Supply Chain Management of AMUL

The Kaira District Co-operative Milk

Producers Union Limited, popularly known as Amul Dairy is a US $1billion turnover institution

It is a institution built up with a network of

over 10000 Village Co-operative Societies and 500,000 plus members

Managed by an apex cooperative

organization, Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF), which today is jointly owned by some 2.41 million milk producers in Gujarat, India

Amul
Amul is the largest food brand in
India with an annual turnover of US $1068 million (2007-08)
Sales Turnover US $ (million)

1994-95
1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2007-08

355
400 450 455 493 493 500 500 575 616 672 850 1068

Amul is the largest producer of milk

and milk products in the world.

Before Amul

Polson dairy had monopoly rights Exploitation of milk producers Producers had to travel long distances to sell their

produce

Had to physically carry their produce Agents decided the prices and the off-take Summers- milk would go sour Winters surplus milk unsold or sold at very low prices

Foundation for Amul

Producers of Kaira district formed a cooperative to supply milk directly to Bombay milk scheme

Decentralized milk collection Village level cooperatives

First modern dairy established at Anand

Indigenous technology and R&D department

Network Structure

Made up of various stakeholders-suppliers to retailers Linked by a common interest of remaining competitive in a demanding environment

Global optimum rather than local optimum

Strategies
Core competency Help

network partners sharing

Information

Dairy Cooperative Structure and details for State of Gujarat

GCMMF

Gujarat cooperative milk marketing federation Marketing entity for the state of Gujarat 42 regional distribution centers in India

5,00,000 retail outlets

Exports to more than 15 countries NDDB (National Dairy Development Board) NCDFI (National Co-Operative Dairy Federation of India)coordinate dairy activities nationally

AMUL SUPPLY CHAIN

Village Cooperative Societies (without Chilling Units) Network Services * Veterinary Services * Animal Husbandry * Animal Feed Factory * Milk Can Producers * Agriculture University * Rural Mgmt Institute * Trucking

Farmers Local Restaurants/Othe r Milk related businesses Chilling Plants Milk Sold to Village & Local Residents

Village Cooperative Societies (with Chilling Units) Milk Processing Union & Warehouses Warehouses

Wholesalers/C&S Retailers Home Delivery Contractors CONSUMERS

CONSUMERS

The Supply-Demand Linkages

***Source: IIM(A), Working Paper No. 2002-05-06

Coordination Mechanisms

Interlocking control Coordination agency-unique role of federation

Supplier enhancement and network servicing

Fair share allocation of benefits Spirit of co-operation

Total Quality Management

Friday departmental meetings Training for transformational leadership

Application of hoshinkanri principles

Training for farmers and their families Retail census

Key Initiatives

In 1994, decided on IT for competitive edge Studied its existing functions and operations and

formulated an IT plan.

Aligned the Information strategy with business strategy. Re-designed and re-organized the existing software applications.

Output of one system should be input of another system or vice-versa.

Problems faced

Indirect connection between Producers and Consumers

Could not forecast productivity accurately and timely

No direct connectivity between zonal, regional, member dairies and head office

Role of Information Technology

Automatic Milk Collection System Units (AMCUS) CEO of Amul Mr. B.M. Vyas said Amul is not a food company ,It is an IT company in the food business. Initially AMCUS was installed free of cost to convince farmers Enterprise-wide integrated application system (EIAS).

Covers market planning, advertising and promotion, distribution network planning, stock control, sales and accounting, budgetary control, quality control management and co-operative service management

Role of IT (contd.)

Connected its zonal offices, regional offices and members dairies through VSATs.

Each Amul office was connected by e-mail and all send a daily report on sales & inventory to main system.

Geographic Information System (GIS)

Helps in getting zone wise data used for sales and distribution planning.

Includes farmer-member census and animal census data. Helps in monitoring veterinary health

Amuls IT Roadmap

Uses AMCUS for milk collection. Implemented a customized ERP system which is used in conjunction with GIS

Uses data analysis software for forecasting milk production and increasing productivity.

Has connected all zonal, regional and member dairies

through VSAT.

One of the first five organizations to have web presence. Has made IT education compulsory for all its employees.

Amuls IT Roadmap (Contd.)

Milk collection information from 10,000 villages is collected

Dairies can make faster decisions in terms of production

and distribution planning

Disease control in 6700000 animals Linked with 45 distribution offices and 3900 distributors GCMMF cyber store-125 cities

Thank You