Amul: The poster boy of rural IT

If opinion makers need one concrete example to showcase the positive impact IT can have on rural India, they only need to take a look at Amul. From using automated milk collection centres, to making IT literacy compulsory for its employees, Amul leaves no stone unturned in promoting its IT initiatives. Srikanth R P reports on how Amul is truly rural India s flag bearer in the IT revolution The term, Digital Divide, has always fascinated the Indian IT industry. Both the government and social organisations from the private sector have launched various schemes to take IT to the masses. It has always been argued that Indias rural populationwhich accounts for more than 70 percent of the total populationcan be uplifted with the help of IT. And if rural India or the government needs a poster boy who could inspire organisations to strategise operations with the help of IT it has to be Amul. No other Indian brand comes close to it. According to Subbarao Hegde, Amuls integrated Formed in the year 1946, Amul initiated the dairy co-operative movement in system has India and formed an apex co-operative organisation called the Gujarat Co- proved to be operative Milk Marketing Federation (GCMMF). Today, this movement is extremely being replicated in 70,000 villages in over 200 districts in India, transforming effective in the life of the Indian villager. This co-operative revolution has made India the streamlining largest producer of milk in the world today. Amul is also one of the largest the demand food brands in India with an annual turnover of $500 million, and with versus products ranging from milk, butter, ghee, cheese, chocolates, ice-creams and supply data pizzas. The case of Amul is noteworthy simply because the movement has not activity on a only lead to efficient collection of milk, but more importantly, has used IT to continuous create higher profits for milk producers. Its no wonder that when the basis Nasscom-Boston Consulting group wanted to showcase successful ecommerce cases in India, they chose Amul, for setting an example for building an online bridge to its consumers.

The successful utilisation of IT to bridge the digital divide, has aptly been described by Dr V Kurien, chairman, GCMMF and the man credited for revolutionising the co-operative movement. Computers were not created to solve the prob lems of poverty, hence it is futile to expect that the world will be a better place if we all had access to computers and the Internet. But information is power and it stands to reason that if this power is shared equitably, all will benefit. There is no better example than Amul to prove this fact. Role of Information Technology

IT has played a critical role in the development of the Amul brand. The logistics behind the co-ordination of approximately six million litres of milk per day from about 10,675 separate village co-operative societies throughout Gujarat, and storing, processing and producing of milk products at the 12 district dairy societies, is carried out with military-like precision. Its in these operations that IT plays a critical role. The installation of over 3,000 Automatic Milk Collection System Units (AMCUS) at village societies to capture member information, milk fat content, volume collected, and amount payable to each member, has proved invaluable in ensuring fairness and transparency throughout the entire organisation. The role of IT in Amul is best summed up by B M Vyas, chief executive officer, Amul (GCMMF) when he says, Amul is not a food company, it is an IT company in the food business. The way things were

GCMMF is an apex co-operative organisation that comprises 12 affiliated member dairies/district milk unions, with each having its own manufacturing unit. These member dairies in turn have collectively about 2.1 million milk-producing members who supply milk twice a day to the respective village co-operative societies. As the collection and coordination of milk was a complex task, the organisation needed a methodology to streamline operations. Further, following the relaxation on food imports by the government of India, the Indian dairy sector faced a strong challenge from large organised dairies. To meet this challenge, the Indian dairy sector needed a strategy to make its operations competitive. Accordingly, IT was decided as the thrust area that would streamline the production and collection process and the processing of milk products. This is where the installation of AMCUS made the entire operation look simple.

For example, on an average, around thousand farmers come to sell milk at their local cooperative milk collection centre. Each farmer is 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 measured by an electronic fat testing machine. Both these details are recorded in the PC. The computer then calculates the amount due to the farmer on the basis of the fat content. The value of the milk is then printed out on a slip and handed over to the farmer, who collects the payment at the adjacent window. Earlier, members had passbooks containing details like identification number, fat percentage of milk and volume of milk. The volume of the milk was recorded in the passbook and a small sample was stored in plastic bottles for measurement of the fat content. The testing of the milk was done at a later date and the entire process used to take more than a week. In the current scenario, with the help of IT, the farmers receive their payments within a matter of minutes. Also, as the method is transparent, the likelihood of fraud has also decreased to a large extent. But all these initiatives have not come without challenges. For example, in the initial phases, to convince sceptical farmers, the AMCUS were installed free of cost and the co-operative was requested to pay up only if they found the unit satisfactory. However, the experiment paid off and these initiatives made farmers aware to the benefits of the new system. Today, the application is being used in over 3,000 rural locations. Subbarao Hegde, chief information officer, Amul - GCMMF says, As milk is a highly perishable commodity, the AMCUS initiative is vital for our operations. Due to this automation, we are in a position to collect six million litres of milk per day from around two million members. More importantly, this initiative has increased the trust and transparency for IT in rural areas. There are around 10,755 organised village co -operative societies in Gujarat, which are affiliated to the respective district union or member dairies. Each member preserves the milk in the cold storage, processing it and producing several products, which are then sold under the Amul brand name. As all products have a limited shelf life, the organisations ability to conduct its operations in a smooth way is much more praiseworthyespecially when one considers the scale of the operations. Amul makes about

10 million payments daily amounting to transactions worth Rs 170 million in cash. More than 5,000 trucks move the milk from the villages to 200 dairy processing plants twice a day, according to a carefully planned schedule. In modern day lingo, it can be described as Justin-Time supply chain management with Six Sigma accuracy.

Key

initiatives

While Amul has always been at the forefront of IT initiatives, the major thrust came only in 1994, when the organisation decided on Information Technology as the key component needed to sharpen its competitive advantage. Amul studied its existing functions and operations and formulated an IT plan for spearheading its growth in the 21st century. The guiding principle behind the exercise was to align the information strategy with the business strategy of the organisation, and derive maximum benefits from computerisation. During the implementation of the plan, Amul took a strategic decision to re-design and re-organise the existing software applications. While implementing the new software, care was taken to integrate the applications in such a manner that once the information was captured at source, it could be leveraged for the enterprises decision making process. The main focus was to ensure that the output of one system could become input of another system and vice-versa. Thus providing a seamless flow of information.

Enterprise-wide

system B M Vyas, Accordingly, Amul assigned the ERP software development project named as says, Enterprise-wide integrated application system (EIAS), on a turnkey basis to Amul is Tata Consultancy Services. At present, the EIAS system covers a plethora of not a food operations like market planning, advertising and promotion, distribution company, it network planning, stock control, sales and accounting, budgetary control, is an IT quality control management and co-operative service management. Amul has company in also connected all its zonal offices, regional offices and members dairies the food through VSATs for seamless exchange of information. business Each of Amuls offices is connected by e-mail and all of them send a daily report on sales and inventory to the main system at Anand. Also, sales offices, C&F points and wholesale distributors of GCMMF have been connected through the Internet for timely exchange of information. The customised ERP EIAS is designed in such a way that it can be plugged into various points of the supply chain and external system. Moreover, the software is platform independent and can work on any operating system. Amul is also in the process of Webenabling the entire supply chain so that it can capture key information at the source, and use the same for decision-making. This would include the likes of transporters, membermanufacturing units, oil packing stations, suppliers, depots and the entire field force. Says Hegde, In the co-operative space, this is the first instance of an integrated system. The same system is going to be linked to each member dairys ERP system in order to get information about a variety of details. For example, details like milk procurement, production and stocks ready for despatch, wholesale distributor orders, secondary sales, direct consumers and demographic census data are available on the click of a button. This has proved to be extremely effective in streamlining the demand versus supply data activity on a continuous basis. Amuls IT Roadmap

integrated

application

Uses

automated system units

milk for

collection

collection of milk

Geographic

information

systems

Implemented a customised

In addition to the EIAS, Amul has also been using ERP system which is used in Geographic Information Systems (GIS) in an innovative conjunction with GIS way. The company uses GIS in its head office and key

Uses data analysis software

marketing offices. Using the Indian map in GIS, the for forecasting milk production company is in a position to plot zone/depot boundary as and increasing productivity well as a pointer for zone, depot and distributor

Has connected all zonal, dairies

locations, which are superimposed by product-wise sales regional and member data. This data is then used for sales and distribution through VSAT planning according to the various zones. The unique

One of the first five Indian

thing about Amuls GIS is that it is used for business organisations to have a Web planning activity at the collection level as it captures the presence farmer-member census information, which includes

Has made IT education

animal census data. This has enabled Amul to decipher compulsory for all its employees information regarding milk production and productivity Opted for the .coop domain of animals, region wise in Gujarat. This ultimately helps to position its brand in a distinct in forecasting milk production according to the region way. and suggests remedies, if any, for a region that has a lower milk production rate. The same GIS system can also be used for monitoring veterinary health and controlling the outbreak of diseases. DISK Also significant are the efforts of IIM-Ahmedabads (IIMA) e-governance centre that has developed additional modules, by building applications upon the existing system. The centre has tried to extend the benefits of the existing applications b y developing a Dairy Information System Kiosk (DISK). Besides automating the collection of milk, the system would be used for data analysis and decision support to help in improving milk collection. The kiosk would also contain an extensive database on the history of cattle owned by the farmers. This would contain details like medical history of the cattle, reproductive cycle and history of diseases. Besides this, farmers can have access to information related to milk production, including best practices in breeding and rearing cattle. Using the same system,

the farmers can even have access to a multimedia database on innovations captured by Srishti, an NGO working with IIMA. 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. Going forward, there are plans to introduce features like Internet banking services and ATMs which will enable milk societies to credit payments directly to the sellers bank account. In line with this vision, officials at Amul are looking at upgrading the plastic cards which are being currently used only for identification purposes, to smart cards which can be used to withdraw cash from ATMs. Online initiatives

The history of Amul shows that it radically changed the way business was done by eliminating the middleman and bringing the producer closer to the consumer resulting in benefits for both. Incidentally, it was also one of the first Indian companies to have a Web presence. Today, Amuls cyberstore gifting service is capable of servicing consumers in more than 125 cities. Says Hegde, We have also linked our distributors to our network and also incorporated Web pages of top retailers in our site, amul.com, as part of our B2B initiatives. Distributors can place their orders on the website, amulb2b.com, especially meant for accepting orders from stockists and promoting Amuls products via e -commerce. Currently, the company receives queries from overseas agents for distributing its products in countries like the US, Britain, New Zealand, Singapore and Thailand. As a result of the online initiatives, today, Amul exports products worth around Rs 100 crore, to countries in West Asia, Africa and the US. Amul has also launched sites like amulgreetings.com and amulkids.com to extend the brand identity to kids and teenagers who are its target market for its ice-cream and chocolates products. Also, as a strategy, Amul has a customer feedback channelwhich uses e-mail like cheese@amul.com for cheese products and butter@amul.com for butter products. In addition, the organisations corporate intranet site contains all the companys updates including policies, procedures, functional role and responsibilities of each person in the organisation. Another example that puts Amul in a league of its own, is its recruitment policy. For instance, for any new requirement in different functional areas, candidates have

to compulsorily undergo a computer literacy test, where the minimum passing mark is 80 percent. Explains Vyas, Our main emphasis is to increase competency at the end user level with the help of IT. All our employees have undergone computer training according to the departmental needs so that they can take charge of their responsibilities in an effective way at the respective supply points. Amuls success in leveraging IT to its advantage lies in the simple fact that the organisation has a clear IT vision. For example, after a top-level domain co-operative was made available, Amul embraced it with gusto. Hegde says that by developing the Amul.coop Web portal, the organisation will be in a position to communicate with other similar co-operative movements. As co-operatives can interact with each other with similar organisations sharing this domain, knowledge can be shared on a pro-active basis, which can lead to further productivity benefits. While it has always been argued that investments related to information technology made in rural India are a disaster, the case of Amul proves that where there is a will, there is a way. From catchy billboards to being a e-commerce success story, Amul is truly rural Indias flagbearer in the IT revolution. GREEN GUJARAT TREE PLANTATION CAMPAIGN BY MILK PRODUCERS OF DAIRY COOPERATIVES

Amul Coops plant more than 311.98 lakhs trees Milk Producer members of Gujarat Dairy Cooperatives- better known as AMUL have been celebrating the nation's Independence Day in a novel manner by planting lakhs of saplings across Gujarat and have taken up an ambitious plan to save the environment by planting trees, making India green and thereby reducing the effects of global warming. The milk producers of Gujarat Dairy Cooperatives are conducting mass tree plantation drive every year on Independence Day for last five years. In last five years (2007 to 2011) the milk producers have planted around 311.98 lakhs trees). The most striking feature of these entire programmes was that it has been initiated by milk producer members of the dairy

cooperatives. The unique fact about the programme was that the milk producer members took up the oath to protect tree saplings till it survives and grows into tree. Over the years, due to intensive agriculture and dairying various natural resources are getting consumed at faster pace in Gujarat state of India. The state level apex body of dairy farmers in Gujarat gave a serious thought in this direction and discovered a novel idea for giving back to nature. The idea was "one member one tree" plantation on our 60th Independence day - 15th August 2007.To put this idea in to the practice a design team constituting of representatives of member unions were formed. The team accepted the idea by heart and immediately decided to spread it among farmer members of village dairy cooperative societies. Then the idea was communicated to farmer members and they all welcomed it and enthusiastically agreed to implement the idea. For smooth implementation of the idea, the design team chalked out the road map for various activities. Execution teams were formed at district union level to give final shape and put the plan in action. Village level coordinators were identified and they were trained to streamline activity of tree plantation. Various awareness materials were prepared. Through various communication media farmer members were made aware of benefits of tree plantation and tree plantation activity schedule

The entire plantation activity was coordinated at all the three tiers of Anand pattern - at village, district and state level dairy cooperatives. On 15th August, 2007, after the flag hoisting ceremony, each member took an oath to plant saplings and ensure that they grew in to trees. Then individually they planted sapling on their own at their identified locations like

their farm, near their home, on Farm bunds, etc. They have taken necessary care to ensure that this sapling survives and they also reported regarding the survival to village level coordinator and district milk unions after five months. In this way, 18.9 lakh trees were planted on 15th August 2007. This was just the beginning. Henceforth, the Village Dairy Cooperative Societies of Gujarat as a mark of respect for our nation decided to conduct such event on every Independence Day and accepted 15th August (Independence Day) as a"Green Revolution Day by Afforestation to Protect Mother Earth from Pollution, Climate change and Global Warming".

But all this required immaculate planning and execution. An action plan of tree plantation programme was drawn up months back in advance. After the identification of the chief coordinator for each district milk union, the organization of a task force for the programme was put in place. Roles and responsibilities were assigned to each member and area of operation allocated. After preparing the overall action plan, each union issued a circular to the Dairy Cooperative Societies regarding the programme and arranged meetings with the societies covered. At the village level, coordinators were identified in respect of the villages to be covered and the number of saplings required. Along with logistical arrangements direct contact was established with different agencies for receipt of saplings. Pointwise methodology for implementation of tree plantation programme on such a mass scale is as following. Point wise Methodology of execution of programme is as following:

1.

Member Unions were informed about the programme and channels of procurement of

saplings, almost six month before to scheduled date of programme. 2. Continuous follow up were taken from the member unions about the status of

activities planned for the programme. 3. A meeting on tree plantation programme was held at GCMMF Ltd., Anand almost a

month ago in which status of action plan was each Member Union was discussed at length. 4. Milk Unions identified the coordinator for the programme and organized a task force

for the successful implementation of the programme. The coordinator at Milk Union level chalked out overall action plan for the programme and assigned roles and responsibilities and area of operation to each member of task force. 5. Milk Unions (MUs) issued circular to their respective VDCSs (Village Dairy

Cooperative Societies) mentioning the entire activity and procedure planned for the celebration of the programme. In circular details for milk producer members to make necessary preparations like deciding the place, digging the pit, taking care of saplings etc. well in advance were also provided. The circular was placed on notice board of VDCSs. 6. MUs task force members contacted & communicated about the concept to VDCS and

identified the village level coordinator and assigned them roles and responsibilities. 7. MUs Coordinator properly explored and communicated the saplings acquiring

sources/nursery details to VDCSs. They also ensured that saplings reach the VDCSs before 3 days. 8. A press note was prepared by the coordinator of the programme at MU level and

which were given in the newspapers on a day before tree plantation to boost morale of producer members and mentally prepare them for the execution of programme on next day. 9. At time of handing over the saplings to members from VDCS, the producer members

took oath to protect the saplings and accepted the responsibility for successfully growing the sapling into tree. 10. On 15th August, after the milk collection process, at a predecided time sirens at

VDCSs were sounded or other means like beating Thali/utensil, loudspeaker etc. were used to facilitate the gathering producer members in time at predecided place in the village for celebration of Independence Day in VDCS premises, common plot, school etc. After flag hoisting ceremony, the tree plantation activity was executed by the producer members.

11.

In many villages the milk producer members planted the trees after performing the

Puja (worship) of saplings before planting them. 12. To add fervour and enthusiasm in the programme at many places the Chairman,

Managing Director and Board of Directors of Member Unions participated in the programme. 13. Next day after the programme on a post programme press note was prepared giving

details of the programme celebrations along with photographs. Similar such notes were published in house magazines/ newsletters. 14. After the completion of the programme the MU's were asked to submit the report on

tree plantation activity. 15. MUs conducted survey after 5 months to find out the survival rate of sapling under the

programme. First tree plantation programme (15th August, 2007) was carried out on "one member, One tree" basis. Second tree plantation programme (15th August, 2008) in which around 52.74 lakhs tree were planted was conducted on "one member three tree" basis. In year 2009 and in year 2010, in mass tree plantation programme around 84.24 and 83.5 lakhs tree saplings were planted respectively. The programme was conducted on "One member, Five tree" basis. Further, this year 2011 around 72.6 lakhs trees were planted, the programme was carried out as per the same process and procedures followed in last year. Hence, in last five years, milk producers of GCMMF planted around 311.98 lakhs tree saplings in 21 districts of Gujarat. By doing so, milk producers of Gujarat Dairy Cooperatives have shown their concern, awareness and commitment for betterment of environment.Yearwise details of tree plantation and survival of tree saplings planted is as under. Sr. Year of tree No. of trees No. of trees Survival

No plantation 1 2 3 2007 2008 2009

planted (in lakhs) Survived (in lakhs) percentage 18.90 52.74 84.24 11 26 38 58 49 45

4 5

2010 2011*

83.5 72.6 311.98

39 34 148.122

47 47 47

Total

*estimated (as survey for survival percentage of the saplings planted in year 2010 is ongoing) According to statistics of Forest Survey of India considering on an average 30-40 cm diameter of these trees, 106 trees would provide one hectare of green tree cover. Considering 47% survivability of planted trees (based on post plantation survey data, around 148.12 lakhs out of 311.98 lakhs tree planted survived during last five years), when they fully grow up, would provide additional 1,39,735 ha. of green cover which is additional 6.41 percent forest cover of Gujarat State of India. Achievements:

This effort to provide green cover to the earth was also acknowledged when the state level apex body of Gujarat Dairy Cooperatives - GCMMF received four successive prestigious "SRISHTI's G-Cube Award"-2007, 2008, 2009 and 2010 for Good Green Governance in the "Service Category". Further, "Amul Green" movement has also been awarded by International Dairy Federation for best environment initiative in the "sustainability category" during the 4th Global Dairy Conference held at Salzburg Congress Center, Austria on 28th April, 2010.

It has been estimated that when one tree is cut, in monetary terms there is loss or Rs. 33 lakhs (Oxygen worth of Rs. 5.3 lakhs, Land Fertility of Rs. 6.4 lakhs, Rs. 10.5 lakh for reduction of pollution of atmosphere and Rs. 5.3 lakh towards Flowers / Fruits and habitation to birds - animals). But the benefits that accrue to mankind when a tree is planted cannot be measured in money and is priceless. The producer members of GCMMF have really set an example for all the cooperatives and other institutions to turn India green in the era of Global warming and environmental crisis. When 3 million dairy farmers of Gujarat have planted more than 311.98 lakh trees in just five years and are planning to plant more trees every year, they are doing an invaluable truly Amul - service to the society. In an era of global warming, Amul is contributing its share in making Gujarat lush green. In this way, the milk producers of Gujarat are ushering in a silent revolution of greening Gujarat.