Assigment

Submitted to:
Sir Fakhre Alam
Submitted By:

Syed Umair Bin Javed

Course Name:
Operation & Supply
Chain Management
Supply Chain
A supply chain is an entire system of producing and delivering a product or
service, from the very beginning stage of sourcing the raw materials to the
final delivery of the product or service to end-users. The supply chain lays
out all aspects of the production process, including the activities involved
at each stage, information that is being communicated, natural resources
that are transformed into useful materials, human resources, and other
components that go into the finished product or service.

Why Should A Company Understand Its Supply Chain?

Mapping out a supply chain is one of the critical steps in performing

an external analysis in a strategic planning process. The importance of clearly
laying out the supply chain is that it helps a company define its own market
and decide where it wants to be in the future. In developing corporate-level
strategies, a company often needs to make decisions on whether to operate a
single line of business or enter into other related or unrelated industries.

Each stage of a supply chain is essentially a different industry, for example, raw
material extraction and manufacturing. The supply chain enables a company
to understand others that are involved in each of the stages, and thereby
provides some insights on the attractiveness or competitiveness in industries
the company might want to enter in the future.

Supply Chain Examples

Let’s look at two different examples of a supply chain.

 

Generic Supply Chain

The generic supply chain begins with the sourcing and extraction of raw
materials. The raw materials are then taken by a logistics provider to a
supplier, which acts as the wholesaler. The materials are taken to a
manufacturer, or probably to various manufacturers that refine and process
them into a finished product.

Afterward, it goes to a distributor that wholesales the finished product, which

is next delivered to a retailer. The retailer sells the product in a store to
consumers. Once the consumer buys it, this completes the cycle, but it’s the
demand that then goes back and drives the production of more raw materials,
and the cycle continues.

 
Supply Chain Management
A collection of resources and commentary providing an introduction to
supply chain management and related systems for students,
practitioners, and anyone else interested in learning more about how
to design, manufacture, transport, store, deliver, and manage
products.

Understanding Amul’s Supply Chain Model

Amul is a dairy cooperative based in the Anand district of Gujarat, India.
The word amul is derived from the Sanskrit word amulya, meaning
invaluable. The co-operative was initially referred to as Anand Milk
Federation Union Limited and hence the name AMUL. What interests me to
writing this is article about Amul is that it is an organization that achieves
economies of scale through its simple supply chain while it thrives to
redistribute wealth in the society and creating many opportunities for the
rural and weaker sections of India.

Initially, the producers had to travel long distances to deliver milk to the
only dairy, the Polson Dairy in Anand – often milk went sour, especially in
the summer season, as producers had to physically carry milk in individual
containers. These agents decided the prices and the off-take from the
farmers by the season. In winter, the producer was either left with surplus
unsold milk or had to sell it at very low prices.
Thus the Kaira District Cooperative was established to collect and process
milk in the district of Kaira. Milk collection was also decentralized, as mos
producers were marginal farmers who would deliver 1-2 litres of milk per
day. Village level cooperatives were established to organize the marginal
milk producers in each of these villages. The first modern dairy of the
Kaira Union was established at Anand (which popularly came to be known
as AMUL dairy after its brand name). The new plant had the capacity to
pasteurize 300,000 pounds of milk per day, manufacture 10,000 pounds of
butter per day, 12,500 pounds of milk powder per day and 1,200 pounds of
casein per day.

With a turn over of $3.2 billion (2013), Amul is the largest food brand in
India. Also, Amul is the largest producer of milk and milk products in India.
The model of Amul is such that it benefits small producers like farmers,
who together form an integrated approach to form an economically large
scale business. The model eliminates middlemen, bringing producers in
direct contact with the customers.

Every day, Amul collects 447,000 litres of millk from 2.12 million farmers,
converts the milk into branded, packaged products and delivers the goods
which are worth Rs. 60 million to about 500,000 retail outlets across the
country.
 Supply Chain of Amul

As shown in the figure, the supply chain of Amul consists of farmers who
produce milk from their cattle. The farmers are organized into cooperatives
called Village Cooperative Societies (VCS). These VCSs supply milk to
thirteen different dairy cooperatives, called Unions, of which Amul is one.
The milk or milk products made at these unions are supplied to the Gujarat
Cooperative Milk Marketing Federation (GCMMF). The GCMMF is the
marketing entity for the products of all the unions in the state of Gujarat.
GCMMF has 42 regional distribution centers in India, serves over 500,000
retail outlets and exports to more than 15 countries. All these organizations
are independent legal entities yet loosely tied together with a common
destiny!

The ultimate goal of the GCMMF is to benefit the farmers through this
hierarchical supply chain that includes different kinds of entities ranging
from small suppliers to large fragmented markets. The success of Amul can
be attributed to the quality of products, the economic pricing and the belief
that it has instilled in its customers.