Summer Training Report at SUMUL_“SURAT DISTRICT CO-OPERATIVE MILK PRODUCER’S UNION LTD”

“SURAT DISTRICT CO-OPERATIVE MILK PRODUCERS’ UNION LTD”

VIVEKANAND COLLEGE FOR B.B.A. 1

1. • Profile of the Company & Industry 2.

2.• Marketing Department 24.

3. • Human Resource Department 68.

4.• Production Department 90.

5.• Finance Department 121.

6.• Bibliography 144.

7.• Annexure 145.

SR.No. PAGE NO.CONTENTS



No. Contents Page no.

Chapter –1 PROFILE OF THE COMPANY & INDUSTRY 2

1.1 Company Overview

1.2 Introduction

1.3 History

1.4 A glimpse picture of industry

1.5 Awards received by sumul

1.6 Milestone of Sumul Dairy

1.7 Objectives of Sumul Dairy

1.8 Sumul’s mission & vision statement

1.9 Work area of sumul

1.10 Unit of Sumul and Their Capacity

1.11 Turnover of sumul

1.12 Organizational Structure of SUMUL

1.13 Number of Departments in SUMUL



11..11 CCOOMMPPAANNYY OOVVEERRVVIIEEWW

Name : (SUMUL)

Surat District Co-operative Milk Producers’ Union Ltd.

Address : Surat District Milk Producer’ Union Ltd.

Post Box No.-501,

Sumul Dairy,

Surat- 395008

PH: 2537693, 2538717, 2531666, 2531137

Fax: 0261-2533572

Owner : P.R.Patel

Bankers : The Surat District Co-operative Bank Ltd., Surat

State Bank of India, Surat

Sarvoday Sahakari Bank Ltd., Surat

Surat Nagrik Sahakari Bank Ltd, Surat

DENA Bank, Surat

I.C.I.C.I. Bank, Surat

Bank of India, Surat

H.D.F.C. Bank, Surat



Board of directors:

1.) Shri Manubhai Amthabhai Patel

Chairman

Representative, Nihali Dudh Utpadak S.M. Ltd,

2.) Shri Sudambhai Raghunathbhai Patel

Vice Chairman

Representative, Velda Vibhag Dudh Utpadak S.M. Ltd.

3.) Shri Pravinbhai Namlabhai Gamit Representative, Vyara Dudh and Shakbhaji Utpadak S. M. Ltd,

4.) Shri Arvindbhai Singabhai Gamit Representative, Pipalkuwa Dudh Utpadak S.M.Ltd,

5.) Shri Jayeshbhai Natvarbhai Patel Representative, Delad Vibhag Dudh and Shakbhaji Vechan S.M. Ltd,

6.) Shri Jitendra Dhirajlal Desai

Representative, Uchchal Dudh Utpadak S.M. Ltd,

7.) Smt.Sumatiben Balavantrai Vashi

Representative, Dindoli Mahila Dudh Utpadak S.M.Ltd.

8.) Shri Manojbhai Naranbhai Patel Representative, Shekhpur Dudh Utpadak S.M. Ltd,

9.) Shri Shivabhai Babubhai Patel Representative, Naugama Dudh Utpadak S.M. Ltd,

10.) Shri Ramanbhai Ukadiyabhai Gamit Representative, Zankhala Dudh Utpadak S.M. Ltd,

11.) Shri Bhupendrabhai Ratilal Desai Representative, Valod Dudh Utpadak S.M. Ltd,

12.) Shri Arvindbhai Bhagvanjibhai Patel Representative, Rampura Dudh & Shakbhaji U.S.M. Ltd.



13.) Shri Shantilal Kalyanjibhai Patel Representative, Bagumra Dudh U.S.M.Ltd

14.) Shri Jaysingbhai Dungariyabhai Vasava

Representative, Dhanavad Dudh Utpadak S.M.Ltd.

15.) The District Registrar,

Representative, The Registrar, Co-op. Societies,

Gandhinagar, Gujarat State.

16.) Shri P. Chellapa / Dr. G.P. Vijya Representative, N.D.D.B., Anand.

17.) Dr. S. T. Desai / Shri S.K. Bhalla Representative, G.C.M.M.F. Ltd, Anand.

18.) Shri Jayesh Harshadbhai Desai

Managing Director, Ex. Officio Member

Secretary. Sumul dairy, Surat.

Date of registration: 22nd August, 1951

Registered Office: Po. Box-501, Sumul Dairy, Surat-395 008. (Gujarat State)

Auditors: Shree Special Auditor (milk) milk audit office, Surat.

Date of commissioning of Pasteurization Dairy Plan: March, 1968

Dairy Plant capacity at the time of commissioning: 50,000 liters per day

Present capacity of Dairy Plant: 5, 00,000 liters per day

Milk Powder Drying capacity: 12.5 Mts. per day



Milk Chilling Plants along with capacity of Milk Chilling:

No.

Chilling Center

Establishment

Capacity in LTPD

Employees

Distance from

Surat (km)

1 Sumul dairy 1951 5,00,000 591 0

2 Bajipura 1975 3,00,000 113 50

3 Uchchal 1982 1,00,000 49 105

4 Navi Pardi 1996 2,00000 66 25

5 Nizer 63,000 16 175

6 Sumuldan 1970 200 MTPD 96 18

No. of Milk Producers Co-operatives:- 956

Total membership and Nos. of Primary Milk Producers' Cooperatives. :

Milk Cooperatives Managed by women: 81

No. of Mobile Veterinary Clinics: 22 No. of Veterinarians: 40 No. of A.I. Centers: 130 Cattle feed Mixing Plant capacity: 300 Mts. per day

Mineral Mixture Plant: Production and sale: 45000 packets for Milk Producers

Category of the society Number of societies Memberships

Tribal 898 171502

Non-tribal 79 32703



11..22 IINNTTRROODDUUCCTTIIOONN

Sumul or Surat Milk Union Limited, which is now renamed as The Surat District

Co-operative Milk Producers' Union Ltd, is one among the 12 district unions which acts

as manufacturing units of dairy products for (G.C.M.M.F.) Gujarat Co-operative Milk

Marketing Federation Limited.

The Sumul district co-operative milk producer’s union ltd (SUMUL Dairy) is a

co-operative endeavor committed to help marginal farmers and down trodden tribal to

lead to a healthy life and better standard of living through scientific animal husbandry

practices. Today’s Sumul enjoys the pride to serve milk and milk products to popular in

Surat city and surrounding towns of it.

Sumul is holding strong brand equity in surat district and command more than

70% of the liquid milk in surat city, to make the distribute system fast and the delivered

milk in time they have as many as milk transportation routes and 1531 agents

(1386 regular and 145 full time).

The area of operation of sumul is the entire district of sumul. The present milk

procurement of 160,929,736 liters of milk annually makes it the third largest union in the

state after the AMUL and Mahesana dairy. The present market of Surat for liquid milk is

around 4.5 lack liters per day. This has necessary active development of “by product”

market. Products so far introduced are paneer, ghee, flavored milk, sweet, shrikhand,

lassie, butter milk etc...Sumul consist of 13 board of directors one each of 13 talukas of

Surat district and they from themselves elect the chairman. The total numbers of

employees are about 1100 besides the contract workers.



Under Sumul’s activities, Surat district is now firmly established as a milk shed

and is growing from strength to strength.

Hence, the Surat district co-operative milk producer’s union ltd, SUMUL is trade

name and literally meaning sound price, came in to existence on August 22, 1951…

The formal commissioning of the pasteurization plant on March 17, 1968 was a turning

point for sumul.

1.3 History:

In the year 1939 Sardar Vallabhbhai Patel went and meets the farmers of Anand

and told them that for the trade of milk the dairy was necessary. During that time there

was only one dairy “POLSUN DAIRY” which belongs to British’s and they use to give

very less price for milk to the Indian Milkmen. At that time a person named Tribhuvandas

Patel came forward to take the leadership. In order to support the Indian farmers

“AMUL DAIRY” was established in the year 1946. DR. Kurien was appointed at this

dairy. Dr. Kurien along with Tribhuvandas Patel took the leadership. Then after Indian

becomes independent in the year 1947. In the meantime AMUL Dairy got order from the

WHO (World Helth Organisation)to produce milk Powder from buffalo milk. Dr. Kurien &

Mr. Dalaya found the technique of producing milk from buffalo milk. After looking at this

Lal Bahadur Shatri took the visit of Ajampur village and promised them to provide with

more money for the systematic development of the dairy industry. For the proper

development of the dairy industry N.D.D.B. (The National Dairy Development Board) was

established at Anand.

NDDB started……… operation-1) Programmer for all dairies in 1971-72.

In the year 1977 operation flood-2)

Transportation machinery & pressmen of milk at low cost and give importance. In

the year 1990-operation flood-3)

Here the farmers were, made aware about their right & responsibilities high productivity

of milk at low cost & so the co-operative of development programs started.

In the year 1998-99 two million tone of milk was produced in Indian & Indian becomes

the world’s first milk producing country. Which is more then 68 million of American.

So it was called “white revolution”



SUMUL has three chilling center at Bajipura, Navi Pardi and Uchchal for ensuring

safe delivery of raw milk to SUMUL where the milk is processed and pack into various

type of liquid milk and by product to improved the nutritional feed given to the cattle at

village level, the co-operative has establishment a cattle feed factory at chalthan. Sumul

also has oil refined oil at the village of DCS level.

1.4 A GLIMPSE PICTURE OF INDUSTRY:-



1.5 AWARDS RECEIVED BY SUMUL

Award Medal Award Title Year Awarded by

National Energy

Conservation

Award

2007-08

Ministry of Energy

Government

of India

National Enterprise Honour

Award

2007-08

Indian Society For

Industry &

Intellectual

Development

National Productivity Award 2007 Ministry of

Agriculture

Award for Excellence

2007 Federation of

Gujarat Industries,

Vadodara

Business Leadership

Develoment Award

2007

Indian Economic

Development and

Research

Association, Delhi

"Excellence in Service"

Award

2007 South Gujarat

Hotel And

Restaurant

Association

National Energy

Conservation Award

2007 Ministry of Energy

Government of

India



National Dairy Product

Judging Contest

Certificate

2006 Alumna

association and

college of dairy

science

Gram Vikas Award

2006 Federation of

Indian Chamber of

commerce

National Energy

Conversation Award

2006 Ministry of Energy

Government of

India

Golden Peacock Award

2006 Institute of Director

(International

Institute)

Manthan-AIF Award

2006 Online Integrated

Computerized

Systems (OICS)

Bajaj Fair Business Award

2005-06 Amazing

Jamanalal

Bajaj Fair Award

FGI Award

2005-06 Federation of

Gujarat Industries,

Vadodara

The 18th Annual CIO 100

Award

2005 CIO 100 Award



Commendable efforts and

achievements in the field of

'Industrial Relations'

2004 Federation of

Gujarat Industries,

Vadodara.

Runners up at CSI-TCS

Award 2003-04 for Best IT

Usage

2004 Computer Society

of India

Intelligent Enterprise

Awards 2004

2004 Computer

Associates

Best Organization of the

District

2003-04 Surat Jilla

Sahakari Sangh,

Surat

Best Garden of the

Company of Surat City

2003-04 Surat Municipal

Corporation, Surat

Enfuse National Award

For

Energy Efficiency

Excellence

2003-04

Energy & Fuel

Users Association

of India,

Chennai

Management Excellence

Award - 2002

2002-03 Surat

Management

Association, Surat

IMC Ramakrishna Bajaj

Award Merit Certificate

2002

2002-03 Indian Merchant

Chamber, Mumbai



Manager of the year 2001

2001-02

Surat

Management

Association, Surat

Birla Cellulosic Award for

Small Group Activity

2001-02 Birla Cellulose,

Kharach

National Productivity Award

(Dairy Development &

Production Sector) - 2nd

2001-02

National

Productivity

Council, New

Delhi

Quality Excellence Award

2000-01

Surat

Management

Association, Surat

Jamnalal Bajaj Fair

Business Practice Merit

certificate

2000-01

Council for Fair

Business Practice,

Mumbai

National Productivity Award

(Dairy Development &

Production Sector) - 2nd

2000-01

National

Productivity

Council, New

Delhi

Appreciation Award for

Total Productivity

maintenance

2000 Quality Circle

Forum of India,

Vadodara

Total Productivity

maintenance Award

1999-00

Ahmedabad

Management

Association,

Ahmedabad



Appreciation Award for

Total Productivity

maintenance

1999 Quality Circle

Forum of India,

Vadodara

Certificate of merit from

National Productivity

Council

1998-99 National

Productivity

Council, New

Delhi

Council for Fair Business

Practices

1993 Council for Fair

Business Practice,

Mumbai

Jamnalal Bajaj fair Practice

Award

1992-93 Council for Fair

Business Practice,

Mumbai

National Productivity Award 1990-91 National

Productivity

Council, New

Delhi

Sardar Patel Saksharta

Award

1989-90 South Gujarat

University, Surat

National Productivity Award 1988-89 National

Productivity

Council, New

Delhi



1.6 Milestone of Sumul Dairy



1.7 OBJECTIVES OOFF TTHHEE SSUUMMUULL DDAAIIRRYY

The Sumul Dairy was established with the following objectives:

To provide year round milk market for their surplus milk and to earn

reasonable returns.

To provide maximum overall net returns to the producers and general

satisfaction to the consumers.

To procure milk and process of milk into good quality milk and milk

products to market it at most economically.

To increase milk productivity at most economic rate by providing technical

input services to the producers.

To increase milk production and to reduce the cost of production.

FUTURE OBJECTIVES OF SUMUL: -

The Sumul Dairy shall provide proper Nutrition and Good Health to its

customers in addition to achieving customer delight.



TECHNIQUES EMPLOYED FOR REALZATION OBJECTIVES: -

The underlying principles of the techniques being employed to realize the objectives are

listed as under:

To increase the milk production potential and productivity in the milch bovine population

of the milk shed area at economic costs by bringing a positive change in:

Genetic structure of milch animals by implementing accepted Breeding

Plans/Policies (selective breeding in buffaloes and cross-breeding in cows using

Pedigreed Jersey OR H.F. Bulls semen) and by timely and effectively breeding them

with due follow-up to bring down the long dry periods within the desired limits.

Management of animals for exploiting they’re full potential of productivity at economic

rates.

Milk procurement practices, speedily, efficiently and economically with least source

of milk.

Milk handling processing & conversion as per the concept of modern dairying.

Milk marketing, packing, transport and retailing system to meet the consumers'

demands effectively, economically and efficiently with no undue accumulation of milk

and milk products.

Management of Union at the district level and societies at the village level most

efficiently and on sound co-operative lines, keeping the overhead expenditure within

the prescribed limits and also maintain the status of Audit Classification "A" on a

continued basis, under the continuous and concurrent audit system.



1.8 SUMUL’S MISSION & VISION STATEMENT:-

"WE ARE SOCIALLY RESPONSIBLE ORGANISATION WITH COMMITMENT TO CONSUMER DELIGHT AND RESPECT FOR ALL. WE BELIEVE IN GROWTH AND CONTINUOUS IMPROVEMENT THROUGH TEAMWORK, TRUST & EXCELLENCE, WITHOUT COMPROMISING OUR HONESTY AND INTEGRITY"

It is quite obvious from the mission statement of the Sumul; the organization is

committed to customer satisfaction and believes in providing the highest quality of

product to them. Infect, for ensuring highest quality product, it has already put into

practice TPM and TQM tools in the organization besides many Quality Circle (QC) and

Small Group Activity (SGA) operating in the organization to achieve the vision and

mission.

Sumul's Vision Statement:

Year 2006-07 2009-20

Turnover RS. 607 Crores RS. 4000 Crores

Milk Procurement

6,59,682 kg/day 14,10,000 kg/day

Milk Sale 595,595 Liters/Per day

13,00,000 Liters/Per day

Quality ISO 9001 & HACCP

ISO 22000 & ISO 14001

Production cost

Minimum Production

Cost

MPC through 100% automation

Distribution System

Consumers oriented,

Quick and

effective

Consumers oriented, Cost Effective Distribution, Cost

Effective Vertical & Horizontal

Distribution



1.9 WORK AREA OF SUMUL

SUMUL dairy is located near railway station road in Surat. It covers 15,000 – acre land. Sumul provides milk collection facilities at the producer’s door in

each village co-operative, where milk is speedily, efficiently and economically transported

twice daily to its dairy plant and chilling centers for processing and marketing.

Since the milk procurement system has been extended far and wide in the entire

district. Sumul have five chilling center at Bajipura, Uchchal, Navi Pardi, Chaved and

Dediapada site at a distance of 50,105,25,110,146 km respectively from Surat city. The

chilled is then transferred to the main plant at Surat railway station road.



1.10 UNIT OF SUMUL & THEIR CAPACITY

Unit

Place

Capacity

Employees

Distance From Surat

SUMUL DAIRY Surat 5 Lakh LTPD 591 0 km

Bajipura Chilling Centre

Bajipura (B.C.C.) 3 Lakh LTPD 113 50 km

Navi Pardi Chilling Centre

Navi Pardi (N.P.C.C.)

2 Lakh LTPD 66 25 km

Uchchhal Chilling Centre

Uchchhal (U.C.C).

1 Lakh LTPD 49 105 km

Nizer Chilling Centre

Nizer 63,000 LTPD 16 175 km

Chasvad Chilling Centre

Chasvad

(C.C.C.)

30,000 LTPD 100 km

Dediapada

Chilling Centre

Dediapada

(D.C.C.)

30,000 LTPD

135 km

Sumuldan Factory

Chalthan (S.D.F.)

200 MT PD 96 18 km

These 6 chilling center have provided have provided equal opportunities of milk

marketing to the distantly inhabited tribal milk producers, which aids the economy of their

milk production enterprise or else they would have been obliged to dispose of their milk to

the middlemen at very low price. These chilling centers were established with a view to

improve the quality of milk and ease pressure at its headquarters. A large plot of area was

bought while establishing Navi Pardi Chilling Center keeping in mind to shift the dairy

plant from city, if the need arises in future.



1.11 TURN OVER OF SUMUL

From the study of the above diagram, we can see that Sumul has made a

continuous progress in their profit making figures. The present profit of the firm is

790 crores which is 90 crores more than the profit of the previous year

0

100

200

300

400

500

600

700

800

94-95 95-96 96-97 97-98 98-99 99-2000

2000-01

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

2007-08

2008-09

149184

234288 290 311

345 353 382

485536 548

647700

790

YEAR CARORE

94-95 149

95-96 184

96-97 234

97-98 288

98-99 290

99-2000 311

2000-01 345

2001-02 353

2002-03 382

2003-04 485

2004-05 536

2005-06 548

2006-07 647

2007-08 700

2008-09 790



1.12 ORGANIZATIONAL STRUCTURE OF SUMUL



1.13 NUMBER OF DEPARTMENTS IN SUMUL DAIRY:-

There are 10 departments at Sumul, they are as follows.

1. HR department

2. Finance department

3. Sales & Marketing department

4. Veternity Department

5. Production & Engineering Department

6. Accounts Department & Audit Section

7. Assembling Department

8. Quality Department

9. Store & Purchase Department

10. Information Technology Department



Chapter – 2 MARKETING DEPARTMENT 24

2.1 Hierarchy Structure of Marketing Department

2.2 Objective of Marketing Department

2.3 Marketing environment (Competition)

2.4 Product mix

2.5 Growth path of Sumul product

2.6 An overview of Sumul’s products & Sales

2.7 Milk & its nutritive value

2.8 Packaging & Labeling

2.9 Pricing policy (Price of Product)

2.10 Organisation’s buying process

2.11 Product Life Cycle (PLC)

2.12 Channel of distribution

2.13 Product Distribution System

2.14 Promotion policy

(A) Promotional Activities (System of approaching to the Customers) (B) Other Promotional Activities

2.15 Customer satisfaction

2.16 Milk marketing system of sumul

2.17 Product Marketing

2.18 Marketing Approach

2.19 Marketing / Sales Department at a glance

2.20 Customer value management

2.21 Format for the marketing plan for the Year



Introduction

Market: -

The common usage of market means a place where goods are bought or sold. In

its strict meaning market need not necessarily mean a place of exchange.

Marketing: -

Marketing is known as important and powerful exchange function. Marketing is

concerned with selling but, now a day the concept has enlarged its meaning. We know

that a product is provided with the aim of sale. The aim producer totally depends on

marketing. Without marketing no unit can run. It covers marketing research, new product

development and so many other important functions.

“Marketing is the process of discovering and translating consumer needs and wants into product and service specifications, creating demand for these products and services and then in turn expanding this demand.”

Sumul’s milk marketing in Surat city is monitored, eliminating costly sales-booths

and though regular and assured twice a day supply of milk to 1662 concessionaires

(Agent) and 198 institutional buyers, through 85 contractors’ route vehicles. There is

guaranteed cash inflow of the sales proceeds on day-to-day basis and safe return of

crates etc. to the Dairy.

The standardized / pasteurizes milk is dispatched to the city twice a day to the

network of concessionaires (Selling it on behalf of Sumul on a commission basis). The

institutional buyers are supplied milk in sealed cans. Contractor’s trucks carry milk from

the Dairy Plant to the places of these concessionaires who caters to the domestic

demand of milk in their respective earmarked areas.



Marketing Manager(Manish M. Bhatt)

Senior Executive Officer

Senior Executive

Junior Executive

Senior Assistant

Junior Assistant

Workmen

2.1 Hierarchy Structure of Marketing Department

2.2 Objectives of Department:

Increase the yearly sale of sumul products by 15 present in Comparison of last

year’s same month.

To monitor the product and the storage condition including GMP and distributors

parlor retailers levels. The monitor internal and external customer’s satisfaction

level.

Training and awareness to customer regarding ISO-9000, ISO-14000, HACCP,

GMP and Sumul products about 1000 customer per year.

Appoint 5 new agents per month to make milk easily available in market.

To take 25 milk awareness programs at various schools in Surat.



2.3 Marketing environment (Competition):

The marketing environment surrounds and impacts upon the organization. There are

three key perspectives on the marketing environment:

The micro-environment

The macro-environment

The internal environment

The micro-environment:

This environment influences the organization directly. It includes suppliers that

deal directly or indirectly, consumers and customers, and other local stakeholders.

Micro tends to suggest small, but this can be misleading. In this context, micro describes

the relationship between firms and the driving forces that control this relationship.

It is a more local relationship, and the firm may exercise a degree of influence.

The macro-environment:

This includes all factors that can influence an organization, but that are out of their direct

control. A company does not generally influence any laws .It is continuously changing,

and the company needs to be flexible to adapt.

The wider environment is also ever changing, and the marketer needs to compensate for

changes in culture, politics, economics and technology.

There may be aggressive competition and rivalry in a market.

The internal environment.

All factors that are internal to the organization are known as the ‘internal environment’.

They are generally audited by applying the ‘Five Ms’ which are Men, Money, Machinery,

Materials and Markets.

The internal environment is as important for managing change as the external. As

marketers we call the process of managing internal change ‘internal marketing.’



The external environment can be audited in more detail using other approaches such as

SWOT Analysis, Michael Porter’s Five Forces Analysis or PEST Analysis

The macro-environment, there may be aggressive competition and rivalry in a

market. The competitors are also affect the company’s market.

There are lots of National Level dairy, State Level, District Level and Taluka Level

Dairy in India. They are not mainly competitors but they also effects indirectly to the sales

of the Sumul in domestic market. They provide tuff competition in price level competition.

Now a days, Sumul and all other Co-operative milk producers are merge with

AMUL. Because, In all the co-operative milk producers AMUL is oldest and very famous

in the market. So all the co-operative milk producers have decided that they are sale his

milk by only one brand name of AMUL.

Because, in future any of the big competitors comes in dairy market so they can

provide tuff competition by his brand name of AMUL. The raw milk section comprises

local co-operative such as Choryasi, Payal etc.

List of Competitors:

Following some of the dairy all from the district i.e. from North Gujarat & Maharashtra:

1. Unity dairy, Uttarsanda 11. Sardar Dairy, Mehsana

2. Jeevan Shakti, Dhuliya 12. Vimal Dairy, Mehsana

3. Vishalsagar, Dhuliya 13. Royal Dairy, Gandhinagar

4. Gopi Milk Products, Puna 14. Suffal (Paneer)

5. Gautam Milk Products,Kopargoan 15. Satyam Dairy, Gandhinagar

6. Gayatri Milk Dairy 16. Sumathur dairy

7. New Suraj Dairy, vijapur 17. Mahakall Dairy, Sid

8. Sarita Milk Products, Kadi

9. Britannia (Ghee)

10. Neslte (Milk powder, Ghee)



2.4 Product Mix of SUMUL Dairy

Products Mix: “The set of all products and items that a particular seller offers for sales

to buyer.”

Homogenized Toned Milk

Liquid Milk

Whole Milk

Pasteurized Standard Milk

Milk Products

Cow Milk

Skimmed Milk

White Butter

Ghee

Butter Milk

Skimmed Milk Powder

Butter Milk

Self Developed Products

Paneer

Flavors Milk

Sweets

Shrikhand

Sumul Sugar

Sumul Tea



2.5 Growth Path of Sumul Products

Products Year

Milk distribution in bottle 3-5-1968

Establishing member of GCMMF 9-7-1973

Milk distribution in polybag 7-12-1978

Butter milk distribution in polybag 1-6-1987

Whole milk (SUMUL YA) in bulk 1987-88

Whole milk (SUMUL YA) in 500 ml 1991

Homogenized toned milk in 500 ml 1994

Homogenized toned milk in 200 ml 1995

Flavor milk 1993

Paneer 1994

Sweets 1994

Shrikhand 1995

Masala Chaas 15-8-1999

Flavored milk in 200 ml pouch 15-8-1999

Pasteurized milk in 5 liter pack 1998

Masala chass, methi chass 2000

Pizza & Ice-cream 2001

Rasgulla, Gulab Jamun,Sugar & Cow milk 2002

Tea 2003

Glabletop Packing for Milk (Plane & Flavored) 2004

Buttermilk in ESL Packing 2005

Cold Coco 2005



2.6 An Overview of SUMUL Products

Milk Products & their recipes:

Milk is the mail product that is produced by the sumul. Milk acts as a raw material

for the other products of sumul like curd, butter milk, paneer, etc. Sumul processes

variety of milks such as whole milk, toned milk, cow milk, etc because the demands of

milk are different from customer to customer sumul tries to fulfill all the demands, e.g.

people who want ‘Malai’ purchases whole milk , standardize milk is used for tea.

A white or yellowish fluid secreted by the mammary gland of animals. It consists of

emulsion of fat in water with casein and other proteins, milk sugar and inorganic salts.

The solids other that fat include protein, carbohydrates, water-soluble, vitamins and

minerals.

MILK

VITAMIN

A

D

E

K

SNF FAT

PROTEIN

MINERALS

IRON

CALSIUM

LECTORS



According to the prevention of food adulteration rules 1995,the percentage of milk,

fat and SNF in different classes and designation of milk specified respectively are as

follow: Buffalo milk (5%-6% and 9%), cow milk (3%-4% and 8.5%) recombined milk (3%

and 8.5%) double toned milk (1.5%-9%) and skimmed milk (not more than 0.5% and

8.7%) the fat percentage for the milk of Cow and Buffalo varies from state to state and is

detailed is DFA rules.

Types of Milks:

Name FAT (%) SNF (%) Pouches.

Amul Gold Milk (Whole Milk) 6 9 500 Ml & 6.0 Ltrs

Amul Shakti Milk (Standardize Milk) 4.5 8.5 500 Ml & 250 Ml

Amul Taaza Milk (Toned Milk) 3 8.5 500 Ml & 6.0 Ltrs.

Sumul Cow Milk 3.5 8.8 500 Ml

Skim Milk 0.07 9.3 500 Ml.

Buffalo Milk 5.5 9 _

PSM 4.7 8.8 _



PASTEURISED MILK

Amul Gold Milk Amul Shakti Milk

Amul Taaza Milk Sumul Cow Milk

Name of Raw Material or Ingredient:

1. Raw Milk

2. Pasteurize Skim Milk

3. Pasteurize Cream

4. LDPE Film

5. Water



PURE GHEE

Ghee Cow Ghee

Recipe:

A Product obtained from milk, cream or butter from various animal species by

means of processes, which result in the total removal of moisture and SNF contents, with

a developed physical structure. Clarified butter fat with a strong flavor is prepared by

heating makkhan.


1. Pasteurize White Butter/White Butter

2. Sour Butter

3. Hd:Ld:Hd

4. 3 layer Polyethylene Bag

5. Tin (Lacquered) 15kg size

6. 1kg/2kg Size With Corrugated Box

7. 1kg/2kg Size With Corrugated Box



PANEER

Recipe:

Milk to boiling temperature and limejuice, citric acid, or sour whey. Paneer

contain 70% moisture. The whole milk paneer should contain 50%, milk fat on dry matter

basic. In skimmed milk paneer the fat on dry matter basic should not exceed 13%.


1. Pasteurized Standardized Milk

2. Citric Acid

3. Common Salt

4. Moralized Polyester Bag

5. Pasteurized Chilled Water



FLAVORED MILK

Recipe:

Milk standardized to a certain fat percentage to which some flavor such as

chocolate and fruit syrup is added.

Flavored: : American Ice cream Soda

: Kesar Elaichi

: Elaichi

: Pista

: Rose


1. Homogenized Pasteurize Toned Milk

2. Sugar

3. Flavor

4. Color

5. Glass Bottle

6. Crown Cork



BUTTER MILK

Chhash Masala Chhash

By product obtained after the removal of butter or cream from crud by churning or

otherwise also known as ‘Chhash’.



2. Skim Milk Powder

3. Batch Starter

4. Water

White Butter


1. Pasteurize Cream 3. HM-HDPE Sheet

2. Corrugated Box 4. Pasteurized Chilled 5.Water



SWEETS

Shrikhand

A milk based sweets male from concentrated curd with a sweet and sour taste. It

is a semi-soft whole milk product prepared from curd and resembles sweetened quark.

Curd is drained of its whey by hanging it in a cloth from 4 to 6 hours to producing a solid

mass called chakka or maska. The resultant maska is mixed with the required sugar,

condiments and flavor.


1. Pasteurize Whole Milk


3. Sugar

4. Saffron (kesar)

5. Nuts (Kaju, Badam, Pista etc)

6. Poly-Propylene Cups

7. Sealing Foil

8. Corrugated Box



Elaichi Shrikhand


1. Chakka

2. Sugar

3. Elaichi (Cardamom)

Peda:


1. Pasteurize Milk

2. Sugar

3. Saffron (kesar) Powder

4. Cardamom (Elaichi)

5. Nuts (Kaju, Badam, Pista etc)

6. Paper Box

7. Oxygen Scavenger Poly Bag



Elaichi Peda


1. Milk

2. Cardamom

3. Sugar

Kesar Peda


1. Milk

2. Sugar

3. Kesar



MalaiPuri


1. Milk

2. Sugar

3. cardamom

4. Ghee

5. Pista

Other Sweets

Rasgulla Gulabjabun

Sumul Milk Powder


1. Pasteurized Skimmed Milk

2. LOPE film

3. Kraft Paper Bag



Other Products:

Khawa

A product obtains from Cow, Buffalo or mixed milk by heat desiccation of milk to

65-50% solid in an open pan. It is also called as khawa or mava.

Tea

Sugar



2.7 MILK & its Nutritive Value:-

Milk may be defined as the normal secretion of the mammary glands of females

for the nourishment of their young off-spring. Milk is a white opaque liquid and it is

supposed to have a typical, clean, slightly sweet taste and should have a clean smell.

Milk secreted for a few days after parturition and characterized by high proteins and

immune body content is called colostrums which is ideal and a must for the overall

growth of the young off-spring. From a nutritive stand point, milk is defined as the most

nearly ‘perfect food’. It supplies more of essential nutrients in significant amount than

any other single food.

Breast milk is different in its composition from cow's milk. It has higher lactose

content and lower protein content

TYPE OF MILK % FAT % PROTEIN

% LACTOSE

% ASH % BIOWATER

HUMAN 3.8 1.0 7.0 0.2 88.0

COW 4.0 3.4 4.8 0.7 87.0

BUFFALOE 7.4 3.6 5.5 0.8 82.1

CAMEL 4.5 3.6 5.0 0.7 86.2

HORSE 1.9 2.5 6.2 0.5 88.9

GOAT 4.5 2.9 4.1 0.8 88.7

SHEEP 7.3 5.5 6.1 0.4 80.7

WHALE 19.6 9.5 0.0 1.0 69.9

ELEPHANT 19.6 3.1 8.8 0.7 67.8



2.8 Packaging & Labeling:

Packaging is one of the most important factors that management must have to

consider in mind. When the raw materials are converted in the finished goods all the

products are then send to the packing room.

Here different machines are available for different types of packing. The firm is

now going for a new type of packing called “Gable top packing”. The main advantage

of such type of packing is in this packing milk remains fresh for about 10 days. Soon,

Sumul milk will be available in such type of package.

Well designed package can create convenience and promotional value.

Developing an effective package requires a number of decisions as below.

1. Identify the brand,

2. Convey descriptive and persuasive information,

3. Facilitate product transportation and protection,

4. Aid product consumption.

2.9 Pricing Policy:

The marked or announced amount of money asked from a buyer is known as basic

price-value placed on a product. Price is the one element of the marketing mix that

produces revenue. Prices are the easiest marketing mix element to adjust; product

features, channels, and even promotion take more time.

General information regarding to setting of price is it has fixed structure followed by

GCMMF at Sumul farmers are paid on the basis of kilo fat in their milk. They are paid

Rs.318 per KG of fat. Taking this as base the price of the product is being set.

Hence, the price of other product or ingredients used. In case of keser peda, kesar is

used for malaipuri certain dry fruits are used to taken into consideration and accordingly

their prices the price is set. Here the electricity expenses are also added to it. No

additional profit is being charged. Here while setting the price the care is taken that the

price of the product of Sumul is kept low equal to the precluding price of the similar

product in the market.



Price list of Sumul Products:

Price list of the various products produced by the Sumul with various quantities

are as under.

Commodity Quality Price(Rs.) Ghee 15 kg 2300

5 liter 720

2 liter 275

1 liter 150

1 liter pouch 145

500 ml pouch 74

200 ml pouch 31

White Butter 15 kg 1695

500 gm 60

Jome 200 ml bottle 8

200 ml pouch 5

Paneer 1 kg 105

200 gr 22

EIaichy Peda 500 gr 59

250 gr 30

Kesar Peda 500 gr 79

250 gr 40

Malai Puri Peda 250 gr 36

Premium Tea 500 gr 62

250 gr 33

100 gr 14

Silbver Tea 500 gr 71

250 gr 39

100 gr 16

EIaichy Shrikhand 500 gr 40

Kesar Shrikhand 500 gr 45

100 gr 10



2.10 Organisation’s buying Process:

Buying Process:

1. Sumul collects the milk from the villages.

2. The collected milk is tested against the set standard. That insures

quality of milk being received from the root level.

3. The milk is tested in lab. No compromises with the quality of milk being

received and pay the price of milk on the basis of fat.

4. The qualified milk is received at raw milk receiving Dock at dairy.

5. The received milk is transported to the dairy for the further processing.



2.11 Product Life Cycle:

The Product Life Cycle concept helps marketers interpret product and market dynamics.

It can be used for planning and control, although it is useful as a forecasting tool.

PLC theory has its share of crities.they claim that claim that life-cycle Patterns are too

variable in shape and duration.

The “Product Life Cycle” is the name given to the stages through which a product passes

over time. The classic Product Life Cycle has four stages:

Introduction Growth Maturity

decline

Product Life Cycle model:

1. Introduction:

At the market introduction stage the size of the market, sales volumes and sales

growth are small. A product will also normally be subject to little or no competition.

The primary goal in the introduction stage is to establish a market and build consumer

demand for the product.



2. Growth:

If the public gains awareness of a product and consumers come to understand the

benefits of the product and accept it then a company can expect a period of rapid

sales growth, enter the “Growth Stage”.

The growth space is characterized by a rapid increase in sales volume. So, we can

say that Sumul is now in Growth Stage. In the Growth Stage, a company will try to

build brand loyalty and increase market share.

3. Maturity

When a product reaches maturity, sales growth slows and sales volume eventually

peaks and stabilises. This is the stage during which the market as a whole makes the

most profit. A company’s primary objective at this point is to defend market share

while maximising profit.

4. Decline:

A product enters into decline when sales and profits start to fall. The market for that

product shrinks which reduces the amount of profit available to the firms in the

industry. A decline might occur because the market has become saturated, the

product has become obsolete, or customer tastes have changed.

The product life cycle concept can be used to analyze a product category,

a product from, a product or a brand and so on. Our company is at the growth

stage of the product life cycle and our company also create the new idea and

launching new product time to time and increasing sales every time.



2.12 Channel of Distribution:

1. Direct Distribution Channel:

2. Indirect Distribution Channel:

1. Direct Distribution Channel :

Sumul is handling 1900 outlets for selling their buttermilk, tea and sugar

2. Indirect Distribution Channels :

Sumul is distribution various products that are milk & other than milk there are 3

major distributors in Surat city & 19 distributors in rural areas. All dairy co-

operative society acts as a distributor for all Sumul products. In Surat city Sumul is

creates 3400 outlets; Sumul has their own 44 milk parlors which are in direct

contact with the customer.

DISTRIBUTION CHANNEL OF LIQUID MILK

So, its called one level (1 level) Distribution Channel

DISTRIBUTION CHANNEL OF DAIRY PRODUCTS

So, its called two level (2 level) Distribution Channel

DAIRY DISTRIBUTOR RETAILER CUSTOMER

DAIRY AGENT CUSTOMER



2.13 PRODUCT DISTRIBUTION SYSTEM:-

The management of dispatching milk from production (processing in case of milk)

to dispatching milk & milk products to the distributors is done in the following three main

stages, which are as follows.

1. Production to finished product system,

2. Marketing to finished product system,

3. Final product system to final dispatch.

1. PRODUCTION TO FINISHED PRODUCT SYSTEM

Steps:-

Goods are produced in production department as per the demand estimated by

the marketing department. (Demands are estimated yearly, monthly and weekly.

Final products are sent to laboratory for testing. If sample product is not

satisfactory it is sent again back to the production.

After testing the final product are packed in the cartoons.



These cartoons are sent to the finished product system.

FPS checks the receipt of the goods sent by the production and collects the

goods.

Finally the No. of cartoons is counted and this information is entered into the

oracle system.

2. MARKETING TO FINISHED PRODUCT SYSTEM

Steps:-

Marketing department takes the order from distributor on phone

Marketing department can access the quantity of the goods which are

available with the finished product system.

According to the order marketing department prepare the party wise bill.

These bills are sent to finished product system.

FPS sees the bill and loads the truck accordingly.

After goods are dispatched the closing stock is counted and the information is

entered into the register by the FPS.

3. FINAL PRODUCT SYSTEM TO FINAL DISPATCH Steps:-

FPS loads the truck according to the demand.

Driver of the respective vehicle signs the bill of the goods that is loaded in his truck

at the gate of the dairy.

Again all the cartoons are counted by the employee of dairy at the gate.

Gate keeper takes the gate pass which is attached with the bill after checking the

goods.

And finally the truck are dispatched & trucks go to the distributor.



In short the Product Distribution System is managed in this Flow-

Distributors:

SR # CODE # DISTRIBUTORS LOCATION TELEPHONE #

1 4001 Chandrakantbhai Gheewala Varachha 9824187724

2 4005 Kamleshbhai Patel Ukai 02624-233079

3 4011 Gopi Agency Sachin 2890493 / 2890023

4 4012 Bhagvati Maisuriya Kim 02621-230979

5 4014 Nitaben Shah Kadod 246998

PRODUCTION

FINISHED PRODUCT SYSTEM

ENTRY IN ORACLE SYSTEM (AFTER CHECKING STOCK)

ALL THE STOCKS CAN BE ACCESSED BY ALL THE DEPARTMENTS

BILLS ARE GIVEN IN THE FPS

ACCORDINGLY THE GOODS ARE LOADED IN THE TRUCK

TRUCKS ARE THAN DESPATCHED

FINALLY SENT TO DISTRIBUTION



6 4015 Patel Bhailal Rander 2484350

7 4016 Gurukrupa Traders Olpad 02621-221225

8 4020 Aashirwad Agency Bardoli 02622-226475

9 4021 Patel Ambalal Navsari 2482085

10 4022 Kikiben Patel Dumas ---

11 4024 Hashmukhbhai Mayavanshi Bedkuvadur 02626-231251

12 4028 Ambika Bakery Udhana 2678518

13 4031 Puja Agency Salabatpura 2616715

14 4047 Jagdamba Disributors Chalthan 02622-271446

15 4125 Sunandaben Patil Navapur ---

16 4126 Super Sales Corporation --- ---

17 4114 Yogeshbhai Desai Katargam 9825390086

18 4128 Ishwarbhai Rambhai Bari --- ---

Parlors:



SR # CODE # PARLOURS LOCATION TELEPHONE #

1 4000 Sumul Staff Society Sumul Main gate Ext. # 252 / 274

2 4002 Khedut Sahkari Jin 2 Vyara 02626-220045

3 4003 KRIBHCO Staff Society KRIBHCO 8422575

4 4004 Bardoli Sugar Staff Society Bardoli 02622-220418

5 4006 Swaminarayan Kariyana Stores Kathor 02621-256364

6 4008 Sagar Dairy & Provision Stores Vyara 02626-222401

7 4009 Kamrej Kela Mandli Kamrej 02621-252067

8 4010 Asha Dairy Katargam 2414379

9 4017 Bune Catering Station ---

10 4019 Rajendra C. Patel Ambikaniketan 2258839

11 4023 Madhi Sugar Staff Society Madhi 242141 / 241048

12 4029 Madhuben Vyas Anand Mahel 2747650

13 4030 Vasantbhai Patel Road Varachha 2556430

14 4121 Shobhaben Thakkar Gopipurat ---

15 4033 AMUL Pizza Parlor Athwagate 3464917

16 4037 Jivanlal Barwalia A. K. Road 9824136802

17 4038 Bhalala Madhubhai Katargam 2530815

18 4039 Prakashbhai Patel Kapodra 2566162

19 4041 Janak Dalal Navapur ---

20 4043 Sanjay Gaurishankar Shah Station Road ---

21 4044 Bharatbhai Patel Amroli 2495867

22 4045 Dhananjay Sukhadiya Bhagal 2311517

23 4046 Palsana Grocery Palsana 02622-263218

24 4048 Jitesh Shah Kathor 9824189931

25 4124 Shanti Provision and Dry Fruits City Light Area ---



28 4050 Sayan Sugar Staff Society Sayan

29 4051 Khadi Gram Olpad 221002

30 4052 Ilayasbawa Kosamba 02629-232314

31 4053 Sarvajanik Kanya Vidhyalaya Bardoli ---

32 4054 Kadwa Aptiva Samaj Navi Pardi ---

33 4055 Dinesh Rathod Olpad 02674-286370

34 4059 Bavchandbhai Patel Ayurvedic College 7548372

35 4061 Sevni Sahkari Mill Kamrej 02621-264509

37 4099 Vimal Patel Kadodara

38 4106 Amit Ghadiya Adajan 2680698

39 4108 Upeshkumar Patel Patelnagar 2697086

40 4110 Aahir Vamankumar Kim ---

Area covers:

The distributors NAD parlors cover whole Surat District including Surat City,

Bardoli, Vyara, Kodod, Ukai, Chatthan, Kamrej, Kim, Kosamba, Olpad, Kathor, and

Sayan. This whole district is coverd by almost 3000 retail outlets; they constantly remain

in contact with the customers.

Market Share:

In dairy industry Sumul Dairy is wide term. We are the market leaders in almost

each dairy product in Surat District.

Products Share

Ghee 70%

Paneer 50%

Shrikhand 15%



2.14 Promotion Policy

Promotion activity mainly consists of advertisement. Sumul is a co-operative

sector and so the advertisement budget is quite less. However Sumul dairy spend nearly 20 to 25 lakh on the advertisement. The contract of advertisement is with the

Venus ads. Here advertising is done through hoardings, banners, wall painting,

newspapers, and stickers etc.

Sumul as part of promotion activity helds “Sumul healthy baby contest” on

regular intervals. The participation is increasing every time the contest is being held.

Here, every one is given information about product of Sumul and their views

regarding the Sumul product. What change they want? Which other product they want?

Are also being asked shop painting is also promotion activity carried on by them.

(A) Promotional Activities: (System of Approaching the Customers):

Sumul is doing the following activities to Approach to its customers.

Advertisement:

By giving the advertising and to a local TV channel by hosting famous

anchor advertising through during festival Seasons.

Here, advertising is also done through hoardings, banners, wall painting, newspapers, and stickers etc.

Paneer Show:

In this show different items made from paneer are sold at a discount rate.



Healthy Baby Contest:

In order to popularize milk and milk products, Sumul organize every

year Sumul Healthy Baby Competition. Healthy Baby Contest is

unique contest of its kind in Surat. It is conducted each year since

1992 successfully.

Education Programs:

The firm also gives information to the cool children about cow milk

by visiting different type of schools in Surat city.

House Visits:

The companies also visit different houses and collect information

about different products of the company and also take suggestion

from the customer.

(B) Other Promotional Marketing Activities:

Changes have been done in paking and slogans of few products.

Door to door advertising is done for new product.

Facility of taking loan from bank for vehicle and refrigerator are given to agents.

A mobile van with facility to test milk show films to customers and address public

regarding the hygienic aspects of Sumul milk.

Sumul Healthy Baby Competition.

Sumul Painting Competition 2002-02 organized by Sumul & Saint Xavier’s School.

School students visiting Sumul as a part of their education to know about

production activity.



“Sumul Dairy Cooking Competition” organized by Sumul at Hotel Holiday Inn,

Surat. “Rasoi Show” organized by Sumul at Hotel Holiday Inn, Surat.

Sumul also organized ”Healthy Baby Contest” since 1992

”Healthy Baby Contest”



2.15 Customers Satisfaction:

Needs:

Hording & banners of Sumul products are used for advertisement.

Change have been done in packing & slogans of few production Door to door advertisement is done for new products. Facility of taking loans from bank for vehicles & refrigerators are given to

agents.

The schoolboys & girls, who are the future customer, are educated about

Sumul milks & milks products & its purity. A mobile van with facility to test milk, show films to customer & address

public regarding the hygienic aspects of Sumul milk.

Cash center has been opened in different areas & through bank so that the

agent can deposit their cash daily.

Feedback:

After personal visit to customers & explaining the causes of complaint.

Replacement is given for storage milk or low weight milk pouches.

If agents changes more than MRP than they are fined & even terminated.

Agents may also be terminated for his unwanted behavior.

Customer satisfaction is most important for the organization.

The organization goes for consumer survey to know their preferences &

intended Demand.

A separate wing is creating in the sales department who takes care of

customer complaint. Consumer forums in different areas are formed and

regular meeting are organized to address their grievances.

Complains are received either by the letter or telephone.

Complains are entered in to the customer complaint resister.

Seeing the nature of complaint, action is taken.



Complain:

Curding of milk

Low weight

Price changed by the agent more than MRP

Agent’s Behavior

Leakage

Complain Process Steps:

Receive the complain.

Complains are received either by the letter or telephone.

Complaints are entered in to the customer complaint resister.

After the proper evaluation of complains the necessary steps or action are

taken by the marketing department.

2.16 MILK Marketing System of SUMUL:

Sumul’s milk marketing in Surat city is monitored by eliminating costly sales-

booths and though regular and assured distribution of milk, twice a day supply of milk to

1662 concessionaires (Agent) and 198 institutional buyers, through 85 contractors’

route vehicles. There is guaranteed cash inflow of the sales proceeds on day-to-day

basis and safe return of crates etc. to the Dairy. The standardized / pasteurized milk is

dispatched to the city twice a day to the network of concessionaires (Selling it on behalf

of Sumul on a commission basis).

The institutional buyers are supplied milk in sealed cans. Contractor’s trucks

carry milk from the Dairy Plant to the places of these concessionaires who caters to the

domestic demand of milk in their respective earmarked areas.



Both economic and operational advantages of keeping the sales-counters at the residential places of the Agents are distinct as:

No creation or maintenance of these sales-counters is involved.

All the security of milk, material and money.

Operational convenience to deliver milk and off tack of crates etc. from

these permanent places at any time, including odd hours.

Utilization of Agent’s family, labour and residential place and hence very

economic operation for them and the Dairy.

Familiarity of the Agents with locality and vice-versa and hence smooth

dealing under mutual confidence.

The institutional buyers include hotels, restaurants, canteens, hotels, charitable

institutions, milk vendor’s etc. who enter into contracts for purchase of milk for the entire

year and receive milk as per the contract, twice-a-day, in sealed cans, through the

contractor’s milk routs and make the full payment to the Dairy Representative just at the

time of delivery of milk to them.

The contractors are responsible for any shortage, breakage OR pilferage of milk

and material occurring during transportation. While the Agents hold the responsibility of

any such incidence occurring at their level. There is regular, assured and smooth in-flow

of cash from milk sales from the Agents to the Dairy’s Cash Collection Centers on day-

to-day basis without involving a bank for collection of sales-proceeds and maintaining

individual accounts.

The Agents sale milk delivered to these Agents during the day and they develop

the sale-proceeds daily at the nearest Cash Collection Centers of the Dairy.

The Dairy runs these Centers for all 365 days in a year for regular day-to-day

receipt of cash amount. For any default on the part of the Agent, such as nonpayment or

short-payment of cash, the Dairy takes corrective action almost instantaneously.

Sumul also encourage a Small Savings Scheme for the Agents by deducting a

particular amount from the commission every month and transferring the same into their

deposit amount, thereby allowing the deposit to build-up every month, Currently the

commission of 40 paisa per liter is paid to the Agent.



2.17 PRODUCT MARKETING:-

Party Orders: Sumul parlors and Sumul dairy gives a proper attention to

bulk and party orders. For that dairy or parlor even gives a home delivery facility if

it is convenient.

Online Shopping Facility: Advertising and Free Offer Information.

Information technology is growing very fast and Sumul always tries to lead

in technology. Customer should get the advantage of these technologies for this

reason Sumul Started online shopping facility to Direct Customer as well as

Distributor and parlor also net facilities like.

Direct Customer www.sumuldairy.com

Distributor and parlor www.b2bsumul.com

Website "www.sumuldairy.com" for online product information & takes online orders.

2.18 Marketing Approach:-

SURAT CITY

STRATIFICATION OF SURAT CITY IN ZONE

IDENTIFICATION OF ZONES HAVING SHARE LESS THAN 70%

STRATIFICATION OF ZONES INTO SUBZONES

IDENTIFICATION OF SUBZONES HAVING SHARE LESS THAN 70%



SALIENT FEATURES FROM MIS:-

• Zone Having 200 Households per agent has share more than 70 %

• Zone Having 1500 - 1800 Population per agent has share more than 70 %

• Zones where customers are ignorant about the quality of milk are having fewer

shares (slum areas).

IMPLEMENTATION PLAN:-

• Identify Sub zones having share less than 70 %

• Number of agencies are increased considering

(A) 200 Household per agent,

(B) 1500 Population per agent,

• Study is done in Sub zones having share less than 70 %

• For competitors’ Strengths/ Weaknesses, their sales volume & type of milk

preferred by the consumers.

• The Consumer Awareness

(A) Live testing of milk in the market to show the difference between our milk and

competitors’

(B) School programmers.

2.19 Marketing / Sales Department at a glance:

Population of Surat City: 33, 00,000

Market Size: 8, 25,000 Liters/ day.

(Population*250ml per capital)

Average sale (2006-07) is 6, 70,000 Liters milk per day

Growth: 14.82.0%

Market share: 77%

Competitors in packed milk:18-20 having sale 25000-30000 liters in total per day.

Raw milk: vendors and local organized dairy.



Milk Procurement:(2008-09)

Milk Sales Volume (Liters)-(2008-09



2.20 CUSTOMER VALUE MANGEMENT

CUSTOMER VALUE MANAGEMENTTOTAL QUALITY MANAGEMENT

:MAKING QUALITY A STRATEGIC WEAPON : The four stages

• Confirm to requirement

•Do it rightthe 1st time

•Reduce scrap & Re-work

•Get closer to customer

•Understand needs and expectations

•Be customer driven

•Get closer to themarket (customer & competitors customer) than your comp. Do•Use customer valueanalysis to viewperformance versescompetitors.•Understand clearlywhy orders are won or lost

•Be market driven

•Satisfy all stakeholder •Use customer valueanalysis to :-- Track competitiveness.--Decide what business to

be in.--Make capital investments

•Align entire organisation(people & processes) with the evolving needs of the market.

Stage-1 Stage-4Stage-3Stage-2

FocusInternal operation

Customers Targeted Market and performance v/sCompetitors

Critical role of quality & Volume in overall strategic frame work



2.21 FORMAT FOR MARKETING PLAN FOR THE YEAR:-

ITEM CURRENT STATUS

DESIRABLE STATUS

STRATEGIES IMPLEMENTATION PLAN

WHO WILL DO IT

WHEN IT WILL BE DONE

Milk sale

Distribution

Distribution cost

Grievance handling

Market returns

TQM activity

Customer relations



Chapter – 3 HR DEPARTMENT 68

3.1 About the Personnel Management

3.2 Hierarchy of HR department

3.3 Board of Directors

3.4 HR Objective

3.5 Role of HR in sumul

3.6 Human Resource activities

3.7 Recruitment & Selection process

3.8 Human Resource Planning

3.9 Training & Development system

3.10 Performance appraisal system

3.11 Promotion & Transfer policy

3.12 Wage & Salary structure

3.13 Employees welfare

3.14 Motivation Programmers for the Agents

3.15 Personnel Information System & Pay-roll Accounting System



3.1 About the Personnel Management:-

Personnel department is the key department of the any business.

Personnel department is the main part behind the company’s success or failure.

“Personnel management is that part of management, which concerned with people at

work and with their relationship within an enterprise.”

According to Flippo, personnel management or Human resource management

is “the planning, organizing, directing, and controlling of the procurement, development,

compensation, integration, maintenance and reproduction of Human resource to the end

that individual, organizational, and societal objectives are accomplished.”

In any organization, human resource management is very useful to improve and

maintain relation between management and employee, trade union and management.

It also helpful to organization to retain efficient workforce. It watches each and every

movement of employees in the organization. Its aim is, to bring and develop into an

effective organization.

Therefore, every organization needs separate personnel department & likewise

“SURAT DISTRICT CO-OPERATIVE MILK PRODUCERS’ UNION LTD” (SUMUL)

also has separate personnel department, which handled all the function of the personnel.

Personnel management is a continuous process. It cannot stop. Personnel

management is a never-ending process. It helps in achieving objectives of company.

This is done by proper perform of personnel function like recruitment, selection, training

& development, labor activity, motivation, welfare etc. it also helps to keep a smooth

relationship between employers & employees.

Sumul believes that the most significant resource is its Human Resource and

Sumul’s Success in the long run depends very much on the quality of its human

resources. Human resource comprise the aggregate of employee attributes including

knowledge, skill, experience and health, which are presently available to the organization

for the achievement of its goal, objectives and service to the society.



3.2 Hierarchy of Organization:

Board of Director

Managing Director

(Mr. Jayesh H.Desai)

General Manager

Assistant General Manager

Manager

Dy. Manager/Assistant Manager

Executive Officer/ Sr. Exe. Officer

Sr. / Jr. Assistant

Skilled / Unskilled Work Man



3.3 BOARD OF DIRECTORS:

No Name Details Phone No.

1. Shri Manubhai

Amthabhai

Patel

Chairman

Representative, Nihali Dudh Utpadak

S.M. Ltd,

At.: Nihali, Po.: Dholikui, Tal.:

Mahuva.394250

(02625) 258158

Mo.98241-10316

99799 11122

2. Shri Sudambhai

Raghunathbhai

Patel

Vice Chairman

Representative, Velda Vibhag Dudh

Utpadak S.M. Ltd.

At. Velda Tal. Nizar 394370

( 02628 )

244238 / 244228

3. Shri Pravinbhai

Namlabhai

Gamit

Representative, Vyara Dudh and

Shakbhaji Utpadak S. M. Ltd,

At. & Po.: Vyara, Tal.: Vyara.394 650

(From 01-07-2006)

(02626) 220558

Mo. 99794 84300

4. Shri Arvindbhai

Singabhai

Gamit

Representative, Pipalkuwa Dudh

Utpadak S.M.Ltd,Pipalkuwa,

Po.:Pipalkuwa, Tal.: Songadh.394660

(02624) 251088

Mo. 94268 69388

5. Shri Jayeshbhai

Natvarbhai

Patel

Representative, Delad Vibhag Dudh And

Shakbhaji Vechan S.M. Ltd,

At. Delad Po.: Sayan, Tal.:

Olpad.394540

(02621) 242405

Mo. 94268 87393

6. Shri Jitendra

Dhirajlal Desai

Representative, Uchchal Dudh Utpadak

S.M. Ltd,

At & Po.: Uchchal ,Tal.:

Uchchhal.394375

(02628)

231106/231123

Mo. 94261 88775



7. Smt.Sumatiben

Balavantrai

Vashi

RepresentativeDindoli Mahila Dudh

Utpadak S.M.Ltd.

At & Po.:Dindoli,Tal.:Choriyasi.(From 01-

07-2006)

(02621) 242526

Mo. 94261 48670

8. Shri Manojbhai

Naranbhai Patel

Representative, Shekhpur Dudh

Utpadak S.M. Ltd,

At Shekhpur Po.: Sayan,

Tal.:Kamrej.394180

(0261) 2272083

9. Shri Shivabhai

Babubhai Patel

Representative, Naugama Dudh

Utpadak S.M. Ltd,

At Naugama(Nani) Po.: Simodra,Tal.:

Mangrol.394410

(02623) 233288

Mo. 94271 66144

10. Shri Ramanbhai

Ukadiyabhai

Gamit

Representative, Zankhala Dudh Utpadak

S.M. Ltd,

At & Po. Zankhala Tal.: Mandvi.394160

(02623) 221396

Mo. 98795 73064

11. Shri

Bhupendrabhai

Ratilal Desai

Representative, Valod Dudh Utpadak

S.M. Ltd,

At & Po. Tal.: Valod.394640

(02625) 220151

12. Shri Arvindbhai

Bhagvanjibhai

Patel

Representative, Rampura Dudh &

Shakbhaji U.S.M. Ltd.

At.Rampura. Po.Varad.

Tal:Bardoli.394602

(02622)

263308/263309

Mo. 98980 63308

13. Shri Shantilal

Kalyanjibhai

Patel

Representative, Bagumra Dudh

U.S.M.Ltd At & Po.: Bagumra

,Ta.:Palsana.

(02622) 220431

Mo. 98252 55975

14. Shri Jaysingbhai Dungariyabhai Vasava

Representative, Dhanavad Dudh

Utpadak S.M.Ltd.

At & Po.Dhanavad, Tal. Umarpada.

(02629) 253542

Mo. 94271 77812



15. The District

Registrar

Representative, The Registrar, Co-op.

Societies,

Gujarat State, Gandhinagar.

(0261)-2472051 (O)

16. Shri P. Chellapa

/ G.P.Vijya

Representative, N.D.D.B., Anand. ------

17. Dr. S. T. Desai Representative, GCMMF Ltd, Anand. ------

18. Shri S.K. Bhalla Representative, GCMMF Ltd, Anand. ------

19. Shri Jayesh

Harshadbhai

Desai

Managing Director, Ex. Officio Member

Secretary. Sumul dairy, Surat.

Mo. 99799 22122

98241 36863

3.4 HR Objectives:

To develop and sustain core values.

To develop business leaders for tomorrow.

To provide job contentment through empowerment, accountability and

responsibility.

To build and upgrade competencies through virtual learning, opportunities

for growth and providing challenge in the job.

To faster a climate of creativity, innovation and enthusiasm.

To enhance the quality of life of employees and their family.

3.5 Role of HR in SUMUL:

Alignment of HR vision with Corporate Vision.

Shift from support group to strategic in business operations

HR as a change agent.

Enhance productivity and performance by developing employee competency and

potential.

Developing professional attitude and approach

Developing ‘Global Managers’ for tomorrow to ensure the role of global players.



3.6 Human Resources Activities:

The main activities of this department are recruitment, selection, training, and

welfare actives.

To diffuse the effect of Global Competition, Sumul has adopted the latest

concepts of management practices and provided appropriate training with the help of

leading institute from time to time for up-gradation & development of its Human

Resource. Some of the efforts of Sumul to achieve this are:

3.7 Recruitment & Selection Process

Recruitment:

In simple term, recruitment is understood as the process of searching for and obtaining

application for jobs, from among whom the right people can be selected.

“Recruitment is a process of searching for prospective employees and

stimulating and encouraging them to apply for jobs in an organization.”

In Sumul Recruitment is basically done by HRD department in consultation with

the concerned department for which new employee is required. It is not a regular event

as recruitment is done only when there is any vacancy or some requirement comes up in

the organization. All the new employees must meet the minimum experience and

qualification criteria as set by personnel department.

Employee Personality Development

(Attitude, skill & Knowledge)

1995

Self Development

(Self management Leadership, Meditation)

1995

Total Quality Management, QC, SGA, Kaizen, SQC 1996

Total Productive Maintenance 1999

Meditation Hall 2000



Recruitment Process:

HR Department receives requisitions.

Locating and developing the sources of required number and type of

employees.

Identifying the prospective employee.

Communicating the information.

Sources of Recruitment:

Generally, two types of SOURCES are used in the Organization:

1. Internal Sources:

It is generally done through Relative of present employees, promotion and

transfer.

2. External Sources:

Advertisement

This is the common source of recruitment. All types of organizations are using it for

recruitment. Sumul use most of time this source for recruitment.It gives advertisement

in local and state level news paper.

Employment exchange

Employment exchanges have been setup all over the country in difference to in

provisions of the Employment Exchanges Act, 1959. These agencies are providing a

wide range of services, counseling assistance in getting in getting jobs, information

about the labour market, labour and wage rates.

Campus interview.

Colleges, universities and institutes are fertile ground for recruiters. Sumul also recruit

it employee from colleges and universities campuses.

Direct Interview:

By giving advertisements in the newspapers.



Selection Process

The Selection Process is concerned with determining whether an applicant meets

with all the qualification need to perform a particular job. It means right person a right

place. It is very important because of a wrong person is selected it will cost to the

company. Need of selection would be arise when vacancies are made in

organization. Procedure for selection is differing from organization to organization and

from job to job.

For Executives:

Written Test

- Aptitude test

- Subject test

Group Discussion

Interview

Final selection For Non-Executives:

Written Test

Final interview

Final selection

3.8 HUMAN RESOURCE PLANNING

Meaning of HRP:-

Human resource planning as been defining as………,

“The process by which management determines how an organization should move

from its current manpower position to its desirable manpower position. Though it

management strive to have the right number and the right kind of people at the right

place, at the right time, doings things which result in both the organization and the

individual receiving, maximum long range profit.”



According to Beach, “ human Resources planning is a process of determining and

assuming that the organization will have an adequate number of qualified persons,

available at the proper times, performing jobs which meet the needs of the enterprise

and which provide satisfaction for the individuals involved .”

Human Resource Planning Process:

In Sumul, Human Resource Planning process is done by following steps

1. Organizations objectives and policies:

Human resource plan needs to be based on organizations objectives that means

objective of human resource must be derived from organizations objectives. Specific

requirement in terms of number and characteristics of employee should be derived from

these objectives.

Sumul take care of organization objectives and policies while recruit employees and also

take care of such questions like whether organization should fill vacancies by internal

sources or external sources of recruitment.

2. Human resource demand forecast:

Human resource forecasting is the process of estimating the future quality and quantity

of people require. The basis of forecast is annual budget and long term plans of Sumul,

which are translated into activity level for each function and department. Base on this

information the number of hours to be worked by each skilled man power in a given

period of time should be calculated. Once the hours are available the next logical step is

to find out the quantity and quality of personnel.

The human resource forecasting is done by various techniques like- Managerial

judgment, Trend analysis, Delphi method, Flow models and Work study method and

many others.



3. Human resource supply forecast:

Personnel demand analysis provides the manager with number and quality of employee

that to be require. Next logical step for manager is to find out the number of people likely

to be available form within and outside of an organization. The supply forecast covers the

existing human resources, internal source of supply and external source of supply.

Sumul use the analysis of present employee human resource audit summaries, each

employee skill and ability for understanding capability available in organizations work

force. It also forecast the internal source or supply. Managers are calculating the

available supply of manpower within the organization.

4. Human resource programming:

Once, an organizations personnel demand and supply are estimated or forecasted by the

managers, then they take care of the balancing between them. The balancing is needed

in order to fill the vacancies by the right employees at right time. So human resource

programming has greater important in planning process.

5. Human resource plan implementation:

Implementation requires converting human resource plan into action, such human

resource plan includes Recruitment, Selection, Placement, Training, Development,

Re-training and Re-development, Sumul use such various plans.

6. Control and Evaluation program:

Control and Evaluation program represent the monetary of H.R planning process the

H.R. plan should include budget target and standards. We should also clarify

responsibility for implementation and control. It should establish reporting procedure to

monitor the execution of H.R. plan again achieve result.



3.9 Training and Development System:

Training:

- “Bridge the gap between job requirements and present competence of an employee”

- “Training is the process of increasing the knowledge and skills for doing a particular

job”

Training is a learning process which seeks a relatively permanent change in

behavior that occurs as a result of experience. Training refers only to instruction in

technical and organized operations. Training courses are typically designed for a short

term, stated set purpose.

In Sumul Dairy, training is given with the objective of increase in productivity

of employees, increase quality of work, enhance and update knowledge and skills of

employees and many others but there is no without training program. Sumul provides

training as on the job training and give training to new employee. Training is given to

the workers which are basically at period of one month.

On the job training is training in which Sumul and its members are help and

provide guidance, if there is any difficulty in any work. Training is based on learn and

teach and hence, employees will grow with experience.

Need for Training:

1. Job Requirements.

2. Technological Changes.

3. Organizational Viability.

4. Internal Mobility



Training is given in 3 Categories as:

1. Management Training.

2. Office Training

3. Senior Executive Training

The management training is given for 6 months. Officers and senior

Executives attend the management development programmed organized by the

institute. Training is not uncommon in Sumul. It has an elaborate training program to

make employees acquire new skills and knowledge. Both internal and external

training is carried out as and when required.

Development:

- Development involves preparing the individual for a future job and growth of

the individual.

- Development is the process of transition of an employee from a lower level of

ability, skills and knowledge to that of higher level. Sumuldairy also run

program of development periodically. Sumul tries to develop new skills,

techniques and personality of their employees.

So, the sumul also organized various development programs for Officers

and Executives.



Following are the data of internal and external training programmed conducted by

Sumul in the last five years.

Number of Training Programs:

Programs 2001-02 2000-01 1999-00 1998-99 1997-98

No. of in-house Programs

144 53 20 - -

No. of Participants 1762 628 415 - -

No. of External Programs

9 9 14 16 22

No. of Participants 55 31 43 55 57

Total Programs 153 62 34 16 22

Total Participants 1817 859 458 55 57

In addition to this, Sumul also has the policy to sponsor employees for higher

education to various institutes. The following table shows the number of employees

sponsored by Sumul.

No. of Employees sponsored for higher studies:

Particulars 2001-02 2000-01 1999-00 1998-99 19997-98

Employees Sponsored for

2 2 1 - -

Advance Study continue



3.10 Performance appraisal System:

“Performance appraisal is the systematic, periodic and an impartial rating of an

employee’s excellence in matters of pertaining to his present job and his potential for a

better job”

After recruitment organization gives specific project to the employee to train

him. After completion of this project, it is checked by the authorized person of the

department if the employee do not perform well then they are terminated from the

organization. Performance Appraisal System is still in rudimentary stage in Sumul.

Through Performance the top management does appraisal or reporting head, it is short

on comprehensiveness and touches only few aspects. However the silver lining is that in

order to make system transparent and open, evaluation is cross-checked with the

employee by HRD people and in case of some differences try to solve out the problem.

3.11 Promotions and Transfer Policy

Promotion Policy:

The Management trainees are given 6 month training and later on if they perform

well are promoted as provisionary and after one year they are confirmed.

Moreover, Promotion is given on the basis of education obtain by different

personnel.

Transfer policy:

There is not any policy for transfer, but managing director of the organization

generally takes the decisions of transfer.



3.12 Wage & Salary Structure:

“Wages represent hourly rates of pay & Salary means monthly rates of pay”

Wage and Salary are subject to annual profit. They differ from employee and

depend upon the job nature, seniority & merit.

Sumul provides this type of allowances :

Dearness Allowance (DA)

Additional Dearness Allowance (ADA)

House rent Allowance (HRA)

Some fixed amount of house rent allowance is provided for those who live in

rental house. Sumul has a fixed increment system for each level of authority in the

organization. Only one increment is given a year. However for calculating increment for

an employee, the period of time the day of his joining rather month of January and July

are considered as base month for the same.

For instance, an employee joining the organization in second week of January

in 1999 would be having his next increment due in 2000 July not in January.

There is also a compulsory increment every 14 and 23 year in which, the

employee becomes eligible for immediate next salary scale. Plus two increments without

any change in his/her designation. However, during last agreement, upgraded

employees have also been given designation as per new salary scale. Recently, Sumul

has revised its pay structure to attract more young talents.

Sumul provides this type of allowances :

Leave Travel Allowance (LTA)

Every year allowance is given to employees for traveling any place. This amount

is also fixed. Super Annuitant Scheme (SAS) it provided after every 3 years

(BASIC+DA+ADA).



Washing Allowances (WA)

Rs. 20/- is provided every month as washing allowances to worker category.

City & Travel Allowance (CTA)

Those who live in city are given these allowances more than those are in the village.

Shift Allowance (SA)

Shift allowance is provided in following way:

PRESENCE IN ONE-MONTH ALLOWANCE (RS.)

25 & More 65

24 60

23 45

22 30

21 15

20 & Below 00

Visiting Allowance (VA)

This allowance is given to the entire field officers and veterinary officer.

Bicycle Allowance (BA)

It is give to all permanent employee of worker category.

Scooter Allowance (SA)

This allowance is given to all the officers and marketing executives.

Driving Allowance (DA)

It is giving to the drivers of tempos and trucks of SUMUL.

Other Components:

a) Bonus

(8.33% of BASIC +DA+ADA)



b) Funeral Fund

Rs.3000 to the ward and family of the dad.

Every month Rs1/- of all higher executives salary is maintained for this fund.

3.13 Employee Welfare:

- “Labour welfare means anything done for the comfort and improvement.

Intellectual or social of the employees over and above the wage paid which

is not a necessity of the industry”

- Employee welfare or labour welfare means “The efforts to make life worth

living for workmen”

Intra mural welfare activity of Sumul:

Convenience and comfort during the work

Workshop and cleanliness, lighting, elimination of dust, smoke, gases

Control of effluents

Supply of necessary beverage, pills and tables, tea, coffee

Notice boards, posters, information, slogans

Distribution of work hours and provision for rest hours, meal times and breaks

House keeping, garden, passage, lawns, floor maintenance

Medical facilities

Safety instruments such as guards, caps, shoes, aid equipments

Uniform and changing rooms

Urinals and latrines, wash basins, waste disposal

Provision for drinking water

Economic services such as health insurance and bonus schemes



Extra mural welfare activity of Sumul:

Transportation

Discount in purchase on medicines

Roads, lighting, garden

Communication facility

Security

Training and development programs

Other Facilities:

1. Washing facilities:

The facility of washing clothes is provided to all the employees.

2. Store & Drying facility:

The full time workers are given personnel lockers to store their things and also

facility for drying clothes.

3. Canteen facility:

It is providing employee to take Break-fast, Lunch and Dinner at economic price.

4. Rest room:

It is also provided to take rest during the Lunch hours.

5. First aid facility:

It is given for quick remedy of employees. When any accident occurs during the

working hours of the organization.

6. Vehicle parking space:

It is provide for employee, worker and visitors separately.

7. Accommodation:

Organization is providing township & accommodation facilities to employees.



8. Vehicle loan:

It is given to Employee / Executive only.

9. Department stores:

“KAMDHENU” department store is in the staff ready credit society / Staff

Quarters to purchase all necessary items at economic rate for employee.

10. Uniforms, Shoes and Raincoats:

Uniforms, Shoes and Raincoats are provided to all employees and workers.

11. House rent recovery:

House rent recovery for those employees who are live in rental house.

3.14 Motivation Programmer for the agents:-

Agents are front soldiers in the market, so keeping them motivated is very essential.

In this regard the union has planned to conduct several programs regularly,

such as………..

• Arranging agents meeting area wise in heir area itself to understand their problem.

• Half yearly general meetings of all agents in dairy.

• Performance based award system.

• Recognition of regular agents.

• Arrangement of soft loans for vehicle, deepfreeze and household things with the

negotiation of bank.

• Solving agents’ problem immediately.

• Training of agents on consumer behavior.

• Efficient cash collection through more cash collection centers near to agents

selling price.

• Agent renewal system introduced.



3.15 Personnel Information System & Payroll Accounting System

Objectives of the Personnel Information:

Basic information about each employee

Supports unlimited earning & deduction parameters

Salary Processing & Pay slip generation

Bonus / Ex-gratia calculation

PF & SAS passbook

Payroll data used for Income Tax calculation

The HR department keeps the information of each and every employee from top

to bottom level workers. This information is updated from time to time. This Personnel

information includes name, address, gender, birth date, designation, name of the

department where the employee or worker is working, job responsibilities, shift no., job

code no. etc. With the photograph of the worker/employee.



Chapter – 4 PRODUCTION DEPARTMENT 90

4.1 Production Management Structure of Organization

4.2 Milestones of production process

4.3 Activities & Map of Activities Area

4.4 Production Plan

4.5 Production Process

4.6 Production of different products by SUMUL

4.7 Milk Procurement & Milk Sales

4.8 Micro Motion Studies

4.9 Quality policy, TQM, Environment Policy

4.10 Support services

4.11 Material handling equipments

4.12 Monitor & Measurement

4.13 Co-ordination with other Departments

4.14 SUMUL’S Input & Extension Programmer To help Producers

increase their Milk Production

4.15 Radical Improvements

4.16 Highlight of productivity Improvement Efforts



4.1 Production Management Structure:

Managing Director

(Mr. Jayesh H. Desai)

In charge Strategy

Business Unit Center

Packing of Shrikhand

All Sweets

Production manager (1)

Milk Processing

Cream Processing

Packing of Pasteurized

Milk

Packing of Manufacturing of

Flavored Milk


Ghee


Curd

Production manager (2)

Cream Processing

Tanker Handling

Raw Milk Transportation

Pasteurized Milk Transportation

Manufacturing Skim milk Powder



4.2 Milestones of production process:



4.3 Activities of Production Departments:

1. Production of planning

2. Material requirement planning

3. Store finished goods and raw material

4. Quality control

5. Packaging

6. Painting of pack product

7. Transport to Marketplace

8. Washing and cleaning of equipments, regular maintenance of machine and

other equipments.

MMAAPP OOFF AACCTTIIVVIITTYY AARREEAA::--

Main Dairy Plant Cilling Centre

km distance from surat

Taluka/ Tahsil Name Cattle Feed Factory



4.4 Production Plan:

1. Sales / marketing department is sending daily demand to the production

department as per demand of marketing department.

2. From Gujarat Co-operation Milk Marketing Federation every week sending

demands of Amul products.

3. According to satisfy both production department prepare their production plan

schedule. Production plan schedule generates raw material requirements

packaging material & it contain utilize requirements

4.5 Production Process:

Milk cycle:

6. A machine milking the cow

7. Milk producer’s co-operative Ltd collects the milk from the entire village.

8. The collected milk is tested against the set standard. That insures

quality of milk being received from the root level.

9. The received milk is sold locally as well as transported to the dairy for

the further processing

10. The milk is tested in dairy lab. No compromises with the quality of milk

being received.

11. The qualified milk is received at raw milk receiving Dock at dairy.

12. Cleanliness is always the top priority at any stage of milk cycle cans

cleaning process.

13. Milk is pasteurized, clarified and standardized using lasted technological

machine & equipments.

14. Milk again tested before being packed.

10. Pouch filling for all the end users.

11. Packed milk stored in well-maintained cold storage

12. Milk dispatched for the sale in the marker.



Thus, the production process at SUMUL dairy is derived into two main stages.

They are as follows-

1. Process flow from Village to Chilling Centre Level,

2. Dairy plant to Market Level,

PROCESS FLOW FROM VILLAGE TO CHILLING CENTRE

Milking by Producer Producer approaching DCS Grading & Testing at DCS

Collection at DCSTransportation to Chilling Centre

Receiv ing at Chilling Centre Testing at Chilling Centre Transportation to Dairy Plant



The processing after the milk is received by dairy includes the following Stages:

1. CLARIFICATION:-

Milk is clarified to remove unseen dirt & dust or foreign material which may be

harmful to our body.

2. PASTURIZATION:-

Milk is pasteurized to kill all pathogens (harmful bacteria) for our body & this

process is ensured through automatic controller (Flow diversion value) which

allow only pasteurized to tank for packing.

3. CONSISTANCY:-

Sumul has certified ISO9002 Quality System & HACCP (food safety) and Sumul

has undergone through inspection audit system for continuous improvement &

effectiveness of corrective action.

4. STANDARDIZATION:-

Milk is being standardized according to the type of milk & set standard as per ISO

& PFA. Standardized milk is checked through MILKO SCAN (like body scan)

which ensure standardization of each constituent of milk. This type of machine’s

available to Sumul only in this region. Small player can not have this cost of Rs.

300000.

5. BACTERIOLOGICAL LABORATORY:-

Sumul has well established bacteriological laboratory to ensure safe milk supply to

our valued customer.

6. STAFF:-

Sumul has highly qualified staff that ensures each test & process in compliance

with set standard. Each employee has undergone for TQM Training & work for

KAIZEN (continuous improvement) for value or money for customer.

The whole process in the dairy is done through Ss Pipe only & no where it is

through by hand.

The equipment cleaning is done through Centralized automatic CIP Unit.



4.6 Production of different products by SUMUL:-

The dairy plant having capacity of 40,000 LPD was designed in 1968 with

Swedish credit loan under technical expertise of N.D.D.B.; and today, with gradual

expansion of the processing and production facilities, Sumul can handle 6, 00,000 LTPD

and process and pack milk and manufacture milk products like Ghee, Butter-milk, Butter,

Milk powder, Lassi, Masala Chhas, (Jome) Flavored milk, Curd (Dahi), Paneer and

Indigenous sweets. Sumul also pack Amul Masti Dahi, Amul Flavored Milk and Amul

Paneer. Thus, the milk business is generating more than Rs. 790 crores a year.

DAIRY PLANT TO MARKET LEVEL

Milk Receiving Testing of Milk Processing

ProcessingPacking

Storage Delivery

Processing

Market



4.7 Milk Procurement & Milk Sales:(2008-09)

Milk Procurement :

Milk Sale :



22110285

19903296

21660723

21975528

18045000

21352459

21800820

21915543

21280632

19861320

19577585

19845750

27449677

25574913

29250306

27806780

25297750

23513653

20590552

19320677

20127961

20228022

21852128

21858457

0 5000000 10000000 15000000 20000000 25000000 30000000

MAR(09)

FEB(09)

JAN(09)

DEC(08)

NOV(08)

OCT(08)

SEP(08)

AUG(08)

JUL(08)

JUN(08)

MAY(08)

APR(08)

MONTHS

Month Wise Milk Procurement (Kgs.) V/S. Milk Sale (Ltrs)

(2008-2009)

Milk Proc.(Kgs.) Milk Sale(Ltrs.)



362960

1659125

1162070

2437955

3299270

2402010

2499965

2242695

2712515

3964155

3912155

9477325

8366995

7199205

9015240

15992535

843536

1384503

3653195

7327065

7710675

8980136

9900699

11556825

16895224

19170179

23325386

25110422

26778767

32767161

39294856

41149706

0 10000000 20000000 30000000 40000000 50000000

AHVADANG

CHORYASI

PALSANA

KAMREJ

UMARPADA

UCHCHHAL

BARDOLI

VALOD

VALIYA

MANGROL

NIZER

SONGADH

OLPAD

MANDVI

VYARA

MAHUVA

TALUKA

Taluka Wise Milk Procurement (Ltrs.) V/S. Cattle Feed Sale (Kgs.)

(2008-2009)

Taluka wise Milk Proc.(Ltrs.) Taluka Wise C.F. Sale(Kgs.)



4.8 Micro Motion Study:

During the visit to the production plant we have done micro motion study of a worker

whose work was to take the milk pouched from the machine and the keep them on

crate, which uses to come serially on the belt conveyors. The position of the person

was such that it to very less time.

The pouches of 500 ml were filled in Polly bags, sealed and ready pouches were

thrown though the pouch-filling machine.

1. First of all we caught the two pouches in one hand and again two pouches with

other hand (5 sec)

2. Then he kept all the four pouches together in the crate coming over the Belt

conveyor. (4 sec)

3. He again tuned and caught all the four pouches with two hands. (5 sec)

4. And again kept all the four pouches together in the crate coming over the Belt

conveyor. (4 sec)

The entire process was completed in 18 sec.

4.9 QUALITY POLICY

“WE AT SUMUL DAIRY ARE DEVOTED, DEDICATED AND MOTIVATED WORKFORCE TRAINEDTO ENSURE CONSISTENT SUPPLY OF GOOD QUALITY

AND SAFE MILK AND MILK PRODUCTS TO ACHIEVE HIGHEST LEVEL OF CUSTOMER SATISFACTION.

WE WILL ACHIEVE THIS BY MONITORING AND UPGRADATION OF PROCEDURES AND PROCESS APPLYING SCIENTIFIC INNOVATIONS AND STATE OF THE ART TECHNOLOGY AND REMAIN ECOFRIENDLY QUALITY AND FOOD SAFETY MANAGEMENT SYSTEM.”



TOTAL QUALITY MANAGEMENT (TQM)

TQM (Total Quality Management) was implemented at SUMUL on 6th May, 1996

with the help of EICHER CONSULTANCY, Mumbai.

TQM (Total Quality Management) which includes………

1. Total employee involvement,

2. Total quality Control,

3. Total Waste Elimination through Quality circles and

4. Continuous Improvement

Sumul has adopted International Standards for Quality Management. QAS

Australia has certified our quality management systems by issuing ISO 9002, ISO-14001

and H.A.C.C.P. Certificates. By adopting quality management system, Sumul has

standardized all process and procedure system for production of milk and milk products.

As usual, it is easy to design system but difficult to implement it. But with active

Participation and dedication of our workers and staff & with better leadership & guidance

of Board of Directors, Officers, Continuous training programs under TPM and GMP, we

have successfully Implemented ISO Standards. At every six months interval, Total

Quality Management System has to be audited and if found proper as per standard

Quality Management norms then certification are renewed. We have received continuous

renewals.



TOTAL PRODUCT MANAGEMENT (TPM)

TPM (Total Product Management) was implemented at SUMUL

on 19th, October, 1999 with the help of TQM center at Surat under consultancy of

Dr. B. C. Naidu.

OBJECTIVES OF TPM

• Zero breakdown

• Zero rejection

• Zero accidents

CORE THEME OF TPM

• Cleaning is Inspection

• Only the operating man can tell what is the actual problem

6 BIG LOSSES • Breakdown / Machines Failures • Setup & Adjustment losses• Small Stops & Idling• Speed Losses• Rejects during production• Rejects during running

LOSSES UNDER TPM



SEVERAL DEVELOPMENTS/ PROGRAMS/MANAGEMENT TOOLS

• AMCS ISO 9K,

• BCU ISO 14K,

• CMP FSMS 22K,

• CD program SGA,

• AI training GMP,

• DIPA program TQM-TWE ; TEI ; TQC,

TPM,

QUALITY CIRCLE,

KAIZEN-CA, PA, NC,

HACCP,

Sumul is meeting International Standards through getting the International Licenses

like-

ISO 9002 :-

Sumul’s Cattle Feed Factory has received ISO - 9002 thus established that

cattle feed manufactured at it’s cattle feed plant is under 100% quality control

system, is safe & meets International Standard Certification.

ISO 14K :-

During March, 2002 audit, Sumul Union has received I.S.O. 14001 Certification. This Certification has enhanced it’s image in International area and

placed Sumul in front line in Dairy Industry in the State of Gujarat. This certificate

will help Sumul in International business competition.

HACCP ( Hazard Analysis Critical Control Point)



IINNTTEERRNNAATTIIOONNAALL II..SS..OO -- 1144000011 CCEERRTTIIFFIICCAATTIIOONN FFOORR EENNVVIIRROONNMMEENNTT CCOONNTTRROOLL

Accreditation of ISO 14001 certificates is a testimony of our commitment towards

our customers for 100% quality safe milk and milk products. By complying with Terms

and Conditions of ISO 9002, ISO 14001, HACCP, Quality Management and Environment

Control, Union has undertaken various measures for fully automation in their various

production lines; installation of Automatic Machinery in various production lines is in

progress.

QQUUAALLIITTYY && OORRGGAANNIISSAATTIIOONNAALL FFOOCCUUSS

- Sumul is doing value addition at each stage in terms of Improving raw milk quality,

controlling microbiological growth & Improving Product shelf life Coordination

between CD Development Dept, Chilling Centers, Marketing, Production & QC.

Undertaking activities like - Clarification, Pasteurization, Standardization,

Bacteriological Testing etc Process Reengineering undertaken

for optimizing process & storage temperature

Reduction in Material Handling during manufacturing process & usage of SS

Pipelines & Equipment. Technological upgrading of equipment's by incorporating

state of art technology & Automation in certain areas

CIP through Centralized CIP unit supported by Manual Scrubbing of Pipelines &

Tanks etc.

Improving MBRT at all levels

Adherence to Standards

PFA, W&M & NDDB

ISO 9002 / HACCP & 14001

Improving Good Manufacturing Practices Implemented



TQM, KAZIEN, SQC & TPM concept at all stages.

Increased Overall Equipment Efficiency (OEE)

Reduction in Machine Down Time

Increase in Preventive Maintenance

Reduction in Leakage, Quality Rejection & Reprocessing

Availability of Maintenance Personnel at Floor

Multi skill development

Reduction in Utility Consumption

Computerization at each level, Centralized Oracle based Data Management System for

all activities for sharing information & analyzing it whenever required.

Employees Development

Training on Personality Development

Training on Self Management Leadership (SML)

Training on Quality Concepts

Total Quality Management (TQM), Quality Circle, Small Group Activities, Kaizen,

Statistical Quality Control (SQC)

Total Productive Maintenance (TPM)

ISO 9000 / HACCP & ISO 14001

OEE CALCULATIONOVERALL EQUIPMENT EFFICECTIVENESS = O.E.E.

= AVAILIBILITY X PERFORMANCE EFFICIENCY X RATE OF QUALITY PRODUCTS

AVALIBILITY = LOADING TIME – DOWN TIME LOADING TIME

PERFORMANCE = IDEAL CYCLE TIME X PROCESS AMOUNTEFFICIENCY OPERATING TIME

RATE OF = PROCESSED AMOUNT – DEFECTIVE AMOUNTQUALITY PROCESSED AMOUNTPRODUCTS



ENVIRONMENT POLICY

Surat District Co-operative Milk Producers Union Ltd., is engaged in

manufacturing of Milk and Milk Products and Marketing it within Surat District under

“SUMUL” brand and outside Surat district under the brand of “AMUL “ or “Sagar”. We are

conscious and committed to protect and preserve the environment.

The guiding principles of our Environmental Policy are as follows:-

Comply with all applicable environmental legislation, regulations and other requirements

Control Plant operations to conserve natural resources such as water, electricity and fuel

and prevent pollution

Promoting greening of Earth in and around our manufacturing complex * Minimizing

generation of waste / effluents. Continual improvement of our environmental

performance Creating awareness towards environmental issues among suppliers and

stake holders

4.10 Support Services:

Maintenance

Packing

Maintenance:

Maintenance is necessary for both raw materials as well as finished goods. The

company has to put stress on the matter regarding the spoiling of goods due to weather

or other aspects. At SUMUL, there is a strong maintenance procedure on raw materials

& final products, because such milk products should be maintain in such way they

maintains their quality for the long period of time.



Packing:

Packing is one of the most important factors that management must have

to consider in mind. When the raw materials are converted in the finished goods all

the products are then send to the packing room. Here different machines are

available for different types of packing. The firm is now going for a new type of

packing called Gable top packing. The main advantage of such type of packing is in

this packing milk remains fresh for about 10 days. Soon, Sumul milk will be available

in such type of package.

4.11 Material Handling Equipments Used

1) Pipeline: Pipe lines are used to convey liquid milk from tank to standardized plant. They are

made up of steel or other suitable anticorrosive material to with stand wear & tear &

pressure of liquids. When height is to achieved, pumping is done through pipes,

other wise gravity flow is used.

2) Trolleys: In Sumul, most of the Dairy products are produced. So, there is strong need to keep

the trolley for movement of that kind of products. The entire dairy plant is so much

big that it is not easy to move all the product with men power labour.

So, there is this type of trolleys are used:

Crates Trolleys

Cans Trolleys

Plastic Tube



3) Belt Conveyors: Belt-Conveyors are gravity of powered equipments primarily for moving uniform

loads between fixed prints. They may be fixed or portable & horizontal or inclined.

Their speed can be changed and direction can be altered by smooth curves or 90

degree bends with the help of additional belts.

4) Trucks (Tempos):

There are no. of trucks (tempos) used for transportation and delivery of milk and

milks product to the various parlors and dairy.

No. of Material Handling Equipments Used:

Equipment Quality

Milk Tankers :

Sumul

On contract

13

11

Tempos (on contract) 70

Belt Conover 8

Crates 40,000

Cans :

40 Liter.

20 Liter.

250

25

Crates Trolleys 50

Cans Trolleys 10

Plastic Tube 5

Glass Betties (200 ml) 35,000



4.12 Monitoring & Measurement:

Measurement:

1. Partly ledger and account verification monthly.

2. Internal customer satisfactions quarterly.

3. Bills payable monthly.

4. Preparation of financial repots cash/fund utilization weekly.

Monitoring:

Internal document:

1. Bank reconciliation statement monthly.

2. Internal audits.

External document:

1. Sales tax registers number certification.

2. Center sales tax number center.

4.13 Co-ordinations with other Departments

A. Stores and Production:

There are two-store department in SUMUL

1. Store department for raw material.

2. Store department for finished goods.

For raw material:

Whenever the production department needs something from the stores

stock it sends person with show the quality demand and will be signed by the

authorized person of that department. The store in-change will provide the

demanded stock and make an entry in the bin card which shows the quality

received and stored.



For Finished material:

Whenever the production process is completed, the finished goods are sent

to the stores department, with the permission of production manager. The store in-

charge checks the production and than manes an entry in his register about the

quality received and stored.

B. Purchase and Production

Whenever the production department wants some goods to be purchases it

sends an indent letter to purchase reference is sent to store department for

verification.

The store department verification the stock position and later on by giving

code numbers and last purchase reference is sent to purchase department. After

necessary process the purchase activity is done. When purchase procedure is

completed the production department is informed and the purchase goods are stores

department.

C. Purchase and Dispatch

When the production of milk products is completed they are in the store

department and whenever demand arises, these products are dispatched.

Where as for three types of dispatch takes place. In morning, evening and

late evening. The sale order id received through phone from distributors. Accordingly

the production and dispatch procedure takes place.

D. Production and Engineering

The so-ordination between production and engineering department is very

informal whenever any problem occur in any machine of production department, the

authorizes person of that department informs the engineering department through

phone and the concerned engineer is send for repairing the machine.



4.14 SUMUL'S Input & Extension Programmers to help Producers increase their Milk Production:

Once a guaranteed and remunerative milk market is assured to the producers for

their entire marketable surplus round the year, they are stimulated to increase milk

production and productivity by adoption of scientific Animal Husbandry and input

programmer. To materialize this, Sumul maintains a well-knit ‘Animal Husbandry &

Extension Organization’ in its ‘Animal Husbandry department’, which provides various

essential inputs to the Member Producers through their milk societies, viz. Veterinary

Health Cover, Artificial Insemination, Animal Disease Diagnostic Laboratory, Balanced

Cattle Feed, Improved Fodder Seeds etc.

A. ROUTINE & EMERGENCY VETERINARY SERVICE AT PRODUCERS' DOORS:

Sumul has commenced Mobile Veterinary Clinic Services in the villages since June 1977. However, year by year, the number of mobile clinics is increasing embracing

more and more villages on their routes and the services are being intensified due to

increase in adoption rate by the Member Producers. Emergency services are made

available to any producer member, round the clock at reasonable cost.

The distinct benefits achieved by the Radio-Telephone Service in terms of saving

Veterinary-men hours, transport cost and timely treatment of emergency cases

cannot be over emphasized.

A veterinarian, while visiting a village on route or emergency visit not only

treats the case, but also tries to educate the milk producers on the spot on the preventive

methods of the disease under treatment & where warranted on the sound management

methods of nutrition, breeding, disease control and general management of the animals

as well, by his proper advice and good results of this treatment he wins the confidence of

the producers and they listen to his advice for adoption. Under Veterinary health

coverage programmer, Sumul organizes ‘veterinary camps’ at villages.



- Sumul organizes ‘veterinary camps’ at villages. The details are mentioned below.

Sr. no Year No. of camp No. of cases

1 1993-94 262 35342

2 1994-95 305 40594

3 1995-96 355 43009

4 1996-97 375 50858

5 1997-98 400 58745

6 1998-99 420 70057

7 1999-2000 432 79218

8 2000-2001 500 101346

9 2001-2002 501 135522

B) ARTIFICIAL INSEMINATION:

The Artificial Insemination Training Centre at Sumul Campus is provided with all

necessary teaching aids and staff. Sumul has organized a Training Centre for Artificial

Insemination and Veterinary First Aid, where modern facilities for training, hostel

accommodation and essential amenities are provided to the trainees. The above training

(50 days programmer) is provided to the selected village youths not only of this district,

but drawn from all over India.

C) The main objectives of extending Artificial Insemination Services to the producers'

breed able animals is to improve the genetic potential of milch animal by selective

breeding and those of cows by cross-breeding with Jersey OR Hosstein Fresian

Semen and also to bring down the long dry periods of milk animals within reasonable

limits. These twin objectives, when materialized, will greatly accelerate the pace of

production and economic in dairying at the producers' level.



D) SUPPLY OF BALANCED CATTLE FEED TO SUPPORT MAINTENANCE, GROWTH AND MILK PRODUCTION ETC.:

Balanced Cattle Feed is one of the most essential items in the total package of

inputs to sustain productive function and reproductive health of milch animals and

thereby boost-up their overall productivity. With this view, a Balanced Cattle Feed

Plant named ‘Sumuldan’ Factory was set-up at Chalthan in 1970 to provide scientifically

formulated range of nutritious Balanced Cattle Feed to milk producer’s at most

competitive and reasonable price. Balanced Cattle Feed are now manufactured and

supplied by Sumul for various categories of animals. Balanced Cattle Feed is

manufactured using multi-ingredient least-cost formula and maintaining the DCP-TDN

contents of each, as per the required nutritional feeding standards. The production

capacity of the plant has been raised to 300 MT's. Per day. Due to extended production

capacity, the factory is simultaneously being equipped with increased storage capacity

for raw-materials and this will strengthen the Union to meet the growing requirement of

Cattle Feed more effectively & speedily in its area.

E) PROGRAMME FOR FODDER DEVELOPMENT IN THE MILK SHED AREA:

Green fodder is generally considered as essential and the cheapest source of

cattle-feed nutrients to support animal health and the productivity at economic costs and

also economizes on the use of costlier concentrate feeds. The milk producers are,

therefore, constantly advised by the extension team to grow green fodder as per their

optimum requirement for animals following a cropping scheme suited most to the agro-

climatic conditions of the area to give maximum DCP-TDN per acre per year at economic

costs.

F) SUMUL'S RURAL EXTENSION PROGRAMME IN ACTION:

To enlighten the common milk producers in scientific animal husbandry practices

and to place their milk production enterprise in a sound footing and make it profitable,

Sumul carried out rural extension programmers in the village regularly.



4.15 RADICAL IMPROVEMENTS:-

A.) YEARWISE FAT LOSS & MONTHLY MILK HANDALING:

Sumul has implemented several techniques and Sumul also invites innovative

techniques from its staff and hence Sumul has successfully got some achievements in

the matter of energy saving and water consumption in the processing, reducing water

v/s milk ratio, which can be seen from the below analysis presented with the bar

diagram’s.

Today people have become health conscious and hence it’s very essential for the

dairy to look into the matter of fat % of dairy’s processed milk. And hence Sumul has

achieved 49% fat loss by the year 2007-08.

The above diagrammed also shows the Milk handling per month by Sumul dairy.

Sumul dairy has achieved an increase of 57% for last 1 decade. (I.e. from 1998-99 to

2007-08).

YEARWISE FAT LOSS%07-08 => 49 % Reduction in Ratio

2.26 2.3

1.43

1.661.53 1.56 1.51 1.57 1.52

1.14

23861230272259918889

1852116501

17528

1514015405

18712

0

0.5

1

1.5

2

2.5

1998-991999-002000-012001-022002-032003-042004-052005-062006-072007-080

5000

10000

15000

20000

25000

30000

Fat lost per month ( in %) Milk Handling per month (in 1000 ltrs)



A.)WATER V/S MILK RATIO:

Sumul has reduced the ratio of milk v/s water by 0.46 Kilo

B.)SPECIFIC ENERGY CONSUMTION:



In the above diagrammed year and energy consumption (in Kilo wht per Metric

tone) are presented on the x-axis and y-axis respectively. The above diagrammed show

Sumul dairy’s efficiency in the saving of energy over the years. Initially Sumul utilized

33.1 kwht/mt energy but now the energy consumption utilized by Sumul has gradually

decreased to 27.32 kwht/mt. Sumul has achieved a decrease of 17.46% in the level of

Energy Consumption by the use of various innovative techniques.

This decrease in the consumption of energy saved management’s 352.81 lakh

Rs. which could have otherwise been wasted, but this saving is used by Sumul dairy to

pay more to the milk farmers for their contribution. Initially the saving for les energy

consumption was 53.53 lakh but it increased to 352.81 lakh, which shows a phenomenal

change in saving. The cumulative saving in energy conservation is shown in the below

bar-diagrammed

53.53

114.23

236.55

352.81

050

100150200250300350400

2004-05 2005-06 2006-07 2007-08

Comulativeenergy

(In Lakh)

YEAR

Comulative saving in Energy Conservation

Comulative saving in Energy Conservation



D.) ENERGY COST TO MANUFACTURING COST:

The % Energy cost to the manufacturing cost is also reducing by 42.08%, which is

also a result of the innovative techniques used by Sumul Dairy for production.

4.16 HIGHLIGHTS OF PRODUCTIVITY IMPROVEMENT EFFORTS

Surat District Co-operative Milk Producers' Union Limited (SUMU) is an important

Co-operative democratic institution in Surat. Sumul through its Policies & appropriate

technology has helped farmers in increasing milk production and thereby milk

procurement.

Prior to Sumul's entry, middleman exploited producers, as well as consumers with

the sole objective of maximum profit. Sumul meets major requirement of milk of the

citizens of Surat and nearby urban area. Sumul was born to meet the needs of milk

producer's i.e. to eliminate middleman and provide quality milk and milk products to

consumers at a reasonable price.



Sumul provides milk collection facilities in each Village. The milk is promptly

transported twice a day i.e. morning and evening to nearest Chilling Center. At present

81 Milk Routes are in operation. The milk is chilled to 3 - 4 C and is then transported to

Dairy Plant at Surat in insulated milk tanks.

Following table shows details of Chilling Centers in Operation:

Sumul tests pooled samples of milk received from society for fat & SNF and pays

the cost as per the price schedule. The society collects random samples of milk of

individual member and the sample is sent to dairy for analysis. About 8 - 10 samples per

month are collected. Society pays milk producers on the basis of quality of milk.

Sumul introduced Computer based milk testing and weight recording system

known as AMCS. Till now 160 AMCS are installed. These machines give quality,

quantity & price on the spot. There by milk producer can know details in person.

Name of Chilling Center

Chilling Capacity.

Distance from Surat

SUMUL DAIRY 5 Lakh LTPD 0 km

Bajipura Chilling Centre 3 Lakh LTPD 50 km

Navi Pardi Chilling Centre 2 Lakh LTPD 25 km

Uchchhal Chilling Centre 1 Lakh LTPD 105 km

Nizer Chilling Centre 63,000 LTPD 175 km

Chasvad Chilling Centre 30,000 LTPD 100 km

Dediapada Chilling Centre 30,000 LTPD 135 km

Sumuldan Factory 200 MT PD 18 km



Chapter – 5 FINANCE DEPARTMENTS 121

5.1 Hierarchy of Finance Department

5.2 Objectives of Finance Department

5.3 Present Scenario

5.4 Turn over information

5.5 Budgeting & Planning

5.6 Taking loans (Sources of funds)

5.7 Issuing Shares

5.8 Source of Finance

5.9 Cost system

5.10 Payment Process

5.11 Interpretation of final accounts

5.12 Treasury operation

5.13 Importance data of the previous financial year

5.14 From where does 1 Rs. Come (Income)?

5.15 From where does 1 Rs. Go (Expenditure)?

5.16 Ratio Analysis

5.17 Analysis drawn from it

5.18 Working capital



5.1 Hierarchy of Finance Department:

Finance management is that managerial activity which is concerned with the

planning and controlling of the firm financial resources. Still today it has no unique body

of knowledge of its own and draws heavily or economic for its theoretical concept.

“Finance management means the use of such managerial function as planning

and control to undertake finance function.”

- Earnest Walker

Managing Director

(Mr.Jayesh H. Desai)

Material Manager Accountant Manager

Assistant Manager

Senior Executive

Junior Executive

Senior Assistant

Junior Assistant

Workman

Finance Manager



Sumul is the co-operative so it has not special financial department.

Sumul require a lot of funds for meaning its working capital needs and other obligations.

It manages its working capital needs through internal funding only. There is regular,

assured and smooth in flow of cash from milk sales from the agents to dairy’s Cash

Collection Centers on day-to-day basis. The dairy runs there centers for all 365 days

without fail. Intact there is a separate cash recovery department in the organization to

look exclusively this aspect. Because of its excellent cash collection system. Sumul

generally does not face any difficulty in dispensing amount to the producers every month

and meeting other obligations. However, for the expansion work and setting up new

projects, it takes loans from NDDB.

5.2 Objectives of Finance Department:

The main objective of finance department is Sumul are as under.

1. To monitor & measure debtors

2. To prepare profit & loss account

3. To maintain working capital at minimum level compared to last year.

4. To prepare a balance sheet of 7th may each year.

5. To monitor & measure internal customer satisfaction.

6. To increase short-term investment by 10%.

5.3 PRESENT SCENARIOS:

• Population growth in Surat – 6.7 %

• Milk receipt Reduction – 6-7 %

• Sales growth – 13 %

• Turn over expected – 725 Cores

• Present Avg. Milk Receipt – 7.75 LLPD



5.4 TURN OVER INFORMATION:

From the study of the above diagram, we can see that Sumul has made a

continuous progress in their profit making figures. The present turn over of the firm is

790 crores which is 90 crores more than the profit of the previous year.

0

100

200

300

400

500

600

700

800

94-95 95-96 96-97 97-98 98-99 99-2000

2000-01

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

2007-08

2008-09

149184

234288 290 311

345 353 382

485536 548

647700

790

CRORES

YEAR

YEAR CARORE

94-95 149

95-96 184

96-97 234

97-98 288

98-99 290

99-2000 311

2000-01 345

2001-02 353

2002-03 382

2003-04 485

2004-05 536

2005-06 548

2006-07 647

2007-08 700

2008-09 790



5.5 Budgeting & Planning:

Capital budgeting decision pertaining to fixed and long term assets which by

definition refer to assets which are in operation and yield a return over a period of time ,

usually exceeding one year .

Capital budgeting is the most important and complicated problem of managerial

decision. Because it is concerned with designing and carrying out through a systematic

investment programmes. It involves the planning of such expenditures, which provides

yields over a number of years. The firm’s investment decision would generally include

expansion, acquisition, modernization and replacement of the long-term assets.

There are two types of methods for evaluating a project:

Discounted Method: -

I. Pay Back Period

II. Average Rate Return

Non-discounted Method: -

I. Net present Value

II. Profitability Index

III. Internal Rate of Return

In short, the capital budgeting decisions means a decision as to whether or not

money should be invested in long term projects.

Such projects may include the setting up of a factory or machinery or certain

creating additional capacities to manufacturing part which at present may be purchased

from out side. It includes a financial analysis of the various proposals regarding capital

expenditure to evaluate their impact on the financial condition of the company for the

proposal to choose the best out of the various alternatives.



Annual Business Plan:

The annual business plan is prepared by taking the information regarding sales

of every product. The sales officer compile these data taking into consideration

growth rate of city population, per capital consumption so as to arrive at overall

market size and the targeted market sale for Sumul product, for the effectiveness of

annual business plan the data regarding marketing channel, and product mix are

needed.

Data Required for Annual Plan:

1. Product mix plan

2. Marketing channels

3. Manpower requirement

4. Estimated investment

5. Institutional demand

6. Segment wise demand estimation

7. 5 Years procurement analysis

8. 5 Years procurement capacity

9. Urban population demand



5.6 Taking loans (Sources of funds):

Every firm needs money or funds for the activities of it’s organization and

they all takes it from either share capital or loans like debentures, bonds etc, This is

the corporate company so it is no more taking loans or the sources of funds because

in the company to making the profit in the end of the year it is reinvested in the

second year in the company.

Interpretation:-

At the and of the year Sumul has….

Reserve fund & other source of funds Rs. 16,85,26,228

Redeemable Debenture Rs. 4,54,500

Total Loans Rs. 42,32,87,520

Reserve fund & other funds: 16,85,26,228

Debenture Redeemable:

909 debentures Rs.500/- each

4,54,500

Loans:

N.D.D.B. (operation flood)

Cattle loan etc.

Short term Loan

42,32,87,520

27,08,078

2,05,79,442

40,00,00,000



5.7 Issuing Shares:

Interpretation:-

Sumul has 10, 00,000 ordinary shares of Rs.100/ each.

So, Authorized Share Capital Rs. 10,00,00,000

Sumul Issued Share Capital is 4,23,672 ordinary shares of Rs.100/- each.

Which are fully paid up. So, Share Capital Rs. 4,23,67,200

Authorized Share Capital:

(10, 00,000 ordinary shares of Rs.100/ each.)

10,00,00,000

Share Capital (Issued fully paid up.)

(4, 23,672 ordinary shares of Rs.100/- each.)

4,23,67,200



5.8 Sources of Finance:

In the Sumul dairy requirement of finance is major into two major areas.

1. In working Capital

2. Investment on expansion

These requirements fulfill by taking loan and issuing share.

(1) For working Capital:

To meet the needs of arising working capital Sumul makes transactions from

the following banks.

The Surat District Co-operative Bank Ltd, Surat

Sarvoday Sahakari Bank Ltd, Surat

State Bank of India, Surat

Surat Mahila Nagrik Sahakari Bank, Surat

Indian Bank, Surat

Dena Bank, Surat

Co-operation Bank, Surat

(2) For Investment on Expansion:

National Dairy Board

Share capital

Debenture



5.9 Cost System:

Cost is one of the main factors affecting finance department. There are lots of

control techniques through which companies can control their cost. Costing is the factor

that affects the pricing as well as profits of the company. If the costs are controlled then

the company can fix competitive price and achieve targeted returns. If the company is

able to get the cost at minim um level then can get an additional benefit over their

competitors.

To control Cost Company might have to:

1. Replacement of worm out machines and equipments with new ones.

2. Make or buy decision

3. Extension of existing production plant.

4. By having latest technology machines and equipment.

5. By producing large quantities of products.

6. Controlling the inventory levels.

7. To do investments where maximum returns can be achieve.

Cost Structure of Product:

Production cost

+ Transport expenditure

+ Profit Margin

+ Commission

------------------------------

Cost



5.10 Payment Process:

1. Collection of sales bills & sales data

2. Data verification with sales information

3. Feed concern data in computer

4. Feed duration data in computer

5. To pass duration entry to the computer.

To the Milk Producers:

Finance department will make payment on the base of certified & approved bills.

1. Receipt of milk collection data.

2. Verify the data with concern department & payment for each dairy co-operative

society.

3. Feed all the data in computer with oracle support

4. Reduction of DCSP (dairy co-operative society purchase) & other miscellaneous

5. Account of net amount payable to society is prepared.

6. The payment will send by MT (Money Transfer) by district co-operative bank.

To The Transporters:

All the come to the finance department for final payment. Every bill is certified by

the concern department authority. They have to give justification for any expenses.

And then finance department will make payment to the transportation for any

expenses & then finance department will make payment to the transporters on the

bases of certified & approved bills.



5.11 Interpretation of Final Accounts:

From the study of the profit & loss account of the year 31-03-09, it can be

measure that the net profit of the firm (income-expenses) is Rs. 2,13,60,442 also from

the study of the final accounts. it can be easily seen that the firm is getting more & more

profit. Because the present turn over of the firm is 790 crores which is 90 crores more

than the profit of the previous year.

5.12 Treasury Operation:

The treasury operation of the company is panned in such a way so that it

maintains purchase cost, production cost, inventory management and budgeting based

on the market forecast. Treasury operation is maintained to facilitate demand and supply

condition, timely payments for purchases, meeting contingency expenses. Proper

dispatching of the good on delivery dates and minimizing opportunity cost. Some unseen

contingency may arise such as strike; flood fire etc. for this purpose also there way

should be made.

5.13 Important data of the Previous Financial Year:-

• Number of societies – 1051

• Milk procured – 24.33 Crores Kg

• Price paid – 295 Rs. Per kg Fat

• No. of members – 222307 No.

• Avg. Milk Sale – 5.96 LLPD

• Avg. Butter Milk sale – 74 KLPD

• Agents in Surat City – 2290

• Full Time sale centers – 251

• Agents in Surat Dist. – 207

• Sugar Sale – 1060 Qt.

• Tea Sale – 241 Qt.

• Net profit – 2.07 Crores



5.14 FROM WHERE DOES 1 Rs. COME (Income)?

Milk Sale – 0.78

Product Sale – 0.16

Closing Stock – 0.05

Other income – 0.01

Incomes:

5.15 WHERE DOES Rs.1 GO (Expenditure)?

Milk purchase – 0.84

Packing – 0.03

Salaries/Wages – 0.02

Transportation – 0.02

R & D – 0.02

Water, Electricity, Fuel – 0.02

Processing – 0.01

Maintenance – 0.01

Distribution – 0.01

Depreciation – 0.01

Interest Exp. – 0.01

Income Rs. 31-3-09 Rs.

By Sales (Milk & Product)

By Other Incomes

By Closing Stock

7,89,92,33,138

5,47,59,851

45,21,23,119

Total Income 8,40,61,16,108



Expenditures:

Expenditure Rs.

31-3-20009 Rs.

To Opening Stock

To Purchase

To Transport Society

To Animal Husbandry & Extension

To Processing Laboratory etc.

To Packing Expenses

To Power,Water,Fuel Supply Exp.

To Salaries & Wages Exp.

To Provident Fund ESI & other Amenities

To Repairs & maintenance

To Distribution Expenses

To Stationary Expenses

To Insurance Legal fees

To Vehicle Tax, Municipal tax

To Continuous & concurrent Audit fees

To Sundry Expenses

To Interest & Bank Commission

To Depreciation

To Provision for doubtful debts

To Net Profit

51,74,24,884

6,60,15,91,585

13,32,88,450

16,30,13,697

5,75,20,835

25,45,00,581

13,41,78,111

18,32,04,096

4,52,89,691

5,28,69,828

10,04,94,233

49,51,560

95,38,807

34,03,664

61,34,003

58,10,249

4,05,70,877

6,49,70,515

60,00,000

2,13,60,442

Total 8,40,61,16,108



5.16 Ratio Analysis:

LIQUIDITY RATIOS:

1) CURRENT RATIO:

It measures the solvency of the company in the short term. It also indicates the

firm’s ability to pay its current liabilities .It shows the strength of credit, working capital

and capacity to carry on effective operation.

Current Ratio = Current Assets

Current Liabilities

The graph showing the Current Ratio of the “SUMUL DAIRY” for the last two

years is as follows:

1.16

1.11

1.081.1

1.121.141.161.18

2007-08 2008-09CURR

ENT

ASS

ET :

CURR

ENT

LIA

BILI

TY

YEAR

CURRENT RATIO

Particulars 2007-08 2008-09

Current Assets 1,56,45,47,395 1,76,94,57,337

Current Liabilities 1,34,53,70,370 1,59,04,09,166

Current Ratio 1.16 : 1 1.11 : 1



Interpretation:-

As a conventional rule. Current ratio of 2:1 or more is considered satisfactory. We

can see from the above graph that, In year 2007-08, Sumul had C.R. of 1.16:1, though it

is less than standard ratio, but still it says that Sumul is able to meet its current

obligations. But in the very next year 2008-09, that of ratio has been reduced, ratio is

1.11, which means that for every one rupee of current liability, Sumul having 1.16 and

1.11 current assets in last two years.

But still it shows the little worse condition of Sumul, because the above ratio

indicates that, Sumul’s current liabilities are increasing more rapidly than its current

assets.

2) QUICK RATIO

It is used to measure the company’s ability to meet its immediate liability. This

ratio is important for financial institution. Higher ratio i.e. 1:1 indicates sound financial

position of the company.

Quick Ratio = Liquid Assets (C.A. – Stock)

Current Liabilities

Particulars 2007-08 2008-09

Current Assets 1,56,45,47,395 1,76,94,57,337

Stock 54,47,01,276 48,05,07,794

Current Liabilities 1,34,53,70,370 1,59,04,09,166

Quick Ratio 0.76:1 0.81:1



The graph showing the Quick Ratio of the “SUMUL DAIRY” for the last three years

is as follows:

Interpretation:-

From the above graph and table, in year 2007-08, the quick ratio of Sumul was

0.76. We know that the standard ratio is 1:1, here that of ratio is little less; it means that

Sumul may fulfill its immediate obligations. In year 2008-09, that of ratio has been

increased and reached near to the standard ratio. So, we can say that Sumul can able to

meet its current obligations, if it requires immediately. So Sumul may find difficult to meet

its immediate obligations.

Thus, from the above all, we can say that Sumul should increase its liquid cash

either by reducing its stock or reducing its current liabilities.

0.76

0.81

0.720.740.760.78

0.80.82

2007-08 2008-09

PRCE

NTA

GE

YEAR

QUICK RATIO



3. Proprietary Ratio: = Shareholder’s Fund *100

Total tangible assets

= 4, 23, 67,200

47, 69, 45,273

= 8.88%

4. Debt Equity Ratio = Total long term debt

Shareholder’s Fund

= 63, 46, 35,448

4, 23, 67,200

= 14.98

5. Fixed asset to proprietary ratio:

= Fixed assets

Long term debts

= 47, 69, 45,273

63, 46, 35,448

= 0.75

Profitability Ratios:

6. Gross profit ratio = Gross Profit *100

Net Sales

= 1,23,23,39,788*100

7,89,92,33,138

= 15.60%



7. Net profit Ratio = Net Profit *100

Net Sales

= 2,13,60,442 *100

7,89,92,33,138

= 0.27 %

Efficiency Ratios:

8. Stock turn over Ratio: = Cost of Goods Sold

Avg. Stock.

= 6,66,68,93,350

48,47,74,002

= 13.75

5.17 Analysis drawn from it:

The turnover of Sumul Dairy has increased from 41 lakh to 790 crores from

1970-71 to 2008-09. Such a high growth shows Sumul dairy’s effectiveness in production

and distribution of milk and milk products with the use of various production techniques.

Initially the production didn’t increase much but it shows the highest increase in turn over

from 1995-96 to 2008-09.but the production shows the least increase from the period of

2003 to 2008-09

Such a phenomenal increase in turn over shows high efficiency in the

production management, process and distribution of milk and milk products. The turn-

over has increased 90 crores from the last year.



5.18 Working capital:

Generally, the term Working capital refers to that part of capital which is not tied

up in fixed assets but is used to meet the day-to-day requirements of business. It is

invested in current assets like cash, stock, bills receivable, debtors, etc.this type of

capital is used to make payments for purchase of raw material, Wages and to meet other

expenses till goods are sold and money is collected against it. The socks are to be

maintained continuously to meet demand for the product and some money is tied up in

the credit sales. Capital used for this purpose is called Working Capital.

In other words, working capital is that which is held to meet day-to-day

requirements of business, which changes from day-to-day, and which is converted in to

cash continuously. The risk element is low in it. Working capital I is also known as

current capital, circulating capital and floating capital. Some people call it variable capital

also.

There are two concept of working capital. According to one school of thought,

working capital means total of all current assets. Authorities like Meade and Montgomery

have accepted this Interpretation. According to the other interpretation, working capital is

the excess of current assets over current liabilities. Lincoln Stevens and Saliers are in

favor of this interpretation.



Method of Finding Working Capital requirement

Net Working capital = Net current assets – Net current liabilities

particulars

31st December

Changes in W.C.

2007 Rs. 2008 Rs. Increase Rs. Decrease Rs.

Current Assets:

Stock

Investment

Cash & bank

5,40,26,404

4,77,44,132

75,49,00,370

54,47,01,276

4,97,44,132

75,49,00,390

49,06,74,872

20,00,000

20

-

-

85,66,70,906 1,34,93,45,798

Current Liabilities

Reserve fund

& other funds

Current

liabilities &

loans

13,72,96,025

1,25,93,28,687

15,03,81,724

1,34,53,70,370

1,30,85,699

8,60,41,683

-

-

1,39,66,24,712 1,49,57,52,094

Working

capital

53,99,53,806 14,64,06,296 59,18,02,274 -

Increase in

W.C. - 39,35,47,510 39,35,47,510 -

53,99,53,806 53,99,53,806 98,53,49,784 -



It was a matter of big pleasures and joy acquiring the valuable experience

to undertaking the practical training at “SURAT DISTRICT CO-OPERATIVE MILK

UNION LTD” (SUMUL), Surat. This unit has provided me the best of opportunities for

good and useful experiences for my study visit.

With the objective to gain Practical knowledge and experience in the

company and to study the activities of different functional area. It was good

experience at “SUMUL”. Studying about the different department. On the other hand

going for a market survey was an invaluable addition to my Knowledge. To

conclude in a single student, I personally feel that eight weeks [2 month] Training

at SUMUL has added many features to my knowledge wing which will definitely

help me to achieving a success during my future and career bright.

I observed all the aspects of the company with fill Co-operation of the

person whose behaviors rightly and politely with us. That was matter for pleasure to us.

In last I would like to say that “SUMUL, Surat” has bright future. I wish it

would make its name in all over India.

Thanks.



www.sumuldairy.com www.indiadairy.com www.milkpalace.com

Summer Training Report at SUMUL_“SURAT DISTRICT CO-OPERATIVE MILK PRODUCER’S UNION LTD”

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Transcript of Summer Training Report at SUMUL_“SURAT DISTRICT CO-OPERATIVE MILK PRODUCER’S UNION LTD”