Index

Sr.no Title Page.no

1 Introduction 5
1.0 Chapter-1Plan Micro-Project Proposal 6
1.2 Literature Review 7
1.3 Activities of wholesalers 10
1.4 Proposed Methodology 11
2.0 Chapter-2Out come after Execution 12
2.2 Course Outcome Integrated 13
2.4 Customers 16
3 Actual Procedure Followed 17
7 Advantages and disadvantages of Chain Supply 19
Management in Dairy Plant
8 Reference 20

List of figures
Fig.no Fig.name Page.no
1.1 rational 6
1.2 supply chain management of a dairy plant 7
1.3 supply chain management 7
1.4 Activities of wholesalers 10
2.1 Milk supply chain 12
2.2 wholesaler marketing strategies 13
2.3 retail strategy 15
2.4 Dairy Management 16
2.5 Buying operation 17

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 Introduction

The Indian dairy industry has been through an advancement right from the British period until
today. The nation is the world's biggest milk maker, representing more than 13% of world's
aggregate milk creation. Milk creation contributes 22 % to agricultural GDP. It has made some
amazing progress throughout the years from a milk generation volume of 23 million tons in 1973
to 132.4 million tons in 2013. Today, the Indian Dairy industry is at a mammoth size of US$ 70
billion. Presently, just 20% of the milk creation originates from the sorted-out segment (organized)
including co-agents and private dairies. The extent of Indian dairy industry in both organized and
un-organized areas is expected to double to $140 billion by 2020, because of growing demand and
rising disposable income.

According to NDDB, the Indian dairy industry is good to go to experience high development rates
with demand to reach 200 million tons by 2022 from 132 million tons in 2013.

Regardless of the increment in dairy creation, a demand supply crevice has ended up basic in the
dairy business because of the changing utilization patterns, different demography, and the quick
urbanization of rural India. With this quite a bit of quick changes in the area, supply chain network
assumes an essential part in getting the outcomes productively.

Supply chain network has ventures to get a good or service from the supplier to the client. Supply
chain network management is an essential part for organizations, and numerous organizations end
devour to have the most enhanced supply chain network on the grounds that it normally means
lower expenses for the organization. Supply chain network incorporates various organizations, for
example, suppliers, makers, and the retailers.

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 Chapter-1
Plan Micro-Project Proposal

1.1 Rational:

Fig.1.1- (rational)

-Milk producing animals have been domesticated for thousands of years. Initially, they were part
of the subsistence farming that nomads engaged in. As the community moved about the country,
their animals accompanied them. Protecting and feeding the animals were a big part of the
symbiotic relationship between the animals and theherders.

-In the more recent past, people in agricultural societies owned dairy animals that they milked
for domestic and local (village) consumption, a typical example of a cottage industry. The
animals might serve multiple purposes (for example, as a draught animal for pulling a plow as
a youngster, and at the end of its useful life as meat). In this case, the animals were normally
milked by hand and the herd size was quite small, so that all of the animals could be milked in
less than an hour—about 10 per milker. These tasks were performed by a dairymaid
(dairywoman) or dairyman. The word dairy harkens back to Middle English dayerie, deyerie,
from deye (female servant or dairymaid) and further back to Old English doge (kneader
ofbread).

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-With industrialization and urbanization, the supply of milk became a commercial industry,
with specialized breeds of cattle being developed for dairy, as distinct from beef or draught
animals. Initially, more people were employed as milers, but it soon turned to mechanization
with machines designed to do the milking.

1.2Literature Review –
Supply chain management of a dairy plant

Fig.1.2- (supply chain management of a dairy plant)

Supply chain management of a dairy plant: -

Supply chain management is a process of managing the upstream & downstream value-added
flow of materials. It also supplies related information among suppliers, the company, resellers
& final customers.
See the below figure:

Fig.1.3- (supply chain management)

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Any dairy industry also follows the same supply chain management that we discussed in the
above figure. At first, they should go for –

1.2.1. Suppliers: From the very beginning of any production, suppliers are the main person who
helps a company to produce their desired product. In the production of the dairy industry, we
can see that there are a lot of suppliers who are ready to help.
1.2.2. Company: The company and suppliers have an inbound relationship. Because, whatever
a company needs at the primary levels, suppliers give them that. After then, a company should
go for production. In the case of Mondelez dairy, they do the same things. Let’s see
1.2.3. Collection of Raw material: As Mondelez dairy is milk and dairy product processing
company; they need a lot of milk for their production. Mondelez dairy has its own dairy farm.
But these are not enough for meeting the market demand. So, they need to collect more raw
materials from outside of the farm. These raw materials are also collected from individual’s
farmers. Mondelez dairy purchase low-fat milk at $5 and higher- fat at $8 per liter.
1.2.4. Product strategies: After collection of raw materials, Mondelez dairy should go for the
production process. Here, the Collection of milk should go for pasteurization. The pasteurized
milk is one of the food products of Mondelez dairy. This product is the combination of whole
milk, skim milk, standardized milk and various types of cream. Mondelez dairy also has various
types of food products. Have a look
1.2.5. Butter
1.2.6. Cheese
1.2.7. Fresh milk
1.2.8. Ghee
1.2.9. Power milk
1.2.10. Value-added milk
1.2.11. Yogurt
1.2.12. Cadbury dairy milk
1.2.13. Pricing strategies: The producer may apply a number of pricing strategies. For example,
the producer may charge a high price for the high quality of a product; others may use a value
pricing strategy with a lower price and quality. Besides, everyone doesn’t want a higher quality

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of product and that’s why some people will sacrifice some quality for a lower price. Moreover,
producer adopts physiological pricing and status promotion encourages customers to purchase
goods. Sometimes, food producer also gives price discounts to attract customers. The Mondelez
dairy also adopts of these pricing strategies.
1.2.14. Price setting of Mondelez dairy: The Mondelez dairy set their price based on their total
cost. We know that, Total cost= total fixed cost +total variable cost.

The fixed cost is- land, equipment, and plant

the variable costs are- labor, cost, marketing cost, promotion cost, transportation, warehousing

After calculating the total cost, they try to keep at least a 7% profit. Then they set their pricing
by adding -total cost + 7% profit = selling price

Distribution strategies: Place and transportation are significantly related to the distribution of
the product. The producer may go for selling their food products through conventional food
stores, selling through online, vending machines, mail or catalogs, home delivery and door to
door selling. Besides, there are three principal markets for food processors are industrial
customers, foodservice firms and consumer markets. There are many producers operating their
own sales offices and wholesale operations but very few are involved in retailing to consumers.
Resellers: There are two forms of resellers in the supply chain management like Dealers or
wholesalers and
Retailers.
After producing any product, the company sells it to the dealers or wholesalers. Then
wholesalers sell it to the retailers who bring the product to the final customers.

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 Fig.1.4- (Activities of wholesalers)

1.3Activities of wholesalers:
-Mondelez dairy has its private wholesalers or dealers and independent wholesaler because
they add value by doing their tasks. Mondelez dairy sells its final food product to the
wholesaler. In this case, the producer makes a profit 7% from a wholesaler.

After purchasing from producers, wholesalers have some activities need to complete. These
activities are-
❖ Selling and promoting
❖ Buying and assortment building
❖ Bulk breaking
❖ Warehousing
❖ Transportation
❖ Financing
❖ Risk-bearing
❖ Market information
❖ Market services and advice
by doing these activities, wholesaler needs to bear the cost. In that case, wholesaler makes the
profit of at least 12/15% by selling to the retailers.
-Besides, Mondelez dairy has their own dealers who bring their products to the retailers. In that
case, dealers reduce the tasks of the wholesaler. Mondelez dairy provides promotion,

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warehousing, transportation, financial support to their dealers. These dealers directly sell to the
retailers at the company selected price.

1.4 Proposed Methodology –

a) Selecting the topic for the micro project.
b) Informing guide about the topic which were selected by group member.
c)Distributing various activities among the group members regarding the selected. topic.
d)Collected all information and prepare drought outline of the project.
e) Fill all information in given format of the micro project.

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 Chapter-2
Out come after Execution

2.1 Rational

Fig.2.1- (Milk supply chain)

-Historically, the milking and the processing took place close together in space and time: on a
dairy farm. People milked the animals by hand; on farms where only small numbers are kept,
hand-milking may still be practiced. Hand-milking is accomplished by grasping the teats (often
pronounced tit or tits) in the hand and expressing milk either by squeezing the fingers
progressively, from the udder end to the tip, or by squeezing the teat between thumb and index
finger, then moving the hand downward from udder towards the end of the teat. The action of
the hand or fingers is designed to close off the milk duct at the udder (upper) end and, by the
movement of the fingers, close the duct progressively to the tip to express the trapped milk.
Each half or quarter of the udder is emptied one milk-duct capacity at a time.
-The stripping action is repeated, using both hands for speed. Both methods result in the
milk that was trapped in the milk duct being squirted out the end into a bucket that is supported
between the knees (or rests on the ground) of the milker, who usually sits on a low stool.

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 -Traditionally the cow, or cows, would stand in the field or paddock while being milked.
Young stock, heifers, would have to be trained to remain still to be milked. In many countries,
the cows were tethered to a post and milked.

2.2 Course Outcome Integrated

This Micro-Project aims at,
a. To identify various Supply Chain Management of Dairy Plant and its importance.
b. To study the purpose of management.

2.3Literature Review –
2.3.1The area of improvement for wholesalers:
-At present, wholesalers face some competitive pressure because there are more -demanding
customers, new technologies. Besides, there are direct buying programs arranged by large
industries. As a result, wholesalers need to adopt better some strategies. These may be related
to segmentation, targeting, differentiation, and positioning and marketing mix.

Fig.2.2- (wholesaler marketing strategies)

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2.3.2Price setting of wholesalers:
-If we look at the price setting of wholesalers, we can see that wholesalers set their pricing by
keeping at least 12 or 15 % profit. It means that wholesalers make 12- 15% profit from retailers
by selling goods. Why they do that? It is a big question for us. Basically, they do it for several
reasons. Have look at first,
wholesalers buy a bulk amount of goods from producers. Then they need to go for warehousing,
transportation, financing, risk bearing and so on.

2.3.3The activities of retailers:

-The retailers are those who bring a product to the final customers. Because, they have a direct
connection with the buyers. They buy from the wholesaler and sell to the customer. Besides,
they need to perform some other activities. Like
❖ Arrange for the assortment of offerings
❖ Breaking quantity
❖ Holding stock
❖ Extending services

2.3.4the area of improvement for retailers:

-They always need to follow the new marketing strategy to attract and hold
customers. They always seek unique products and services. At present, so many retailers
do the same job. That’s why consumers prefer mass-merchandise discount store, off-price
retail store, specialty store, and online store. Today’s customers are so smart and price
sensitive. They are ready to for any identical brands. For all these reasons, retailers need to
improve their strategies. These may be related with segmentation, targeting, differentiation,
and positioning and marketing mix.

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 Fig.2.3- (retail strategy)

2.3.5Price setting of retailers:

-If we look at the price setting of retailers, we can see that retailers set their pricing by
keeping at least 20 or 25 %profit. It means that retailers make 20-25% profit from the customer
by selling goods. Why they do that? It is a big question for us. Basically, they do it for several
reasons. Have look-
-At first, retailers buy a large number of goods from wholesalers. They store or hold these
goods until the selling of these goods. To keep these goods, retailers need to bear store rent,
workers salary and electricity bills.

2.3.6Promotional strategies:
-Promotion means to remind, inform or persuade. This is the most visible strategies for every
company. At this stage, Mondelez obviously goes for the promotion of their product. Milk and
dairy products are related to our daily life. So, promotion can make awareness among customer
through
❖ Electronic media (TVs, FM Radio, Facebook, Twitters, Instagram, YouTube, Daily
motion, Pinterest etc.)

❖ Print media (Newspaper, Magazine, poster etc.)

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 ❖ Campaigning (School, college, university)

❖ Corporate ads

2.4 Customers:
Customers are the final user of the product. Customers can buy their necessaries goods from
retailers. Whatever the producers set their price, consumers are ready to pay this. Because,
producers have well information about customers, their taste and preferences, their income,
spending patterns etc.

Fig.2.4- (Dairy Management)

2.4.1 Management problem of Pran dairy:

Sometimes, Mondelez dairy faces problem in two major areas. Such as – processing operations
and buying operations.

2.4.2Processing operations
-At the primary level, Food producer needs to invest a lot in plant and equipment. Because this
investment can help them to operate efficiently all over the year. Besides, there is a wide
variation of farm product supplies and seasonal variations. One of the main problems is All
farm products are perishable. The food processing cost is not the same all over the year, there

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is a seasonal variability. The producer may face a dilemma about deciding on the number and
size of the operations. Besides the labor costs are increasing day by day.

2.4.3Buying operations
-Farm products are mostly purchased by food processors. Their purchasing decisions must
consider many marketing decisions. Like – storage, transportation, risk bearing, financing, and
market information. There is a big variation of output and prices of farms products that affect
the food processors. Food producer may develop better market information and purchasing
information.

Fig.2.5- (Buying operation)

3 Actual Procedure Followed–

3.1 In the sixth semester, we have subject Industrial Engineering and Quality Control.
3.2 Then we start searching for Supply Chain Management of Dairy Plant.
3.3 We found information of Supply Chain Management of Dairy Plant through the help of
different website.
3.4 Then we got a clear concept about Supply Chain Management of Dairy Plant with the help
of videos on YouTube.
3.5 After searching the Supply Chain Management of Dairy Plant, we discussed with our guide
about making of report.
3.6 Then we start make report on it.

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3.7 After completing report, we take approval from our guide and start making power point
presentation.
3.8 After this we give seminar and final submission of project is done.

4 Application of this Micro-project Construction-

-The supply chain includes four echelons namely raw milk suppliers, plant, warehouse and
customers. In this model, emphasis is mainly on production and distribution activities, with a
view to find out purchase plan of raw milk, production plan of product mix and transportation
plan of the products.

5 Area of Future Improvement

-Aggressive Indian dairy industry has risk/challenges for the survival in the worldwide dairy
market in future. Extension is high for the development of the dairy business in future. The
advancement of Indian dairy industry is because of auxiliary changes realized by the coming
of dairy cooperatives.

6 Skill developed / Learning out of the Micro-Project

a. Project managers with good negotiation skills will be an asset to their teams as they seek to
resolve conflicts by finding the win-win scenarios for everyone.
b. It should go without saying that project scheduling is a core project of Automobiles.
c. You can build your critical thinking skills through practice and by equipping yourself with
tools and approaches to help you structure arguments logically and see things from all angles
before making the final decision.

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7 Advantages and disadvantages of Chain Supply Management in
Dairy Plant

7.1 Advantages

The advantages of milk run logistics can be felt soon after its implementation. See below which
are the main:
• Decreased inactive loads;
• Reduction in the rate of malfunctions;
• Flexibility and agility;
• Script priest,
• Use of space for the solidification of loads.

7.2Disadvantages

Before implementing the system, it is important to investigate some issues to avoid future problems
with suppliers and customers. These include:

• Need for synchrony between suppliers and customer demands;

• Possibility of loss of credibility with producers,
• Commitment to all stages of milk run, avoiding delays in the availability of inputs
and in the manufacture of products.

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 8 Reference

1. SUPPLY CHAIN AND QUALITY PROBLEMS IN DAIRY SECTOR by Judit Vágány PhD–
Brigitta Katona – Mónika Pónusz PhD
2. Supply Chain Management in a Dairy Industry – A Case Study K. Venkata Subbaiah ,
Member, IAENG, K. Narayana Rao K. Nookesh babu
3. A Dairy Supply Chain Model of the New Zealand Dairy Industry O. Montes de Ocaa , C.K.G
Dakea , A. E. Dooleya and D. Clarkb

Data collected site links-

1. https://www.mssanz.org.au/MODSIM03/Volume_04/C06/10_Montes.pdf
2. http://www.iaeng.org/publication/WCE2009/WCE2009_pp595-599.pdf
3. https://www.ifama.org/resources/files/2009-Symposium/1186_poster.pdf

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