Amul distribution network

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PRESENTATION ON DISTRIBUTION NETWORK MANAGEMENT OF AMUL Presented by: Yaswant Narayan Singh Presented to: SCCE Prof. 1

Transcript of Amul distribution network

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PRESENTATION ON DISTRIBUTION NETWORK

MANAGEMENTOF

AMUL

Presented by: Yaswant Narayan Singh Presented to:SCCE Prof.

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INDIAN DAIRY INDUSTRY India is world’s largest producer of dairy

products by volume.

It is accounting more than 13% of world’s total milk production.

Also India is world’s largest consumer of dairy products, consuming almost all of its own milk production.

Indian dairy market is growing at an annual rate of 7%.

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CONT…

Interests from private sector investors have facilitated construction of larger dairies through partnering with dairy processors.

Indian dairy industry is different from other dairy producing countries as India places its emphasis on both cattle and buffalo milk.

India nevertheless faces a milk supply gap due to increasing demand from a growing middle class population.

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CHALLENGES FACED BY INDIAN DAIRY INDUSTRY

Procurement (collection)• The three-tier system of milk collection

Advent of organized retail channels• Increased availability of branded, packaged

milk • Reduced role of middlemen, mainly the milk

vendors

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Distribution• Lack of superior cold-storage transport• Distribution wastage due to improper storage• No enforcement of HACCP principles

Lack of supporting information systems• Database maintained by Milk Producers

Organizations in developed countries

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AMUL Type - Cooperative Industry - Dairy

Founded - 1946

Key people - Dr. Verghese Kurien

Milk Producers 52.8 million

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KEY FACTS AMUL means priceless in Sanskrit “Amoolya”

Brand name managed by an apex cooperation organization –GCMMF

World’s biggest vegetarian cheese brand

World’s largest pouched milk brand

Largest food brand in India

Spurred the white revolution in India

Accreditation with 9001 and HACCP certification by QAS, Australia.

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GCMMF

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Year of Establishment 1973

Members17 District Cooperative Milk

Producers' Unions (16 Members & 1 Nominal Members)

No. of Producer Members 3.18 MillionNo. of Village Societies 16,117

Total Milk handling capacity per day 13.67 Million litres per day

Milk Collection (Total - 2011-12) 3.88 billion litresMilk collection (Daily Average

2011-12) 10.6 million litres (peak 13 million)

Milk Drying Capacity 647 Mts. per dayCattle feed manufacturing

Capacity 3690 Mts. per day

Sales Turnover -(2011-12) Rs. 11668 Crores (US $2.5 Billion)

GCMMF - An Overview

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1. QUALITY

2. VALUE FOR MONEY

3. AVAILIBILITY

4. SERVICE

STRATEGICAL PILLERS OF AMUL

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AMUL PRODUCT’S DIVERSIFICATION

Dairy • Cheese Products• Bread Spreads• Milk Drinks &

Desserts• Fresh Milk

Non-Dairy• Instant Food• Snacks• Veg. Oils

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MARKET SHARE

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AMUL MODEL

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SUPPLY CHAIN MANAGEMENT

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LOGISTICS PROCESS I. Logistics in collection –

6 million liters of milk per dayFrom about 10,600 separate village cooperative

societies.Approximately 2.8 million milk producing member.

II. Logistics in coordination of –

Storing the milk.Processing the milk.Distributing the milk.

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CONT…

III. Supplier logistics –

Weighing the milk.Determining of fat content.Calculation of the purchase price.

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EVOLUTION OF “IT” The evolution of IT in AMUL was took place in

the guidance of DR.B.M Vyas.

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

Data analysis software utilization for milk production estimation and increasing productivity.

VATS network between all the level of distribution network and GCMMF.

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AUTOMATIC MILK COLLECTION UNIT SYSTEM

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BENEFITS OF IT Processing of 10 Million payments daily, amounting to

transactions worth USD 3.78 million in cash.

Radical changes in business processes - eliminating middlemen.

Improved delivery mechanisms and transparency of business operations.

Due to this process, AMUL is able to collect six million litres of milk per day.

Huge reduction in processing time for effecting payments to the farmers from a week to couple of minute.

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CONT… Movement of 5000 trucks to 200 dairy processing

plants twice a day in a most optimum manner.

Practicing just in time supply chain management with six sigma accuracy.

Online order placements of Amul’s products on the web.

Distributors can place their orders on the website.

Amul exports products worth around US$ 25 million to countries in West Asia, Africa and USA.

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There is improvement in quality of milk in term of acidity and sour milk

Milk union records show 2% reduction in the amount of the sour milk received from the union

Improved microbiological quality of upcoming raw milk in the form of methylene blue reduction

This gives better shelf life to the product

TOTAL QUALITY MANAGEMENT

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Friday Departmental meetings: to disscuss issues related to quality.

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Distribution Process

Company Wholesaler Dealer Franchisee

Retailer

Consumers26

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THE CHANNEL NETWORK

Procurement channel- upstream flow

Distribution channel- downstream flow

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PROCUREMENT Activities at the village level comprised

developing and servicing the VCSs.

Increasing milk collection, procuring milk, and transporting it to the chilling and processing units twice a day.

The VCSs provided the farmers with good quality animal feed, fodder, and other services like veterinary first aid.

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PROCUREMENT CHANNEL(UPSTREAM)

On an average around thousand farmers come to sell milk at their local co-operative milk collection center.

Each farmer has been given a plastic card for identification.

At the milk collection counter, the farmer drops the card into a box and the identification number is transmitted to a personal computer attached to the machine.

The milk is then weighed and the fat content of the milk is measured by an electronic fat testing machine.

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CONT… Both these details are recorded in the PC. The

computer then calculates the amount due to farmer on the basis of the fat content.

The value of the milk is then printed out on a slip and handed over to farmer who collects the payment at adjacent window.

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COLD STORAGE NETWORK Chillers in proximity of villages

Prompt transport to district facilities for further dispatch to consumers/ processing units.

Chilled trucks to transport processed products

Delivery to local chillers by insulated rail tankers and chilled trucks.

Refrigerators and freezers with retailers and departmental stores to retain freshness.

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DISTRIBUTION GCMMF coordinated with various unions to get a

regular supply of milk and dairy products.

The processed milk and dairy products were procured from district dairy unions and distributed through third party distributors.

To ensure quality and timely deliveries, GCMMF and the district unions had several mechanisms in place.

The unions monitored the supplies of milk and the distribution of finished products.

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DOWNSTREAM FLOW First leg

Manufacturing units to company depots using 9 and 18 MT trucks

Frozen food below -18°CDairy wet 0-4°C

Second legDepots to WDsTransport through insulated 3 and 5 MT TATA 407’s

Third legWDs to retailersTransport through rickshaws 34

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REVERSE LOGISTICS

MILK CHURN from dairy to VCS

BOTTLEfrom retailer to dairy

DAMAGED PRODUCTS from customer to retailer then to dairy

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POUCH MILK TRAYfrom retailer to dairy

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DIRECT RETAILING Amul has recently entered into direct

retailing through "Amul Utterly Delicious" parlors created in major cities.

Amul has plans to create a large chain of

such outlets to be managed by franchisees throughout the country.

More than 2000 parlor with a turnover of Rs.

200 crores.37

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THANK YOU…

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Comments : Now a days, online shopping becomes

popular and gradually be accepted by the public. There are plenty of attractive spots of this new type of business. Convenience, easy-delivery and low cost. Thereby, it is also a great opportunity for AMUL if start their business in this area. The major features.