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Type Industry Founded Key people Revenue Employee -

Cooperative Dairy 1946 Dr. Verghese Kurien INR 97.74 billion (2010-2011) Marketing arm: 735 Milk producers: 2.8 million

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

Year of Establishment Members 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)

1973 17 District Cooperative Milk Producers' Unions (16 Members & 1 Nominal Members) 3.18 Million 16,117 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)

Dairy
Cheese Products Bread Spreads Milk Drinks & Desserts Fresh Milk

Non-Dairy
Instant Food Snacks Veg. Oils

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Bread Spreads Milk Drinks Powder Milk Fresh Milk Cheese For Cooking Chocolate

A three tier cooperative structure:


! Dairy cooperative society at village level ! Milk union at district level ! Milk federation at state level

! 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

! Procurement

the District.

of milk from the Village Dairy Societies of

! Arranging

transportation of raw milk from the VDCS to the Milk Union.

! Providing input services to the producers. ! Conducting training on Cooperative development

! Marketing of milk & milk products ! Establish distribution network ! Arranging transportation from the Milk Unions to the market. ! Creating & maintaining a brand ! Providing

services. ! Decide on the products to be manufactured at various Milk Unions (product-mix) ! Conduct long-term Milk Production, Procurement, Processing & Marketing Planning ! Conflict Resolution & keeping the entire structure intact

Technical Inputs, management support & advisory

! Procurement channel- upstream flow ! Distribution channel- downstream flow

! Activities

at the village level comprised developing and servicing the VCSs. milk collection, procuring milk, and transporting it to the chilling and processing units twice a day. VCSs provided the farmers with good quality animal feed, fodder, and other services like veterinary first aid.

! Increasing

! The

! 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. ! 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.

! Chillers in proximity of villages ! Prompt

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

! Chilled trucks to transport processed products ! Delivery

trucks.

to local chillers by insulated rail tankers and chilled

! Refrigerators

and freezers with retailers and departmental stores to retain freshness.

! GCMMF

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

! The

! To

! The

! 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

MILK CHURN !from dairy to VCS POUCH MILK TRAY !rom retailer to dairy f BOTTLE !rom retailer to dairy f DAMAGED PRODUCTS !rom customer to retailer then to dairy f

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Managing this supply chain efficiently is critical as GCMMF's competitive position is driven by low consumer prices supported by a low cost system. In the past years the concept of just-in-time was not introduced, all GCMMF branches were engaged in route scheduling and have dedicated vehicle operations. Even though the cooperative was formed to bring together farmers, professional managers and technocrats would be still required to manage the network effectively and make it commercially viable. It is worth noting that a number of third parties are not in the organized sector, and many are not professionally managed with little regard for quality and service. This is a particularly critical issue in the logistics and transport of a perishable commodity where there are already weaknesses in the basic infrastructure. Its network which consists of large number of members requires regular roll out improvement programs and high implementation rate of these programs. Having a strong supply chain is only the beginning, the remaining part includes making consumer products that sell well and that the same consumers are able to be impacted by marketing and advertising movements. The organization was also suffering from the high middleman cost which was tackled by managing milk supplies from the cattle farmer and sending it straight to the factory. Due to the perishable nature of the product, it has to invest in cold storage which is an extra burden in distribution and warehousing.

At the time Amul was formed; consumers had limited purchasing power, and modest consumption levels of milk and other dairy products. Thus Amul adopted a low-cost price strategy to make its products affordable and attractive to consumers by guaranteeing them value for money. In addition to the weaknesses in the basic infrastructure, logistics and transportation services are typically not professionally managed, with little regard for quality and service. GCMMF was one of the first FMCG (fast-moving consumer goods) firms in India to employ Internet technologies to implement B2C commerce. Today customers can order a variety of products through the Internet and be assured of timely delivery with cash payment upon recipt.

! Larger lead time ! Gap between demand and Supply ! Suppliers ! Managing third part providers

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Amul should improve its distribution system, as it has already implemented on ERP in the company, still due to in disciplined behavior of its distributors, retailers suffers which ultimately affect the consumers. We know that the time schedule of the distributors & their transportation system cannot be capsuled, but they can reduce their errors. E.g. drive carefully to prevent accidents. Manpower should be more than 18 years of age. (in some of the areas, we have observed small children engaged in loading & unloading the trays from the truck) Before offering any extra benefits or schemes to their retailers, Amul should aware them in advance, so that the incentives can be reached in the right hands at right time, otherwise distributors enjoy the benefits of retailers. Codification of raw material should be done in an easily understand manner. Reduce the solving time of the consumer/retailers complaints. Payment to the milk suppliers should be made on time to ensure the proper inflow of milk.

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Amul should also launch certain schemes for households. It has schemes for retailers but not for households. This section being the major user of milk and in order to enter into a new area such starting schemes can be very helpful. For refrigerated and frozen food distribution, a world class cold chain would help in providing quality assurance to the consumers around the region. Logistics and transportation services should be professionally managed to avoid wastes. Use of internet for exploring the unknown terrain. Active customer feedback should be taken regularly for increasing product line. Employees of GCMMF should involved actively in all activities of the member unions. Relationship with business associates like wholesaler should be made closer and deeper. The company should take initiative to reduce transportation time from the depots to the wholesale dealers, improvement in ROI of wholesale dealers, implementation of Zero Stock Out through improved availability of products at depots and also the implementation of Just-in-Time in finance to reduce the float.

Completely in tune with the ground reality an enquiry is initiated on the organizational climate. This gave detail about the core competencies and most importantly gave details about the handicaps and inadequacies. Have recognized change as an essential factor governing business needs and hence incorporates changes in every form at every stage. employees, suppliers and distributors also change ready always

! 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. ! Processing of 10 Million payments daily, amounting to transactions worth USD 3.78 million in cash.

! 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.

! Long term perspective ! Simultaneous development of markets and suppliers. ! Network partnership Vs. ownership ! Cost leadership and value for money ! Technology and Information Sharing

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