Welcome to the world of Amul

!
 Journey of Amul
1946- Company inception
1948- Milk collection reaches 5000 litres/day
1955- Manufacturing of milk powder and butter
1965- Creation of national dairy development board
1973- Creation of GCMMF (Gujarat cooperative milk
marketing federation )
1996- Manufacturing of ice cream
2005- Milk collection reaches 62 lakhs litres/day
.
 History
• Realization of the dream began with the Kaira District Cooperative Milk
Producers‘ which processes milk purchased from local village producers
for distribution to Bombay, and now also sells other dairy products under
the trade name AMUL throughout India .
• KDCMP was founded by Varghese Kurien and Tribhovandas Patel Union on
December 14, 1946 As a brand name Amul with the blessing of
Vallabhai Patel and the inspiration of former Union Finance Minister
Morarji Desai
•
•
•

Varghese Kurien Pandit Jawaharlal Nehru, Indira Gandhi, Tribhuvandas

Morarji Desai and others at the
inauguration of Amul Dairy. K. Patel
 History
•
• Amul Word is Sourced from the Sanskritword
“अमूलया  Amoolya”, means priceless.
•
• Suggested by a quality control expert in Anand and
it was chosen because it was a perfect acronym
for Anand Milk Union Limited.
•
• The Amul revolution was started as awareness
among the farmers. It grew and matured into a
protest movement that was channeled towards
economic prosperity.
Image : Amul Dairy, Anand
Continued…

• It is a cooperative managed by professionals but owned

by its mn. of semi-literate and illiterate farmers
•
•
•
•
•
• The reason for the co-operation to be started was to free
the milk producer from intermediaries and provide
access to market their by ensuring maximum returns
for their efforts.
• The white revolution has not been easy to achieve. At
one time, the milk lake of Kaira district was stagnant.
A few traders skimmed off fat profits, leaving to the
numerous producers only a sour thin whey of
 Implementation

• To implement this vision a hierarchical network of

cooperatives was developed.
•
• To manage this network and making it commercially
viable they required professional managers and
technocrats.
 Obstacles Faced…
• During winter the production was 2.5 times more than
summer which the Bombay milk scheme was not able
to absorb in a winter season. So they decided to set
up a plant to process milk in to butter and milk
powder. They were the first in the world who
introduced spray drying technology to convert buffalo
milk into milk powder.
•
• Problem of integrating - logistics of milk collection,
distribution of dairy products, sale of products through
dealers and retail stores, provision of animal feed, and
veterinary services into Amul robust supply chain
management.
 Obstacles Faced…
• Where number of these third parties are not in the
organized sector, and many are not professionally
managed with little regard for quality and service.
• Establishing best practices was to maintain quality
concerns like: every Friday, without fail, between
10.00 a.m. and 11.00 a.m., all employees of GCMMF
meet at the closest office, be it a department or a
branch or a depot to discuss their various quality
concerns.
•
Competitors
 Overview of GCMMF
Gujarat Cooperative Milk Marketing Federation

• India's largest food products marketing organization

• State level apex body of milk cooperatives in Gujarat
• 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.
•
 Overview of GCMMF
Gujarat Cooperative Milk Marketing Federation

Sales Turnover Rs (million) US $ (in million)

1994-95 11140 355
1995-96 13790 400
1996-97 15540 450
1997-98 18840 455
1998-99 22192 493
1999-00 22185 493
2000-01 22588 500
2001-02 23365 500
2002-03 27457 575
2003-04 28941 616
2004-05 29225 672
2005-06 37736 850
2006-07 42778 1050
2007-08 52554 1325
 Entry of GCMMF
Gujarat Cooperative Milk Marketing Federation

• As supply and range of products grew there was a great

need for better marketing and production for which
GCMMF was formed in 1973
• Mr. Kurien is the chairman of GCMMF
• Mr. Kurien defined its objective simultaneously creating
long term demand and supply of the dairy market
• He also ensured equitable distribution of milk production
across all Amul unions
 Role of GCMMF
• To coordinate production planning with unions
• Coordinate with 47 depots, 3,500 distributors and 5 lakh
retailers
• Handle the distribution of milk from surplus to the deficit
area
• Market including branding, product development and
pricing
 Role of district union
• To coordinate production planning with GCMMF
• To collect and transport milk from village societies
• To manage farmer’s payments, create subsidies, and
loans for yield improvement programmes
• To supply animal feed and veterinary services, support
farmers education for long term supplier development

 Business Model
Amul supply chain is based on 3 tiered


cooperative structure.
1. Supply starts with farmers who
are members of village level
societies who buy a share of
the society and agree to sell
milk exclusively to that society
2.
3. Farmers take their milk to village
collection point twice a day
where their milk is measured
for quality and quantity and
they are paid immediately
4.
5. GCMMF provides each plants with
a monthly production plan
and coordinates distribution of Collection of milk at a village
products from the plants to society
nationwide distribution.
•
 Business Model
 Amul supply chain is based on
3 tiered cooperative
structure.


1. Supply starts with

farmers who are
members of village
level societies who
buy a share of the
society and agree
to sell milk
exclusively to that
society
2.
3.
4. Farmers take their milk to
village collection
point twice a day
where their milk is
measured for
quality and
quantity and they
are paid
immediately.
5.
6.
7.
8. GCMMF provides each
plants with a
monthly production
plan and
coordinates
distribution of
products from the
 Basic concept
Milk and milk products :


• Branding on a value driven platform,

• Growing organically into an umbrella brand
• That supports a variety of products with
Consistent personality and positioning.
 Umbrella Brand

An umbrella brand is a brand that covers diverse kinds of products which are more or less
related.
AMUL Supply Chain
 Distribution Network
• 5 lakh retail outlets
• Network of 3,500 distributers.
• 47 depot with dry and cold warehouses to buffer
inventory of the entire range of products.
• 25 lakh members farmers from 12,000 village
societies that feed into 12 district unions.
• GCMMF maintains cash transaction throughout
the supply chain which minimizes dumping
 Distribution Network
• Wholesale dealers carry inventory that is just adequate
to take care of the transit time from the branch
warehouse to the their premises.
•
• The JIT (Just-in-Time) inventory strategy improves
dealers ROI (Return on Investment).
•
• All GCMMF branches engage in route-scheduling and
have dedicated vehicle operation
 Strategy Formulation
• Amul and GCMMF adopted a number of strategies to
assure the growth of the dairy industry contingent
on the simultaneous development of supply and
demand
•
• Amul adopted a low price strategy to make their
products affordable and guarantee value to the
consumer
 Strategy Implementation
• Low cost strategy - through innovating
technology
•
• Installed automatic milk collection unit
system
– Test of Fat and SNF
– Reduced time required for
collecting the milk
– Immediate payment to farmers
•
• GCMMF gets all supplier (milk farmers)
information through system integration
•
 Amul and the unions retain tight control
over above stated process in order to
ensure efficiency and quality
 Strategy Implementation
•
• Organized delivery animal feed and other supplies to the
village level societies
•
• Continuous implementation and development of good
practices across all elements of the network
•
• Bought “Kaizen” system for milk sour and acidity
improvement
 Results
 Amul compete successfully against MNCs like Nestle,
HLL, and Cadbury.
•
 Amul collects 63 lakh litres of milk everyday
•
 Amul have a total milk handling capacity of 99 lakh
litres/day.
•
 Amul have 25 lakh producer members
•
• There are 11962 village societies associated with Amul.
(year- 2005-06)

 Critical Success factor
• Use of technology to overcome problems
• Long-term commitment to develop supply and demand in
equitable manner.
• Efficient supply chain and operational management
• Ability to coordinate and control large network of people
• Continuous improvement program to improve quality
• Creation of Amul as a brand
 Impact
 Amul transform the Indian dairy industry by inspiring
other states
 Amul provided livelihood to billions of farmers.
 Amul contributed to India to become the largest milk
producer in the world
•
Vying for the Guinness Records