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PRESENTATION ON DISTRIBUTION NETWORK
MANAGEMENTOF
AMUL
Presented by: Yaswant Narayan Singh Presented to:SCCE Prof.
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INDIAN DAIRY INDUSTRY India is world’s largest producer of dairy
products by volume.
It is accounting more than 13% of world’s total milk production.
Also India is world’s largest consumer of dairy products, consuming almost all of its own milk production.
Indian dairy market is growing at an annual rate of 7%.
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CONT…
Interests from private sector investors have facilitated construction of larger dairies through partnering with dairy processors.
Indian dairy industry is different from other dairy producing countries as India places its emphasis on both cattle and buffalo milk.
India nevertheless faces a milk supply gap due to increasing demand from a growing middle class population.
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CHALLENGES FACED BY INDIAN DAIRY INDUSTRY
Procurement (collection)• The three-tier system of milk collection
Advent of organized retail channels• Increased availability of branded, packaged
milk • Reduced role of middlemen, mainly the milk
vendors
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Distribution• Lack of superior cold-storage transport• Distribution wastage due to improper storage• No enforcement of HACCP principles
Lack of supporting information systems• Database maintained by Milk Producers
Organizations in developed countries
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AMUL Type - Cooperative Industry - Dairy
Founded - 1946
Key people - Dr. Verghese Kurien
Milk Producers 52.8 million
KEY FACTS AMUL means priceless in Sanskrit “Amoolya”
Brand name managed by an apex cooperation organization –GCMMF
World’s biggest vegetarian cheese brand
World’s largest pouched milk brand
Largest food brand in India
Spurred the white revolution in India
Accreditation with 9001 and HACCP certification by QAS, Australia.
GCMMF
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Year of Establishment 1973
Members17 District Cooperative Milk
Producers' Unions (16 Members & 1 Nominal Members)
No. of Producer Members 3.18 MillionNo. of Village Societies 16,117
Total Milk handling capacity per day 13.67 Million litres per day
Milk Collection (Total - 2011-12) 3.88 billion litresMilk collection (Daily Average
2011-12) 10.6 million litres (peak 13 million)
Milk Drying Capacity 647 Mts. per dayCattle feed manufacturing
Capacity 3690 Mts. per day
Sales Turnover -(2011-12) Rs. 11668 Crores (US $2.5 Billion)
GCMMF - An Overview
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1. QUALITY
2. VALUE FOR MONEY
3. AVAILIBILITY
4. SERVICE
STRATEGICAL PILLERS OF AMUL
AMUL PRODUCT’S DIVERSIFICATION
Dairy • Cheese Products• Bread Spreads• Milk Drinks &
Desserts• Fresh Milk
Non-Dairy• Instant Food• Snacks• Veg. Oils
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PRODUCTS
Bread Spreads
Milk Drinks
Powder Milk
Fresh Milk
Cheese
For Cooking
Chocolate12
MARKET SHARE
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AMUL MODEL
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SUPPLY CHAIN MANAGEMENT
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LOGISTICS PROCESS I. Logistics in collection –
6 million liters of milk per dayFrom about 10,600 separate village cooperative
societies.Approximately 2.8 million milk producing member.
II. Logistics in coordination of –
Storing the milk.Processing the milk.Distributing the milk.
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CONT…
III. Supplier logistics –
Weighing the milk.Determining of fat content.Calculation of the purchase price.
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EVOLUTION OF “IT” The evolution of IT in AMUL was took place in
the guidance of DR.B.M Vyas.
The milk collection center at village cooperative societies, were first automated.
Data analysis software utilization for milk production estimation and increasing productivity.
VATS network between all the level of distribution network and GCMMF.
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AUTOMATIC MILK COLLECTION UNIT SYSTEM
BENEFITS OF IT Processing of 10 Million payments daily, amounting to
transactions worth USD 3.78 million in cash.
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.
CONT… 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 Amul’s 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.
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There is improvement in quality of milk in term of acidity and sour milk
Milk union records show 2% reduction in the amount of the sour milk received from the union
Improved microbiological quality of upcoming raw milk in the form of methylene blue reduction
This gives better shelf life to the product
TOTAL QUALITY MANAGEMENT
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Friday Departmental meetings: to disscuss issues related to quality.
Distribution Process
Company Wholesaler Dealer Franchisee
Retailer
Consumers26
THE CHANNEL NETWORK
Procurement channel- upstream flow
Distribution channel- downstream flow
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PROCUREMENT Activities at the village level comprised
developing and servicing the VCSs.
Increasing milk collection, procuring milk, and transporting it to the chilling and processing units twice a day.
The VCSs provided the farmers with good quality animal feed, fodder, and other services like veterinary first aid.
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PROCUREMENT CHANNEL(UPSTREAM)
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.
CONT… 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.
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COLD STORAGE NETWORK Chillers in proximity of villages
Prompt transport to district facilities for further dispatch to consumers/ processing units.
Chilled trucks to transport processed products
Delivery to local chillers by insulated rail tankers and chilled trucks.
Refrigerators and freezers with retailers and departmental stores to retain freshness.
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DISTRIBUTION GCMMF coordinated with various unions to get a
regular supply of milk and dairy products.
The processed milk and dairy products were procured from district dairy unions and distributed through third party distributors.
To ensure quality and timely deliveries, GCMMF and the district unions had several mechanisms in place.
The unions monitored the supplies of milk and the distribution of finished products.
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DOWNSTREAM FLOW First leg
Manufacturing units to company depots using 9 and 18 MT trucks
Frozen food below -18°CDairy wet 0-4°C
Second legDepots to WDsTransport through insulated 3 and 5 MT TATA 407’s
Third legWDs to retailersTransport through rickshaws 34
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REVERSE LOGISTICS
MILK CHURN from dairy to VCS
BOTTLEfrom retailer to dairy
DAMAGED PRODUCTS from customer to retailer then to dairy
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POUCH MILK TRAYfrom retailer to dairy
DIRECT RETAILING Amul has recently entered into direct
retailing through "Amul Utterly Delicious" parlors created in major cities.
Amul has plans to create a large chain of
such outlets to be managed by franchisees throughout the country.
More than 2000 parlor with a turnover of Rs.
200 crores.37
THANK YOU…
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Comments : Now a days, online shopping becomes
popular and gradually be accepted by the public. There are plenty of attractive spots of this new type of business. Convenience, easy-delivery and low cost. Thereby, it is also a great opportunity for AMUL if start their business in this area. The major features.
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