"Optimizing Dairy Operations: Amul's 4Vs Approach to

Supply Chain Excellence"

Operations and Supply Chain Management at Amul

AUGUST 16, 2023

BY RAMAN KUMAR SAH
BSC (Hons) International Business Management

ramanshah716@gmail.com

AUGUST 16, 2023

Table of Contents
Executive summary ................................................................................................................................. 3
Introduction ............................................................................................................................................ 4
Background of The Organisation. ............................................................................................................ 5
Operations management at Amul: ......................................................................................................... 6
a)Volume ............................................................................................................................................. 6
Influence on Supply Chain Structure:...................................................................................................... 7
Upstream Supply Chain ....................................................................................................................... 8
Process and Layout of Amul .................................................................................................................... 9
Milk Sourcing ...................................................................................................................................... 9
Processing ......................................................................................................................................... 10
Distribution ....................................................................................................................................... 10
Layout: .............................................................................................................................................. 10
Performance Objective ......................................................................................................................... 10
Quality: .............................................................................................................................................. 11
Speed ................................................................................................................................................ 11
Dependability .................................................................................................................................... 11
Flexibility ........................................................................................................................................... 11
Cost-effectiveness ............................................................................................................................. 11
Downstream supply chain..................................................................................................................... 12
Project Objectives and Impact on Operations and Supply Chain: ........................................................ 12
Reduce waste .................................................................................................................................... 12
Improve productivity ........................................................................................................................ 12
Enhance quality................................................................................................................................. 13
Increase flexibility ............................................................................................................................. 13
Elements of the Project Processes and Plan ......................................................................................... 13
Project Scope .................................................................................................................................... 13
Value Stream Mapping (VSM):.......................................................................................................... 13
Kaizen Events .................................................................................................................................... 13
5S Methodology ................................................................................................................................ 14
Continuous Improvement Culture .................................................................................................... 14
Challenges in Implementing the Project Plan: ...................................................................................... 14
Resistance to change: ....................................................................................................................... 14
Resource constraints:........................................................................................................................ 14

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 Cultural shift...................................................................................................................................... 14
Evaluation of Project Outcomes:........................................................................................................... 14
Cycle Time Reduction........................................................................................................................ 14
Defect Rate ....................................................................................................................................... 15
Cost Savings ...................................................................................................................................... 15
Employee Engagement ..................................................................................................................... 15
conclusion ............................................................................................................................................. 15
Reference List ........................................................................................................................................ 16

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Executive summary

This research paper explores the operations and supply chain management practices
at Amul, a renowned dairy cooperative. The study focuses on understanding how Amul
utilizes the 4Vs (Volume, Variety, Variation, and Visibility) in its operations
management, which contributes to its success in the dairy industry. Amul efficiently
manages its high milk capacity and diverse range of dairy products, becoming a
significant player in the market. The company's operations demonstrate flexibility,
enabling it to adapt towards changing consumer demands and seasonal fluctuations
in milk production. Through strategic positioning of processing plants near milk-
producing areas, it ensures efficient delivery, reduced transportation costs, and
maintained product freshness and quality. The implementation of technologies like
cleansing and homogenization further guarantees product safety and customer
satisfaction. its operational strategies have enabled to achieve economies of scale,
cost efficiency, and a stable milk supply, making it a leader in the organic and fresh
food market

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Title: Operations and Supply Chain Management at Amul

Introduction

Amul Operation management plays a vital role in the fields

of success as a dairy cooperative. The 4Vs agenda supports to know the exclusive
characteristics of Amul operation Management. As per an organization commerce with
high capacities of milk in addition a wide variety of dairy goods, It has recognized well-
organized procedures and systems towards handle the measure and variety of its
procedures (Slack, Chambers, & Johnston, 2019). The supportive typical allows it in
the direction of change into a huge link of farmers, confirming a fixed amount of milk
towards encounter the capacity supplies. This dimensions benefit enables it in the
direction of reach economies of scale and cost efficiency (Devaraj, 2016).

In relations of diversity, it offers a various variety of

dairy products, cuisine to diverse buyer favourites and demands. The operations side
of Amul, it manages this diversity through implementing healthy manufacture planning
in addition arrangement progressions in the direction of confirm the obtainability of
different products thru the year (Kaplan, Weggeman, & Scheltema, 2018). Additionally,
its operations display flexibility in the direction of achieve variations efficiently. They
are organized in the direction of handle instabilities in milk production due toward
seasonal changes in addition reply to changing consumer demands via quickly
correcting production stages also product mix (Slack et al., 2019).

its operations layout and procedures allow the

effectual delivery of goods and services in the direction of its clients. The corporation
strategically discovers its processing plants close milk-producing areas, dropping
transportation time and costs (Deshpande & Khanna, 2020), which helps to
maintaining the freshness and quality of milk. The arrangement of processing plants
is considered towards optimize workflow, minimize waste, and certify horizontal
operations (Kumar & Suresh, 2020). Through accepting technologies such as per
sanitization and homogenization, its confirms the safety and quality of products,
therefore attractive customer support (Deshpande & Khanna, 2020).

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Background of The Organisation.

In India, Amul is well recognized by means of the Gujarat Cooperative Milk Marketing
Federation (GCMMF), stands a well-known dairy cooperative. It was founded in 1946
as per a reply in the direction of the manipulation of milk producers via middlemen. It
operates proceeding a cooperative prototypical, with millions of dairy farmers as per
its memberships. It is founded in Anand, Gujarat, and takes grown into one of the
largest dairy organizations in the world. It success can be qualified in the direction of
its innovative approach towards dairy manufacture, marketing, and supply. The
cooperative transformed the dairy manufacturing in India through implementing a
vertically joined supply chain, which confirmed that farmers received fair prices for
their milk and consumers must access on the way towards high-quality dairy products.
Amul is widely recognized for its iconic brand mascot, the Amul girl, who has been
featured popular numerous advertisements and turn into a symbol of the product's
wittiness and social explanation. Nowadays, Amul continues toward be situated as a
leading power in the dairy manufacturing, offering a diverse range of dairy products
and maintaining a strong presence in both domestic and international markets.

Figure 1 : Amul is widely recognized for its iconic brands.

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Operations management at Amul: Operations management involves the

design, planning, coordination, and control of the processes and resources required
towards produce in addition deliver goods or else services efficiently. It incorporates a
range of actions, as well as product design, volume planning, supply chain
management, quality control, and performance dimension. The area of operations
management stands towards optimize operations on the way to achieve the desired
outcomes, such as per cost-effectiveness, quality, speed, flexibility, and buyer
fulfilment.

In the framework of Amul, operations management plays a vital role in the total dairy
manufacture procedure. It contains managing the cooperative farmers' link, confirming
a steady supply of milk, designing and implementing efficient production processes,
maintaining quality standards, in addition coordinating the distribution of dairy products
towards clients. it's operations management focuses on maximizing productivity,
minimizing costs, maintaining product quality, also meeting customer demands
efficiently (Slack, Chambers, & Johnston, 2019). Finished effective operations
management, it has been able in the direction of establish itself in place of a top player
in the dairy industry of India in addition deliver high-quality dairy products towards a
huge consumer base.

The 4Vs framework supports to understand the nature of Amul's operations:

• Volume: According to Smith (2020), Amul's success in maintaining a consistent

and reliable supply of diverse dairy products is credited in the direction of its
cooperative model, which has been studied extensively in the Journal of
Agricultural Economics. The author emphasizes the corporation's high-volume
production and its significant network of cooperative farmers. It is a high-volume
producer of dairy products Through an enormous network of cooperative
farmers and it processes millions of litters of milk daily, confirming a consistent
also reliable supply of diverse products.
• Variety: Amul offers a diverse range of dairy products, as well as milk, butter,
cheese, ice cream, and extra. This variety meets the variable favourites and
demands of its massive buyer base.

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 • Variation: Due to seasonal instabilities cutting-edge milk production in addition
changing consumer demands, its operations essential towards stay adaptable
to manage dissimilarities effectively.
• Visibility: Its procedures prioritize transparency and traceability, enhancing
customer trust in addition self-confidence in the quality of its products.

These characteristics of operations management at Amul permit the company to

capably produce and deliver dairy products, meet customer demands, and maintain a
strong market position.

Influence on Supply Chain Structure: it's efficient and well-coordinated

operations play a significant role in shaping the subject supply chain structure, thru
ensuring a reliable supply of milk finished its cooperative farmer network and
maintaining efficient dispensation and delivery processes, it is intelligent towards
establish a healthy and reliable supply chain that effectively delivers dairy products
towards customers.

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Upstream Supply Chain

Upstream supply chain management involves activities related in the direction of the
sourcing, procurement, too management of raw materials, components, and other
inputs required for production. It focuses on the flow of materials and information from
suppliers on the way to the manufacturers. This includes tasks such as supplier
selection, supplier relationship management, procurement, inventory management,
and demand forecasting.

• Supplier Relationships: Its strong relationships through supportive farmers

confirm a constant supply of high-quality milk. The helpful model adopts trust
and collaboration by dealers.

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 • Inventory Management: Its operations focus on time inventory supervision,
dropping holding expenses and inventory wastage. This efficient method
influences the supply chain via minimizing inventory during the chain.

• Distribution Network: The well-organized layout in addition well-managed

distribution network allows Amul in the direction of reach a huge consumer base
diagonally diverse areas and establishment the supply chain.

• Technology Integration: It joins technology and data-driven decision-making in

the situation of operations, which enhances supply chain visibility, traceability,
and efficiency.

Process and Layout of Amul: Process denotes in the direction of a set of

interconnected actions and tasks that transform contributions interested in desired

productions. In the context of Amul, the process involves various stages of dairy
production, including milk collection, processing, packaging, and distribution. It has
established well-organized and standardized processes on the way to certify
consistent quality and timely delivery of dairy products although Layout refers to the
physical arrangement of facilities, equipment, and resources within an organization. In
the case of Amul, the layout includes dairy processing plants, storage facilities,
distribution centers, and retail exits. It is designed to optimize workflow, minimize
blockages, and facilitate horizontal program of materials and products throughout the
supply chain, ensuring efficient operations and timely delivery towards customers
(Chowdhury, Rahman & Molla, 2019). Moreover, it is processes and layout play a
crucial role in delivering goods and services efficiently

• Milk Sourcing: Its operations depend on a decentralized milk sourcing

approach, where milk is acquired from an enormous network of cooperative
farmers diagonally India. This method certifies a stable source of milk through
the time, as per it is sourced straight from farmers who are share of the
cooperative. This dispersed sourcing model helps popular reducing
transportation costs in addition maintaining a nearby relationship thru farmers.

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 • Processing: After milk collection, it is transported in the direction of its
processing plants. At this time, the milk experiences various stages of
processing, including pasteurization, homogenization, and packaging. The
processing plants are equipped by means of advanced technology in addition
follow to strict quality control measures on the way to confirm that the milk is
processed efficiently and meets the desired quality morals.
• Distribution: it has established a well-structured distribution network to ensure
that the subject dairy products influence customers in a appropriate manner.
The distribution network extents across various frequencies, including selling
outlets, supermarkets, also online stages (Rathore & Kalla, 2019). The
extensive distribution network enables Amul in the direction of reach a wide
customer base also cater to the diverse demands of consumers crosswise
diverse regions.
• Layout: It strategically locates its production facilities near milk-producing
regions for minimize transportation time and costs which helps in reducing the
lead time between milk collection also processing, ensuring that the milk
remains fresh. The layout of the processing plants stays planned to facilitate
streamlined operations, per efficient flow paths, optimized storage areas,
besides proper segregation of processing stages. Its layout design supports
popular minimizing waste, improving productivity, too maintaining product
quality in the production process.

These factors contribute of its ability towards efficiently source milk, process it hooked
on high-quality dairy products, then deliver them to customers over a well-structured
distribution system.

Performance Objective

It operations, also supply chain reflect several performance objectives. The

cooperative emphasizes quality in maintaining strict quality control measures. It
focuses arranged speed to meet customer demands promptly. Dependability is
ensured through consistent product availability, too flexibility is demonstrated in

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adapting near changing preferences. Cost-effectiveness is achieved by optimizing
processes besides leveraging economies of scale.

• Quality: lts places a strong emphasis arranged maintaining high-quality

standards all through the subject operations too supply chain. Since sourcing
milk on or after cooperative farmers to processing, packaging, also distribution,
lt confirms strict quality control measures which focus arranged quality helps
build customer trust also loyalty, as per consumers subordinate it with reliable
then superior dairy products.
• Speed: It recognizes the importance of speed in meeting customer demands
promptly. The company strives in the direction of minimize production lead
times then ensure efficient distribution to deliver its products in a timely manner.
Its operations are designed near optimize production processes, enabling them
in the direction of respond quickly for market demands then also reduce time-
to-market for new goods.
• Dependability: It's operations, also supply chain are built happening the way on
the way to be dependable too reliable. The company ensures consistent
product availability in maintaining a robust network of cooperative farmers also
efficient distribution channels. Its aims toward encounter customer expectations
in ensuring on-time deliveries in addition minimizing disruptions in the supply
chain.
• Flexibility: It's operations show flexibility to adapt in changing consumer
preferences and also market dynamics. The company continuously monitors
market trends and customer feedback, allowing the subject to introduce new
products and modify existing ones to see evolving consumer demands. It's
flexible operations enable them to quickly adjust production levels, product mix,
too distribution strategies as required.
• Cost-effectiveness: Cost-effectiveness is a critical performance objective for
Amul. The company focuses on optimizing its operations then supply chain on
the way to achieve cost efficiencies lacking compromising on quality. By
leveraging economies of scale, efficient procurement practices, then
streamlined processes, It is able to offer competitive prices to its customers.

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These performance objectives collectively contribute to Amul's ability to deliver high-
quality dairy products efficiently, meet customer demands, and maintain a competitive
edge in the market.

Downstream supply chain

Amul has established itself as a role model for efficiency and also effectiveness in the
downstream supply chain. By means of operating an extensive network comprising
milk collection centers, processing facilities, and distribution channels, it ensures a
consistent movement of high-quality dairy products on the way to consumers during
India (Srivastav,2018). Amul is firm commitment to a farmer-centric approach,
including prompt collection besides payment systems and takes fostered robust
relationships with milk producers, ensuring a stable, dependable supply of raw
materials (Pathak & Katiyar, 2019). Moreover, its investments in cutting-edge
technology also supply chain management applies take further streamlined
operations, resulting trendy reduced lead times in addition minimized wastage.
Additional dairy companies can look to its a benchmark for effective downstream
supply chain management (Srivastava, 2018).

Project Objectives and Impact on Operations and Supply Chain:

The objective of this project stands near toward enhance the efficiency and
effectiveness of Its production processes in implementing lean manufacturing
principles. The specific objectives contain:

• Reduce waste: Identify in addition eliminate non-value-added activities,

processes, such by way of excessive inventory, overproduction, then
unnecessary motion, for reduce waste also optimize resource utilization.
• Improve productivity: Modernize production flows in addition optimize work
processes for increase productivity and material, enabling it for meet customer
demands more efficiently.

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 • Enhance quality: Implement quality control mechanisms and continuous
improvement initiatives for ensure consistent product quality also minimize
defects, leading for improved customer satisfaction.
• Increase flexibility: Develop alert manufacturing capabilities, respond quickly for
changing market demands and product variations, enabling for adapt Amul’s
operations added successfully.

The impact of this project on Amul's operations and supply chain would be significant.
By implementing lean manufacturing principles, Amul can achieve shorter lead times,
reduce inventory holding costs, improve product quality, and enhance overall
operational efficiency. This would result in increased customer satisfaction, reduced
production costs, and improved competitiveness in the dairy industry.

Elements of the Project Processes and Plan:

To effectively implement this project, the following elements and project management
tools/frameworks will be utilized:

• Project Scope: Clearly define the boundaries of the project, specific areas of Its
manufacture processes that will be targeted for improvement. This may include
areas such as per raw material handling, processing, packaging, then
distribution.
• Value Stream Mapping (VSM): Conduct a comprehensive VSM analysis for
identify value-added and also non-value-added activities, bottlenecks, areas of
waste inside the production processes. This will provide a visual representation
of the current state for help identify areas for improvement.
• Kaizen Events: Organize focused improvement events, known as Kaizen
events, to address specific issues identified in the VSM analysis. These events
involve cross-functional teams working together for develop and implement
solutions for process improvement.

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 • 5S Methodology: Implement the 5S methodology (Sort, Set in Order, Shine,
Standardize, Sustain) for organize the workplace, improve cleanliness, also
enhance overall operational productivity.
• Continuous Improvement Culture: Foster a culture of continuous improvement
by means of implementing regular review too feedback mechanisms,
empowering employees for suggest and also implement process
improvements.

Challenges in Implementing the Project Plan:

Implementing the project plan may face several challenges, including:

• Resistance to change: Introducing thin manufacturing principles might be

encountered thru resistance since employees who are familiarized toward
traditional processes. Effective change management strategies, such by way
of communication, training, and involvement of employees, can help mitigate
resistance.
• Resource constraints: Implementing lean manufacturing may require additional
resources, including time, personnel, and investment in technology. Securing
necessary resources and managing their allocation effectively is crucial for
successful implementation.
• Cultural shift: Shifting the organizational culture towards continuous
improvement too embracing lean principles might require a change trendy
mindset and attitudes. Leadership support and clear communication regarding
the benefits of lean manufacturing will be essential for drive this cultural shift.

Evaluation of Project Outcomes:

The project outcomes can be evaluated by using the following criteria:

• Cycle Time Reduction: Measure the reduction in cycle time for key production
processes, indicating improved operational efficiency in addition faster delivery
of products.

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 • Defect Rate: Assess the reduction in the defect rate, indicating improved
product quality then minimized rework or rejection.
• Cost Savings: Quantify the cost savings achieved complete waste reduction,
optimized resource utilization, and increased productivity.
• Employee Engagement: Evaluate employee involvement also engagement in
the project, representing the level of adoption of thin principles and the
sustainability.

Conclusion

In conclusion, Amul has emerged as a leading example of excellence and

effectiveness in the downstream supply chain. With a vast network of milk collection
centers, processing facilities, and distribution channels, they ensure a consistent
supply of high-quality dairy products to consumers. Their farmer-centric approach,
efficient collection and payment systems, and strong relationships with milk producers
ensure a stable and dependable source of raw materials. By investing in technology
and adopting streamlined supply chain management practices, Amul has successfully
reduced lead times and minimized wastage. The ongoing project aimed at
implementing lean manufacturing principles holds great potential for enhancing
production processes, reducing waste, increasing productivity, improving product
quality, and fostering flexibility. Successful implementation will lead to improved
operational efficiency, customer satisfaction, and competitiveness in the dairy
industry. However, challenges such as resistance to change, resource constraints,
and cultural shifts must be overcome for the project's success. Overall, Amul's
commitment towards effective downstream supply chain management crowds them
apart as a benchmark for other dairy companies on the way to follow.

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Reference List

Devaraj, S. (2016). Managing Cooperative Supply Chains: Lessons from Amul.

International Journal of Supply Chain Management, 5(2), 29-37.

Deshpande, V., & Khanna, R. (2020). Amul: The Game Changer in the Dairy Industry.
In Global Business Strategies in Crisis (pp. 119-131). Springer.

Kaplan, A., Weggeman, M., & Scheltema, T. (2018). How a Farmer Cooperative
Thrives in a Competitive Dairy Industry. Long Range Planning, 51(2), 255-267.

Kumar, A., & Suresh, N. (2020). Analysis of Distribution Channels of Dairy Products
in India: A Case Study of Amul Dairy. Journal of Development Research and
Management, 1(2), 51-64.

Slack, N., Chambers, S., & Johnston, R. (2019). Operations Management (9th ed.).
Pearson.

Pathak, P., & Katiyar, A. (2019). Exploring supply chain strategies and practices in
Indian dairy sector: A case study of Amul. International Journal of Operations &
Production Management, 39(3), 436-458. doi:10.1108/IJOPM-05-2017-0316

Srivastava, R. K., & Srivastava, R. K. (2018). Supply Chain Management Practices in

Indian Dairy Industry: A Case of Amul. International Journal of Management Studies,
5(3), 90-99.

Slack, N., Chambers, S., & Johnston, R. (2019). Operations Management (9th ed.).
Pearson.

Rathore, V. S., & Kalla, P. R. (2019). Supply Chain Management Practices: A Study
on Dairy Industry in India. International Journal of Pure and Applied Mathematics,
120(6), 5733-5743.

Chowdhury, S., Rahman, M., & Molla, A. (2019). Operations Management: A Case
Study Approach. Springer.

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Smith, J. (2020). The Cooperative Model in the Dairy Industry: A Case Study of Amul.
Journal of Agricultural Economics, 25(2), 123-145.

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