Information on Company and Their Activities

8/6/2019 Information on Company and Their Activities

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SUPPILYCHAIN MANAGEMENT OF AMUL:

INFORMATION OF COMPANY AND THEIR ACTIVITIES

Amul was set up in 1946 and its full form is Anand Milk- producers Union Ltd. The Brand Amul is a

movement in dairy cooperative in India. The management of the brand name is done by the Gujarat Co-

operative Milk Marketing Federation Ltd (GCMMF) which is a cooperative organization.

Amul is located in the town Anand which is in the state of Gujarat and it has set up itself as a model for

development in the rural areas. For Amul Brand has started the Revolution White of India which has

helped to make the country the biggest manufacturer of milk and its by products in the whole world.

Every day Amul collects 447,000 litres of milk from 2.12 million farmers , converts the milk into

branded, packaged products, and delivers goods worth Rs 6 crore (Rs 60 million) to over500,000 retail

outlets across the country.

Amul is the biggest brand in the pouched milk sector in the world and in India it is the biggest food

brand. Amul's range of products includes milk, ghee, milk powders, curd, ice cream, paneer, cream,

chocolate, cheese, butter, and shrikhand.

Amul exports its products to various countries such as USA, Australia, Mauritius, China, Hong Kong,

Singapore, UAE, and Bangladesh.

DESCRIPTION OF THE SCM

A supply chain is dynamic and involves the constant flow of information, product, and funds between

different stages. In AMUL vast and complex supply chain stretches from small suppliers to large

fragmented markets. Management of this network is made more complex by the fact that GCMMF is

directly responsible only for a small part of the chain, with a number of third party players (distributors,

retailers and logistics support providers) playing large roles. Managing this supply chain efficiently iscritical as GCMMF's competitive position is driven by low consumer prices supported by a low cost

system of providing milk at a basic, affordable price.

SCM MODEL

In the early 1950s, AMUL adopted the network as the basic model for long term growth.

The network explicitly includes secondary services to the farmer-suppliers.

Several of the entities in the network are organized as cooperatives linked in a

Hierarchical fashion.


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AMULS SUPPLY CHAINSWOT ANALYSIS OF AMULS SCM SYSTEM

Strengths:

Demand profile: Absolutely optimistic.

Margins: Quite reasonable, even on packed liquid milk.

Flexibility ofproduct mix:Tremendous. With balancing equipment, you can keep on adding to

your product line.

Availability of raw material: Abundant. Presently, more than 80 per cent of milk produced is

flowing into the unorganized sector, which requires proper channelization.

Technical manpower: Professionally-trained, technical human resource pool, built over last 30

years.

Weaknesses:

Perishability: Pasteurization has overcome this weakness partially. UHT gives milk long life.Surely, many new processes will follow to improve milk quality and extend its shelf life.

Lack of control over yield: Theoretically, there is little control over milk yield.

However, increased awareness of developments like embryo transplant, artificial

inseminationand properly managed animal husbandry practices, coupled with higher income to

rural milk producers should automatically lead to improvement in milk yields.

Logistics of procurement: Woes of bad roads and inadequate transportation facility make milk

procurement problematic. But with the overall economic improvement in India, these problems

would also get solved.

Problematic distribution: Yes, all is not well with distribution. But then if ice creams can be

sold virtually at every nook and corner, why cant we sell other dairy products too? Moreover, it

is only a matter of time before we see the emergence of a cold chain linking the producer to the

refrigerator at the consumers home. Competition: With so many newcomers entering this industry, competition is becoming tougher

day by day. But then competition has to be faced as a ground reality. Themarket is large enough

for many to carve out their niche.

Opportunities:

"Failure is never final, and success never ending. Dr Kurien bears out this statement perfectly. He

entered the industry when there were only threats. He met failure head-on, and now he clearly is an

example of never ending success! If dairy entrepreneurs are looking foropportunitiesin India, the

following areas must be tapped:

Value addition: There is a phenomenal scope for innovations in product development,

packaging and presentation. Given below are potential areas of value addition:

o Steps should be taken to introduce value-added products likeshrikhand, ice

creams,paneer, khoa, flavored milk, dairy sweets, etc. This will lead to agreater presence and flexibility in the market place along with opportunities in the field

of brand building.

o Addition of cultured products like yoghurt and cheese lend further strength - both in

terms of utilization of resources and presence in the market place.
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o A lateral view opens up opportunities in milk proteins through casein, caseinates and

other dietary proteins, further opening up export opportunitie s.

o Yet another aspect can be the addition of infant foods, geriatric foods and nutritionals.

Export potential: Efforts to exploit export potential are already on. Amul is exporting to

Bangladesh, Sri Lanka, Nigeria, and the Middle East. Following the new GATT treaty,

opportunities will increase tremendously for the export of agri-products in general and dairy

products in particular.

Threats:

Milk vendors, the un-organized sector: Today milk vendors are occupying the pride of place in the

industry. Organized dissemination of information about the harm that they are doing to producers and

consumers should see a steady decline in their importance.

Their success in dairying depends on factors such as an efficient yet economical procurement network,

hygienic and cost-effective processing facilities and innovativeness in the market place. All that needs to

be done is: to innovate, convert products into commercially exploitable ideas.

ADVANTAGES OF AMULS SCM SYSTEM

The advantages of SCM are enormous - increased coordination between suppliers, distributors and

partners, enhanced customer relationship, and reduced cost of operation.

Important advantage of supply chain management is that it results in business organizations gaining a

competitive advantage by earning the loyalty of customers, shareholders and employees.

COMPARISON WITH SCM USED BY THE NEAREST COMPETITOR

BRITANNIA: butter, cheese, dairy whitener segment.

NESTLE: butter, baby food, curd, chocolates.

AMUL V/S NESTLE

Nestle defines SCM as the two-way management of the flow of goods, services and information from

suppliers to manufacturers, wholesalers, distributors, stores to the end user. SCM is especially critical

for the food industry because of the ease of spoilage. In comparison with Nestle does no farming. And the

worlds largest food company sells almost nothing directly to consumers.

Suggestions:

Amul should go in for exclusive outlets in at least all the shopping malls coming up these days

and any location where footfalls are large in number.

Pushcarts should be increased in number in order to increase the market reach this can provide

with e very effective channel for ice creams and flavored milks.

Trade promotion should be formulated for newly launched products instead of just tagging them

onto best sellers.
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The company should start a home delivery where a particular household will order full

range of products required by it over a period of time. For this the company could provide a

deliveryman with cycle to reach the different houses.

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Information on Company and Their Activities