CASE STUDY - AMUL

The history of Amul is as old as that of independent India. Amul was started in a
small town called Anand in Gujarat, and became the epitome of progress at the
grassroots level. It started as an alternative to the existing model of milk
distribution through middlemen, where farmers had very little say. As a protest
against the existing practice, the farmers formed their own cooperative of
procurement, and marketing of milk. In 1946, the first cooperative was formed,
and it was called the Kaira District Cooperative Milk Producers Union Ltd. The
initial operations started with only two village dairy cooperative societies
collecting 247 litres of milk, to become ‘Amul’ as it is known today.

In 1965, the National Dairy Develoment Board was set up with the basic
objective of replicating the Amul model.

The Amul model of procuring and distributing milk is a fascinating example of

logistics excellence. Using a three – tier, the model connects more than 3 million
milk producers with 17,000 village cooperatives and 17 district cooperatives. In
the first stage, the village cooperatives collect milk from the producers and then
supply the collected milk to the district unions. AT the district level, there are
chilling centers and milk-processing plants that add value to the milk for further
distribution. The district unions also provide services to the village cooperatives,
which include cattle feed provision, veterinary services and rural health schemes.
The district unions are managed by the State cooperative milk marketing
federation, which is responsible for the distribution of milk and milk products
across the country through its distribution network. For Amul, the milk federation
is known as the Gujarat Cooperative Milk Marketing Federation (GCMMF).

The GCMMF has established a retail model through its network of Amul Parlours
which allows it to showcase its entire range of products. Currently, there are
7,000 Amul parlours in the country. On an average, daily milk procurement is
13.1 million kg. In addition to milk, the other value added products that Amul
distributes includes butter, cheese, curd and ice-creams. A strong distribution
network has helped Amul to establish itself as a household name across the
country.

Over the last few years, Amul has moved out of Gujarat and has established
district unions in other places such as Maharashtra and Haryana as well. The
typical flow of activities in the Amul procurement and distribution network is as
follows.

Milk producers Village dairy cooperative District Milk Cooperative Union

 State Cooperative Milk marketing Federation  The Consumer.
i. Identify the various logistics elements that are present in the Amul model. (7)
ii. Considering the perishable nature of the products, what are the key determinants (8)
of the success of milk cooperatives such as Amul?
iii. Name the other milk marketing federations that exist in the country. Compare and (10)
contrast their models with the Amul model.