGRESS
RAW-
MATERIAL FINISHED
GOODS
CREDITORS
SALES
CASH
TRADE
DEBTORS
WORKING CAPITAL MANAGEMENT
Working capital management usually is concerned with the administration of all the
current assets and current liabilities. Thus it is basically concerned with: -
Determining the need of working capital

Determining the optimum level of investment in various assets, and
Examining the salient point of regarding each element of working capital
It is obvious that given a constant level of production higher the amount of working
capital the lower will be the return on investment since capital turnover ratio will be
less. On the other hand lower the amount of working capital the higher would be the
amount of the risk since the company would not have adequate liquidity to meet its
short- term obligation.
The two important aims of the working capital management are: profitability and
solvency. Solvency refers to the firm's continuous ability to meet maturing
obligations. Lenders and creditors expect prompt settlement of their claims as and
when they due. TO ensure solvency, the firm should be very liquid. If the firm
maintains a relatively large investment in the current assets, it will have no difficulty
in paying claims of creditors when they become due and will be able to fill all sales
orders and ensure smooth production. Thus a liquid firm has less risk of insolvency.
However there is a cost associated with maintaining a sound liquidity position. A
considerable amount of the firm's funds will be tied-up in the current assets, and to
the extent this investment is idle, the firm's profitability will suffer. To have higher
profitability, the firm may sacrifice solvency and maintain a relatively low level of
current assets. When the firm does so, its profitability will improve as less funds are
tied-up in the current assets, but its solvency would be threatened and would be
exposed to greater risk of cash shortage and stock-outs.
SIGNIFICANCE OF WORKING CAPITAL
Management of working capital is an essential task of the finance manager. He has to

ensure that the amount of working capital available with his concern is neither too
large nor too small for its requirements. A large amount of working capital would
mean that the company has ideal funds. Since funds have a cost the company has to
pay huge amount as invest on such funds. .
Over capitalization implies that a company has large funds for its requirements,
resulting in a lower rate of return a situation, which implies a less then optimum use
of recourses. A firm has therefore, to be very careful in estimating its working capital
requirements
If the firm has inadequate working capital it is said to be under capitalized, such a
firm runs the risk of insolvency.
WORKING CAPITAL FORCAST
Estimate of future working capital based on current assets and current liabilities. The
estimation of future working capital can be made if the amount of current assets and
current liabilities can be estimated as follows:-
The various constituents of current assets and current liabilities have a direct being on
the computation of working capital and the operating cycle. The holding period of
various constituents of operating cycle may either contract or expand the net
operating cycle period; lower will be the requirement of working capital and vice-
versa.
DETERMINENT OF WORKING CAPITAL
Working capital requirements are always very from industry to industry, firm to firm
etc. The following factors influence the working capital requirement of the firm.
1] Nature of the business

2] Sales and Demand condition
3] Technology and Manufacturing Policy
4] Credit Policy and Production Policy
5] Availability of the Credit
6] Operating Efficiency
7] Price level changes
8] Seasonality of Operation
9] Market Condition
10] Size of the Organization
11] Operating Process Cycle
12] Inventory
13] Types of raw material require and their procurement sources
14] Safety stock and lead time
15] Marketing of the company's goodwill etc.
MEHSANA DISTRICT CO-OPERATIVE MILK PRODUCERS UNION LTD
Balance Sheet for the Year ending on 31st March 2009
PARTICULAR 2006-07 2007-08 2008-09
ASSEST
FIXED ASSETS 831957692 898608895 4510945763
CAPITAL WORK IN PROCESS 9695503 10713587 212254155
INVESTMENTS
INVESTMENT IN SHARE 77026920 98191020 98191020
NATIONAL SAVING CERTIFICATE 16000 16000 22000
INVENTORIES 1130026534 1746402925 1900294576
TRADE DEBTOR 628486610 844306783 571369017
LOAN & ADVANCES 278296775 300393847 531448223
CASH & BANK 1515573851 294499251 2346561963
TOTEL 4471079885 4193132308 10171086717

LIABILITIES
AUTHORIZED SHARE CAPITAL 250000000 250000000 250000000
SHARE CAPITAL(FULLY PAID) 182943200 183107200 183197200

RESERVES 265716835 283466254 3909157254
LOAN
SECURED 1487516157 1460857134 1204963315
UNCURED 636516100 736516100 2486516100
CURRENTLIABILITIES & PROVISIONS
DEPOSITS 314612337 379986885 480085481
UNPAID DIVIDEND 5634 7423 8443
DUES TO SOCIETIES 1223474127 740415963 1367281855
OUTSTANDING AGAIN EXP 72032031 95881537 140989987
OUTSTANDING AGAIN PURCHASE 112972951 140793050 181912808
SANDRY CREDITORS 77558291 67006202 84786012
DEBENTURE REDEMPTION PREMIUM 10238708 14334191 18429674
PROVISION FOR INCOME TAX 50162554 55262554 73087554
PROVISION FOR CONTINGENT LIABILITY 0 0 3471578
PROFIT & LOSS A/C 37330960 35497815 37199456
TOTEL 4471079885 4193132308 10171086717
MEHSANA DISTRICT CO-OPERATIVE MILK PRODUCERS UNION LTD
Trading, Profit and Loss Account for the Year ending on 31st March 2009
2006-07 2007-08 2008-09

EXPENDITURE
OPENING STOCK 1051298582 762183626 1324870445
WORK IN PROCESS 161073409 118143040 151429162
RAW MATERIAL OF MILK 33392648 49043885 29452351
PURCHASE 8930681333 1138823750112448930258
PURCHASE EXP 366069948 490701293 66465771
POWER & FUEL 317897797 374750901 479878006
MATERIAL CONSUMED 1982968666 2365212470 2988357484
CO-OPERATIVE EXP 18118133 20839892 21808578
PROCESSING EXP 14031551 16825130 18647354
INSURANCE PREMIUM 6410080 3749309 2876917
SALARY & WAGES 279753718 280769559 354520320
STAFF P.F & OTHERS BENEFIT 96112142 77248480 97499710
FREIGHT & FORWARDING EXPENSE 40265698 50948347 65538769

AUDIT FEE 10741408 15710259 10669377
INTEREST & COMMISSION 101258595 96956538 156708131
OTHER EXP 17890105 31869931 36003267
MARKETING EXPENSE 12026015 11436918 9964683
DONATION 12211 0 0
REPAIR & MAINTENANCE 61289639 67239455 83125090
RATE RENT & TAXES 8035693 5294435 7801914
POST TEL.&STASTIONERY-PRIN 6443369 4712322 6644787
PREVISION FOR TAX 1694465 5677035 18928748
PROVISION FOR RESPONSIBILITY 0 0 3471578
DEPRECIATION 113446183 121655115 120425999
PROFIT 37330960 35497815 37199456
TOTAL 13668242348 16394703256 18541218155
INCOME 79643064 67123786 67505990
SALES 12659228733 14821827512 17502649176
CLOSING STOCK 929370551 1505751958 1569254289
LOSS
TOTAL 13668242348 16394703256 19139409455

8 PART – D
1 Introduction
3 Human Resource planning
4 Recruitment sources
5 Selection methods
6 Placement
7 Training and development
8 Performance appraisal policy
9 Wage and salary administration – job evaluation
10 Promotion and Transfer
11 Role of Human Resource Development
12 Trade union and industrial relation
13 Dispute management
14 Social responsibility
1. INTRODUCTION
Manpower is one of the important aspects to be taken into consideration. If a

company has highly advance technology for the production unit but does not have
well skilled labor to operate the machineries then all the technology is a waste. Even
after having highly advanced technology the unit cannot excel in its production
objectives. Human resource management deals with the human aspect of the
organization.
“It is basically concerned with two important function is managerial function, under
which planning, organizing, directing, and controlling are included and also
operating function under which procurement development, compensation integration
and separation are included.
Adovin Flippo
Thus in short, it is concerned with the obtaining and maintaining of satisfactory and
satisfied work costs. The main objectives of personnel department are:
1. To select the personnel on need.

2. Effective utilization of personnel in the achievement of organization goals.
3. To safeguard the interest of labor and management by securing the highest
level of mutual understanding and goodwill among those sections in the
company which participate in the manufacturing process?
4. To maintain harmonious relations between workman & management.
5. To sustain & improve work condition so that the employee nay sick to their
jobs for longer period.
Now a day in India, the importance of personnel has been identified and realized and
therefore maximum efforts are being done to develop it and thus DUDHSAGAR has
maintained a separate department having separate nice president.
In DUDHSAGAR DAIRY total member of staff are above 1850, and maximum
member of workers is in powder section & it is 361.
2. ORGANISATION STRUCTURE
H.R. DEPARTMENT
H.R. MANAGER

ASSISTANT MANAGER
SUPER VISOR
CLARK
WORKER
3. HUMAN RESOURCE PLANNING

“The process of determining manpower requirements and the means for meeting
those requirements in order to carry out the integrate plan of the organization”.
Coleman
Human resource planning is the process by which a management determines how an

organization should move from its current manpower position to its desired
manpower position. Through HRP a management strives to have the right number &
right kind of people at the right places, at the right time to do things, which result in
both organization & individual receiving the maximum long range benefit. Thus,
HRP consist of projecting future manpower requirements & developing manpower
plans for the implementation of the projection.
There are several factors that have to be consideration in the time of

Human Resource Planning.
 Strategy of the organization

 Organizational growth
 Environment Uncertainty
 Time horizon
 Nature of the job
 Off loading the work
Human resource planning is understood as the process of forecasting an
organization’s future demand for and supply of the right type of people in the right
number. This is a crucial step in the overall HRM process. Organizational planning
includes managerial activities that set the companies objectives of the future and
determine the appropriate means for achieving those objectives.

4. RECRUITMENT SOURCES
“Recruitment is a process of searching for prospective employee & stimulating &
encouraging them to apply for jobs in an organization”.
When management official thinks that, in the organization, requirement for the
recruitment & fill up the vacancy, for suitable person for suitable job, to do
recruitment. Company for its better future & earn more profit than earlier, it shall fill
the vacancy & appoint the right person in right place, by advertising on the notice
board, in the magazine, newspaper, & from the past pending application in the
organization.
E.g. the recruiters prepare profiles for each category of works & according
by work and the main specialization, where they should be placed.
DUDHSAGAR DAIRY generally use both type of sources of Recruitment:
RECRUITMENT
INTERNAL EXTRERNAL
1) Internal: -
Internal sources include personnel already available in the company, e.g. its
working force when ever vacancy occur somebody from within the organization is
upgraded transferred promoted & some time demoted.
2) External: -
External sources of recruitment are private employment agencies, placement

exchangers, and management consulting firms.
5. SELECTION METHODS
SELECTION
“It is the process of choosing the prospective candidate who can match best with the
job profile as well as can adjust best with the Organization culture.”
Flippo

After considering the application from the candidate who is given an application for
the job a particular designation, by the selected official creates a selection committee
to select the right candidate. That committee calls the candidate for personal
interview; they select a candidate with his knowledge, practical skill & qualification.
One of the most beneficial points is that candidates have any experience in that type
of work.
Selection is a hard tasks & it is complex in nature. It is also time consuming as well
as costly. In DUDHSAGAR dairy
SELECTION IN DUDHSAGAR
The company has adopted the various methods of selecting the essential workers in
the organization. One of those methods is to call the candidates for personal interview
to know his basic knowledge, attitudes regarding the job and some other basic testing.
For that, company has a selection committee to select a suitable candidate for the job.
Selection for the managerial level post, it’s based on educational qualification as well
as practical knowledge & skill. For workers, it’s based on experience & seniority.
VACANCY IN ANY DEPARTMENT


APPROVAL FROM M.D.

ADVERTISEMENT

COLLECTION OF APPLICATION

SECURITIZE THE APPLICATION

INTERVIEW

MEDICAL CHECKUP

SELECTION
In DUDHSAGAR DAIRY the probation period for officers is 12 months, 6 months

for clerical employee, and 3 months for workers
6. PLACEMENT & INDUCTION

PLACEMENT
After an employee has been hired, an offer of employment has been extended
and accepted & accepted the final stage in procurement function is to be
concluded namely that of placement of the individual on the new job. Placement

includes initial assignment of new employees and the promotion transfer or

demotion of present employees.
Placement may be defined as the determination of the job to which an accepted

candidate is to be assigned & his assignment to that job it is matching of what
the supervisor has reason to think he can do which the job demands. It is
matching of what he describes.
Collect details about the employees


Construct his / her profile

Which subgroup profile does the individual’s profile best fit?

Compare subgroup profile to job profile.

Which job profile does subgroup profile best fit?

Assign the individual to job family

Finally placement is done with right candidate at right job.
“DUDHSAGAR DAIRY” is also having systematic placement activity i.e. this firm
also checkout all the information of job & job holder before giving him final
placement so that best individual can be fit into the job. In DUDHSAGAR
DAIRY, worker as well as engineers guide to new comers but there are
fewer chances of demotion and transfer.
INDUCTION
“Induction is the process of receiving & welcoming an Employee when he first joins
a company & giving him the basis information he needs to settle down quickly &
happily & start Work.”
Michal Armstrong
Purpose of Induction
 Promote among old employees

 Build up confidence of new Employee
 To give necessary Information about company to new employees
 To faster a close and cordial relationship

Induction in DUDHSAGAR
 Company’s Organization Structure

 Brief History & Operations of the Company
 Product & Services of the Company
 Rules & Regulations and Daily work Routine
 Working Method & Discipline of the Unit
 Training & Promotion Policy
 Benefits & Services to Employees
DUDHSAGAR DAIRY is not having any specific induction procedure i.e. whenever
any new employee is appointed, the information regarding daily work routing & work
rules is given no any other welcome process is carried out in this organization
7. TRAINING & DEVELOPMENT
TRAINING
Training is very important need after selection of the workers for jobs. Training
programme can help to the company in competition period for its quality. Training is
defined as “the act of increasing knowledge and skills of an employee for doing a
particular job”. Training implies activities in that teach employees how to perform
their present job better. In short, training prepares people to perform their present jobs
more efficiently. Training teaches employees required skills, knowledge, attitudes and
helps them improving their performance by improving new skill, new techniques of
doing the work and improving their work habits, and reduces wastage of time or cost.
“Training is a process of learning a sequence of programmed behavior”. It is a short

term process utilizing a systematic and organizes procedure by which non managerial
personnel learn technical knowledge and skill for definite purpose.
TRAINING METHODS
A) On the Job Training :
This most commonly used & widely accepted method of training is helpful to
the job. On the job training is essentially a process of learning while doing the
job. A variety of on the job training methods may be employed by
organizations, which are discussed below.
1) Job Instruction Training

2) Training by supervisors
3) Simulation
4) Apprenticeship
5) Self – learning
6) Training by experience workman
7) Instruction
B) Off – the – Job Training :-
In off – the – job training, the training does not form part of actual job activity.
Here, the training is provided first to the new employee either at co classroom or
at training centers owned by organization. When training tests completed,
employee is put one actual job activity. Some of the widely accept off – the –
job training methods are as discussed below.
1) Lectures method
2) Conferences
3) Seminar or group discussion
4) Role play
5) Programmed instructions
6) Case study etc.
TRAINING FOR THE WORKERS

The HR department of the DUDHSAGAR DAIRY prepares schedule for training of

the workers in orders to make them familiar with their task and to develop the job.
The main purpose of the company behind imparting training is to make the workers
well converse with the new technology.
TRAINING FOR CLERK AND TECHNICAL STAFF
The DUDHSAGAR DAIRY is not imparting any training course as far as clerical
staff is concerned. But the supervisors are trained for:
• Gaining knowledge of responsibility
• Cost control and cost effectiveness
• Knowledge of all disciplinary action
• Development of leadership quality
DEVELOPMENT
DUDHSAGAR aims at improving the managerial skills and effectiveness of its every
individual through a planned and deliberate profile and process of learning.
The Human Resource Department of the DUDHSAGAR arranges various
conferences and invites guests and other executives from its different units to audit
the organization and to impart training to the executive. On the contrary, the officers
and managers of this company are also sent to its different units within the country as
well as aboard for the exchange of idea relate to the operation management and also
for the improvement of this technical knowledge.
8. PERFORMANCE APPRAISAL POLICY
“Performance Appraisal is a systematic, periodic and impartial rating of employee’s

excellence in matters pertaining to his present job and to his potentialities for an
enhanced job.”
Flippo
It is a process of obtaining, analyzing & recording information about the relative

worth of an employee. Performance Appraisal evaluates the Performance of
employees by quantitative factors such as quantity of output and rejected output,
standard of work etc…
PERFORMANCE APPRAISAL IN DUDHSAGAR
DUDHSAGAR has adopted performance appraisal system in an Organization. It

helps to
 To assist in determining promotion and transfer policies.

 To improve job performance & identify potentialities for other work.
 To help in proper placement of workers.
 To reduce grievances among employees.
 To identify work area & needs for further training of employees.
 To develop positive relation in between employees and high authority.
TIME KEEPING SYSTEM
The dairy has a time keeping system. The officers & employees have to mark their
presence in attendance register. There is also card system that is very easy. All the
staff on factory floor is working in the three shifts and each shift is of 8 hours.
 First shift - 4.00 a.m. to 8.00 a.m.

 Second shift - 8.00 a.m. to 16.00 p.m.
 Third shift - 16.00 a.m. to 24.00 p.m.
 Office time - 10.00 a.m. to 18.00 p.m.
9. WAGES AND SALARY
It is a universal fact that no one will work without any reward. Thus an employee has
to be properly rewarded for his services rendered to the organization. He should be
paid reasonable wage or salary. The salary or wage is the remuneration for his service
to the organization.
At DUDHSAGAR, wages and salaries arc paid on monthly basis. A time rate wage
system is followed by the organization. The salary of an employee would include
basic salary plus allowances like house rent, medical allowance, clearness allowances,
performance allowances, festival allowances, travel allowances, education and
development allowances, leave allowances etc,.
A common method is followed for the wage and salary administration. The present
catalogue record received from the time keeping officer is maintained of each
employee in the register, which is known as "Muster Roll".
Timekeeper sends that muster roll to the account department for attendance of each
and every employee. This will analyze and entered in the computer. The report is
scrutinized and statutory and non-statutory deductions are made. After this salary is
calculated for each employee through computer according to that they prepare salary
sleep of employees.
10. PROMOTION AND TRANSFER
PROMOTION

Promotion is a term which covers a change & calls for greater responsibility
& usually involves higher pay & better terms & condition of service and therefore, a
higher status or rank. Following points are to be considered while promoting
employees:
 Seniority
 Vacancies
 Opinion of Divisional head, past record, behavior
 Skill and knowledge
 Experience
 Loyalty towards organization
TRANSFER
Promotion means an improvement in pay prestige, position and responsibilities of an
employee within his/her organization. A mere shifting of an employee is a different
job which has better working hours better location and pleasant working conditions
does not amount to promotion. The new job is a promotion. The new job is a
promotion for the employee only when it carries increased responsibilities and
enhanced pay. Transfer is a horizontal movement policy. It does not change authority,
salary, status but only place is changed from one organization to another organization.
DUDHSAGAR gives first preference for transfer to those employees who are coming
from local areas. Normally DUDHSAGAR gives transfer to adjust the work force of
one plant to another. There is no any fix transfer policy. Sometime temporary transfer
is also given to employees.
SLOGAN: - “ONE HAND IN ANOTHER HAND”
11. WALFARE POLICY

DUDHSAGAR provide very good facility to their employees so that employees work
effectively and efficiently. It provides following services to their employees:

 UNIFORM: DUDHSAGAR gives two pairs of uniform every two years to

the workers.
 CANTEEN FACILITY: DUDHSAGAR has its own canteen for its

employees. All the employees of DUDHSAGAR get tea, coffee, breakfast and
lunch at minimum rate. They lunch dish at Rs. 10 per dish. For that they
provide coupon to their employees.
 SAFTEY: DUDHSAGAR provides hand gloves, cap, shoes, apron and other
things for the safety purpose of workers.
 MEDICAL FACILITY: DUDHSAGAR also provide medical facility to its

workers. They organize vaccination programme for the workers on regular
basis. DUDHSAGAR has its own hospital in the organization.
 WORKERS COMPENSATION POLICY: If during the working time any

accident occurs, the company will pay for the injury as per the workman
compensation act.
 BONUS: In DUDHSAGAR bonus is given to the workers and officers before

Diwali, Production Bonus is also given to employees.
 PERSONAL ACCIDENT POLICY: the amount for this is set up for every
worker category wise. The premium is paid by the organization on behalf of
workers. In case of any accident this policy is very useful for the workers.
 REST ROOM FACILITY: There is a rest room facility in the organization

for worker. So they can take rest during their intervals and free time. It covers
number of light, fans, toilet and bathrooms and again services of personnel
lockers. So employee can put their things in the locker.
 LIBRARY FACILITY: DUDHSAGAR gives library facility to the

employees.
12. TRADE UNION & INDUSTRIAL RELATION

TRADE UNION

Trade unions as we know exist in most organization. Trade unions are the typical
unions made up of employees of that particular organization. Generally the
employees in order to get better working conditions, better pay scales and to protect
themselves from exploitation form Trade Unions. Trade unions perform the basic
activities of discussions and negotiations with the management regarding the issues of
conflict.
At DUDHSAGAR there are tree trade unions in existence. One trade union is for
workers the other is for clerical staff and finally one is for officials. In the initial stage
there were many strikes had for 2 to 3 days of workers. However since then
DUDHSAGAR has been faced harmonious relations with trade unions. Since
DUDHSAGAR is a co-operative organization each member of trade union works as a
family member of DUDHSAGAR
INDUSTRIAL RELATION
Industrial Relation is concerned with the systems, rules and procedures used by union
and employers to determine the reward for effort and other conditions of
employment, to product the interests of the employed and their employers and to
regulate the ways in which employers treat their employees.
There are 3 approaches of industrial relation.
• Uniform approach
• Pluralistic approach
• Marxist approach
13. DISPUTE MANAGEMENT

Disputes are common in industries. Disputes occur only through the

misunderstanding among the executives, officers, employees & employers or
among hem in the company for the common task to be performed in company.
Disputes are also one of the parts of success because through it, one can also
find the new ways or solutions for the problems & it would assist in increasing
the creativity & innovativeness for the solution.
Causes of Industrial Disputes:-
(1) Wage & Salary

(2) Working Hours
(3) Working Environment
(4) Privileges & Benefits
(5) Rights & Obligations
(6) Failure of Trade Unions
(7) Absence of Any Suitable Grievance Redressed Procedure
(8) Management Attitude to Labour.
In case of DUDHSAGAR there is a manual harmonious relation between the

management and personnel. There is a peace and harmony in the unit. But, if there is
any grievance between the employee and management then the head management
manages the grievance and tries to solve problems very factually. Thus the unit
enjoys internal peace and harmony.
14. SOCIAL RESPONSIBILITY

“To actively contribute to the social and economic development of the communities
in which we operate. In so doing, build a better, sustainable way of life for the weaker
sections of society and raise the country’s Human Development index”.
In DUDHSAGAR Dairy social empowerment of about 5 LACS milk producing

members. So, the social responsibility is necessary for progress and welfare of
society.
9. GENERAL SUMMARY AND FINDINGS

• RECOMMENDATION
PRODUCTION DEPARTMENT
• Strengthen the relationship with villagers.

• As the dairy industry depends on agriculture & veterinary
DUDHSAGAR Dairy should have to concentrate on making strong
relationship with villagers by providing societal services like health and safety
(medical facility) to the farmers, educational facility to their children,
insurance facilities etc.
• Though milk is perishable item durability of milk should be increase
by increase in number of chilling centers in all over the Gujarat.
Working system in many departments is obsolescing. So, union has to adopt

new operating systems to work like increase in no. of computers in
administrative department, salary department etc. So that work can be done
speedier and efficiently and newly recruited employees can be motivated.
• SUGGESTION
I would like to give suggestion as bellow.
 The operating expenses are very high. Such has a raw material, research &
extension, packaging, processing, power & fuel etc. In this expenses raw
material consumption is most and company can never controlled. Such
expenses. Because DUDHSAGAR is expanding its dairy network year to
year. So plant machinery consumption, operation expanses and other expenses
will be increase in future. So firm should more focus to increase in sales. So
increasing in the selling of milk products is necessary.
 Average collection period of DUDHSAGAR is not covered with in credit

period, which is granted by firm to its debtor with in month. So firm should
try to collect amount from debtors with in month.
 To purchase milk is most important factor of DUDHSAGAR because firm

milk as a raw material which is perishable. So firm should use more and more
high speed vehicles like tanker, railways etc for to collect raw-material and
arrangement of more calling centers are necessary to protect the raw-material.
Because wastage of milk can effect on the expected production or on the
profit also.
 Firm should pay its creditor or societies with in few times. Because if payment
became late. The credit of company may be affected.

 Since several years DUDHSAGAR is expanding dairy network .So collection

of milk from far places is very costly and its maintenance and other cost are
also may be increased. So DUDHSAGAR should establish satellite dairies on
such far places. Because such this steps the production and sales will be
increased and market of the private competitor will be decreased.
 In the globalization world when cutthroat competition is prevailing in all

developed or developing country so to survive in the market, high qualified
persons are more necessary for every firm. Due to lack of salary and other.
Facilities qualified person cannot stay in the particular firm. So for
DUDHSAGAR should take necessary steps for this. Firm should increase
extra facility or high salary.
 In the marketing field to increase the market of new products. Firm should use
more and more distribution channels like DUDHSAGAR parlor, retailer, and
direct selling and media like more advertisement in television, news-paper
posters, board and many more.
• FUTURE CHALLENGES
The future of any institution is a subject, which requires constant attention. The future
is perceived as one embroiled with hardship. Hardships may surface in many forms as
global demands and changes, foreign affiliations, competition, liberalization,
changing values, urban shifting etc. are some of them to name which we foresee and
union has to cope with these.
In future union should adopt latest technology. Union should not sit with foremost
quality of product and co-placement with existing product range but think in a more
innovative way. To stay ahead research and development unit has to be strengthened.
Union also thinks of price to sustain leading position in the market. Prices will have
to remain steady and so union should concentrate on reducing maintenance expenses
rather than proposing increasing product price.
In comparison with other countries, which are in leading position in dairy industry,
the milk-producing animals in our country yield 4 times less milk. Hence, it is the
time that union should seriously review enhancement of milk production by adopting
better animal husbandry practices.

10. BIBLIOGRAPHY
For the reference I have used the following:
BOOKS:
Sr. on. Name of books Author name
1 Marketing Management Philip kotler
2 Human Resources Management P. Subbarao
REPORT:
 Annual report of Dudhsagar dairy

 Annual report of Amul dairy
WEB SITES:
◘ www.indiandairy.com
◘ www.intra.sagar.com
◘ www.amul.com
◘ www.sagar.com
◘ www.gcmmf.com
◘ www.dudhsagardairy.co.in

Dudhsagar DairyRreport 2009,10

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Dudhsagar DairyRreport 2009,10

Uploaded by

Copyright:

Available Formats

MEHSANA DISTRICT CO-OPERATIVE MILK PRODUCERS UNION LIMITED

MEHSANA DISTRICT CO-OPERATIVE MILK

N.R.VEKARIA INSTITUTE OF BUSINESS MAGAGEMENT STUDIES, JUNAGADH 1

PREPARED BY: PROJECT GUIDE:

SAURASHTRA UNIVERSITY – RAJKOT

N.R.VEKARIA INSTITUTE OF BUSINESS MAGAGEMENT STUDIES, JUNAGADH 2

As a part of my curriculum for M.B.A. , I am supposed to prepare a

So I have chosen MEHSANA DISTRICT CO-OPERATIVE MILK

During preparation of this project report we came to know about various

N.R.VEKARIA INSTITUTE OF BUSINESS MAGAGEMENT STUDIES, JUNAGADH 3

The undersigned Mr. PATEL SANDIP A., the student of M.B.A. - II

At last, I submit this report to the college and complete my responsibility to

DATE: YOURS FAITHFULY

PLACE: JUNAGADH PATEL SANDIP A.

N.R.VEKARIA INSTITUTE OF BUSINESS MAGAGEMENT STUDIES, JUNAGADH 4

With a deep sense of gratitude, I wish to express my sincere thanks to

The project report will be considered incomplete without acknowledging the

I am thankful to Mr. PULAK MUKHARJI sir of Sales dept giving us this

I am thankful to Mr. B.K.RANA. AGM (Engineering), Mr. J G PATEL A.M

I am thankful to all respondents for their contribution & also co-

N.R.VEKARIA INSTITUTE OF BUSINESS MAGAGEMENT STUDIES, JUNAGADH 5

N.R.VEKARIA INSTITUTE OF BUSINESS MAGAGEMENT STUDIES, JUNAGADH 6

N.R.VEKARIA INSTITUTE OF BUSINESS MAGAGEMENT STUDIES, JUNAGADH 7

8 Performance appraisal policy 102

N.R.VEKARIA INSTITUTE OF BUSINESS MAGAGEMENT STUDIES, JUNAGADH 8

N.R.VEKARIA INSTITUTE OF BUSINESS MAGAGEMENT STUDIES, JUNAGADH 9

“Practice makes a man perfect”. A man can become perfect with a

And the same case is with management studies, management is

This training provides a golden opportunity to the students for getting a

As a part of my learning in management field and requirement of MBA

Production of milk in India

Year Production in million MT

WORLD'S MAJOR MILK PRODUCERS

N.R.VEKARIA INSTITUTE OF BUSINESS MAGAGEMENT STUDIES, JUNAGADH 12

Countries 1998 1997 1996

EMERGING DAIRY MARKETS

• Food service institutional market: It is growing at double the rate of

Market Size And Growth

N.R.VEKARIA INSTITUTE OF BUSINESS MAGAGEMENT STUDIES, JUNAGADH 13

MAJOR DAIRY PRODUCTS MANUFACTURERS

Some of the major dairy products manufacturers in the country:

Company Brands Major Products

Britannia Milkman Flavoured milk, cheese, Milk Powder,

N.R.VEKARIA INSTITUTE OF BUSINESS MAGAGEMENT STUDIES, JUNAGADH 14

Be it investors, researchers, entrepreneurs, or the merely curious – Indian Dairy sector

Milk production is relatively efficient way of converting vegetable material into

DAIRY INDUSTRY IN GUJARAT

Gujarat Cooperative Milk Marketing Federation (GCMMF)

MEMBERS 12 DISTRICT CO-OPERATIVE

The Mehsana District Co-operative Milk Producers’ Union Limited, Mehsana is

N.R.VEKARIA INSTITUTE OF BUSINESS MAGAGEMENT STUDIES, JUNAGADH 16

HISTORY AND DEVELOPMENT

N.R.VEKARIA INSTITUTE OF BUSINESS MAGAGEMENT STUDIES, JUNAGADH 17

Late Shri. Mansihbhai Pruthviraj Patel – (1919-1970)

Late Shri. Motibhai R Chaudhary – (1923-2005)

As an able Leader & Administrator, Shri. Motibhai R Chaudhary was Chairman of

PROGRESSIVE JOURNEY OF DUDHSAGAR DAIRY

The Union has been awarded National

HISTORICAL BACKGROUND INAUGURATION

1960 - Establishment of the MDCMPU Ltd.

1964 - Inauguration of the Vihar chilling center.

BASIC INFORMATION OF THE COMPANY

N.R.VEKARIA INSTITUTE OF BUSINESS MAGAGEMENT STUDIES, JUNAGADH 20