Sei sulla pagina 1di 161

Presented By:

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 is an Indian dairy cooperative,


based at Anand in the state of Gujarat,
India
The co-operative was initially referred to
as Anand Milk Federation Union Limited
Formed in 1946, it is a brand managed by
a cooperative body, the Gujarat Cooperative Milk Marketing Federation Ltd.
(GCMMF), which today is jointly owned by
3.6 million milk producers in Gujarat

The brand name Amul means


AMULYA
This word has been derived from the
Sanskrit word AMULYA which
means PRICELESS
A quality control expert in Anand
had suggested the brand name

Amul the co-operative registered on 1


December 1946 as a response to the
exploitation of marginal milk producers by
traders or agents of the only existing dairy,
thePolson dairy
The prices of milk were arbitrarily determined.
Moreover, the government had given monopoly
rights to Polson
Angered by the unfair trade practices, the
farmers approachedSardarVallabhbhai Patel
who advised them to form acooperative

Amul spurred India's White Revolution,


which made the country the world's
largest producer of milk and milk
products.
In the process Amul became the largest
food brand in India and has ventured into
markets overseas.

AMUL
Anand Milk Union
Limited

FMCG
Fast Moving Consumers Goods

GCMMF
Gujarat Co-operative Milk Marketing
Federation Ltd

Shri Jethabhai
Patel,
Chairman
GCMMF

Dr. Verghese Kurien


Founder
GCMMF

The GCMMF is the largest food products


marketing organisation of India. It is the exclusive
marketing organisation for products under the
brand name of Amul and Sagar.
Over the last five and a half decades, dairy
cooperatives in Gujarat have created an economic
network that links more than 3.1million village
milk products with millions of consumers in India.
More than 70% of the members are small or
marginal farmers and landless labourers including
a sizeable population of tribes

The three-tier Amul Model or 'Anand


Pattern'
The structure consists of a dairy cooperative
society at the village level affiliated to a milk
union at the district level which in turn is
federated into a milk federation at the state
level.
Milk collection is done at the village dairy
society, milk processing at the District Milk
Union and milk products marketing at the
state milk federation.
The structure was evolved at Amul in Gujarat
and thereafter replicated all over the country

During the last 5


years, turnover
of GCMMF grew
from Rs. 8005
crores to Rs.
20,733 crores,
a remarkable
growth of 159%,

We are working towards


building our own milk
brand similar to Amul,
which can command a
premium in the marketDevendra
Fadnavis(Maharashtra
Chief Minister )

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

Large emerging economies, e.g., India and China, have complexities


that range from development of markets (where the largest
segment of population is the one which has low purchasing power)
to integration of low cost suppliers who are predominantly very
small.
For firms that aspire to conduct substantial business in such
markets, such complexities have to be recognized and then
overcome.
Developing a network of firms in order to overcome the
complexities of a large yet fragmented market like those in
emerging economies by creating value for suppliers as well as the
customers
AMUL has led the milk dairy revolution in India that has now
emerged as one of the largest milk producers in the world.

Starting with a single shared plant at Anand and two village


cooperative societies for milk procurement, the dairy cooperative
movement in the State of Gujarat had evolved into a network of 2.12
million milk producers (called farmers) who are organized in
10,411 milk collection independent cooperatives (called Village
Societies)
These Village Societies (VS) supply milk to thirteen independent
dairy cooperatives (called Unions).
AMUL is one such Union
Milk and milk products from these Unions are marketed by a
common marketing organization (called Federation).
Structure in Gujarat after its huge success was replicated at the
central level

AMULS JOURNEY TOWARDS


EXCELLENCE

AMULs journey towards excellence is marked by some critical


understanding of the business environment in large emerging
economies like India where markets have to be developed by
combining efficiency related initiatives with increasing the base of
marginal suppliers and consumers.
It combined market and social development in an emerging
economy.
It recognized the inter-linkages between various environments that
governed the lives of marginal milk farmers and the unmet needs of
consumers.
It also changed the supply chain paradigm in order to reduce the
cost to the consumer while increasing the return to the supplier.

It realized that in order to achieve their objectives, it had to benefit a


large number of people both suppliers and consumers.
While large scale had the danger of failure due to poor control and
required more resources, it also had the advantage of creating a
momentum that would be necessary to bring more people into the
fold and thereby help more suppliers and consumers.
It also realized that its goal could only be achieved in the long run
and this required developing values in people and processes that
were robust, replicable and transparent.
It also realized that the cooperative would not be independent and
viable in the face of competition if it were not financially sound. This
implied that AMUL had to develop distinct capabilities that would
deliver competitive advantage to its operations.
This would include long 9 term cost containment, world-class
deployment of technological resources and R&D, and better
leveraging of scarce resources.

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

He interfaced with global financing agencies to build new projects at


AMUL
He worked with the Unions to bring the best of technology to the
plants
He worked with marginal village farmers to create systems that
would increase milk yields
Kurien shaped the destiny of the milk movement in India through
NDDB (as its Chairman) and particularly at GCMMF and cooperatives
in Gujarat
He helped build a modern organization with professional
management systems that would support the aspirations of farmers
and customers
Over a period of time, he developed a very close link with the poor
farmers who, as he always says, were his employers at the
cooperative

He would travel through the villages along with Tribhuvandas and


work out the details of how the milk collection cooperative would
work, how trucks would pickup milk from village societies, how the
cattle would have to be taken care of and how all of this would help
the poor milk farmer come out of poverty and the clutches of the
middleman.
Operational details were meticulously planned and executed
And then, he along with two of his close associates would work on
the design of the dairy plant including conducting experiments to
create powder out of buffalo milk a task that was ridiculed by all
who heard of it including the international aid agencies in the dairy
industry
Membership of the cooperative started to increase, professional
managers started to join AMUL and production capacity at AMUL
started to expand

BUSINESS STRATEGY

Driven by its twin objectives of (i) long-term, sustainable growth to


its member farmers, and (ii) value proposition to a large customer
base by providing milk and other dairy products a low price.
1. SIMULTANEOUS
CUSTOMERS

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.

STRATEGY TO OVERCOME THIS PROBLEM


First, for the short term, the procurement prices were set so as to
provide fair and reasonable return.
Second, aware of the liquidity problems, cash payments for milk
supply was made with minimum of delay
FOR THE LONG-TERM, THE UNIONS FOLLOWED A
MULTIPRONGED STRATEGY OF
EDUCATION AND SUPPORT
Only part of the surplus generated by the Unions is paid to the
members in the form of dividends.
A substantial part of this surplus is used for activities that promote
growth of milk supply and improve yields

These include provision of 12 veterinary services, support for cold


storage facilities at the village societies etc. In parallel, the Unions
have put in place a number of initiatives to help educate the
members.
To summarize, the dual strategy of simultaneous development of the
market and member farmers has resulted in parallel growth of
demand and supply at a steady pace and in turn assured the growth
of the industry over an extended period of time.

COST LEADERSHIP

AMULs objective of providing a value proposition to a large


customer base led naturally to a choice of cost leadership
position

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

However, it played a proactive role in making support services


available to its members wherever it found that markets for such
services were not developed
For example, in the initial stages, its small and marginal member
farmers did not have access to finance, veterinary service, knowledge
of basic animal husbandry etc. Thus to assure continued growth in milk
production and supply, AMUL actively sought and worked with partners
to provide these required services.

MANAGING THIRD PARTY SERVICE PROVIDERS


Well before the ideas of core competence and the role of third parties
in managing the supply chain were recognized and became
fashionable, these concepts were practiced by GCMMF and AMUL
It handled only the core aspect of the Business
Marketing efforts (including brand development) were assumed by
GCMMF
All other activities were entrusted to 13 third party service providers
These include 1) Logistics of milk collection
2) Distribution of dairy products
3) Sale of products through dealers and retail stores
4) Some veterinary services
Many of the third parties were not in the organized sector.

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.

OVERVIEW OF SUPPLY CHAIN


Strongly driven by the objective of establishing and operating an
efficient supply chain from milk production and procurement to
product delivery to customers
Management of this network is built around two key elements
(a) coordination of the diverse elements of the network and
(b) use of appropriate technology that includes product, process and
information
technology and managerial practices and systems.
Robust coordination is one of the key reasons for the success of
operations involving such an extensive network of producers and
distributors at GCMMF.
Two critical mechanisms of coordination that ensure that decision
making is coherent and that the farmers gain the most from this
effort.
Inter-locking Control

Industry Analysis
Category

Business Environment

Competition

Growt
h

Pouched
Milk

Huge Investment Required ;


Unorganized sector

Mother Dairy

6%

Flavored
Milk

Very high growth

Mother Dairy, Nandini

25%

Milk
powder

High Price ; Export


Opportunities

Nestle, Britannia

10%

Baby Food

Huge Margin, Single Major


Player

Nestle (95% share)

10%

Ghee

Home-made preferred

Unorganized market

9%

Butter

Consumers increasing
favoring low-fat varieties

Britannia

7%

Cheese

Opportunities in rural market

Britannia, Dabur

15%

Ice Cream

Competitive

Kwality Walls, Vadilal, Mother


Dairy

12%

Paneer

Market penetration possible

Amul is the only national player


having >50% share of organized
market.

8%

Flavored
Yogurt

New category and gaining


quick acceptance,
considered as a premium

Nestle, Danone, Cocoberry

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

Strong dependency on weak

infrastructure

Alliance with third parties who do

not belong to the organized sector

42

Opportunities..!

43

Opportunities.!

Penetrate international

markets

Diversify product portfolio to

enter new product categories

and expand existing categories

like processed foods,


chocolates etc

44

t
a

e
r !
h

T s
45

Threats!
Competitors - Hindustan Lever, Nestle

and Britannia

Still competition from MNCs in butter


Growing price of milk and milk products
Ban on export of milk powder

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

had limited purchasing power & modest consumption


levels of milk & other dairy products .
Low-Cost Price strategy
Low Cost Price Strategy was adopted to make the
product affordable & alluring to consumers by
guaranteeing them value for money.
The main aim of Amul is to provide quality products
to the consumers at minimum cost.
The goal of Amul is to provide maximum profit in
terms of money to the farmers.

Defense Strategy

Moving consumers from loose milk to packaged

milk and gradually move them up the value chain


(tetra pack to beverages)
A sound strategy likely to work.
Being exposed to a brand, it is natural for a
customer to try more products

Successful Brand Strategy


Product Positioning Strategy
Product Re-Positioning Strategy
Product Overlap Strategy
Product Design Strategy
Product Elimination
Diversification Strategy
Value Strategy

Product Positioning
Placing a product in that part of the market

where it will receive a favorable reception


compared to competing products.
Positioning of Amul is Taste of India . It has
created value for everyone in value chain, be
it customers or farmers.
USP- Quality with affordability

Positioning Continued..
Amul launched Chocolate milk under brand name of

Amul Kool Koko.


This was targeted at teenagers and youths.
New offerings for health conscious and vibrant India
Indias First Pro-Biotic Wellness Ice cream & Sugar
Free Delights For Diabetics.
Health and energy drinks
Stamina, a health drink made from milk with added
vitamin C against Red Bull and Gatorade, milk better
than cola.

Product Repositioning
New Competition
Change in consumer preference
Wrong original positioning
Amul marketed bottled water product named

JALDHARA but due to less potential in the


market it turned out to be blunder.
So Amul launched new bottled water
NARMADA NEER.

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

support is no longer justified where


performance is falling short of expectations, it
is desirable to pull the product out of the
market place.
It eliminated JALDHARA a decade ago as
Bottled water product do not have potential
customers.

AMUL Products Diversification


Dairy Product
Fresh milk
Milk drinks and
desserts
Bread spreads
Cheese products

Non Dairy Product


Veg. Oil
Instant Food
Snack

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.

Product Design Strategy


Whether to offer standard or customized
products.
Amul has offered a mix of both standard and
customized products.
Use of Utterly-Butterly Girl:
Using since 1967.
Entered in the Guinness Book Of World
Records for being the longest running
campaign ever.
The Amul ads have witty one-liners which
capture relevant events that have caught the
fancy of the nation.

Some Creative Ads of AMUL

Utterly Barfily Delicious AMUL

61

Other Promotional Strategies

Amul STAR Voice of India


Amul Master Chef India
Amulya Surabhi
Amul Maharani Bano Contest
Amul Chote Ustaad
Amul Music Ka Maha Muqabla
Amul Food Maha Challenge.

Cafe Amul is a Casual


Dining Restaurant in a
pleasant ambience which
offers scrumptious delicacies
in pizzas, burgers ,
sandwiches, sundaes etc.

BRANDING &
ADVERTISEMENT STRATEGY
OF AMUL

Reasons for Success of Amul


Robust Supply Chain
Low Cost Strategy
Diverse Product Mix
Strong Distribution Network
Technology and initiatives
The Brand Value of Amul
Quality
Value for money
Availablity
Service

BRAND ELEMENTS OF AMUL


NAME
URL

TAGLINE

ELEMENTS
MASCOT

JINGLES

LOGO

Product line of AMUL


Bread spreads:
Amul Butter
Amul Lite
Low Fat Bread
spread
Amul Cooking
Butter
Delicious
Margarine

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

Fresh Milk :Amul Taaza Toned


Milk 3% fat

Curd
Products :-

Amul Icecreams :Royal Treat Range (Butterscotch, Rajbhog,


Malai Kulfi)

Amul Gold Full


Cream Milk 6% fat

Yogi
Sweetened
Flavoured Dahi
(Dessert)

Amul Shakti
Standardised Milk
4.5% fat

Amul Masti
Dahi (fresh
curd)

Nature's Treat (Alphanso Mango, Fresh


Litchi, Shahi Anjir, Fresh Strawberry, Black
Currant, Santra Mantra, Fresh Pineapple)

Amul Slim & Trim


Double Toned Milk
1.5% fat

Amul Lite Dahi

Sundae Range (Mango, Black Currant,


Sundae Magic, Double Sundae)

Amul Saathi
Skimmed Milk 0% fat
Amul Cow Milk

Amul Prolife
probiotic Dahi
Amul Masti
Spiced Butter
Milk
Amul Lassee

Nut-o-Mania Range (Kaju Draksh, Kesar


Pista Royale, Fruit Bonanza, Roasted
Almond)

Assorted Treat (Chocobar, Dollies, Frostik,


Ice Candies, Tricone, Chococrunch,
Megabite, Cassatta)
Utterly Delicious (Vanila, Strawberry,
Chocolate, Chocochips, Cake Magic)
Amul Sugar Free Ice cream

AMUL PRODUCT PORTFOLIO AND


MARKET SHARES

THE ULTIMATE STRATEGY: ADVERTISING


THROUGH THE AMUL MOPPET GIRL

ABOUT THE AMUL


GIRL
The moppet who put Amul on India's breakfast table
50 years after it was first launched, Amul's sale figures have jumped from
1000 tonnes a year in 1966 to over 25,000 tonnes a year in 1997. No
other brand comes even close to It. All because a thumb-sized girl
climbed on to the hoardings and put a spell on the masses.
The Amul girl was the brainchild of SylvesterdaCunha, the managing
director of the advertising agency AS. The ads were designed as a
series of hoardings with designs relating to day-to-day issues. The
brand recall for the Amul girl is phenomenal across India today. And
the biggest reason for this is the topical nature of the ads. The Amul
ads have witty one-liners which capture relevant events that have
caught the fancy of the nation.

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

Milk Marketing Federation Ltd. (GCMMF) suggested a mischievous


little girl as a mascot with two requirements. It had to be easy to draw
and memorable as most of the advertising would be outdoor media
which required hand painting in those days and the hoardings had to

Amul is known for taking up current affairs and


issues as part of its campaign-advertisements.
On the Supreme Court verdict on Section 377, Amul releases a
print ad called "Freedom of Choice"

Powerful Impact of Amul Girl


For 50 odd years the Utterly Butterly girl has

managed to keep her fan following intact.


The mascot has been mobilized to comment

on many day-to-day events as well as events


of national and political importance.
It earned a Guinness world record for the

longest running ad campaign in the world.

Controversies
In

2001, Amul ran an ad campaign criticizing the Indian Airlines strike,


whereupon Indian Airlines threatened to stop offering Amul Butter on their flights
unless the ads were pulled.

Another

ad during the Ganapati festival which said, Ganpati Bappa More


Ghya (Ganpati Bappa take more). The Shiv Sena party said that if the ad wasn't
removed, they would come and destroy Amul's office.

In July 2011, an ad criticizing Suresh Kalmadi led to trouble in Pune, while an ad

poking fun at Mamata Banerjee in December 2011 led to problems in Kolkata.


Subsequently, another ad with Banerjee was released all over India except in Kolkata
in March 2012.
In 2011, they came up with Maine kyaa khaya' (What did I eat?) for Suresh Kalmadi

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

Scandalum!' for Satyam Computer Services's disgraced Chairman Ramalinga Raju, he


says, We got a formal letter from the Satyam Board threatening us with dire
consequences: all their employees would stop eating Amul butter!

Using Billboards and Hoardings

OUTDOOR MEDIA

Use of Traditional Mediums like wall painting

H
O
A
R
D
I
N
G
S
B
I
L
L
B
O
A
R
D

Full and constant coverage in all leading


newspapers

PRINT MEDIA

Using Television Commercials

BROADCAST MEDIA

A glimpse of Rural Development done by Amul


Old classic ad (Featuring
stills from Smita Patil
starrer movie Manthan)

New Ad Revamp of the


classic with modern
touch

https://youtu.be/RW9DSUbZX34

https://youtu.be/4SiRZNx4jlE

Bringing the nation together with Amul The


taste of India
Old classic

https://youtu.be/ZV1zkB1auSc

New Ad

https://youtu.be/ivLmx6ixRRc

Har Ghar, Amul Ghar (Every Home, Amul


Home)
Funny ad film showcasing how Amul plays a big part in every
Indian Family.
https://youtu.be/3h0DsC6UvWc

Use of Social Media

INTERNET

Using Facebook to interact with customers


https://www.facebook.com/amul.coop

Website Where information about its brands, GCMMF, news


coverage, B2B and various social campaigns can be known.
http://www.amul.com/

Point of Sales: Amul Parlours/


Cafe

Amul has always lend its support to sports

Amul seems to have got the taste of global


events.
Amul became the
official partner of
Switzerlandheadquartered S
auber F1 team at
the inaugural
Indian Grand Prix
in the year 2011.

Sponsored social causes like Women


Empowerment through education, training
and health programmes.

Amul has not left out entertainment

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

appeal of the ad lies in its simplicity. There is clarity in the message.


One of the best ways of branding to a local market is to create a vision that people of

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.

Success of Amul Ads


Amul by now is already an established brand

so it is correctly focusing on brand awareness


along with their inherent marketing.
In 2011, Amul was named the Most Trusted
brand in the Food and Beverages sector
in The Brand Trust Report published by Trust
Research Advisory on 18th January, 2011.
Amongst India's top 20 brands: Amul is No. 1.

Suggestions & Recommendations


Focus on retail expansion in Indian cities, towns and villages

increase branded Amul parlours to capture the consumer attention


and keep the competition at bay
Amul can venture into offering low-fat versions of its products as it

would help capture the hearts of second and third generation


Indians in US & Global Market
Amul can venture out on new products like dairy based sweets,

baby food product


Amul must try to understand the cause of certain products like

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

even better in the rural areas by advertising actively through the


media viz cable channels and newspapers. Sponsoring more
shows on TV, sports events can be of great help.

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

. By identifying the trend & introducing variants, Amul has been

emerged as the fastest growing brand in non-carbonated soft drinks category.

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

Generic Supply Chain

104

105

Milk Supply Chain: Processing Issues


Bulk of new capacity in the period in last decade, has

been established in the Northern states, Gujarat,


Maharashtra and Tamil Nadu. Remaining states are
lagging in dairy growth.
Capacity utilization of dairy plants is about 60%
(assuming 300 working days in a year). Due to Lack of
milk availability in the lean season.
For e.g. Rajasthan has 8% share in milk production
and 11% share in consumption of milk products,
however the share in dairy processing capacity is 4%.
Meaning much of the milk escapes from the valueaddition in dairy supply chain. A similar situation
prevails in Bihar.
106

Existing supply chain of amul


The distribution network
Amul products are available in over 500,000 retail outlets across India through
its network of 3,500 distributors. There are 47 depots with dry and cold
warehouses to buffer inventory of the entire range of products.
Largest Cold Chain
AMUL has the largest cold chain network in India (18000 refrigerators) as
compared to any other company.
Customers
Suppliers
A majority of suppliers are small or marginal farmers who are illiterate, poor and
with liquidity problems.
107
Third party logistics service
There are ample deficiencies in the current infrastructure and the outbound
logistics is taken care by GCMMF coordinating with distributors.

AMUL Supply Chain:

VILLAGE

DISTRICT
MARKETING
COOP.UNION

STATE MILK COOP.


FEDERATION

RETAIL

In the given village, a dairy Cooperative Society (DCS) is formed.

Every dairy cooperative society has ~110 farmers.

Combined, all DCS together handle 16-18 million kg milk / day.

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.

similarly Gandhinagar District Co-operative Milk Producers Union Ltd.=Madhur dairy.

Surat= Sumul Dairy

Surendranagar District Co =Sursagar Dairy.

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)

The main boss is Gujarat Cooperative Milk marketing federation (GCMMF).

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.

2012: Amul opened 10000 retail outlets across India.

Other than that, even private shops, hotels, restaurants etc. too sell Amul products.

108

Logistics Process
I.

Logistics in collection

6 million liters of milk per day


From about 16,600 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.

109

Cont
III. Supplier logistics

Weighing the milk.


Determining of fat content.
Calculation of the purchase price.

110

E-SCM
What is the fuss about?
E-Supply Chain
Management

E-SCM can be defined as the


integrated
management
approach for planning and
controlling
the
flow
of
materials from suppliers to the
end users using IT and
internet technologies.

Eg: Walmart, Amul etc

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:

Public companies 1971 onwards


Private companies 1991 onwards

Operations governed by Traditional methods. Plagued by


problems such as low per cattle yield, shortage of fodder,
inadequate transportation and Cold storage facilities.
Recently, transformations in the sector have been spearheaded
by Amuls adoption of IT services.
Major Players : Amul, Mother Dairy, Nestle and other regional
players

COMPANY OVERVIEW

Amuls Inception and Business Model


AMULs INCEPTION
Launched in 1946
Prior to Amuls launch, Indian Dairy industry was dominated British Polson Dairy
In the protest against Polsons discriminatory policies, a non-cooperation movement was
launched
which eventually culminated in to the inception of Amul in late 1946
BUSINESS MODEL
Eliminating the middlemen
Division of Procurement units on the basis of Societies (Amalgamation of villages)
On the Supply side, daily procurement of 3 million litres a day from 1.25 million milk suppliers, and
thus in 1994, it implemented Automatic Milk Collection Units (AMCUS)
On the Demand side, GCMMF (Gujarat Co-operative Milk Manufacturing Federation) controls the
manufacturing, distribution and marketing of milk and other related products
Low price strategy
Dual strategy of simultaneous development of the market and member farmers helped attain
sustainable competitive advantage. IT and TQM have significantly optimized operations at Amul

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

Thus, over a period of 7 years, Amul introduced a


variety of end-to-end IT solutions to tightly integrate
the various components of its Supply Chain.

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

(c) TIME MANAGEMENT

(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

Assigned the ERP software development project on a


turnkey basis to TCS and IBM
Phased transition
First implemented AMCUS in Navali Village co-operative
society on a pilot basis in 1996

3. TEAM STRUCTURE
Retail B2B & B2C
Portal
EIAS & GIS Internet

ERP DISK

Wholesale depots and Connect with the Direct


Retailers
customer base
GCMMF head office
members and the
distributors

Interface
suppliers
retailers

between
and

the
the

Union members, Head Connect


with
the
of the village society farmers
and
village
and suppliers
cooperative societies

ORGANISATION METRICS
How effective is Amul and its supply chain
(a) QUALITY MEASUREMENT ISSUES
METHOD USED: Kaizen Techniques of six sigma

Number of AMCUS installed


Satisfaction level of villagers is measured
Improvement in quality of milk (reduction in acidity and sour
milk)
Planned activities for maintenance of machines
(b) COMMUNICATION EFFECTIVENESS
METHOD USED: INFORMATION COMMUNICATION
TECHNIQUES

Reduced time delay in getting money.


Improved cash availability and reduced the need for loan.
Possibility of error was reduced.
Reduced Waiting time
(c) TRAINING AND SKILL DEVELOPMENT

Procurement system- integrator and knowledge sharing platform

Trained 2 or 3 operators by system provider

BUSINESS PARTNERS
Who contributed in the success story of Amul

Helped implement SAP ERP system


which enabled to have a complete
view of supply chain and integrate
GCMMF and district unions

Business intelligence system which


gave them an insight on all its
products all over the country and
generated reports to manage the
supply chain

14

To achieve the objective of C2C (cow


to consumers), Amul laid down a five
point agenda using ERP, which were:
ERP implementation for GCMMF
ERP implementation for member
unions
a uniform and automated milk
collection system covering all the
villages in the Amul family
a distributor managed solution
a retail management solution for
Amul
Preferred Outlet
IBM is helping Amul in achieving all
these objectives

CHALLENGES
Implementation of IT in supply chain was not easy

(a) Challenges faced by Management:

Change Management

Scalability

(b) People/ Human Resources Related Challenges

Training and Skill Re-orientation

Farmer Literacy and support

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:

Reduction in lead time


Reduction of pilferage
Reduction in human errors
On the spot payment for farmers
(from a week to a couple of minutes)
Reduction in wastage
Transparency in operation
Integration in operation

After calculating the economic benefits it is


found that the AMCUS benefits the farmer
community by saving Rs. 1159.4 million per
year.

16

EVOLUTION of IT
AMUL is the first company in the co-operative

form to adopt the e-revolution.


The milk collection center at village cooperative
societies, were first automated.
Data analysis software

utilization for milk


production estimation and increasing productivity.

VSAT

network between all the level of


distribution network and GCMMF.

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

village society were installed in the first phase to


automate milk production logistics.
AMCUS facilities to capture member information, milk

fat content, volume collected, and amount payable to


each member electronically.

125

EVOLUTION of IT

126

Cont.
Amul also connected its zonal offices, regional

offices and members dairies through VSATs.


The customized ERP- EIAS has been
implemented across the organization integrating
various operational departments.
Amul is also using Geographic Information
Systems (GIS) for business planning and
optimization of collection processes.

Cont
Indian Institute of Management Ahmedabad supplemented

Amuls IT strategy by providing an application software Dairy


Information System Kiosk(DISK) to facilitate data analysis
and decision support in improving milk collection.
The kiosk would also contain an extensive database on the
history of cattle owned by the farmers, medical history of the
cattle, reproductive cycle and history of diseases.
Farmers can have access to information related to milk
production, including best practices in breeding and rearing
cattle.
As a large amount of detailed history on milk production is
available in the database, the system can be used to forecast
milk collection and monitor the produce from individual sellers.

Automatic Milk Collection System Units


(AMCUS)

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 sixteen

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.

Trying

to practise just in time


management with six sigma accuracy.

supply

chain

Online order placements of Amuls products on the

web.

Distributors can place their orders on the website.


Amul

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

Price paid to village


co-operative societies

Membership
Price paid to milk
suppliers

Village Dairy Cooperative Society (VDCS)


Collection of surplus milk & payment based on quality &

quantity.
Providing support services to the members.
Selling liquid milk for local consumers of the village.
Supplying milk to the District Milk Union

District Cooperative Milk Producers Union


(Milk Union)
Procurement of milk from the Village Dairy Societies of

the District.
Arranging transportation of raw milk from the VDCS to

the Milk Union.


Providing input services to the producers.
Conducting training on Cooperative development

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.

State Cooperative Milk Federation


(Federation)
Marketing of milk & milk products
Establish distribution network
Arranging transportation from the Milk Unions to the market.
Creating & maintaining a brand
Providing Technical Inputs, management support & advisory

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

THE CHANNEL NETWORK


A zero level of channel also called a direct

marketing channel consists of a manufacturer


selling directly to the final customers.
A one level channel; contains one selling
intermediary such as retailer to the final
customers.
A two level channel two intermediaries are
typically wholesaler and retailer.
A three level channel are typically
wholesaler, retailer and jobber in between.

140

THE CHANNEL NETWORK

Procurement channel- upstream flow


Distribution channel- downstream

flow

141

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.
142

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.
144

145

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

146

departmental stores to retain freshness.

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.

147
The unions monitored the supplies of milk and the

distribution of finished products.

DOWNSTREAM FLOW
First leg

Manufacturing units to company depots using 9


and 18 MT trucks
Frozen food below -18C
Dairy wet 0-4C

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

Amul has plans to create a large chain

of such outlets to be managed by


franchisees throughout the country.
151

Expansion plan
Tie up with the Wal Mart
Export is in 15 countries.
Opened 10000+ Amul parlor by the end of the 2010.

Crossed 12000 recently.

Mission 2020
Very ambitious future plan
Turnover of 27000 crore.(three fold increase in the

group turn over.)


Milk production 33.1 million liter/day.
Milk drying capacity 200 mt/day

Amul (Recently in news)


Milk via milk train.
Tie up with Adani Logistics.
50 wagon each capacity 24k liter.
Initial transport cost was 40 crores ,reduce it to half.

Thank you

155

Role of Cooperative in India


It is an organization for the poor who wish to solve
their problems collectively;
It is an institution of mutual help and sharing;
It softens the class conflicts and reduces the social
cleavages;
It reduces the bureaucratic evils and follies of political
factions;
It overcomes the constraints of agricultural
development;
It creates conducive environment for small and
cottage industries.

Cooperatives Working in India


Credit
Production
Processing
Marketing
Input distribution
Housing
Dairying
Textiles

But only in few sectors it achieves some success,


Dairying
Urban banking and housing
Sugar and handlooms.

Reasons For Success of Amul


Robust Supply Chain
Low Cost Strategy
Diverse Product Mix
Strong Distribution Network
Technology and e-initiatives.

Reasons for Failure of a cooperatives


Dormant membership and lack of active

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

Cooperatives Share in Sector in India


Fertilizer production and distribution -over

35% of the market.


Production of sugar -over 58%
Cotton over 60%
Handlooms- over 55%.

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