PRESENTATION ON SUPPLY CHAIN MANAGEMENT

OF

AMUL
Presented by: Karishma Bhavnani Nikunj Gajara Chandan Pahelwani Kinjal Pokar
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Presented to: Dr. Tejash Pujara

INDIAN DAIRY INDUSTRY

India is worlds largest producer of dairy products by volume. It is accounting more than 13% of worlds total milk production. Also India is worlds largest consumer of dairy products, consuming almost all of its own milk production. Indian dairy market is growing at an annual rate of 7%.

CONT

Interests from private sector investors have facilitated construction of larger dairies through partnering with dairy processors. Indian dairy industry is different from other dairy producing countries as India places its emphasis on both cattle and buffalo milk.

India nevertheless faces a milk supply gap due to increasing demand from a growing middle class population.

CHALLENGES FACED BY INDIAN DAIRY INDUSTRY

Procurement (collection) The three-tier system of milk collection

Advent of organized retail channels Increased availability of branded, packaged milk Reduced role of middlemen, mainly the milk vendors
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Distribution Lack of superior cold-storage transport Distribution wastage due to improper storage No enforcement of HACCP principles Lack of supporting information systems Database maintained by Milk Producers Organizations in developed countries

AMUL

Type Industry Founded Key people -

Cooperative Dairy 1946 Dr. Verghese Kurien

Milk Producers

52.8 million
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KEY FACTS

AMUL means priceless in Sanskrit Amoolya Brand name managed organization GCMMF by an apex cooperation

Worlds biggest vegetarian cheese brand

Worlds largest pouched milk brand Largest food brand in India Spurred the white revolution in India Accreditation with 9001 and HACCP certification by QAS, Australia.

GCMMF

GCMMF - An Overview
Year of Establishment Members 1973

17 District Cooperative Milk Producers' Unions (16 Members & 1 Nominal Members) 3.18 Million
16,117 13.67 Million litres per day

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

3.88 billion litres

10.6 million litres (peak 13 million) 647 Mts. per day

Cattle feed manufacturing Capacity

Sales Turnover -(2011-12)

3690 Mts. per day

Rs. 11668 Crores (US $2.5 Billion) 9

STRATEGICAL PILLERS OF AMUL

1.

QUALITY VALUE FOR MONEY

2. 3.

AVAILIBILITY

4.

SERVICE

AMUL PRODUCTS DIVERSIFICATION

Dairy
Cheese Products Bread Spreads Milk Drinks & Desserts Fresh Milk

Non-Dairy
Instant Food Snacks Veg. Oils

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PRODUCTS

Bread Spreads Milk Drinks Powder Milk Fresh Milk Cheese

For Cooking
Chocolate
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MARKET SHARE

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AMUL MODEL
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SUPPLY CHAIN MANAGEMENT

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LOGISTICS PROCESS
I.

Logistics in collection 6 million liters of milk per day From about 10,600 separate village cooperative societies. Approximately 2.8 million milk producing member.

II.

Logistics in coordination of

Storing the milk. Processing the milk. Distributing the milk.

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CONT
III.

Supplier logistics

Weighing the milk. Determining of fat content. Calculation of the purchase price.

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EVOLUTION OF IT

The evolution of IT in AMUL was took place in the guidance of DR.B.M Vyas. The milk collection center at village cooperative societies, were first automated. Data analysis software production estimation productivity. utilization for milk and increasing

VATS network between all the level of distribution network and GCMMF.

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AUTOMATIC
SYSTEM

MILK COLLECTION UNIT

BENEFITS OF IT

Processing of 10 Million payments daily, amounting to transactions worth USD 3.78 million in cash. Radical changes in business processes - eliminating middlemen.

Improved delivery mechanisms and transparency of business operations.

Due to this process, AMUL is able to collect six million litres of milk per day. Huge reduction in processing time for effecting payments to the farmers from a week to couple of minute.

CONT

Movement of 5000 trucks to 200 dairy processing plants twice a day in a most optimum manner. Practicing just in time supply chain management with six sigma accuracy.

Online order placements of Amuls products on the web.

Distributors can place their orders on the website. Amul exports products worth around US$ 25 million to countries in West Asia, Africa and USA. 24

TOTAL QUALITY MANAGEMENT

There is improvement in quality of milk in term of acidity and sour milk Milk union records show 2% reduction in the amount of the sour milk received from the union Improved microbiological quality of upcoming raw milk in the form of methylene blue reduction This gives better shelf life to the product

Friday Departmental meetings: to disscuss issues related to quality.

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Distribution Process
Company Wholesaler Retailer Consumers
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Dealer Franchisee

THE CHANNEL NETWORK

Procurement Distribution

channel- upstream flow

flow

channel- downstream

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PROCUREMENT

Activities at the village level developing and servicing the VCSs.

comprised

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.
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PROCUREMENT CHANNEL (UPSTREAM)

On an average around thousand farmers come to sell milk at their local co-operative milk collection center. Each farmer has been given a plastic card for identification. At the milk collection counter, the farmer drops the card into a box and the identification number is transmitted to a personal computer attached to the machine. The milk is then weighed and the fat content of the milk is measured by an electronic fat testing machine.

CONT

Both these details are recorded in the PC. The computer then calculates the amount due to farmer on the basis of the fat content. The value of the milk is then printed out on a slip and handed over to farmer who collects the payment at adjacent window.

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COLD STORAGE NETWORK

Chillers

in proximity of villages

Prompt

transport to district facilities for further dispatch to consumers/ processing units. trucks to transport processed products

Chilled

Delivery

to local chillers by insulated rail tankers and chilled trucks. and freezers with retailers and 32 departmental stores to retain freshness.

Refrigerators

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 33 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

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REVERSE LOGISTICS
MILK CHURN from dairy to VCS POUCH MILK TRAY from retailer to dairy

BOTTLE from retailer to dairy DAMAGED PRODUCTS from customer to retailer then to dairy
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DIRECT RETAILING
Amul

has recently entered into direct retailing through "Amul Utterly Delicious" parlors created in major cities. has plans to create a large chain of such outlets to be managed by franchisees throughout the country. than 2000 parlor with a turnover of Rs. 200 crores.
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Amul

More

THANK

YOU

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