LOGISTICS OF

Presented by:- Farhan Azmi

AMUL

Type - Cooperative Industry - Dairy

Founded - 1946

Key people - Dr. Verghese kurien

Revenue - INR 67.11billion (2008-2009)

Employee - Marketing arm: 735

Milk producers: 2.8 million

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.

GCMMF: AN OVERVIEW

Members 13 district cooperative milk producers Union

No. of Producer Members 2.79 million

No. of Village Societies 13,328

Total Milk handling capacity 11.22 million liters per day

CONT…

Milk collection (Total - 2008-09): 3.05 billion liters.

Milk collection (Daily Average 2008-09): 8.4 million liters

Milk Drying Capacity: 626 Mts. per day

Cattle feed manufacturing Capacity: 3500 Mts. per day

VALUE CHAIN PROCESS

AMUL PRODUCT’S DIVERSIFICATION

Dairy • Cheese Products• Bread Spreads• Milk Drinks & Desserts• Fresh Milk

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

PRODUCTS

Bread Spreads

Milk Drinks

Powder Milk

Fresh Milk

Cheese

For Cooking

Chocolate

MARKET SHARE

PRODUCT SHARE

Amul butter - 86%

Ice cream - 36%

Chocolate - 10%

Ghee - 20%

Skimmed milk powder - 40%

PROBLEMS TO BE ADDRESSED

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. Logistic in coordination of –

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

CONT….

III. Supplier logistics –

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

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.

Application and utilization of GIS.

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

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

IMPLEMENTATION Amul start implementation of ERP in phases.

Automatic milk collection system units(AMCUS) at village society were installed in the first phase to automate milk production logistics.

AMCUS facilities to capture member information, milk fat content, volume collected, and amount payable to each member electronically.

CONT… Indian Institute of Management – Ahmedabad supplemented

Amul’s IT strategy by providing an application software – Dairy Information System Kiosk(DISK) to facilitate data analysis and decision support in improving milk collection.

The kiosk would also contain an extensive database on the history of cattle owned by the farmers, medical history of the cattle, reproductive cycle and history of diseases.

Farmers can have access to information related to milk production, including best practices in breeding and rearing cattle.

As a large amount of detailed history on milk production is available in the database, the system can be used to forecast milk collection and monitor the produce from individual sellers.

AUTOMATIC MILK COLLECTION SYSTEM UNITS (AMCUS)

REAPING RETURNS

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.

Processing of 10 Million payments daily, amounting to transactions worth USD 3.78 million in cash.

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.

TOTAL QUALITY MANAGEMENT MODEL

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

Sabor 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.

Program like Red Tag Day was launched for cleaning the milk collection center.

AMUL PATTERN

A three tier cooperative structure:

Dairy cooperative society at village level

Milk union at district level

Milk federation at state level

VILLAGE DAIRY COOPERATIVE SOCIETY (VDCS)

Collection of surplus milk & payment based on quality & quantity.

Providing support services to the members.

Selling liquid milk for local consumers of the village.

Supplying milk to the District Milk Union

DISTRICT COOPERATIVE MILK PRODUCERS’ UNION (MILK UNION)

Procurement of milk from the Village Dairy Societies of the District.

Arranging transportation of raw milk from the VDCS to the Milk Union.

Providing input services to the producers.

Conducting training on Cooperative development

CONT.. Providing management support & regular supervision to the

VDCS.

Establish Chilling Centers & Dairy Plants for processing the milk.

Selling liquid milk & milk products within the District.

Process milk into various milk & milk products.

Decide on the prices of milk to be paid to milk producers.

GCMMF’S SUPPLY CHAIN

DISTRIBUTION PROCESS

Company Dealer FranchiseeWholesaler

Retailer

Shopkeeper

Consumers

THE CHANNEL NETWORK

Procurement channel- upstream flow

Distribution channel- downstream flow

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.

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.

REVERSE LOGISTICS

MILK CHURN from dairy to VCS

POUCH MILK TRAY from retailer to dairy

BOTTLEfrom retailer to dairy

DAMAGED PRODUCTS from customer to retailer then to dairy

LESSONS FOR MANAGING LARGE NETWORKS

Long term perspective

Simultaneous development of markets and suppliers.

Network partnership Vs. ownership

Cost leadership and value for money

Technology and Information Sharing

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 200 crore.

EXPANSION PLAN

Tie up with the Wal Mart

Export is in 15 countries.

Plan to open 10000 Amul parlor by the end of the 2010.

MISSION 2020

Very ambitious future plan –

Turnover of 27000 crore.(three fold increase in the group turn over.)

Milk production 33.1 million liter/day.

Milk drying capacity 200 mt/day

AMUL (RECENTLY IN NEWS)

Milk via milk train.

Tie up with Adani Logistics.

50 wagon each capacity 24k liter.

Initial transport cost was 40 crores ,reduce it to half.

THANK YOU………..