Case Study of AMUL

Case Study of 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 it 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 for procurement, processing 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 Development Board (NDDB) 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 structure, 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 centres and milk-processing plants that add value to the milk for further distribution. The district unions also provide services to the village cooperatives, which includes 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 7000 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 include butter, cheese, dahi, and ice cream. 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 1

well. The typical flow of activities in the procurement and distribution network is as follows: Milk producer cooperative union

village dairy cooperative district

milk

state cooperative milk marketing federation

the consumer DISCUSSION QUESTIONS 1. Identify the various logistics elements that are present in the Amul model. Various logistics elements that are present in the Amul model are as discussed below: 

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LOGISTICS IN COLLECTION 

6 million liters of milk per day.

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From about 10,600 separate village cooperative societies.

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Approximately 2.8 million milk producing member.

LOGISTICS IN COORDINATION 

Storing the milk.

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Processing the milk.

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Distributing the milk.

SUPPLIER LOGISTICS 

Weighing the milk.

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Determining of fat content.

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Calculation of the purchase price.

2. Name the other milk-marketing federations that exist in the country. Compare and contrast their models with the Amul model. Apart of Gujarat Cooperative Milk Marketing Federation (GCMMF) there are several other federations are available in India. These federations are as follows: 

Bihar State Cooperative Milk Producers' Federation Ltd (COMPFED) Supply Chain Model Raw Material Procurement Distributors

Chilling Unit / Processing Plant

Retailers

Consumers

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Karnataka Cooperative Milk Producers' Federation Ltd (KMF) Supply Chain Model

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Mother Dairy Supply Chain Model

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Kerala State Cooperative Milk Marketing Federation Ltd (KCMMF)

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Madhya Pradesh State Cooperative Dairy Federation Ltd (MPCDF)

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Maharashtra Rajya Sahakari Maryadit Dugdh Mahasangh

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Odisha State Cooperative Milk Producers' Federation Ltd (OMFED)

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Pradeshik Cooperative Dairy Federation Ltd (PCDF)

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Punjab State Cooperative Milk Producers' Federation Ltd (MILKFED)

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Rajasthan Cooperative Dairy Federation Ltd (RCDF)

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Tamil Nadu Cooperative Milk Producers' Federation Ltd (TCMPF)

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West Bengal Cooperative Milk Producers' Federation Ltd (WBCMPF)

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Andhra Pradesh Dairy Development Cooperative Federation Ltd (APDDCF)

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Haryana Dairy Development Cooperative Federation Ltd (HDDF)

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Himachal Pradesh State Cooperative Milk Producers' Federation Ltd (HPSCMPF)

3. Considering the perishable nature of the product, what are the key determinants of the success of milk cooperatives such as Amul? Key determinants of the success of AMUL are as discussed below: 

Milk distribution channel is very strong.

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Chilling facilities for Milk are good enough to keep milk fresh for a stipulated period.

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Hygienic packaging which keeps milk fresh.

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Transportation time is very less as compared to other dairies because AMUL has very robust logistic services.

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AMUL implements state of art technology in its production.

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