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A PROJECT REPORT ON
2012-13
A PROJECT REPORT ON
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2012-13
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DATED:
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2012-13
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ECONOMICS,
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HAS
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2012-13
TABLE OF CONTENTS
2012-13
CHAPTER 1
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2012-13
CHAPTER 2
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10
2.1.1 MASCOT
Since 1967 Amul products' mascot has been the very recognisable "Amul baby" (a
chubby butter girl usually dressed in polka dotted dress) showing up on hoardings and
product wrappers with the equally recognisable tagline Utterly Butterly Delicious
Amul.The mascot was first used for Amul butter. But in recent years in a second wave
of ad campaign for Amul products, she has also been used for other product like ghee
and milk.
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were unhappy for it. They invested in the animal feed and fodder and they put in their
labor. Yet, it was they who received the smallest share of the Bombay consumers'
rupee. The arrangement benefited everyone but them.
2.2.2 - THE FIRST STEP: FORMATION OF KAIRA UNION
Realizing that something needed to be done about the unequal balance of wealth, they
turned to Sardar Vallabhbhai Patel for advice. Sardar Patel knew that their only
chance of earning a decent income was when they themselves gained control over the
resources they created. He also knew that the cooperatives offered them the best
chance of gaining that control. So he advised them to stop selling milk to Polson and
form a cooperative of their own. In his opinion they were to own their own dairy unit.
He said, "Throw out Polson and his milk contractors". They followed his advice and
the Kaira District Cooperative Milk Producers' Union (AMUL) was born, in 1946. By
good fortune, they could get as Chairman - Shri Tribhuvandas Patel, an equally
remarkable man. He understood the concept of cooperation and he understood people.
His integrity was absolute. Because the farmers of Kaira district trusted and respected
Tribhuvandas Patel, the cooperative was able to pass through some very difficult
times and eventually become a model of cooperative dairying throughout the world.
The Kaira Union began with a clear goal, to ensure that its producer members
received the highest possible share of the consumers' rupee. This goal itself defined
their direction. The focus was on production by the masses, not mass production. By
the early 'sixties, the modest experiment in Kaira had not only become a success,
people began to recognize it as such. Farmers came from all parts of Gujarat to
learn.They went back to their own districts and started their own cooperatives. The
result - Together, the district milk producers unions of Gujarat owned the Gujarat
Cooperative Milk Marketing Federation, which markets the milk and milk products
manufactured by its owners. The Federation's turnover was over Rs. 1700 crore
making it the largest in the food industry.
In 1964, the then Prime Minister Shri Lal Bahadur Shastri came to inaugurate cattle
feed factory owned by Amul near Anand. Impressed by the cooperative's success, he
expressed his wish to "transplant the spirit of Anand in many other places". He
wanted the Anand model of dairy development replicated in other parts of the country.
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With institutions owned by rural producers, which were sensitive to their needs and
responsive to their demands, it was an ideal tool for progress. The National Dairy
Development Board was created in 1965 in response to this call.
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the end of 1948, more than 400 farmers joined in more village societies, and the
quantity of milk handled by one Union increased from 250 to 5,000 liters a day.
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dairy capable of producing 40 tons of milk powder and 20 tons of butter a day was
speedily completed. It was declared open in 1965. The Mogar Complex where high
protein weaning food, chocolate and malted food are being made was another
initiative by Amul to ensure that while it fulfilled the social responsibility to meet the
demand for liquid milk, its members were not deprived of the benefits to be had from
the sale of high value-added products.
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The Union runs a semen production center where it maintains high pedigreed Surti
buffalo bulls; Holstein Friesian bulls, Jersey bulls and 50 per cent crossbred bulls. The
semen obtained from these bulls is used for artificial breeding of buffaloes and cows
belonging to the farmer members of the district. The artificial insemination service
has become very popular because it regulates the frequency of calving in cows and
buffaloes thus reducing their dry period. Not only that, a balanced feed concentrate is
manufactured in the Union's Cattle Feed Plant and sold to the members through the
societies at cost price.
Impressive though its growth, the unique feature of the Amul sagas did not lie in the
extensive use of modern technology, nor the range of its products, not even the rapid
inroads it made into the market for dairy products. The essence of the Amul story lies
in the breakthrough it achieved in modernizing the subsistence economy of a sector
by organizing the rural producers in the areas.
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Provide a support system to the milk producers without disturbing their agroeconomic systems
Plough back the profits, by prudent use of men, material and machines, in the rural
sector for the common good and betterment of the member producers and
Even though, growing with time and on scale, it has remained with the smallest
producer members. In that sense, Amul is an example par excellence, of an
intervention for rural change.
The Union looks after policy formulation, processing and marketing of milk,
provision of technical inputs to enhance milk yield of animals, the artificial
insemination service, veterinary care, better feeds and the like - all through the village
societies.
The village society also facilitates the implementation of various production
enhancement and member education programs undertaken by the Union. The staffs of
the village societies have been trained to undertake the veterinary first-aid and the
artificial insemination activities on their own.
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CHAPTER 3
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2.36 million
11,333
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V
i
l
a
g
DISTRIBUTION CHANNEL OF AMUL e
r
s
producers union and then a state level marketing federation is established. The
structure is line relationship, which provides easy way to operation. It also provides
better communication between two stages.
V
i
l
l
a
g
e
r
s
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A systematic & well-defined organizational structure plays a vital role & provides
accurate information to the top-level management. An organisation structure defines a
clear-cut line of authorities & responsibilities among the employees of GCMMF. The
Organisation structure of Amul is well-arranged structure. At a glance a person can
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completely come to know about the organization structure. Amul is leaded by the
director under him five branches viz. Factory, Marketing, Accounts, Purchase, Human
Resources Department.
Factory department has a separate general manager under him there are six braches
viz. Production, Stores, Distribution, Cold Storage, Quality, and Deep-freezing. This
department takes care of the factory work.
Marketing department has regional senior marketing manager and under him there is a
regional manager. This department takes care of the marketing aspects of Amul.
Accounts department takes care regarding accounts i.e. day-to-day work. Under the
accountant there is one clerk. Purchase department takes care regarding the purchase
of raw materials and many other things.
2012-13
Sales Turnover
Rs (million)
US $ (in million)
1994-95
11140
355
1995-96
13790
400
1996-97
15540
450
1997-98
18840
455
1998-99
22192
493
1999-00
22185
493
2000-01
22588
500
2001-02
23365
500
2002-03
27457
575
2003-04
28941
616
2004-05
29225
672
2005-06
37736
850
2006-07
42778
1050
2007-08
52554
1325
2008-09
67113
1504
24
The Kheda Union began pasteurizing milk for the Bombay Milk Scheme in June
1948. An assured market proved a great incentive to the milk producers of the district.
By the end of 1948, more than 400 farmers joined in more village societies, and the
quantity of milk handled by the Union increased from 250 to 5000 litres a day. In the
early years, AMUL had to face a number of problems. The response to these provided
stimulus for further growth. For example, as the movement spread in the district, it
was found that the Bombay Milk Scheme could not absorb the extra milk collected by
the Kheda Union in winter, when the production on an average was 2.5 times the
summer. Thus, even by 1953, the farmer-members had no assured market for the extra
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milk produced in winter. They were again forced to sell a large surplus at low rates to
the middlemen.
The remedy was to set up a plant to process milk into products like butter and milk
powder. A Rs. 5 million plant to manufacture milk powder and butter was completed
in 1955. In 1958, the factory was expanded to manufacture sweetened condensed
milk. Two years later, a new wing was added for the manufacture of 2500 tons of
roller-dried baby food and 600 tons of cheese per year, the former based on a formula
developed with the assistance of Central Food Technological Research Institute
(CFTRI), Mysore.
It was the first time anywhere in the world that cheese or baby food was made from
buffalo milk on a large, commercial scale. Another milestone was the completion of a
project to manufacture balanced cattle feed. The plant was donated by OXFAM under
the Freedom From Hunger Campaign of the FAO. To meet the requirement of milk
powder for the Defense, the Kheda Union was asked by the Government of India in
1963 to set-up additional milk drying capacity.
A new dairy capable of producing 40 tons of milk powder and 20 tons of butter a day
was speedily completed. It was declared open in 1965. The Mogar Complex where
high protein weaning food, chocolate and malted food are being made was another
initiative by AMUL to ensure that while it fulfilled the social responsibility to meet
the demand for liquid milk, its members were not deprived of the benefits to be had
from the sale of high value-added products. The Mogar complex also started
manufacturing Amullite a substitute for butter in 1994. Amul has also set up a new
Dairy Plant to handle 6.5 lakh liters per day with facilities to produce 60 tonnes of
powder and 70 tonnes of butter in a highly automated plant. It has recently set up a 20
MT Cheese plant at Khatraj near Memdabad.
Impressive though its growth, the unique feature of the AMUL sagas did not lie in the
extensive use of modern technology, nor the range of its products, nor even the rapid
inroads it made into the market for dairy products. The essence of the AMUL story
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27
The Union's 16 mobile veterinary dispensaries have fully qualified staff. All the
villages are visited bi-monthly on a pre-determined day, to provide animal health care.
A 24-hour Emergency Service is also available at a fee (Rs.35 for members and
Rs.100 for non-members). All the mobile veterinary vans are equipped with Radio
Telephones.
The Union runs a semen production centre where it maintains high pedigreed Surti
buffalo bulls, Holstein Fresian bulls, Jersey bulls and 50 per cent cross-bred bulls to
cater to the need of semen for artificial breeding of buffaloes and cows belonging to
the farmer members of the district. Artificial insemination service has become very
popular and effective because it regulates the frequency of calving in cows and
buffaloes and thus reduces their dry period. A balanced feed concentrate is
manufactured in the Union's Cattle Feed Plant and sold to the members through the
societies at cost price.
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yield of animals: artificial insemination service, veterinary care, better feeds and the
like, all through the village societies.
The village society also facilitates the implementation of various production
enhancement, and member education programmers undertaken by the Union. The
staffs of the village societies have been trained to undertake the veterinary first-aid
and the artificial insemination activities on their own.
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CHAPTER 4
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Amul Lite
Utterly
Butterly
Delicious
Cholesterol Bread
Spread
Delicious
Table
Dairy
Margarine
Whitener
to eat healthy
Dairy Whitener
Powder Milk
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Amulya
31
Amul
Spray
Infant
Milk
Amul
Instant
Food
Powder
A dairy in your
home
baby
Sagar
Skimmed
Milk
Powder
Sagar
Tea
Coffee Whitener
Which is especially
useful
for
diet
preparations or for
use by people on
low
calorie
and
Fresh Milk
Amul Fresh Milk
milk
in
the
market. Pasteurised
in
state-of-the-art
processing
and
plants
pouch-packed
for convenience.
Amul
Taaza
Amul
Double
Toned
Milk
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Lite
Slim
Amul
Fresh
Cream
Amul
Kool
Chocolate Milk
Amul
Kool
Amul
Kool
Flavoured
Flavoured
Tetra
Bottled Milk
Pack
Amul
Amul
Shakti
Toned Milk
Masti
Spiced
Buttermilk
Amul introduces the
Best
Thirst
Quenching Drink
Amul cheese
Amul
Pasteurised
Amul
Cheese
Processed Cheese
Spreads
100%
Vegetarian
in 3 great flavours.
microbial rennet
Amul
Emmental
Cheese
The
Pizza
Mozzarella
Great
Swiss
Cheese
Pizza cheese...makes
has
sweet-dry
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Amul
33
Gouda Cheese
For Cooking
Amul / Sagar Pure
Cooking Butter
Ghee
Made
from
fresh
and
granular
texture.
An
product
made
ethnic
by
Utterly
Pizza
Delicious
Mate
Sweetened Condensed
Milk - Free flowing
and smooth texture.
White to creamy color
with a pleasant taste.
Health Drink
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Masti Dahi
Nutramul
Amul
Health
made
Drink
from
malt
has
the
extract
highest
Shakti
Food
Available in Kesar-
protein
Almond
and
Chocolate flavours.
sold
in
India.
Desserts
Amul Ice Creams
Amul
made
anytime.
in
various
Shrikhand
delicious
treat,
Amul
Mithaee
Gulab
Jamuns
Pure
Khoya
Gulab
Jamums...best served
piping hot.
Amul
Chocolates
Amul Lassee
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Amul Basundi
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This framework assumes that an increase in relative market share will result in an
increase in the generation of cash. This assumption often is true because of the
experience curve; increased relative market share implies that the firm is moving
forward on the experience curve relative to its competitors, thus developing a cost
advantage. A second assumption is that a growing market requires investment in
assets to increase capacity and therefore results in the consumption of cash. Thus the
position of a business on the growth-share matrix provides an indication of its cash
generation and its cash consumption.
It is observed that the cash required by rapidly growing business units could be
obtained from the firm's other business units that were at a more mature stage and
generating significant cash. By investing to become the market share leader in a
rapidly growing market, the business unit could move along the experience curve and
develop a cost advantage. From this reasoning, the BCG Growth-Share Matrix was
born.
Here, we shall consider the products of GCMMF (Amul India). The products to be
placed in the BCG matrix for the study are, Amul Butter, Amul Ice cream, Amul
Kool and Amul Chocolates.
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For Amul brand, Amul Kool and Amul Chocolates are a perfect example of a
Question mark product or a problem child. Question marks business are wait and
watch business. Amul kool and the chocolates.are businesses the company entered
because it felt that both these product category have high growth potential.
Stars - Stars generate large amounts of cash because of their strong relative market
share, but also consume large amounts of cash because of their high growth rate;
therefore the cash in each direction approximately nets out. If a star can maintain its
large market share, it will become a cash cow when the market growth rate declines.
The portfolio of a diversified company always should have stars that will become the
next cash cows and ensure future cash generation.
Amul Ice cream, is a star generating huge amounts of cash for the company. No
doubts it demands huge amount of investments as well but at the same time has
enormous growth rate. It has still maintained its large market share in competition
with other large brands like Kwality Walls Ice cream and Dullops etc. It has
earned very high returns compared to its investments and continues to be so. The
company hopes to cash on this product in future.
Cash cows - As leaders in a mature market, cash cows exhibit a return on assets that
is greater than the market growth rate, and thus generate more cash than they
consume. Such business units should be "milked", extracting the profits and investing
as little cash as possible. Cash cows provide the cash required to turn question marks
into market leaders, to cover the administrative costs of the company, to fund research
and development, to service the corporate debt, and to pay dividends to shareholders.
Because the cash cow generates a relatively stable cash flow, its value can be
determined with reasonable accuracy by calculating the present value of its cash
stream using a discounted cash flow analysis.
Amul Butter is one of the unbeatable product in the product profile of the company. It
is primarily their most successful product with hardly any competitors in the market.
The pricing of this product is absolutely strategic so as to avoid further competitors
from entering this segment of the product consumers. The advertisements and
billboards of this product is major contributor to the sales. It is the oldest in the
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market and hence still enjoys the First Mover Advantage, as per the law of marketing.
This product has been a thorough cash cow from the beginning since it gave huge
returns with lowest investments which made it easy for the company to plough those
profits for other products, i.e the Question Mark and the Star segments.
Dogs - Dogs have low market share and a low growth rate and thus neither generate
nor consume a large amount of cash. However, dogs are cash traps because of the
money tied up in a business that has little potential. Such businesses are candidates for
divestiture.
The unfortunate product for any company is when it enters the Dog segment. The
most unsuccessful product for the company has been Amul Ready to eat Pizza. The
company had to call off the product from its list of products. Inspite of all the
marketing strategies the company undertook to make this product a success it proved
to be futile. Somehow, the company could not induce the idea of ready to-eat pizza
in the minds of the consumers. With tough competitors like Pizza Hut and Dominos
Pizza it was wise for them to withdraw the product from the market to avoid further
losses for the company
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exporting to Bangladesh, Sri Lanka, Nigeria, and the Middle East. Following the new
GATT treaty, opportunities will increase tremendously for the export of agri-products
in general and dairy products in particular. There is a strong basis of cost efficiency,
which GCMMF can leverage in the world market.
Markets: The market for the traditional as wells as processed dairy products is
expanding both at the domestic and international front.
IT support: Software is now available for project formulation for dairy enterprise. It
has also computerized its production processes. Mother Dairy was the first fully
computerized dairy in India. In its Anand plant all products are processed
computerized, which does not have any hand touch during any stage of process.
4.3.4 THREATS
Milk vendors, the un-organized sector: Today milk vendors are occupying the
pride of place in the industry. Organized dissemination of information about the harm
that they are doing to producers and consumers should see a steady decline in their
importance.
Infestation: There are increasing incidents of chemical contaminants as well as
residual antibiotics in milk.
Quality: The quality of the milk is found to be poor as compared to the international
standards. One of the reasons for these according to the EU and America is the
method of milching the milk. In these nations the milk is hands by the farmers owning
the cattle do milched with the help of machines, while in India.
Exploitation: The liberalization of the Dairy Industry is likely to be exploited by the
multinationals. They will be interested manufacturing the milk products, which yield
high profits. It will create milk shortage in the country adversely affecting the
consumers.
Subsidy by Western Nations: There have been incidences wherein the Western
nations subsidizing the dairy products by a few means like transportation. Because of
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such reasons the final price of the product goes below the prices prevailing in the
Indian Market. Hence it proves a threat to GCMMFs and other Indian dairy products.
Creation of Non Tariff Barriers by Developed Nations: The Developed Nations have
created Non Tariff Barriers related to Quality of the milk specifically. They want that
the milk be processed with potable Air and Water. They also want that the milching of
cattle be done with the help of machines. However this type if system is yet to evolve
in India. Because of these reasons they are reducing the market potential of Indian
made products, where GCMMF holds a lions share.
The study of this SWOT analysis shows that the strengths and opportunities
far outweigh weaknesses and threats. Strengths and opportunities are
fundamental and weaknesses and threats are transitory. Any investment idea can
do well only when you have three essential ingredients: entrepreneurship (the
ability to take risks), innovative approach (in product lines and marketing) and
values (of quality/ethics).
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Milk
4.4.1
Gayatri
PORTERS
FIVE-FORCE
Royal
MODEL
The
Sardar
competitors
Uttam
Shreshtha
dairy
major
of the Amul
include:
Ice Crean
Havmor
The success of
and
Vadilal
local
brands includes
distribution
Ghee
competitors
effective
system,
advertising,
ascribed
the national
Gayatri
good pricing
Nestle
factors
by
porter are:
Threats of
Milk Powder
2012-13
Nestle
45
Chocolate
Nestle
Cadbury
new entrants
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art technology. To get this technology in India, a firm would require a huge amount of
resources.
Capital Requirements: The total investment required in the industry is huge and is a
decision worth considering even for MNCs. The investment decisions cover the
processing costs as well as the marketing costs. To compete with the brand Amul in
India is difficult as Amul is synonymous to Quality.
Bargaining Power of Supplier
The objective of Amul dairy is not profiting. As it is a part of co-operative society, it
runs for the benefit of farmers those are the suppliers of milk and users of milk
products. According the concept of the cooperative society supplier has bargaining
power to have a good return on his or her supply. However, supplier has limited rights
to bargain with the cooperative society because it is made and run for the sake of mass
and not for individual benefit. But it is made sure that the supplier gets his fair share
of return.
There is appropriate bargaining power of the supplier. In olden days there were not
any kind of cooperative societies as the farmer was exploited. But, nowadays the
farmers rights are protected under the cooperative rules and regulations, which
ultimately results in moderate power of bargaining from the supplier.
Bargaining Power of Buyers
Cost of switching to competitor brands: The switching of brands is seen very much
in products such as ice cream, curd, milk powders, milk additives etc. but it can be
seen comparatively less in liquid milk category. Even if the buyers shift to the other
brands of milk, the value that they get is less than they would get from consuming
Amul.
Large no. of buyers: Milk is a necessity product and hence is a mass product. It has
a considerable share of the rupee spent by any Indian. Moreover the buyers are spread
evenly over the country and do not have any bargaining power.
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Not immediate substitutes: Distant substitutes are present in many of the categories
of business of GCMMF. For example in the Masti Buttermilk category it faces
competition from cold drinks and ice cream.
These 5 forces interact among themselves at different degrees over a period of time.
Moreover it will get intense or loosen up depending upon the moves of its
competitors, buyers, suppliers, etc. However GCMMF has been able to outperform on
almost all fronts excluding a few lines of business.
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CHAPTER 5
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50
5.1 PRODUCTION
Explosion of the production technology and changes in technical field is going to
bring out revolution in the industry sector which eventually gives stand to study and
favors the come backing subject i.e. production and management.
Production and operation management is planning, organizing, staffing, directing and
controlling of all the production system those portion of organization that convert
inputs into products and services. In general production system takes raw material,
personnel, machines, buildings and other resources and produce products and
services.
The core of production system is its conversion subsystem where in workers; raw
materials are used to convert inputs into products and services. This production
department is at heart of the firm, as it is able to produce low cost products and
superior quality in timely manners.
Thus, there arises enormous need of giving due importance to this department as a
whole and a strong concrete base being foundation pillars of a manufacturing
organization, if the intention is to succeed domestically and globally.
5.1.1 CO OPERATIVE MILK PRODUCING SOCIETIES IN GUJARAT
Following are the cooperatives that function under GCMMF.
Ahmedabad Dist Coop Milk Producers Union Ltd, Ahmedabad. Soc: 433, Mems:
52,428. Av Milk Proc: 90,000 lpd.
Banaskantha Dist Coop Milk Producers Union Ltd, Palanpur. Soc: 1,130, Mems:
97,251. Av Milk Proc: 295,000 lpd.
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Baroda Dist Coop Milk Producers Union Ltd, Baroda. Soc: 783, Mems: 156,691.
Av Milk Proc: 225,000 lpd.
Bharuch Dist Coop Milk Producers Union Ltd, Bharuch. Soc: 289, Mems:
37,900. Av Milk Proc: 38,000 lpd.
Bhavnagar Dist Coop Milk Producers Union Ltd, Bhavnagar. Soc: 190, Mems:
25,532. Av Milk Proc: 23,000 lpd.
Gandhinagar Dist Coop Milk Producers Union Ltd, Gandhinagar. Soc: 56, Mems:
13,000. Av Milk Proc: 46,500 lpd.
Junagadh Dist Coop Milk Producers Union Ltd, Junagadh. Soc: 400, Mems:
41,500. Av Milk Proc: 73,000 lpd.
Kaira Dist Coop Milk Producers Union Ltd, Amul Dairy, Anand. Soc: 943,
Mems: 513,280. Av Milk Proc: 740,000 lpd.
Kutch Dist Coop Milk Producers Union Ltd, Kutch Dairy, Madhapar. Av Milk
Proc: 25,000 lpd.
Mehsana Dist Coop Milk Producers Union Ltd, Dudhsagar Dairy, Mehsana. Soc:
1,020, Mems: 292,800. Av Milk Proc: 704,402 lpd.
Panchmahal Dist Coop Milk Producers Union Ltd, Godhra. Soc: 1,133, Mems:
126,510. Av Milk Proc: 112,000 lpd.
Rajkot Dist Coop Milk Producers Union Ltd, Rajkot. Soc: 193, Mems: 29,620.
Av Milk Proc: 50,000 lpd.
Sabarkantha Dist Coop Milk Producers Union Ltd, Sabar Dairy, Himatnagar. Soc:
1,315, Mems: 200,482. Av Milk Proc: 322,346 lpd.
Surat Dist Coop Milk Producers Union Ltd, Sumul Dairy, Surat. Soc: 864, Mems:
160,000. Av Milk Proc: 300,000 lpd.
Surendranagar Dist Coop Milk Producers Union Ltd, Surendranagar. Soc: 486,
Mems: 31,000. Av Milk Proc: 30,000 lpd.
Valsad Dist Coop Milk Producers Union Ltd, Vasudhara Dairy, Valsad. Soc: 348,
Mems: 35,900. Av Milk Proc: 74,400 lpd.
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Plant layout is the overall arrangement of the machine tools, handling equipments,
storeroom and other various accessories required for facilitating production in a
factory. These arrangements are pre-planned with the results that the building has
been constructed to fit a layout of a given process.
AMUL plant is indigenously worked out with facilitation of various production
processes and production of multi products under one plant. The total plot is nearly
about 2.27 kms. Separate buildings are provided with required arrangements of
machine tools handling and computers connection through the control room to fit for
varying product-manufacturing departments.
The plant is engaged in producing milk, ice creams, milk powder and ghee. Entire
department is uniquely provided with facilities for the processing each product. There
are 4 production departments and packaging departments pertaining to each product
respectively.
Thus, plant layout encompasses all production and service facilities and provides for
the most effective utilization of the men, materials and machines constituting the
process. It is the master blue print of coordinating all operations.
A good layout results in elimination or minimization of accidents and hazards and
cost while increases the output. Thus a good layout specifically is observed to be
beneficial on the following grounds:
Efforts minimization
Fewer material handling will be provided manufacturing units cost will be lover
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Thus, a true beneficiary is provided to the plant through good and sound planning for
plant layout.
Separation Process
Quality Check
Packaging Process
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Cold Storage
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SNF
FAT
9%
8.5%
6%
4.5%
After laboratory gives green signal and confirming the raw milk at the reception dock
is brought in to the house connected with the pump is sent to the milk processing
plant. This is than chilled below 4 degree C. and then stored in milk silos. After that
milk is processed this has two steps i.e. pasteurizing and standardizing.
2. Pasteurizing & standardizing
After collecting and checking and conducting laboratory tests, the pasteurizing
process is conducted. To pasteurized the milk means to kill all the germs in the milk
by a particular method which was invented by a scientist called James Pasteur and so
the name pasteurization.
In pasteurizing, the milk is first heated at 72 C to 76 C for 15 seconds and then it is
immediately cooled below 4 C. By this method they destroy the pathogenic bacteria
present in the raw milk. But if the right degree of temperature is not provided there
are chances that the milk might still contain germs. After this process some milk goes
to separator machine and remaining is proportionately sent for standardization.
Standardization process is known such as it bifurcates the milk in 3 categories varying
according to that FAT & SNF contents. The equipment named OSTA. Auto
standardization adjusts the fat directly. The computer is just ordered whether gold or
standard milk is to be rationed and the same will be received with appropriate
contents.
Ready Milk = Pasteurized + Standardized.
3.
Separation Process
Separator machine separates two kinds of products, skimmed milk & cream, through
channels. There are 100 disks fixed in separator machines, which revolve at 5000 rpm
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(revolution per minute). It is taken to the tanks, which has the capacity of 20000 litres.
Whenever the milk is needed from the tank, it is tested in the laboratory and the
deficit proportion fat is added by mixing cream. This process continues for 24 hours.
4. Quality Check
Pasteurized milk is sent for a quality check in the Quality Assurance laboratory of the
dairy plant. Within 14 seconds FAT and SNF proportion is received regarding 30 lack
litres of milk. The total investment put into the lab by the Dairy plant is of Rs. 6
crores.
This laboratory only checks and analyses the powder, milk and ghee. There is a
separate ice-cream analysing laboratory.
5. Packing Process
After this the milk is sent for packing to the milk packing station in the dairy plant. In
the milk packaging station there are huge pipelines and behind each of them there is
polyfill machine from which the material to pack milk comes out. There are 12 such
polyfill machines in the packaging station from which the materials to pack milk
comes out. From each of these 12 machines 100 pouches are packed in one single
minute.
6. Storage
Then the milk is sent to the cold storage of the dairy where the milk is stored until it is
dispatched. Here the milk is stored at temperature ranging from 5 C to 10 C, it is
maintained with the help of exhaust fans having silicon chips. About 40000 litres of
milk is dispatched from the cold storage of the dairy plant everyday. The damaged
pouches are kept a side and the milk is once again put to the tank.
7. Milk Powder
For converting milk powder first of all water content is evaporated in condensing
plant. By this process they get condensed milk, it is used as a raw material. There after
the milk is sent to the drying plant. The spray drying plant is huge in size with a
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height of 70 feet. The plant is divided into many floors to enable easy use of the plant.
First of all the raw material i.e. condensed milk is put into the first floor of the plant
along with air at 200 C. By this process the remaining water, which the condensed
milk might have retained is also evaporated and milk comes as powder but this is not
the last stage.
This powder is again put in to a machine called milk calendaria, where it is turned in
to real milk powder. Its capacity is 1000 litres per 15 minutes. Then again this milk
powder is put into a Dense Waise Vessel. Here the lumps are removed and uniform
milk powder is sent up.
After processing the powder is sent for quality checking at quality assurance
laboratory. After the quality confirms, this milk powder is differentiated, by adding
different flavors to them like elaichi, chocolate & sugar free milk powder. Thereafter
they are packed in tins and boxes. Afterwards it is stored at storage department.
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Wholesaler
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Consumer
We can see from above figure that GCMMF distribution channel is simple and clear.
The products change hands for three times before it reaches to the final consumer.
First of all the products are stored at the Agents end who are mere facilitators in the
network. Then the products are sold to wholesale dealers who then sell to retailers and
then the product finally reaches the consumers.
Amul Parlors
Amul has come out with a unique concept of Amul Parlours. They have classified
those under four types namely:
On the Move
Amul Parlours
Center for Excellence: These Amul Parlours are specifically at a place, which has a
class of excellence of its own. We can find such parlors at the Infosys, IIMA, NID
Ahmedabad etc.
On the Move: These parlors are at the railway stations and at different state bus
depots across different cities.
Amul Parlours: These parlors can be seen at different gardens across different cities.
These are fully owned by Amul.
Amul Preferred Outlets: These are the private shops that keep the entire of product
range of Amul. They also agree not to keep any competitor brands in the outlets. They
can keep other brands that are in the non-competitor category.
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Amul has more than 200 such outlets right now. It wants to have 1,00,000 parlors by
the end of the year 2010.
Consumer Packs
Amul Butter
Amul Shrikhand
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Amul Cheese
Bulk Packs
The products are exported to 18 countries namely, USA, Kuwait, Qatar, UAE, Yemen,
Bahrain, Muscat, Saudi Arabia, Tanzania, Madagascar, Sri Lanka, Singapore, Nepal,
Bangladesh, Nepal Thailand and Australia.
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Some 2.2 million farmers from 12 districts of Kaira (kheda), Sabar Kantha,
Baroda, Panchmahal, Rajkot, Bharuch, Mehsana, Banas Kantha, Surat,
Ahmedabad, Valsad and Gandhi nagar reach the milk collection centers every day
in the morning and afternoon to sell the milk their buffaloes have given in the
morning and in the noon
The total milk procurement in the last year 2002 was an average 47.32 l per day
where the peak the peak procurement touched a high of 62 l. All the milk
procurement centers are equipped with computers and electronic milk testers
(EMTs). EMTs ensure efficient testing and measurement of milk constituents. The
computers run the automatic milk collection system, which ensures immediate
preparation of milk payment bills, transparency of operations and greater
efficiency of milk collection.
The milk is then sent to chilling depots in each village of the member unions.
There are 10852 villages under GCMMF and each one has a village Cooperative
society. VDC also runs the automatic milk collection system.
The milk is then sent to the 12 member unions. All of them run an ultra modern
dairy that processes this raw material, which has traveled from faraway villages to
the district headquarters.
The various products made under the flagship of AMUL such as butter, milk
powder, cheese, dahi, ready made foods such as gulab jamun, pizza etc. Are
manufactured at these various plants and distributed through the various
distributors across the country and abroad through GCMMF.
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FARMERS
2.2 million
VCS
10675
MEMBER UNIONS
12 units
GCMMF
700 Emp
DISTRIBUTORS
3000+
RETAILERS
500000+
END USERS
One reason that Amul is the giant it is because its built on the back of a co-operative
movement. It encourages women and farmers to collect milk from their cows and pass
it on to them for a price. By managing milk supplies from the cattle farmer and
sending it straight to the factory, its been able to eliminate the middleman.
Complexity and dynamics of the supply chain make it very difficult to assess the
interaction effects.
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Milk procurement
Total milk procurement by our Member Unions during the year 2012-13 averaged
93.02 lakhs kilograms (9.30 million kgs) per day representing a growth of 6.68% over
87.19 lakhs kgs (8.7 million kgs) per day achieved during the year 2008-09. The
highest procurement as usual was recorded during January, 2012 at 122.5 lakhs kgs
per day
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GCMMF transacts on an advance demand draft basis from its wholesale dealers
instead of the cheque system adopted by other major FMCG companies. This practice
is consistent with GCMMF's philosophy of maintaining cash transactions throughout
the supply chain and it also minimizes dumping.
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In the past years the concept of just-in-time was not introduced, all GCMMF
branches were engaged in route scheduling and have dedicated vehicle operations.
Even though the cooperative was formed to bring together farmers, professional
managers and technocrats would be still required to manage the network
effectively and make it commercially viable.
It is worth noting that a number of third parties are not in the organized sector, and
many are not professionally managed with little regard for quality and service.
This is a particularly critical issue in the logistics and transport of a perishable
commodity where there are already weaknesses in the basic infrastructure.
Its network which consists of large number of members requires regular roll out
improvement programs and high implementation rate of these programs.
Having a strong supply chain is only the beginning, the remaining part includes
making consumer products that sell well and that the same consumers are able to
be impacted by marketing and advertising movements.
The organization was also suffering from the high middleman cost which was
tackled by managing milk supplies from the cattle farmer and sending it straight to
the factory.
Due to the perishable nature of the product, it has to invest in cold storage which
is an extra burden in distribution and warehousing.
At the time Amul was formed; consumers had limited purchasing power, and
modest consumption levels of milk and other dairy products. Thus Amul adopted
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GCMMF was one of the first FMCG (fast-moving consumer goods) firms in India
to employ Internet technologies to implement B2C commerce. Today customers
can order a variety of products through the Internet and be assured of timely
delivery with cash payment upon receipt. Another e-initiative underway is to
provide farmers access to information relating to markets, technology and best
practices in the dairy industry through net enabled kiosks in the villages. GCMMF
has also implemented a Geographical Information System (GIS) at both ends of
the supply chain, i.e. milk collection as well as the marketing process.
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CHAPTER 6
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SEX
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OCCUPATION
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CONSUMPTION
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BRAND IDENTIFICATION
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PURCHASE
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FREQUENCY
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23 % respondent says that taste act as a prime factor for purchase factor
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36 % respondent says that product trust act as a prime factor for purchase.
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10 % respondent says that habitual consumption act as a prime factor for purchase of
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Taste, Trust, Habitual are the prime reasons for consumption of the product
6.6 RECOMMENDATION
Trust has to be maintained through out as people are purchasing only due to trust
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CHAPTER 7
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The member-suppliers were typically small and marginal farmers with severe
liquidity problems, illiterate and untrained. AMUL and other cooperative Unions
adopted a number of strategies to develop the supply of milk and assure steady
growth. 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 the
milk supply was made with minimum of delay.
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. From the beginning, it was recognized that the core activity
for the unions lay in processing of milk and production of dairy products.
Accordingly, the unions focused efforts on these activities and related technology
development. The marketing efforts (including brand development) were assumed by
GCMMF. All other activities were entrusted to third parties. These include logistics of
milk collection, Distribution of dairy products, sale of products through dealers and
retail stores, some veterinary services etc.
Some other issues found in its supply chain are as follows:
It has excellent ability to anticipate the right type of product at the right time
through the years.
Amul is a cooperative where the milk suppliers are the shareholders. The owners
decide what they should pay themselves for the raw material they supply. A
unique situation where the owners of the company are also its largest vendors!
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The company has core competency in milk processing and the production of dairy
products and all other activities were entrusted to 3PLs
Amul was one of the first FMCG firms in India to employ Internet technologies to
implement B2C commerce. Today customers can order a variety of products through
the Internet and be assured of timely delivery with cash payment upon receipt. It has
also implemented a Geographical Information System (GIS) at both ends of the
supply chain, i.e. milk collection as well as the marketing process.
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We know that the time schedule of the distributors & their transportation system
cannot be capsuled, but they can reduce their errors. E.g. drive carefully to
prevent accidents.
Manpower should be more than 18 years of age. (in some of the areas, we have
observed small children engaged in loading & unloading the trays from the truck)
Before offering any extra benefits or schemes to their retailers, Amul should
aware them in advance, so that the incentives can be reached in the right hands at
right time. Otherwise distributors enjoy the benefits of retailers.
Payment to the milk suppliers should be made on time to ensure the proper inflow
of milk.
Amul should also launch certain schemes for households. It has schemes for
retailers but not for households. This section being the major user of milk and in
order to enter into a new area such starting schemes can be very helpful.
For refrigerated and frozen food distribution, a world class cold chain would help
in providing quality assurance to the consumers around the region.
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Active customer feedback should be taken regularly for increasing product line.
Relationship with business associates like wholesaler should be made closer and
deeper.
The company should take initiative to reduce transportation time from the depots
to the wholesale dealers, improvement in ROI of wholesale dealers,
implementation of Zero Stock Out through improved availability of products at
depots and also the implementation of Just-in-Time in finance to reduce the float.
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CHAPTER 8
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8.1 CONCLUSION
Amul means different things to different people .
To a milk producer A life enriching experience
To a consumer Assurance of having wholesome milk
To a mother A reliable source of nourishment for her child
To the country Rural development and self reliance
Amul has given a new dimension to marketing. It showed that a democratically
owned and managed farmer organisation can successfully develop and sustain a
commercial product in a national market.By doing this Amul provided virtually
guaranteed marketing service to the milk producer at his door step. Amul has
displayed dynamic initiative at a time when its multinational competitors were merely
content to use depreciated machinery.
Following factors have given us the insight to conclude, why Amul is thriving with
success today:
Emphasis on Quality: All the products of Amul are of highest grade. Consumers
were very quick to perceive this and the sales success that followed reflected the
publics stamp of approval.
Modern marketing: A good product alone cannot succeed unless backed by
innovative marketing, including packaging, price and promotion. Amuls advertising
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campaigns created a splash in the market that eventually led to a tidal wave that
rocked the competition.
Management: The judicious handling of people, recognition of performance and
encouragement for a good try has gone a long way to build a sound foundation of
people. All the basic components of management that is production, marketing,
finance and organisation behavior are nicely arrayed at Amul.
The co-operative concept: The fundamental thesis underlying the Anand model is
that the rural producer must own and enjoy the assets they have helped to create. The
model has inspired the creation of hundreds of other Anand.
The system has succeeded mainly because of involvement of people on such a large
scale, providing assured market at remunerated prices for milk producers, enables the
consumers access to high quality milk and milk products, ploughing back the profit to
the members, part of the profit is used by the society for common good and
community development.
Amul has established itself as a uniquely appropriate model for rural development.
Amul has spurred the white revolution of India, which has made India the largest
producer of milk and milk products in the world. Amul products have been in use in
millions of homes since 1946. Today Amul is a symbol of many things like of highquality products sold at reasonable prices & the genesis of a vast co-operative
network. Its supply chain is easily one of the most complicated in the world. The
supply chain linking farmer-suppliers of milk with the millions of consumers. Amul
encourages women and farmers to collect milk from their cows and pass it on to them
for a price directly eliminating cost of middleman. Introduction of just-in-time
inventory strategy improves dealers' return on investment (ROI).Amul was one of the
first FMCG firms in India to employ Internet technologies to implement B2C
commerce. Today customers can order a variety of products through the Internet and
be assured of timely delivery with cash payment upon receipt. It has also implemented
a Geographical Information System (GIS) at both ends of the supply chain, i.e. milk
collection as well as the marketing process.
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8.2 BIBLIOGRAPHY
Patel, Rameshbhai P., Amul, The Kaira District Cooperative Milk Producers
Union Ltd. Anand, 50 Years of Milk & Health.
Dr. Kurien., Amul, The Kaira District Cooperative Milk Producers Union Ltd.
Anand, 50 Years of Milk & Health.
Carter, Thomas R., Amul, The Kaira District Cooperative Milk Producers Union
Ltd. Anand, 50 Years of Milk & Health.
Patel, T. K., Amul, The Kaira District Cooperative Milk Producers Union Ltd.
Anand, 50 Years of Milk & Health.
Gowda, Shri Deve, Amul, The Kaira District Cooperative Milk Producers Union
Ltd. Anand, 50 Years of Milk & Health.
Halse, Michael, Amul, The Kaira District Cooperative Milk Producers Union
Ltd. Anand, 50 Years of Milk & Health.
Baxi, J. J. Amul, The Kaira District Cooperative Milk Producers Union Ltd.
Anand, 50 Years of Milk & Health.
Singh, Katar, Mittal, S. P., Singh Virendra, Amul, The Kaira District Cooperative
Milk Producers Union Ltd. Anand, 50 Years of Milk & Health.
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Dr. Oza, D. R., Amul, The Kaira District Cooperative Milk Producers Union
Ltd. Anand, 50 Years of Milk & Health.
Thodarson, Bruce, Amul, The Kaira District Cooperative Milk Producers Union
Ltd. Anand, 50 Years of Milk & Health.
WEBSITE VISITED
www.amul.coop
www.indiadairy.com
www.indianmilkproducts.com
BOOKS
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