SCM & Distribution channel

PRESENTED BY: PRASANNA LAD(10) VAIBHAV JADHAV(07) SUBODH SINGH(20) BALIRAM DESAI(04)

SCM & DISTRIBUTION CHANNEL What is SCM?

SCM is the management of a network of all business processes and activities involving procurement of raw materials, manufacturing and distribution management of Finished Goods. SCM is also called the art of management of providing the Right Product, At the Right Time, Right Place and at the Right Cost to the Customer.

Distribution channel A path through which goods and services flow in one direction (from vendor to the consumer), and the payments generated by them that flow in the opposite direction (from consumer to the vendor).

Amul Company
Dr Verghese Kurien,was the Chairman of the GCMMF(Gujarat Co-operative Milk Marketing Federation Ltd),an apex cooperative organisation, based in the in Anand town of Gujarat, India.

Overview
AMUL means "priceless" . The brand name "Amul,comes from the Sanskrit word "Amoolya, The Brand AMUL (ANAND MILK UNION LIMITED) is owned by The Gujarat Cooperative Milk Marketing Federation(GCMMF). It was established in year1946.

GCMMF is Largest Food Products Marketing organization of India, with a revenue of $2.5 Billion.
It links 3.18 Million Village Milk producers and 16,117Cooperative Societies across 24 Districts to milk and dairy consumers across India. White revolution of India was an initiative under the Umbrella of Amul.

Key Elements of Business Model

Operations that are low cost, high quality and high efficiency (Competitive Edge).

Strict margins at retail and distribution ends, utilizing economies of scale to remain competitive. High Sharing of profits with Farmers, to develop long-term relationships with them.

Village Dairy Cooperative Society (VDCS)

Collection of surplus milk & payment based on quality & quantity. Providing support services to the members. Selling liquid milk for local consumers of the village. Supplying milk to the District Milk Union

District Cooperative Milk Producers Union (Milk Union)

Procurement of milk from the VDCS Providing input services to the producers. Conducting training on Cooperative development Providing management support & regular supervision to the VDCS. Establish Chilling Centers & Dairy Plants for processing the milk. Selling liquid milk & milk products within the District. Process milk into various milk & milk products. Decide on the prices of milk to be paid to milk producers.

E- SUPPLY CHAIN MANAGEMENT OF AMUL

Amul uses E- SUPPLY CHAIN MANAGEMENT E-SCM may be described as the integrated management approach for planning and controlling the flow of materials from suppliers to the end users using internet technologies. E-SCM refers to the complex network of relationship that organizations maintain with trading partner to source, manufacture and deliver the products.

E-SCM OF AMUL

Amul has installed over 3000 Automatic milk collection system units(AMCUS) at village societies to capture member information, milk fat content, volume collected and amount payable to each member. An average of 1,000 Farmers sell milk at a Local Cooperative society. Each Farmer has plastic cards for identification. The Identification Number is fed into a computer. The milk is then weighed and the fat content of the milk is measured by an electronic fat testing machine. The Computer then calculates the amount due to a farmer on the basis of the fat content in the milk. The value of the milk is then printed out on a slip and handed over to farmer who collects the payment at adjacent window.

COMPONENTS OF E-SCM

Benefits of E-SCM
Supports exchange of real time information Web visibility & processing capability 24/7 Return on investment Incorporates broadcast & active messaging

THE CHANNEL NETWORK

Procurement channel- upstream flow

Distribution channel- downstream flow

Procurement

Activities at the village level comprised developing and servicing the VCSs. Increasing milk collection, procuring milk, and transporting it to the chilling and processing units twice a day.

The VCSs provided the farmers with good quality animal feed, fodder, and other services like veterinary first aid.

COLD STORAGE NETWORK

Chillers in proximity of villages Prompt transport to district facilities for further dispatch to consumers/ processing units. Chilled trucks to transport processed products Delivery to local chillers by insulated rail tankers and chilled trucks. Refrigerators and freezers with retailers and departmental stores to retain freshness.

Distribution

GCMMF coordinated with various unions to get a regular supply of milk and dairy products. The processed milk and dairy products were procured from district dairy unions and distributed through third party distributors. To ensure quality and timely deliveries, GCMMF and the district unions had several mechanisms in place. The unions monitored the supplies of milk and the distribution of finished products.

DOWNSTREAM FLOW

First leg
Manufacturing units to company depots using 9 and 18 MT trucks Frozen food-below 18C Dairy wet-0-4C

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

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

Members

17 District Cooperative Milk Producers' Unions 3.18 Million 16,117

No. of Producer Members No. of Village Societies

Total Milk handling capacity per day

Milk Collection (Total - 2011-12) Milk collection (Daily Average 2011-12) Milk Drying Capacity Cattlefeed manufacturing Capacity Sales Turnover -(2011-12)

13.67 Million litres per day

3.88 billion litres 10.6 million litres (peak 13 million) 647 Mts. per day 3690 Mts. per day Rs. 11668 Crores (US $2.5 Billion)

Turnover in Cr
140000

120000

116680 97742 80053

100000

80000

67113
60000

52554 42778 37736 29225 28942 27457 23365 22588 22185

turnover

40000

20000

Distribution and Dealers

Distribution Channel From the manufacturing units to the retailers.

Amul products are available in over 10,00,000 retail outlets across India through its network of over 5,000 distributors. First Leg From manufacturing units to Depots: Amul has 65 depots across major cities of India. Second Leg From Depot to Wholesale Dealers: Amul has a network of over 5000 distributors . The margins offered to the distributors range between 3-5%.On every crate there is a margin of Rs 5.5 .No volume discounts to distributors, prices are fixed. Third Leg - This is the flow of good from WDs to retailers, a beat plan is prepared and transportation is done on auto-rickshaws, rickshaws and bicycles.

WHY AMUL IS ?

Physique : Taste, Quality

Personality : Simple, Indian

Relationship : Sociable

Culture : Co-operative, Sharing

Reflection : Value Oriented

Self-Image : Proud Indian, Fun loving

Thank you