Distribution Channel AMUL

DISTRIBUTION CHANNEL OF AMUL
A PROJECT REPORT ON
2012-13 1
A PROJECT REPORT ON
“DISTRIBUTION CHANNEL OF AMUL”
SUBMITTED BY
“___________”
FOR THE DEGREE OF

THE BACHELOR OF MANAGEMENT STUDIES
UNDER THE GUIDANCE OF
“MISS _____________”
___________ COLLEGE OF COMMERCE AND ECONOMICS

_________, MUMBAI – 4000____
ACADEMIC YEAR 2010 - 2011
2012-13 2
DECLARATION
I, ___________, OF THE _________ COLLEGE OF COMMERCE AND
ECONOMICS, ___________( E ) , HEREBY DECLARE THAT I HAVE COMPLETED
THE PROJECT ENTITLED “DISTRIBUTION CHANNEL OF AMUL” IN PARTIAL
FULFILLMENT OF THE REQUIREMENT FOR THE THIRD YEAR OF THE
BACHELOR OF MANAGEMENT STUDIES COURSE FOR THE ACADEMIC YEAR
2012-2013
I FURTHER DECLARE THAT INFORMATION SUBMITTED BY ME IS TRUE AND

ORIGINAL TO THE BEST OF MY KNOWLEDGE.
DATED: _________
Name of the student
2012-13 3
CERTIFICATE
I MISS ______________ HEREBY CERTIFY THAT ROSHANI PAREKH
_________________ STUDYING IN TYBMS AT ______COLLEGE OF COMMERCE
AND ECONOMICS, __________, HAS COMPLETED A PROJECT ON
“DISTRIBUTION CHANNEL OF AMUL” IN THE ACADEMIC YEAR 2012-2013
UNDER MY GUIDANCE.
I FURTHER CERTIFY THAT THE INFORMATION SUBMITTED IS TRUE AND

ORIGINAL TO THE BEST OF MY KNOWLEDGE.
DATED:
Place:
Name of the guide

Examiner’s Sign &Date PROJECT GUIDE
_____________________
College Seal PRINCIPAL
2012-13 4
ACKNOWLEDEGEMENT
I EXPRESS MY SINCERE THANKS TO MISS ______________FOR HER

VALUABLE GUIDANCE IN DOING THIS PROJECT.
I WISH TO TAKE THE OPPORTUNITY TO EXPRESS MY DEEP SENCE OF

GRATITUDE TO PRINCIPAL ___________________________ AND PROF. (Mr.)
________________________ FOR THEIR INVALUABLE GUIDANCE AND
SUPPORT IN THIS ENDEAVOUR. THEY HAVE BEEN A CONSTANT SOURCE OF
INSPIRATION.
FINALLY IT IS THE FOREMOST DUTY TO THANK ALL MY RESPONDENTS,

FAMILY & FRIENDS WHO HAVE HELPED ME DIRECTLY OR INDIRECTLY IN
COMPLETING MY FIELD WORK, WITHOUT WHICH THIS PROJECT WOULD
NOT HAVE BEEN SUCCESSFUL.
Name of the student
2012-13 5
TABLE OF CONTENTS
2012-13 6
CHAPTER 1
2012-13 7
1.1 EXECUTIVE SUMMARY
Imagine going for a morning walk in the wee hours to a park, making a brief stop-
over and coming back home with a belly-full of tasty flavored milk and hot pizza
topped with cheese! Defeats the purpose of the walk, but may make you feel on top of
the world.
Now, imagine the CEO of a dairy company saying, “Ours is not a food company, it is
an IT company in the food business. The most efficient way of building links between
milk producers and consumers so as to provide the best returns for both is through IT
and innovation.”
Or better still, imagine a cooperative movement that has delivered a Rs. 2746 crore
turnover and has been planning actively to take it up to the 10000 crore mark.
Amul India limited, and its team of energetic professionals have planned to take on
HLL in ice-creams, Cadbury in chocolates, and NDDB in a verbal duel to uphold the
cooperative movement. On top of all this, set up a retailing network that would be the
toast of the town.
2012-13 8
CHAPTER 2
2012-13 9
2.1 AMUL STORY
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 Co-operative Milk Marketing Federation Ltd. (GCMMF), which today is
jointly owned by some 2.8 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.
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 2.8 million
producer members with milk collection average of 10.16 million litres per day.
Besides India, Amul has entered overseas markets such as Mauritius, UAE, USA,
Bangladesh, Australia, China, Singapore, Hong Kong and a few South African
countries. Its bid to enter Japanese market in 1994 had not succeeded, but now it has
fresh plans of flooding the Japanese markets. Other potential markets being
considered include Sri Lanka.
Dr Verghese Kurien, former chairman of the GCMMF, is recognised as the man

behind the success of Amul. On 10 Aug 2006 Parthi Bhatol, chairman of the
Banaskantha Union, was elected chairman of GCMMF.
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2.1.1 MASCOT
Since 1967 Amul products' mascot has been the very recognisable "Amul baby" (a
chubby butter girl usually dressed in polka dotted dress) showing up on hoardings and
product wrappers with the equally recognisable tagline Utterly Butterly Delicious
Amul.The mascot was first used for Amul butter. But in recent years in a second wave
of ad campaign for Amul products, she has also been used for other product like ghee
and milk.
2012-13 11
2.2 EVOLUTION OF THE CO-OPERATIVE MOVEMENT
One of the most powerful co-operative movements originating from the birth state of
Mahatma Gandhi is responsible for the birth and growth of the popular FMCG brand-
AMUL. Before the cooperative movement began, middlemen who supplied milk to
the consumers were exploiting the dairy industry in the Kaira District. It began as a
response to this exploitation and put an end to it. It grew because it responded to the
farmers financially as well as with services. It has thrived because farmers who have a
stake in its success, own it. And because it has been managed by capable professionals
and strengthened by dedicated scientists, technologists and workers, it has forged
ahead. Today in India, there are 75,000 dairy cooperative societies, spread all over the
country with a membership of 10 million. The farmer in the village is now assured of
a better future thanks to these cooperatives. Recently one of the European Embassies
in Delhi requested Amul for information on the five biggest "companies" in the dairy
business. The first three are in the cooperative sector - The Gujarat Cooperative Milk
Marketing Federation (GCMMF), The Kaira District Cooperative Milk Producers'
Union Limited and The Mehsana District Cooperative Milk Producers' Union. The
Kaira District Cooperative is the second best in the country. It helped to create
GCMMF, the apex body of all cooperatives in Gujarat.
2.2.1 - THE HUMBLE BEGINNING

In the forties one firm - Polsons, dominated the dairy industry. Established by a rather
enterprising gentleman who discovered that Kaira District, of what was then Bombay
Presidency, produced a good deal of milk. He established a creamery and for a while
the name Polsons was synonymous with butter - much as Amul is today.
One of Polson's businesses was to supply milk to Bombay. As Kaira district was an
abundant source of the commodity, Polson was chosen to procure it from there. He in
turn, entered into an arrangement with a number of contractors who actually went to
the villages and collected the milk. Everyone was happy. Bombay received reasonably
good quality milk and Polson made a handsome profit. The contractors too managed
to earn large margins by over quoting the farmers. It was only the poor farmers who
were unhappy for it. They invested in the animal feed and fodder and they put in their
2012-13 12
labor. Yet, it was they who received the smallest share of the Bombay consumers'
rupee. The arrangement benefited everyone but them.
2.2.2 - THE FIRST STEP: FORMATION OF KAIRA UNION

Realizing that something needed to be done about the unequal balance of wealth, they
turned to Sardar Vallabhbhai Patel for advice. Sardar Patel knew that their only
chance of earning a decent income was when they themselves gained control over the
resources they created. He also knew that the cooperatives offered them the best
chance of gaining that control. So he advised them to stop selling milk to Polson and
form a cooperative of their own. In his opinion they were to own their own dairy unit.
He said, "Throw out Polson and his milk contractors". They followed his advice and
the Kaira District Cooperative Milk Producers' Union (AMUL) was born, in 1946. By
good fortune, they could get as Chairman - Shri Tribhuvandas Patel, an equally
remarkable man. He understood the concept of cooperation and he understood people.
His integrity was absolute. Because the farmers of Kaira district trusted and respected
Tribhuvandas Patel, the cooperative was able to pass through some very difficult
times and eventually become a model of cooperative dairying throughout the world.
The Kaira Union began with a clear goal, to ensure that its producer members
received the highest possible share of the consumers' rupee. This goal itself defined
their direction. The focus was on production by the masses, not mass production. By
the early 'sixties, the modest experiment in Kaira had not only become a success,
people began to recognize it as such. Farmers came from all parts of Gujarat to
learn.They went back to their own districts and started their own cooperatives. The
result - Together, the district milk producers unions of Gujarat owned the Gujarat
Cooperative Milk Marketing Federation, which markets the milk and milk products
manufactured by its owners. The Federation's turnover was over Rs. 1700 crore
making it the largest in the food industry.
In 1964, the then Prime Minister Shri Lal Bahadur Shastri came to inaugurate cattle
feed factory owned by Amul near Anand. Impressed by the cooperative's success, he
expressed his wish to "transplant the spirit of Anand in many other places". He
wanted the Anand model of dairy development replicated in other parts of the country.
With institutions owned by rural producers, which were sensitive to their needs and
2012-13 13
responsive to their demands, it was an ideal tool for progress. The National Dairy
Development Board was created in 1965 in response to this call.
2012-13 14
2.3 OPERATION FLOOD
The mighty Ganges at its origin is but a tiny stream in the Gangotri ranges of the
Himalayas. Similar is the story of Amul, which inspired 'Operation Flood' and
heralded the 'White Revolution' in India. It began with two village cooperatives and
250 liters of milk per day, nothing but a trickle compared to the flood it has become
today. Today Amul collects , processes and distributes over a million liters of milk and
milk products per day, during the peak, on behalf of more than a thousand village
cooperatives owned by half a million-farmer members. Further, as Ganga-ma carries
the aspirations of generations for moksha, Amul too has become a symbol of the
aspirations of millions of farmers, creating a pattern of liberation and self-reliance for
every farmer to follow.
2.3.1 - THE START OF A REVOLUTION

The revolution started as awareness among the farmers that grew and matured into a
protest movement and the determination to liberate them. Over four decades ago, the
life of a farmer in Kaira District was very much like that of his counterpart anywhere
else in India. His income was derived almost entirely from seasonal crops. The
income from milch buffaloes was undependable. Private traders and middlemen
controlled the marketing and distribution system for the milk. As milk is perishable,
farmers were compelled to sell it for whatever they were offered. Often, they had to
sell cream and ghee at throwaway prices. In this situation, the one who gained was the
private trader. Gradually, the realization dawned on the farmers that the exploitation
by the trader could be checked only if marketed their milk themselves. In order to do
that they needed to form some sort of an organization. This realization is what led to
the establishment of the Kaira District Cooperative Milk Producers' Union
Limited (popularly known as Amul) that was formally registered on December 14,
1946.
The Kaira Union began pasteurizing milk for the Bombay Milk Scheme in June 1948.
An assured market proved a great incentive to the milk producers of the district. By
2012-13 15
the end of 1948, more than 400 farmers joined in more village societies, and the
quantity of milk handled by one Union increased from 250 to 5,000 liters a day.
2.3.2 - OBSTACLES: SPRINGBOARDS FOR SUCCESS

Each failure, each obstacle, each stumbling block can be turned into a success story.
In the early years, Amul had to face a number of problems. With every problem came
opportunity- a chance to turn a negative into a positive. Milk by-products and
supplementary yield, which suffered from the same lack of marketing and distribution
facilities, became encumbrance. Instead of being bogged down by their fate they were
used as stepping-stones for expansion. Backward integration of the process led the
cooperatives to advances in animal husbandry and veterinary practice.
2.3.3 - MILK BY PRODUCTS: AN EXCUSE TO EXPAND

The response to these provided stimulus for further growth. For example, as the
movement spread in the district, it was found that the Bombay Milk Scheme could not
absorb the extra milk collected by the Kaira Union in winter, when the production on
an average was 2.5 times more than in summer. Thus, even by 1953, the farmer-
members had no assured market for the extra milk produced in winter. They were
again forced to sell a large surplus at low rates to the middlemen. The remedy was to
set up a plant to process milk into products like butter and milk powder. A Rs 5
million plant to manufacture milk powder and butter was completed in 1955. In 1958,
the factory was expanded to manufacture sweetened condensed milk. Two years later,
a new wing was added for the manufacture of 2500 tons of roller-dried baby food and
600 tons of cheese per year, the former based on a formula developed with the
assistance of Central Food Technological Research Institute (CFTRI), Mysore. It was
the first time anywhere in the world that cheese or baby food was made from buffalo
milk on a large, commercial scale. Another milestone was the completion of a project
to manufacture balanced cattle feed. The plant was donated by OXFAM under the
Freedom from Hunger Campaign of the FAO.
To meet the requirement of milk powder for the Defense, the Kaira Union was asked
by the Government of India in 1963 to setup additional milk drying capacity. A new
2012-13 16
dairy capable of producing 40 tons of milk powder and 20 tons of butter a day was
speedily completed. It was declared open in 1965. The Mogar Complex where high
protein weaning food, chocolate and malted food are being made was another
initiative by Amul to ensure that while it fulfilled the social responsibility to meet the
demand for liquid milk, its members were not deprived of the benefits to be had from
the sale of high value-added products.
2.3.4 - CATTLE: FROM STUMBLING BLOCKS TO BUILDING BLOCKS

Traditionally dairying was a subsidiary occupation of the farmers of Kaira. However,
the contribution to the farmer's income was not as prominent as his attachment to
dairying as a tradition handed down from one generation to the next. The milk yield
from animals, which were maintained mainly on the by products of the farm, was
decidedly low. That together with the lack of facilities to market even the little
produced rendered the scientific practice of animal husbandry irrational as well as
unaffordable. The return on the investment as well as the prospects of being able to
market the product looked very bleak. It was a vicious cycle reinforced by generations
of beliefs.
The Kaira Union broke the cycle by not only taking upon themselves the
responsibility of collecting the marketable surplus of milk but also provided the
members with every provision needed to enhance production. Thus the Kaira Union
has full-fledged machinery geared to provide animal health care and breeding
facilities. As early as late fifties, the Union started making high quality buffalo semen.
Through village society workers artificial insemination service was made available to
the rural animal population. The Union started its mobile veterinary services to render
animal health care at the farmers' doorstep. Probably for the first time in the country,
veterinary first aid services, by trained personnel, were made available in the villages.
Fully qualified staff mans the Union’s 16 mobile veterinary dispensaries. All the
villages are visited bi-monthly, on a predetermined day, to provide animal health care.
A 24-hour Emergency Service is also available at a fee (Rs. 35 for members and Rs.
100 for non-members). All the mobile veterinary vans are equipped with Radio
Telephone.
2012-13 17
The Union runs a semen production center where it maintains high pedigreed Surti
buffalo bulls; Holstein Friesian bulls, Jersey bulls and 50 per cent crossbred bulls. The
semen obtained from these bulls is used for artificial breeding of buffaloes and cows
belonging to the farmer members of the district. The artificial insemination service
has become very popular because it regulates the frequency of calving in cows and
buffaloes thus reducing their dry period. Not only that, a balanced feed concentrate is
manufactured in the Union's Cattle Feed Plant and sold to the members through the
societies at cost price.
Impressive though its growth, the unique feature of the Amul sagas did not lie in the
extensive use of modern technology, nor the range of its products, not even the rapid
inroads it made into the market for dairy products. The essence of the Amul story lies
in the breakthrough it achieved in modernizing the subsistence economy of a sector
by organizing the rural producers in the areas.
2.3.5 - PEOPLE POWER: AMUL'S SECRET OF SUCCESS

The system succeeded mainly because it provides an assured market at remunerative
prices for producers' milk besides acting as a channel to market the production
enhancement package.
What's more, it does not disturb the agro-system of the farmers. It also enables the
consumer an access to high quality milk and milk products. Contrary to the traditional
system, when the profit of the business was cornered by the middlemen, the system
ensured that the profit goes to the participants for their socio-economic upliftment and
common good.
Looking back on the path traversed by Amul, the following features make it a pattern
and model for emulation elsewhere. Amul has been able to:
Produce an appropriate blend of the policy makers farmers board of management and
the professionals: each group appreciating its roles and limitations
Bring at the command of the rural milk producers the best of the technology and
harness its fruit for betterment
2012-13 18
Provide a support system to the milk producers without disturbing their agro-
economic systems
Plough back the profits, by prudent use of men, material and machines, in the rural
sector for the common good and betterment of the member producers and
Even though, growing with time and on scale, it has remained with the smallest
producer members. In that sense, Amul is an example par excellence, of an
intervention for rural change.
The Union looks after policy formulation, processing and marketing of milk,
provision of technical inputs to enhance milk yield of animals, the artificial
insemination service, veterinary care, better feeds and the like - all through the village
societies.
The village society also facilitates the implementation of various production

enhancement and member education programs undertaken by the Union. The staffs of
the village societies have been trained to undertake the veterinary first-aid and the
artificial insemination activities on their own.
2012-13 19
CHAPTER 3
2012-13 20
3.1 GCMMF: AN OVERVIEW
Gujarat Cooperative Milk Marketing Federation (GCMMF) is the India’s largest food
product marketing organization. It is a state level apex body of milk cooperatives in
Gujarat, which aims to provide remunerative returns to the farmers.
Members 12 district cooperative milk producers' Union

No. of Producer Members 2.36 million
No. of Village Societies 11,333
Total Milk handling capacity 6.9 million litres per day
Milk collection (Total – 2008-09) 2.81 billion litres
Milk collection (Daily Average 2008-09) 5.97 million litres
Milk Drying Capacity 511 metric Tons per day
Cattle feed manufacturing Capacity 2340 MTs per day
3.1.1 - ORGANIZATION STRUCTURE IS DIVIDED INTO TWO PARTS:

External Organization Structure
Internal Organization Structure
External Organization Structure

External Organization Structure is the organization structure that affects the
organization from the out side.
State Level Marketing Federation
District Milk Product Union Ltd.
Village Milk Product Union Ltd.
As we know, GCMMF is unit of Gujarat Milk Marketing Federation, which is a co-

Villagers
operative organization. The villagers of more than 10000 villages of Gujarat are the
bases of this structure. They all make village milk producers union, district level milk
2012-13 21
V
i
l
a
g
e
r
s
producers union and then a state level marketing federation is established. The
structure is line relationship, which provides easy way to operation. It also provides
better communication between two stages.
V
i
l
l
a
g
e
r
s
2012-13 22
Internal Organization Structure of Amul
A systematic & well-defined organizational structure plays a vital role & provides
accurate information to the top-level management. An organisation structure defines a
clear-cut line of authorities & responsibilities among the employees of GCMMF. The
Organisation structure of Amul is well-arranged structure. At a glance a person can
2012-13 23
completely come to know about the organization structure. Amul is leaded by the
director under him five branches viz. Factory, Marketing, Accounts, Purchase, Human
Resources Department.
Factory department has a separate general manager under him there are six braches
viz. Production, Stores, Distribution, Cold Storage, Quality, and Deep-freezing. This
department takes care of the factory work.
Marketing department has regional senior marketing manager and under him there is a
regional manager. This department takes care of the marketing aspects of Amul.
Accounts department takes care regarding accounts i.e. day-to-day work. Under the
accountant there is one clerk. Purchase department takes care regarding the purchase
of raw materials and many other things.
Sales Turnover Rs (million) US $ (in million)

1994-95 11140 355
1995-96 13790 400
1996-97 15540 450
1997-98 18840 455
1998-99 22192 493
1999-00 22185 493
2000-01 22588 500
2001-02 23365 500
2002-03 27457 575
2003-04 28941 616
2004-05 29225 672
2005-06 37736 850
2006-07 42778 1050
2007-08 52554 1325
2008-09 67113 1504
2012-13 24
3.2 ANAND PATTERN OF DEVELOPMENT
It began with two village co-operatives and 250 liters of milk per day -- anything but a
trickle compared to the flood it has become today. Today AMUL collects processes
and distributes over 9 lakh liters of milk per day during the peak on behalf of 962
village co-operatives owned by 5.42 lakh farmer members. AMUL has become the
sign and symbol of the aspirations of millions of farmers, and the pattern of liberation
and self-reliance for every farmer.
The Kheda District Co-operative Milk Producers' Union Limited (popularly known as
AMUL) was formally registered on December 14, 1946.
The Kheda Union began pasteurizing milk for the Bombay Milk Scheme in June
1948. An assured market proved a great incentive to the milk producers of the district.
By the end of 1948, more than 400 farmers joined in more village societies, and the
quantity of milk handled by the Union increased from 250 to 5000 litres a day. In the
early years, AMUL had to face a number of problems. The response to these provided
stimulus for further growth. For example, as the movement spread in the district, it
was found that the Bombay Milk Scheme could not absorb the extra milk collected by
the Kheda Union in winter, when the production on an average was 2.5 times the
summer. Thus, even by 1953, the farmer-members had no assured market for the extra
2012-13 25
milk produced in winter. They were again forced to sell a large surplus at low rates to
the middlemen.
The remedy was to set up a plant to process milk into products like butter and milk
powder. A Rs. 5 million plant to manufacture milk powder and butter was completed
in 1955. In 1958, the factory was expanded to manufacture sweetened condensed
milk. Two years later, a new wing was added for the manufacture of 2500 tons of
roller-dried baby food and 600 tons of cheese per year, the former based on a formula
developed with the assistance of Central Food Technological Research Institute
(CFTRI), Mysore.
It was the first time anywhere in the world that cheese or baby food was made from
buffalo milk on a large, commercial scale. Another milestone was the completion of a
project to manufacture balanced cattle feed. The plant was donated by OXFAM under
the Freedom From Hunger Campaign of the FAO. To meet the requirement of milk
powder for the Defense, the Kheda Union was asked by the Government of India in
1963 to set-up additional milk drying capacity.
A new dairy capable of producing 40 tons of milk powder and 20 tons of butter a day
was speedily completed. It was declared open in 1965. The Mogar Complex where
high protein weaning food, chocolate and malted food are being made was another
initiative by AMUL to ensure that while it fulfilled the social responsibility to meet
the demand for liquid milk, its members were not deprived of the benefits to be had
from the sale of high value-added products. The Mogar complex also started
manufacturing Amullite a substitute for butter in 1994. Amul has also set up a new
Dairy Plant to handle 6.5 lakh liters per day with facilities to produce 60 tonnes of
powder and 70 tonnes of butter in a highly automated plant. It has recently set up a 20
MT Cheese plant at Khatraj near Memdabad.
Impressive though its growth, the unique feature of the AMUL sagas did not lie in the
extensive use of modern technology, nor the range of its products, nor even the rapid
inroads it made into the market for dairy products. The essence of the AMUL story
2012-13 26
lies in the breakthrough it achieved in modernizing the subsistence economy of a

sector by organizing the rural producers in the area.
True, traditionally dairying was a subsidiary occupation of the farmers of Kheda.

However, the contribution to the farmer's income was not as prominent as his
attachment to dairying as a tradition handed down from one generation to the next.
Low milk yield of animals maintained on the by-products of the farm, together with
lack of facilities to market even the little produced, turned the decision to invest in
scientific practice of animal husbandry and nutrition, decidedly irrational; the return
on the investment as well as the prospects of being able to market the product looked
very bleak indeed.
Since its inception, the Kheda Union also believed that the responsibility to collect the
marketable surplus of milk should be coupled with the provision of making the
production enhancement inputs reach the members. The Kheda Union has thus a full-
fledged machinery to provide animal health care and breeding facilities. As early as
late fifties, the Union started making high quality buffalo semen and the artificial
insemination service available to the rural animal population through the village
society workers. The Union started its mobile veterinary services to render animal
health care at the door steps of the farmers. Probably for the first time in the country,
the veterinary first aid service was made available in the villages through trained
village-society workers.
2012-13 27
The Union's 16 mobile veterinary dispensaries have fully qualified staff. All the
villages are visited bi-monthly on a pre-determined day, to provide animal health care.
A 24-hour Emergency Service is also available at a fee (Rs.35 for members and
Rs.100 for non-members). All the mobile veterinary vans are equipped with Radio
Telephones.
The Union runs a semen production centre where it maintains high pedigreed Surti
buffalo bulls, Holstein Fresian bulls, Jersey bulls and 50 per cent cross-bred bulls to
cater to the need of semen for artificial breeding of buffaloes and cows belonging to
the farmer members of the district. Artificial insemination service has become very
popular and effective because it regulates the frequency of calving in cows and
buffaloes and thus reduces their dry period. A balanced feed concentrate is
manufactured in the Union's Cattle Feed Plant and sold to the members through the
societies at cost price.
The system succeeded mainly because it provides an assured market at remunerative

prices for producers' milk, besides acting as a channel to market the production
enhancement package; and does not disturb the agro-system of the farmers. It also
enables the consumer an access to high quality milk and milk products. Contrary to
the traditional system, when the profit of the business was cornered by the
middlemen, the system ensured that the profit goes to the participants for their socio-
economic upliftment and common good. The Union looks after policy formulation,
processing and marketing of milk and provision of technical inputs to enhance milk
2012-13 28
yield of animals: artificial insemination service, veterinary care, better feeds and the
like, all through the village societies.
The village society also facilitates the implementation of various production

enhancement, and member education programmers undertaken by the Union. The
staffs of the village societies have been trained to undertake the veterinary first-aid
and the artificial insemination activities on their own.
2012-13 29
CHAPTER 4
2012-13 30
4.1 AMUL – THE COMMERCIAL BRAND
AMUL means "priceless" in Sanskrit. The brand name "Amul," from the Sanskrit
"Amoolya," was suggested by a quality control expert in Anand. Variants, all meaning
"priceless", are found in several Indian languages. Amul products have been in use in
millions of homes since 1946. Amul Butter, Amul Milk Powder, Amul Ghee,
Amulspray, Amul Cheese, Amul Chocolates, Amul Shrikhand, Amul Ice cream,
Nutramul, Amul Milk and Amulya have made Amul a leading food brand in India.
(Turnover: Rs. 37.74 billion in 2005-06). Today Amul is a symbol of many things. Of
high-quality products sold at reasonable prices. Of the genesis of a vast co-operative
network. Of the triumph of indigenous technology. Of the marketing savvy of a
farmers' organisation. And of a proven model for dairy development.
4.1 – PRODUCT RANGE

Bread Spreads
Amul Butter Amul Lite
Utterly Butterly Low fat, low
Delicious Cholesterol Bread
Spread
Delicious Table Amulya Dairy

Margarine Whitener
The Delicious way The Richest, Purest
to eat healthy Dairy Whitener
Powder Milk
2012-13 31
Amul Spray Amul Instant

Infant Milk Full Cream Milk
Food Powder
Still, Mother's Milk A dairy in your
is Best for your home
baby
Sagar Skimmed Sagar Tea
Milk Powder Coffee Whitener
Which is especially
useful for diet
preparations or for
use by people on
low calorie and
high protein diet.
Fresh Milk
Amul Fresh Milk Amul Gold Milk
This is the most
hygienic milk
available in the
market. Pasteurised
in state-of-the-art
processing plants
and pouch-packed
for convenience.
Amul Taaza Amul Lite Slim
Double Toned and Trim Milk
Milk
2012-13 32
Amul Fresh Amul Kool

Cream Chocolate Milk
Amul Kool Amul Kool

Flavoured Flavoured Tetra
Bottled Milk Pack
Amul Shakti Amul Masti

Toned Milk Spiced
Buttermilk
Amul introduces the
Best Thirst
Quenching Drink
Amul cheese
Amul Pasteurised Amul Cheese
Processed Cheese Spreads
100% Vegetarian Tasty Cheese Spreads
Cheese made from in 3 great flavours.
microbial rennet
Amul Emmental Amul Pizza
Cheese Mozzarella
The Great Swiss Cheese
Cheese from Amul, Pizza cheese...makes
has a sweet-dry great tasting pizzas!
flavour and hazelnut
aroma
2012-13 33
Gouda Cheese
For Cooking
Amul / Sagar Pure Cooking Butter
Ghee
Made from fresh
cream. Has typical rich
aroma and granular
texture. An ethnic
product made by
diaries with decades of
experience.
Amul Malai Paneer Utterly Delicious
Ready to cook paneer Pizza
to make your favourite
recipes!
Mithai Mate Masti Dahi

Sweetened Condensed
Milk - Free flowing
and smooth texture.
White to creamy color
with a pleasant taste.
Health Drink
2012-13 34
Nutramul Amul Shakti

Malted Milk Food Health Food
made from malt Drink
extract has the Available in Kesar-
highest protein Almond and
content among all Chocolate flavours.
the brown beverage
powders sold in
India.
Desserts
Amul Ice Creams Amul Shrikhand
Premium Ice Cream A delicious treat,
made in various anytime.
varieties and flavours
with dry fruits and
nuts.
Amul Mithaee Gulab Jamun Mix

Gulab Jamuns
Pure Khoya Gulab
Jamums...best served
piping hot.
Amul Chocolates Amul Lassee
The perfect gift for
someone you love.
2012-13 35
Amul Basundi
4.2 BCG MATRIX
The BCG Growth-Share Matrix is a portfolio planning model.. It is based on the

observation that a company's business units can be classified into four categories
based on combinations of market growth and market share relative to the largest
competitor, hence the name "growth-share". Market growth serves as a proxy for
industry attractiveness, and relative market share serves as a proxy for competitive
advantage. The growth-share matrix thus maps the business unit positions within
these two important determinants of profitability.
4.2.1 BCG GROWTH-SHARE MATRIX
2012-13 36
This framework assumes that an increase in relative market share will result in an
increase in the generation of cash. This assumption often is true because of the
experience curve; increased relative market share implies that the firm is moving
forward on the experience curve relative to its competitors, thus developing a cost
advantage. A second assumption is that a growing market requires investment in
assets to increase capacity and therefore results in the consumption of cash. Thus the
position of a business on the growth-share matrix provides an indication of its cash
generation and its cash consumption.
It is observed that the cash required by rapidly growing business units could be
obtained from the firm's other business units that were at a more mature stage and
generating significant cash. By investing to become the market share leader in a
rapidly growing market, the business unit could move along the experience curve and
develop a cost advantage. From this reasoning, the BCG Growth-Share Matrix was
born.
Here, we shall consider the products of GCMMF (Amul India). The products to be
placed in the BCG matrix for the study are, Amul Butter, Amul Ice – cream, Amul
Kool and Amul Chocolates.
THE FOUR CATEGORIES ARE:

Question marks - Question marks are growing rapidly and thus consume large
amounts of cash, but because they have low market shares they do not generate much
cash. The result is a large net cash comsumption. A question mark (also known as a
"problem child") has the potential to gain market share and become a star, and
eventually a cash cow when the market growth slows. If the question mark does not
succeed in becoming the market leader, then after perhaps years of cash consumption
it will degenerate into a dog when the market growth declines. Question marks must
be analyzed carefully in order to determine whether they are worth the investment
required to grow market share.
2012-13 37
For Amul brand, Amul Kool and Amul Chocolates are a perfect example of a
Question mark product or a problem child. Question marks business are wait and
watch business. Amul kool and the chocolates.are businesses the company entered
because it felt that both these product category have high growth potential.
Stars - Stars generate large amounts of cash because of their strong relative market
share, but also consume large amounts of cash because of their high growth rate;
therefore the cash in each direction approximately nets out. If a star can maintain its
large market share, it will become a cash cow when the market growth rate declines.
The portfolio of a diversified company always should have stars that will become the
next cash cows and ensure future cash generation.
Amul Ice – cream, is a star generating huge amounts of cash for the company. No
doubts it demands huge amount of investments as well but at the same time has
enormous growth rate. It has still maintained its large market share in competition
with other large brands like ‘Kwality Walls Ice – cream’ and ‘Dullops’ etc. It has
earned very high returns compared to its investments and continues to be so. The
company hopes to cash on this product in future.
Cash cows - As leaders in a mature market, cash cows exhibit a return on assets that
is greater than the market growth rate, and thus generate more cash than they
consume. Such business units should be "milked", extracting the profits and investing
as little cash as possible. Cash cows provide the cash required to turn question marks
into market leaders, to cover the administrative costs of the company, to fund research
and development, to service the corporate debt, and to pay dividends to shareholders.
Because the cash cow generates a relatively stable cash flow, its value can be
determined with reasonable accuracy by calculating the present value of its cash
stream using a discounted cash flow analysis.
Amul Butter is one of the unbeatable product in the product profile of the company. It
is primarily their most successful product with hardly any competitors in the market.
The pricing of this product is absolutely strategic so as to avoid further competitors
from entering this segment of the product consumers. The advertisements and
billboards of this product is major contributor to the sales. It is the oldest in the
2012-13 38
market and hence still enjoys the First Mover Advantage, as per the law of marketing.
This product has been a thorough cash cow from the beginning since it gave huge
returns with lowest investments which made it easy for the company to plough those
profits for other products, i.e the Question Mark and the Star segments.
Dogs - Dogs have low market share and a low growth rate and thus neither generate
nor consume a large amount of cash. However, dogs are cash traps because of the
money tied up in a business that has little potential. Such businesses are candidates for
divestiture.
The unfortunate product for any company is when it enters the Dog segment. The
most unsuccessful product for the company has been Amul – Ready to eat Pizza. The
company had to call off the product from its list of products. Inspite of all the
marketing strategies the company undertook to make this product a success it proved
to be futile. Somehow, the company could not induce the idea of ready –to-eat pizza
in the minds of the consumers. With tough competitors like ‘Pizza Hut’ and ‘Dominos
Pizza’ it was wise for them to withdraw the product from the market to avoid further
losses for the company
4.3 SWOT ANALYSIS
4.3.1 - STRENGTHS
Demand profile : Absolutely optimistic. Milk being a necessity product, the
demand will stay and the sales at GCMMF are bound to increase over a period of
time.
Margins: Quite reasonable, even on packed liquid milk. The margins are enough to
limit the entry of potential entrants.
2012-13 39
Flexibility of product mix : Tremendous. With balancing equipment, GCMMF

has kept adding a wide array of products to its product line.
Availability of raw material: Abundant. Presently, more than 80 per cent of

milk produced is flowing into the unorganized sector, which requires proper
channelization. Amul & GCMMF have leveraged this and has got itself a strong base
of suppliers who provide them milk throughout the year. Large number of dairy
plants in public and cooperative sectors besides several others coming
up in the private sector would result in competition. Because of this the
end consumer would benefit and a good product mix would emerge.
Technical manpower : Professionally trained, technical human resource pool,

built over last 30 years is the strength that GCMMF has. The employees of GCCMF
are highly recognized in the industry and have earned name for themselves as well as
the federation.
Enhanced Milk Production: Increase in the milk production with

consequently increased availability of milk processing has led to
increase in consumption and faster access to the consumers through
effective distribution. The technology is brought from Denmark and the
production of milk has benefited from that.
Transportation: The transportation facilities and the easy availability
of the special trucks have provided a boost. Cold refrigerated trucks are
there in place and the warehouses also have the cold storage facilities
that facilitate the transportation.
Vast resources: Country has vast natural resources which offer

immense potential growth and development for dairying. Moreover the
financial resources available with the federation are immense and the
reputation is such that in case of any further requirements, it can
approach any institution and raise any form of capital.
2012-13 40
Increasing purchase power and changing tastes of the consumers:

The purchasing power of the residents is increasing. As a result a lot of
products are being consumed. Moreover, the consuming habits are
changing. As a result, the demand for products such as butter and
cheese is increasing at a very rapid rate.
4.3.2 WEAKNESSES
Perishability: Pasteurization has overcome this weakness partially. UHT gives
milk long life. Still perishability is there at the milk vendors end. This does result in
loss of some production. But Amul Dairy is taking steps to store milk at the vendors
end. Surely, many new processes will follow to improve milk quality and extend its
shelf life.
Lack of control over yield : Theoretically, there is little control over milk yield.
A lot depends upon the monsoon in the country. This is because of the quality of
cattle feed that would be available will not have the required nutritional content. Steps
are taken to provide awareness regarding these and the penetration of quality feed is
being increased. Moreover, increased awareness of developments like embryo
transplant, artificial insemination and properly managed animal husbandry practices,
coupled with higher income to rural milk producers should automatically lead to
improvement in milk yields.
Logistics of procurement : Woes of bad roads and inadequate transportation
facility make milk procurement problematic. All these factors lead to perishability of
the procured milk. But with the overall economic improvement in India, these
problems would also get solved.
Erratic power supply : The erratic power supply would cause harm in the
processing of milk.
Underdeveloped systems : There still exist underdeveloped raw milk

collection systems in some parts of the country. However steps are
being taken such as setting up of cold storage points at key collection
centers to combat the situation.
2012-13 41
Lack of proper implementation : Dairy development programmes have not

been fully implemented as per the needs of the region in different agro-climatic zones.
Infrastructure: The infrastructure that is available is not up to the current world
standards. Also lack of infrastructure for offering dairy business management
programmes to the trained personnel is creating a hindrance.
4.3.3 OPPORTUNITIES
"Failure is never final, and success never ending”. Dr Kurien bears out this
statement perfectly. He entered the industry when there were only threats. He met
failure head-on, and now he clearly is an example of ‘never ending success’! If dairy
entrepreneurs are looking for opportunities in India, the following areas must be
tapped:
Competition: With so many newcomers entering this industry, competition is

becoming tougher day by day. But then competition has to be faced as a ground
reality. The market is large enough for many to carve out their niche. Moreover due to
competition, there is a chance to better serve the market with innovative products.
Value addition: There is a phenomenal scope for innovations in product

development, packaging and presentation. Given below are potential areas of value
addition:
Steps should be taken to introduce value-added products like shrikhand, ice

creams, paneer, khoa, flavored milk, dairy sweets, etc. This will lead to a greater
presence and flexibility in the market place along with opportunities in the field of
brand building.
Addition of cultured products like yoghurt and cheese lend further strength - both in
terms of utilization of resources and presence in the market place.
Yet another aspect can be the addition of infant foods, geriatric foods and nutritional.
Export potential: Efforts to exploit export potential are already on. Amul is
2012-13 42
exporting to Bangladesh, Sri Lanka, Nigeria, and the Middle East. Following the new
GATT treaty, opportunities will increase tremendously for the export of agri-products
in general and dairy products in particular. There is a strong basis of cost efficiency,
which GCMMF can leverage in the world market.
Markets: The market for the traditional as wells as processed dairy products is
expanding both at the domestic and international front.
IT support: Software is now available for project formulation for dairy enterprise. It
has also computerized its production processes. Mother Dairy was the first fully
computerized dairy in India. In its Anand plant all products are processed
computerized, which does not have any hand touch during any stage of process.
4.3.4 THREATS
Milk vendors, the un-organized sector: Today milk vendors are occupying the
pride of place in the industry. Organized dissemination of information about the harm
that they are doing to producers and consumers should see a steady decline in their
importance.
Infestation: There are increasing incidents of chemical contaminants as well as
residual antibiotics in milk.
Quality: The quality of the milk is found to be poor as compared to the international
standards. One of the reasons for these according to the EU and America is the
method of milching the milk. In these nations the milk is hands by the farmers owning
the cattle do milched with the help of machines, while in India.
Exploitation: The liberalization of the Dairy Industry is likely to be exploited by the

multinationals. They will be interested manufacturing the milk products, which yield
high profits. It will create milk shortage in the country adversely affecting the
consumers.
Subsidy by Western Nations: There have been incidences wherein the Western
nations subsidizing the dairy products by a few means like transportation. Because of
2012-13 43
such reasons the final price of the product goes below the prices prevailing in the
Indian Market. Hence it proves a threat to GCMMF’s and other Indian dairy products.
Creation of Non Tariff Barriers by Developed Nations: The Developed Nations have
created Non Tariff Barriers related to Quality of the milk specifically. They want that
the milk be processed with potable Air and Water. They also want that the milching of
cattle be done with the help of machines. However this type if system is yet to evolve
in India. Because of these reasons they are reducing the market potential of Indian
made products, where GCMMF holds a lions share.
The study of this SWOT analysis shows that the ‘strengths’ and ‘opportunities’
far outweigh ‘weaknesses’ and ‘threats’. Strengths and opportunities are
fundamental and weaknesses and threats are transitory. Any investment idea can
do well only when you have three essential ingredients: entrepreneurship (the
ability to take risks), innovative approach (in product lines and marketing) and
values (of quality/ethics).
4.4 MICHAEL PORTERS FIVE FORCES ANALYSIS
According to Porter (1980) a firm must be analyzed in relation to its industry. Factors
outside the industry tend to influence all the industry’s firms in the same way and are
thus not as important to study.
To a large extent, industry structure governs the strategies open to the firms. The
profitability and attractiveness of an industry is dependent of the level of competition.
Competition in an industry originates from industry structure and goes well beyond
the behavior of individual competitors.
According to Porter, each industry has a potential profitability and the profitability for
the firms is dependent on the competitive forces in the industry. Porter identifies five
competitive forces that derive from the ambition to obtain as large share of the
profitability as possible. The five forces are the foundation of the five-force model.
2012-13 44
Milk Gayatri
4.4.1 PORTER’S
FIVE-FORCE Royal MODEL
The major Sardar competitors
of the Amul Uttam dairy
include: Shreshtha
Ice Crean Vadilal
Havmor
The success of the national
Kwality Walls Max
and local competitor’s
brands includes Local & Regional players effective
distribution system,
advertising, Gayatri good pricing
Ghee
policy etc. The Nestle factors
ascribed by porter are:
 Threats of new entrants
Milk Powder Nestle
2012-13 45
Chocolate Nestle
Cadbury
 Bargaining power of suppliers

 Bargaining power of buyers
 Rivalry among competitors
 Threats from substitutes
These factors can be explained in context to GCMMF as below:
Threats of New Entrants

Economies of Scale: GCMMF enjoys economies of scale, which is difficult to match
by any other competitor. It is because of this reason that no regional competitor has
grown to a national level.
Cost and Resource advantages: Amul dairy is co-operative society. That means
“cooperation among competitive” is the fundamental principle. Amul dairy is
managed under the norms of GCMMF and market the products under the brand name
‘Amul’, which has a very good reputation at domestic and international level. Here,
the raw material procurement is very difficult for the new entrants. Consequently
Capital requirement is also high. Still new entrants are emerging such as domestic and
international players. So the threats of new entrants are moderate.
Brand Preferences and Consumer Loyalty: There is an immense level of Brand

Preference of Amul in the minds of the people. The level of preference specifically in
the liquid milk sector is that they would go to other retailer if the retailer does not
have milk.
Access to Distribution Channels: The distribution channel of GCMMF is a very

planned and perfect one. For any new entrant to enter it would be a very difficult task.
For GCMMF the result is years of hard work and its investment in its employees as
well as at different levels in the distribution network.
Inability to match the technology and specialized know-how of firms already in

the industry: The technology used by Amul is imported from Denmark. It is a state of
2012-13 46
art technology. To get this technology in India, a firm would require a huge amount of
resources.
Capital Requirements: The total investment required in the industry is huge and is a
decision worth considering even for MNC’s. The investment decisions cover the
processing costs as well as the marketing costs. To compete with the brand Amul in
India is difficult as Amul is synonymous to Quality.
Bargaining Power of Supplier

The objective of Amul dairy is not profiting. As it is a part of co-operative society, it
runs for the benefit of farmers those are the suppliers of milk and users of milk
products. According the concept of the cooperative society supplier has bargaining
power to have a good return on his or her supply. However, supplier has limited rights
to bargain with the cooperative society because it is made and run for the sake of mass
and not for individual benefit. But it is made sure that the supplier gets his fair share
of return.
There is appropriate bargaining power of the supplier. In olden days there were not
any kind of cooperative societies as the farmer was exploited. But, nowadays the
farmer’s rights are protected under the cooperative rules and regulations, which
ultimately results in moderate power of bargaining from the supplier.
Bargaining Power of Buyers

Cost of switching to competitor brands: The switching of brands is seen very much
in products such as ice cream, curd, milk powders, milk additives etc. but it can be
seen comparatively less in liquid milk category. Even if the buyers shift to the other
brands of milk, the value that they get is less than they would get from consuming
Amul.
Large no. of buyers: Milk is a necessity product and hence is a mass product. It has
a considerable share of the rupee spent by any Indian. Moreover the buyers are spread
evenly over the country and do not have any bargaining power.
2012-13 47
Rivalry among competitors

Demand for the product: The demand of the products of GCMMF is increasing at a
very healthy rate. To stand against the rivalry GCMMF is coming with a wide range
of products.
Nature of Competitors: In different business category GCMMF faces competition

from different players. In the Milk powder category it faces competition from
Cadbury & Nestle, in the chocolate category also I faces competition from Cadbury &
Nestle. While in the ice cream market it faces competition from Kwality Walls Max
and Havmor. In butter and chesses it faces competition from Britannia. Moreover in
almost all categories there is presence of local retailers and processors and milk
vendors. Rivalry intensifies as each of the competitors has different lines and this
would in turn depend on the importance the line holds for the competitor.
Mergers and Acquisitions: As such in the industry there are no mergers or

acquisitions. However if any MNC wishes to enter through this route then the
competition might be severe.
Threats of Substitute
Availability of attractive priced substitutes: Different substitutes are available for
different category of products. There is ample availability of low priced substitutes
from local vendors and retailers. This is a front where GCMMF is still finding hard to
combat.
Satisfaction level of substitutes: Customers do consider these products as equal on

quality if not better then the products of GCMMF. Hence the rate of customers
switching to the substitutes is very high. Moreover the buyers also can switch to the
customers easily without any hurdles.
2012-13 48
Not immediate substitutes: Distant substitutes are present in many of the categories
of business of GCMMF. For example in the Masti Buttermilk category it faces
competition from cold drinks and ice cream.
These 5 forces interact among themselves at different degrees over a period of time.
Moreover it will get intense or loosen up depending upon the moves of its
competitors, buyers, suppliers, etc. However GCMMF has been able to outperform on
almost all fronts excluding a few lines of business.
2012-13 49
CHAPTER 5
2012-13 50
5.1 PRODUCTION
Explosion of the production technology and changes in technical field is going to

bring out revolution in the industry sector which eventually gives stand to study and
favors the come backing subject i.e. production and management.
Production and operation management is planning, organizing, staffing, directing and

controlling of all the production system those portion of organization that convert
inputs into products and services. In general production system takes raw material,
personnel, machines, buildings and other resources and produce products and
services.
The core of production system is its conversion subsystem where in workers; raw
materials are used to convert inputs into products and services. This production
department is at heart of the firm, as it is able to produce low cost products and
superior quality in timely manners.
Thus, there arises enormous need of giving due importance to this department as a
whole and a strong concrete base being foundation pillars of a manufacturing
organization, if the intention is to succeed domestically and globally.
5.1.1 CO OPERATIVE MILK PRODUCING SOCIETIES IN GUJARAT

Following are the cooperatives that function under GCMMF.
 Ahmedabad Dist Coop Milk Producers’ Union Ltd, Ahmedabad. Soc: 433, Mems:
52,428. Av Milk Proc: 90,000 lpd.
 Banaskantha Dist Coop Milk Producers’ Union Ltd, Palanpur. Soc: 1,130, Mems:
97,251. Av Milk Proc: 295,000 lpd.
2012-13 51
 Baroda Dist Coop Milk Producers’ Union Ltd, Baroda. Soc: 783, Mems: 156,691.
Av Milk Proc: 225,000 lpd.
 Bharuch Dist Coop Milk Producers’ Union Ltd, Bharuch. Soc: 289, Mems:
37,900. Av Milk Proc: 38,000 lpd.
 Bhavnagar Dist Coop Milk Producers’ Union Ltd, Bhavnagar. Soc: 190, Mems:
25,532. Av Milk Proc: 23,000 lpd.
 Gandhinagar Dist Coop Milk Producers’ Union Ltd, Gandhinagar. Soc: 56, Mems:
13,000. Av Milk Proc: 46,500 lpd.
 Junagadh Dist Coop Milk Producers’ Union Ltd, Junagadh. Soc: 400, Mems:
41,500. Av Milk Proc: 73,000 lpd.
 Kaira Dist Coop Milk Producers’ Union Ltd, Amul Dairy, Anand. Soc: 943,
Mems: 513,280. Av Milk Proc: 740,000 lpd.
 Kutch Dist Coop Milk Producers’ Union Ltd, Kutch Dairy, Madhapar. Av Milk
Proc: 25,000 lpd.
 Mehsana Dist Coop Milk Producers’ Union Ltd, Dudhsagar Dairy, Mehsana. Soc:
1,020, Mems: 292,800. Av Milk Proc: 704,402 lpd.
 Panchmahal Dist Coop Milk Producers’ Union Ltd, Godhra. Soc: 1,133, Mems:
126,510. Av Milk Proc: 112,000 lpd.
 Rajkot Dist Coop Milk Producers’ Union Ltd, Rajkot. Soc: 193, Mems: 29,620.
Av Milk Proc: 50,000 lpd.
 Sabarkantha Dist Coop Milk Producers’ Union Ltd, Sabar Dairy, Himatnagar. Soc:
1,315, Mems: 200,482. Av Milk Proc: 322,346 lpd.
 Surat Dist Coop Milk Producers’ Union Ltd, Sumul Dairy, Surat. Soc: 864, Mems:
160,000. Av Milk Proc: 300,000 lpd.
 Surendranagar Dist Coop Milk Producers’ Union Ltd, Surendranagar. Soc: 486,
 Valsad Dist Coop Milk Producers’ Union Ltd, Vasudhara Dairy, Valsad. Soc: 348,
5.1.2 - PLANT LAYOUT

Plant layout is the overall arrangement of the machine tools, handling equipments,
storeroom and other various accessories required for facilitating production in a
2012-13 52
factory. These arrangements are pre-planned with the results that the building has
been constructed to fit a layout of a given process.
AMUL plant is indigenously worked out with facilitation of various production

processes and production of multi products under one plant. The total plot is nearly
about 2.27 kms. Separate buildings are provided with required arrangements of
machine tools handling and computers connection through the control room to fit for
varying product-manufacturing departments.
The plant is engaged in producing milk, ice creams, milk powder and ghee. Entire
department is uniquely provided with facilities for the processing each product. There
are 4 production departments and packaging departments pertaining to each product
respectively.
Thus, plant layout encompasses all production and service facilities and provides for
the most effective utilization of the men, materials and machines constituting the
process. It is the master blue print of coordinating all operations.
A good layout results in elimination or minimization of accidents and hazards and
cost while increases the output. Thus a good layout specifically is observed to be
beneficial on the following grounds:
 Efforts minimization
 Fewer material handling will be provided manufacturing units cost will be lover
 Bottlenecking of production will be eliminated
 Total item in process will be less
 Specialization of operations is facilitated
 Less inspection will be required
 Production control will be easier to achieve
 Plant investment can be held to the necessary minimum
 Plant and equipment obsolescence may be less
 Wastage space will be eliminated
2012-13 53
Thus, a true beneficiary is provided to the plant through good and sound planning for
plant layout.
5.1.3 - OPERATING ANALYSIS

Amul’s only source of raw material is Village Milk societies. Milk is brought from
such village milk societies every morning and evening. This milk is then sent to the
dairy plant. In the dairy plant the milk is processed i.e. it is made free from germs.
5.1.4 - MILK PROCESSING

The entire process of milk can be divided into following steps:
Milk Processing Chart:
Collection of Raw-Milk
Electronic Milk Test
MethylineBlu Reduction Test

Purchasing And Standardizing Process
Separation Process
Quality Check
Packaging Process
Cold Storage
2012-13 54
Steps in Production Process

1. Collection of Raw Milk
Raw milk is collected from different co-operative societies of Gujarat. About 122000
liters of raw milk is collected per day. Before this milk is sent to the laboratory for
testing the ‘FAT & SNF’ proportion, the milk is separated from the raw milk. The
milk is taken from the chilling centers to Ahmedabad with the help of trucks.
After collecting the samples of milk, they are taken to the laboratory, where two types
of tests are conducted.
 Electronic milk test

 Methyline blue reduction test
Electronic Milk Test

Before pasteurizing the milk the samples are taken to the laboratory. In the laboratory
with the help of machine called electronic milk tester, the proportion of SNF & FAT is
checked with phosphate solution. When the colour of the milk becomes yellow, it is
sent for pasteurization.
Methyline Blue Reduction Test

Another test, which is taken in the laboratory, is called Methyline blue reduction test.
This test is conducted for checking for how long the milk will remain fresh. To check
this, 10 ml of milk is taken and 1 ml of methyline blue solution is added to it. It is
then kept under water at 57-degree C. After one hour, if the solution losses its colour
than it is called raw milk. If the solution remains the same even after 5 hours than it is
considered as fresh milk, which remains constant for a long period of time.
The dairy fixes the proportion of FAT & SAF.
2012-13 55
MILK SNF FAT

Buffalo 9% 6%
Cow 8.5% 4.5%
After laboratory gives green signal and confirming the raw milk at the reception dock
is brought in to the house connected with the pump is sent to the milk processing
plant. This is than chilled below 4 degree C. and then stored in milk silos. After that
milk is processed this has two steps i.e. pasteurizing and standardizing.
2. Pasteurizing & standardizing

After collecting and checking and conducting laboratory tests, the pasteurizing
process is conducted. To pasteurized the milk means to kill all the germs in the milk
by a particular method which was invented by a scientist called James Pasteur and so
the name pasteurization.
In pasteurizing, the milk is first heated at 72 C to 76 C for 15 seconds and then it is

immediately cooled below 4 C. By this method they destroy the pathogenic bacteria
present in the raw milk. But if the right degree of temperature is not provided there
are chances that the milk might still contain germs. After this process some milk goes
to separator machine and remaining is proportionately sent for standardization.
Standardization process is known such as it bifurcates the milk in 3 categories varying

according to that FAT & SNF contents. The equipment named OSTA. Auto
standardization adjusts the fat directly. The computer is just ordered whether gold or
standard milk is to be rationed and the same will be received with appropriate
contents.
Ready Milk = Pasteurized + Standardized.
3. Separation Process
Separator machine separates two kinds of products, skimmed milk & cream, through
channels. There are 100 disks fixed in separator machines, which revolve at 5000 rpm
(revolution per minute). It is taken to the tanks, which has the capacity of 20000 litres.
2012-13 56
Whenever the milk is needed from the tank, it is tested in the laboratory and the
deficit proportion fat is added by mixing cream. This process continues for 24 hours.
4. Quality Check
Pasteurized milk is sent for a quality check in the Quality Assurance laboratory of the
dairy plant. Within 14 seconds FAT and SNF proportion is received regarding 30 lack
litres of milk. The total investment put into the lab by the Dairy plant is of Rs. 6
crores.
This laboratory only checks and analyses the powder, milk and ghee. There is a
separate ice-cream analysing laboratory.
5. Packing Process
After this the milk is sent for packing to the milk packing station in the dairy plant. In
the milk packaging station there are huge pipelines and behind each of them there is
polyfill machine from which the material to pack milk comes out. There are 12 such
polyfill machines in the packaging station from which the materials to pack milk
comes out. From each of these 12 machines 100 pouches are packed in one single
minute.
6. Storage
Then the milk is sent to the cold storage of the dairy where the milk is stored until it is
dispatched. Here the milk is stored at temperature ranging from 5 C to 10 C, it is
maintained with the help of exhaust fans having silicon chips. About 40000 litres of
milk is dispatched from the cold storage of the dairy plant everyday. The damaged
pouches are kept a side and the milk is once again put to the tank.
7. Milk Powder
For converting milk powder first of all water content is evaporated in condensing
plant. By this process they get condensed milk, it is used as a raw material. There after
the milk is sent to the drying plant. The spray drying plant is huge in size with a
height of 70 feet. The plant is divided into many floors to enable easy use of the plant.
2012-13 57
First of all the raw material i.e. condensed milk is put into the first floor of the plant
along with air at 200 C. By this process the remaining water, which the condensed
milk might have retained is also evaporated and milk comes as powder but this is not
the last stage.
This powder is again put in to a machine called milk calendaria, where it is turned in
to real milk powder. Its capacity is 1000 litres per 15 minutes. Then again this milk
powder is put into a Dense Waise Vessel. Here the lumps are removed and uniform
milk powder is sent up.
After processing the powder is sent for quality checking at quality assurance
laboratory. After the quality confirms, this milk powder is differentiated, by adding
different flavors to them like elaichi, chocolate & sugar free milk powder. Thereafter
they are packed in tins and boxes. Afterwards it is stored at storage department.
2012-13 58
5.2 DISTRIBUTION NETWORK
Distribution Network
Most producers work with marketing intermediaries to bring their products to market.
The marketing intermediaries make up a marketing channel also called distribution
cannel. Distribution channels are sets of interdependent organizations involved in the
process of making a product or service available for use or consumption.
The Head Office of GCMMF is located at Anand. The entire market is divided in 5
zones. The zonal offices are located at Ahmedabad, Mumbai, New Delhi, Kolkata and
Chennai. Moreover there are 49 Depots located across the country and GCMMF
caters to 13 Export markets.
A zero level of channel also called a direct marketing channel consists of a

manufacturer selling directly to the final customers. A one level channel; contains one
selling intermediary such as retailer to the final customers. A two level channel two
intermediaries are typically wholesaler and retailer. A three level channel are typically
wholesaler, retailer and jobber in between.
GCMMF has an excellent distribution. It is its distribution channel, which has made it
so popular. GCMMF’s products like milk and milk products are perishable. It
becomes that much important for them to have a good distribution.
Products
5.2.2 DISTRIBUTION CHART
Agents
Wholesaler
2012-13 Retailer
59
Consumer
We can see from above figure that GCMMF distribution channel is simple and clear.
The products change hands for three times before it reaches to the final consumer.
First of all the products are stored at the Agents end who are mere facilitators in the
network. Then the products are sold to wholesale dealers who then sell to retailers and
then the product finally reaches the consumers.
Amul Parlors
Amul has come out with a unique concept of Amul Parlours. They have classified
those under four types namely:
 Center for excellence
 On the Move
 Amul Parlours
 Amul Preferred Outlets
Center for Excellence: These Amul Parlours are specifically at a place, which has a
class of excellence of its own. We can find such parlors at the Infosys, IIMA, NID
Ahmedabad etc.
On the Move: These parlors are at the railway stations and at different state bus
depots across different cities.
Amul Parlours: These parlors can be seen at different gardens across different cities.
These are fully owned by Amul.
Amul Preferred Outlets: These are the private shops that keep the entire of product
range of Amul. They also agree not to keep any competitor brands in the outlets. They
can keep other brands that are in the non-competitor category.
2012-13 60
Amul has more than 200 such outlets right now. It wants to have 1,00,000 parlors by
the end of the year 2010.
5.2.3 - MANAGING COMPETITION

The Indian market is dominated by a large number of small local and regional players.
There are an estimated 150 manufacturers in the organized segment, which accounts
for 30-35% of sales and about 1000 units in the unorganized segments of the market.
In the organized segment the significant brands are Kwality Walls , Vadilal, Amul,
Havmor, Mother dairy and Baskins & Robbins. GCMMF is facing very tough
competition from both in and outside India.
Amul combats competition from its competitors by providing quality products at a

price which its customers value. Along with good quality products and reasonable
price the packaging is also very good. Most of its products are available in many
flavors. Excellent advertising backs its products and helps GCMMF (AMUL) to leave
its competitors a tough time. Also Amul has come out with Amul Parlours to cater to
various segments of customers. Amul has a very strong Brand Image in the Domestic
market. Many products are exported by GCMMF.
Exports: GCMMF is India's largest exporter of Dairy Products. It has been accorded a
"Trading House" status. GCMMF has received the APEDA Award from Government
of India for Excellence in Dairy Product Exports for the last 9 years.
The major export products are:
 Consumer Packs
 Amul Pure Ghee
 Amul Butter
 Amul Shrikhand
 Amul Mithaee Gulabjamun
 Nutramul Brown Beverage
 Amulspray Infant Milk Food
2012-13 61
 Amul Cheese
 Amul Malai Paneer
 Amul UHT Milk (Long Life)
 Amul Fresh Cream
 Bulk Packs
 Amul Skimmed Milk Powder
 Amul Full Cream Milk Powder
The products are exported to 18 countries namely, USA, Kuwait, Qatar, UAE, Yemen,
Bahrain, Muscat, Saudi Arabia, Tanzania, Madagascar, Sri Lanka, Singapore, Nepal,
Bangladesh, Nepal Thailand and Australia.
2012-13 62
5.3 SUPPLY CHAIN FRAMEWORK
The supply chain of Amul can be described in the following steps:-

 Some 2.2 million farmers from 12 districts of Kaira (kheda), Sabar Kantha,
Baroda, Panchmahal, Rajkot, Bharuch, Mehsana, Banas Kantha, Surat,
Ahmedabad, Valsad and Gandhi nagar reach the milk collection centers every day
in the morning and afternoon to sell the milk their buffaloes have given in the
morning and in the noon
 The total milk procurement in the last year 2002 was an average 47.32 l per day
where the peak the peak procurement touched a high of 62 l. All the milk
procurement centers are equipped with computers and electronic milk testers
(EMTs). EMTs ensure efficient testing and measurement of milk constituents. The
computers run the automatic milk collection system, which ensures immediate
preparation of milk payment bills, transparency of operations and greater
efficiency of milk collection.
 The milk is then sent to chilling depots in each village of the member unions.
There are 10852 villages under GCMMF and each one has a village Cooperative
society. VDC also runs the automatic milk collection system.
 The milk is then sent to the 12 member unions. All of them run an ultra modern
dairy that processes this raw material, which has traveled from faraway villages to
the district headquarters.
 The various products made under the flagship of AMUL such as butter, milk
powder, cheese, dahi, ready made foods such as gulab jamun, pizza etc. Are
manufactured at these various plants and distributed through the various
distributors across the country and abroad through GCMMF.
2012-13 63
FARMERS VCS MEMBER UNIONS

2.2 million 10675
12 units
GCMMF
700 Emp
DISTRIBUTORS RETAILERS END USERS

3000+ 500000+
Fig: - The flow of materials and information at AMUL
One reason that Amul is the giant it is because it’s built on the back of a co-operative
movement. It encourages women and farmers to collect milk from their cows and pass
it on to them for a price. By managing milk supplies from the cattle farmer and
sending it straight to the factory, it’s been able to eliminate the middleman.
Complexity and dynamics of the supply chain make it very difficult to assess the
interaction effects.
2012-13 64
Increased cooperation among network members has resulted in a number of changes

at all levels -- operational, tactical and strategic, and has led to the emergence of
practices and strategies for improving the chain's performance. Most prominent
among these include the following:
(i) Information sharing, often dynamically, to improve planning and execution.

Sharing of POS data is a classic example for minimizing the distortions due to bull-
whip effect and reducing perceived variability of demand by the partners in the chain.
Typically, information sharing extends to costs as well.
(ii) Focus on core competence of each player in the chain. The objective is to
ensure that each task is performed by the entity best suited for it. As a result, firms
have become willing partners in ceding control to a network partner for improving
performance. VMI in many industries is a direct result of such change in management
thinking. Similarly, the role of third parties for providing specific expertise such as
logistics has grown substantially with emphasis on supply chain.
(iii) Capacity improvement: It helps network partners in improving their capability

and making them competitive.
Milk procurement
Total milk procurement by our Member Unions during the year 2012-13 averaged
93.02 lakhs kilograms (9.30 million kgs) per day representing a growth of 6.68% over
87.19 lakhs kgs (8.7 million kgs) per day achieved during the year 2008-09. The
highest procurement as usual was recorded during January, 2012 at 122.5 lakhs kgs
per day
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.
2012-13 65
GCMMF transacts on an advance demand draft basis from its wholesale dealers
instead of the cheque system adopted by other major FMCG companies. This practice
is consistent with GCMMF's philosophy of maintaining cash transactions throughout
the supply chain and it also minimizes dumping.
Managing third party service providers

Its core activity lay in milk processing and the production of dairy products and all
other activities such as logistics of milk collection, distribution of dairy products, sale
of products through dealers and retail stores, provision of animal feed, and veterinary
services were entrusted to third parties.
2012-13 66
5.4 PROBLEMS & ISSUES WITH SUPPLY CHAIN
 Managing this supply chain efficiently is critical as GCMMF's competitive

position is driven by low consumer prices supported by a low cost system.
 In the past years the concept of just-in-time was not introduced, all GCMMF
branches were engaged in route scheduling and have dedicated vehicle operations.
 Even though the cooperative was formed to bring together farmers, professional
managers and technocrats would be still required to manage the network
effectively and make it commercially viable.
 It is worth noting that a number of third parties are not in the organized sector, and
many are not professionally managed with little regard for quality and service.
This is a particularly critical issue in the logistics and transport of a perishable
commodity where there are already weaknesses in the basic infrastructure.
 Its network which consists of large number of members requires regular roll out
improvement programs and high implementation rate of these programs.
 Having a strong supply chain is only the beginning, the remaining part includes
making consumer products that sell well and that the same consumers are able to
be impacted by marketing and advertising movements.
 The organization was also suffering from the high middleman cost which was
tackled by managing milk supplies from the cattle farmer and sending it straight to
the factory.
 Due to the perishable nature of the product, it has to invest in cold storage which
is an extra burden in distribution and warehousing.
 At the time Amul was formed; consumers had limited purchasing power, and
modest consumption levels of milk and other dairy products. Thus Amul adopted
2012-13 67
a low-cost price strategy to make its products affordable and attractive to

consumers by guaranteeing them value for money.
 In addition to the weaknesses in the basic infrastructure, logistics and
transportation services are typically not professionally managed, with little regard
for quality and service.
 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.
2012-13 68
CHAPTER 6
2012-13 69
6.1 RESEARCH OBJECTIVES
To study consumer perception towards brand AMUL
6.2 SAMPLE SIZE
100 respondents
6.3 RESEARCH LIMITATION
 Research is limited to 100 respondents

 Research is limited to study of consumer perception only towards brand AMUL
2012-13 70
6.4 DATA INTERPRETATION
AGE GROUP
 42 % respondents were of the age group 40 – 50

 30 % respondents were of the age group 30-40
2012-13 71
SEX
 61 % respondents were Male

 39 % respondents were Female
2012-13 72
OCCUPATION
 42 % respondents were salaried

 21 % respondents were professional
 8 % respondents were Proprietor
 29 % respondents were Housewife
2012-13 73
CONSUMPTION
All the 100 respondents consume brand AMUL
2012-13 74
BRAND IDENTIFICATION
100 % respondents identified accurately as AMUL brands.
2012-13 75
PURCHASE
 21 % respondents purchase from Kirana store

 56 % Respondents purchase from Dairy
 13 % respondents purchase from Super market
 20 % respondents purchase from Malls
2012-13 76
FREQUENCY
 67 % respondents purchase once in a week

 12 % respondents purchase Twice in a week
 20 % respondents purchase once in month
2012-13 77
REASONS FOR PURCHASE
 33 % respondent purchase as it is their daily requirement.

 67 % respondent purchase as it is their household use requirement
2012-13 78
TASTE AS A PURCHASE FACTOR
23 % respondent says that taste act as a prime factor for purchase factor
2012-13 79
PRODUCT TRUST AS A PURCHASE FACTOR
36 % respondent says that product trust act as a prime factor for purchase.
2012-13 80
HABITUAL CONSUMPTION AS A PURCHASE REASON
10 % respondent says that habitual consumption act as a prime factor for purchase of
2012-13 81
6.5 SURVEY FINDINGS
 Majority of the respondents were in the group of 40-50
 Dairies were prime purchase of product.
 Almost 3/4th respondent consume at least once in a week
 Taste, Trust, Habitual are the prime reasons for consumption of the product
 AMUL is the primary preference when compared to other brands
 AMUL was primarily associated with household requirement
6.6 RECOMMENDATION
 Trust has to be maintained through out as people are purchasing only due to trust
 More retail outlets to be explored for Avaibility
 Should be supplied as daily product like milk and news paper
2012-13 82
CHAPTER 7
2012-13 83
7.1 OBSERVATION OF SCM ISSUES
Following are the major issues analyzed with respect to the SCM of Amul:
Larger lead time:-

A number of third parties are not in the organized sector, and many are not
professionally managed with little regard for quality and service. Due to the old and
obsolete means of transportation, failure of machinery etc. leads the delay in reaching
to retailers and end users. In the past years the concept of just-in-time was not
introduced, all GCMMF branches were engaged in route scheduling and have
dedicated vehicle operations. Due to the perishable nature of the product, it has to
invest in cold storage which is an extra burden in distribution and warehousing. As a
result need of JIT were felt and the concept has introduced to avoid any kind of delay
and destruction of products. Introduction of just-in-time inventory strategy improves
dealers' return on investment (ROI).
Gap between demand and supply:-

Due to the unprofessional and inexperienced 3PL providers there is vast gap between
demand and supply. In the peak season, the company fails to satisfy the retailers’
demand on certain products. Since the lead time was high so company were unable to
get raw material on time and also were unable to produce final product to match with
the quantity demanded by retailers and consumers. Amul decided to focus on farmers
facing business processes such as supply, distribution and its own internal operations.
The main goals of the supply chain initiative were improving forecast accuracy to
match supply with demand, delivery performance to avoid stock-outs thereby creating
a dependable and reliable brand image without excessive spend. These steps were
taken to reduce dependency on cold storage.
SUPPLIERS:-
The member-suppliers were typically small and marginal farmers with severe
liquidity problems, illiterate and untrained. AMUL and other cooperative Unions
adopted a number of strategies to develop the supply of milk and assure steady
2012-13 84
growth. First, for the short term, the procurement prices were set so as to provide fair
and reasonable return. Second, aware of the liquidity problems, cash payments for the
milk supply was made with minimum of delay.
Managing Third Party Service Providers:

Well before the ideas of core competence and the role of third parties in managing the
supply chain were recognized and became fashionable, these concepts were practiced
by GCMMF and AMUL. From the beginning, it was recognized that the core activity
for the unions lay in processing of milk and production of dairy products.
Accordingly, the unions focused efforts on these activities and related technology
development. The 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, some veterinary services etc.
Some other issues found in its supply chain are as follows:-

 It has excellent ability to anticipate the right type of product at the right time
through the years.
 Amul is a cooperative where the milk suppliers are the shareholders. The owners
decide what they should pay themselves for the raw material they supply. A
unique situation where the owners of the company are also its largest vendors!
 To implement their vision while retaining their focus on farmers, a hierarchical
network of cooperatives was developed, which today forms the robust supply
chain behind GCMMF's endeavors.
 Introduction of just-in-time inventory strategy improves dealers' return on
investment (ROI).
 In order to manage the network effectively and make it commercially viable
professional managers and technocrats were introduced.
 The company has core competency in milk processing and the production of dairy
products and all other activities were entrusted to 3PLs
 Infreight logistics solutions limited, Transport Corporation of India, Gammon
India ltd. are some of its main 3PL providers.
2012-13 85
Amul was one of the first FMCG 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. It 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.
2012-13 86
7.2 RECOMMENDATION & SUGGESTION
 Amul should improve its distribution system, as it has already implemented on

ERP in the company, still due to in disciplined behavior of its distributors,
retailers suffers which ultimately affect the consumers.
 We know that the time schedule of the distributors & their transportation system
cannot be capsuled, but they can reduce their errors. E.g. drive carefully to
prevent accidents.
 Manpower should be more than 18 years of age. (in some of the areas, we have
observed small children engaged in loading & unloading the trays from the truck)
 Before offering any extra benefits or schemes to their retailers, Amul should
aware them in advance, so that the incentives can be reached in the right hands at
right time. Otherwise distributors enjoy the benefits of retailers.
 Codification of raw material should be done in an easily understand manner.
 Reduce the solving time of the consumer/retailers’ complaints.
 Payment to the milk suppliers should be made on time to ensure the proper inflow
of milk.
 Amul should also launch certain schemes for households. It has schemes for
retailers but not for households. This section being the major user of milk and in
order to enter into a new area such starting schemes can be very helpful.
 For refrigerated and frozen food distribution, a world class cold chain would help
in providing quality assurance to the consumers around the region.
 Logistics and transportation services should be professionally managed to avoid
wastes.
 Use of internet for exploring the unknown terrain.
 Active customer feedback should be taken regularly for increasing product line.
 Employees of GCMMF should involved actively in all activities of the member
unions.
 Relationship with business associates like wholesaler should be made closer and
deeper.
2012-13 87
 The company should take initiative to reduce transportation time from the depots
to the wholesale dealers, improvement in ROI of wholesale dealers,
implementation of Zero Stock Out through improved availability of products at
depots and also the implementation of Just-in-Time in finance to reduce the float.
 Completely in tune with the ground reality an enquiry is initiated on the
organizational climate. This gave detail about the core competencies and most
importantly gave details about the handicaps and inadequacies.
 Have recognized “change” as an essential factor governing business needs and
hence incorporates changes in every form at every stage. employees, suppliers and
distributors also “change ready” always
2012-13 88
CHAPTER 8
2012-13 89
8.1 CONCLUSION
Amul means different things to different people .
To a milk producer – A life enriching experience

To a consumer – Assurance of having wholesome milk
To a mother – A reliable source of nourishment for her child
To the country – Rural development and self reliance
Amul has given a new dimension to marketing. It showed that a democratically

owned and managed farmer organisation can successfully develop and sustain a
commercial product in a national market.By doing this Amul provided virtually
guaranteed marketing service to the milk producer at his door step. Amul has
displayed dynamic initiative at a time when its multinational competitors were merely
content to use depreciated machinery.
Following factors have given us the insight to conclude, why Amul is thriving with
success today:
Emphasis on Quality: All the products of Amul are of highest grade. Consumers
were very quick to perceive this and the sales success that followed reflected the
public’s stamp of approval.
Modern marketing: A good product alone cannot succeed unless backed by

innovative marketing, including packaging, price and promotion. Amul’s advertising
campaigns created a splash in the market that eventually led to a tidal wave that
rocked the competition.
Management: The judicious handling of people, recognition of performance and

encouragement for a good try has gone a long way to build a sound foundation of
2012-13 90
people. All the basic components of management that is production, marketing,

finance and organisation behavior are nicely arrayed at Amul.
The co-operative concept: The fundamental thesis underlying the Anand model is
that the rural producer must own and enjoy the assets they have helped to create. The
model has inspired the creation of hundreds of other Anand.
The system has succeeded mainly because of involvement of people on such a large
scale, providing assured market at remunerated prices for milk producers, enables the
consumers access to high quality milk and milk products, ploughing back the profit to
the members, part of the profit is used by the society for common good and
community development.
Amul 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. Amul products have been in use in
millions of homes since 1946. Today Amul is a symbol of many things like of high-
quality products sold at reasonable prices & the genesis of a vast co-operative
network. Its supply chain is easily one of the most complicated in the world. The
supply chain linking farmer-suppliers of milk with the millions of consumers. Amul
encourages women and farmers to collect milk from their cows and pass it on to them
for a price directly eliminating cost of middleman. Introduction of just-in-time
inventory strategy improves dealers' return on investment (ROI).Amul was one of the
first FMCG 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. It 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.
2012-13 91
8.2 BIBLIOGRAPHY
 Johnson Gerry, Scholes Kevan; “Exploring Corporate Strategy-Text and Cases”,

Sixth Edition, Prentice Hall of India Pvt. Ltd. 2004, pp 100-102,134,183.
 Thompson Arthur A. Jr., Strickland J. A. III; “Strategic Management-Concepts
and Cases”, Thirteenth Edition, Tata McGraw-Hill Publishing Co. Ltd. 2003, pp
117, 123 –127.
 Patel, Rameshbhai P., “Amul, The Kaira District Cooperative Milk Producers’
Union Ltd. Anand, 50 Years of Milk & Health.”
 Dr. Kurien., “Amul, The Kaira District Cooperative Milk Producers’ Union Ltd.
Anand, 50 Years of Milk & Health.”
 Carter, Thomas R., “Amul, The Kaira District Cooperative Milk Producers’ Union
Ltd. Anand, 50 Years of Milk & Health.”
 Patel, T. K., “Amul, The Kaira District Cooperative Milk Producers’ Union Ltd.
 Gowda, Shri Deve, “Amul, The Kaira District Cooperative Milk Producers’ Union
 Halse, Michael, “Amul, The Kaira District Cooperative Milk Producers’ Union
 Baxi, J. J. “Amul, The Kaira District Cooperative Milk Producers’ Union Ltd.
 Singh, Katar, Mittal, S. P., Singh Virendra, “Amul, The Kaira District Cooperative
Milk Producers’ Union Ltd. Anand, 50 Years of Milk & Health.”
 Dr. Oza, D. R., “Amul, The Kaira District Cooperative Milk Producers’ Union
 Thodarson, Bruce, “Amul, The Kaira District Cooperative Milk Producers’ Union
WEBSITE VISITED
2012-13 92
 www.amul.coop
 www.indiadairy.com
 www.indianmilkproducts.com
BOOKS
 White revoltion - Dr. Kurien
 Management of Co-Operatives - Romeo S Mascarenhas
 Management of Co-Operatives - Ramkison
 Tapping of Rural India
2012-13 93

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DISTRIBUTION CHANNEL OF AMUL

DISTRIBUTION CHANNEL OF AMUL

“DISTRIBUTION CHANNEL OF AMUL”

FOR THE DEGREE OF

UNDER THE GUIDANCE OF

___________ COLLEGE OF COMMERCE AND ECONOMICS

I FURTHER DECLARE THAT INFORMATION SUBMITTED BY ME IS TRUE AND

I FURTHER CERTIFY THAT THE INFORMATION SUBMITTED IS TRUE AND

Name of the guide

I EXPRESS MY SINCERE THANKS TO MISS ______________FOR HER

I WISH TO TAKE THE OPPORTUNITY TO EXPRESS MY DEEP SENCE OF

FINALLY IT IS THE FOREMOST DUTY TO THANK ALL MY RESPONDENTS,

Name of the student

1.1 EXECUTIVE SUMMARY

2.1 AMUL STORY

Amul (Anand Milk Union Limited), formed in 1946, is a dairy cooperative

Dr Verghese Kurien, former chairman of the GCMMF, is recognised as the man

2.2 EVOLUTION OF THE CO-OPERATIVE MOVEMENT

2.2.1 - THE HUMBLE BEGINNING

2.2.2 - THE FIRST STEP: FORMATION OF KAIRA UNION

2.3 OPERATION FLOOD

2.3.1 - THE START OF A REVOLUTION

2.3.2 - OBSTACLES: SPRINGBOARDS FOR SUCCESS

2.3.3 - MILK BY PRODUCTS: AN EXCUSE TO EXPAND

2.3.4 - CATTLE: FROM STUMBLING BLOCKS TO BUILDING BLOCKS

2.3.5 - PEOPLE POWER: AMUL'S SECRET OF SUCCESS

The village society also facilitates the implementation of various production

3.1 GCMMF: AN OVERVIEW

Members 12 district cooperative milk producers' Union

3.1.1 - ORGANIZATION STRUCTURE IS DIVIDED INTO TWO PARTS:

External Organization Structure

District Milk Product Union Ltd.

Village Milk Product Union Ltd.

As we know, GCMMF is unit of Gujarat Milk Marketing Federation, which is a co-

Internal Organization Structure of Amul

Sales Turnover Rs (million) US $ (in million)

3.2 ANAND PATTERN OF DEVELOPMENT

lies in the breakthrough it achieved in modernizing the subsistence economy of a

True, traditionally dairying was a subsidiary occupation of the farmers of Kheda.

The system succeeded mainly because it provides an assured market at remunerative

The village society also facilitates the implementation of various production

4.1 AMUL – THE COMMERCIAL BRAND

4.1 – PRODUCT RANGE

Delicious Table Amulya Dairy

Amul Spray Amul Instant

Amul Fresh Amul Kool

Amul Kool Amul Kool

Amul Shakti Amul Masti

Mithai Mate Masti Dahi

Nutramul Amul Shakti

Amul Mithaee Gulab Jamun Mix

4.2 BCG MATRIX

The BCG Growth-Share Matrix is a portfolio planning model.. It is based on the

4.2.1 BCG GROWTH-SHARE MATRIX

THE FOUR CATEGORIES ARE:

4.3 SWOT ANALYSIS

Flexibility of product mix : Tremendous. With balancing equipment, GCMMF

Availability of raw material: Abundant. Presently, more than 80 per cent of

Technical manpower : Professionally trained, technical human resource pool,

Enhanced Milk Production: Increase in the milk production with

Vast resources: Country has vast natural resources which offer

Increasing purchase power and changing tastes of the consumers:

Underdeveloped systems : There still exist underdeveloped raw milk