INTRODUCTION

Gujrat Cooperative Milk Marketing Federation Ltd. (GCMMF) established in November,1973 is

India’s largest food product marketing organization with annual turnover (2018-2019) US$ 4.8 billion.

Its daily milk procurement is approx. 23 million lit per day from 18700 village milk cooperative

societies, 18 member unions covering 33 districts and 3.6 million milk producing members.

Amul, aims to provide remunerative returns to the farmers and also serve the interest of its consumers by

providing quality products which are good value for money. It operates through 61 sales offices and has a

dealer network of 10000 dealers and 10 lakh retailers, which is one of the largest such networks in India.

COMPANY PRACTICES

The country’s largest food company, Amul, is the market leader in butter, whole milk, cheese,

ice cream, dairy whitener, condensed milk, saturated fats and chocolates.

Amul follows a unique business model, which aims at providing ‘value for money’ products to

its consumer, while protecting the interest of the milk producing farmers who are its suppliers

as well as its owners.

Despite being a farmer's co-operative, Amul has given multinationals a run for their money.

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 MISSION STATEMENT

GCMMF aka Amul’, mission is to satisfy the taste and nutritional requirements of the

customers of the world.

Through Co-operative networking, Amul is committed to offer quality products that provide

value for money.

COMPANY OBJECTIVE

 Customer Orientation

 Commitment to Producers

 Co-operation

 Employee satisfaction

 Integrity

 Quality

 Innovation

PRODUCT RANGE

 Breadspreads

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  Pure Ghee

 Milk Powders

 Condensed milk

 Sweets

 Fresh milk

 Curd

 Ice creams

 Chocolates and Confectionary

 Milk drinks

 Health drinks

 Cattle feed

 Cream

 Paneer

 Cheese

BRIEF HISTORY

In 1946, to stop the unfair and manipulative trade practices followed by the local middlemen, the farmers

initiated the cooperative movement under the influence of Sardar Vallabhbhai Patel. He advised them to

form their own cooperative, which would have procurement, processing, and marketing under their

control.

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The first cooperative, the Kaira District Co-operative Milk Producers Union Ltd. Began with just two

village dairy co-operative societies and 247 litres of milk and is today better known as Amul Dairy.

Amul grew under the leadership of Tribhuvandas Patel, the founder chairman Dr Verghese Kurien.

OVERVIEW

Year of Establishment 1973

Members 18 District cooperative Milk Producers’ Unions

No. Of Producer Members 3.6 Million

No. Of Village Societies 18,554

Total Milk handling capacity per day 35 Million Litres per day

Milk collection (Daily Average 2018-2019) 23 Million Litres per day

Cattle feed manufacturing capacity 9200 MTs per day

Sales Turnover (2018-2019) Rs. 33150 crores (US $ 4.8 Billion)

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 SALES TURNOVER

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

2010-11 97742 2172

2011-12 116680 2500

2012-13 137350 2540

2013-14 181434 3024

2014-15 207330 3410

2015-16 229720 3500

2016-17 270850 4100

2017-18 292250 4500

2018-19 331500 4800

Sales turnover of Amul

THE AMUL MODEL

The Amul Model of dairy development is a three-tiered structure with the dairy cooperative societies at

the village level federated under a milk union at the district level and a federation of member unions at the

state level.

1. Establishment of a direct linkage between milk producers and consumers by eliminating

middlemen.

2. Milk producers (farmers) control procurement, processing and marketing.

3. Professional management.

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 Fig 1.1: Process Flow of Amul

TQM IN INDIAN DAIRY INDUSTRY

India is the world’s largest milk producing country for past more than a decade. This is at a time

when milk is being considered as complete food for every human being, Quality plays a vital role for

Indian dairy industry from food safety point of view.

After 1992, due to World Trade Organization (WTO) & General Agreement on Tariffs and

Trade(GATT) agreement, world has become an open market for every product. Yet, to streamline

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quality parameters across the globe for every product, International organization for standardization

(ISO) has derived various standards like ISO: 9001 for quality management, ISO-22000 for food

safety management etc; which have direct impact with the Indian Dairy Industry. Again all these

standards are revised from time to time considering rising demand of the customers and food safety.

The pressure to sustain in business and to grow in open market across the world, Indian Diary

Industry has accepted this challenge spontaneously and today, India is not only the highest milk

producing country in the world but also a major exporter of various milk products to many countries.

Today Gujarat Co-Operative Milk Marketing Federation Ltd. (GCMMF), very well know by Amul

brand has achieved 15th position in Dairy Industry of the world with respect to milk solids being

handled by them.

The credit goes to various professional management tools being implemented in Indian Dairy

Industry among which TQM has played a very vital role. TQM itself covers three major aspects viz.

Total Quality Control (TQC), Total Employee Involvement (TEI) and Total Waste Elimination

(TWE). Essence of these three combinations has helped to achieve quality Assurance in Indian Diary

Industry. The word itself justifies about on assurance of quality of milk and milk products from

consumer’s perspective. At the same time stringent laws being introduced for human safety, Quality

Assurance has become mandatory for every food processing industry and dairy industry is part of the

same. Thus quality assurance is a key to the success of Indian diary industry for sustainable business

growth. The same can be achieved and maintained through TQM practices.

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 TOTAL QUALITY MANAGEMENT AT AMUL

The major initiatives taken by the federation towards its path of change management. In 1994,

AMUL decided to introduce the concept of TQM with its twin pillars of customer focus &

continuous improvement. This brought employee involvement, waste reduction, and process

improvement as tools for TQM. They made various initiatives like Kaizen, Housekeeping, Small

Group Activities Etc.

PRODUCTION PLANNING

Production planning helps to plan the supply and demand of products

ANNUAL PRODUCTION PLANNING

 Feedback from union members about projections of milk procurement and production

of dairy products.

 Projection of inter union and private milk sales.

 Deciding on the production targets with the help of marketing dossier.

 Deciding on the union production of various products based on fat &SNF availability.

 Finalizing the projections at each stage.

 Submitting the annual production plan to MD, AGM (Marketing)

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 MONTHLY PRODUCTION PLANNING

 Projection of current monthly milk procurement.

 Projection of inter union and private milk sales.

 Projected sales and stocks for the depots.

 Indepth forecasting for the coming month.

 Estimation of unionwise, productwise production.

 Getting the report verified by the concerned authorities AGM (Marketing).

 Month end processing done by dispatch department.

VILLAGE LEVEL

PROCUREMENT

As Amul is in the Dairy sector, the only raw material which it has is milk. Since milk is a

perishable commodity and it has a very low shelf life, care has to been taken, control is one of

the dimensions of milk procurement. The information technology is best utilized at Amul. At the

village level they are using AMCUS (Automated Milk Collection Stations) which has helped in

maintaining the quality, making faster payments to the producers and in saving the collection

time. The Milk collection information at different villages are available to all dairies (or Unions)

to enable them make faster decisions in terms of production & distribution planning and disease

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control. In collecting and supplying raw milk from milk producers to the dairy plants, 80 per cent

of Amul's village cooperative societies have been conforming to the standard of ISO 9001:2000*.

LOGISTICS

To reduce the transportation expenses Amul has introduced BMC (Bulk Milk Cooling System)

this is a refrigerated container having a capacity of 20 liters. The Union can collect the milk from

such societies having this unit only once a day. To encourage the societies to take this cooler the

Union is paying a commission of 0.12 paisa per liter. Outsourcing to contractors have helped in

cost effectiveness. Societies are at a distance, where the van cannot reach within the stipulated

time the union has established chilling centers for them.

CATTLE CARE

To improve the breed of the cattle, semen banks have been formed. Cattle feed is provided at a

very reasonable rate through its village societies known as Amul Daan. mineral mixture powder

also given to overcome the weakness inherited due to lactation and to improve the reproductive

efficiency. For genetic improvement Artificial Insemination was introduced.

VETERINARY FACILITIES

For the availability of doctors at doorstep Mobile veterinary vans and Mobile Diagnostic

Laboratories were established. Union also organizes FIP (Fertility Improvement Program

Programme. In this they identify the infertile animals and tag them. Then continuously 4 camps

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are organized for them in which they are provided with the cattle feed, nutrition and mineral

mixture powder.

DISTRICT LEVEL

Anand Milk Union Ltd.'s (Amul’s) plants have become the first in the food industry to comply

with the ISO 22000:2005** standards of food safety management. The food safety management

systems in Amul’s dairy plants at Anand, Food Complex at Mogar and Kheda and satellite dairy

at Khatraj have been accredited as conforming to the international standards. The accreditation is

aligned with recognition of quality management systems at the three product units of Amul.

These units have sustained compliance with the standards of ISO 9001:2000, CODEX HACCP

(Hazard Analysis and Critical Control Points), and GMP (Good Manufacturing Practices) since

1999.

The synergy between the standards assured synchronized control of all elements in the food

chain from raw milk, primary milk producers, milk procurement, reception and chilling of milk

to production processes, utilities including water, air, steam, engineering, manpower,

sanitation, communication, hygiene, packaging, storage, crisis management and overall

environment at Amul plants. The concerted control throughout the food chain ensures

considerably safe, healthy and superior quality dairy and food products.

To further increase the efficiency of the manufacturing process, the federation has established a

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plant for manufacturing the packaging pouches. Pouches are the most popular, convenient and

accepted packaging for marketing of liquid milk. The Packaging Film Project (PFP) was

established to give a competitive edge to the Co-operative Dairy, by ensuring access to the best

quality food grade packaging pouch film, for high speed pouch filling machines, that operate at

speeds 75 per cent higher than at present.

STATE LEVEL

Federation is responsible for marketing of the products so employees are an important

efficiency indicator. Various programmes have been initiated for their development:

Programming Committee Meeting (PCM): Programming committee is comprised of MD of

all member unions, MD and AGM of GCMMF. PCM is held within first 10 days of the month.

In the PCM, last two months procurement figures are discussed. Apart from procurement, inter

dairy milk sales, milk procurement prices, Liquid milk sales quantity & prices, cattle feed selling

price are decided.

Self-Management Leadership Programme: This program conducted by Brahmakumaris.

The self-management leadership programme is aimed at achieving the following results.

 To become a better leader through improved self-esteem.

 To develop a clear focus for the next stage on life.

 To take responsibility for your actions and outcomes.

 To learn how to improve the quality of communications and relationships as well

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 as overall quality of life.

ASC/BRM/Friday Meetings: The objective is to create a culture of flatter organization

& encourage shared vision/goal of the department. This helps in bringing transparency,

information sharing and employee participation in decision making.

Hoshin Kanri (January, 1997): One of the most significant activity performed every six months,

The word Hoshin Kanri comes from Japanese and means guiding light. The principle objective of

this to set goals for the brand at the start of the year keeping an end goal in mind called Hoshin.

The action plan highlights the planning steps and in which way it is desired to be achieved, the

measure of performance against which these achievements will be benchmarked, the time by

which it will be completed, the resource required.

The goals set for the year are reviewed every six months under Hoshin Review.

AQC (October, 1997): AQC used as a tool for Business Consultancy to WDs to improve

their distribution efficiency. It is an excellent review forum for monitoring.

SGA (July, 1995): SGA stands for Small Group activity. In this the work force is divided into

different groups having a group leader, facilitator and 4-5 members. The projects are generally

undertaken for 4-5 month’s time. The major areas which are being looked upon are: Improve

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ROI & Sales, Reduction in 2nd Leg Dispatch Time, Inventory Management, Improve Market

Reputation, Cost Control (Fax, Telephone), New Product Development.

Kaizen (May, 1995): Kaizen is basically small improvements carried out by individuals in

his/her day to day work.

The purpose of kaizen movement is to create a culture of continuous improvement in the

organization. Best Kaizen is rewarded.

Kaizens are being done on thrust areas, systems & processes, communication, coordination, learning,

housekeeping, etc.

Housekeeping (October, 1995): The housekeeping aspect is based upon 5’S principle:

Segregation (Seiri) - This action involves going through all the contents of a workspace

to determine which are needed and which can be removed. Everything that is not used to

complete a work process should leave the work area.

Arrangement (Seiton) - Organize all the items left in the workplace in a logical way so they

make tasks easier for workers to complete. This often involves placing items in ergonomic

locations where people will not need to bend or make extra movements to reach them.

Cleanliness (Seiso) - This means cleaning and maintaining the newly organized workspace.

It can involve routine tasks such as mopping, dusting, etc. or performing maintenance on

machinery, tools, and other equipment.

Maintenance of Standards (Seiketsu) - Create a set of standards for both organization

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 and processes. In essence, this is where we take the first three S's and make rules for how

and when these tasks will be performed. These standards can involve schedules, charts,

lists, etc.

Discipline (Shitsuke) - Sustain new practices and conduct audits to maintain discipline. This

means the previous four S's must be continued over time. This is achieved by developing a

sense of self-discipline in employees who will participate in 5S.

This concept was further extended to the Dealers and Wholesalers. The evaluation was based

upon the cleanliness maintained, Damaged Stock Management, Pest/Rodent Control,

Ventilation, Temperature (Cold Storage, Deep Freeze Cold room, Product Temperature, Ante-

Room Temperature, Functional Thermometer). These practices have helped inculcating

awareness to keeping their work area clean and to maintain a proper inventory of the products,

further managing the wastage efficiently

CSR INITIATIVES

Rural Sanitation Campaign

Amul Dairy has launched a novel scheme for total rural sanitation for itself whereby not a single

milk producer will attend to nature’s call in the open. The Dairy with the support of District

Rural Development Agency (DRDA) will provide interest free loans to set up ‘pucca’ toilet

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blocks, which will also ensure hygiene.

Amul has prepared a model low-cost toilet block that costs Rs.11,500 per unit through subsidy

ranging between Rs.4500 and Rs.4600 for BPL/APL families, Amul will provide its members

an interest free loan worth Rs.4300 returnable in four years’ time.

Amul Scholarship

To encourage outstanding children of farmers in pursuing higher studies Amul introduced

scholarship schemes in 1992. Every year the outstanding children are identified from the villages

and scholarships are provided to fulfill their dream of achieving academic excellence. This effort

has motivated greatly children to excel in their studies and spread education in rural areas.

Amul Scholar Felicitation Programme

Annually Amul felicitate outstanding children of employees who have secured highest marks in

10th, 12th standards and Gold Medalist in graduation. Amul Scholars’ Felicitation Programme

was initiated in 2004 and has facilitated many outstanding students of Amul family.

Amul Vidya Shree & Vidya Bhushan

It is India’s first of its kind award that recognizes and rewards brilliant minds of India. By

winning this award, not only the student gets recognized, but it also helps the schools to

enhance their image as an academy that imparts quality education. The inception of these

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awards dates back to 2004-05.

Blood Donation

Amul in association with the Indian Red Cross Society aim to inspire, encourage and initiate

humanitarian services to contribute for “Humanity to Peace”.

Towards this objective Amul initiated blood donation campaign since 1987. Blood donation

camps are organized regularly in rural areas through Village Dairy Co-operative Societies.

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Similarly camps are organized in Amul Dairy Campus wherein employees and

their family members join in donating blood. In addition, Amul organizes the

donation of blood on emergency.

Dairy Demonstration Farm

As part of Amul’s continuous effort to improve the socio-economic conditions and

livelihood of dairy farmers, Amul has come out with various schemes to increase

cattle holding per farmer thereby their income.

A Dairy Demonstration Farm (DDF) has been set up at Mogar to demonstrate scientific

methods of dairy farming. The project envisages encouraging the farmers to use high

yielding animals and modern aids to increase milk production.

The Union provides technical support to milk producers on Scientific Animal

Husbandry practices and also facilitates loan disbursement from banks to the needy

by guaranteeing the loan repayment on behalf of farmers. The Dairy Demonstration

Farm is generating an overwhelming interest in milk producer members because of

its success and viability.

So far, under various schemes, thousands of farmers are covered to increase the cattle

holding size from small to medium size.

Tree Plantation

In last five years, milk producers of GCMMF planted around 312 lakhs tree saplings.

By doing so, milk producers of Gujarat Dairy Cooperatives have shown their concern,

awareness and commitment for the betterment of environment.

In an era of global warming, Amul is contributing its share in making Gujarat lush

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green. In this way, the milk producers of Gujarat are ushering in a silent revolution of

greening Gujarat.

A SAPLING, OFTEN, RESULTS IN A TREE. A CRORE SAPLINGS, HOWEVER,

RESULT IN GLOBAL

RECOGNITION. "Amul Green" movement wins the International Dairy

Federation's award for the best environment initiative in the "sustainability

category" during the 4th Global Dairy Conference held at Salzburg Congress

Centre, Austria on 28th April, 2010.

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