Amul Logistics

47
SUPPLY CHAIN MANAGEMENT

Transcript of Amul Logistics

SUPPLY CHAIN MANAGEMENT

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

VALUE CHAIN PROCESS

AMUL PRODUCT’S DIVERSIFICATION

Dairy

• Cheese Products

• Bread Spreads

• Milk Drinks & Desserts

• Fresh Milk

Non-Dairy

• Instant Food

• Snacks

• Veg. Oils

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 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.

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 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

GCMMF’S SUPPLY CHAIN

DISTRIBUTION PROCESS

Company

Dealer Franchisee

Wholesaler

Retailer

Shopkeeper

Consumers

THE CHANNEL NETWORK

Procurement channel- upstream flow

Distribution channel- downstream flow

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.

THANK YOU………..