Amul strengthens supply

chain using IT

Prerna
Sharma

 It is best known as the architect of India's white revolution' and is

credited for making the country the largest producer of milk and milk
products. But the road to this was not at all easy for Gujarat
Cooperative Milk Marketing Federation (GCMMF), known for its dairy
products brand Amul, it waded through many troubles and leveraged
the power of IT to make a mark for itself. It all started with only 2
village dairy co-operative societies and 247 liters of milk.

But today, with more than 15 mn milk producers, 1,44,246 dairy

cooperative societies, 177 district co-operative unions, and 22 state
marketing federations, the company has proved its mettle. Expanding
numbers of outlets, diversification of products, and manufacturing
capacity are some of the challenges for any traditional company. Such
has been the story of GCMMF that we bring to you where a traditional
dairy farm used IT to streamliane its supply chain.

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The IT Call

As GCMMF started expanding its operations exponentially, it

needed a strong solution that can provide end-to-end supply
chain as per dairy specific functionality, tighter integration
between sales and distribution arm, accurate and timely data that
needed to be provided to the farmers as they were also facing
problems in terms of data discrepancies and inaccuracies.
All this required a complete overhaul of the entire IT
infrastructure. It was difficult for an in-house IT team to keep
pace with the fast evolution of technology and stay
knowledgeable about all the new solutions which could support
their business. So, Amul decided to handover the management of
IT to an organization which has competence in IT Infrastructure
and application management.
The management understood the need to focus on their core
competence of milk production and distribution and outsource the
non-core functions to partners who are knowledgeable in their
areas like advertising and logistics management. It was not the
first time; GCMMF had gone through multiple rounds of
implementation of IT through the traditional route of engaging
vendors to provide application solutions and buying infrastructure

Hence, GCMMF leadership thought of partnering with a

vendor who could take complete ownership of IT strategy
and roadmap for GCMMF and member unions and be ready
to work with a result oriented approach rather than selling
solutions in bits and pieces.

Scout For the Right Solution

Before evaluating each solution by different vendors,

GCMMF team decided to lay down some parameters which
helped them to select the best solution. Following were
some of the parameters used while evaluating the
strategySelection of vendor having strong knowledge of dairy
operations and success stories
Experience in successfully executing complex and mission
critical projects
Leverage best practices
Functional coverage and integration of solution with
member unions
Scalability
Shorter time to deploy but longer life
Quick return of investment-low initial investment

The Eureka Moment

After screening various solutions, the management identified that the best
possible process was defined within the complete suite of SAP solution. It gave
them a complete view of its supply chain and helped to tightly integrate
various functions and processes, including sales and distribution.
"IBM helped us implement SAP ERP system. This system enabled us to have a
complete view of our supply chain, have tight integration between GCMMF and
our district unions. The system also gave us a view of the sale of our products
to our distributors across the country," says R S Sodhi, managing director,
GCMMF, Anand.
Amul also implemented the business intelligence system which provided it a
view of movement of all its products across the country. Using this system,
various reports were generated which enabled it understand the demand
pattern of all the products across the market place.
To achieve the objective of C2C (cow to consumers), Amul had 5 initiatives in
their roadmap, which were-ERP implementation for GCMMF, ERP
implementation for member unions, a uniform automated milk collection
system in all 16,000+ village societies in the Amul family, a distributor manage
solution, and a retail management solution for Amul preferred outlets (APO).
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The company has set up a state-of-the-art data center and IT

infrastructure at GCMMF premises in Anand to support the
IT implementation. It has gone live in 2 phases in April 2011
and March 2012. The first phase covered GCMMF and the 4
large milk unions, while the second phase covered the rest
of the milk unions.

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The Traditional Mode

Prior to SAP, the company used to work on customized applications which
were decentralized. Data capturing was not structured to provide analysis on
transactions with regard to sales, distribution, expenses, etc. The application
was also not accessible online. This created a major loophole in decisionmaking processes for the management. Implementing solutions like SAP ERP
provided them tight integration between multiple departments through its
integrated modules and also helped automatic execution of various
voluminous business transactions like sales invoicing, freight expense
booking, recording of purchases, tax accounting, payroll relate transaction,
etc.
In SAP, 100% accuracy of the transactions was achieved by maintaining
proper master data in the system which was partly missing in the traditional
system. Users were also happy with SAP because now various reports could
be generated from SAP in desired formats and facilities for performing mass
transactions. The overall solution helped the management to do 3
dimensional analyzes of its business processes. The biggest benefit was to
streamline the distribution network across the country and provide real-time
data to its partners.
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Achievements
Standard and harmonized processes, enabled by technology,
across the organization enabled the planned growth, with
better visibility to enable a faster response to market
demand changes, better planning capabilities led to
optimization of process efficiencies, better management
visibility, and decision support through improved accuracy
currency of information. Better knowledge management and
effectiveness measures to improve the efficiency of the
processes, better audit trials across the organization between
DCS and MU/business controls were other achievements.

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