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Shaveta
Banda(14810067)
Vikrant
Kanwar(14810082)
Pavan
Wadhonkar(14810086
)
Vinay
Kumar(14810083)
Vikky
Anand(14810081)
Angesh
Dhiman(11214004)
What is worlds
Largest pouched
milk brand ?
Which is the
Largest food brand
in India ?
AMUL
Anand Milk Union
Limited
FMCG
Fast Moving Consumers Goods
GCMMF
Gujarat Co-operative Milk Marketing
Federation Ltd
Shri Jethabhai
Patel,
Chairman
GCMMF
BUSINESS MODEL
AND STRATEGIES
1. Objective
2. Structure
3. Strategies
OBJECTIVE
DELIVER PROFITABLE AND EQUITABLE RETURNS TO A LARGE
NUMBER OF FARMERS FOR A LONG PERIOD OF TIME
DEVELOP THE SUPPLIER OVER THE LONG TERM THROUGH
SOCIAL CHANGE
LEADERSHIP
While Kaira Union (or AMUL) had the support of national leaders who
were at the forefront of the Indian independence movement
Its local leaders were trained in Gandhian simplicity17 and had their
feet rooted firmly amongst people whom they had mobilized the
poor farmers of Anand
Tribhuvandas was the first Chairman of the cooperative. His skills lay
in organizing the village producers
Another important aspect of his remarkable management style was
his gentleness and ability to repose trust in people he gave
complete autonomy to managers of the union and earned complete
commitment from them
Verghese Kurien was one such manager who would, first, shape the
destiny of the Union and then the milk movement throughout the
country.
He managed to keep the government and bureaucrats away from the
BUSINESS STRATEGY
DEVELOPMENT
OF
SUPPLIERS
AND
a). From the very early stages of the formation of AMUL, the
cooperative realized
that sustained growth for the long-term was contingent on
matching supply and
demand.
b). Further, given the primitive state of the market and the
suppliers of milk, their
development in a synchronous manner was critical for the
continued growth of
the industry
c). At the time AMUL was formed, the vast majority of consumers had
limited purchasing power and was value conscious with very low
levels of consumption
of milk and other dairy products. Thus,
AMUL adopted a low price strategy to
make their products
affordable and guarantee value to the consumer
d). PRODUCT MIX - Beginning with liquid milk, the product mix was
enhanced slowly by progressive addition of higher value products
while maintaining desired growth in existing products.
On the supply side, as mentioned earlier, the member-suppliers
were typically small and marginal- farmers had severe liquidity
problems.
They were illiterate and had no prior training in dairy farming.
COST LEADERSHIP
Given the low purchasing power of the Indian consumer and the
marginal discretionary spending power, the only viable option for
AMUL was to price its products as low as possible. This in turn led to a
focus on costs and had significant implications for managing its
operations and supply chain practices.
FOCUS ON CORE ACTIVITIES
In view of its small beginnings and limited resources, it became clear
fairly early that AMUL would not be in a position to be an integrated
player from milk production to delivery to the consumer.
Accordingly, it chose a strategy to focus on core dairy activities and
rely on third parties for other complementary needs.
This philosophy is reflected in almost all phases of AMUL network
spanning R&D, production, collection, processing, marketing,
distribution, retailing etc
FINANCIAL STRATEGY
Driven primarily by its desire to be self-reliant and thus depend on
internally generated resources for funding its growth and development
AMULs financial strategy may thus be characterized by two elements:
(a) retention of surplus to fund growth and development
(b) limited/ no credit, i.e., all transactions are essentially cash only.
For example, payment for milk procured by village societies is in cash
and within 12 hours of procurement (most, however, pay at the same
time as the receipt of milk).
No dispatches of finished products are made without advance payment
from distributors etc.
Industry Analysis
Category
Business Environment
Competition
Growt
h
Pouched
Milk
Mother Dairy
6%
Flavored
Milk
25%
Milk
powder
Nestle, Britannia
10%
Baby Food
10%
Ghee
Home-made preferred
Unorganized market
9%
Butter
Consumers increasing
favoring low-fat varieties
Britannia
7%
Cheese
Britannia, Dabur
15%
Ice Cream
Competitive
12%
Paneer
8%
Flavored
Yogurt
22%
Strengths
Largest food brand in India
High Quality, Low Price
World's Largest Pouched Milk Brand
Annual turnover of US $1504 million
Highly Diverse Product Mix
Robust Distribution Network
40
Weaknesses
41
Weaknesses..
Risks of highly complex supply
chain system
infrastructure
42
Opportunities..!
43
Opportunities.!
Penetrate international
markets
44
t
a
e
r !
h
T s
45
Threats!
Competitors - Hindustan Lever, Nestle
and Britannia
46
Products
Bread Spreads
Milk Drinks
Powder Milk
Fresh Milk
Cheese
For Cooking
Chocolate
47
Trivial Strategies
At the time when AMUL was formed , consumers
Defense Strategy
Product Positioning
Placing a product in that part of the market
Positioning Continued..
Amul launched Chocolate milk under brand name of
Product Repositioning
New Competition
Change in consumer preference
Wrong original positioning
Amul marketed bottled water product named
Product Overlap
Situation where company decides to compete against its own
brands.
1)Powdered Milk
Health and price Conscious.
SAGAR Vs Amulya.
USP: Sagar is affordable whitener for health conscious one.
2)Cheese Spreads
Specific Vs General
Amul Processed Cheese Vs Cheese Spread
USP: Cheese spread is highly accepted spread for regular use.
3)Milk Drinks
Nutramul Energy Drink Vs Amul Kool
Product Elimination
Product reaches the stage where continued
56
Diversification
Seeking unfamiliar products or markets or both in the pursuits
of growth.
Secrets of Amuls Diversification Philosophy : Progressive
addition of higher value products while maintaining the desired
growth in existing products.
Amul introduced products with consistent value addition but
never left the core philosophy of providing milk at a basic and
at affordable price.
Benefits of Diversification:
High Growth
Expansion of network
Advantage of each underline objectives.
61
BRANDING &
ADVERTISEMENT STRATEGY
OF AMUL
TAGLINE
ELEMENTS
MASCOT
JINGLES
LOGO
Pure Ghee:
Milk Powders :-
Sweets :-
Amul Pure
Ghee
Sagar Pure
Ghee
Amul Cow
Ghee
Amul Full
Cream Milk
Powder
Amulya Dairy
Whitener
Sagar
Skimmed
Milk Powder
Sagar Tea
and Coffee
Whitener
Amul
Shrikhand &
Amrakhand
Amul Mithaee
Khoya
Gulabjamaun
Amul
Basundi
Curd
Products :-
Yogi
Sweetened
Flavoured Dahi
(Dessert)
Amul Shakti
Standardised Milk
4.5% fat
Amul Masti
Dahi (fresh
curd)
Amul Saathi
Skimmed Milk 0% fat
Amul Cow Milk
Amul Prolife
probiotic Dahi
Amul Masti
Spiced Butter
Milk
Amul Lassee
The Amul
Girl
The Amul girl is a hand-drawn cartoon of a young, chubby Indian girl
dressed in a polka dotted frock with blue hair and a half pony tied up.
The Amul girl was created as a response to Amul's rival brand
Polson's butter-girl.
The idea was conceived in 1967 when ASP (Advertising, Sales and
Promotion) took over the brand portfolio from the previous agency
FCB Ulka. It was executed by Sylvester Da Cunha, the owner of the
agency.
Dr Verghese Kurien, the then chairman of the Gujarat Co-operative
Controversies
In
Another
during the Commonwealth Games scam, they ran into trouble. He was found guilty, he
was in jail, his party had abandoned him. But party workers in Pune actually pulled
down the hoarding, recalls a bewildered da Cunha.
There have been some laughable protests as well. When they wrote Satyam Sharam
OUTDOOR MEDIA
H
O
A
R
D
I
N
G
S
B
I
L
L
B
O
A
R
D
PRINT MEDIA
BROADCAST MEDIA
https://youtu.be/RW9DSUbZX34
https://youtu.be/4SiRZNx4jlE
https://youtu.be/ZV1zkB1auSc
New Ad
https://youtu.be/ivLmx6ixRRc
INTERNET
It has been the key sponsor for MasterChef India for all its
seasons.
Analysis of Advertisments
Without endorsing a public figure for millions, Amul ads are captivating in itself. The
that place carry in their mind and this is exactly communicated in the ad.
They are creating a picture which shows their perception about modern rural India with
its empowered women who have impact on people across the country.
It also shows different segments of customers they reach and how they touch their
lives.
Also the Indianness of the campaign allows it to connect so well with the people.
The jingle or the song is actually in lines with folk songs from states of India.
The inherent feature of an ad is to make people notice the brand in such a way that
when they think about a particular product, one of the companies that comes
immediately to their mind is yours.
Amul basundi, gulab jamoon, and chocolates etc not being very
popular. Amul need to take up thorough market research and work
on improving these products
Though Amuls hoardings are a huge success, it can penetrate
Conclusion
GCMMF that owns Amul , Asias largest milk brand realized that with the
changing lifestyle & increased awareness about health issues , there has been
a discernable shift towards health based drinks from carbonated drinks. To
utilize the potential of flavoured milk, butter milk & other milk based beverages
that have an age old tradition in India. By identifying the targeted teenagers &
youth , who were biggest consumers of colas & aerated drinks. The New
variants of the brand were advertised through major national channels with
special focus on youth oriented TV channels like MTV &
Network
Cartoon
STRATEGICAL PILLERS
OF AMUL
1.
QUALITY
VALUE FOR
MONEY
2.
3.
4.
AVAILIBILITY
SERVICE
Supply Chain
Management
SCM is the management of upstream
and downstream relationships in
order to deliver superior customer
value at less cost to the supply chain
as a whole
102
104
105
VILLAGE
DISTRICT
MARKETING
COOP.UNION
RETAIL
theyre equipped with Automatic milk collection unit (AMCUS): computer analyses fat
content of milk, automatic printing of receipts etc.
they process milk=> butter, ghee, milk powder, cheese, ice cream etc.
E.g. Banaskantha District Cooperative Milk Producers Union Limited known as Banas Dairy. They
manufacture a large number of dairy products under AMUL, SAGAR and BANAS brands. Usually
Banas products sold locally, and Amul products sent to other states.
They can sell their products under the brand name Amul as long as they meet the requirements
of GCMMF. (e.g. must collect 30,000 litres milk daily for a period of three years)
All of above district cooperative unions (Banas, Madhur, Sumul Sursagar) etc. fall under GCMMF
umbrella.
Amul has more than 15000 outlets of own- at high streets, residential areas, Railway Stations,
Bus Stations, Educational Institutions, across India.
Other than that, even private shops, hotels, restaurants etc. too sell Amul products.
108
Logistics Process
I.
Logistics in collection
109
Cont
III. Supplier logistics
110
E-SCM
What is the fuss about?
E-Supply Chain
Management
INDUSTRY OVERVIEW
Insights into the Dairy Industry
India is the biggest producer, consumer and exporter of milk
and milk products
In 2013-14, India exported 94,824.19 Metric tons of milk
products worth 1621.09 crores
Growth Periods:
COMPANY OVERVIEW
BUSINESS SOLUTION
E-SCM to Amuls rescue
In order to address the scalability and integration issues, Amul started implementing a
collection of
Technical and IT initiatives.
As a part of its E-SCM implementation, the following systems were introduced:
1.
2.
3.
4.
5.
AMCUS
Supply Side -- Procurement
DISK
VSAT
Milk Processing and Marketing
GIS
Demand Side - Distribution
Amul Cyber Store
Farmers
IMPLEMENTATION METHODOLOGY
How things changed at AMUL
1. PROJECT PLANNING
(a) SCOPE MANAGEMENT:
Location Scope
Business Scope
Process Scope
Application Scope
Report Scope
Data Migration Report
User Scope
Technology Scope
(b) HUMAN
RESOURCE
MANAGEMENT
Recruitment
On the job Training
Online Portal
Team
IMPLEMENTATION METHODOLOGY
How things changed
1. PROJECT PLANNING
(d) TRAINING MANAGEMENT
Chirag Banas Internet Seva in Gujarat
Infrastructure for training
(e) QUALITY MANAGEMENT
TQM- Internal Consultant Development
Developing internal competencies for
technology user community
(f) CHANGE MANAGEMENT
Free systems- diffused IT in villages
Empowered village cooperative societies
(g) RISK MANAGEMENT
Minimum delay in payments
Whole milk accepted
Surplus paid in the form of dividends
7
IMPLEMENTATION METHODOLOGY
How things changed
2. IMPLEMENTATION STRATEGY
3. TEAM STRUCTURE
Retail B2B & B2C
Portal
EIAS & GIS Internet
ERP DISK
Interface
suppliers
retailers
between
and
the
the
ORGANISATION METRICS
How effective is Amul and its supply chain
(a) QUALITY MEASUREMENT ISSUES
METHOD USED: Kaizen Techniques of six sigma
BUSINESS PARTNERS
Who contributed in the success story of Amul
14
CHALLENGES
Implementation of IT in supply chain was not easy
Change Management
Scalability
15
ADVANTAGES
Has E-SCM been useful to Amul?
After the implementation of AMCUS in 1995 and other IT initiatives, there have been a
steady and a healthy increase in the procurement of milk
Demonstrated benefits of the ICT
platform:
16
EVOLUTION of IT
AMUL is the first company in the co-operative
VSAT
122
EVOLUTION of IT
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.
123
EVOLUTION of IT
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.
The project was named as Enterprise wise
integrated application system (EIAS)
124
EVOLUTION of IT
Automatic milk collection system units(AMCUS) at
125
EVOLUTION of IT
126
Cont.
Amul also connected its zonal offices, regional
Cont
Indian Institute of Management Ahmedabad supplemented
Benefits of IT
Processing of 10 Million payments daily, amounting to
middlemen.
business operations.
Huge
Cont
Movement of 5000 trucks to 200 dairy processing
Trying
supply
chain
web.
132
exports products worth around US$ 25
million to countries in West Asia, Africa and USA.
AMUL PATTERN
A three tier cooperative structure:
Dairy cooperative society at village level
Milk union at district level
Milk federation at state level
ORGANIZATION STRUCTURE
LEVEL
State
Federation
MEMBERS
DECISION-MAKING
Price paid to district
unions (fixed across
unions)
Product mix and
quantity
District
Village
Membership
Price paid to milk
suppliers
quantity.
Providing support services to the members.
Selling liquid milk for local consumers of the village.
Supplying milk to the District Milk Union
the District.
Arranging transportation of raw milk from the VDCS to
Cont..
Providing management support & regular supervision to the
VDCS.
Establish Chilling Centers & Dairy Plants for processing the milk.
Selling liquid milk & milk products within the District.
Process milk into various milk & milk products.
Decide on the prices of milk to be paid to milk producers.
services.
Decide on the products to be manufactured at various Milk
Unions (product-mix)
Conduct long-term Milk Production, Procurement, Processing
& Marketing Planning
Conflict Resolution & keeping the entire structure intact
Distribution Process
Company
Wholesaler
Dealer Franchisee
Retailer
Consumers
139
140
flow
141
Procurement
Activities at the village level comprised
PROCUREMENT CHANNEL
(UPSTREAM)
On an average around thousand farmers come to sell
Each
Cont
Both these details are recorded in the PC.
145
146
Distribution
GCMMF coordinated with various unions to get a
The
147
The unions monitored the supplies of milk and the
DOWNSTREAM FLOW
First leg
Second leg
Depots to WDs
Transport through insulated 3 and 5 MT TATA
407s
Third leg
WDs to retailers
Transport through rickshaws
148
149
Reverse logistics
MILK CHURN
from dairy to VCS
POUCH MILK TRAY
from retailer to dairy
BOTTLE
from retailer to dairy
DAMAGED PRODUCTS
from customer to retailer then to dairy
150
Direct retailing
Amul has recently entered into direct
retailing
Delicious"
cities.
through
"Amul
Utterly
parlors created in major
Expansion plan
Tie up with the Wal Mart
Export is in 15 countries.
Opened 10000+ Amul parlor by the end of the 2010.
Mission 2020
Very ambitious future plan
Turnover of 27000 crore.(three fold increase in the
Thank you
155
participation of members.
Lack of mobilization of internal resources.
Over dependence on government assistance.
Lack of professional management.
Bureaucratic control and interference in the
management.
Political interference
Money