Introduction

1) Why Amul
Gujarat Cooperative Milk Marketing Federation Ltd (GCMMF) is the largest Food Company
marketing milk & milk products under the brand names of AMUL and SAGAR with an
annual turnover exceeding Rs 20733 crores.
GCMMF is a unique organization. It's a body created by Farmers, managed by competent
professionals serving a very competitive and challenging consumer market. It is a true
testimony of synergistic national development through the practice of modern
management methods.
AMUL believes in Work is Worship and offers the career opportunity in the fields of
production, marketing, sales to unlock a persons true potential. A person can take up a
role of a production engineer to one of sales manager in AMUL. It is a well-established
organization with the divisions and functions defined. It has evolved over the years when
it started in 1946 till now. It would be a great opportunity to study the organizational
structure of AMUL as students.
2) Progress so far
A) Studied the organizational structure
Chairman

Managing
Director

General
Manager

Assistant
General
Manager
Finance
Departm
ent

Productio
n
Departm
ent

Mareting
Departm
ent

Sales and
Purchase
Departm
ent

Personnel
Departm
ent

Senior
Manager

Senior
Manager

Senior
Manager

Senior
Manager

Senior
Manager

Finance
Manager

Productio
n
Managers

Marketin
g
Manager

Sales
Manager

Personnel
Manager

Accounta
nt

Superviso
rs

Marketin
g Trainee

Officer

Exeutive

Officers

Officers

Sales
Executive

GCMMF incorporates cooperative structure near its primary producers. Under the Anand
Pattern structure of Amul, individual farmers are associated with a village-level dairy
cooperative societies or DCS. Many DCS in district form district-level unions, which are
associated with the state-level marketing federations. The core feature of the Anand
Pattern model is farmer control of the three stages following production, that is,
procurement, processing, and marketing of milk and milk products.
All its wholesale dealers are computerized and GCMMF is moving on a B2B model for
integration interface with its dealers, be it for placing order for buying its products,
sharing information or for tracking logistic of dispatch/receipt of goods. A unique
initiatives, in terms of involvement of its wholesale dealers in a common platform, is to
address issues of market/customers. All the wholesale dealers from across the country
have visited Anand in a unique programme called "AMULYATRA". It further intends to
invite the top retailers of various cities/towns to Anand. The purpose is not just to orient
them to GCMMFs business plans and models, but to instil a much bigger goal in their

heart that when they are associated with AMUL, they are working for a modest milk
producer in the rural hinterland of the country.
GCMMF has more than 200 Amul Quality Circles in the country where all the above
wholesale Dealers meet in group on every third Saturday of the month to discuss their
business, quality initiatives and also pain areas. This has impacted tremendously not only
in communication but also in improving the transparency in the organization.
GCMMF has also intiated, Hoshin Kanri a deployment initiative where more than 100
Officers/Heads participate twice in a year to review its business goals/processes and
implement new initiatives. This is further extended to wholesale dealers in different
territories in a two day exercise called Vision Mission Strategy (VMS) Workshop.
These initiatives have resulted common understanding of goals, eliminating
communication barrier. The initiative of TQM has made the organization efficient whether
it be in launch of brands, or in implementing ERPs or expanding its distribution network.
More striking feature of GCMMFs TQM experience is the integration of its business
linkages at the village level to the forward linkage through its sales offices/wholesale
dealers in the market.
b) Strategy model
AMUL is a very systematic and structured dairy cooperative in western India, which has
become worlds largest milk producer for India through its strategy and innovation. The
distinctive feature of this organization is, it manages a large number of decentralized
producers or milk farmers and suppliers, continuous development of markets and
suppliers using a very efficient supply chain model and breakthrough leadership.
AMULs strategy is mainly divided in two components:
The first one is its collection chain which includes weighing and collecting milk from the
farmers, determination of its quality and finally the calculation of the price.
The second one is its supply chain management where storing, processing and finally
distribution of milk and other dairy products occur.

C) Business model

d) Stakeholders
Internal Stakeholders:
The stakeholders in the chain are 3.37 million primary producers or farmers, 18,536
village milk cooperative societies, dealers, wholesalers, retailers, processors, commission
agents, logistics providers and consumers.
Also involve entities like milk 31 unions union, 17 state cooperative milk federations and
marketing firms.
External Stakeholders
It involves entities like, Animal husbandry, Feed factory, milk can producers, veterinary
services, agriculture universities, packaging industry, rural management institutes and
trucking facilities etc. supporting supply chain in various ways.
Other entities like input dealers, bankers, and insurance companies also support the
supply chain.
Also government, competitors, village governing bodies is also stake holders in Amul.
d) Future developments
Amul, which is marketed under the tagline The taste of India, plans to target the Indian and other
Southeast Asian population in the New Jersey, New York and Boston regions. The company estimates
this niche consumer base comprises around nine million people. With its investment of US$2 million in
local manufacturing, the products will be 10-15% cheaper than if imported from India.

Ghee and paneer are key ingredients in traditional Indian cooking, and with the authenticity of Amul
products, steady but small-scale demand can be anticipated and so over the long term manufacturing
investment is justified.

Contact person:
Statutory Auditor of Banaskantha Plant (GCMMF))
Anand Sharma, FCA | Partner | Talati & Talati, Chartered Accountants
Ambica Chambers, Near Old High Court, Navrangpura, Ahmedabad, Gujarat (India)
Tel: +91 79 27544571 | Fax: +91 79 27542233 |
Email: anand@talatiandtalati.com | www.talatiandtalati.com

Questionnaire:

Yes
No

1) Has the organization structure been recently reviewed and updated?

[Explanation: The Company will be expanding into the US markets and we wish to know
how it will adapt to the different environment and culture]
2) What measures the effectiveness of your structure? (May choose more than one)
Sales revenue
Market Share
Productivity
Customer Satisfaction
Profitability
[Explanation: We need to find out how the organization evaluates itself and determines
whether their practices are working or not. Once we know this we can analyse if there is
a way to restructure the organization so that all the mentioned areas get enhanced]
3) In terms of centralisation how accurate are the below statements? (1 = very
inaccurate 5 = very accurate)
(a) This organization can be characterised as highly centralised
(b) Only a few people at the upper levels of this organization are involved in the decision
making process
[Explanation: Business owners should carefully consider which type of organizational
structure to use in their company. A large organization like this would benefit from a more
decentralized structure since such companies can have several divisions or departments.
We may need to suggest changes in the structure depending on the growth and
expansion of business operations]
4) In terms of formalization how accurate are the below statements? (1 = very inaccurate
5 = very accurate)
(a) The organization has a very large number of written rules and policies
(b) A 'rules and procedures' manual exists and is readily available within the organization
(c) There is a complete written job description for most jobs in the organization
(d) The organization keeps a written record of nearly everyone's job performance

5) In broad terms, what proportion of total staff is involved in:

Front-line supervision activities (on-site and off-site, policy development licensing,
enforcement)
Supervisory support functions (e.g. statistics, legal, economic analysis)
Corporate services (e.g. admin, human resources, finance, premises)
[Explanation: This should help us access what is the division of the workforce between
the upper, middle and lower levels. It will show us whether there is a surplus or deficit
managers to the ratio of subordinates. This will be very important to design a structure
which will support an equal distribution of employees under every manager.]
6) On a scale of 1-5 to what extent does the company use outsourcing of corporate and
other activities? (1 = never 5 = often)
[Explanation: Though outsourcing has its perks such as efficiency, cuts costs, speeds up
product development, and allows companies to focus on their core competencies. The
negative outweigh the gains. Outsourcing is easy to be replicated by the competition; it
leads to fragmentation and disintegration of the supply chain, inviting new competitors
into the industry. It also nurtures corporate complacency; and it undermines a companys
relations with its labour, customers, and the domestic and local communities. So such a
structure needs to be put in place such that these activities can be achieved internally.]

7) How is the division and coordination of labour in the organization structured? (May
choose more than one)
Vertical division of labour
Horizontal division of labour
Departmentalization
Task Forces
Integration
[Explanation: There is a manner in which a company divides its labour into specific tasks
and achieves coordination among these tasks. Structure affects how effectively and
efficiently group effort is coordinated. To achieve its goals, an organization has to divide
labour among its members and then coordinate what has been divided. Once we figure
out how exactly this organization works only then can we suggest tweaks which will
further increase their efficiency and productivity.]
Additional questions
1. How does Amul plan to shield the organizational values while expanding into
newer markets with such high diversity?
2. What kind of changes is expected in the organization?
3. What are the success factors for company's business and how is the structure
supporting these factors - for example is the cost leadership a success factor?
4. If yes so how the structure ensuring the Cost Leadership"?
5. Is product leadership important?
6. If so how is focus on developing new products?
7. How is structure supporting product development?
References:
http://www.portal.euromonitor.com/portal/analysis/tab
http://www.amul.com/
http://www.slideshare.net/strategian/supply-chain-management-of-amul-supply-chainmanagement

http://cmuscm.blogspot.in/2014/01/understanding-amuls-supply-chain-model.html
https://en.wikipedia.org/wiki/Amul
http://www.amuldairy.com/index.php/about-us/history