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W16367

AMUL’S IT-ENABLED SERVICE DELIVERY TO DAIRY FARMERS

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Harekrishna Misra and S.R. Asokan wrote this case solely to provide material for class discussion. The authors do not intend to
illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other
identifying information to protect confidentiality.

This publication may not be transmitted, photocopied, digitized or otherwise reproduced in any form or by any means without the

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permission of the copyright holder. Reproduction of this material is not covered under authorization by any reproduction rights
organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Business School, Western
University, London, Ontario, Canada, N6G 0N1; (t) 519.661.3208; (e) cases@ivey.ca; www.iveycases.com.

Copyright © 2016, Richard Ivey School of Business Foundation Version: 2016-06-23

In April 2015, Dr. K. Rathnam, the managing director of Kaira District Co-operative Milk Producers’
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Union Limited (Kaira Union), a member union of the popular dairy brand Amul, was in discussions with
Dr. Hriday Desai, Kaira Union’s general manager, and Harshad Shah, the head of Kaira Union’s call
centre. The executives were feeling a sense of pride because Kaira Union’s centralized veterinary call
centre, rolled out in 2013, had covered all of the village-level cooperative societies of Kaira Union as
planned. The call centre had resulted in considerable savings in the cost of delivering veterinary services
to the dairy farmers, as well as improvement in the quality of service. Data received through this call
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centre was very useful in tracking disease patterns, medicine consumption, and veterinary efficiency. In
light of the call centre’s success, Rathnam was contemplating expanding it to include Kaira Union’s
operational areas in the states of Maharashtra and West Bengal. Rathnam wanted to know whether the
call centre had the right structure and processes to adapt to a scaling-up strategy. He asked Desai and
Shah to examine the situation and develop a proposal for expansion.

THE INDIAN DAIRY SECTOR

No

India was the world’s leading milk producer, accounting for 17 per cent of global production. This figure
represented a great achievement, considering that India had produced a mere 17 million tonnes in 1950/51
and was essentially dependent on Western aid until the 1970s to meet its requirements. From 2012 to
2013, milk production was 132.4 million tonnes.1 The per capita availability of milk, which was 124
grams per day in 1950/51, reached 290 grams per day in 2012/13,2 despite the population increase of
nearly four times. The phenomenal achievement was largely due to a program called Operation Flood.
The focus of the program was establishing village-level cooperative societies to procure milk and provide
Do

inputs and services to the member farmers. The physical and institutional infrastructure created for
procurement, processing, marketing, and production enhancement services helped to realize fair prices for
the farmers and thereby boost milk production. About 15.1 million farmers had been brought under the
ambit of 155,634 village-level cooperative societies. These societies were affiliated with a district union,
1
Government of India, Basic Animal Husbandry & Fisheries Statistics 2014 (New Delhi, 2014), 8, accessed May 30, 2016,
http://dahd.nic.in/sites/default/files/Final%20BAHS%202014%2011.03.2015%20%202.pdf.
2
Ibid, 9.

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and the unions were federated at the apex state level. In India, there were 22 such state-level dairy

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federations.

In addition to encouraging cooperatives, the government of India limited commercial dairy imports until
the 1990s, in order to protect the domestic “infant industry.” Even though the focus of dairy development
was village-level cooperative societies, small independent operators also flourished. However, large

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proprietary firms in the sector were restricted through licensing.

In tune with the liberalization of the Indian economy in 1991, the restrictions under the Milk and Milk
Products Order, 1992 (MMPO) were relaxed, which allowed private players to enter the sector.3 Under
the amendment to the MMPO, dairy plants handling 200,000 litres or more per day needed to be
registered. The milk shed concept was removed, thus paving the way for private companies and
cooperatives to expand their procurement operations.4 There were several private and foreign players

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registered under the MMPO, but the MMPO, which regulated dairy products, was replaced by the Food
Safety and Standards Regulations (FSSR), 2011. Both domestic and imported food fell under the FSSR,
in which food business operators—such as food processors, manufacturers, exporters, and importers—
were required to have a licence to operate.5
 
The demand for milk and milk products had been increasing due to the expanding population, as well as
an increase in disposable income. The share of milk and milk products in total food expenditure per capita
was 11 per cent in rural areas and 14 per cent in urban areas during 1970/71, which increased to 16 and 19
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per cent, respectively, during 2009/10.6 The demand for milk was expected to reach 155 million tonnes by
2016/17 and over 200 million tonnes by 2021/22.7 With the expanding economy, the demand for dairy
products (especially value-added dairy products, such as yogurt, cheese, ice cream, and baby food) was
set to grow at a compound annual growth rate of 20 to 30 per cent in the next few years.8

However, there were several constraints in meeting this demand, such as low productivity of animals,
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scarcity of fodder and cattle feed, and bottlenecks in the infrastructure to collect milk from the villages.
The business of producing, storing, and distributing dairy—also known as “dairying”—was largely a
supplementary activity to farming and was part of the farming system. An Indian farm held, on average,
one hectare of land. With such a small resource base, farmers were constrained and could only keep one
or two cows/buffaloes and use the crop residue as fodder. The average holding of cattle per farming
household was two to three animals.9 With such small operations, farmers needed input services (such as
cattle feed), technical services (like veterinary care at an affordable cost, near their villages), and market
No

linkages to realize better prices for the output. The National Dairy Plan (NDP) tried to address these

3
Anneleen Vandeplas, Bart Minten, and Jo Swinnen, “Multinationals versus Cooperatives: The Income and Efficiency
Effects of Supply Chain Governance in India” (paper presented at the International Association of Agricultural Economists
Triennial Conference, Brazil, August 18–24, 2012), accessed February 20, 2015,
http://ageconsearch.umn.edu/bitstream/126892/2/Vandeplas_Minten_Swinnen_Brazil.pdf.
4
Milk sheds are restrictive in terms of milk procurement in certain specified areas. A milk shed is a region
producing milk that may be supplied to the area of demand. It is an area geographically demarcated for the collection of milk
or milk products.
5
USDA Foreign Agricultural Service, Dairy and Products, GAIN Annual Report IN3119 (2013).
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6
Government of India, op. cit., 110–111.
7
National Dairy Development Board, “Village Based Milk Procurement System,” 2015, accessed February 24, 2015,
www.nddb.org/ndpi/focus/mps.
8
Sharleen D’Souza and Sohini Das, “Foreign Dairy Players Eye India Entry,” Business Standard, September 4, 2013,
accessed February 25, 2015, www.business-standard.com/article/markets/foreign-dairy-players-eye-india-entry-
113090400442_1.html.
9
Government of India Planning Commission, Report of the Working Group on Animal Husbandry and Dairying: 11th Five
Year Plan (2007–12) (New Delhi, 2006), 40, accessed March 3, 2015,
http://planningcommission.nic.in/aboutus/committee/wrkgrp11/wg11_rpanim.doc.

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issues by following a farmer-centric approach. The objectives of the NDP were (a) adoption of scientific

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and systematic processes in the provision of technical inputs and services to milk producers at their door
step and (b) facilitating milk producers’ access to the organized milk processing sector.10 In addition to
the NDP, government departments such as Animal Husbandry and the Ministry of Agriculture were also
implementing several schemes for dairy cattle improvement, providing technical inputs and improving
infrastructure for clean milk production in various states.

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KAIRA DISTRICT CO-OPERATIVE MILK PRODUCERS’ UNION LIMITED (KAIRA UNION)

In 1946, farmers within Kaira, a district in the state of Gujarat, formed a cooperative and succeeded in
forcing the then provincial government to buy milk from them for the city of Bombay. The farmers were
initially exploited by the middlemen who purchased from them and supplied to the city under the Bombay

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Milk Scheme. The farmers refused to supply milk to Polsons, a private dairy that had secured the
exclusive right of supply to the city. After 15 days, the city had no milk supply, and the government
acknowledged the farmers’ problem and agreed to buy from them.11 The cooperative was registered as
Kaira District Co-operative Milk Producers’ Union Limited—in short, Kaira Union. By 1954, the
cooperative was procuring 5,000 litres per day and had built a plant to convert the surplus milk into milk
powder and butter. In 1957, the cooperative adopted the brand name Amul for its products.

At the village level, farmers were organized into village-level dairy cooperative societies (DCSs). The
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member farmers sold milk to the cooperatives, and the milk was transported to the district plant owned by
the union. Members of the village cooperative society elected a managing committee, and the committee,
in turn, elected a chairman. The managing committee also appointed a paid secretary to supervise the
functioning of the society.
 
In 1965, the National Dairy Development Board was established to replicate the success of Amul. By the
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late 1960s, there were six district unions in Gujarat alone, replicating the organizational structure of Amul
and marketing their products under their brand names. Foreseeing a potential competition among them
that would negatively impact the farmers, an apex body, Gujarat Cooperative Milk Marketing Federation
(GCMMF), was formed in 1973. GCMMF was owned by the unions, and their products were sold under a
common brand: Amul, the brand owned by Kaira Union.

Thus, a three-tiered structure that came to be known as the “Anand Model” emerged. Each tier had its
No

separate responsibilities and administration. The village-level society operated a milk collection centre
and tested the quality of milk supplied by its members, based on which payments were made. The price
was conveyed by Kaira Union. The union of all village-level cooperative societies operated at the district
level.

The district-level unions elected a board from among the village societies’ chairmen. This board then
elected its chairman and vice chairman. The board also appointed the managing director of the district-
level union. The tenure of the chairman and vice chairman was normally 36 months; the board’s tenure
was usually five years. The unions purchased milk from the village societies, then processed the product
Do

into pasteurized milk and value-added products and marketed such products within the districts. The
district-level cooperative unions were also responsible for manufacturing and supplying cattle feed to the
village-level cooperative societies. They also provided services, such as veterinary care, to address

10
“NDP I in Brief,” National Dairy Development Board, accessed February 24, 2015, www.nddb.org/ndpi/about/brief;
“Projects & Operations,” National Dairy Development Board, accessed June 8, 2016, www.nddb.org/ndpi/info/op.
11
“History,” Amul Dairy, 2013, accessed March 10, 2015, www.amuldairy.com/index.php/about-us/history.

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diseased animals affecting milk supplies, and artificial insemination (AI) services, to improve the breed.

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At the top of the chain, the GCMMF board was elected from among the chairmen of 17 affiliated unions,
and this board, in turn, elected the chairman for the federation. The federation planned the individual
product mixes for the unions, depending on the size of their operations. It procured the necessary raw
materials (other than milk) for all the unions, leveraging the large scale of operations when negotiating
with the suppliers. GCMMF also established a common distribution network for the unions to market

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their products. GCMMF achieved a turnover of ₹207.33 billion12 in March 2015 (see Exhibits 1 and 2).

SUPPLY CHAIN OF KAIRA UNION

There were 1,250 village-level DCSs, with a membership of around 0.7 million milk producers under
Kaira Union, covering villages within the districts of Anand, Kheda, and part of Mahisagar. Kaira Union
had the capacity to handle 2.5 million litres of milk per day and had achieved a turnover of ₹34.41 billion

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during 2013/14.13 In addition, Kaira Union was given the responsibility of procuring milk in the adjoining
state of Maharashtra and the state of West Bengal in eastern India.

The supply chain strategy followed by Kaira Union centred on its members. The success of the
cooperative venture depended on the performance of its members and their willingness to supply milk. To
sustain growth, Kaira Union also reached out to non-members to conduct business by providing technical
inputs as well as collecting milk. However, the cost of service and the prices for milk were differentiated to
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encourage members to remain with the cooperative and to prompt non-members to become members as well.

The dairy farmers supplied milk to the DCS in which they were members. The collected milk was stored
in bulk milk chilling units (BMCUs) operated by the dairy cooperative at the village level. Each
cooperative society under Kaira Union had installed BMCUs, as per their requirements. Transporting
milk from the DCS to Kaira Union’s processing plants was done through outsourced logistics operators
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who (depending on the volume of milk stored) managed routes and transported milk to the processing plants.

After the farmer, the DCS, and the transport operator, Kaira Union was the fourth actor in the supply
chain. As noted, Kaira Union was governed by the elected representatives from the DCS and ensured that
the milk received was processed into products, as per the rolling plan provided by GCMMF (see Exhibit
3). GCMMF constantly monitored the market while preparing the rolling plan for each union. It managed
the supply chain on the marketing end (e.g., stockists, dealers/distributors, and retailers). In order to
No

ensure economies of scale, GCMMF also negotiated the rates for annual contracts for the supply of inputs
to cattle feed plants, veterinary medicines, and other high-volume items on behalf of its affiliate unions
and DCSs. As competition from both cooperative and private players (including multinationals)
intensified, GCMMF’s focus was more on improving efficiency in the supply chain to remain
competitive, as well as ensuring members’ continued affiliation with the business.

In order to pursue “cost leadership” attributes with effective supply chains, Kaira Union had been
proactively using information and communications technologies (ICTs) in various forms. ICTs had been
part of GCMMF’s overall strategy for the implementation of enterprise resource planning (ERP) solutions
Do

and SAP for managing the supply chain. To promote “lean inventory principles” in the supply chain,
Kaira Union had introduced various initiatives that included ICT-enabled interfaces and transactions at
various levels involving members, employees, suppliers, and supply chain partners.

12
₹ = INR = Indian rupee; all currency amounts are in ₹ unless otherwise specified; ₹1 = US$0.01595 on March 9, 2015.
13
“An Overview,” Amul Dairy, 2013, accessed March 10, 2015, www.AMULdairy.com/index.php/the-organization/an-
overview.

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RATIONALE FOR THE CALL CENTRE

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In the initial years of Kaira Union, when communication facilities were poor, the DCSs were equipped
with wireless sets used to report sick animals and request veterinary services from Kaira Union (which,
aside from offering AI/veterinary services, also provided cattle feed and collected milk). This was a
critical service to maintain the milk supply because the death of an animal was not only a loss to the

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member but also had an adverse impact on the investment made by Kaira Union in plants and other
overheads. Later, when communication facilities improved, farmers started requesting veterinary services
through their own mobile phones or land lines.

In order to address this critical issue, Kaira Union decided to create 13 veterinary centres (VCs) covering
its operations in Anand, Kheda, and part of Mahisagar. Kaira Union employed 160 veterinarians (vets) in
these VCs. Each vet was assigned a set of villages, and a route map was provided. Typically, a vet would

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cover 10 to 12 villages in a route (see Exhibit 4). Four-wheelers were provided for travel to these villages.
GCMMF announced the rate contracts for veterinary medicines and other supplies. As per these rates,
Kaira Union procured, stocked, and supplied the medicines periodically to the VCs from which the
veterinarians took supplies. Some staple medicines were always in the vets’ kits (see Exhibit 5).

In case of any need for veterinary assistance, farmers first called the VC under whose jurisdiction their
DCS fell; then they had to go to the DCS office and pay the stipulated amount pre-fixed by Kaira Union
(₹100 for a normal visit, ₹250 for an emergency visit). Non-members were charged ₹300 per visit by the
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vets (see Exhibit 6). Kaira Union issued the receipt in the form of a booklet with 20 leaves. The DCS
purchased these booklets on credit, to be deducted from the proceeds of the milk supplied to Kaira Union.
Vets were dispatched by the VC or visited unwell animals in the normal course of their rounds, at which
point they collected farmers’ receipts, thus having proof of attending to animals that had been reported.
The vets then submitted the receipts to the VC, along with the details of the number of animals treated,
the kind of disease or ailment, and medicines used, which information was then forwarded to Kaira
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Union. In case of emergency, or if the farmer was not in a position to obtain the receipt, the vet attended
to the animal, charged the farmer the non-member fee, and deposited the amount with the VC. If the
farmer was, in fact, a member, the difference was later reimbursed by the VC.

Union management received information about the treatment and the medicines used from the vets;
however, this information was often received too late or was not compiled in time. Hence, it was of little
use for management decisions. Further, there was no way to monitor the time taken to attend to a case
No

from the time the call was received. It was difficult to monitor any non-members who were also
benefitting, as well as how the money and medicines were being accounted for. In addition, if vets were
attending to any animals as part of their designated routes, they naturally could not attend to any
emergency calls within that route at the same time. A vet on a nearby route might be relatively free, but
without a centralized system, the vets’ movements and their engagement could not be traced. Therefore,
Kaira Union realized the need for a centralized call centre (staffed at all hours of the day) to overcome
some of these problems.

In October 2013, the veterinary call centre (CC) was established at Kaira Union’s headquarters in Anand.
Do

By March 2014, all 13 VCs were connected to the centralized CC. Now, instead of calling each VC,
farmers called the CC at Anand, which in turn notified the vets about sick animals within their route. In case
of emergency, it was easy to trace other vets on different routes and dispatch them to attend to such cases.

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SETTING UP THE CALL CENTRE

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The CC, situated at Kaira Union’s headquarters, was operated in shifts to manage the demand for service.
There were four shifts in a day (6 a.m. to 2 p.m., 7 a.m. to 3 p.m. [women call centre operators], 2 p.m. to
10 p.m., and 10 p.m. to 6 a.m.). This demand was received through a 30-line-based dedicated primary rate
interface (PRI) service (land line) obtained from the telecommunications operator. Calls were routed to

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one of the eight receptionists, depending on which was free at the time. These calls were managed by
special software. A caller could reach the CC through calls from a mobile phone and/or landline. The
receptionist registered the details of each complaint and the type of service required and transferred the
service call to the assigned team, moving along the designated route. All the service profiles were
registered in the database through intranet application software. There were 95 routes covered under the
central CC, and each route was approximately 30 kilometres (km). There were 25 vets assigned to the
main centre at the Anand headquarters, whereas 12 to 15 vets were allocated to each second-tier VC

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located at Cambay, Balasinor, and Kapadvanj. In third-tier VCs, the average number of vets assigned was
between five and eight. Information about the disease and medicines used in each case was keyed into the
tablet device supplied to each vet. Thus, through the CC, management could track online the movements
of the vets, the medicines used, the type of diseases, etc. In this way, an online management information
system constantly generated information in the intranet for effective decision making. This system
revealed that daily coverage by all vets was 11,000 km in the “lean” season (April to June) and 14,000 km
in the “flush” season (October to February).
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Farmers were instructed to call the CC for any veterinary service. The CC then tracked the vet of that
route and informed the vet of the services requested. All requested services were logged by the CC before
being channeled to the respective vet, as per the route assigned. Each vet had a mobile phone and a tablet
device to access the service requests (see Exhibit 7). In case of emergency or if the veterinarian was
otherwise engaged, the CC alerted another vet on a nearby route and directed that vet to attend to the
emergency call. In the process of rendering veterinary services, vets had another critical role to play—
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namely, to keep track of payments made. Vets were expected to render services to members and non-
members without any discrimination regarding service quality. However, the pricing policy did
discriminate between members and non-members. In order to streamline this process, Kaira Union had
developed standard operating procedures, which described the types of services, the fee for each type of
service, the receipt books for the DCSs, and how to stock and issue medicines for the VCs for
management of inventory.
No

Kaira Union recognized the importance of a service-orientation strategy for its members. It may be noted
that farmers were the demand generators. These farmers were conversant only with the local language.
Transacting with SAP software, which was in English, was a difficult proposition for the farmers. For this
purpose, the CC was an option before the Kaira Union to introduce and ensure that public switched
telephone network (PSTN)-based communication would be an ideal mode. This was easier to implement,
as the CC employees were local residents and could converse easily.

Service-orientation approaches generally followed service-oriented architecture (SoA) principles. SoA

argued in favour of a network through which services demanded by users were well orchestrated and
Do

brokered, precisely identified with the nature of the service, and then delivered within a prescribed time.
Typically, SoA had three major components with distinct deliverables: demand generators and
aggregators, orchestrators, and service providers, all of which co-existed in the architecture to render
services on demand.14 The users of the CC were farmers whose livelihoods were dependent on dairying.

14
Thomas Erl, Service-Oriented Architecture: Concepts, Technology, and Design (Boston, MA: Pearson Education, 2005),
335–336.

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The CC was functioning as an “orchestrator,” while the DCSs and the VCs were acting as “service

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demand aggregators” for their members. Members were the “demand generators,” and the DCSs, VCs,
union, and vets were acting as “service providers.”

The CC and the DCSs were the first points of contact for the members (and non-members) to record their
demands for a particular service. A pool of services (with pricing information) was available to the CC,

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DCSs, and VCs for guidance. Vets were also equipped with this information, and they rendered services
as per demand, while ensuring that payments were made by the farmers. The VCs and Kaira Union
ensured the availability of inventory for the vets. The CC had resulted in a considerable reduction in the
cost of the veterinary service provided and also improved response times (see Exhibits 8 and 9). Dairy
farmers were generally happy with the service provided and the improvement in the quality of service
after the CC was established (see Exhibit 10).

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IT-ENABLED SERVICES FOR THE CALL CENTRE

Since its inception, the central CC had seen information technology (IT)-enabled services as essential.
The CC primarily depended on the IT infrastructure interfaced with the intranet of Kaira Union. The CC
had state-of-the-art infrastructure to manage incoming calls from the farmers. CC employees worked 24
hours per day, seven days per week in their respective shifts to attend to the calls, ascertain the nature of
the calls (normal or emergency), and update the database. There was a remote access service (RAS)
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server connected to the CC intranet that managed 20 personal computers to interface with the calls. This
RAS server was connected to the PSTN and PRI lines for better call management with voice quality (see
Exhibit 11). The CC database recorded all the calls and assigned the respective routes for the vets to
attend to the services demanded.

Because Kaira Union was part of GCMMF, the SAP/ERP product that was installed for managing all
tC

functions of GCMMF had been extended to manage the functions of all the unions, including Kaira
Union. Two scenarios emerged as a result: one scenario related to the functioning of the CC, and the other
related to interfacing with the SAP. All Kaira Union VCs were connected to the SAP and CC software
modules to support services rendered through the CC. Each vet working with the VC raised the indents as
per the service demanded through the CC software module. These vets received the medicines and other
items issued through the SAP module, and consumption of the items was entered in the CC software
module. These situations created an environment where SAP and CC modules needed to interact for
No

better clarity and to maintain currency in the databases of SAP and CC. These updates were carried out
through online and batch mode daily, with a time gap of four hours.

The CC had been constantly pursuing innovative approaches to improve upon its service standards. It was
contemplating the aggressive use of the Internet of Things (IoT).15 Though the use of IoT was not yet
widespread, Kaira Union felt that it could be quite beneficial for the CC operations and for managing
services. Rather than having farmers call the CC operators through their mobiles, Kaira Union believed
that mobile-interfaced IoT devices would encourage farmers to effectively engage with the supply chain
agents and vets on call.16 In Kaira Union, vets were technologically savvy, using mobiles and tablets
Do

during their shifts to update the consumption of items and track updates on emergency and/or normal
calls. Through this tracking, vets were advised to attend to calls depending on their proximity to the

15
Dave Evans, “The Internet of Things: How the Next Evolution of the Internet Is Changing Everything,” Cisco, April 2011,
accessed September 27, 2015, www.cisco.com/c/dam/en_us/about/ac79/docs/innov/IoT_IBSG_0411FINAL.pdf.
16
“Realising the Benefits of Mobile-Enabled IoT Solutions,” PricewaterhouseCoopers Private Limited, 2015, accessed May
8, 2016, www.pwc.in/assets/pdfs/publications/2015/realising-the-benefits-of-mobile-enabled-iot-solutions.pdf.

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 Page 8 9B16E020

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farmer who needed service. Vets’ vehicles were not IoT enabled with a global positioning system or

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general packet radio service for better route management. Therefore, the union planned to upgrade mobile
services with the support of IoT and facilitate transparency in the management of vehicles and inventory.
This plan included the installation of IoT in the vehicles carrying medicine to support vets on call. The
aim was to track inventory in the vehicle in addition to sharing information with all the vets so that
optimal time was used to attend to services on demand.

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Kaira Union VCs had IT infrastructure as part of the organizational intranet. These VCs were connected
to the CC and Kaira Union intranets through broadband-enabled PSTN services. VC managers could
access the SAP and CC modules to carry out different tasks. However, indents raised by the vets and the
assignment of vehicles were both managed through manual procedures. Each VC manager recorded the
distance covered by the vehicles in the CC module daily.

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SCALE-UP STRATEGY

Kaira Union believed that its supply chain management needed ICT support in order to scale up its
operations. The CC played a crucial role in terms of reaching out to members to render prompt, quality
services on demand. In its present form, Kaira Union’s CC catered to the demand of VCs, vets, logistics
operators, and milk producers. Kaira Union wanted to expand its network for milk procurement in the
states of Maharashtra and West Bengal. This scaling-up strategy had effects on the role of the CC because
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of the geographical spread; how could Kaira Union use a similar set-up to extend services without
compromising on quality? In order to scale up, Kaira Union would need to set up VCs, deploy vets, and
arrange medicine and logistics service providers; all this would be possible through IT-enabled services
extended from the existing backbone available at Kaira Union. While the ERP product was expected to
extend the services through a virtual private network (VPN), this VPN would also support the CC to
network with the VCs, vets, and logistics operators. Because the mobile applications and tablets were IoT
tC

enabled, services could be extended without any difficulty.

WAY FORWARD

Desai and Shah were still considering the best way to prepare for scaling up the CC activities before
submitting their ideas to Rathnam and the board. The primary challenge was whether the existing CC
No

architecture could address the needs of two states (Maharashtra and West Bengal) that were
geographically vast. Could the VC concept used in the CC architecture be replicated? If so, how could
VCs be set up in such a way that the database, networks, connectivity, and software of the current systems
could handle this scale-up? How would vets be located and their movements planned with traceability?
How would the CC manage farmers’ calls, some of which would be in different vernacular languages?
Do

The authors gratefully acknowledge the cooperation and support received from Dr. Rathnam, managing director,
Kaira Union, and his team for writing this case.

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 Page 9 9B16E020

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EXHIBIT 1: KEY COMPANIES IN THE DAIRY SECTOR (COOPERATIVES) AND THEIR PRODUCT

os
PORTFOLIOS

Mother
Name/Brand Amul Aavin Nandini Verka Omfed Milma
Dairy
Turnover, March 207.33 35.00 106.98 21.83 6.5 18.00 63.00*
2014 (in ₹ billions)

rP
Fresh milk Y Y Y Y Y Y Y
Ultra-high- Y -- Y -- -- -- --
temperature milk
Ghee (clarified Y Y Y Y Y Y Y
butter)
Butter Y Y Y Y -- Y Y
Cheese Y Y Y Y -- -- Y
Paneer Y Y Y Y -- -- Y
Curd/yogourt Y Y Y Y Y Y Y

yo
Ice cream Y Y Y Y -- Y Y
Milk powder Y Y Y Y -- Y --
Fresh cream Y -- -- -- -- -- Y
There are 22 state-level cooperative federations in different states. Some of the important ones are shown
above. They include Aavin (Tamil Nadu), Nandini (Karnataka), Verka (Punjab), Omfed (Orissa), Milma
(Kerala), and GCMMF/Amul (Gujarat); Mother Dairy is under National Dairy Development Board; *turnover
includes edible oil, vegetables, etc.
op
Source: Compiled by the case authors based on the following company websites, all accessed February 24, 2015: Amul,
www.amul.com/m/brands; Aavin, www.aavinmilk.com/products.html; Karnataka Co-operative Milk Producer’s Federation Ltd,
www.kmfnandini.coop/product/milk; Verka, www.verka.coop/page/marketing; The Orissa State Cooperative Milk Producers’
Federation Ltd., http://omfed.com/products_details.asp?lnk=pro; Milma, www.milma.com/index.php/product; Mother Dairy,
www.motherdairy.com/MotherDairyPages/ourproducts.aspx.

EXHIBIT 2: KEY COMPANIES IN THE PRIVATE DAIRY SECTOR AND THEIR PRODUCT
tC

PORTFOLIOS

Name/Brand Britannia Nestlé Heritage Hatsun Gowardhan Kwality

Foods (Parag)
Turnover, March 2014 63,470* 98,060* 2,142
2,165 15,000 4,578
(₹ millions)
Fresh Milk -- -- Y Y Y Y
Ultra-high-temperature milk Y Y Y Y Y
No

Ghee (clarified butter) Y -- Y Y Y Y

Butter Y -- -- Y Y Y
Cheese Y Y -- Y --
Paneer Y -- -- Y Y
Curd/yogourt Y Y Y Y Y --
Ice cream -- -- Y Y -- Y
Milk powder Y -- -- -- -- --
Fresh cream -- -- -- -- -- --
*Turnover includes other products such as biscuits, packaged foods, coffee, etc.
Do

Source: Compiled by the case authors based on the following company websites, all accessed February 25, 2015: Britannia,
http://britannia.co.in/products/dairy; Nestlé, https://www.nestle.in/brands/mpn; Heritage Foods Limited,
www.heritagefoods.in/product.html; Hatsun Agro Product Ltd., www.hatsun.com/hatsun-overview.html; Parag,
www.paragmilkfoods.com/our-brands.php; Kwality Limited, www.kdil.in/milk.php.

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 Page 10 9B16E020

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EXHIBIT 3: SUPPLY CHAIN OF KAIRA UNION

os
Agents 4: Agents 5:
Agents 1: Agents 3: Logistics Union, Agents 6:
Agents 2: Cooperative Operators GCMMF
Farmers Transporters Retailers
Society & Kaira
Union

rP
Forward Linkage in Supply Chain

Dairy Milk Marketing of

Farmer Collection Products,
Members and Milk
Processing Establishing
Milk Transport Market
Collection and
Milk Storage Production Channels and
and Networks,
Transport and Local of Value-

yo
Sale Added Demand
Products, Management,
Dairy
Milk Local Managing Scale
Farmer
Storage – Sales on Input
Non-
Chilling Inventory,
Members
Centres Finished Goods
op
Reverse Linkage in Supply Chain

Information as a Service, Revenue,

Inventory Management for Cattle, Cattle Feed, AI Financial
Members as a Service, Services, Bull Rearing Services,
Finance and Accounts as a Centre and Services, Grants,
Veterinary and Allied Infrastructure
tC

Service for Members,

Member Education as a Services, Insurance
Service, Transparent
Transaction as a Service
Agents 8: Union, Agents 7: GCMMF,
Agents 9: Cattle Suppliers, Banks and Financial
Union, Cooperative Government, Institutions,
Society, Logistics Insurance agencies, Government, NDDB
Operators, Call Centre NDDB
No

Note: NDDB = National Dairy Development Board.

Source: Compiled by the case authors based on company information.
Do

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 Page 11 9B16E020

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EXHIBIT 4: MANAGEMENT OF VETERINARY SERVICES THROUGH VETERINARY CENTRES (VCs)

os
Member
#11

VC #1

rP
(Head- Member
quarters) #1n

Manual Transactions and Sharing of Information

yo
VC #2 op VC #3 VC #13

Area # Area # Area # Area # Area # Area #

21 2n 31 3n 131 13n
tC

Manual Transactions and Sharing of Information

DCS DCS DCS # DCS #

#1 #2 1249 1250
No

Manual Transactions and Sharing of Information

Member Member Member Member

#1-1 #1-x #1250-1 #1250-x
Do

Source: Compiled by the case authors based on company information.

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 Page 12 9B16E020

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EXHIBIT 5: MOVEMENT OF DOCTORS

os
Village #1
Kaira
Union
Assigns Doctor Covers

rP
Village #13

Receives

Disease Route

yo
Medicines
Inventory

AI Kits

Uses Used
op
Receipts

Member
Updates Services
tC

Non-
Member

Source: Compiled by the case authors based on company information.

No
Do

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 Page 13 9B16E020

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EXHIBIT 6: PAYMENT FLOW CHART

os
Emergency Service Fee
(₹250)

Normal Service Fee (₹100)

Approves

rP
Service
Kaira Dairy Fee Issue of Death Certificate
Union (₹150)

Non-Member Service Fee

(₹300)

Surgical Service Fee (₹250)

yo Shares
Information
on Service
Fee
DCS
Pays for
Issue of
Receipt
Books as per
Requirement
op
Green Level: Emergency
tC

Stocks
Validates Advance Yellow Level: Normal Service
and Receipt Details
Submits Booklets
Service Blue Level: Fertility Camp
Fee/Re-
i
No

Member
Extends
Service
Doctor
Non-
Member

Submits
Receipts/
Pays for
Service
Do

Source: Compiled by the case authors based on company information.

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 Page 14 9B16E020

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EXHIBIT 7: SERVICE FLOW CHART

os
Member Mobile

Farmer Service
Non- Request Call Centre

rP
Member
Landline

DCS

yo
Member
Details
Records
Requests
Accesses
Cattle Details
op
Disease
Details
tC

Mobile
Identifies
Doctor and
Allocates
Tablet
No

Provides
Service

Source: Compiled by the case authors based on company information.

Do

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 Page 15 9B16E020

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EXHIBIT 8: EFFECTIVENESS OF THE CALL CENTRE (COST)

os
Milk
Collection Amount of Amount of Total Route Unit Cost Unit Cost Total
(in millions Medicines Medicines Covered (in (₹) per (₹) per Unit
of Purchased Used (₹ millions of Service Service Cost
Year kilograms) (₹ millions) millions) km) (Transport) (Medicine) (₹)

rP
2011/12 55.51 72.80 68.94 4.10 46 74 120

2012/13 61.65 87.84 81.54 4.15 47 105 152

2013/14 61.63 101.68 95.55 4.29 55 118 173

2014/15 63.57 72.35 72.39 4.53 71 91 162

yo
Source: Kaira Union.

EXHIBIT 9: EFFECTIVENESS OF THE CALL CENTRE (TIMELINESS)

Year Average No. of No. of No. of No. of Amount

Response Cases Cases Cases Overtime Overtime
op
Time Attended Attended Attended Visits Paid (in ₹
to within 1 to within 2 to within 3 millions)
Hour Hours Hours
(Average) (Average) (Average)
2011/12 N.A. N.A. N.A. N.A. 182,025 5.82

2012/13 N.A. N.A. N.A. N.A. 192,389 7.88

tC

2013/14 3 hours 25,153 47,912 31,062 178,919 7.31

2014/15 3 hours 104,240 116,758 96,697 122,462 4.99

Note: N.A. = Information not available.

Source: Kaira Union.
No
Do

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 Page 16 9B16E020

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EXHIBIT 10: DAIRY FARMERS AND THE CALL CENTRE

os
In order to understand the experience of the dairy farmers with the call centre, 63 farmers in five villages
in Anand District were randomly selected to complete a survey.

 The average family size of the respondents was 5.62.

 The average herd size of the respondents was 1.97.

rP
 For 40% of respondents, the main source of income was dairying, and for another 48%, it was
dairying and crop farming.
 A DCS was the main source of information about the call centre for 81% of the farmers; fellow
farmers were the main source for 14%.
 84% of the dairy farmers faced no difficulty in placing a call and registering for the veterinary
service; the same number felt the CC employees were receptive and courteous.
 In 67% of cases, the request for emergency services was fulfilled within an hour; for 24%, it took

yo
more than two hours.
 Having a central CC was considered an excellent idea by 56% of the respondents; only 7% said it
was a poor strategy, and the rest had no opinion.
 60% felt the quality of service improved after the CC was established.
 56% noted the CC service was easy to use.
 70% of respondents agreed that the CC had been very useful.
 About 90% made the payment to the DCS.
 92% of the respondents used only the vets of Kaira Union through the CC; the remaining 8%
op
used both Kaira Union vets as well as private practitioners. The charges by the private vets
ranged from ₹600 to ₹800, depending on the nature of the condition and treatment.
 None of the respondents reported that the Kaira Union vets asked them to purchase medicine
from outside because they had no stock.

Source: Primary survey conducted by the case authors.

tC
No
Do

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 Page 17 9B16E020

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EXHIBIT 11: AMUL CALL CENTRE

os
rP
yo
op
tC

Source: Compiled by the case authors based on company information.

No
Do

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