Supply Chain Management

Digital Assignment – 2
Milk Run for Milk – Gopaljee

Prepared by
Gowtham Kumar J
18MBA0044

1. How can Gopaljee’s Supply and Distribution Model be extended to other business lines in the
Indian and South Asian context?
The Gopaljee milk product have enlarged supply chain as they deal with a few hours sustainable
resource i.e. milk if not brought under the controlled environment. The Gopaljee brings in milk collected
from the villages (4500 in numbers) to its 26 bulk chillers within 3 hours of milking for which it has 50
collection routes and each village as got its VLC to inspect and receive milk producer directly from the
cattle farmer and inspect the quality and features of the product (Fat and SnF).
With established collection route for effective and efficient logistics and VLC act as company
representative to interact with the supplier and quality circle process. The supply chain as been a strong
and back-bone to it successful operations.
The same above supply chain channel could be used to extend the business line or operation of Gopaljee
such that economy of scale from its logistics chain. Business line such as Agri-based products i.e.
vegetables, fruits, paddy, wheat and rice etc are the new products which the company could take
advantage from its logistics. This is also adding up value to its VLC which perform similar action of
milk in these said products, where the farmer delivers the product and representative examine their
fitness and fair pricing could be reached to farmers avoiding middle-men.
For Indian context, as like milk the nearer distribution chain of Gopaljee which covers few parts of
Northern India could be adding the business of vegetables and fruits as they too have few days of
expiration and other products to be distributed around India.
For South Asian context, the existing exported products i.e. pasteurized milk and ghee the same could
be exported with Frozen food category products such as potato fries and others could made and
distributed overseas and operation is also effectively used for chilling purpose as the company could
scale in existing knowledge and achieve them profitably.

2. Which socio-economics features of South Asian societies can be identified as the foundations for
building sustainable supply chains?
Socio- economic features of South Asian societies are:
i. Family culture: Almost every where in South Asia the family relationship is closely bonded
such that the joint family culture which rather different from most of the western customs. Both
the men and women of the family indulge in the workings which are common amongst family
such that share of work (in industrial words its operation).
ii. Agriculture based country: Prior to todays shift in the economic transitions, these countries hold
a strong service and production of agriculture products and other business such as artesian and
craft works. All these activities are carried by their generations.
 iii. Loyalty: Its one of the key value/ principles the most individual holds, such that the suppliers
are happy to be hold with the first reached firms and trusted firms to hold of for longer run as
the benefit of doubt and risk-aversion to the new players.
iv. Economic factors: As like developed countries (ex: USA) there are no much wider range and
product breadth offered to the customers for which the cost of production is likely to be higher
side. The factors that would affect are
a. Labour cost: The South Asian labours are cheap and could perform the similar job at
less rate of charges compared to the set pay scale of developed countries citizens.
b. Cost of sourcing: This cost is low in South Asian countries are the more populated and
scaled suppliers are high for which created more supply and price on floor.
c. Competition: The market is driven by set of well-established players which doesn’t rise
due to less people willing to risk and most distribution chain captured by the current
run players making it difficult for the new entrants.

3. How can the existing distribution channels in the South Asian region be transformed to
maximize the value delivered to the customer?
With the current set run of supply chain the firm (Gopaljee) has been able to reach the region of Delhi
and NCR for distributing the poly-pack and loose milk where as the ghee and skimmed milk are only
distributed to the other regions of South Asia. To transform the supply chain in order in creating
maximum value to those customers can be through
i. Expansion of Milk processing facility: this could provide wide range of the regular milk to be
reached which are now not available to those regions due to the sustainability of products life.
And technology innovation and milk maintain techniques to derive more by-products like
paneer, cheese and more could help in maximizing the value.
ii. Adding new business line: As mention in the first answer, Agri-based products i.e. vegetables,
fruits, paddy, wheat and rice etc are the new products which the company could take advantage
from its logistics providing new business revenue using the existing supply chain which are
minimal as the cost decrease compared to green-field investment of supply chain.

4. Gopaljee’s supply and distribution networks have successfully connected a highly fragmented
supply base with an equally fragmented market. How can this indigenously developed SCM
Model to integrate with and expand into global supply chain?
The most important component of the Gopaljee supply chain is that there is removal of the
intermediaries who are to be avoid in order to dictate the price for the market by itself where these
middle men would involve in defacing the quality to keep the product from turning to waste and tape
the profit.
For the supply chain to grow globally the company must make investment in those country it wishes to
run operation and brand supply to final customer, as the product that Gopaljee are currently producing
doesn’t sustain no more than a day or few days. Thus, the same SCM model feasible in other countries
and supplier counter-part also successfully connected would bring in the revenue once the market is
tapped with the product and branding. This as fundamental risk in establishing as the following may
pose the threat for it run:
i. Existing country’s competition
ii. Lack of supplier
iii. Governmental and legal policies to be compliance
iv. And critical market expectation
v. Consumer behaviour of the region.
Considering the by-product line of milk such as cheese, paneer and frozen food from vegetables and
fruits and also the combination of milk and fruits product to create the product line of Ice-creams and
milk-based bottle drinks would seem to be much more authentic reason for the company to expand
globally.

5. How do you see this model being replicated by medium and small enterprises placed in similar
situations in other industries? Illustrate with examples.
This SCM model is made for the most perishable product i.e. milk which requires immediate processing
and shift/ movement in the logistics aspects. Such that creating important strategies and planning to
reduce the risk and cost to the company. Mostly with the scale of covering large areas and region with
self-relayed transportation is possible for the large size firm as the manpower requirement and cashflow
required per day are huge. Implementation of the same model to medium and small-scale industry could
change the scenario such that these doesn’t have to deal with perishable products for their business
operation. The following is the medium and small enterprise which could use this SCM model,
Agarbathi/ Incense stick manufacturer (Hand-rolled)

In B2B the manufacturer to yield large quantity of production for making hand rolled agarbathi and to
supply the B2C Company would require huge number of employee as the most of the process is carried
out by the human hands, such that to keep and handle that population would require more investments
to factory layout such that the cost rise would be continuously and become the burden to run its
operation.
For which these outsource/ sub-contracting such that they supply the raw material such as bamboo stick,
Charcoal, Saw-dust and more to the surrounding village regions house-holds (who does it in their home)
and teach them the direction of making, usually most individual in the distributed village would have
experienced the methods convert them in product and dispatch to the collecting booth.

Village Route 1

Transport
Village Route 2 Processing Client
Plant
Channel

Village Route 3
Usually the transportation plan will be for a Lorry (Eicher) to carry the estimated capacity of the village
planned to attend and the cash to pay, also the villages route consist of efficient cost planned region
covering a maximum distance and produce. Once lorry reaches the respective village the people already
collected material will dispatch the finished goods to the firm’s representative who checks the
weightage of the product collected compared to the last trip provided material and pays off the cash
according to submitted agarbathi and the household would collect the next material for making and
returning back at next trip. In this case the piece rate system is followed and this reduces the facility
cost and individual produce at their convenience.
The routine trip to the village is planned weekly such that one lorry can visit 6 to 7 routes in a week
where one route daily visited. Suppose the route visited is X on Monday, then the next time route X
would be visited in next Monday. Such that the product is collected stored in the Processing plant for
further quality control and packaging according to specification of the clients. And dispatch the same
to the client in large number which wouldn’t be possible if the manufacturing is done under one-roof/
facility.