Supply Chain Management Amul

Supply Chain Management of AMUL

The Kaira District Co-operative Milk Producers Union Limited, popularly known as Amul Dairy is a US $1billion turnover institution It is a institution built up with a network of  over 10000 Village Co-operative Societies and 500,000 plus members Managed by an apex cooperative organization, Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF), which today is jointly owned by some 2.41 million milk producers in Gujarat, India

Amul Sales Turnover

Amul is the largest food brand in

India with an annual turnover of US $1068 million (2007-08) Amul is the largest producer of milk

and milk products in the world.

US $ (million)

1994-95

355

1995-96

400

1996-97

450

1997-98

455

1998-99

493

1999-00

493

2000-01

500

2001-02

500

2002-03

575

2003-04

616

2004-05

672

2005-06

850

2007-08

1068

Before Amul 

Polson dairy had monopoly rights

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Exploitation of milk producers

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Producers had to travel long distances to sell their produce

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Had to physically carry their produce

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Agents decided the prices and the off-take

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Summers- milk would go sour

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Winters –surplus milk unsold or sold at very low prices

Foundation for Amul 

Producers of Kaira district formed a cooperative to supply milk directly to Bombay milk scheme

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Decentralized milk collection

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Village level cooperatives

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First modern dairy established at Anand

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Indigenous technology and R&D department

Network Structure 

Made up of various stakeholders-suppliers to retailers

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Linked by a common interest of remaining competitive in a demanding environment

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Global optimum rather than local optimum

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Strategies 

Core competency

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Help network partners

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Information sharing

Dairy Cooperative Structure and details for State of Gujarat

GCMMF 

Gujarat cooperative milk marketing federation

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Marketing entity for the state of Gujarat

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42 regional distribution centers in India

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5,00,000 retail outlets

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Exports to more than 15 countries

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NDDB (National Dairy Development Board)

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NCDFI (National Co-Operative Dairy Federation of India)coordinate dairy activities nationally

AMUL SUPPLY CHAIN Village Cooperative Societies (without Chilling Units) Network Services * Veterinary Services * Animal Husbandry * Animal Feed Factory * Milk Can Producers * Agriculture University * Rural Mgmt Institute * Trucking

Farmers

Village Cooperative Societies (with Chilling Units)

Local Restaurants/Othe r Milk related businesses

Milk Processing Union & Warehouses

Chilling Plants

Warehouses

Wholesalers/C&S Retailers

Home Delivery Contractors

CONSUMERS

CONSUMERS

Milk Sold to Village & Local Residents

The Supply-Demand Linkages

Coordination Mechanisms 

Interlocking control

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Coordination agency-unique role of federation

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Supplier enhancement and network servicing

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Fair share allocation of benefits

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Spirit of co-operation

Total Quality Management 

Friday departmental meetings

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Training for transformational leadership

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Application of hoshinkanri principles

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Training for farmers and their families

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Retail census

Key Initiatives 

In 1994, decided on IT for competitive edge

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Studied its existing functions and operations and formulated an IT plan.

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Aligned the Information strategy with business strategy.

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Re-designed and re-organized the existing software applications.

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Output of one system should be input of another system or vice-versa.

Problems faced 

Indirect connection between Producers and Consumers

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Could not forecast productivity accurately and timely

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No direct connectivity between zonal, regional, member dairies and head office

Role of Information Technology 

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Automatic Milk Collection System Units (AMCUS) CEO of Amul Mr. B.M. Vyas said ”Amul is not a food company ,It is an IT company in the food business.” Initially AMCUS was installed free of cost to convince farmers Enterprise-wide integrated application system (EIAS). Covers market planning, advertising and promotion, distribution network planning, stock control, sales and accounting, budgetary control, quality control management and co-operative service management

Role of IT (contd.) 

Connected its zonal offices, regional offices and members dairies through VSATs.

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Each Amul office was connected by e-mail and all send a daily report on sales & inventory to main system.

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Geographic Information System (GIS)

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Helps in getting zone wise data used for sales and distribution planning.

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Includes farmer-member census and animal census data.

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Helps in monitoring veterinary health

Amul’s IT Roadmap 

Uses AMCUS for milk collection.

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Implemented a customized ERP system which is used in conjunction with GIS

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Uses data analysis software for forecasting milk production and increasing productivity.

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Has connected all zonal, regional and member dairies through VSAT.

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One of the first five organizations to have web presence.

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Has made IT education compulsory for all its employees.

Amul’s IT Roadmap (Contd.) 

Milk collection information from 10,000 villages is collected

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Dairies can make faster decisions in terms of production and distribution planning

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Disease control in 6700000 animals

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Linked with 45 distribution offices and 3900 distributors

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GCMMF cyber store-125 cities

Thank You