Amul Logistics

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Transcript of Amul Logistics

AMUL PATTERN

SUPPLY CHAIN MANAGEMENT1Group no. 2AMIT RAI 10SHUBHANGI CHOUHAN 61KULVINDER PATHANIA 27PRATEEK CHHABRA 16ASHISH SONAWARE 29GAURAV CHOUHAN 57

2AMULType - 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

3KEY FACTSAMUL means priceless in Sanskrit Amoolya

Brand name managed by an apex cooperation organization GCMMF

Worlds biggest vegetarian cheese brand

Worlds largest pouched milk brand

Largest food brand in India

Spurred the white revolution in India

Accreditation with 9001 and HACCP certification by QAS, Australia.

4GCMMF: An OverviewMembers 13 district cooperative milk producers Union

No. of Producer Members2.79 million

No. of Village Societies13,328

Total Milk handling capacity11.22 million liters per day

5ContMilk 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

6VALUE CHAIN PROCESS

7Amul Products Diversification

8PRODUCTSBread Spreads

Milk Drinks

Powder Milk

Fresh Milk

Cheese

For Cooking

Chocolate

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MARKET SHARE

10PRODUCT SHAREAmul butter - 86%

Ice cream - 36%

Chocolate - 10%

Ghee - 20%

Skimmed milk powder - 40%

11PROBLEMS TO BE ADDRESSED Logistics in collection

6 million liters of milk per dayFrom about 10,600 separate village cooperative societies.Approximately 2.8 million milk producing member.

Logistic in coordination of

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

12Cont.Supplier logistics

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

13EVOLUTION of ITThe 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.

14Shift processThe 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)

15IMPLEMENTATIONAmul 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.

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17Cont.Amul also connected its zonal offices, regional offices and members 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.

18Cont Indian Institute of Management Ahmedabad supplemented Amuls 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.

19ContThe 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.

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Automatic Milk Collection System Units (AMCUS)

21REAPING 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.

22Cont..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 Amuls 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.

23Total Quality Management ModelThere 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.

24AMUL PATTERNA three tier cooperative structure:

Dairy cooperative society at village level

Milk union at district level

Milk federation at state level

25ORGANIZATION STRUCTUREState FederationDistrictVillageDECISION-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 quantityLEVELMEMBERS

26Village 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

27District 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

28Cont..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.

29State Cooperative Milk Federation (Federation)Marketing of milk & milk productsEstablish distribution network Arranging transportation from the Milk Unions to the market.Creating & maintaining a brandProviding 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 PlanningConflict Resolution & keeping the entire structure intact

30GCMMFs Supply Chain

31Distribution ProcessCompany Dealer FranchiseeWholesaler

Retailer

Shopkeeper

Consumers

32THE CHANNEL NETWORKProcurement channel- upstream flow

Distribution channel- downstream flow

33ProcurementActivities 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.

34PROCURNMENT CHANNELOn 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. 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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36COLD STORAGE NETWORKChillers 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.

37DistributionGCMMF 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