Deliverables:

1. Introduction of the company and the brand

2. Where is the brand on the PLC
3. Business model
4. How is the SC managed
5. Manufacturing strategy
6. Retail strategy
7. Logistics and warehousing strategy
8. Inventory models for RM, WIP, FG
9. Demand forecasting strategy
10. Future challenges

GCMMF Overview:

Gujarat Co-operative Milk Marketing Federation (GCMMF) is Indias largest food products marketing
organization. It is a state level apex body of milk co-operatives in Gujarat which aims at providing
remunerative returns to the farmers who are the producers of milk while at the same time provide
quality products which hold value for money. GCMMF is the largest organization in FMCG industry which
is engaged in the marketing of milk and milk products and hold two brand names under itself AMUL and
SAGAR and the annual turnover of the company exceeds Rs. 9000 crores.

AMUL India

AMUL meaning priceless in Sanskrit is a leading food brand in India well known for Milk and Milk
Products. The brand has been a home partner in millions of homes since 1946. The co-operative was
formed as the resultant of a strike against the exploitive trade practices followed by the local trade
cartel. The co-operative Kaira District Co-operative Milk Producers Union Ltd started off with 2 village
dairy co-operative societies and 247 litres of milk and today is popularly known as Amul Dairy. Under the
inspired leadership of Mr. Tribhuvandas Patel, the company has witnessed tremendous growth and
today is involved into manufacturing of multiple products.

The AMUL model is a three-tiered structure consisting of the dairy co-operative societies at the village
level followed by the milk union at the district level and a federation of members of the union at the
state level.
The above image represents the hierarchy of the AMUL Model which indicates the movement of goods
from the manufacturer to the final consumer.

The strategically defined and implemented AMUL Model has made India emerge as the largest milk
producer in the World. Today, more than 15 million milk producers pour their milk in more than 144000
dairy co-operative societies set up across the nation. Their milk is being processed in more than 180
district unions which are being marketed by more than 20 state Federations and all of them
collaboratively ensure building a better life for a million population.

Location of AMUL on the Product Life Cycle: Maturity Stage

Although AMUL has been a well-established brand since years, but it still is enjoying the maturity phase.
Reason being the time-to-time introduction of variant products in terms of flavors and packaging sizes.
Products like AMUL Butter and ice-cream are currently on the maturity stage wherein there sales are
increasing but at a slower rate and they have a well-established customer base and the introduction of
new variants and flavors allow them to maintain the customer base.
Business Model of AMUL:

AMUL as an organization is the perfect blend of co-operative form and professionalism wherein the
owners of the organization are the participative members. The organization has a three-tier structure
the village society which is the procurement unit, the union which acts as the processing unit and the
federation which is the marketing unit. These units are being effectively managed via professionals who
follow a corporate hierarchy structure. The board of directors of the corporation constitutes of farmers
from their respective societies so as to ensure the ownership remains in the hands of the producers.

How is the SC managed?

The supply chain of AMUL begins with the farmers who are the producers of milk from their cattle.
These farmers are categorized based on co-operatives which are also known as Village Co-operative
Societies (VCS). These VCS are the ones who supply milk to different dairy co-operatives popularly
known as Unions and AMUL is a part of such Union. The milk and milk products manufactured are
supplied to the Gujarat Co-operative Milk Marketing Federation (GCMMF) which acts as the marketing
organization for all the products of the unions in Gujarat. GCMMF currently has more than 40 regional
distribution centers across the nation which serves over 500,000 retail outlets and also handles exports
to more than 15 countries.

AMUL on a daily basis collects 447,000 litres of milk from 2.12 million farmers, converts the milk into
branded, packaged products, and delivers goods to over 500,000 retailer across the nation.

Maintaining an efficient supply chain management helps in reducing lead time, leads to faster inventory
turnover, enhancing forecasting accuracy and increased warehouse utilization, reduction in safety stock
and better working capital utilization. It has also helped AMUL in reducing its dependency on
distribution centers and the possibility of stock-outs was completely removed.
Manufacturing Strategy

Retail Strategy

The head office for GCMMF is located at Anand and the entire market is divided into 5 different zones -
Ahmedabad, Mumbai, New Delhi, Kolkata and Chennai. AMUL uses a blend of zero level, one level, two
levels and three level distribution strategies to maintain efficient distribution across the nation. Under
zero level channel, AMUL as a manufacturer sells directly to the customers; level one contains one
intermediary between manufacturer and customer; level two contains two intermediaries wholesaler
and retailer whereas three level strategy involves wholesaler, retailer and jobber in middle. The
distribution strategy is found out to be as: