Amul Logistics
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Transcript of Amul Logistics
GROUP NO. 2
AMIT RAI – 10
SHUBHANGI CHOUHAN – 61
KULVINDER PATHANIA – 27
PRATEEK CHHABRA – 16
ASHISH SONAWARE – 29
GAURAV CHOUHAN – 57
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
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
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 day
From 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 ofDR.B.M Vyas.
The milk collection center at village cooperative societies, werefirst automated.
Application and utilization of GIS.
Data analysis software utilization for milk production estimationand increasing productivity.
VATS network between all the level of distribution network andGCMMF.
SHIFT PROCESS
The company zeroed in on ERP as means to keep
pace with dynamically changing business
environment.
TCS was hired to guide them in its implementation.
The project was named as Enterprise wise integrated
application system (EIAS)
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….
Amul also connected its zonal offices, regional
offices and member’s dairies through VSATs.
The customized ERP- EIAS has been
implemented across the organization
integrating various operational departments.
Amul is also using Geographic Information
Systems (GIS) for business planning and
optimization of collection processes.
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.
CONT…
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.
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 sourmilk.
Sabor milk union records show 2% reduction in the amount ofthe sour milk received from the union.
Improved microbiological quality of upcoming raw milk in theform of methylene blue reduction.
This gives better shelf life to the product.
Program like Red Tag Day was launched for cleaning the milkcollection center.
AMUL PATTERN
A three tier cooperative structure:
Dairy cooperative society at village level
Milk union at district level
Milk federation at state level
ORGANIZATION STRUCTURE
District level Chairpersons, Registrar of Co-operatives, NDDB
Representative, Technical Expert, CEO
Chairpersons of Village Dairy Co-operative Societies, BOD, MD
Milk Producers, Managing Committee
State
Federation
District
Village
DECISION-MAKING
• Membership
• Price paid to milk
suppliers
• Price paid to village
co-operative societies
• Price paid to district
unions (fixed across
unions)
• Product mix and
quantity
LEVEL MEMBERS
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.
STATE COOPERATIVE MILK FEDERATION (FEDERATION)
Marketing of milk & milk products
Establish distribution network
Arranging transportation from the Milk Unions to the market.
Creating & maintaining a brand
Providing Technical Inputs, management support & advisory services.
Decide on the products to be manufactured at various Milk Unions
(product-mix)
Conduct long-term Milk Production, Procurement, Processing &
Marketing Planning
Conflict Resolution & keeping the entire structure intact
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.
PROCURNMENT CHANNEL
On an average around thousand farmers come to sell milk attheir 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 abox and the identification number is transmitted to a personalcomputer attached to the machine.
The milk is then weighed and the fat content of the milk ismeasured by an electronic fat testing machine.
Both these details are recorded in the PC. The computer thencalculates the amount due to farmer on the basis of the fatcontent.
The value of the milk is then printed out on a slip and handedover to farmer who collects the payment at adjacent window.
COLD STORAGE NETWORK
Chillers in proximity of villages
Prompt transport to district facilities for further dispatch toconsumers/ processing units.
Chilled trucks to transport processed products
Delivery to local chillers by insulated rail tankers and chilledtrucks.
Refrigerators and freezers with retailers and departmental storesto 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.
DOWNSTREAM FLOW
First legManufacturing units to company depots using 9 and 18 MT
trucks
Frozen food-below 18C
Dairy wet-0-4C
Second legDepots to WDs
Transport through insulated 3 and 5 MT TATA 407’s
Third legWDs to retailers
Transport through rickshaws according to the beat plan
REVERSE LOGISTICS
MILK CHURN
from dairy to VCS
POUCH MILK TRAY
from retailer to dairy
BOTTLE
from 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.