A

PROJECT REPORT
ON

STUDY ON THE DISTRIBUTION AND

SUPPLY CHAIN MANAGEMENT OF AMUL
MILK
Summer Internship Report Submitted to the University Of Mumbai In
Partial fulfillment for the award of degree of Master Of

Management Studies (Marketing)

By
(Leroy Correia)
(08)

Batch: 2012-2014
For the summer Internship at,

Gujarat CO-operative Milk Marketing Federation Ltd.

VIVA INSTITUTE OF MANAGEMANT AND RESEARCH

(Affiliated to the University of Mumbai, Approved By AICTE New Delhi) INDIA
July 2013

Evaluation Report
Summer Internship 2012-2013
Basic Information
Name of the student: Leroy Correia
Academic Year and Roll No: 2012-2014

08

Name of the company: Gujarat CO-operative Milk Marketing Federation Ltd

Name of the Designation Of the Training Supervisor:
Area of training:
Special Project, if any:
Score card
Please rate The Following Attributes On A scale Of 01-05.
(01=Average, 02=good,03=Very Good ,04=excellent and 05=outstanding
Sr.No.

Attributes
1
2
3
4
5
6
7
8
9
10

score

Attendance
Punctuality
Attitude
Performance
Imitative
Interpersonal skill
Diligence Level
Subject Knowledge
Personal Grooming
Communication skill
Total Score(out of 50)

Special Remarks /Appreciation, if any:

-------------------------------------------------------------------------------------------------------------------------------------------------Name &signature of Training Supervisor

Official Seal of The Company

Date

place:

Evaluation of Dissertation

1. Name of the candidate

: Leroy Correia

2. Seat Number

: 08

3. Name/Code Of Subject

4. Title of dissertation

5. Evaluation

Sr.No.

Parameters

Maximum
Marks

1
2

Introduction
Literature Review and Problem Definition

05
05

Process Description

10

Project Profile

10

Findings & Conclusion

15

Learning Experience

05
Total

50

6. Name & Address of Evaluation:

7. Signature Of Evaluator with date :
8. Signature of the Head Of the Institution with seal:

Declaration

Marks
Awarded

This Is Certify the Summer project titled STUDY ON STUDY ON THE

DISTRIBUTION AND SUPPLY CHAIN MANAGEMENT OF AMUL MILK at
Gujarat Co-operative Milk Marketing Federation Ltd., Kala Ghoda, Mumbai is original work
and being submitted in partial fulfillment for the award the degree ,Master Of
Management studies of the University of Mumbai .This Summer Project Report Has
been Submitted Earlier Either To this university, or to any Affiliated college of this
university , or ,to any other university /institution for the fulfillment of the requirement
of MMS Course .

Date: ----------------------

-----------------------------(Signature of student)

Place: ---------------------

------------------------------(Name of the student )

Acknowledgement

This Is To Acknowledge To Something About Those People Who Have Cooperated Me To

Reach At The Edge Of My Training Work. I Wish To Place A Close Profound Indeptness And

Deep Sense Of Gratitude To Director Dr.Harish Kumar Purohit Sir (Project Guide),
Ms.Piyushi Sharma (Placement Advisor), Prof. Manmeet Barve (Faculty) And All
Professors For Providing And Guiding Me To Get Training In Amul Industry.
I Am Grateful To Respected Mr. Prakash Aute (In Charge- Amul Fresh Division)
Sanjay Patil (Jr.Sales Executive) Of Mumbai And Vishal Dsouza (Executive Sales) In
Fresh Product Department.
I Am Highly Thankful To The Management Committee For Helping Me In My Project Work
By Providing Me All The Information Needed And Guided Me In Making The Report,
Directing And Helping Me Which Made The Process Very Easy And Educational. I Would
Also Like To Thank All Those People Who Have Knowingly And Unknowingly Helped Me
In My Report Making.

Date: ----------------------

-----------------------------(Signature of student)

Place: ---------------------

------------------------------(Name of the student)

INDEX
SR.NO

PARTICULARS

Executive summary

Introduction and history

History
Introduction to Indian dairy industry
Literature review & problem statement: Literature review and problem statement
Market size and growth
Major players
Packaging technology
Regulatory framework
Company profile
Amul in abroad
GCMMF
Birth of Amul
Data processing & analysis: Data analysis for retailers
Data analysis for customers
Process description
Product mix of Amul
Amul plant
The channel network
Procurement channel
Anand Patten
SMC and market logistic
Amul parlor's
Selection, motivation and evaluation of channel members
Conflict and cooperation among channel members
Process description:
Product information
Sales and profit
Distribution channel of Amul
Transportation method
Competitors analysis
Learing & findings and suggestions

Conclusion and bibliography

Appendix

EXECUTIVE SUMMARY

In todays competitive world while entering in the market it is very necessary to have
good knowledge of the potential of a particular market. The growth of a company is
invariably determined not just by its strategy, but on how it responds to the challenges it
encounters. Over the decades AMUL has successfully countered several challenges that
have come its way with innovative responses and continuous improvement, which have
enabled it to remain stable and even convert some of these challenges into opportunities.
It is the culture of endurance that has accorded AMUL the insight and focus to deal with
the current economic environment. Drawing from its inner strength and beliefs, AMUL
responded by launching several initiatives across all its operations in various geographies
that are helping the group achieve growth even in current times. It is also this very
strategic culture that will propel AMUL to continue on its growth trajectory in years to
come.
The report provides a comprehensive insight into the company and also about the
companys SWOT analysis. This report mainly studies in detail the various product mix
strategies of the company and also focuses on the segmentation of both company based
and industry based and helps in analysing the companys competitive advantage and the
reason behind its success.

HISTORY
In early 1940s a farmer in Kaira district, as elsewhere in India, derived his income almost
entirely from seasonal crops. The income from milk was paltry and could not be depended
upon. The main buyers were milk traders of Polson Ltd.-a privately owned company that

enjoyed

monopoly for supply of milk from Kaira to the Government Milk Scheme Bombay. The
system leads to exploitation of poor and illiterate farmers by the private traders.
However, when the exploitation became intolerable, the farmers were frustrated. They
collectively appealed to Sardar Vallabhbhai Patel, who was a leading activist in the freedom
movement. Sardar Patel advised the farmers to sell the milk on their own by establishing a
cooperative union, instated of supplying milk to private traders. Sardar Patel sent the farmer
to Shri Morarji Dasai in order to gain his Co-operation and help. Shri Dasai held a meeting at
Samrkha village near Anand, on January 4, 1946. He advised the farmers to from a society
for collection of the milk.These village societies would collect the milk themselves and also
decided prices for that which would be profitable for them. The district union was also from
to collect the milk from such village cooperative societies and to sell them. It was also
resolved that the government should asked to buy milk from the union.

However, the government did not seem to help farmer by any means. It gave the negative
response by turning down the demand for the milk. To respond to this action of government,
farmer of Kaira district went on a milk strike. For 15 days not a single drop of milk was sold
to the traders. As a result the Bombay milk scheme was severely affected. The milk
commissioner of Bombay then visited Anand to assess the situation. Finely he decided to
fulfill the farmers demand.
Thus their cooperative unions were forced at village and district level to collect and sell milk
on a cooperative basis, without the intervention of government. Mr. Verghese Kurien had
main interest in establishing union who was supported by Shri Tribhuvandas Patel who
convinced farmers in forming the cooperative unions at thevillage level. The Kaira District
Co-operative Milk Producers Union was thus established in Anand and was registered
formally under section 10 of Bombay Act VII of 1925 on December 14, 1946. Since then
farmers are selling all the milk in Anand through cooperative union. In 1955 it was
commonly decided the sell milk under the brand name Amul
At the initial stage only 250 liters of milk was collected everyday. But with the
growing awareness of the benefits of the co-operative-ness the collection of milk increased.
Today Amul collect 50, 00,000 liters of milk everyday. As the milk is perishable commodity
it became difficult to preserve milk for a longer period. Besides when the milk was to be
collected from the far places there was a fear of spoiling of milk. To over come this problem
the union thought to develop the chilling unit at various junctions, which would collect the
milk and could chill so as preserve it a for a longer period. Thus, today Amul has more than
168 chilling centers in various villages. Milk is collected from almost 1097 societies.
With the financial help from UNICEF, assistance from the government of New
Zealand under the Colombo plan, of Rs. 50 million for factory to manufactory milk powder
and butter. Dr. Rajendara Prasad, the president of India laid the foundation on November 50,
1954. Shri Pandit Jawaharlal Nehru, the prim minister of India declared it open at Amul dairy
on November 20, 1955.

A plant to manufacture balanced cattle feed was formally commissioned on October

31, 1964 by Shri Lalbahadur Shastri, the Prime Minister of India. At the request of the
government of India, a new dairy with a capacity to manufacture 40 tons of milk powder and
20 tons of butter a day was completed in 1963. This was meant to meet the requirement of
Indias defense forces. The dairy was declared open by ShriMorarji Desai in April, 1965. in
1974, the Kaira Union setup a plant to manufacture high-protein weaning food, chocolate and
malted food at Mogar, about 8 km south of Anand.
In September, 1981, the second cattle feed plant at Kanjari were started. The
succesion of the co-generation project on September 11, 1985, marked a milestone on the
energy front when two gas turbine generators of 1.5 MW each based on natural gas, were
commissioned. On October 31, 1992, Dr. V. Kurien chairman, National Dairy Development
Board, laid the foundation of Kaira Unions third dairy with a processing capacity of 6.5 lakh
liters of milk a day. Work on the third dairy and cheese plant at Khatraj with capacity for 20
Metric Ton of cheese per day, began in February, 1994. Also in 1994, Kaira Union put up
bread spread plant at Mogar with the assistance from National Dairy Development Board.
Gujarat Cooperative Milk Marketing Federation (GCMMF) is India's largest food products
marketing organization. It is a state level apex body of milk cooperatives in Gujarat which
aims to provide remunerative returns to the farmers and also serve the interest of consumers
by providing quality products which are good value for money.

Members:

13 district cooperative milk producers'

No. of Producer Members:

No. of Village Societies:
Total Milk handling capacity:
Milk collection
Milk collection
Milk Drying Capacity:
Cattle feed manufacturing Capacity:
About Machinery

Union
2.6 million
12,792
10.16 million litres per day
2.38 billion litres
6.5 million litres
594 Mts. per day
2640 Mts per day

In AMUL 3 production of powder, Butter and Milk are being done

continuously. These productions are done by latest machineries equipped with
computer system and it is handled by one technicians.
-

The Milk pasteurizer machines belong to Alfa level company of Pune

Powder plant machineries belong to L & T Larson and Turbo company of

India
Butter production machineries belong to S.G.company of switrzland and

other
Butter manufacturing production machineries belong to Simon Feres com.of
France

LITERATURE REVIEW & PROBLEM STATEMENT:-

ORGANISATION STRUCTURE OF AMUL

Board of Director

CHAIRMAN

MANAGING CHAIRMAN

GENERAL MANAGER

ASSISTANT GENERAL MANAGER

MANAGER

DEPUTY MANAGER

ASSISTANT MANAGER

SENIOR EXECUTIVE

SENIOR OFFICER

SENIOR ASSITANT

WORKERS

Grade ( Ato E)
.

INTRODUCTION TO THE INDIAN DAIRY INDUSTRY

The world's biggest dairy producing country is growing fast and looking to become an
export powerhouse despite major quality problems...
A Note to our Readers: the following information on India's dairy sector is reproduced from
India Infoline.com. India is the world's largest milk producing country and is growing fast,
with an eye toward becoming a major dairy exporter. This article is helpful reading for
anyone interested better understanding.

CONSUMER HABITS AND PRACTICES

Milk has been an integral part of Indian food for centuries. The per capita availability
of milk in India has grown from 172 gm per person per day in 1972 to 182gm in 1992 and
203 gm in 1998-99.This is expected to increase to 212gms for 2008. However a large part of
the population cannot afford milk. At this per capita consumption it is below the world
average of 285 gm and even less than 220 gm recommended by the Nutritional Advisory
Committee of the Indian Council of Medical Research.
There are regional disparities in production and consumption also. The per capita availability
in the north is 278 gm, west 174 gm, south 148 gm and in the east only 93 gm per person per
day. This disparity is due to concentration of milk production in some pockets and high cost
of transportation. Also the output of milk in cereal growing areas is much higher than
elsewhere which can be attributed to abundant availability of fodder, crop residues, etc which
have a high food value for milky animals.
In India about 46 per cent of the total milk produced is consumed in liquid form and
47 per cent is converted into traditional products like cottage butter, ghee, paneer, khoya,
curd, malai, etc. Only 7 per cent of the milk goes into the production of western products like
milk powders, processed butter and processed cheese. The remaining 54% is utilized for
conversion to milk products. Among the milk products manufactured by the organized sector
some of the prominent ones are ghee, butter, cheese, ice creams, milk powders, malted milk
food, condensed milk infants foods etc. Of these ghee alone accounts for 85%.

It is estimated that around 20% of the total milk produced in the country is consumed
at producer-household level and remaining is marketed through various cooperatives, private
dairies and vendors. Also of the total produce more than 50% is procured by cooperatives and
other private dairies.
While for cooperatives of the total milk procured 60% is consumed in fluid form and rest is
used for manufacturing processed value added dairy products; for private dairies only 45% is
marketed in fluid form and rest is processed into value added dairy products like ghee,
makhan etc.
Still, several consumers in urban areas prefer to buy loose milk from vendors due to
the strong perception that loose milk is fresh. Also, the current level of processing and
packaging capacity limits the availability of packaged milk.
The preferred dairy animal in India is buffalo unlike the majority of the world market,
which is dominated by cow milk. As high as 98% of milk is produced in rural India, which
caters to 72% of the total population, whereas the urban sector with 28% population
consumes 56% of total milk produced. Even in urban India, as high as 83% of the consumed
milk comes from the unorganized traditional sector.
Presently only 12% of the milk market is represented by packaged and branded
pasteurized milk, valued at about Rs.8, 000 crores. Quality of milk sold by unorganized
sector however is inconsistent and so is the price across the season in local areas. Also these
vendors add water and caustic soda, which makes the milk unhygienic.

Market Size and Growth

Market size for milk (sold in loose/ packaged form) is estimated to be 36mn MT valued at
Rs470bn. The market is currently growing at round 4% pa in volume terms. The milk surplus
states in India are Uttar Pradesh, Punjab, Haryana, Rajasthan, Gujarat, Maharashtra, Andhra
Pradesh, Karnataka and Tamil Nadu. The manufacturing of milk products is concentrated in
these milk surplus States. The top 6 states viz. Uttar Pradesh, Punjab, Madhya Pradesh,
Rajasthan, Tamil Nadu and Gujarat together account for 58% of national production.
Milk production grew by a mere 1% pa between 1947 and 1970. Since the early 70's, under
Operation Flood, production growth increased significantly averaging over 5% pa.
About 75% of milk is consumed at the household level which is not a part of
commercial dairy industry. Loose milk has a larger market in India as it is perceived to be
fresh by most consumers. In reality however, it poses a higher risk of adulteration and
contamination.
The production of milk products, i.e. milk products including infant milk food, malted
food, condensed milk & cheese stood at 3.07 lakh MT in 2008. Production of milk powder
including infant milk-food has risen to 2.25 lakh MT in 2008, whereas that of malted food is
at 65000 MT. Cheese and condensed milk production stands at 5000 and 11000 MT
respectively in the same year.

Major Players
The packaged milk segment is dominated by the dairy cooperatives. Gujarat Co-operative
Milk Marketing Federation (GCMMF) is the largest player. All other local dairy cooperatives
have their local brands (For e.g. Gokul, Warana in Maharashtra, Saras in Rajasthan, Verka in
Punjab, Vijaya in Andhra Pradesh, Aavin in Tamil Nadu, etc). Other private players include J
K Dairy, Heritage Foods, Indiana Dairy, Dairy Specialties, etc. Amrut Industries, once a
leading player in the sector has turned bankrupt and is facing liquidation.

Packaging Technology
Milk was initially sold door-to-door by the local milkman. When the dairy cooperatives initially started marketing branded milk, it was sold in glass bottles sealed with
foil. Over the years, several developments in packaging media have taken place. In the early
80's, plastic pouches replaced the bottles. Plastic pouches made transportation and storage
very convenient, besides reducing costs. Milk packed in plastic pouches/bottles have a shelf
life of just 1-2 days, that too only if refrigerated. In 1996, Tetra Packs were introduced in
India. Tetra Packs are aseptic laminate packs made of aluminum, paper, board and plastic.
Milk stored in tetra packs
and treated under Ultra High Temperature (UHT) technique can be stored for four months
without refrigeration. Most of the dairy co-operatives in Andhra Pradesh, Tamil Nadu, Punjab
and Rajasthan sell milk in tetra packs. However tetra packed milk is costlier by Rs5-7
compared to plastic pouches. In 2008-00 Nestle launched its UHT milk. Amul too relaunched
its Amul Taaza brand of UHT milk. The UHT milk market is expected to grow at a rate of
more than 10-12% in coming years.

Regulatory Framework
The dairy industry was de-licensed in 1991 with a view to encourage private
investment and flow of capital and new technology in the segment. Although de-licensing
attracted a large number of players, concerns on issues like excess capacity, sale of
contaminated/ substandard quality of milk etc induced the Government to promulgate the
MMPO (Milk and Milk Products Order) in 2008. Milk and Milk Products Order (MMPO)
regulates milk and milk products production in the country. The order requires no permission
for units handling less than 10,000 litres of liquid milk per day or milk solids up to 500 TPA.
MMPO prescribes State registration to plants producing between 10,000 to 75,000 litres of
milk per day or manufacturing milk products containing between 500 to 3,750 tones of milk
solids per year. Plants producing over 75,000 litres per day or more than 3,750 tones per year
of milk solids have to be registered with the Central Government. The stringent regulations,
government controls and licensing requirements for new capacities have restricted large
Indian and MNC players from making significant investments in this product category. Most
of the private sector players have restricted themselves to manufacture of value added milk
products like baby food, dairy whiteners, condensed milk etc.
All the milk products except malted foods are covered in the category of industries
for which foreign equity participation up to 51% is automatically allowed. Ice cream, which
was
earlier reserved for manufacturing in the small-scale sector, has now been de-reserved. As
such, no license is required for setting up of large-scale production facilities for manufacture
of ice cream.
Subsequent to de-canalization, exports of some milk based products are freely allowed
provided these units comply with the compulsory inspection requirements of concerned
agencies like: National Dairy Development Board, Export Inspection Council etc. Bureau of
Indian standards has prescribed the necessary standards for almost all milk-based products,
which are to be adhered to by the industry.

Proposal to Amend the MMPO

A proposal to raise the exemption limit for compulsory registration of dairy plants,
from the present 10,000 litres a day to 20,000 litres, is being considered by the Animal
Husbandry Department. The 75,000-litre limit is likely to be raised either to 100,000 litres or
125,000 litres in the amended order. The new order would also do away with the provision
for re-registration.

Penetration of milk products

Western table spreads such as butter, margarine and jams are not very popular in
India. All India penetration of butter/ margarine is only 4%. This is also largely represented
by urban areas, where penetration is higher at 9%. In rural areas, butter/ margarine have
penetrated in 2.1% of households only. The use of these products in the large metros is
higher, with penetration at 15%.
Penetration of cheese is almost nil in rural areas and negligible in the urban areas. Per capita
consumption even among the cheese-consuming households is a poor 2.4kg pa as compared
to over 20kg in USA. The lower penetration is due to peculiar food habits, relatively
expensive products and also non-availability in many parts of the country. Butter, margarine
and cheese products are mainly manufactured by organized sector.
Similarly, penetration of ghee is highest in medium sized towns at 37.2% compared to
31.7% in all urban areas and 21.3% in all rural areas. The all India penetration of ghee is
24.1%. In relative terms, penetration of ghee is significantly higher in North and West, which
are milk surplus regions. North accounts for 57% of ghee consumption and West for 23%,
South & East together account for the balance 20%. A large part of ghee is made at home and
by small/ cottage industry from milk. The relative share of branded products in this category
is very low at around 1-2%.
Milk powder and condensed milk have not been able to garner any significant
consumer acceptance in India as indicated by a very low 4.7% penetration. The penetration is
higher at
8.1% in urban areas and lower at 3.5% in rural areas. Within urban areas, it is relatively
higher in medium sized towns at 8.5% compared to 7.7% in large metros.

Export Potential
India has the potential to become one of the leading players in milk and milk product
exports. Location advantage: India is located amidst major milk deficit countries in Asia and
Africa. Major importers of milk and milk products are Bangladesh, China, Hong Kong,
Singapore, Thailand, Malaysia, Philippines, Japan, UAE, Oman and other gulf countries, all
located close to India.
The major export products: - The products of Amul is being exported in the 40 countries
of the world . Many of the products are now available in the U.S.A , Gulf countries and
Singapore. Amul products are being exported to the Singapore since last three decades .
undoubtedly , Amul is the preferred taste of Indians in the Gulf countries.

Low Cost of Production:

Milk production is scale insensitive and labour intensive. Due to low labour cost, cost of
production of milk is significantly lower in India.
Concerns in export competitiveness are Quality: Significant investment has to be
made in milk procurement, equipments, chilling and refrigeration facilities. Also, training has
to be imparted to improve the quality to bring it up to international standards.

Productivity: To have an exportable surplus in the long-term and also to maintain cost
competitiveness, it is imperative to improve productivity of Indian cattle.
There is a vast market for the export of traditional milk products such as ghee, paneer,
shrikhand, rasagulas and other ethnic sweets to the large number of Indians scattered all over
the world.

Indian (traditional) Milk Products

There are a large variety of traditional Indian milk products such as
Makkhan - unsalted butter. Ghee - butter oil prepared by heat clarification, for longer shelf
life. Kheer - a sweet mix of boiled milk, sugar and rice. Basundi - milk and sugar boiled
down till it thickens. Rabri - sweetened cream. Dahi - a type of curd. Lassi - curd mixed with
water and sugar/ salt. Channa/Paneer - milk mixed with lactic acid to coagulate. Khoa evaporated milk, used as a base to produce sweet meats. The market for indigenous based
milk food products is difficult to estimate as most of these products are manufactured at
home or in small cottage industries catering to local areas.
Consumers while purchasing dairy products look for freshness, quality, taste and texture,
variety and convenience. Products like Dahi and sweets like Kheer, Basundi, Rabri are
perishable products with a shelf life of less than a day. These products are therefore
manufactured and sold by local milk and sweet shops. There are several such small shops
within the vicinity of residential areas. Consumer loyalty is built by consistent quality, taste
and freshness. There are several sweetmeat shops, which have built a strong brand franchise,
and have several branches located in various parts of a city.

Branding Of Traditional Milk Products

Among the traditional milk products, ghee is the only product, which is currently marketed,
in branded form. main ghee brands are Sagar, Milkman (Britannia), Amul (GCMMF), Aarey
(Mafco Ltd), Vijaya (AP Dairy Development Cooperative Federation), Verka ( Punjab Dairy
Cooperative), Everyday (Nestle) and Farm Fresh (Wockhardt).

With increasing urbanization and changing consumer preferences, there is possibility

of large scale manufacture of indigenous milk products also. The equipments in milk
manufacturing have versatility and can be adapted for several products. For instance,
equipments used to manufacture yogurt also can be adapted for large scale production of
Indian curd products (dahi and lassi). Significant research work has been done on dairy
equipments under the aegis of NDDB.

Mafco Limited sells Lassi under the Aarey brand and flavored milk under the Energee
franchise (in the Western region, mainly in Mumbai). Britannia has launched flavored milk in
various flavors in tetra packs.
GCMMF has also made a beginning in branding of other traditional milk products
with the launch of packaged Paneer under the Amul brand. It has also created a new umbrella
brand "Amul Mithaee", for a range of ethnic Indian sweets that are proposed to be launched
the first new product Amul Mithaee Gulabjamun has already been launched in major Indian
markets.

Western Milk Products

Western milk products such as butter, cheese, yogurt have gained popularity in the Indian
market only during the last few years. However consumption has been expanding with
increasing urbanization.
Butter
Most Indians prefer to use home made white butter (makkhan) for reasons of taste and
affordability. Most of the branded butter is sold in the towns and cities. The major brands are
Amul, Vijaya, Sagar, Nandini and Aarey. Amul is the leading national brand while the other
players have greater shares in their local markets. The latest entrant in the butter market has
been Britannia. Britannia has the advantages of a wide distribution reach and a strong brand
recall.
Priced at par with the Amul brand, it is expected to give stiff competition to the existing
players. In 2008-00 the butter production is estimated at 4 lakh MT of this only 45K MT is in
the white form used for table purposes rest all is in the yellow form.

COMPANY PROFILE

AMUL means "priceless" in Sanskrit. A quality control expert in Anand suggested the brand
name Amul, from the Sanskrit Amoolya, Variants, all meaning "priceless", are found in
several Indian languages. Amul products have been in use in millions of homes since 1946.
Amul Butter, Amul Milk Powder, Amul Ghee, Amul spray, Amul Cheese, Amul Chocolates,
Amul Shrikhand, Amul Ice cream, Nutramul, Amul Milk and Amulya have made Amul a
leading food brand in India. (Turnover: Rs. 25 billion in 2002). Today Amul is a symbol of
many things. Of high-quality products sold at reasonable prices, of the genesis of a vast cooperative network, of the triumph of indigenous technology, of the marketing savvy of a
farmers' organization and have a proven model for dairy development.

AMUL IN ABROAD

. Besides India, Amul has entered overseas markets such as

Australia, China, Singapore, Hong Kong

and a few South

African

Mauritius, UAE, USA, Bangladesh,

countries. Its bid to enter

Japanese

market in 1994 did not succeed, but now it has fresh plans entering the Japanese markets
Other potential markets being considered include Sri Lanka.

[6].

GCMMF

The Gujarat Cooperative Milk Marketing Federation Ltd, Anand (GCMMF) is the largest
food products marketing organization of India. It is the apex organization of the Dairy
Cooperatives of Gujarat. This State has been a pioneer in organizing dairy cooperatives and
our success has not only been emulated in India but serves as a model for rest of the World.
Over the last five and a half decades, Dairy Cooperatives in Gujarat have created an
economic network that links more than 2.8 million village milk producers with millions of
consumers in India and abroad through a cooperative system that includes 13,141 Village
Dairy Cooperative Societies (VDCS) at the village level, affiliated to 13 District Cooperative
Milk Producers Unions at the District level and GCMMF at the State level. These
cooperatives collect on an average 7.5 million litres of milk per day from their producer
members, more than 70% of whom are small, marginal farmers and landless labourers and
include a sizeable population of tribal folk and people belonging to the scheduled castes. The
turnover of GCMMF (AMUL) during 2008-09 was Rs. 67.11 billion. It markets the products,
produced by the district milk unions in 30 dairy plants, under the renowned AMUL brand
name. The combined processing capacity of these plants is 11.6 million litres per day, with
four dairy plants having processing capacity in excess of 1 million Litres per day. The
farmers of Gujarat own the largest state of the art dairy plant in Asia Mother Dairy,
Gandhinagar, Gujarat which can handle 2.5 million litres of milk per day and process 100
MTs of milk powder daily. During the last year, 3.1 billion litres of milk was collected by
Member Unions of GCMMF. Huge capacities for milk drying, product manufacture and
cattle feed. Ever since the movement was launched fifty-five years ago, Gujarats Dairy
Cooperatives have brought about a significant social and economic change to our rural
people. The Dairy Cooperatives have helped in ending the exploitation of farmers and
demonstrated that when our rural producers benefit, the community and nation benefits as
well.

GCMMF: An overview

Members:

13 district cooperative milk producers'

Union

No. of Producer Members:

2.9 million

No. of Village Societies:

15,322

Total Milk handling capacity:

13.07 million litres per day

Milk collection (Total - 2009-10):

3.32 billion litres

Milk collection (Daily Average

9.10 million litres

2009-10):
Milk Drying Capacity:

647 Mts. per day

Cattlefeed manufacturing

3740 Mts per day

Capacity:

BIRTH OF AMUL

The birth of Amul at Anand provided the impetus to the cooperative dairy movement in the
country. The Kaira District Cooperative Milk Producers Union Limited was registered on
December 14, 1946 as a response to exploitation of marginal milk producers by traders or
agents of existing dairies in the small town named Anand (in Kaira District of Gujarat). Milk
Producers had to travel long distances to deliver milk to the only dairy, the Polson Dairy in
Anand . Angered by the unfair and manipulative trade practices, the farmers of Kaira District
approached

Sardar Vallabhbhai Patel

(who later became the first Deputy Prime Minister and

Home Minister of free India) under the leadership of the local farmer leader

Tribhuvandas Patel.

Sardar Patel advised the farmers to form a Cooperative and supply milk directly to the
Bombay Milk Scheme instead of selling it to Polson (who did the same but gave low prices
to the producers). He sent Morarji Desai (who later became Prime Minister of India) to organize
the farmers. In 1946, the farmers of the area went on a milk strike refusing to be further
oppressed. Thus the Kaira District Cooperative was established to collect and process milk in
the District of Kaira in 1946. Milk collection was also decentralized, as most producers .
were marginal farmers who were in a position to deliver 1-2 litres of milk per day. Village
level cooperatives were established to organize the marginal milk producers in each of these
villages. The Cooperative was further developed & managed by Dr. V Kurien along with Shri
H M Dalaya . in 1973, the Gujarat Co-operative Milk Marketing Federation was established.
The Kaira District Co-operative Milk Producers Union Ltd. which had established the brand
name AMUL in 1955 decided to hand over the brand name to GCMMF (AMUL). With the
creation of GCMMF (AMUL), we[ who?] managed to eliminate competition between
Gujarats cooperatives while competing with the private sector as a combined stronger force.
GCMMF (AMUL) has ensured remunerative returns to the farmers while providing
consumers with products under the brand name AMUL.

DATA PROCESSING & ANALYSIS:Data Analysis For Retailers:1) Number of retailers stocking Amul milk.

Answer

No. of
respondents

Percentage

Yes

55

20%

No

114

80%

Y
e
s
3
3
%

Yes
N
o

N
o
6
7
%

Interpretation:
rd

The above graph indicates that only 1/3 of the retailers are selling Amul milk.
It shows that Amul milk brand is not popular among the retailers.

2) Sizes of Amul milk packets retailers preferred to store.

(Out of 169 retailers only 55 were buying Amul milk.)

Answer

5 Ltr

No. of
respondents

250ml

500 ml

32

1 Ltr

23

5 Ltr

1 Ltr

23

500 ml

32

250ml

0
0

10

15

20

25

30

35

No. of respondents

Interpretation:

The above graph shows that most of the retailers preferred to stored 500 ml and 1 Ltr
pouch of Amul milk as per the customer demand.

In case of 5 Ltr. Pouch there was no customers demand.

250 ml pouches were not available to retailers.

3)

Reasons for Amul milk not stored by retailers.

(Out of 169 retailers 114 were not buying Amul milk.)

Absence of packaging date

No.
respondents
6

Low margin

75

No replacement for leakage

20

No distribution

13

Answer

No distribution

of

13

No replacement for
leakage

20

Low margin

Absence of packaging
date
0

75

10

20

30

40

50

60

70

80

No. of respondents

Interpretation:

From above graph it is clear that half of the retailers were not satisfied with Amul
replacement and margin policy.

Some retailers responded about absence of packaging date.

Very less retailers complained about distribution network

4) Preference of retailers to milk brand.

BRANDS

RESPONDENTS

Amul

15

Mother
dairy

77

manali

45

Tabala
milk

Others

26

Others
tabala

26
6

manali

45

motherdry

77

Amul

15
0

10

20

30

40

50

60

70

RESPODENT

Interpretation:

The above graph shows that the motherdairy is most preferable brand in all.

Some retailers also prefers tabala and others brands.

80

90

5)

Sources from where retailers get Amul milk

(Out of 169 retailers only 55 were buying Amul milk.)
Answer
Distributors
Other suppliers

No.
respondents
52
3

of Percentage
95 %
5%

Interpretation:
Almost all retailers said that they purchased milk from Amul
distributors.

6) Retailers satisfaction with Amul distributor.

(Out of 169 retailers only 55 were buying Amul milk)
Answer
Yes

No.
of Percentage
Respondents
34
62 %

No

21

38 %

N
o
3
8
%

Yes
Yes
62%

No

Interpretation:

Graph shows that most of the retailers were satisfied with the service provided by the
Amul distributors.

7) Awareness among retailers about different Sales Promotional activities for Amul milk.
(Out of 169 retailers only 55 were buying Amul milk.)

Activities

Aware

Not aware

Price off

37

18

Free samples

13

42

Credit facility

16

39

Advertisement

49

P-O-P Displays

41

14

Coupons

50

60
50

18

40
30

42

20
10
0

Price off

39
49

37
13

14

41

50

16

Free samples Credit facility

Aware

Advertisement

P-O-P
Displays

Coupons

Not aware

Interpretation:

The graph shows that retailers were aware about the sales promotion activity that Amul
carried out, but some respondents were unaware about various activities.

Most of the retailers were aware about advertisement and coupons scheme during
festivals.

Credit facility and free samples were not provided to single retailers.

8) Interest of retailers in wholesale distribution of Amul milk.

Answer
Yes

No. of
respondents
27

No

Percentage
16 %

142

84 %

Y
e
s
1
6
%

Yes
No

N
o
8
4
%

Interpretation:

Graph represents the interest of the retailers to start Amul milk distribution .The questions
asked to increase the retail coverage.

Most of the retailers were not interested.

Only 16% of the retailers were ready to start Amul distribution.

9) Awareness among retailers for Amul Parlor (APO) and its benefits.
(Out of 169 retailers only 118were questioned as they had large store.)

Answer

Percentage

Yes

No. of
respondents
70

No

48

41 %

59 %

N
o
4
1
%

Ye
s
No

Y
e
s
5
9
%

Interpretation:

APO is the outlet where you get Amul milk and milk products and it helps to increase the
market share. This question asked to the retailers who were strong enough in capital.
From graph it can be interpreted that the awareness about APO is very low.

10) Interest of retailers in opening an Amul Parlor (APO).

(Out of 169 retailers only 118 were questioned as they had large store.)

Answer
Yes
No

No. of
respondents
15

Percentage
13 %

103

87 %

Yes
13%

Yes
No

N
o
8
7
%

Interpretation:

The graph represent that very less number of retailers were interested to start APO.

11) Consumers expectation from Amul milk.

(Out of 169 retailers only 55 were buying Amul milk.)
ATTRIBUTE

RESPONDENTS

Good quality

Clear packaging date

23

Availability

25

Availability

25

Clear packaging date

23

Good quality

10

15

20

25

30

RESPODENT

Interpretation:

The question asked to the retailers where the Amul milk is being sale, and tried to collect
feedback of customers about Amul milk.
More customers were having complaints about the clear date of packaging and
availability.

Some customers were not happy with quality of milk.

12) Ratings from retailers for attributes of Amul milk.

(Out of 169 retailers only 55 were questioned as they buying Amul milk.)
Attribute
Rating

60
50
40

Quality

Brand
image

Availability

Packaging

Margin

Very good

37

48

34

Good

13

15

Average

48

Bad

Very bad

55

Total

55

55

55

55

55

0
5

13

15
48

30
20

48
37

34

10

2
5

0
Quality

55

Brand image
Very good Good

Availability

Packaging

Average

Bad Very bad

0
Margin

Interpretation:
From the above graph it can be concluded that

QUALITY: Most of the retailers were satisfied with Amul milk quality.
BRAND IMAGE: The graph shows that Amul is having good brand image.
AVAILABILITY: Most of the retailers were satisfied with the Amul milk distribution.
PACKAGING DATE: Most of the retailers were not satisfied about not printing of
packaging date and they were facing a problem regarding same.
MARGIN: All retailers were not satisfied with the margin policy given by Amul.

6.2DATA ANALYSIS FOR CUSTOMERS:1) Number of customers purchasing Amul milk.

Answer

No. of
respondents

Percentage

Yes

30

32%

No

65

68%

Y
e
s
3
2
%

Yes
N
o

N
o
6
8
%

Interpretation:
The above graph indicates that only 32% of the customers are purchasing Amul
milk.
It shows that Amul milk brand is not popular among the customers.

2) Ratings from customers for attributes of Amul milk.

(Out of 95 customers only 30 were questioned as they buying Amul milk.)
Attribute
Rating

Brand

Quality

image

Availability

Packaging

Price

Very good

18

25

16

Good

13

Average

15

11

Bad

Very bad

Total

30

30

30

30

30

35
30
25

0
3

0
5

0
5
0

20

11

15
10

15

25
18

13

16
2

5
0
Quality

Brand image
Very good

Good

Availability
Average

Bad

Packaging

Price

Very bad

Interpretation:
From the above graph it can be concluded that

QUALITY: Most of the customers were satisfied with Amul milk quality.
BRAND IMAGE: The graph shows that Amul is having good brand image.
AVAILABILITY: Most of the customers were satisfied with the Amul milk distribution.
PACKAGING DATE: Most of the customers were not satisfied about not printing of
packaging date and they were facing a problem regarding same.
PRICE: Some customers were not satisfied with the price given by Amul.

3) Preference of retailers to milk brand.

BRANDS

RESPONDENTS

Amul

15

motherdairy

44

manali

11

tabala

Others

17

17

Others
8

tabala

11

manali

44

motherdairy
15

Amul
0

10

15

20

25

30

35

40

RESPODENTS

.
Interpretation:

The above graph shows that the motherdairy is most preferable brand in all.

Some customers also prefers tabala and others brands.

45

1. Data Analysis for Sales Promotion Activity:We carried sales promotion activity at two places of nallasopara city
1. Shri prastra
2. Apna nagar
Store name

Sales(Ltr)
Initially

Day 1

Day 2

Day 3

Day 4

Day 5

Day 6

Day 7

Sai

10

Vaishali

15

15

15

15

15

15

15

New hanuman

20

15

15

15

15

15

15

Hanuman

15

30

25

25

25

25

25

25

Durga

10

10

Sales (Ltr)
35
30

30

25

25

20

25

25

25

25

25

20

15

15

10

15
10

sai
vaishali

15

15

15

15

15

15

hanuman

8
5

8
5

8
5

8
5

8
5

new
hanuman
Durga

Day 3

Day 4

Day 5

Day 6

Day 7

8
5

0
initially

Day 1 Day 2

Interpretation:

Most of the retail outlets were not interested in Amul milk selling, but after launching
coupons scheme, not only sales shoot up by considerable amount initially but also remain
constant for next days.

In case of Sai and Vaishali retail outlet they were not interested in Amul milk selling
but now they are selling 20 Ltr of milk daily. And they said if response will remain same
they will increase milk order.

PROCESS DESCRIPTION:
PRODUCT MIX OF AMUL
Breadspreads:

Amul Butter

Amul Lite Low Fat Breadspread

Cheese Range:

Amul Pasteurized Processed Cheddar Cheese

Amul Processed Cheese Spread

Amul Mozarella Cheese

Amul Emmental Cheese

Amul Gouda Cheese

Amul Malai Paneer (cottage cheese)

Utterly Delicious Pizza

Mithaee Range (Ethnic sweets):

Amul Shrikhand (Mango, Saffron, Almond Pistachio, Cardamom)

Amul Amrakhand

Amul Mithaee Gulabjamuns

Amul Mithaee Gulabjamun Mix

Amul Mithaee Kulfi Mix

UHT Milk Range:

Amul Taaza 3% fat Milk

Amul Gold 4.5% fat Milk

Amul Slim-n-Trim 0% fat milk

Amul Chocolate Milk

Amul Fresh Cream

Amul Snowcap Softy Mix

Pure Ghee:

Amul Pure Ghee

Sagar Pure Ghee

Infant Milk Range:

Amul Infant Milk Formula 1 (0-6 months)

Amul Infant Milk Formula 2 ( 6 months above)

Amulspray Infant Milk Food

Milk Powders:

Amul Full Cream Milk Powder

Amulya Dairy Whitener

Sagar Skimmed Milk Powder

Sagar Tea and Coffee Whitener

Sweetened Condensed Milk:

Amul Mithaimate Sweetened Condensed Milk

Fresh Milk:

Amul Taaza Toned Milk 3% fat

Amul Gold Full Cream Milk 6% fat

Amul Shakti Standardised Milk 3% fat

Amul Smart Double Toned Milk 1.5% fat

Curd Products:

Amul Masti Dahi (fresh curd)

Amul Butter Milk

Amul Icecreams:

Royal Treat Range (Rajbhog, Cappuchino, Chocochips, Butterscotch, Tutti Frutti)

Nut-o-mania range (Kaju Drakshi, Kesar Pista, Roasted Almond, Kesar Carnival,
Badshahi Badam Kulfi, Shista Pista Kulfi)

Utsav Range (Anjir, Roasted Almond)

Simply Delicious Range (Vanilla, Strawberry, Pineapple, Rose, Chocolate)

Nature's Treat (Alphanso Mango, Fresh Litchi, Anjir, Fresh Strawberry, Black
Currant)

Sundae Range (Mango, Black Currant, Chocolate, Strawberry)

Millennium Icecream (Cheese with Almonds, Dates with Honey)

Milk Bars (Chocobar, Mango Dolly, Raspberry Dolly, Shahi Badam Kulfi, Shahi
Pista Kulfi, Mawa Malai Kulfi, Green Pista Kulfi)

Cool Candies (Orange, Mango)

Cassatta

Tricone Cones (Butterscotch, Chocolate)

Megabite Almond Cone

Frostik - 3 layer chocolate Bar

Fundoo Range - exclusively for kids

SlimScoop Fat Free Frozen Dessert (Vanilla, Banana, Mango, Pineapple)

Chocolate & Confectionery:

Amul Milk Chocolate

Amul Fruit & Nut Chocolate

Amul Eclairs

Brown Beverage:

Nutramul Malted Milk Food

AMUL PLANTS

1. First plant is at ANAND, which engaged in the manufacturing of milk, butter, ghee,
milk powder, flavored milk and buttermilk.

2. Second plant is at MOGAR, which engaged in manufacturing chocolate, nutramul,

Amul Ganthia and Amul lite.

3. Third plant is at Kanjari, which produces cattelfeed.

4. Fourth plant is at Khatraj, which engaged in producing cheese.

THE CHANNEL NETWORK

Procurement Channel
(Upstream flow)
Distribution

GCMMF
Head office

MU1

MU...n

VCS1

VCSn

Village
1

Village
n

THE ANAND PATTERN

Distribution channel
GCMMF
Head office

Manufacturin
g

First leg

(from manufacturing units)

Depot..
.1

Depot..
.n

Second
leg
WD1

WDn

Third leg

Retail..
.n

Retail1

Downstream flow

Downstream Channel, it is the distribution part of the supply chain, from the manufacturing
units to the retailers.

First leg of transport is from the manufacturing unit to the company depots. This is
done using 9 and 18 MT trucks any lesser quantity will be uneconomical to the

company there for is some time the quantity ordered is lesser then club loading is
done which means that the product ordered is supplied with some other products.

Frozen food the temperature of these trucks is kept below -18C

Dairy wet the temperature of these trucks is kept between 0-4C

Second leg is from the depot to the WDs, this transport is carried out in insulated 3
and 5 MT TATA 407s here a permanent dispatch plan (PDP) is prepared where the
distributor plans out the quantity of various products to be ordered on a particular
date.

Third leg this is the flow of good from WDs to retailers, a beat plan is prepared and
transportation is done on auto-rickshaws, rickshaws and bicycles.

Amul products are available in over 500,000 retail outlets across India through its network of
over 3,500 distributors. There are 47 depots with dry and cold warehouses to buffer inventory
of the entire range of products.
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. All GCMMF branches engage in route scheduling and have
dedicated vehicle operations Depots with dry and cold warehouses to buffer inventory of the
entire range of products
Wholesale dealers carry inventory that is just adequate to take care of the transit time from
the branch warehouse to their premises. This just-in-time inventory strategy improves
dealers' return on investment (ROI). All GCMMF branches engage in route scheduling and
have dedicated vehicle operations.

Policy regarding unsold/spoilt goods

If product crosses the shelf life, the retailer bears the costs.

If the product gets spoilt during the transportation or if there is any customer
complaint, Amul bears costs.

Unsold goods are not returned to the manufacturer.

No reverse logistics.

SCM AND MARKET LOGISTICS

THE BUSINESS MODEL

The strategy, design and practices in AMULs network are 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
1. Coordination of the diverse elements of the network and
2. Use of appropriate technology that includes product, process and information
technology and managerial practices and systems.

Simultaneous Development of Suppliers and Customers: 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. 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.

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 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.

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. Marketing efforts (including brand
development) were assumed by GCMMF. All other activities were entrusted to third party
service providers. These include logistics of milk collection, distribution of dairy products,
sale of products through dealers and retail stores, some veterinary services etc.

Coordination for Competitiveness

Robust coordination is one of the key reasons for the success of operations involving such an
extensive network of producers and distributors at GCMMF. Some interesting mechanisms
exist for coordinating the supply chain at GCMMF. These range from ensuring fair share
allocation of benefits to various stakeholders in the chain to coordinated planning of
production and distribution. More importantly, the reason for setting up of this cooperative is
not amiss to anyone in this large network organization. Employees, third part service
providers, and distributors are constantly reminded that they work for the farmers and the
entire network strives to provide the best returns to the farmers, the real owners of the
cooperative. It may be r

emembered that coordination mechanisms have to link the

lives and activities of 2.12 million small suppliers and 0.5 million retailers!

There appear to be two critical mechanisms of coordination that ensure that decision making
is coherent and that the farmers gain the most from this effort.
These mechanisms are:

Inter-locking Control: - The objective for developing such an inter-locking control

mechanism is to ensure that the interest of the farmer is always kept at the top of the
agenda through its representatives who constitute the Boards of different entities that
comprise the supply chain. This form of direct representation also ensures that
professional managers and farmers work together as a team to strengthen the
cooperative. This helps in coordinating decisions across different entities as well as
speeding both the flow of information to the respective constituents and decisions.

Coordination Agency: Unique Role of Federation:- In addition to being the

marketing and distribution arm of the Unions, GCMMF plays the role of a
coordinator to the entire network within the State coordinating procurement
requirements with other Federations (in other states), determining the best production
allocation for its product mix from amongst its Unions, managing inter-dairy
movements, etc. It works with two very clear objectives:
1. To ensure that all milk that the farmers produce gets sold in the market either
as milk or as value added products and
2. To ensure that milk is made available to increasingly large sections of the
society at affordable prices.

Supplier Enhancement and Network servicing:- Their objective is to ensure that producers
get maximum benefit and to resolve all their problems. They manage the procurement of
milk that comes via trucks & tankers from the VSs. They negotiate annual contracts with
truckers, ensure availability of trucks for procurement, establish truck routes, monitor truck
movement and prevent stealing of milk while it is being transported.

Technology for Effectiveness:Technology or knowledge that was embodied in products, processes, and practices became
an important factor in delivering effectiveness to the network of cooperatives. One
distinguishing feature of AMUL (in comparison with other similar cooperatives globally) is
the large variety in their product mix. Most of its plants are state of art and automated.
AMULs innovations in the areas of energy conservation and recovery have also contributed
to reduction in cost of its operations. AMUL also indigenously developed a low cost process
for providing long shelf life to many of its perishable products.
The extent of IT usage includes a B2C ordering portal, an ERP based supply chain planning
system for the flow of material in the network, a net based dairy kiosk at some village
societies (for dissemination of dairy related information), automated milk collection stations
at village societies and a GIS based data network connecting villages societies to markets.
Milk collection information at more than 10,000 villages is available to all dairies (or
Unions) to enable them make faster decisions in terms of production & distribution planning,
and disease control in more than 6,700,000 animals. This is linked with information at all 45
distribution offices and 3900 distributors. This network is being extended to cover all related

field offices in the network. The GCMMF cyber store delivers AMUL products at the
doorsteps of the consumers in 125 cities across the country.
Now, going back to the supply chain of Amul, Amul has gone the e- commerce way. The 1st
initiatives taken for an ERP system was in 94. Tata Consultancy Services was hired to
guide in
its implementation. The implementation project was named as Enterprise- wise Integrated
Application System (EIAS). Automatic Milk Collection System units (AMCUS) at village
societies
were installed in the first phase to automate milk producers logistics. Amul also connected its
zonal
offices, regional offices and members dairies through VSATs for seamless exchange of
information. Amul is also using Geographic Information Systems (GIS) for business
planning and
optimization of collection processes. 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. There are plans
to
introduce features like Internet banking services and ATMs which will enable the milk
societies to
credit payments directly to the sellers bank account. Distributors can place their orders on
the
website www.amul2b.com especially meant for accepting orders from stockists and
promoting
Amuls products via e-commerce

TQM (Total quality management) at the grassroots has been a strong movement to develop
leadership, operational and strategic capabilities in the entire network farmers, village
cooperatives, dairy plants, distributors and wholesalers and retailers. Key elements of this
TQM movement have been:

Friday Departmental Meetings : Each Friday, at a prescribed time, everyone in the

network (from the farmers to the carry & forwarding agents) joins their respective
departmental meeting to discuss quality initiatives and share policy related
information.

Training for Transformational Leadership so that individuals are able to control

their thoughts, feelings and behavior and take more responsibility in ones life and
surrounding environment.

Application of Hoshin Kanri principles to bring about a bottom-up setting of

objectives aligning policies for effective management of Unions & village societies
on hand with those of channel member on the other hand. ISO/HACCP certification
was obtained for all the Unions and each village society is in the process of obtaining
the same.

Training for farmers and their families emphasizing the need for good health care
for not only cattle during its pregnancy and feeding but also for expecting and feeding
mothers and the whole family. This effort has brought about a significant social
change towards such issues in villages that have cooperative milk societies.

Retail Census: GCMMF undertakes a census of all retail outlets (over 500,000) to
evaluate customer perceptions and distribution efficacy of their network. This is being
done by wholesalers in their respective territories at their own cost. This information
is used for policy deployment exercise.

THE NETWORK

Milk is procured from the villages and collected at Village Cooperative Societies (VCS),
from there the milk is taken to manufacturing units where the milk is processed into various
products.
The products are then transporters to the company Depots located in various parts of the
country. The products are then sent to Wholesale Distributors (WD) and from there to the
retailers.
THE FACT SHEET

Milk is procured twice a day from 2 million from Gujarat alone

The payment is made under twelve hours of procurement

There are 10000 village cooperative societies

There are 3600 wholesale distributors in the country

45 depots

The C&F agents are not fixed and are decided by the local company offices

There are aproxx. 4,50,000 retailers spread all over India

Total house hold consumers covered are 100,000

The milk procured per day is 5 million liters

Where the total capacity of operation is 7 million liters per day

The peak processing till date has been 6 million liters per day

These co operative societies are bound to supply there produce only to

GCMMF

Amul products are available in over 500,000 retail outlets across India
through its of over 3,500 distributors.

47 depots with dry and cold warehouses to buffer inventory of the entire
range of products

AMUL PARLOURS (DIRECT DISTRIBUTION)

With products being highly perishable, the supply chain ought to have to maintain correct
temperature, humidity etc and the chain should move fast.

To reach out its consumers more directly and let them the total brand experience, Amul has
come up with Amul parlors. These are called Utterly delicious parlors. They have come up
in major cities like Ahmadabad, Bangalore, Baroda, Delhi, Mumbai, Hyderabad and Surat
already, and many more starting up real soon. Till date there are about 400 Amul parlors
across the country. These parlors are set at prominent locations such as campuses of Infosys,
Wipro, IIM-A, IIT-B, temples, Metros etc.

Amul has franchisee plans in regards of the Amul parlors. This might start pretty soon, since
the talk is almost at the end.

Facts
2300 Amul Parlors in 2007-08
Goal of setting up 10,000 outlets by March 2010

Selection, Motivation & Evaluation of Channel Members

Selection:

The company takes into consideration a host of factors while selecting the channel members.
This is because GCMMF believes that selection of channel members is a long run decision &
the rest of the decision regarding the supply chain depends upon the efficiency & coverage
by the channel members. The following are the host of factors considered by the company in
selecting the channel members:

Authentication is required by the regarding the identity of the channel members, which
includes the name & address, photograph of the location.

Proof of solvency which requires name & address of the channel members bankers

Safety of the inventory, which means that the distributor/ dealer should get the stock of
the company insured.

Inventory or the perishable goods kept by the distributor/ dealer should be in good
condition which means a detail of storage space & Refrigeration facility is to be
provided. Refrigeration system should have deep freezers, cold room & walk in coolers.

Details of the delivery vehicle, which includes Light Commercial Vehicles, Matador, 3
Wheeler Van, Tricycle Van & Hand/Push cart. The number & model of each of the
vehicle needs to be furnished to the company.

GCMMF acknowledges the fact that it needs to be sensitive to the market demands. For
this it requires that a number of salesmen needs to be present on the field. The salesmen
too are divided into various categories like the Field salesmen & Counter salesmen. Also
the details of Clerical Staff & Mazdoors are to be provided. The technical competence of
the salesmen needs to be mentioned

Details of the product kept of other companies have to be provided. The annual sales of
these products too have to be mentioned. Also details of complementary products &
product lines need to be mentioned.

Dealers of the company must carry a good reputation. This is due to the fact that the
company believes reputation of the dealer affects the clientele.

Market coverage by the distributors needs to be defined which includes details of

Geographic coverage & Outlets per market area.

The company also requires the dealers to furnish any Advertising & Sales initiative
undertaken by them on behalf of the company.

Motivation of Channel Members

GCMMF strongly believes in maintaining a good relationship with the channel members so
that they are genuinely motivated to work for the company. Also if the channel members are
motivated, they can also initiate advertising & sales promotion schemes on behalf of the
company. However to keep the channel members motivated to work, the company has to
incur certain costs but the benefits of it are felt in the long run. The following are the
motivation programs run by the company:

Distributors

One of the main factors, which keep the distributors motivated, is the margin. Usually the
margins offered by the company are 8% & it is raised to 8.5%. Volume wise this comes
out to be a big figure since Amuls product has a good demand in the market. However
compared to the other companies the margins are still lower since the new players in the
market offer a much higher margin. But the very fact that Amuls products have good
demand in the market motivates the distributors to stock it.

Amul being a cooperative cannot afford to give heavy monetary incentives. Amuls
products are considered to be value for money since the company does not believe in
charging high margins. In fact all monetary incentives are just the short run means to
promote the companys product. In order to keep the Channel members motivated in the
long run, Amul builds on the concept of Trade Marketing which makes the dealers &
the distributors believe that the companys products are worthy of being pushed in the
market.

The company is organizing various Total Quality Management initiatives & workshops.
Here various counseling measures are undertaken by the company to improve the overall
working of the distribution network.

Vision and mission statement: the company cascades down the vision to the various
channel members, this is done through various events organized by the company at
different locations where the values of the company are made clear and enforced to the
channel members. Also the fact that Amul being a cooperative society cannot afford to
spend exorbitantly on such events therefore it has a very traditional way of organizing
these get together which leaves an impact on the members.

Amul yatras: this includes taking the channel members on a guided tour of the
manufacturing and procuring facilities in Gujarat. So that the channel members can have
an experience of the working of the company and can pick up some quality measures that
can help them to synchronize and improve their own functioning at various levels. This in
turn help the company to co ordinate the entire value chain, as the channel members
understand the various constraints and liberties the company goes through. The company
has already got the Rajiv Gandhi award for quality.

The Retailers

Trade schemes: these are undertaken by the company only for the hard selling items
e.g. Ice creams, flavored milk etc. for these the company raises the margins by 2%,
also schemes like good packaging incase of butter and cheese is undertaken by the
company. However this is only a short-term initiative to push the products of the
company.

Glow boards: the company puts up glow boards at the retailer and pays the major
portion of the cost.

Schedule of the salesmen: they provide the retails with this schedule so the retailers
can pre estimate the quantities of the various products needed.

Infrastructure facilitation: the company facilitates the retailers to buy freezers and
fridges by formulating an easy payment program and a commitment to buy back the
equipment at a reasonable price when the value of the equipment has depreciated.

Evaluation of channel members

Beat plan: this plan is generated for the various product categories i.e. diary dry,
diary wet, Dhara and ice cream. A weekly schedule is prepared for various markets
and the retailers the turnover for each of the product is calculated for the wholesale
dealers.

Cumulative performance: the performance of the dealers is averaged out over a

period of three years where a comparison is made of the present performance vis-vis the previous ones.

Target versus achievement: the performance and the targets are compared and
therefore the gaps are identified which help in evaluating the WD and planning for
the next year as well. This is done for each of the product category.

Other criterion

o Details of the bank guaranty

o Photographs of the offices
o Details of the WD salesmen and the product lines he deals in
o The computerization facility available
o The storage space
o Refrigeration facility with photograph
o Details of the delivery vehicle with photograph
o Summary of the monthly potential sales of markets
o Summary of the product wise monthly sales potential of institutions

Conflicts And Co-Operation Among Channel Members

Conflicts

Ownership of assets: Previously the company used to give the cooling equipment on
lease to the retailers, when the company wanted the stuff back; the retailer disagreed
to comply and created issues of ownership.

Stocking issues: The company doesnt want the retailers to stock the competing
brand in the company leased fridges, which at times s hard to manage as retailers tend
to do it often.

Replacement of products: The deterioration in the product calls for fail in

replacement by the company this major issue of vertical conflict.

Credit policy: Compared to the market, the companys credit period is less that
specially incase of institutional sales is very important.

Packaging: The channel members for easy storing demand a better quality of
packaging.

Replenishment: The replenishment of the stocks is not prompt in case of amul

cheese and all hard selling items.

Margins: The Company provides least margins to all the channel members. For e.g.
The retailers margin in case of butter is 8% as compared to Britannias 12%

CO-OPERATION AMONG CHANNEL MEMBERS

Amul quality circles: The members of the local channel meet together every month
to share issues and the achievements of the channel members. This is an ongoing
activity facilitated by the company offices in different locations; this enables the
channel members to learn together and reduces the horizontal conflicts among the
WDs.

Pilot salesmen scheme: To reduce the financial burden of the distributors this
scheme is run whereby half the cost of the salesmen is born by the company and the
rest half by the distributor

Scheduling of sales: The WDs provides Schedule of the distributors sales men to
the retailers so that the retailers can plan out and place the orders in advance.

Agreement defining rights: The company makes the distributors sign an agreement
where the areas of operation for each of the distributors are defined, therefore
avoiding any conflict amongst the distributors regarding their areas of operation.

PRODUCT INFORMATION

PRODUCT-AMUL GOLD PASTEURISED FULL CREAM MILK

WEIGHT- 500 ml Nett
PRICE- Rs. 16
FAT-6.0 AND SNF-9.0
NUTRITIONAL INFORMATION

Serving size

200 ml

Amount per 100 ml

Energy

87 kcal

Energy from fat

54 kcal

Total fat

:6g

Phosphorus

:130 mg

Saturated fat

: 3.7g

Sodium

:50 mg

Cholesterol

:16 mg

Thiamine

:42 mcg

Total carbohydrate

:5.0g

Rivoflavin

:120mcg

Added sugar

:0g

Niacin

:100mcg

Protein

:3.3g

Folic acid

:7.5 mcg

Calcium

:150mg

Vita(retinol)

:85mcg

VOLUME PURCHASED

Total volume distributed by distributer to dealers in Badarpur Bodor-800-1000 liter

Total volume purchased by each dealers- 160-180 liters (i.e. total no of packets of amul gold
milk purchased by each dealer)- 320-360
Total volume purchased by each retailers-10-12 liter (20-25 packets)

SALES AND PROFIT

Sales and profit for Distributer

Total volume of milk distributed by distributer -800-1000 liters(i.e. total no of packets

distributed 400-450 approx)
Profit margin for distributer per liter-60 paise
Total profit for each distributer- 480-600 Rs

Sales and profit for dealers

Total sale done by each dealer- 160-180 liters

Profit margin for each dealer per liter-40paise
Total profit generated by each dealer-64-72 Rs
Sales and profit for retailers

Total sales done by each retailers-10-12 liters

Profit margin for retailers per litre-50paise
Profit generated by each retailers- 5-6 Rs

DISTRIBUTION CHANNEL OF AMUL MILK

MANUFACTURED UNIT

PACKING AND LABELLING

DISTRIBUTORS

DEALERS

RETAILERS

CUSTOMERS

STOCK REPLENISHMENT CYCLE

Since milk is a fast moving consumer goods daily used by each household in India. So Amul
gold pasteurised full cream milk is supplied by distributer everyday to dealers and retailers.
Stock is purchased within 24 hours (early in the morning).

TRANSPORATION METHODS

They manage the procurement of milk that comes via trucks & tankers from the VSs to
manufacturing unit and then to distributers and dealers .They negotiate annual contracts with
truckers, ensure availability of trucks for procurement, establish truck routes, monitor truck
movement and prevent stealing of milk while it is being transported.

COMPETITOR ANALYSIS

The main competitor of Amul is Mother dairy in Delhi. Most of the market share is captured
by mother dairy products (55% (approx) market of pasteurized full cream milk is covered by
Mother dairy

product
Amul
Mother dairy
others

% of market share
30
55
15

market share

15

mother dairy
amul
others
55

30

AMUL

PESTEURIZED

FULL

PASTEURISED FULL CREAM MILK

CREAM

VS

MOTHER

DAIRY

VS

Price
Weight
Margin for distributors
Margin for dealers
Margin for retailers

AMUL
16Rs
500 ml
60paise/liter
40paise/liter
50paise/liter

MOTHER DAIRY
17Rs
500 ml
60paise/liter
40paise/liter
50paise/liter

Sales and profit of Mother dairy pasteurized milk

Mother diary full cream milk is purchased in more quantity as compared to Amul full cream
pasteurized milk.

For distributor

Total quantity of mother dairy full cream pasteurized milk is distributed by distributor at
-2300-2500 liters

Profit margin for distributer-60paise/liter

Total profit generated by distributer- 1380Rs-1500

For dealers

Total quantity purchased by each dealer at 400-500 liters

Profit margin for dealers-40paise/liter

Total profit generated by dealers-160-200Rs

For retailers
Total quantity purchased by each retailer at Badarpur Boder-25-30 liters

Profit margin for retailers- 50paise/liter

Total profit generated by retailer-12.5-15Rs

Table of total Sales done each channel member

Channel member
By distributer
By dealers
By retailers

Amul (in liters)

800-1000
160-180
12-15

Mother dairy(in liters)

2300-2500
400-500
25-30

Table of profit generated by each member per day

Channel member
For distributor
For dealers
For retailers

Amul(in Rs)
480-500
64-72
10-12

Mother dairy(in Rs)

1380-1500
160-200
12-15

As compared to amul, mother dairy has more market share and more quantity of mother
dairy full cream pasteurized milk is distributed and supplied by channel members. Hence
more profit is generated by each channel member inspite of having equal margin on each
product.

LEARINGS

It was a great opportunity to carry a research project on such a reputed organization which
gave me a good learning experience and knowledge about the products and industry.
Another very crucial area that needs mention is the experience I gained while talking to and
interacting with people. This has been a truly enriching experience because interacting with
people with varied profile helped in enriching my communication skills

FINDINGS

Lack of Awareness in consumers. Many people are not know about Amul chocolates
specially children and teenagers.

As I found that the main product of Amul is Milk and company firstly wants to
capture maximum market share in milk market which is approx. 66%, after it Amul is
concentrating upon butter & cheese which has market share of approx. 88%, so it is not
concentrating upon chocolates.

 There is lack of Sales Promotional Activities i.e. free tattoo, extra weight, toys, quiz
contest etc.

Cadbury is main competitor and strategically better performer then Amul.

I find the main thing is that Amul brand name has very good image in consumers
mind and they consider it as Pure & Good Product.

People who have tasted Amul Chocolate are not ready to purchase the same again.

SUGGESTIONS
First and foremost Amul should take proper action in order to improve service,
because although being on a top slot in Butter and milk supplies it does not get the
sales in chocolate, which it should get.

Company should use brand ambassador which attracts each age segment i.e. Saniya
Mirza, Shaktimaan, Amitabh Bacchan, Superman, Krrish, Jadoo etc.

 Amul should give local advertisements apart from the advertisements given at the
national level. Local advertisement must mention the exclusive Amul shops of the
city.

Try and change the perception of the people through word of mouth about Amul in
advertisements, because they are the best source to reach Children and families.

Though Amul chocolate advertisements are rarely shown on television yet many
people could recall it as per the data of research. It shows that there is only need to
give advertisement only to rememorize customers. Because Amul is very strong
brand name.

Company should launch chocolate in new attractive packing to change image of

Amul chocolate in consumers mind.

Company should introduce sales promotion schemes like free weight, pranky,
tattoo, contest, free gifts etc.

Advertisement can be done with the help of animations that attracts children and
teenagers because chocolates are consumed largely in this segment.

CONCLUSION

As Amul is a very huge organization' it has maximum market share in milk

The company must make policy for replacment of product's
The company must call a meeting of retailers time to time
Amul should look Oberlin towards the increment in profit margin of distributors and

retailers
Amul should provide credit facilities for retailers and distributors
The overall management of Amul is so superior that they manage the overall system
in 750 employees

Amul must come up with new promotional activities such that the people become
aware of Amul milk like Tazza n Gold

BIBLIOGRAPHY

Books:
i.

Marketing Management (12th Edition) Philip Kotlar

ii.

Research Methodology C. R. Kothari

Websites:

i.

www.google.co.in

ii.

www.wikipedia.com

iii.

www.amul.com.

iv.

www.marketresearch.com

v.

www.dairy.com

ANNEXURE
QUESTIONNAIRE:(Retailer Survey)
Name of the shop: __________________________________________________

Retailer Name: ____________________________________________________

Address: __________________________________________________________

1) Do you stock Amul milk? a) Yes

b) No

2) If yes, what is the size of Amul milk packets do you preferred to store?
a) 250 ml
b) 500 ml
c) 1 Ltr
d) 5 Ltr.
3) If No, Why?
a. Absence of packaging date
b. Low margin
c. No replacement for leakage
d. Low distribution
4) Which is the most preferable brand of packaged milk that you stock?

Amul
motherdairy
manali
tabala
Others

5) From where do you get Amul milk?

a) Distributors
b) Other
suppliers
6) Are you satisfied with Amul distributor?
a)
Yes
b)
No
7) Do you know which Sales promotional activities does the company undertake for
Amul milk?
a) Price off

d) Free samples

b) Credit facility

e) Coupons

c) Advertisement

f) P-O-P Displays

8) Are you interested in distribution of Amul milk?

a) Yes
b) No
9) Are you aware of Amul Parlor (APO) and its benefits?
a)
Yes
b)
No
10) Are you interested in opening an Amul Parlor (APO)
a)
Yes
b)

No

11) What is consumers expectation from Amul

milk? a) Good quality
b)
Packaging
c)
Availability
12) Give your ratings to following attributes of Amul milk.
Very good Good Average Bad Very bad
a) Quality
b) Brand image
c) Availability
d) Packaging
e) Margin

QUESTIONNAIRE:(Customer survey)

Name of the shop:

__________________________________________________
Retailer Name:
____________________________________________________
Address:
__________________________________________________________

1) Do you know about Amul?

Yes

No

2) What are the products of Amul you use very frequently?

Butter

Cheese

Shrikhand

Milk Powder

Dahi

Milk

Ice-Cream

Butter Milk

3) Do you regularly get the Amul Milk?

Yes

No

4) Which brands milk do you like most?

Amul

Katraj

Chitale

Gokul

Other (Specify)..
5) Do you know about Amul God and Taaza?
Yes

No

6) How is the taste of Amul milk?

Poor

Satisfactory

Excellent

7)

How is the taste of Amul Tazza?

Poor

8)

Satisfactory

Excellent

What about the price of Amul milk?

Low

Average

High

9. Do you like the home delivery scheme of Amul Milk?

Yes

No

10. Give your ratings to following attributes of Amul milk.

Very good Good Average Bad Very bad
f) Quality
g) Brand image
h) Availability
i) Packaging
j) Price

11. Any suggestion about Amul milk: