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Submitted To: - Pranay Verma
Submitted: - By Prashant Kumar Rai FT (RM)-08-117
India is the largest producer of milk producing more than 100 million tons of milk per annum. Yet, her per capita milk consumption is around 250 g per day. World wide Milk Production
Rank Country Production (109kg/y) 
Amul (Anand Milk Union Limited), formed in 1946, is a dairy cooperative movement in India. It is a brand name managed by an apex cooperative organisation, “Gujarat Cooperative Milk Marketing Federation Ltd” (GCMMF), which today is jointly owned by some 2.6 million milk producers in Gujarat, India AMUL is based in Anand, Gujarat and has been a sterling example of a co-operative organization's success in the long term. It is one of the best examples of co-operative achievement in the developing economy. "Anyone who has seen ... the dairy cooperatives in the state of Gujarat, especially the highly successful one known as AMUL, will naturally wonder what combination of influences and incentives is needed to multiply such a model a thousand times over in developing regions everywhere." The Amul Pattern has established itself as a uniquely appropriate model for rural development. Amul has spurred the White Revolution of India, which has made India the largest producer of milk and milk products in the world. It is also the world's biggest vegetarian cheese brand.
1- Bread Spreads: - Amul Butter:
-Utterly Butterly Delicious, Delicious Table Margarine: -The Delicious way to eat healthy, Amul Lite: -Low fat, low Cholesterol Bread Spread. Café, Amul Kool Chocolate Milk, Amul Kool Thandai, Amul Lassee, Amul Kool Flavoured Tetra Pack, Amul Kool Flavoured Bottled Milk, Kool Koko: -A delight to Chocolate Lovers. Delicious Chocolate taste, Nutramul Energy Drink: -A drink for Kids - provides energy to suit the needs of growing Kids, Amul Masti Spiced Buttermilk: -Amul introduces the Best Thirst Quenching Drink.
2- Milk Drinks : -Amul Kool Millk Shaake, Amul Kool, Amul Kool
3- Powder Milk: -Amul Spray Infant Milk Food:
-Still, Mother's Milk is Best for your baby, Amul Instant Full Cream Milk Powder: -A dairy in your home, Sagar Skimmed Milk Powder: -Which is especially useful for diet preparations or for use by people on low calorie and high protein diet, Amulya Dairy Whitener: -The Richest, Purest Dairy Whitener, Sagar Tea Coffee Whitener. available in the market. Pasteurised in state-of-the-art processing plants and pouch-packed for convenience, Amul Gold Milk, Amul Taaza Double Toned Milk, Amul Lite Slim and Trim Milk,Amul Lite Slim and Trim Milk, Amul Fresh Cream, Amul Shakti Toned Milk, Amul Buttermilk, Amul Calci+.
4- Fresh Milk: - Amul Fresh Milk: -This is the most hygienic milk
5- Cheese: -Amul Pasteurised Processed Cheese:
-100% Vegetarian Cheese made from microbial rennet, Amul Cheese Spreads: -Tasty Cheese Spreads in 3 great flavours, Amul Emmental Cheese: -The Great Swiss Cheese from Amul, has a sweet-dry flavour and hazelnut aroma, Amul Pizza Mozzarella Cheese:-Pizza cheese...makes great tasting pizzas!, Gouda Cheese. Has typical rich aroma and granular texture. An ethnic product made by dairies with decades of experience, Cooking Butter, Amul Malai Paneer: -Ready to cook paneer to make your favourite recipes!, Mithai Mate: -Sweetened Condensed Milk - Free flowing and smooth texture.
6- For Cooking: - Amul/Sagar Pure Ghee: -Made from fresh cream.
White to creamy color with a pleasant taste, Pro-biotic Dahi, Utterly Delicious Pizza, Masti Dahi.
7- Desserts: -Amul Ice Creams: -Premium Ice Cream made in various
varieties and flavours with dry fruits and nuts, Amul Mithaee Gulab Jamuns: -Pure Khoya Gulab Jamums...best served piping hot, Amul Shrikhand: -A delicious treat, anytime, Amul Chocolates: -The perfect gift for someone you love, Amul Basundi.
8- Health Drink: - Nutramul: -Malted Milk Food made from malt
extract has the highest protein content among all the brown beverage powders sold in India, Amul Shakti Health Food Drink: -Available in Kesar-Almond and Chocolate flavours.
9- Curd Products: - Yogi Sweetened Flavoured Dahi (Dessert),Amul
Masti Dahi (fresh curd), Amul Masti Spiced Butter Milk, Amul Lassee.
10- Amul Icecreams: -Royal
Treat Range-(Butterscotch, Rajbhog, Malai Kulfi),Nut-o-Mania Range-(Kaju Draksh, Kesar Pista Royale, Fruit Bonanza, Roasted Almond), Nature's Treat-(Alphanso Mango, Fresh Litchi, Shahi Anjir, Fresh Strawberry, Black Currant, Santra Mantra, Fresh Pineapple), Sundae Range-(Mango, Black Currant, Sundae Magic, Double Sundae), Assorted Treat-(Chocobar, Dollies, Frostik, Ice Candies, Tricone, Chococrunch, Megabite, Cassatta),Utterly Delicious-(Vanila, Strawberry, Chocolate, Chocochips, Cake Magic).
NO. OF STORS
The firms run 180 stores and are present in Uttar Pradesh, Punjab, Haryana, Rajasthan and Madhaypradesh. These stores saw a 30 to 40 percent growth in FMCG sales and a three figure growth in grocery sales during the April Jun quarter. Amul is the largest food brand in India and world's Largest Pouched Milk Brand with an annual turnover of US $1050 million (2006-07). Currently Amul has 2.6 million producer members with milk collection average of 10.16 million litres per day. Members: No. of Producer Members: No. of Village Societies: Total Milk handling capacity: Milk collection (Total Milk collection (Daily Average 2008-09): Milk Drying Capacity: 13 district cooperative milk producers' Union 2.79 million 13,328 11.22 million litres per day 3.05 billion litres 8.4 million litres 626 Mts. per day
Cattlefeed manufacturing 3500 Mts per day Capacity:
SALES TURN OVER
Sales turnover 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 Rs(million) 11140 13790 15540 18840 22192 22185 22588 23365 27457 28941 29225 37736 42778 52554 US$(million) 355 400 450 455 493 493 500 500 575 616 672 850 1056 1325
1: -Developing demand: -At the time Amul was formed, consumers had
limited purchasing power, and modest consumption levels of milk and other dairy products. Thus Amul adopted a low-cost price strategy to make its products affordable and attractive to consumers by guaranteeing them value for money.
2: -Introducing higher value products: -Beginning with liquid milk,
GCMMF enhanced the product mix through the progressive addition of higher value products while maintaining the desired growth in existing products.
3: -The distribution network: -Amul products are available in over 500,000
retail outlets across India through its network of over 3,500 distributors. There are 47 depots with dry and cold warehouses to buffer inventory of the entire range of products.
4: -Umbrella branding: -The network follows an umbrella branding strategy.
Amul is the common brand for most product categories produced by various unions: liquid milk, milk powders, butter, ghee, cheese, cocoa products, sweets, ice-cream and condensed milk. Amul's sub-brands include variants such as Amulspray, Amulspree, Amulya and Nutramul. The edible oil products are grouped around Dhara and Lokdhara, mineral water is sold under the Jal Dhara brand while fruit drinks bear the Safal name. By insisting on an umbrella brand, GCMMF not only skillfully avoided inter-union conflicts but also created an opportunity for the union members to cooperate in developing products.
5: -Managing the supply chain: -Even though the cooperative was formed to
bring together farmers, it was recognised that professional managers and technocrats would be required to manage the network effectively and make it commercially viable.
6: -Coordination: -Given the large number of organisations and entities in the
supply chain and decentralised responsibility for various activities, effective coordination is critical for efficiency and cost control. GCMMF and the unions play a major role in this process and jointly achieve the desired degree of control.
7: -Managing third party service providers: -From the beginning, it was
recognised that the unions' core activity lay in milk processing and the production of dairy products. Accordingly, marketing efforts (including brand development) were assumed by GCMMF. All other activities were entrusted to third parties. These include logistics of milk collection, distribution of dairy products, sale of products through dealers and retail stores, provision of animal feed, and veterinary services.
8: -Establishing best practices: -A key source of competitive advantage has
been the enterprise's ability to continuously implement best practices across all elements of the network: the federation, the unions, the village societies and the distribution channel. In developing these practices, the federation and the unions have adapted successful models from around the world. It could be the implementation of small group activities or quality circles at the federation. Or a TQM program at the unions. Or housekeeping and good accounting practices at the village society level.
9: -Technology and e-initiatives: -GCMMF's technology strategy is
characterized by four distinct components: new products, process technology, and complementary assets to enhance milk production and e-commerce. GCMMF was one of the first FMCG (fast-moving consumer goods) firms in India to employ Internet technologies to implement B2C commerce. Today customers can order a variety of products through the Internet and be assured of timely delivery with cash payment upon receipt. Another e-initiative underway is to provide farmers access to information relating to markets, technology and best practices in the dairy industry through net enabled kiosks in the villages. GCMMF has also implemented a Geographical Information System (GIS) at both ends of the supply chain, i.e. milk collection as well as the marketing process.
10: -Low Price Strategy: - Amul adopted a low-cost price strategy to make its
products affordable and attractive to consumers by guaranteeing them value for money
A need was felt to look for a strategy to make its operations competitive and streamline the collection and production processes of Milk products with the help of ICT tools. Amul decided to leverage on the strengths of an ERP System and took major initiatives in this direction in 1994. Amul studied its existing functions and operations to formulate an IT plan for spearheading its growth in the long term perspective. Automatic Milk Collection System units (AMCUS) at village societies were installed in the first phase to automate milk producers logistics. AMCUS facilitated to capture member information, milk fat contents, volume collected and amount payable to each members electronically. On an average, around thousand farmers come to sell milk at their local cooperative milk collection centre. Each farmer has been given a plastic card for identification. At the milk collection counter, the farmer drops the card into a box and the identification number is transmitted to a personal computer attached to the machine. The milk is then weighed and the fat content of the milk is measured by an electronic fat testing machine. Both these details are recorded in the PC. The computer then calculates the amount due to farmer on the basis of the fat content. The value of the milk is then printed out on a slip and handed over to farmer who collects the payment at adjacent window. Amul also connected its zonal offices, regional offices and member’s dairies through VSATs for seamless exchange of information. In addition to EIAS, Amul is also using Geographic Information Systems (GIS) for business planning and optimization of collection processes. Indian Institute of Management – Ahmedabad supplemented Amul’s IT strategy by providing an application software – Dairy Information System
Kiosk(DISK) to facilitate data analysis and decision support in improving milk collection. The kiosk would also contain an extensive database on the history of cattle owned by the farmers, medical history of the cattle, reproductive cycle and history of diseases. Besides this, farmers can have access to information related to milk production, including best practices in breeding and rearing cattle. Using the same system, the farmers can even have access to a multimedia database on innovations captured by Srishti, an NGO working with IIMA. As a large amount of detailed history on milk production is available in the database, the system can be used to forecast milk collection and monitor the produce from individual sellers. Going forward, there are plans to introduce features like Internet banking services and ATMs which will enable milk societies to credit payments directly to the seller’s bank account. In line with this vision, officials at Amul are looking at upgrading the plastic cards which are being currently used only for identification purposes, to smart cards which can be used to withdraw cash from ATMs.
Review of Operations
1: -Milk Procurement: -This
year total milk procurement by AMUL member unions during the year 2008-09 averaged 87.19 lakh kilograms ( 8.7 million kg) per day, representing a quantum growth of 14.87 per cent over 75.90 lakh kilograms ( 7.6 million kg) per day achieved during 2007-08. This high growth of 14.87 per cent in milk procurement has been achieved, after an impressive growth of 12.9 per cent, last year. The highest procurement as usual, was recorded during January 2009 at 114.24 lakh kilograms (11.14 million kg) per day. We have also successfully demonstrated our ability to process almost 11 million litres of milk per day.
2: - SALES: -During
the year, sales of AMUL Federation registered a quantum growth of 27.7 per cent to reach Rs.6711.31 crores ( Rs.67.11 billion). Last year, AMUL turnover was Rs. 5255.41 crores (Rs. 52.55 billion). This is an extremely impressive growth, when viewed from the perspective of 22.9 per cent growth that AMUL had achieved in 2007-08. Sales of Amul Milk in pouches have grown by 44% in value terms. UHT milk has also shown an impressive growth of 26%. AMUL sales in Amul Processed Cheese have shown consistent and very impressive growth of 25%. Amul Ice-cream has shown an impressive growth of 16 per cent in value terms over the last year. At the same time AMUL have remained No. 1 Ice-cream brand in India leaving a wide gap with the nearest competitor. In the Infant Milk Food category, AMUL brand Amulspray registered a growth of 20%. In the dairy whitener segment, Amulya recorded a growth of almost 12%. AMUL managed to achieve 17 per cent value growth in Butter, despite intense competition in this category. In there effort to ensure that all sections of there society are able to afford Amul Butter, they have given special emphasis to low unit value packs.
3: - RETAILING: -The concept of Amul parlors initiated in 2002 has come
a long way and has today, evolved into the most visible face of brand Amul. The network of more than 4000 parlors in almost all major towns of the country bears testimony to the fact that the model is hugely scalable and inherently sustainable.
This retailing initiative has not only enabled them to interface directly with consumer, it has also helped them in there endeavor to reduce middle-men from the supply chain. Taking cue from the success of AMUL parlors, commitment from there sales team and all there channel partners dealing in milk, ice-cream and dairy products; they plan to take the total tally of Amul parlors to 10000 by adding 6000 parlors during the coming financial year.
4: -EXPORT: - Despite unfavorable conditions in international dairy market,
AMUL’s export business reached Rs.133 crores against Rs.125 crore last year. They have further consolidated there growth in consumer products including Paneer, Butter, Cheese, UHT Milk etc. This is extremely encouraging and indicates the high trust that our customers place in Amul Brand. They have not been able to export Milk Powder in bulk packing in larger quantity due to fall of world market prices by nearly 50% as compared t previous year.
5: -DISTRIBUTION NETWORK: -Over a period of time AMUL have
built unique capabilities of distributing Ambient, Chilled, Frozen and Fresh products simultaneously through there versatile distribution highways. Today, 3500 Distributors for Value added milk products, 1800 Distributors for Fresh Milk, ensure that Amul Products are available to all segments of consumers in India through more than 2 Million outlets. In Federation, there distributor is considered to be the real Marketing Manager. To update them with modern marketing concept a workshop on Marketing and Sales Management is being conducted in collaboration with a premier business school. So far, 1100 Distributors have been benefited from this workshop. There Amul Yatra Programmes ensure that there every new distributor and other business partners visit Anand to get an exposure to our co-operative structure, there culture as well as there operational systems and processes. The initiative continued this year as well and so far, about 7400 Distributors and other business associates have visited Anand on Amul Yatra.
PROBLEM OR ISSUE
1- Perishability of product. 2- Cooling system is not available every where. 3- Problems are addressed in logistics in collection of Milk from villages. 4- Problems in distribution of perishable product in on a daily basis. 5- Problem in gathering spare product from market. 6- Local dairy like Shyam Doodh (East, U.P.), Verka Milk (Punjab-Haryana), Lakshami Dairy (NCR), Sachi Milk (M.P.), Parag Milk (U.P.) etc. 7- Emotional Problems in Infancy and Childhood.
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