Milma Project

ORGANISATION STUDY AT MILMA, KOLLAM DAIRY
EXECUTIVE SUMMARY
An efficient organisation is essential for the success of a business enterprise. The defining of
duties and fixing responsibilities of all employees in the organisation is essential. An effective
organisation system ensures proper supervision and control. Organisation is the mechanism
which determines the relationship of various persons. With the help of a well defined
management is able to perform the functions of direction, co-ordination and control. An illdefined organisation plan will not enable the management to make an effective exhibition of
its managerial talents to realise business goals. An organisational study was conducted in
Milma, Kollam Dairy to know the real functioning of an organisation.
In this study primary and secondary data were the main sources of information. Here the
primary data are collected through an interview method with the managers of the concerned
department. Then interactions with the plant workers were done in order to collect data
regarding the processing of the plant. Secondary data are collected from websites, newspaper,
and magazines.
The main objectives of the study are,
The study is conducted to familiarise with the functioning of the organisation.
To know the functions of all departments.
To know the interrelation of all departments with each other and the Dairy Manager.
The main findings are,
There is good coordination between the Dairy Manager and the departmental heads.
Fine interrelationship between all departments leads to proper working.
The Kollam Milma unit planning to implement thumb punching system for attendance
taking.
There are certain areas to improve such as to implement R& D department for
producing new products.
The main suggestions are,
Modern equipments are needed especially an alert computerised system.
The HRD dept should try all efforts to implement the thumb pressing system instead
of punching system without any chances for unrest in the firm.
Implementation of R & D department is required to make new products or acquiring
know how to produce new products from other Milma units.
The study faces certain limitations they are,
Majority of the office staff were busy during study conducted, hence less information
was gathered from them.

All the plant workers and the officers were not met due to different time shifts.
It was found that some plant workers did not reveal certain information due to fear
from the actions of the management.
The organisation study at Milma was done with an objective to understanding how an
organiastion functions, what are its major departments and functioning of these departments.
The study at Milma provided the opportunity to learn the organiastional goals and objectives,
various department that conduct critical functions and the interrelation between them.
Milma is observed to be an organiastion that not only has an objective of working profitably
but also a socially responsible organiastion that cares of different sections of the society viz ;
the milk producers, and the milk consumers
The organization Milma has established different departments based on functions like
procurement, production, human resource, marketing etc. It ensures quality of product
through established systems which are monitored by quality control department. Finally the
project enabled understanding of an organiastion and its objectives and how they function to
achieve organiastional objectives.
INTRODUCTION
1.1 INTRODUCTION TO STUDY
Present business system is very complex. The firm must run efficient to stay in the
competitive world of business. Various jobs are to be performed by persons most to suitable.
Manager who knows how to make effective use of their resources can make any
organisational design or pattern work efficiently. A manager has to create the right conditions
to enable the employees to efficiently utilize the resources of the organisation to achieve
organisational goals. He has to make the employees understand the necessity of cooperation
2
for accomplishing tasks. Employees should understand their roles and responsibilities and
should work together to achieve the organisational objectives. This applies to any
organisation business, government, or a football team. For a subordinate to understand his
role, a manager must provide verifiable objectives and a clear picture of the major duties to
be performed. The manager must also specify subordinates authority and responsibility. This
gives the subordinate idea of what he must do to achieve the goals and objectives of the
organisation. In addition, a manager should provide the subordinates with necessary
information and tools for efficiently performing their roles.
Organising refers to the process of bringing together physical, financial and human
resources and establishing productive relations among them for the achievement of specific
goals. It is concerned with building up a stable framework or structure of various interrelated
parts of an enterprise, each part having its own function and being centrally regulated. The
aim of organising is to enable people to relate to each other and to work together for a
common purpose. The organised group of people in a collective sense are known as
organisation.
An organisational structure shows different classification of the departments and its
employees hierarchy. This also fixes their authority and the type communication with the
superiors, subordinates and their peers. An organisational structure also shows the type of
span of control. It can be narrow or a wide one.
An organisation has to follow certain management process such as planning, organising,
staffing, directing and controlling.
Planning is the process of deciding in future the activities to be done .it includes
plans, targets, and so on. Organising is confined with the activity of organising the
requirements of a firm to implement the plans which are formulated. Staffing is another
important process of appointing required employees to particular positions to work as per the
plans of the organisation. To do work as per the plans it needs directions, so directing is
another process. And last to see whether the actual performances of the activities are per the
plans controlling process is done. So if any deviations are there it can be located and reasons
are found out for that and been rectified as per the plans formulated. Such a situationis
prevalent in Milma, Kollam Dairy. Thus an Organisational Study was conducted which
enables to know the real functioning of an organisation.
1.2 OBJECTIVES
There are two objectives. There are primary and secondary objectives,
3
Primary objective
The study is conducted to get familiarise with the functioning of the organisation.
Secondary objective
To know the functions of all departments.

To know the interrelation of all departments with each other and the Dairy Manager.
To know the organisational culture.
To know the various academic applications from the practical perspective.
1.3 SCOPE OF THE STUDY

The study enables to know,
Functioning of Kollam Dairy
Milk production
Marketing of Milk products in Kerala
The diary industry in India, special emphasis given to Kerala market.
1.4 RESEARCH METHODOLOGY
Methods of Data Collection
The most integral part of the study was the data collection process. The data consist of
two types. It can be classified as primary data and secondary data.
Primary Data
Primary data are collected for the first time and are original in character. Here the
primary data are collected through an interview method with the managers of the
concerned department. Then interactions with the plant workers were done in order to
collect data regarding the processing of the plant.
Secondary Data
Secondary data are those which have already been collected by some other persons
and which are passed through the statistical machines at least once. Data are collected
from websites, newspaper, and magazines.
1.5 LIMITATION OF THE STUDY
1. Majority of the office staff were busy in the time of study conducted, less information
gathered from them.
2. All the plant workers and the officers were not met due to different shifts.
3. It was found that some plant workers did not reveal certain information due to fear
from the actions of the management.
4
INDUSTRY PROFILE
2.1 INTERNATIONAL SCENARIO
The international dairy federation, with its head quarters Brussels, was established in
1903 and consists of 32 member countries throughout the world.
UNICEF has been the motivating force for establishing a dairy industry in many under
developed countries. One of these is in India, where large modern processing plants have
been set up to process locally produced milk or to reconstitute milk from donated or
purchased milk fat and powder. Domestic milk production has increased in India and a part of
the pasteurized milk is provided free to children in the larger cities through UNICEF.
The first co-operative artificial breeding association was organized in Denmark in 1936.
There are now many such associations which helped the diary industries. After 1950s dairy
industries faced a wide range of development throughout the world.
2.2 NATIONAL SCENARIO
Indian dairy sector has come a long way from price independence era of acute milk
shortage and dependent on foreign aid in the form of milk powder to meet the growing milk
demand. As a result of this a dairy co-operative society was registered in 1913 for meeting
this problem. Later Kaira District milk supply union was formed at Anand. It was an
important land mark in the history of the co-operative dairy sector. Inspired by the
achievements of this institution, the Government of India constituted a National Dairy
Development Board in 1965.
ANAND PATTERN
ANAND is a small village of farmers in Kaira District of Gujarat. ANAND Milk

Union Limited is a Co-operative Society formed by the farmers of Anand Village for the
purpose of distribution of milk. Now the world famous Anand Milk Union Limited is
popularly known as Amul.
The Anand Milk Union Limited has a three tier structure.
1. Village level Primary Co-operative Society called APCOS.
2. District Milk Producers Union.
3. State Level Milk Marketing Federation.
NATIONAL DAIRY DEVELOPMENT BOARD
National Dairy Development Board was developed by the Government for the purpose of
organising, planning and executing the dairy development programmes in the country. This
board, with the help of government, got assistance valuing Rs. 120 crores under flood
programmes. Under this scheme financial assistance was provided to various state
governments and other agencies for implementing development scheme.
OPERATION FLOOD
Operation Flood is an important move in the history of dairy development in India. Operating
Flood was conceived and formulated by National Dairy Development Board during the fourth
plan. It aimed at establishing a broad base for acceleration and development of the dairy
industry sponsored by the European economic community through world food programme.
Operation Flood was conducted to meet Indias rapidly increasing need for milk and milks
product, and making dairy industry capable of viable and self-sustaining growth. The
ideology followed by Operation Flood was the remunerative linking of the rural milk
production centre with the urban demand centre so as to build up a viable dairy industry.
2.3 STATE SCENARIO
Dairy co-operatives were also developed in Kerala as a part of operation flood. Dairy
co-operatives have a three tier structure in Kerala with primary milk supply society at the
base and milk supply union at the district level and a state level federation. This co-operative
society follows the Anand pattern of dairy development scheme. Apart from the state
federation two regional unions were also formed in our state.
2.4 COMPETITORS
6
Milma holds more than 45% market share, who is the front leader in the market. There are
more than 30 competitors in Kerala against Milma.
Some of other competitors are:
Malanadu
K.C.A
A1 Milk
Nirmalgram
Ambady
Surya
P.D.DP
Penta
Royal
Pooja
Figure 2.1
KERALA MARKET SHARE OF MILK
OTHERS; 39%
A1 MILK; 7%
MILMA; 45%
K.C.A; 9%
SALES OF KOLLAM
PRODUCTS
Source: KeralaMILMA
Co-operative
Milk Marketing Federation (KCMMF) Report, 2009-10
Table 2.1
PRODUCT
Milk
CONSUMPTION
1, 20,000 litres/ day
Ghee
30,000 litres/ monthly
Sambaram
1000 litres/monthly
Curd
2000
litres/day
Source: Thiruvananthapuram Regional Co-operative Milk Producers' Union Ltd Report, 2009-10
2.5 REGULATORY FRAMEWORKS
(1) ACTS OF THE GOVERNMENT:

(a)
Milk and Milk Products Order
(i) Milk and Milk Products Order, 1992: The production, distribution and supply of
milk products are controlled by the Milk and Milk Products Order, 1992. The order
sets sanitary requirements for dairies, machinery, and premises, and includes quality
control, certification, packing, marking and labeling standards for milk and milk
products.
Standards specified in the order also apply to imported products. The Department
of Animal Husbandry, Dairying and Fisheries at the Ministry of Agriculture is the
regulatory authority.
(ii) Essential Commodities Act, 1955: The main objective of the Act is to regulate the
manufacture, commerce, and distribution of essential commodities, including food. A
number of Control Orders have been promulgated under the provisions of this Act.
(iii) Standards of Weights and Measures Act, 1976 and the Standards of Weights and
Measures (Packaged Commodities) Rules, 1977: The Act governs sale of packaged
commodities and provides for mandatory registration of all packaged products in the
country.
(iv) Consumer Protection Act, 1986: The Act provides for constitution of District
Forum/State/National Commission for settlement of disputes between the
seller/service provider and the consumer.
(v) The Insecticide Act, 1968: The Act envisages safe use of insecticides so as to ensure
that the leftover chemical residues do not pose any health hazard.
(vi) Export (Quality Control and Inspection) Act, 1963: The Act aims at facilitating
export trade through quality control and inspection before the products are sold to
international buyers.
(vii) Environment Protection Act, 1986: This Act incorporates rules for the manufacture,
use, import and storage of hazardous microorganisms / substances / cells used as
foodstuff.
(viii) Pollution Control (Ministry of Environment and Forests): A no-objection
certificate from the respective State Pollution Control Board is essential for all dairy
plants.
(ix) Industrial Licences: No licence is required for setting up a dairy plant in India. Only
a memorandum has to be submitted to the Secretariat for Industrial Approvals (SIA)
and an acknowledgement obtained. However, a certificate of registration is required
under the Milk and Milk Products Order (MMPO), 1992.
(b) Directorate of Marketing and Inspection (DMI):
The DMI enforces the Agricultural Products (Grading and Marketing) Act, 1937.
Under this Act, Grade Standards are prescribed for agricultural and allied
commodities. These are known as "Agmark" Standards. Grading under the provisions
of this Act is voluntary. Manufacturers who comply with standard laid down by DMI
are allowed to use "Agmark" labels on their products.
(c) Management Systems for Quality and Food Safety:
ISO 9000 Quality Management Systems: The ISO 9000 system is looked at as a
system with minimum quality requirements. It builds a baseline system for managing
quality. The focus, therefore, is on designing a total quality management system, one
that complies with external standards, but includes the specific requirement of industry
and integrates elements of competitiveness. The millennium standard (ISO 9000:2000)
has changed the focus from procedure to process.
(d) ISO 14000 (EMS):
The ISO 14000 family addresses various aspects of environmental management.
The very first two standards, ISO 14001:2004 and ISO 14004:2004 deal with
environmental management systems (EMS). ISO 14001:2004 provides the
requirements for an EMS and ISO 14004:2004 gives general EMS guidelines.
(2) AUTHORITIES OF THE GOVERNMENT

NATIONAL DAIRY DEVELOPMENT BOARD
The National Dairy Development Board is an institution of national importance setup by

an Act of Parliament of India. The main office is located in Anand, Gujarat with regional
offices throughout the country. NDDB's subsidiaries include Mother Dairy, Delhi. It was
founded by Dr. Varghese Kurien and Dr. Amrita Patel is the current Chairman of the
National Dairy Development Board, Anand.
The National Dairy Development Board (NDDB) was created in 1965, fulfilling the
desire of the then Prime Minister of India - the late Lal Bahadur Shastri - to extend the
success of the Kaira Cooperative Milk Producers' Union (Amul) to other parts of India.
That success combined the wisdom and energy of farmers with professional management
to successfully capture liquid milk and milk product markets while supporting farmer
investment with inputs and services. The major success of this mission was achieved
through the World Bank financed Operation Flood, which lasted for 26 years from 1970
to 1996 and was responsible for making India the world's largest producers of milk. This
operation was started with the objective of increasing milk production, augmenting
farmer income and providing fair prices for consumers.
NDDB has now integrated 96,000 dairy co-operatives in what it calls the Anand Pattern,
linking the village society to the state federations in a three-tier structure.NDDB
launched its Perspective Plan 2010 with four thrust areas: Quality Assurance,
Productivity Enhancement, Institution Building and National Information Network.
(3) CENTRAL AND STATE DEPARTMENTS
Government of India& Government ofKerala
The Phenomenal success of the Dairy Co-operatives in Kerala could not have been
achieved, without the foundation of animal husbandry activities, led by the Animal
Husbandry Department, Dairy Development Department and Kerala Livestock
Development Board, of the Government of Kerala & India.
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COMPANY PROFILE
3.1 HISTORY
Kerala Co-operative Milk Marketing Federation (KCMMF), popularly called Milma
was established in April, 1980 with its Head Office at Thiruvananthapuram for the successful
implementation of the Operation Flood (a dairy programme launched in 1970 under the
agenceis of National Dairy Development Board(NDDB).
The name Milma represents:
2,702 primary milk co-operative societies
7.78 lakhs farmer members
Three Regional Co-operative Milk Producers' Union
Eleven Dairies capable of handling 9.90 lakhs litres of milk per day.
Thirteen Milk Chilling Centres
Two Cattle Feed Plants with cumulative capacity of 600MT per day
One Milk Powder Plant of 10MT per day capacity
A well established Training Centre
5,200 retail outlets
Over 32,000 people working either directly or indirectly for the functioning of milma
3.2 (a) Mission

The mission of Milma is: Farmers prosperity through consumer satisfaction.
3.2 (b)Objectives
11
To channelize marketable surplus milk from the rural areas to urban deficit areas to
maximize the returns to the producer and provide quality milk and milk products to
the consumers.
To carryout activities for promoting Production, Procurement, Processing and

Marketing of milk and milk products for economic development of the farming
community.
To build up a viable dairy industry in the State.
To provide constant market and stable price to the dairy farmers for their produce.
3.3 Strategy
The Motto of Co-operation,"of the people, by the people and for the people" is the foundation
of the "three tier system" followed by the organisation. At the village level Milma have the
Village Milk Co-operative Societies which have the local milk producers as its members.
These Village Co-operatives unite at the Regional level and form Regional Co-operative Milk
Producers' Unions. These Unions are federated at the State level to form State Federation
namely Kerala Co-operative Milk Marketing Federation (KCMMF).
3.4 Associates
Milma is in constant touch with other Organisations in this sector. It is only through this
active exchange that Milma grew from a small dairy co-operative to the position it holds in
Kerala today.
Cheif associates are:
National Dairy Development Board

NDDB, under Dr. V Kurien's guidance set up KCMMF in 1980. Ever since then, there
has been a very close co-operation between NDDB and the Federation. NDDB are the
originators of the Operation Flood Programme and have been our funding agent for
the Operation Flood Projects in Kerala.
12
Amul
The Dairy Co-operatives of Gujarat have been the inspiration for the development of
such a vast network of dairy co-operatives in Kerala. Among the co-operatives in
Gujarat, the Kaira District Co-operative Milk Producers' Unions (Amul) is the the first
in this sector. Our Co-operatives are called "Anand Pattern Co-operative Societies"
following the illustrious lineage of "Amul".
Government of Kerala
The Phenomenal success of the Dairy Co-operatives in Kerala could not have been
achieved, without the foundation of animal husbandry activities, led by the Animal
Husbandry Department, Dairy Development Department and Kerala Livestock
Development Board, of the Government of Kerala.
FUNCTIONAL AREAS OF MILMA, KOLLAM DAIRY

Kollam Milma Dairy has well established HRD, Financeand Account, Procurement
and Inputs, Production, Quality Control, Marketing, and. Maintenance and Engineering
departments.
Human Resource Development
Milma has 2098 skilled, efficient and qualified personnel and has an excellent labour
relationship
Takes active role in framing personnel policies and service rules
Finalise long term wage settlement, bonus etc.
Placement and career development activities.

Finance and Accounts
Financial management of KCMMF and its units
Liaison with financial institutions for availing loan for creation of infrastructure.
13
Liaison with Government for availing Government financial assistance
Long term repayment and scheduling of loans
Capital Management Schemes for primary co-operative societies
Recommend remuneration of APCOS employees
Procurement and Inputs
Centralised purchase of Dairy consumables
Purchase of Raw Materials for Cattle Feed Plants
Purchase functions of KCMMF Head Office
Marketing
Brand Management
Bulk trading of surplus products
Co-ordinated promotional activities
Packaging & Product Development
Procurement & Consumer Pricing
Quality Control
Render technical & legal assistance to primary dairy co-operatives and Regional Milk
Unions
Liaison and maintain quality of milk and milk products as per the standards
Liaison with statutory authorities for bringing in suitable amendments in statutes
14
Attend to consumer complaints on quality problems
Projects
Planning and execution of projects for creating infrastructure for Regional Milk
Unions and KCMMF
Providing consultancy for execution of projects
Liaison with statutory authorities like Factories and Boilers, Electrical Inspectorate,
Dept.of Explosives etc for obtaining approval and implementation of projects
Liaison with Government for land allocation, water, power and other amenities
Estate management and assistance in maintenance of Plant & Machinery of KCMMF

Units
Computer
Maintenance of Systems at KCMMF, Units and Regional Milk Unions
Conducts Training programs for development of computer skills
3.5 TOP MANAGEMENT

Top Management of Kerala Co-operative Milk Marketing Federation (KCMMF)
The Board of Director of Thiruvananthapuram Regional Co-operative Milk
Producers' Union Ltd (TRCMPU) is headed by the Board of Directors The
Present Chairman of the Union is Shri.Kallada Ramesh The Managing
Director
of
the
Union
is
Shri.
Baby
Joseph
The Board of Director of TRCMPU Ltd. comprise of 14 directors elected

from among the Presidents of affiliated Primary Milk Producer Societies,
three Govt. nominees and the Managing Director as ex-officio member.
Table 3.1
Board is the Policy making forum of the Union.The term of Board is five
years.
15
BOARD OF DIRECTORS
Shri. Kallada Ramesh
Chairman
Shri. K Ayappan Nair
Director
Shri. MurthikkavuDivakaran
Director
Shri. Girish Kumar
Director
Smt. Sreeja S
Director
Shri. Venugopalakurrupu
Director
Shri. K Rajashekaran
Director
Shri. S SadashivanPillai
Director
Shri. Gopakumar
Director
Shri. Mathew Chammathil
Director
Shri. Sebastain Joseph
Director-NDDB
Shri. George Joseph
Director-KCMMF
Shri. Baby Joseph
Director
3.6 KERALA
CO-OPERATIVE
MILK
MARKETING
FEDERATION
Source:
Thiruvananthapuram Regional
Co-operative
Milk Producers'
Union Ltd Report,(KCMMF)
2009-10
Figure 3.1
KCMMF LTD
TRCMPU
ERCMPU
MRCMPU
Source: Kerala Co-operative Milk Marketing Federation (KCMMF) Report, 2009-10
Milma is the trade mark of the Kerala Co-operative Milk Marketing Federation Ltd, which
is the apex Co-op of three regional milk Unions viz. Thiruvananthapuram (TRCMPU),
Ernakulam (ERCMPU) and Malabar (MRCMPU).
Performance of KCMMF
Milestones
Federation and all the three Regional Milk Unions joined hands with NDDB to be a
part of the national stream to promote co-operative brand. In the wake of competition
from private sector, KCMMF and the Regional Milk Unions readily accepted the well
planned Marketing Strategy of NDDB and the mnemonic symbol of NDDB was
introduced in the milk pouches in the State. Kerala is the first federation to adopt the
mnemonic symbol throughout the State.
16
The year 2007 was a landmark year for milk production in the country, which reached
a new high. At over 100 million tonnes, milk output has breached the magical threedigit level, making India the worlds second largest producer, after the European
Union (154 million tonnes) and accounting for nearly 15 per cent of the world
production of 675 million tonnes. The milk prices in India have been rising primarily
because economic growth and demographic pressure have pushed demand higher.
Prices also edged up because of the countrys entry into the international market for
skimmed milk powder. High milk powder prices led the government to even place an
embargo on its export. Being milk deficit State, the year 2007-08 was a turbulent year
to Kerala and our dependency on other States have increased. With the active coordination and involvement of Regional Milk Unions Milma could get through the
problems faced by our organization in this front and we could meet the demand for
milk from our esteemed consumers.
27 years ago, we responded to the challenges that threatened dairying in our State by
implementing the Operation Flood program with the active support and assistance of
the National Dairy Development Board. NDDB guided in taking up us the challenges
with a program that contributed significantly to creating the self-reliant, vibrant dairy
industry that now greatly benefits millions of rural households across the country.
Though, milk price was increased twice during the financial year and we passed on
nearly 70% of the increased consumer rupee to the farmer s, still our members are
struggling to continue in the profession due to spiralling cost of production. We would
believe that what the milk producer seeks to achieve by engaging his time and energy
in milk production is a remunerative price and a stable round the year market. If these
two needs are fulfilled, then the milk producer would continue in dairying and
perhaps, even expand even expand his business,of course within the boundaries of
other constrains.
Increasing the selling price of milk and passing on maximum benefit to the farmers is
not the only solution and in long run we have to look for other ways. The choice of
cost plus approach for milk pricing would breed inefficiencies since it would ignore
the demand factor. Similarly this would be an open invitation for large-scale import of
17
milk from the less priced neighboring states through other channels and ultimately
work to the determent of the milk producers of our State. So also, we have to
appreciate that soaring prices in a shorter period could adversely affect domestic
consumption as many of the households are in the low-income category.
Healthy growth in milk production can be achieved only through active intervention
in reducing the cost of production at farmer level and sustained investments in animal
feeding, breeding and health care.
A heavy surge in raw material prices for manufacturing of cattle feed has placed us in
a crisis situation as cattle feed plants are running heavy losses. Though we tried to
keep the cattle feed prices at reasonable levels, the increasing cost of raw material
forced us to increase the selling price of cattle feed which in turn resulted in increased
cost of production to our farmer members. The situation with regard to the availability
of raw material needed for cattle feed manufacturing was not at all rosy. The oil cakes
are costly and in short supply. Maize is being diverted for the production of ethanol as
bio-fuel due to its better conversion efficiency in the fuel.
Molasses became a scarce material and availability and its price become serious
concern to us. The prices of rice bran have gone up mainly due to ban on export of
rice. Since the ingredient cost is going up regularly, the cost of the compounded feed
is also going up, beyond the reach of a small producer. As the cost of milk production
increases, the margin of profit for the producer decreases. This is quite discouraging
trend, especially for the milk producers who are sometime even forced to quit
dairying as a profession. We feel that it is high time we looked forward for alternative
nutritional technologies, which would help our members to get the nutritional
requirement for their animals. So also efforts to be made by through Government
intervention to cushion the dairy producers against inflation by extending subsidy to
the farmers for purchase of cattle feed at reasonable prices.
Milma acclaimed as the No:1 brand in the State for the 2nd consecutive year
in the survey conducted by Dhanam Magazine which shows the popularity and
consumer belongingness of this household brand.
Aims for the year to come

18
The dairy industry in the country is exposed to various challenges.The management of

lean-flush periods has always been a matter of major concern to Milma and it still
continues to be a key problem to be addressed on top priority. Milma has to rededicate ourselves to uphold our oft-repeated slogan "Farmers' Prosperity through
Consumer Satisfaction". To keep farmer and consumer contended and happy in chorus
is a difficult task. Milma has to formulate strategies and plans to accomplish the
aforesaid task. Though a quarter century has elapsed since the drawn of Operation
Flood programme we are yet to achieve self-sufficiency in milk production. At the
same time we can be proud of our achievements in the area of infrastructure
development, milk consumption enhancement and economic and social development
of rural dairy farmers. A joint concerted effort of Milma and other Government
agencies in Dairy Development and Animal Husbandry will go a long way in
fulfilling our dreams. We have to strive to wipe off the accumulated losses and to
improve the performance both on the physical and financial fronts. Your trust, your
confidence and your encouragement will further energize and motivate us in this
pursuit.
Food crisis is a major threat now faced by the world and being the 2nd largest
populated country we are forced to bear the brunt more than others. Our Government
is giving priority to ensure food security to the citizens. To ensure food security we
have to enhance domestic production of agricultural commodities including dairy
products. This can only be achieved through ensuring remunerative prices to their
produce and encouraging them to produce more milk and other agriculture products.
We have to strengthen the hands of our farmers by enhancing their capability to
produce more and thereby ensure the prosperity of our nation .
The Federation achieved a turnover of Rs. 14128 lakhs in the year 2007-08 as against
Rs.13280 lakhs during previous year.
Turnover of KCMMF (Units wise - Rs.in Lakhs*)
Table 3.2
Year
Cattle Feed
Plant
Cattle Feed Plant

Malampuzha
Central Products
Dairy, Alappuzha
Total
1212.65
1220.71
1333.63
1463.66
4773.19
4753.53
Pattanakkadu
1996-97
1997-98
2226.91
2069.16
19
1998-99
1999-2000
3041.71
4419.66
1903.05
3667.48
1704.95
2307.53
6649.71
10394.67
2000-2001
4284.89
3798.49
2778.82
10862.20
2001-2002
4580.42
2922.4
3053.23
10556.05
2002-2003
4691.39
2691.13
2901.08
10283.60
2003-2004
4968.62
3124.79
3020.13
11113.54
2004-2005
4325.24
3885.46
3629.94
11840.64
2005-2006
5135.58
3602.57
4000.85
12739.00
2006-2007
5082.00
3954.00
4244.00
13280.00
2007-2008
4933.08
4738.22
4456.55
14128.00
2008-2009
5644.05
5074.30
5507.38
16186.62
2009-2010
6465.80
6747.92
6150.56
19364.28
Table 3.3
Turnover & Profits of Milma (2009-10)
Turnover / Rs in crores
Net profit/Loss
TRCMPU
ERCMPU
MRCMPU
KCMMF
TOTAL
362.62
231.07
357.45
193.64
1144.78
0.18
2.78
1.21
(-)0.75
3.42
Milk Procurement and Sales of KCMMF
Table 3.4
Year
Procurement (Liters)
Sales (Lakhs)
2000
2249.33
2308.69
2001
2487.11
2412.83
2002
2418.25
2558.59
2003
2179.73
2698.80
20
2004
2319.70
2841.21
2005
2630.14
3069.51
2006
2921.14
3340.05
2007
2722.90
3497.43
2008
2693.57
3475.22
2009
276.45
3575.91
2010
2729.00
3911.96
Organization Profile -TRCMPU Ltd (MILMA)

Organization
Thiruvananthapuram Regional Co-operative Milk Producers' Union Ltd (TRCMPU) was
registered in 1985, as a Regional Milk Union with 4 Southern Districts of Kerala viz,
Thiruvananthapuram, Kollam, Alappuzha and Pathanamthitta as its area of operation.
TRCMPU was formed by dividing the area of operation of Kerala Milk Marketing
Federation, formed for implementing of II project in 1980, in to two viz ERCMPU with 4
northern districts under of II area, and TRCMPU.
Thiruvananthapuram Regional Co-operative Milk Producers Union has completed 25 years

of its operation successfully. It has successfully faced odds like excessive procurement in the
initial stages and consequent losses, stagnation of sales in early 1990s and of late shortage of
milk and related problems and consequent loss. With such diverse experience in the past and
the talent pool it has, it can face any adverse environmental problems successfully. In 1985,
Union started operation from the old Thiruvananthapuram Dairy handed over by KLD & MM
Board which was selling milk in Thiruvananthapuram and Kollam districts and having a
capacity of 40,000 LPD. The first Dairy plant under OF II project in TRCMPU area was
commissioned at Kollam with a capacity of 60,000 LPD in 1986. Subsequently Chilling
21
Plants with capacity of 10,000 LPD each were set up at Mannar and Pathanamthitta. New
Dairy Plant at Alappuzha with a capacity of 60,000 LPD was commissioned in 1989, and new
Dairy Plant with one lakh LPD capacity was commissioned at Thiruvananthapuram in 1992.
The Dairy plant at Alappuzha was transferred to KCMMF in 1992 in order to facilitate
operation of Powder Plant set up at Alappuzha for handling surplus milk in the State.
Subsequently capacity of Kollam Dairy was expanded to 1 Lakh LPD and that of
Thiruvananthapuram Dairy to 2 Lakh LPD. The capacities of the Chilling Plants were also
expanded to 30,000 LPD each. A glance at the unions procurement and sales over the years
as given below and reveal that Unions procurement and sale has been showing a two digit
growth over the years.
Past Performance of TRCMPU Ltd
Table 3.5
YEAR
2000-01
MILK PROCUREMENT(LPD)
231649
MILK SALES(LPD)
288334
2001-02
273551
298788
2002-03
252521
316425
2003-04
205067
321806
2004-05
206200
354361
2005-06
234280
377579
2006-07
254827
406890
2007-08
230476
402109
2008-09
213085
403073
However the growth in procurement has always been lagging as compared to milk sales.
Union used to have surplus milk in the flush season up to 1996. However the fast growth in
demand thereafter and rapid decline in milk production in the State after 2001, owing to
demographic problems like rapid urbanization, diminishing land holding size, transformation
22
to nuclear families and reduction in family size, due to reduction in population growth,
attractive price for cash crops, shortage of unskilled labour an offshoot of high literacy rate,
etc. The demand for milk has been growing rapidly since the beginning and even the opening
up of markets in 1991 did not affect this growth much. Unlike the northern districts of the
State, not many competitors ever came to the market. Union in fact had maximum sales
growth during the period 1995-2000. Union has been purchasing milk right from the
beginning from the other two sister Unions and also from outside states mostly Tamil Nadu
till the year 2006.
From 2006 onwards, Unions milk deficit shot up due to rise in demand and drop in
milk procurement and the milk availability in Tamil Nadu also came down and hence Union
was forced to move to Karnataka for meeting its deficit. This reduced availability of milk in
the Southern States resulted in the steep increase in milk price in Karnataka and Union started
incurring loss on milk purchased from outside. Side by side the price of skim milk powder
also sky rocketed. The combined effect of these was the heavy loss to union in 2007-08.
Appendix III shows the financial performance of Union since beginning. Unions sales
turnover from products has always been below 10% since beginning, since Union never had
surplus milk after meeting demand for liquid milk.
Vision
To achieve the status of the best union in the country in turnover and profitabilityby
achieving 10-15% growth per annum by accelerating the growth in milk production and sale
of milk and milk products and by diversification into related areas in food sector.
Mission
To become the leading organisation in the food and nutrition sector in the region,
through the attainment of its marketing objectives and to become nucleus of an endeavour for
an accelerated development of the rural economy of the region. Further it would aspire to
function as professional,profitable and socially responsible organisationensuring better returns
to farmers,primary societies as well as its customers by providing good value for their money.
23
Units of TRCMPU
The Units of TRCMPU are as follows,
1. Thiruvananthapuram Dairy:
Thiruvananthapuram Dairy is Located on the way to Kovalam 4 Km from the City.
The Dairy with a capacity to handle 1 lakh LPD was commissioned in 1992. The Dairy is
selling milk in Thiruvananthapuram District except ChirayinkeezhThaluk.
No. of Employees
287
No. of societies pouring
340
No of agents selling milk
2100
Average procurement
100,000 LPD
Average milk sale
2,10,000 LPD
The Entire Milk is collected through Bulk Milk coolers

Thiruvananthapuram Dairy started to collect the entire milk through Bulk Milk Coolers since
November 2009.The capacity of the Dairy has been expanded to 2 Lakh litres per day by
2001 Now it is proposed to expand the capacity to 3 Lakh litres per day. In addition a
separate block for manufacture of Products is proposed to be constructed.
Thiruvananthapuram is the first "ISO 2001" certified Dairy in the State and all steps have
been initiated to get HACCP for Thiruvananthapuram Dairy.
2. Kollam Dairy:
The Dairy was commissioned in 1986 with a capacity to handle 60,000 litres per day and
subsequently expanded to handle 1 lakh litres per day.
No of employees
226
No of Societies
336
No. of agencies
1080
24
Average milk collection
50,000 LPD
Average milk sale
120,000 LPD
Quantity processed and supplied to Pathanamthitta unit-45000 lpd At present 18,000 litres
milk is collected through Bulk Milk Coolers and the remaining quantity in Cans. Presently
the milk marketed in Pathanamthitta district is supplied from Kollam Dairy, in pasteurized,
standardized condition.
3. Pathanamthitta Dairy:
A new dairy plant with 60,000 litre capacity is constructed at Thatta near Adoor in
Pathanamthitta district and is expected to be commissioned by the end of 2009. Presently
there is a 30,000 litres Chilling Plant in the district. Milk is also packed there at present.
These facilities will be decommissioned when the new Dairy Plant is commissioned. Now the
entire milk in the district is being collected through Bulk Milk Coolers.
4. Alappuzha District:
In Alappuzha district, 60,000 Litres per day dairy constructed under O.F II has been
expanded to 1 Lakh litres per day which is managed by KCMMF. Milk Procurement and
marketing activities are carried out by Union. There is also a Chilling Plant with 30,000
Litres capacity in the district.
Details of Staff, Senior Officers Head Office, TRCMPU
Table3.5
DESIGNATION
NAME
Managing Director:
Sri.Baby Joseph
Table3.6
Senior Manager (Production):
Sri.R.Sudhir
KOLLAM MANAGEMENT
Senior Manager (Inspection):
Dr.K.Marthandan
Dairy Manager
Mr. Prasanna Kumar
Manager (Maintenance):
Sri.K.S.Vijayakumar
Human
Resource
Manager
Manager
(Marketing):
Mr.
FiroshMurali
Sri.G.Rajesh
Manager Manager
(HRD):
Marketing
Manager (F&A):
Finance & Accounts Manager
Officer I/C(MIS/Systems):
Sri.K.R.Polachan
Mr.
Sri.K.Sathyanarayanan
Sri.G.Krishnalal
Mr. Sri.A.K.Madhusoodanan Nair
Sri.Sarathchandrababu
Assistant MD:
Sri.K.K.GopinathanNair
25
Procurement & Input Manager
Mr. Joan Lewis
Production Manager
Mr. Sri.I.G.Venugopal
Quality Manager
Mr. UnniKrishnan V.S
Engineering Manager
Mr. C K James
Maintenance Manager
Mr. Suresh Chandran K.R
3.7 PRODUCTS PROFILE
Pasteurized Milk
Milma pasteurized vitamin A enriched milk comes in three varieties.
Fat free milk
Toned milk which contains 3.0% fat and 8.5% SNF
Standardised milk which contains 4.5% fat and 9.0% SNF
Conveniently packed in 500 ml and 1 litre sachets, the fat content range of Milma's Milk
has made it the popular health drink of young and old alike.
Sterilized Flavoured Skimmed Milk

Prepared from pasteurized skimmed milk, sweetened with cane sugar and flavoured with
cardamom. It is very tasty in chilled condition and has a keeping quality of 60 days.
Ice-Cream
26
Milma ice-cream, is available in a range of lip smacking flavours: vanila, chocolate,

mango, strawberry and fruit & nut. In addition, our Ernakulam Union also produces and
distributes delicious "kulfi" and cream rolls.
The only ice-cream in Kerala market which is manufactured in a dairy,and hence most
fresh ice cream.
Sambharam
Sambharam (butter milk) a favourite beverage of Kerala.MilmaSambharam, the only
product of its kind in the market, is very popular throughout the State. It comes in
convenient 200ml throw away sachets.
Curd
It is a fermented product prepared from pasteurized skim milk using Curd Culture from
National Dairy Research Institute (NDRI). It is delicious, tasty, free from cholesterol and
available in 500ml and bulk.
Lassi
It is a sweetened and flavoured product prepared from curd. It is available in 200ml pack
and is a very good health drink for all age group.
Ghee
Ghee is a key ingredient in most Indian delicacies. Milma produces good quality, pure
ghee from butter or cream at all dairies. The ghee is available in convenient packs of
100gm to 15Kg.
Butter
27
Milma Butter prepared from the cream of milk contains 81% fat and less than 15.6%
water.
This is available in convenient 100gm,200gm and 500gm family packs. Available in
salted and unsalted varieties.
Tetrapack Flavoured Milk

Milma offers a range of flavored health drinks in hygienic tetra packs. Cardamom milk
has already captured the market and are available at all Milma outlets.
Refresh
In addition to milk drinks, Milma also has a mango drink in the market. Refresh, Milma 's
manago drink is a favorite in the fruit drink sector.
Peda
An indigenous milk product manufactured by evaporating water content from wholesome
cow's milk and sweetened with cane sugar. It is a nutritious and delicious sweet bite for
children. It is available in 25gm and 250gm cartons.
Cream Roll
Mixture of tasty ice-cream and tooty fruity encircled with oven fresh sponge cake. It is a
delicious snack rich in Milma cream.
28
Milma Ize Premium Soda

MilmaIze Premium Soda recently introduced in the market as part of product
diversification.
Milma Chocolates:
(a) Milky Thundr: Wafers coated with black and milk chocolate. The product is sold
at Rs.5
(b) Milky Beats: Milk chocolate bar, available in the market at Rs 10.
(c) Choco Beats: Black chocolate bar, available in the market at Rs 10.
(d) Milma Krispy: Black chocolate wafer at the price of Rs.5
(e) MilmaChocochat: Small black chocolate bar at the price of Rs.2.
(f) MilmaEclairs: clair toffee for Re.1
MilmaPayasam Mix
Full ingridents for making payasam is available as a kit during Onam season.
Cattle Feed
Balanced cattle feed is the major input provided to the dairy farmers of the State from the
Federation.
There is a high level of acceptability for this product in the market. Milma is now
producing 600MT cattle feed a day. It produces both mash and pellet form of cattle feed.
In addition to augment the balanced feed and to support vitamin level in animal, milma
has come out with milma mineral mixture - "MilmaMin". The cattle feed is distributed to
farmers at reasonable rate through Apcos, Dealers and Government agencies.
29
Adjudged Top Feed Manufacturer of India for manufacture of Aflotoxin-free best quality
cattle feed by Indian Association of Veterinary Pathologists during 1998.
ORGANISATION CHART
An organization chart is a diagrammatical form which shows important aspects of an
organization including the major functions and their respective relationships. In other words ,
it is a graphic portrayal of positions in the enterprise and of the formal lines of
communication among them. It provides a birds eye-view of the relationships between
different departments or divisions of an enterprise as well as the relationships between the
executives and subordinates at various levels. It enables each executive and employee to
understand his position in the organization and to know to whom he is accountable. Thus, it is
obvious that an organisation chart has the following characteristics:
1.
2.
3.
4.
It is a diagrammatical presentation.
It shows principal lines of authority in the organisation.
It shows the interplay of various functions and relationships
It indicates the channels of communication.
<
An organization chart is merely a type of record showing the formal orgainsational

relationalship which management intends should prevail. It is, therefore, primarily a
technique of presentation. It presents diagrammatically the lines of authority and
responsibility among different individuals and positions. It may be either personnel or
functional.
Personnel organization chart depicts the relationship between positions held by different
persons. Functional organization chart depicts the functions or activities of each unit and subunit in the organiastion. Organisation chart helps in the following ways,
1. It shows the employees how their positions fit into the total organisation and how they
relate to others. It shows the lines of authority and responsibility among employees.
2. It serves as a valuable guide to the new personnel in understanding the organisation and
for their training.
30
DEPARTMENTS & FUNCTIONS
DEPARTMENTS AND FUNCTIONAL AREA ANALYSIS

31
Chester I. Barnard defined formal organization as
a system of consciously
coordinated activities or forces of two or more persons. A formal organization is deliberately

designed to achieve some particular objectives. It refers to the structure of well-defined jobs,
each bearing a definite measure of authority, responsibility and accountability. The structure
is consciously designed to enable the organizational members to work together for
accomplishing common objectives. It tells the employee to do certain things in a specified
manner, to obey orders from designated individuals and to cooperate with others. Coordination also proceeds according to a prescribed pattern in the formal organization
structure.
The formal organization is built around four key pillars, namely:
(i)
(ii)
Division of labour
(iii)
Structure
Scalar and functional processes
(iv)
Span of control
Division of labour and specialization is the basic principle of formal organization. The scalar
and functional processes imply the growth of the organization both vertically and
horizontally. The structure of the organization refers to the overall arrangement in the
organization which ensures proper balance between different parts of the organization and
secures the execution of all operations and the achievement of organization objectives.
The span of control refers to the number of subordinates directly reporting and accountable to
one superior.The Organisational Structure of any firm will include the Top Level
Management, who takes the main administrative decisions for the business concern; the
Middle Level Management which is concerned with the day to day management of the
concern; and the Lower Level Management which is concerned with the normal day to day
activities of the concern. Milma follows such a structure for the department and function
areas.
5.1 HUMAN RESOURCE DEVELOPMENT DEPARTMENT

ORGANISATIONALSTRUCTURE HUMAN RESORCE DEVELOPMENT
Figure 5.1
32
Assistant HR Mgr
Assistant Personnel Officer
Junior Superintendent
Senior Assistant
Junior Assistant
Stenographer
Typist
Office General
FUNCTIONS
Deals with all the matter of employees.

Recruitment
Selection
Tests & interview
Training
Performance appraisal
Grievance redressal
ROLES & RESPONISIBILITIES

(1)Assistant Manager:
Total administration of discipline in the firm.
Communicating between the management and the employees.
Solving the problems regarding employees.
Takes precautionary measures to avoid unrest in the firm.
(2) Assistant Personnel Officer:
Assists the assistant HR manager.
(3) Junior Superintendent:

Deals with salary matters such as ESI, PF etc
Deals with welfare of the employees
(4) Senior Assistant:
Deals with matters regarding transfers, payments etc
Service matters
(5) Junior Assistant:
Deals with the primary stages of grievance redressal
(6) Stenographer:
Does secretary jobs towards the assistant manager.
(7) Typist:
33
Does job related to typing the official matters of the firm.

(8) Office General:
Does filling works and collecting couriers.
STAFF POLICY
There are 226 employees in Kollam Dairy Milma. It includes 32 employees and rest
areworkers.The members in the organisation formed a welfare society named Milma
Employees Welfare Organisation.
A cooperative society is working in the organisation to provide loans to the workers at a
nominal rate of interest. This society gives scholarship and cash award to the children of
employees in the organisation who gets high marks in their studies.
(a) WAGE PAYMENT AND INCENTIVE PLAN
Milma is under time basis wage payment system. Under this method employee is paid on
the basis of time worked.
Milma is giving the following non-financial incentives to the workers.
1.
Offers job security.
2.
The superior officers take interest on the subordinates.
3.
Provide more promotion.
4.
Provide more training for unskilled and new workers.
5.
Facilitate labour welfare and social security measures.
(b) FRINGE BENEFITS

The following are the fringe benefits provided to its workers
i.
Leaves
Every employee can take 13 casual leaves in a year
ii.
Provident fund and gratuity

The provident fund scheme is followed by the organisation. They also provides
gratuity scheme with the help of General Insurance Company.
34
(c) OTHER BENEFITS

Each employee of the organisation gets 500ml of milk every day. As per the Bonus
Act
of 1948, they are paying bonus to the employees. There is free uniform and
footwear washing facility.

(d) PROMOTION AND TRANSFER POLICY
The policy applies to promotion within workers categories and workmen confirmed in
the permanent service of the federation/unions working of its various units within
Kerala state and at the registered office. Promotions are on the basis of seniority rather
than merit.
<
TRAINING AND DEVELOPMENT
Milma sends their workers to many training institutions in various parts of India. Important
among these institutions is MANSING INSTITUTE OF TRAINING, GUJARAT. They
adopt the following techniques like formal lecture, seminar and so on.Milma also gives
apprenticeship training to workers and provides a stipend to them. The training covers areas
in management training as well as operational areas.
SELECTION PROCESS
Temporary staff are recruited by the concerned units and permanent staff are recruited by the
head office, in the following process:
1. Inviting application
Federation releases the advertisement in leading news papers showing the vacancy and
quality required by the applicant.
2. Screening the application
The next step is the screening of the application to reduce the number of applicants and
also to find out more suitable candidates.
3. Interview
Next step is the interview conducted by top officials of Milma. Interview is also
conducted by a group of various managers.
35
4. Final selection
If a candidate overcomes all the procedures given above, he would be selected. An
appointment letter is given to him mentioning the terms of appointment, pay scale etc.
The selected candidate undergoes a probationary period of one year.
DISCIPLINARY PROCEEDINGS
The HRD department is responsible for maintaining discipline in the organisation. At the
Kollam diary, the rules and regulations for office staff and workers are different. Staff
regulations are concerned with the office and standing orders are concerned with workers. If
there is way in disciplinary action arises from a worker standing order will be issued. The
procedure in as follows:
Written explanation is asked from the concerned workers.
Domestic enquiry will be conducted either by an efficient advocate or by a top
manager in the dairy.
WORKING HOURS
The office time is from 10.00 am to 5.00 am. The workers work for 8 hours in the dairy.
There are 3 shifts:
7.00 a.m to 3.00 pm,
3.00 p.m to 1.00 pm and
11.00 p.m to 7.00 am
TRADE UNION
Trade unions are voluntary associations of workers or employers formed to promote and
protect their interests through collective action. The Trade Unions Act,1926 defines a trade
union as a combination, whether temporary or permanent, formed
(i)
Primarily for the purpose of regulating the relation between

(a) between workers and employers
(b) between workers and workers
(c) between employers and employers, or
(ii)
For imposing restrictive conditions on the conduct of any trade or business, and
includes any federation of two or more trade unions.
36
The main trade unions in Kollam Milma are,

All India Trade Union Congress (AITUC),
Central Industrial Trade Union (CITUC),
and Indian Trade Union congress(INTUC)
PUNCHING SYSTEM
The attendance of the employees is done by punching system. There are discussions going on
for the implementation of finger laser punching system within two months. This system can
automatically can daily attendance and compute the salary of employees. This process
enables achieve accurate salary as well as incentive calculation.
5.2. FINANCE AND ACCOUNTS DEPARTMENT

ORGANISATIONAL STRURCTURE OF FINANCE & ACCOUNTS
Figure 5.2
Assistant Mgr
Assistant Account Officer
Computer technician
Superintendent
Senior Assistant
Junior Assistant
Mgt Apprentice
Occasional Apprentice
FUNCTIONS
Providing financial assistance as per the departmental requirements.
37
Keeping the monetary transactions in the book of accounts expect the marketing
department.
Proceeding requisitions of Milma Kollam units requirements towards the head
office.
Finance department also deals with the Systems department.
Systems department operates with software which is made by KCMMF, Milma
Integrated Information System.
ROLES & RESPONSIBILITIES

(1)
Assistant Manager:
Deals with the entire functions of the Finance and Systems departments.
Final verification of all financial matters.
Confirms sending the concerned statements to the Dairy Manager.
(2)
Assistant Account Officer:
Verification of entire accounts
(3) Superintendent:
Verifies the milk value
Computing the TDS
Preparing the inter units transfers

(4)
Senior Assistant:
Transactions relating to the outside purchases
Transactions relating to the transportations & distributions
Transactions relating to the TA

(5)
Junior Assistant ( Cashier)
Issuing cash payments, especially salaries and wages.
Making advance payments.
(6)
Mgt Apprentice:
Issuing cheques
Dealing with the bank matters.

(7)
Occasional Apprentice:
Filling
Collecting couriers.
(8)
Computer technician :
Development of softwares to support various functions.
Support Management Information System
Networking
SOURCES OF FINANCE:
38
LONG TERM: the source of long term finance is only term loans. CPD gets its financial
assistance from National Dairy Development Board (NDDB) through KCMMF. There is an
agreement between the federation and NDDB.
As per the agreement between them 70% of the loan amount should be repayable and the
remaining 30% subsidy.
SHORT TERM:
the source of short term fund is procured from the Canara Bank at the
prevailing interest rates. It is mainly in terms of overdraft.
MODES OF PAYMENT
HRD dept prepares the payment for employees and sends to the Finance dept. Payments are
made in two ways, through direct cash which is paid in the finance dept and other through in
bank i.e., in the Canara Bank. Overtime payment is not paid in cash but paid in bank. The
following are different modes of payments at certain situations.
CASH PURCHASE: Makes payment within 10 days made to societys milk purchase.
CREDIT PURCHASE: 15 days get as credit period for film (plastic cover pack)
purchase.
ADVANCE PAYMENT: Advance payment is needed for purchase of skimmed milk.

DEPRECIATION
The depreciation pattern maintained as per the Income Tax Schedule. Every year the firm
prepares provision of depreciation.
The following are the depreciation rates for the concerned assets.
Building
Factory building
Plant & Machinery
Vehicles
Furniture
5%
5%
30%
20%
15%
AUDITING PROCESS
The dairy has statutory auditing, which is done by the registrar of the cooperative society. For
the purpose a representative is appointed in the dairy as their concurrent auditor.
39
PROFIT SHARING: The profit earned is given to the farmers as per the quantity and quality
of milk they supplied to the concerned society. Further the dividend is paid to the shareholders.
STATEMENTS & LEDGERS
(a)
(b)
(c)
(d)
Journal
Ledgers
Sub ledgers
P& L a/c
(e)
Balance sheet( yearly
maintained)
(f) Trail balance
(g) Bank reconciliation
5.3. PROCUREMENT AND INPUTS

DEPARTMENT
(h) Budget
ORGANISATIONAL STRUCTURE OF PROCUREMENT AND INPUTS
Figure 5.3
Assistant Mgr
Milk Procurement Officer
Veterinary Officer
Assistant Milk Procurement Officer

Senior Supervisors
Junior Supervisors
FUNCTIONS
This department deals in procuring milk from the societies.

Calling tenders of vehicles
Scheduling of routes
Providing veterinary services.
Providing cattle feed supply

(1) Assistant Manager:
Ensuring all the activities is performing according the plans.
(2) Veterinary Officer:
All medical issues of the cattle are treated.
(3) Milk Procurement Officer:
Entrusted with the activities of calling tenders and quotations of vehicles.
Scheduling of the routes.
(4) Assistant Milk Procurement Officer:
Assisting in the works of the Milk Procurement Officer
(5) Senior Supervisors:
40
Deals with the extension activities in the field such as ,

Finding the needs of the farmers.
Conducting camps and seminars
(6) Junior Supervisors:
Assisting with the activities carried out by the Senior Supervisors.
PROCURING: Procures milk from the societies through tendered trucks and reaches to the
plant. Kollam Milma has 11 regular routes and 11 emergency routes. Milk collection route
contract is awarded annually by collecting competitive offers.
Union is going for quality improvement of raw milk by installing milk coolers in Societies.
At present 41 Nos of coolers are in operation.
Government of India is financing 75% cost for installing coolers. Rs.10 crores has already
been sanctioned for this. Union will meet all expenditure for operating the coolers in
Societies.
VETERINARY SERVICES: This service is extended to the farmers irrespective to the cost
involved for its operation.

INPUT WING: Input wing is responsible for health care, insurance, genetic up gradation,
nutrition, and production enhancement.

PROCUREMENT PROCESS OF MILK FROM FARMERS
Figure 5.4
41
FARMERS
SOCIETY
TANKERS
MILMA
42
5.4. PRODUCTION DEPARTMENT

ORGANISATIONAL STRUCTURE OF PRODUCTION
Figure 5.5
FUNCTIONS
Involved with the processing of milk. Production of curd, buttermilk and ghee.
Procures raw materials.
Procures milk from outside state in the times of scarcity.
Makes payments for the milk powder.
(1) Production Manager:
Controls the entire production function of the plant.
Hears the grievances of plant employees if any.
Informs the Dairy Manager about the production status.
(2) Assistant Production Manager:
Assists the Production Manager in his work.
(3) Technical Officer
Scheduling of the plant activity.
(4) Technical Supervisor:
Implementation of plans.
Ensures that the milk tankers arrive as per the schedule.
(5) Operators :
Operates the plant machines
(6) Workmen:
Involves in the production process.
Figure 5. 6
THE PRODUCTION PROCESS
Raw Milk at diary
Societies
Milk producers
(APCOS)Raw milk is accepted based
on
Organologistic evaluation
Testing for fat on SNF 43
Acidity
MRTP test for bacterial load
SPC
Test for acidity

Coliform
Chilling to <10
To control growth of bacteria

rawmilk is chilled. Plant either
diary tested for fat, SNF, Acidity,
MBRT, Temperature.
Curd ,Samabharam
Skim Milk
Processing
Heating milk to a minimum

temperature
of
72
holding for 15
and
cooling to less than 5
Standardisation &Testing
Fat 3.05% SNF 8.5%
Packing &Cold
storage
Filled only after

quality standards.
Ghee
ensuring
Distribution
At dispatch dock sachet tested for

MBRT, SFN and coliform.
Dispatching to agents
Market sample tested for

MBRT, SNF and coliform.
44
5.5. QUALITY CONTROL

ORGANISATIONAL STRUCTURE OF QUALITY CONTROL
Figure 5.7
FUNCTIONS
Taking samples at every stages of milk processing and of other milk products.
Timely testing the quality of milk and other milk products.
Maintains to keep the standard.
(1) Manager:
Management representative of ISO 9001 standard.
Ensures the quality is maintained.
Ensures that subordinates do the quality testing in time.
(2) Quality control officer:
Management representative of AGMARK standards.
Does mainly quality testing of AGMARK products such as ghee.
Sees whether the milk has required quality.
Similarly this is done in the other milk products also.
Does quality analysis and records the results
Taking periodic statements
(3) Chemist / Bacteriologist:
Does the entire required tests for knowing the quality.
(4) Lab Technician Grade 1:
Assists in the chemist in conducting tests.
(5) Lab Technician Grade 2:
Collects the required samples at every stages of processing.
TYPES OF TESTS
45
The important tests in quality control are given below.

1. At chilling centre
a.
Organoleptic test
b.
Temperature
c.
Clot On Boiling (COB)
d.
Acidity (as lactic acid)
e.
Fat %
f.
SNF % (Solid Non Fat%)

2. At village co-operative society
Organoleptic tests
Fat%
SNF% (Solid Non Fat %)
Periods of quality testing:
1. When milk is received at the plant its appearance and smell is first is checked.
2. Then sample is taken at RMRD (Raw Milk Reception Dock) and tested to know the
fat content in order fix price for the concerned society which supplied the milk.
Sample is taken at the processing stage of milk to know temperature of the milk.
Later sample milk is taken from the processed milk tank to know the fat and acidity.
Sample is taken from filled packets.
Similarly this is done in cold storage.
Sample is taken at despatching of milk packets.
Five packets are taken as samples in a month to know whether the quality is
3.
4.
5.
6.
7.
8.
maintained.
PESERVATION OF MILK: Processed of milk does not need preservatives. After the milk is
chilled and pasteurized. Hence milk does not get spoiled. The milk stays good for two days
under refrigeration conditions.
Table 5.1
SPECIFICATIONS (MINIMUM) AS PER PFA AND MILMA REQUIMENTS

PRODUC
TS
FAT %
TONNED MILK
SNF %
3.0
TOTAL
8.5
ACIDITY
%
PHOSPHA
TE
0.13-0.15
-VE
MBRT
5hrs
46
MILMA RICH PLUS
3.8
10.0
0.15-.18
-VE
5hrs
CURD
0.5
(max)
10.5
0.8-1.3
NA
NA
SAMBHARAM
0.5(max)
4.0-6.0
0.4-0.7
NA
NA
Table 5. 2
SPECIFICATION FOR GHEE-AGMARK REQUIREMENTS

MOISTURE %
FREE FATTY ACID %
PRODUCT
0.3
GHEE (special grade)
5.2(max)
Table 5. 3
COMPOSITION OF MILK
Source: Kerala Co-operative Milk Marketing Federation (KCMMF) Report , 2009-10
Main constituent
Range (%)
Water
85.5 89.5
Total solids
10.5 14.5
Fat
2.5 6.0
Proteins
2.9 5.0
Lactose
3.6 5.5
Minerals
0.6 0.9
5.6. MARKETING DEPARTMENT

ORGANISATIONAL STRUCTURE OF MARKETING
Figure 5.8
47
FUNCTIONS
Sales of milk and other milk products.

Distribution of the products.
Collecting the payments from the agents
Finding the potential markets.
Doing promotional activities.
ROLES & RESPONISIBILITIES

(1) Marketing Manager:
Coordination of all marketing activities
(2) Marketing Officer:
Marketing activities of milk
(3) Assistant Marketing Officer:
Marketing activities of all Milma products including products which arenot
(4)
(5)
(6)
(7)
produced in Kollam unit.

Marketing Organisers:
Dealing with the customer complaints
Agency promotion
Finding potential markets
Canvassing
Marketing Assistants:
Cash collection of agents (CASH BOX system)
Milk despatch activities
Junior Assistant:
Keeping marketing accounts
Issuing invoices
MIS
Salesmen:
Selling process is done in the stall, where located outside Milma unit.
48
Maintaining inventories in the stores.
PRICING
The prices products of Milma are fixed in the head office. Cost plus profit pricing strategy is
used.
PROMOTION
There is less promotional activities from the firm. Usage of posters, calendars bill boards etc
are certain tools used in the promotions activities. Advertisements are used only when the
offers are provided.
DISTRIBUTION
Milk is distributed directly only through retailers i.e. no wholesalers is included. While other
products are provided to wholesalers as well as retailers. Advance payment is to be made for
milk sales by the agents. Nearly 1800 agents are functioning in Kollam. 4% commission is
fixed on the milkat minimum retail price.
MARKETSHARE
Milma milk has a market share of approximately 45% and is leading in the market. But in the
case of other products they are just meeting the targets set by the head office. So there is
relatively small market share for the milk products of Milma.
Table 5. 4
SL.NO
SALES OF PRODUCTS IN MILMA, KOLLAM DAIRY

PRODUCTS
SALES
Milk
1, 20,000 litres/ day
Ghee
30,000 litres/ monthly
Sambaram
1000 litres/monthly
Curd
2000 litres/day
Source:Thiruvananthapuram Regional Co-operative Milk Producers' Union Ltd Report, 2009-10
5.7. MAINTENANCE AND ENGINEERING DEPARTMENT

ORGANISATIONAL STRUCTURE OF MAINTENANCE AND ENGINEERING
Figure 5.9
Assistant Mgr
49
Deputy Engineers
Technical Superintendent
Senior Assistant
Operators and
Technicians
FUNCTIONS
Maintaining the proper functioning of the plant and its machines.
Purchasing the materials for packing of the products,
Purchasing the materials which are required for the machines.
ROLES & RESPONSIBLITIES
(1) Assistant Manager:
Coordinating all the activities of the department
(2) Deputy Engineers:
Maintains the plant and machinery
(3) Technical Superintendent:
Assists the deputy engineers
(4) Senior Assistant:
Making computer entries
Placing purchase orders
Takes statements
(5) Operators &Technicians:
Here various activities are carried out by the following workers as per their
designation.
Technicians (operators cum repairers)
Electricians
Refrigerator operator
General mechanic
Boiler operators
Driver
SWOT ANALYSIS
6.1 SWOT ANALYSIS
SWOT analysis is a strategic planning method used to evaluate the Strengths,
Weaknesses, Opportunities, and Threats involved in a project or in a business venture. It
involves specifying the objective of the business venture or project and identifying the
internal and external factors that are favourable and unfavourable to achieve that objective.
The technique is credited to Albert Humphrey, who led a convention at Stanford University in
the 1960s and 1970s using data from Fortune 500 companies.
50
A SWOT analysis must first start with defining a desired end state or objective. A SWOT
analysis may be incorporated into the strategic planning model. Strategic Planning has been
the subject of much research.
Strengths: characteristics of the business or team that give it an advantage over others in
the industry.
Weaknesses: are characteristics that place the firm at a disadvantage relative to others.
Opportunities: external chances to make greater sales or profits in the environment.
Threats: external elements in the environment that could cause trouble for the business.
Identification of SWOTs is essential because subsequent steps in the process of planning for
achievement of the selected objective may be derived from the SWOTs.
First, the decision makers have to determine whether the objective is attainable, given the
SWOTs. If the objective is not attainable a different objective must be selected and the
process repeated.
The SWOT analysis is often used in academia to highlight and identify strengths,
weaknesses, opportunities and threats. It is particularly helpful in identifying areas for
development.
51
WEAKNESS
STRENGTH
Good brand name in the Kerala dairy
market.
Kollam Milma holds the major market

share in Kollam dairy market, especially
Faces milk shortage.

Outdated machines plant.
Plant is not fully automated.
No computerised warning system in
milk.
plant for detecting problems.
Meets the market demand appropriately.
The Kollam Milma unit cannot take
There is good coordination between the
independent decisions on major
Manager and the departmental heads.
There is good interrelationship between all
situations since head office is the prime

departments.
There is active customer complaint cell.
authority.
Just meeting the demands of the market

There are great number of employees
benefits schemes.
rather creating more demand.
Eco-friendly plant.
There is no R&D department.
Strike free campus.
No recreational activities for
Strict disciplinary actions and quick
grievance redressal are taken.
Ensures timely quality testing of milk and
the
workers.
other related products.

Maintains quality standards such as ISO.
OPPORTUNITIES
THREATS
More scope to procure milk from other Faces milk shortage within the state.
Governments decisions regarding
states, which is not much expensive plus
procuring milk from Tamil Nadu may
ensures good quality.
Good scope for capturing huge market
share in the milk products category.
More opportunities to create demand in
rural areas.
result in loss making due to high price.

New competitor, Thripthi may reduce
market share.
Customers preferring other brands milk
products.
STRENGTHS
52
Milma is one of the first organizations to enter into the Kerala milk market through the
introduction of packed milk. The large acceptance of packed milk of Milma among customers
made the Milma successful. This gradually created Milma as trust worthy one. All these lead
to capture 45% of the market share. Kollam Milma Dairy is successful in delivering quality
milk products in time to its dealers and customers, so customer always rely on Milma
products. Strength of Milma is its employees. They are provided with various incentives and
benefit schemes.
WEAKNESS
Milmas plant is not modernized one, so there is less computerized works. There is lack of
R&D works in the organiastion, which is very essential for surviving in the business. Even
though the employees have various incentives and schemes, it does not have recreational
activities. Independent Milma units are able take their own decisions on major issues, since
top management involves in it.
OPPORTUNITIES
Since Milma has good name among the customers it can introduce new milk products. The
market share of Milma can be increased through creating more demand in rural areas. The
sale of chocolates can be increased by effective promotion activities in the urban areas.
THREATS
Facing milk shortage within the state is a serious issue. Customers prefer other brands milk
product is another issue. Very soon government supported milk organiastion, Thripthi would
be a big competitor to capture the major market share.
SWOT analysis of this organiastion shows its strengths as well as its weakness. This
may enable the company to improve its prevailing methods of production. The firm can make
significant results by implementing good business strategies, which may retain and increase
the market share of Milma.
FINDINGS, SUGGESTIONS & CONCLUSIONS

53
7.1 FINDINGS
The following are the findings:
1. The Kollam Milma unit cannot take independent decisions on major situations since
2.
3.
4.
5.
head office is the prime authority.

The plant lacks modern machines which are required to produce efficiently.
There is no computerised alert system to detect problems in the plant.
The firm planning to implement finger pressing system at the entry gate.
The incoming of the trays into the plant found to be slow, which may result in
delaying of packing the packed milk.

6. There is no scope for developing of new products.
7. It was found that the firm just meet the required demands rather than creating
demand. This was seen in the milk products especially sambharam.
8. There are no recreational activities for the workers.
9. The study revealed that Kollam Milma unit faces milk shortage within the state.
10. In a day around 100 packets of milk are being torn due to improper packing, storing in
old and bad conditioned trays.
7.2 SUGGESTIONS
The following suggestions may help the firm to gain good results,
1.
2.
3.
4.
Implementation of modern equipments is needed to produce efficiently.

Implementation of a computerised alert system may help to detect problems quickly.
An aggressive promotion of products is needed from the marketing department.
The HRD dept should try all efforts to implement the finger punching impressing
system instead of punching system without any chances for unrest in the firm.
5. The Engineering dept should try to maintain proper working of the plant in certain
areas which are not given much importance, especially the breakdown of the conveyor
for bringing the trays from outside.
6. There are certain areas to improve such as to implement R& D department for
producing new products.
7. More production and promotion of Sambharam may increase the market in the
Sabarimala season.
8. The firm may make policy to establish recreational activities for the workers.
9. The Kollam unit may try to procure milk from other states which incur less cost and
provide good quality.
10. Proper packing of milk packets is essentially needed as well as good trays are needed
for storing it.
54
7.3 CONCLUSION
The organisation study at Milma was done with an objective to understanding how an
organiastion functions, what are its major departments and functioning of these departments.
The study at Milma provided the opportunity to learn the organiastional goals and objectives,
various department that conduct critical functions and the interrelation between them.
Milma is observed to be an organiastion that not only has an objective of working
profitably but also a socially responsible organiastion that cares of different sections of the
society viz ; the milk producers, and the milk consumers.
The organiastion, Milma has established different departments based on functions like
procurement, production, human resource, marketing etc. It ensures quality of product
through established systems which are monitored by quality control department. Finally the
project enabled understanding of an organiastion and its objectives and how they function to
achieve organiastional objectives.
BIBLIOGRAPHY
1. Koontz, Harold, Weihrich, Heinz, (2008); Essentials of Principles of Management.
New Delhi: Tata Mc-Graw Hill.
2. Chabara, T.N,2008,Principles & Practices of Management: Dhanpat Rai & Co
3. Aswathappa, K., 2009, Human Resource Management New Delhi: Tata McGraw
Hill Education Private Limited
55
4. Kotler, Philip, Armstrong, Gary, 2006, Principles of Marketing. New Delhi :

Pearson Education
WEBSITES
1. Retrieved November 16, 2010, from http://www.milmatrcmpu.com/organisation.jsp
2. Retrieved November 18, 2010, from http://www.amul.com/organisation.html
3. Retrieved November 19, 2010, from http://www.indiaagronet.com/indiaagronet/
agronet_home/agrinethome.html
4. Retrieved November 21, 2010, from http://en.wikipedia.org/wiki/Kerala_Cooperative_Milk_Marketing_Federation
56

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ORGANISATION STUDY AT MILMA, KOLLAM DAIRY

ORGANISATION STUDY AT MILMA, KOLLAM DAIRY

The study faces certain limitations they are,

was gathered from them.

ORGANISATION STUDY AT MILMA, KOLLAM DAIRY

ORGANISATION STUDY AT MILMA, KOLLAM DAIRY

To know the functions of all departments.

1.3 SCOPE OF THE STUDY

ORGANISATION STUDY AT MILMA, KOLLAM DAIRY

ORGANISATION STUDY AT MILMA, KOLLAM DAIRY

ANAND is a small village of farmers in Kaira District of Gujarat. ANAND Milk

ORGANISATION STUDY AT MILMA, KOLLAM DAIRY

KERALA MARKET SHARE OF MILK

ORGANISATION STUDY AT MILMA, KOLLAM DAIRY

30,000 litres/ monthly

2.5 REGULATORY FRAMEWORKS

(1) ACTS OF THE GOVERNMENT:

ORGANISATION STUDY AT MILMA, KOLLAM DAIRY

ORGANISATION STUDY AT MILMA, KOLLAM DAIRY

(2) AUTHORITIES OF THE GOVERNMENT

The National Dairy Development Board is an institution of national importance setup by

ORGANISATION STUDY AT MILMA, KOLLAM DAIRY

2,702 primary milk co-operative societies

7.78 lakhs farmer members

Three Regional Co-operative Milk Producers' Union

Thirteen Milk Chilling Centres

One Milk Powder Plant of 10MT per day capacity

A well established Training Centre

5,200 retail outlets

3.2 (a) Mission

ORGANISATION STUDY AT MILMA, KOLLAM DAIRY

To carryout activities for promoting Production, Procurement, Processing and

To build up a viable dairy industry in the State.

National Dairy Development Board

ORGANISATION STUDY AT MILMA, KOLLAM DAIRY

FUNCTIONAL AREAS OF MILMA, KOLLAM DAIRY

Takes active role in framing personnel policies and service rules

Finalise long term wage settlement, bonus etc.

Placement and career development activities.

Financial management of KCMMF and its units

ORGANISATION STUDY AT MILMA, KOLLAM DAIRY

Liaison with Government for availing Government financial assistance

Long term repayment and scheduling of loans

Capital Management Schemes for primary co-operative societies

Recommend remuneration of APCOS employees

Procurement and Inputs

Centralised purchase of Dairy consumables

Purchase of Raw Materials for Cattle Feed Plants

Purchase functions of KCMMF Head Office

Bulk trading of surplus products

Co-ordinated promotional activities

Packaging & Product Development

Procurement & Consumer Pricing

Liaison with statutory authorities for bringing in suitable amendments in statutes

ORGANISATION STUDY AT MILMA, KOLLAM DAIRY

Attend to consumer complaints on quality problems

Providing consultancy for execution of projects

Estate management and assistance in maintenance of Plant & Machinery of KCMMF

Maintenance of Systems at KCMMF, Units and Regional Milk Unions

Conducts Training programs for development of computer skills

3.5 TOP MANAGEMENT

The Board of Director of TRCMPU Ltd. comprise of 14 directors elected