Amul’s Transportation and Logistics

Amul follows a distinctive transportation model as far as its transportation is concerned.The

major production units of Amul are located in Gujarat. Major distribution hubs are located in
and around the periphery of the production units. Since Amul produces majorly perishable
goods, it becomes mandatory to follow a proper and smooth transportation of goods. Physical
distribution is a very important part of the whole business.

Milk is procured from the villages and collected at the Village Co-operative societies (VCS).
From there milk is taken to the manufacturing units where the milk is processed into various
products. The products are then transported to the company depots located in various parts of
the country. The products are then sent to the wholesale distributors (WD) and from there to
the retailers. It is then available in over 1,000,000 retail outlets across India through its network
of over 3600 distributors. While for Amul pouch milk, there are 17 distributors. The wholesale
distributors carry inventory that is just adequate to take care of the transit time from the branch
ware house to their premises. This just-in-time inventory strategy improves the distributors’
ROI.

There are two channels involved in the supply chain of Amul.

1) Upstream channel i.e. the procurement channel for milk from the farmers to the
manufacturing units
a. First the milk is taken to the VCS by the farmers on foot or bicycles in small
quantities. The new VCS in Maharashtra have rapid milk chillers.
b. Then milk is transported from co-operatives to the manufacturing units via
special trucks equipped with tankers to carry milk once a day. A tanker carries
three to four societies’ milk together which helps in achieving economy in
transportation of milk. Geo-remote sensing based vehicle tracking system has
been put in use for efficient handling of Road Milk Tankers carrying milk to
Dairy Plant.
2) Downstream channel i.e. the distribution channel from manufacturing units to
retailers
a. First the products are taken from manufacturing units to the depots. This is
done by using 9 to 18 MT trucks. The frozen food is kept at a temperature
below -18C, while milk is kept between the temperature of 0-4C
 b. From depots to the WD’s the transportation is done using insulated 3-5 MT
TATA 407’s. A permanent dispatch plan (PDP) is prepared as per the demand
of various products
c. Finally the goods are to be transported from the WD’s to the retailers. The beat
plan is prepared and the transportation is done by auto-rickshaws, rickshaws
and bicycles

The vehicles have a carrying capacity of 750-850 crates and one crate consists of 40 pouches of
500ml each. The vehicles start leaving the plant at 19:00. All the crates which are placed in the
vehicles have some ice cubes in them, so as to increase their shelf life. The truck drivers are
responsible for the loading and unloading of the crates.

Aside from using the fleet of trucks , Amul has also integrated their transport system with
railway cooling units to improve transport cost and its supply to Delhi. It has tied up with
Adani Logistics to have a dedicated train to transport milk daily from Dudhsagar Diary of
Mehsana to Delhi. This train transport uses 50 wagons with a capacity of 24,000 litres each

Amul has more than 49 depots with dry and cold warehouse for entire storage of products
and the largest cold chain network in India with 18000 refrigerators

Milk is a product which has time band for consumption; hence it needs to reach the retailers
early morning. For up-country distribution, the dispatch time of milk is between 3-8pm,
depending on the location, while for local distribution in Ahmedabad the dispatch timings is
between 8pm to midnight. The location of the trucks are monitored through cell-phones.

While distribution, is the transportation vehicle breaks down, it is the transporters

responsibility and he arranges for a back-up to minimize delay.