PRESENTATION ON

DISTRIBUTION NETWORK MANAGEMENT

OF
AMUL

Presented by: Yaswant

Narayan Singh
Presented to:
SCCE Prof.

1
 INDIAN DAIRY INDUSTRY
 India is world’s largest producer of dairy
products by volume.

 It is accounting more than 13% of world’s

total milk production.

 Also India is world’s largest consumer of

dairy products, consuming almost all of its
own milk production.

 Indian dairy market is growing at an annual

rate of 7%. 2
CONT…

 Interests from private sector investors have

facilitated construction of larger dairies
through partnering with dairy processors.

 Indian dairy industry is different from other

dairy producing countries as India places its
emphasis on both cattle and buffalo milk.

 India nevertheless faces a milk supply gap

due to increasing demand from a growing
middle class population. 3
CHALLENGES FACED BY INDIAN
DAIRY INDUSTRY

 Procurement (collection)
• The three-tier system of milk collection

 Advent of organized retail channels

• Increased availability of branded, packaged
milk
• Reduced role of middlemen, mainly the milk
vendors

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 Distribution
• Lack of superior cold-storage transport
• Distribution wastage due to improper storage
• No enforcement of HACCP principles

 Lack of supporting information systems

• Database maintained by Milk Producers
Organizations in developed countries

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 AMUL

 Type - Cooperative

 Industry - Dairy

 Founded - 1946

 Key people - Dr. Verghese Kurien

 Milk Producers 52.8 million

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 KEY FACTS

 AMUL means priceless in Sanskrit “Amoolya”

 Brand name managed by an apex cooperation

organization –GCMMF

 World’s biggest vegetarian cheese brand

 World’s largest pouched milk brand

 Largest food brand in India

 Spurred the white revolution in India

 Accreditation with 9001 and HACCP certification by QAS,

Australia.
GCMMF

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 GCMMF - An Overview
Year of Establishment
Members
No. of Producer Members
No. of Village Societies
Total Milk handling capacity per
day
Milk Collection (Total - 2011-12)
Milk collection (Daily Average
2011-12)
Milk Drying Capacity
Cattle feed manufacturing Capacity
Sales Turnover -(2011-12)
1973
17 District Cooperative Milk
Producers' Unions (16 Members &
1 Nominal Members)
3.18 Million
16,117
13.67 Million litres per day
3.88 billion litres
10.6 million litres (peak 13 million)
647 Mts. per day
3690 Mts. per day
Rs. 11668 Crores (US $2.5 Billion)9
STRATEGICAL PILLERS
OF AMUL
1. QUALITY

VALUE FOR
2.
MONEY

3. AVAILIBILITY

4. SERVICE
AMUL PRODUCT’S DIVERSIFICATION

Dairy
• Cheese Products
• Bread Spreads Non-Dairy
• Milk Drinks & Desserts
• Instant Food
• Fresh Milk
• Snacks
• Veg. Oils

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 PRODUCTS

 Bread Spreads

 Milk Drinks

 Powder Milk

 Fresh Milk

 Cheese

 For Cooking

 Chocolate 12
MARKET SHARE

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 AMUL MODEL

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15
16
 SUPPLY CHAIN
MANAGEMENT

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18
 LOGISTICS PROCESS
I. Logistics in collection –

 6 million liters of milk per day

 From about 10,600 separate village cooperative
societies.
 Approximately 2.8 million milk producing
member.

II. Logistics in coordination of –

 Storing the milk.

 Processing the milk. 19

 Distributing the milk.

CONT…

III. Supplier logistics –

 Weighing the milk.

 Determining of fat content.
 Calculation of the purchase price.

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 EVOLUTION OF “IT”
 The evolution of IT in AMUL was took place in
the guidance of DR.B.M Vyas.

 The milk collection center at village

cooperative societies, were first automated.

 Data analysis software utilization for milk

production estimation and increasing
productivity.

 VATS network between all the level of 21

distribution network and GCMMF.

AUTOMATIC MILK COLLECTION UNIT
SYSTEM
 BENEFITS OF IT
 Processing of 10 Million payments daily, amounting to
transactions worth USD 3.78 million in cash.

 Radical changes in business processes - eliminating

middlemen.

 Improved delivery mechanisms and transparency of

business operations.

 Due to this process, AMUL is able to collect six million

litres of milk per day.

 Huge reduction in processing time for effecting

payments to the farmers from a week to couple of
minute.
CONT…
 Movement of 5000 trucks to 200 dairy processing
plants twice a day in a most optimum manner.

 Practicing just in time supply chain management with

six sigma accuracy.

 Online order placements of Amul’s products on the

web.

 Distributors can place their orders on the website.

 Amul exports products worth around US$ 25

million to countries in West Asia, Africa and USA. 24
TOTAL QUALITY MANAGEMENT

There is improvement in quality of milk in term

of acidity and sour milk

Milk union records show 2% reduction in the

amount of the sour milk received from the union

Improved microbiological quality of upcoming

raw milk in the form of methylene blue reduction

This gives better shelf life to the

product
Friday Departmental meetings: to disscuss
issues related to quality.
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 Distribution Process

Company

Wholesaler Dealer Franchisee

Retailer

Consumers
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 THE CHANNEL NETWORK

 Procurement channel- upstream flow

 Distribution channel- downstream

flow

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 PROCUREMENT

 Activities at the village level comprised

developing and servicing the VCSs.

 Increasing milk collection, procuring milk, and

transporting it to the chilling and processing units
twice a day.

 The VCSs provided the farmers with good quality

animal feed, fodder, and other services like
veterinary first aid.
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 PROCUREMENT CHANNEL
(UPSTREAM)
 On an average around thousand farmers come to sell
milk at their local co-operative milk collection center.

 Each farmer has been given a plastic card for

identification.

 At the milk collection counter, the farmer drops the

card into a box and the identification number is
transmitted to a personal computer attached to the
machine.

 The milk is then weighed and the fat content of the

milk is measured by an electronic fat testing machine.
CONT…
 Both these details are recorded in the PC. The
computer then calculates the amount due to
farmer on the basis of the fat content.

 The value of the milk is then printed out on a

slip and handed over to farmer who collects the
payment at adjacent window.

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31
 COLD STORAGE NETWORK
 Chillers in proximity of villages

 Prompt transport to district facilities for

further dispatch to consumers/ processing
units.

 Chilled trucks to transport processed products

 Deliveryto local chillers by insulated rail

tankers and chilled trucks.

 Refrigerators
and freezers with retailers and
departmental stores to retain freshness. 32
 DISTRIBUTION
 GCMMF coordinated with various unions to get a
regular supply of milk and dairy products.

 The processed milk and dairy products were

procured from district dairy unions and distributed
through third party distributors.

 To ensure quality and timely deliveries, GCMMF and

the district unions had several mechanisms in
place.

 The unions monitored the supplies of milk and the

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distribution of finished products.
 DOWNSTREAM FLOW
 First leg
 Manufacturing units to company depots using 9

and 18 MT trucks
 Frozen food below -18°C

 Dairy wet 0-4°C

 Second leg
 Depots to WDs

 Transport through insulated 3 and 5 MT TATA

407’s

 Third leg
 WDs to retailers
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 Transport through rickshaws
35
 REVERSE LOGISTICS

MILK CHURN
 from dairy to VCS

POUCH MILK TRAY

from retailer to dairy

BOTTLE
from retailer to dairy

DAMAGED PRODUCTS 36
from customer to retailer then to dairy
 DIRECT RETAILING
 Amul has recently entered into direct
retailing through "Amul Utterly Delicious"
parlors created in major cities.

 Amul has plans to create a large chain of

such outlets to be managed by
franchisees throughout the country.

 More than 2000 parlor with a turnover of

Rs. 200 crores.
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 THANK YOU…
 Comments :
 Now a days, online shopping becomes popular and
gradually be accepted by the public. There are
plenty of attractive spots of this new type of
business. Convenience, easy-delivery and low cost.
Thereby, it is also a great opportunity for AMUL if
start their business in this area. The major features.

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