A PROPOSAL FOR MILK SUPPLY USING MILK ATM MACHINES

BY

INNOVATION POWER COMPANY LTD

REPARED BY:

MBABAZI JANE

……………………………………………………………..

&

TUMWIINE ENOCK

…………………………………………………………….

PRESENTED TO:
BUSINESS SUMMARY

The proposed plan is to venture in milk supply business using Automatic Milk Dispensing
Machine, under our company Innovation Power Company ltd.

We will be supplying milk to final consumers where we are to begin with schools targeting
students and stuff and then we will later expand to supply from supermarkets and then mobile
Milk ATM machine using a Van.

The business will begin operating in the central and western Uganda in areas of Kampala, Wakiso
and Kiruhura Districts

It will be managed by a dedicated, competent and high quality staff to serve the customer needs
and wants. All staff recruited will be trained and accountable to the management team.

How the machines work.

The Anytime Milk Machine (ATM), works like an Automated Teller Machine (ATM), allows
consumers to purchase milk from a mechanized nozzle. Here, the customers bring their own
canisters and key in the amount of milk they want and pay for it. The bonus about this innovation
is that they don’t have to pay for packaging, making it a cheaper option for consumers. With this
innovation, customers have the chance of working within their budgets.

The system also eliminates the middle men - major diary firms - and pumps milk directly from
farms to coolers for pasteurization, from which point it goes straight to the vending machine. 
BACKGROUND INFORMATION

The business will be carried out under Innovation Power Company ltd, and will be dealing
in supply of quality and hygienic milk, that is pasteurized and ready to drink.

Vision
To be a leading supplier of pasteurized milk to final consumers in the most affordable way
using Milk ATM machines.

Mission
To maintain and sustain the supply of quality and hygienic milk and continuously meet the
demands of our clients, thus creating a steady market for milk

Objectives
 To provide quality hygienic milk that is pasteurized and ready to drink to students
and stuff in schools
 To create and increase on the market of milk for farmers by introducing a new form
of milk supply (Automatic Milk Dispensers)
 To create employment opportunities for youth
 To improve on the general people’s standard of living
 To contribute to the revenue of the country by paying tax
MODE OF OPERATION

We will be buying raw milk and pasteurize it and take it straight to the selling points where the
Milk ATM machines are stationed. It will be quality hygienic milk that is ready to drink and we are
targeting to begin selling to students and stuff in schools where we want to station the machines.
Customers will be dispensing milk directly from the machine by themselves.

Later we shall extend our service to supermarkets where we have to negotiate with the
management and then operate with in their premises and also, with the use of a mobile van, we will
have an ATM machine move around reaching to different places selling milk.

Key Benefits Using Automatic Milk Dispensers in schools

Quality Hygienic Milk

 Provision of quality milk to students that has been pasteurized and homogenized
 Milk dispenser provides a safe controlled environment for selling milk in a hygienic manner
 Fresh Milk with all the required nourishment

Extra Revenue

 Milk dispensers enables students to purchase volumes according to funds they have
 With no upfront costs, schools can earn revenue through renting space

Reduced wastage and cost control

 Students purchase only what they need to consume

 Fresh milk delivered with shelf life of up to 3 days
 Low power consumption
 Environmentally friendly

Quality control and Logistics

 Dedicated team to manage Quality Control and Logistic from source to Milk Dispenser
 Communication with the milk dispenser over GSM to enable cost management of logistics
and quality during distribution
 Reduced gap between production and delivery to ensure fresh quality milk and respond
fluctuation in demand

Smart Card System

 Smart cards that students/parents can pre-pay for milk in advance

 Offering students a rich consumer experience
 Smart card can be extended for other services such as; students ID, Library card, Exam
card, etc.

Features of an Automatic Milk Dispensing Machine

  It is designed for professional milk distribution
 Main base structure for the milk vending
 It occupies a space of 190cm x 120 cm
 Dispenser and access doors are located at the front/back
 Fitted with 250L stainless steel tanks. While 2 tanks are at work, a third tank is offsite for
washing phase
 Payment system on dispensing unit is with coins, notes, credit key, Smart card or QR Code
 GSM Alarm system with notification on how much milk is left in tank or power interruption
 Cooling system with forced aeration material
 Bearing structure of high insulation material

Stainless steel tank

 Includes distributor circuit and agitator to maintain motion inside milk tank to prevent
milk from setting
 Fitted with wheels for ease of mobility
 Nozzle to plug into the box 600 milk vending machine designed for easy connection

Dispenser unit opened

Fitted with:

o Electronic control unit for price and supply management

o Temperature control
o Stirrer management
o Integrated payment system for coins and credit keys
o Nozzle sanitization

MARKET RESEARCH

We have done enough research to know what is taking place in the market and to find out what
strategies regarding; customer needs, price and competition.

Customers

We intend to serve all milk consumers; however, we shall begin with schools, selling to students
and stuff and later we shall have stations in supermarkets and also deliver via a mobile van to reach
to the biggest number of consumers

With schools, we are through with the research where we tested the performance of the Milk ATM
machine for a period of one year at Kololo Secondary School as our case study. We went ahead
seeking for market in other schools and we allowed to operate from the following schools;
 S/N Name of the School Estimated number of Status of the school
students in the school

1 Kololo Sec school Over 3000 students Day school

2 Old Kampala Over 25000 students Day school

3 Kisubi High school Boarding school

4 Buddo Sec school Boarding school

5 St. Mary’s Kitende Boarding school

Prices

Our prices will be affordable since one can buy the measure he/she is capable of. And also since
one can also come with a container from home, it will make it cheaper compared to our rivals that
sell packed milk.

Competition

Our competitors are milk production companies including Jesa, Mega, milk man, Fido dido among
others and other milk vendors. Despite the fact that, these companies are already established,
strong financially, and known in the market, we have come up with a mode of delivery that will out
compete them when it comes to supply.

SWOT ANALYSIS

STRENGTHS

 Vast pool of highly trained and skilled manpower available to run the work stations.
 Our mode of operation since we are the pioneers of using Milk ATM machines in Uganda
 We have knowledge and experience in dairy industry
 Different mode of packaging where customers can use their own containers

WEAKNESSES

 Our competitors being already established and widely known in the market
 Limited startup capital

 OPPORTUNITIES

 Available market in schools that we have spotted

 Being the first milk suppliers using Milk ATM machines and thus no
competition(monopoly)
 Places of business extension i.e. in supermarkets and open market since the idea is not yet
in operation.

THREATS

 People coming up with the same business technology

 Seasonal fluctuations in milk production pattern that would affect the supply chain
 Changes in regulations can impact the business

Internal-External Matrices

Opportunities Threats

Strength (external/ positive) (Extern/negative)

(Internal/positive) Strength-Opportunities Strategies Strength-Threat Analysis

 With a pool of trained and skilled
manpower, we will be able to reach
to our target and upcoming market,
supply and maintain them by
keeping to our standard of quality
and hygienic milk.
 Our knowledge and experience in
 With the use of the available skilled
manpower and our experience in the
dairy industry, we will be able to
handle the competition that will
arise and also plan for the seasonal
fluctuations in milk production.
 dairy industry will contribute to our
excellency in the field
Weakness Weakness-Opportunities Strategies
(Internal negative)
 We shall have to work hard;
strategically, keeping the standard
of quality milk, supplying to schools
and extending our service to
supermarkets and delivering to
individuals using a mobile van so as
to make enough sales and boost our
financial strength as well as making
our brand known in the market
EXPRIENCE
Weakness-Threats Strategies
 Due to the fact that our competitors
are already established and widely
known, we shall have to intensively
advertise through different modes
and keep our standard to producing
and supplying quality milk in order
to deal with upcoming competition
 We shall as well go to the ground
level and negotiate with farmers
laying a strategy for the seasonal
changes in production so that we
can have a constant supply
 MILK ATM PERFOMANCE AT KOLOLO SEC SCHOOL
LITRES CONSUMED SELLING PRICE
DAY STUDENTS TEACHERS TOTAL COST PRICE STUDENTS TEACHERS TOTAL SALES GROSS PROFIT
MON 20 20 36000 80000 0 80000 44000
TUES 20 25 45 81000 80000 70000 150000 69000
WED 20 20 36000 80000 0 80000 44000
THUR 20 25 45 81000 80000 70000 150000 69000
FRID 20 20 36000 80000 0 80000 44000
TOTAL 100 50 150 270000 400000 140000 540000 270000

Monthly G.P 1080000

Exp/month
Rent 100000
Disposable 100000
Transport 120000
total exp 320,000
Net profit 760,000

net profit/term 2280000

net profit/year 6840000

MILK ATM MACHINES PERFOMANCE PROJECTION (When milk is pasteurized by other

companies)

ANNUAL PERFOMANCE PROJECTION

Ltrs consumed
    by     selling price    
Total Cost Student
  Schools Students Stuff ltrs price s Stuff Total S.P Gross Profit
Week 1 A 200 100 300 540000 800000 280000 1080000 540000
  B 200 100 300 540000 800000 280000 1080000 540000
  C 200 100 300 540000 800000 280000 1080000 540000
  D 200 100 300 540000 800000 280000 1080000 540000
  E 200 100 300 540000 800000 280000 1080000 540000
  F 200 100 300 540000 800000 280000 1080000 540000
  G 200 100 300 540000 800000 280000 1080000 540000
  H 200 100 300 540000 800000 280000 1080000 540000
  I 200 100 300 540000 800000 280000 1080000 540000
  J 200 100 300 540000 800000 280000 1080000 540000
week 2 A 200 100 300 540000 800000 280000 1080000 540000
  B 200 100 300 540000 800000 280000 1080000 540000
  C 200 100 300 540000 800000 280000 1080000 540000
  D 200 100 300 540000 800000 280000 1080000 540000
  E 200 100 300 540000 800000 280000 1080000 540000
  F 200 100 300 540000 800000 280000 1080000 540000
  G 200 100 300 540000 800000 280000 1080000 540000
  H 200 100 300 540000 800000 280000 1080000 540000
  I 200 100 300 540000 800000 280000 1080000 540000
  J 200 100 300 540000 800000 280000 1080000 540000
week 3 A 200 100 300 540000 800000 280000 1080000 540000
  B 200 100 300 540000 800000 280000 1080000 540000
  C 200 100 300 540000 800000 280000 1080000 540000
  D 200 100 300 540000 800000 280000 1080000 540000
  E 200 100 300 540000 800000 280000 1080000 540000
  F 200 100 300 540000 800000 280000 1080000 540000
  G 200 100 300 540000 800000 280000 1080000 540000
  H 200 100 300 540000 800000 280000 1080000 540000
  I 200 100 300 540000 800000 280000 1080000 540000
  J 200 100 300 540000 800000 280000 1080000 540000
week 4 A 200 100 300 540000 800000 280000 1080000 540000
  B 200 100 300 540000 800000 280000 1080000 540000
  C 200 100 300 540000 800000 280000 1080000 540000
  D 200 100 300 540000 800000 280000 1080000 540000
  E 200 100 300 540000 800000 280000 1080000 540000
  F 200 100 300 540000 800000 280000 1080000 540000
  G 200 100 300 540000 800000 280000 1080000 540000
  H 200 100 300 540000 800000 280000 1080000 540000
  I 200 100 300 540000 800000 280000 1080000 540000
  J 200 100 300 540000 800000 280000 1080000 540000
TOTAL G.P                 21600000
   
Monthly expenses Amount  
Rent 200000  
Fuel 600000  
salary 250000  
disposables 120000  
total 1170000  
total*10 11700000  
NET PROFIT                 9900000
   
PROFIT/TERM 29700000
PROFIT/YR                 89100000

REQUIRED START UP CAPITAL

 QTY Unit Price Amount
EQUIPMENTS
Milk ATM machine 10 10000000 100000000
Generators 10 2000000 20000000
Pasturiser 500ltrs 20350000 20350000
Van 1 150000 150000
Pallets 10 100000 1000000
Total 141500000

WORKING CAPITAL for a Year Per Month Per Year

Rent 200000 1800000
milk 2160000 19440000
Disposables 360000 3240000
Fuel 600000 5400000
electricity
Salary 250000 2250000
Total 32130000

TOTAL CAPITAL 173630000