A

Project report
on
summer training
at

“ surat district co-operative

milk producer’s union ltd. ”
 Introduction
• Sumul or Surat Milk Union Limited, which is now renamed
as The Surat District Co-operative Milk Producers' Union
Ltd, is one among the 12 district unions which acts as
manufacturing units of dairy products for (G.C.M.M.F.)
Gujarat Co-operative Milk Marketing Federation Limited.

• SUMUL Dairy is a co-operative endeavor committed to help

marginal farmers and down trodden tribal to lead to a
healthy life and better standard of living through scientific
animal husbandry practices. Today’s Sumul enjoys the
pride to serve milk and milk products to popular in Surat
city and surrounding towns of it.

• Hence, the Surat district co-operative milk producer’s union

ltd,
SUMUL is trade name and literally meaning sound price,
came in to existence on August 22, 1951…
 History
• In the year 1939 Sardar Vallabhbhai Patel went and meets
the farmers of Anand and told them that for the trade of
milk the dairy was necessary. During that time there was
only one dairy “POLSUN DAIRY” which belongs to British’s
and they use to give very less price for milk to the Indian
Milkmen. At that time a person named Tribhuvandas Patel
came forward to take the leadership. In order to support the
Indian farmers “AMUL DAIRY” was established in
the year 1946.
• DR. Kurien was appointed at this dairy.
• Then after, For the proper development of the dairy
industry N.D.D.B. (The National Dairy Development Board)
was established at Anand.
• Here the farmers were, made aware about their right &
responsibilities high productivity of milk at low cost & so the
co-operative of development programs started.

• In the year 1998-99 two million tone of milk was produced

 Sumul’s mission & vision
statement
“SUMUL IS SOCIALLY RESPONSIBLE ORGANISATION WITH
COMMITMENT TO CONSUMER DELIGHT AND RESPECT
FOR ALL. SUMUL BELIEVE IN GROWTH AND CONTINUOUS
IMPROVEMENT THROUGH TEAMWORK, TRUST & EXCELLENCE,
WITHOUT COMPROMISING HIS HONESTY AND INTEGRITY"

Year 2006-07 2009-20

Turnover RS. 607 Crores RS. 4000 Crores
Milk Procurement 6,59,682 kg/day 14,10,000 kg/day

Milk Sale 595,595 Liters/Per day 13,00,000 Liters/Per day

Quality ISO 9001 & HACCP ISO 22000 & ISO 14001

Production cost Minimum Production Cost MPC through 100%

automation
Distribution System Consumers oriented, Consumers oriented, Cost
Quick and effective Effective Distribution, Cost
Effective Vertical &
Horizontal Distribution
 NUMBER OF DEPARTMENTS IN SUMUL
DAIRY

There are 10 departments at Sumul, they are

as follows.

• 1. HR department
• 2. Finance department
• 3. Sales & Marketing department
• 4. Veternity Department
• 5. Production & Engineering Department
• 6. Accounts Department & Audit Section
• 7. Assembling Department
• 8. Quality Department
• 9. Store & Purchase Department
• 10. Information Technology Department
 introduction

Sumul’s milk marketing in Surat city is monitored, eliminating costly

sales-booths and though regular and assured twice a day supply of milk
to 1662 concessionaires (Agent)
and 198 institutional buyers, through 85 contractors’ route
vehicles. There is guaranteed cash inflow of the sales proceeds on day-
Hierachy
to-day basis and safestructure
return of of marketing
crates department
etc. to the Dairy.
 marketing environment

Internal environment External environment

Micro Macro
 Internal environment:

They are generally audited by applying the ‘Five Ms’ which are….
Men, Money, Machinery, Materials and Markets.

 External environment:

Micro-environment:
This environment influences the organization
Macro-environment:
directly. The wider environment is also ever changing.
It includes :
1. suppliers who deal directly or indirectly It includes competition, Government Policy, Politics,
2. consumers and customers Economical Policy and Cultural activity.
3. other local stakeholders
 List of Competitors
• Following some of the dairy all from the district i.e. from North Gujarat
& Maharashtra:

1. Unity dairy, Uttarsanda 11. Sardar Dairy, Mehsana

2. Jeevan Shakti, Dhuliya 12. Vimal Dairy, Mehsana

3. Vishalsagar, Dhuliya 13. Royal Dairy, Gandhinagar

4. Gopi Milk Products, Puna 14. Suffal (Paneer)

5. Gautam Milk Products,Kopargoan 15. Satyam Dairy, Gandhinagar

6. Gayatri Milk Dairy 16. Sumathur dairy

7. New Suraj Dairy, vijapur 17. Mahakall Dairy, Sid

8. Sarita Milk Products, Kadi
9. Britannia (Ghee)
10.Neslte (Milk powder, Ghee)
 Product- mix OF sumul dairy
Products Mix: “The set of all products and items that a particular seller offers for sales to buyer.”

Liquid Milk Self Developed

Milk Products Products

Whole Milk Butter Milk Paneer

Pasteurized Ghee Flavors

Standard Milk
Milk

White Butter Sweets

Homogenized
Toned Milk

Skimmed Milk Shrikhand

Powder
Skimmed
Milk
Sumul Sugar

Cow Milk
Sumul Tea
 PACKAGING & LABELING
Packaging
• Packaging is one of the
most important factors
that management must
have to consider in mind.
• Here, different machines
are available for different
types of packing. The firm
is now going for a new
type of packing called
“Gable top packing”.
• The main advantage of
such type of packing is in
this packing milk remains
fresh for about 10 days.
Labeling:
• To achieve marketing
objective of the to satisfy
the desire of the consumer
sumul has chosen the
labeling components very
correctly.
• They also use different
-different slogan on the
product.
• SUMUL use this type of
symbol …
 Pricing policy
Pricing Policy:
General information regarding to setting of price is it has fixed structure
followed by GCMMF at Sumul farmers are paid on the basis of kilo fat in their
milk. They are paid Rs.318 per KG of fat. Taking this as base the price
of the product is being set. Price list are as follows:
Commodity Quality Price(Rs.)

Ghee 15 kg 2300
5 liter 720 Cost Structure of Product:
2 liter 275
1 liter 150
1 liter pouch 145 Production cost
500 ml pouch 74 + Transport expenditure
200 ml pouch 31 + Profit Margin
White Butter 15 kg 1695 + Commission
500 gm 60
Jome 200 ml bottle 8
------------------------------
200 ml pouch 5 Cost
Paneer 1 kg 105
200 gr 22
EIaichy Peda 500 gr 59
250 gr 30
Kesar Peda 500 gr 79
250 gr 40
Malai Puri Peda 250 gr 36
Premium Tea 500 gr 62
250 gr 33
100 gr 14
Silbver Tea 500 gr 71
250 gr 39
100 gr 16
EIaichy Shrikhand 500 gr 40
Kesar Shrikhand 500 gr 45
100 gr 10
 Organisation’s buying process

Buying Process:
• Sumul collects the milk from
the villages.
• The collected milk is tested
against the set standard. That
insures quality of milk being
received from the root level.
• The milk is tested in lab. No
compromises with the quality
of milk being received and pay
the price of milk on the basis of
fat.
• The qualified milk is received at
raw milk receiving Dock at
dairy.
• The received milk is
transported to the dairy for the
further processing
 Product life cycle
The Product Life Cycle concept helps marketers interpret product and market dynamics.

Introduction
Growth
Maturity
Decline

Sumul is at the growth stage of the product life cycle and our company
also create the new idea and launching new product time to time and
increasing sales every time.
 Channel of distribution
DISTRIBUTION CHANNEL OF LIQUID MILK

 
So, its called one level (1 level) Distribution Channel

DISTRIBUTION CHANNEL OF DAIRY PRODUCTS

So, its called two level (2 level) Distribution Channel

 MARKETING / SALES Department AT A GLANCE

 Population of Surat City: 45, 00,000

 Market Size: 8, 25,000 Liters/ day. (Population*250ml per

capital)

 Annually Milk sale (2008-09) is 24,93,28,941 Liters .

 Average sale (2008-09) is 6, 83,093 Liters milk per day.

 Growth: 14.82%

 Market share: 77%

 Competitors in packed milk:18-20 having sale 25000-30000

liters in total per day.
 Promotional ACTIVITIES

 Advertisement:
Here advertising is done through hoardings, banners, wall painting,
newspapers, and stickers etc. Sumul dairy spend nearly 20 to 25
lakh on the advertisement. The contract of
advertisement is with the Venus ads.

 Healthy Baby Contest since 1992…

 Paneer Show:

 Education Programs:

 House Visits:
 introduction
• Sumul believes that the most significant resource is its Human Resource
and Sumul’s Success in the long run depends very much on the quality of
its human resources.

 HR Objectives:

• To develop and sustain core values.

• To develop business leaders for tomorrow.
• To provide job contentment through empowerment, accountability and
responsibility.
• To build and upgrade competencies through virtual learning, opportunities
for growth and providing challenge in the job.
• To faster a climate of creativity, innovation and enthusiasm.
• To enhance the quality of life of employees and their family.
 
Organization structure
 Activities of personal department

The main activities of this department are…

Recruitment, selection, Training, Self Development &

Employee Personality Development and welfare activities. R & D

Human resource planning

 When there is any vacancy or some requirement comes up

in the organization. Human resource planning is being done.
 Selection process
• Procedure for selection is differing from organization to
organization and from job to job.• For Non-
• For
Executives: Executives:
• Written Test • Written Test
– Aptitude • Final interview
test • Final selection
– Subject
test
• Group
 PERFORMANCE APPRAISAL SYSTEM
• “Performance appraisal is the systematic, periodic and an
impartial rating of an employee’s excellence in matters of
pertaining to his present job and his potential for a better job”
• In sumul, gives specific project to the employee to train him.
After completion of this project, it is checked by the authorized
person of the department. if the employee do
not perform well then they are terminated from the organization.
Training & DEVELOPMENT
• Sumul Dairy, training is given with the objective of increase in
productivity of employees, increase quality of work, enhance and
update knowledge and skills of employees.

• Sumul provides training as on the job training and give training to

new employee. Training is given to the workers which are basically at
period of one month.
 Training is given in 3 Categories as:
» Management Training.
» Office Training
» Senior Executive Training
• So, the sumul also organized various development programs for
 Wage & salary structure

“Wages represent hourly rates of pay & Salary means monthly rates of pay”
•Sumul also provides this type of allowances :

•Dearness Allowance (DA)

•Additional Dearness Allowance (ADA)
•House rent Allowance (HRA)
•Leave Travel Allowance (LTA)
•Washing Allowances (WA)
•City & Travel Allowance (CTA)
•Visiting Allowance (VA)
•Bicycle Allowance (BA)
•Scooter Allowance (SA)
•Driving Allowance (DA)
•Other Components:
 Bonus
(8.33% of BASIC +DA+ADA)
Funeral Fund
Rs.3000 to the ward and family of
the dad.
Every month Rs1/- of all higher executives salary is maintained
for this fund.
 Employee welfare
“Labour welfare means anything done for the comfort and
improvement. Intellectual or social of the employees over and above
the wage paid which is not a necessity of the industry”
 Intra mural welfare  Extra mural welfare activity
activity of Sumul: of Sumul:
 Convenience and comfort
Transportation
during the work
 Washing facilities Roads, lighting, garden
 Store & Drying facility Communication facility
 Canteen facility Security
 Rest room Training and development
programs
 First aid facility
 Vehicle parking space
 Accommodation
 Vehicle loan
 Uniforms, Shoes and
Raincoats
 House rent recovery
 Personnel information system
The HR department keeps the information of each and every
employee from top to bottom level workers. This information is
updated from time to time.
Organization structure of production department
Activities of production departments
• Production planning
• Material requirement planning
• Store finished goods and raw material
• Quality control
• Packaging
• Painting of pack product
• Transport to Marketplace
• Washing and cleaning of equipments, regular maintenance of
machine and other equipments.

MAP OF ACTIVITY AREA:-

Cilling Centre
Main Dairy Plant
km distance from surat

Taluka/ Tahsil Name Cattle Feed Factory

 Production process
Production process at SUMUL dairy is derived into two main stages.
They are as follows-
1. Process flow from Village to Chilling Centre Level
2. Dairy plant to Market Level

PROCESS FLOW FROM VILLAGE

TO CHILLING CENTRE

Milking by Producer Producer approaching DCS Grading & Testing at DCS

Transportation to Chilling Centre Collection at DCS

Receiv ing at Chilling Centre Testing at Chilling Centre Transportation to Dairy Plant
2. DAIRY PLANT TO MARKET LEVEL

Milk Receiving Testing of Milk Processing

Packing Processing Processing

Storage Delivery Market

 Unit of sumul & their capacity

Unit Place Capacity Employees Distance

From Surat
SUMUL DAIRY Surat 5 Lakh LTPD 591 0 km

Bajipura Bajipura 3 Lakh LTPD 113 50 km

Chilling (B.C.C.)
Centre
Navi Pardi Navi Pardi 2 Lakh LTPD 66 25 km
Chilling Centre (N.P.C.C.)
Uchchhal Uchchhal 1 Lakh LTPD 49 105 km
Chilling Centre (U.C.C).
Nizer Chilling Nizer 63,000 LTPD 16 175 km
Centre
Chasvad Chasvad 30,000 LTPD 100 km
Chilling Centre
(C.C.C.)
Dediapada Dediapada 30,000 LTPD 135 km

Chilling Centre (D.C.C.)

Sumuldan Chalthan 200 MT PD 96 18 km
Factory (S.D.F.)
 Micro motion study
• During the visit to the production plant we have done micro
motion study of a worker whose work was to take the milk
pouched from the machine and the keep them on carate, which
uses to come serially on the belt conveyors. The position of the
person was such that it to very less time.
• The pouches of 500 ml were filled in Polly bags, sealed and ready
pouches were thrown though the pouch-filling machine.
•  The entire process was completed in 18 sec.
Quality policy
“ SUMUL DAIRY ARE DEVOTED, DEDICATED AND MOTIVATED WORKFORCE
TRAINEDTO ENSURE CONSISTENT SUPPLY OF GOOD QUALITY AND SAFE MILK
AND MILK PRODUCTS TO ACHIEVE HIGHEST LEVEL OF CUSTOMER
SATISFACTION.
SUMUL WILL ACHIEVE THIS BY MONITORING AND UPGRADATION OF
PROCEDURES AND PROCESS APPLYING SCIENTIFIC INNOVATIONS AND
STATE OF THE ART TECHNOLOGY AND REMAIN ECOFRIENDLY QUALITY AND
FOOD SAFETY MANAGEMENT SYSTEM.”
 TOTAL QUALITY MANAGEMENT (TQM) 
• TQM (Total Quality Management) was implemented at SUMUL on 6th
May, 1996 with the help of EICHER CONSULTANCY, Mumbai.
 TOTAL PRODUCT MANAGEMENT (TPM) 
• TPM (Total Product Management) was implemented at SUMUL on
19th, October, 1999 with the help of TQM center at Surat under
consultancy of Dr. B. C. Naidu.

• Sumul has adopted International Standards for Quality Management.

QAS Australia has certified our quality management systems by
issuing ISO 9002, ISO-14001 and H.A.C.C.P. Certificates.

 ENVIRONMENT POLICY:
• Comply with all applicable environmental legislation, regulations and
other requirements .
• Control Plant operations to conserve natural resources such as water,
electricity and fuel and prevent pollution 
• Continues improvement of environmental performance Creating
awareness towards environmental issues among
suppliers and stake holders    
 Support services
» Maintenance
» Packing
 Maintenance:
At SUMUL, there is a strong maintenance procedure on raw
materials & final products, because such milk products should be
maintain in such way they maintains their quality for the long
period of time.
 Packing:

 
• Packaging is one of the most important factors that
management must have to consider in mind.
• Here, different machines are available for different types of
packing. The firm is now going for a new type of packing called
“Gable top packing”.
• The main advantage of such type of packing is in this packing
milk remains fresh for about 10 days.
 Material handling equipments
 Material Handling  No. of Material Handling Equipments Used:
Equipments Used
Equipment Quality
Milk Tankers :
• Pipeline:
Sumul 13

On contract 11
• Trolleys:
Tempos (on contract) 70
• Crates Trolleys
Belt Conover 8
• Cans Trolleys
Crates 40,000
• Plastic Tube
Cans :

40 Liter. 250
• Belt Conveyors:
20 Liter. 25

• Crates Trolleys 50
Trucks (Tempos):
Cans Trolleys 10
Plastic Tube 5
Glass Betties (200 ml) 35,000
 Plant location

• SUMUL dairy is located near railway station road in Surat.

It covers 15,000 – acre land. Sumul provides milk
collection facilities at the producer’s door in each village co-
operative, where milk is speedily, efficiently and economically
transported twice daily to its dairy plant and chilling centers for
processing and marketing.
 Hierarchy of finance department
“Finance management is that managerial activity which is concerned
with the planning and controlling of the firm financial resources.”

• Sumul is the co-operative so it

has not special financial
department.
• Sumul require a lot of funds for
meaning its working capital
needs and other obligations.
• It manages its working capital
needs through internal
funding only. There is regular,
assured and smooth in flow of
cash from milk sales from the
agents to dairy’s Cash
Collection Centers on day-to-
day basis.
 Turn -over information

• From the study of the above diagram, we can see that Sumul has
made a continuous progress in their profit making figures.
• The present turn over of the firm is 790 crores
which is 90 crores more than the
profit of the previous year.
 Budgeting & planning
• Capital budgeting decision pertaining to fixed and long term
assets which by definition refer to assets which are in operation
and yield a return over a period of time , usually exceeding one
year .

• Capital budgeting is the most important and complicated problem

of managerial decision. Because it is concerned with designing
and carrying out through a systematic investment programmes.

• It involves the planning of such expenditures, which provides

yields over a number of years. The firm’s investment decision
would generally include expansion, acquisition, modernization and
replacement of the long-term assets.

• In short, the capital budgeting decisions means…

a decision as to whether or not money should be invested in

long term projects.
 Taking loans (SOURCES OF FUNDS)
• Every firm needs money or funds for the activities of it’s
organization and they all takes it from either share capital or loans
like debentures, bonds etc…
 Reserve fund & other funds: 16,85,26,228

 Debenture Redeemable: 4,54,500

909 debentures Rs.500/- each

 Loans: 42,32,87,520

N.D.D.B. (operation flood) 27,08,078

Cattle loan etc. 2,05,79,442

Short term Loan 40,00,00,000

 Interpretation:-
At the and of the year Sumul has….
• Reserve fund & other source of funds Rs.
16,85,26,228
• Redeemable Debenture Rs. 4,54,500
• Total Loans Rs. 42,32,87,520
 Issuing shares
 Authorized Share Capital: 10,00,00,000

(10, 00,000 ordinary shares of Rs.100/ each.)

 Share Capital (Issued fully paid up.) 4,23,67,200

(4, 23,672 ordinary shares of Rs.100/- each.)

•Interpretation:-

• Sumul has 10, 00,000 ordinary shares of Rs.100/ each.

So, Authorized Share Capital Rs. 10,00,00,000

•Sumul Issued Share Capital is 4,23,672 ordinary shares of

Rs.100/- each. Which are fully paid up.
So, Share Capital Rs. 4,23,67,200
 Cost system
• Cost is one of the main factors affecting finance department.
• There are lots of control techniques through which companies
can control their cost.
Cost Structure of Product:

Production cost
+ Transport expenditure
+ Profit Margin
+ Commission
------------------------------
Cost

Payment process
•Collection of sales bills & sales data

•Data verification with sales information

•Feed concern data in computer

•Feed duration data in computer

•To pass duration entry to the computer.

 Balance sheet data
• Comparative analysis means after some period company
analyzing its financial report current year figure with the past years
figure .
• With the help of comparative analyzing company aware about it
financial position.
• Some balance sheet data are as follows:
Liabilities Assets
• Authorized Share Capital 10,00,00,000 • Assets 42,72,01,141
• Investments 4,97,46,578
• Share Capital (Issued fully paid up.) 4,23,67,200 • Stock 48,05,07,794
• Debenture Redeemable 4,54,500
• Reserve fund & other funds 16,85,26,228 • Advances & other assets 32,96,97,582
• Loans 42,32,87,520 • Cash & bank 95,92,51,961
• Current liabilities 1,59,04,09,166
• Profit & Loss A/C. 2,13,60,442

 Net Profit 2,13,60,442

 Total Income / Expenditure 8,40,61,16,108

 Working capital
• Generally, the term Working capital refers to that part of capital
which is not tied up in fixed assets but is used to meet the day-to-
day requirements of business.

Working Capital = Net Current Assets – Net Current

Current Assets: Liabilities
In 2008 Stock is 54,47,01,276, Investment is 4,97,44,132 ,
Cash & Bank A/C is 75,49,00,390 ,
The total Assets is 1,34,93,45,798.

Current Liabilities:

In 2008 Reserve fund & other funds is 15,03,81,724,

Current liabilities & loans is 1,34,53,70,370.
The total Liabilities is 1,49,57,52,094.

So The Net Working Capital is 14,64,06,296