Inventory Strategy For Processing Independent Demand A Study On Amul

INVENTORY STRATEGY FOR PROCESSING INDEPENDENT DEMAND
(A Study on Amul)
Dissertation Submitted to Assam University, Silchar for the award of the Degree of Business Administration
By
SAGARDWIP DEY
Under the guidance of

DR D. GHOSH
DEPARTMENT OF BUSINESS ADMINISTRATION
JN SCHOOL OF MANAGEMENT STUDIES

ASSAM UNIVERSITY SILCHAR 788 011, INDIA MAY 2012
DEPARTMENT OF BUSINESS ADMINISTRATION ASSAM UNIVERSITY

(A Central University) SILCHAR-788011 (Assam)
: 03842-270200, 270847
Dr .D.Ghosh
CERTIFICATE
I certify that the work entitled INVENTORY STRATEGY FOR PROCESSING INDEPENDENT DEMAND written and submitted by Sri Sagardwip Dey in partial fulfillment of the requirement for the Degree of Master of Business Administration is a work by him. Sri Sagardwip Dey is a very hard working and sincere student.
Dated, Silchar The 16th May, 2012
(Debomalya Ghosh)
Preface
I SAGARDWIP DEY declare that the project report titled INVENTORY STRATEGY FOR PROCESSING INDEPENDENT DEMAND in Amul Silchar, carried out by me under the supervision of Dr.D.Ghosh is the result of the original work done by me. To the best of my knowledge and belief this report would not be submitted to any other institution apart from Department of Business Administration of Assam University or any other organization for using any purposes. My special thanks are to Mr. Ajay Agarwal & my friends who helped me a lot in data collection and their encouragement in the successful completion of my work. For the Purpose of the research I have visited Amuls warehouse, distributor & retailers
Dated, Silchar The 16th May 16, 2012
(Sagardwip Dey)
INDEX
Chapters INTRODUCTION
Introduction of study Objectives of study Scope of study CONCEPTUAL & THEORITICAL FRAME Meaning & definition of inventory Classification of inventory Risk & cost associated with inventory Understanding inventory management Historical review of inventory management Types of inventory Inventory cost Purpose of inventory management Benefits of inventory management Inventory control techniques
Page no.
6-7 7 7 7 8-19 9 9 9 11 12 13 14 15 15 16
ORGANIZATION PROFILE Introduction Organization overview Organization structure Production function Operation analysis Amul supply chain Plant
20-50 21 25 28 30 30 33 34
Amul products Amul product history
36 50
RESEARCH METHODOLOGY Research meaning Research design Nature of data Research type Sampling size & technique
51-53 52 52 52 53 53
DATA ANALYSIS & INTERPRETATION Inventory movement data Findings Suggestions Conclusion
54-92 55 91 92 92
APPENDIX BIBILOGRAPHY
93-99 100-101
CHAPTER 1 INTRODUCTION
INTRODUCTION OF THE STUDY

This study is about the inventory management of Amul in Silchar town. Every enterprise needs inventory for smooth running of its activities. It serves as a link between the production and distribution process. The greater a time lag, the higher the requirement of inventory the unforeseen fluctuation of inventory demand and supply of goods, fluctuating inventory prices, necessitate the need for inventory management. The investment inventory constitutes the most significant part of the current assets inventory of the under taking. Thus it is very essential to have a proper control and management of inventory. Inventories cost account for nearly 55 percent of the cost of production, as it is clear from an analysis of financial statements of large number of private and public sector organizations. So, it essential to establish suitable procedures for proper control of materials from the time of purchase order placed with supplier until they have been consumed properly. This study is about how the distributors are managing their inventory, what are the problems they are facing and what are the inventory techniques they are using to maintain the inventory level.
OBJECTIVE OF THE STYDY

To understand the practical concept of Inventory Management &and analyze the management technique used in managing the inventory. To find the problems faced by retailers & distributors in selling and storing. To collect the information about the movement of Inventory in the lower leg.
SCOPE OF THE STUDY

The study carried out in Silchar city so its scope is mainly limited to Silchar city. It gives information about the size of the retail network. It gives information about the services given by distributor to their retailer It will served retailer & consumer in better manner. It provides suggestions to the company to improve their inventory strategy.
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CHAPTER 2 CONCEPTUAL & THEORITICAL FRAME
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MEANING AND DEFINITION OF INVENTORY

The term inventory is originated from the French word Inventaire and the Latin Inventariom which implies a list of things found. The term inventory has a wider meaning then the term Materials or store. According to the Institute of Chartered Accountant of India inventory means Tangible Property held a) For sale in the ordinary course of business. b) In the process of production for sale. c) For rendering of services.
The term inventory refers to the stockpile of the products a firm is offering for sales and the components that make up the product. Inventories are the stocks of the product of a company, manufacturing for sale and the components that make up the product. The various forms in which inventories exist in manufacturing company are (1) raw material (2) work-in process, (3) finish goods and (4) store and spares. However, in commercial parlance, inventory usually includes store, raw material, work-in process and finish goods. The term inventory includes raw material, work-in process, finish goods packaging, spares and others stocked in order to meet an unexpected demand or distribution in the future.
CLASSIFICATION OF INVENTORIES
Classification of Inventory
Production Inventory
Work-in Progress
Finished goods
MRO inventory
1. Production Inventory In production inventory there are two types of production inventory that are as follows: a) Material, which are purchases from the market like raw material and readymade Parts & components require for manufacturing of equipment.
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b) Special part or component manufactured in once own company & kept in stock for uses in manufacturing. 2. Maintenance Repair Operating supplies (MRO Inventory) There are material purchase from vendor & require for Maintenance or production process. 3. Work in progress There are semi-finished products in various stages of production on the factory floor. 4. Finished goods inventory These consist of manufactured kept in warehouses or retail outlets & are meet for sale.
RISKS & COST ASSOCIATED WITH INVENTORIES

Holding of inventories exposes the firm to a number of risks & costs. Risk of holding inventories can be put as follows:i) Price decline This may be due to increase in the market supply of the product, introduction of a new competitive product price-cutting by the competitors etc. ii) Product deterioration This may be due to holding a product for too long a period for too long a period or improper storages condition. iii) Obsolescence This may be due to change in customers taste, new production technique improvements in the product design, specifications etc.
THE COSTS OF HOLDING INVENTORY

i) Material costs This includes the cost of purchasing the goods, transportation and handling charges less any discount allowed by the supplier of goods. ii) Ordering costs This includes the variable cost associated with placing an order for the goods. The fewer the orders lower will be the ordering costs for the firm. iii) Carrying cost This includes the exposes for storing the goods. It comprises storage costs, insurance costs, spoilage costs, cost of funds tied up in inventory.
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Understanding inventory management

Every management problem is a decision problem. Decision is an important task that all organizations have to take. The allocation of resource is a common issue to all organizations. Organizations have to acquire, allocate and control the factors of production which are necessary for the achievement of the businesss objectives. Inventory management as one of the key activities of business logistics, has always been a major preoccupation for the companys survival and growth. The aim of inventory management is to hold inventories at the lowest possible cost, given the objectives to ensure uninterrupted supplies for ongoing operations. When making decisions on inventory, management has to find a compromise between the different cost components, such as the costs of supplying inventory, inventory-holding costs and costs resulting from insufficient inventories According to Wild inventory control is the activity which organises the availability of items to the customers. It coordinates the purchasing, manufacturing and distribution functions to meet the marketing needs. This role includes the supply of current sales items, new products, consumables; spare parts, obsolescent items and all other supplies. Inventory enables a company to support the customer service, logistic or manufacturing activities in situations where purchasing or manufacturing of the items is not able to satisfy the demand. Lack of satisfaction could arise either because of the speed of purchasing or manufacturing is too protracted, or because quantities cannot be provided without stocks. Clodfelter adds that a good inventory control system offers the following benefits: a) The proper relationship between sales and inventory can better be well maintained. Without inventory control procedures in place, the store or department can become overstocked or under stocked. b) Inventory control systems provide a business with information needed to take markdowns by identifying slow-selling merchandise. Discovering such items early in the season will allow a business to reduce prices or make a change in marketing strategy before consumer demand completely disappears. c) Merchandise control systems allow buyers to identify best-sellers early enough in the season so that re-orders can be placed to increase total sales for the store or department. d) Merchandise shortages and shrinkage, can be identified using inventory control systems. Excessive shrinkage will indicate that more effective merchandising controls need to be implemented to reduce employee theft or shoplifting. Emphasizing the pertinence of the topic, in 2001, Gourdin noted that inventory is one area of logistics that has received a great deal of management attention over the past decade. Executives now realize that holding excessive stocks is simply too expensive. Therefore, a great deal of effort has been expended to eliminate unnecessary inventory without compromising customer service. However, there are numerous situations where inventory simply must be held, particularly when meeting the needs of global customers.
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Managements goal should be to hold only what is necessary to satisfy customer requirements and manage it effectively (Gourdin 2001:82). Inventory problems preoccupy profit- making organizations and nonprofit institutions as well. Inventories are common to agriculture, manufacturers, wholesalers, retailers, hospitals, churches, prisons, zoos, universities and national, state and local governments. Indeed, inventories are also relevant to the family unit in relation to clothing, pharmaceutical products, food and so forth. This indicates how inventories are important and deserve a serious attention in order to achieve organizational objectives.
Historical review of inventory management

Historically, inventory management has often meant too much inventory and too little management or too little inventory and too much management. There can be severe penalties for excesses in either direction. Inventory problems have proliferated as technological progress has increased the organizations ability to produce goods in greater quantities, faster and with multiple design variations. The public has compounded the problem by its receptiveness to variations and frequent design changes . since the mid-1980s the strategic benefits of inventory management and production planning and scheduling have become obvious. The business press has highlighted the success of Japanese, European, North American firms in achieving unparalleled effectiveness and efficiency in manufacturing and distribution. In recent years, many of the firms have raised the bar, yet again by coordinating with other firms in their supply chains. For instance, instead of responding to unknown and variable demand, they share information so that the variability of the demand they observe is significantly lower Silver, Pyke and Peterson continue arguing that in the United States of America and other Western Countries, productivity improvement was pursued through reducing the amount of direct manufacturing labour expended per unit of output. This was a valid strategy because of the high labour content in many manufactured products. However, the proportion of unit cost due to labour has been steadily decreasing in recent years. In fact, the ratio of purchased materials to sales (in dollars) reached 60 percent for U.S. firms in 1985. Even large manufacturing firms, such as the U.S auto assemblers, purchase up to 60 percent of the value of the product. This implies that management of raw materials inventories is an area that shows great promise for productivity improvement. Japanese firms received much deserved attention in the mid-to late 1980s because of their remarkable performance on quality and inventory management. The tremendous interest in Just-in-Time manufacturing (JIT) indicates that work-in-process inventory management is also an area ripe for improvement.
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Types of inventory
According to Stock and Lambert, inventories can be categorized into six distinct forms that are: a) Cycle stock. Cycle stock is inventory that results from the replenishment process and is required in order to meet demand under conditions of certainty, that is, when the firm can predict demand and replenishment times (lead times) almost perfectly. For example, if the rate of sales for a constant 20 units per day and the lead time is always 10 days, no inventory beyond the cycle stock would be required. While assumptions of constant demand and lead time remove the complexities involved in inventory management, lets look at such an example to clarify the basic inventory principles. b) In-transit inventories. In-transit inventories are items that are en route from one location to another. They may be considered part of cycle stock even though they are not available for sale and /or shipment until after they arrive at the destination. For the calculation of inventory carrying costs, in-transit inventories should be considered as inventory at the place of shipment origin since the items are not available for the buyer, sale, or subsequent reshipment.
c) Safety or buffer stock. Safety or buffer stock is held in excess of cycle stock because of uncertainty in demand or lead time. The notion is that a portion of average inventory should be devoted to cover short-range variations in demand and lead time. Average inventory at a stock-keeping location that experiences demand or lead time variability is equal to half the order quantity plus the safety stock. d) Speculation stock. Speculation stock is inventory held for reasons other than satisfying current demand. For example, materials may be purchased in volumes larger than necessary in order to receive quantity discounts, because of a forecasted price increase or materials shortage, or to protect against the possibility of a strike.
e) Seasonal stock. Seasonal stock is a form of speculative stock that involves the accumulation of inventory before a season begins in order to maintain a stable labour force and stable production runs or, in the case of agricultural products, inventory accumulated as the result of a growing season that limits availability throughout the year.
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f) Dead stock is inventory that no one wants, at least immediately. The question is why any organization would incur the costs associated with holding these items rather than simply disposing of them. One reason might be that management expects demand to resume at some point in the future. Alternatively, it may cost more to get rid of an item that it does to keep it. But the most compelling reason for maintaining these goods is customer service. Perhaps an important buyer has an occasional need for some of these items, so management keeps them on hand as a goodwill gesture.
Inventory costs
According to Gourdin there are three types of costs that must be considered in setting inventory levels. a) Holding (or carrying) costs are costs such as storage, handling, insurance, taxes, obsolescence, theft and interest on funds financing the goods. These charges increase as inventory levels rise. In order to minimize carrying costs, management makes frequent orders of small quantities. Holding costs are commonly assessed as a percentage of unit value, i.e. 15 percent, 20 percent, rather than attempting to derive a monetary value for each of these costs individually. This practice is a reflection of the difficulty inherent in deriving a specific per-unit cost for, for example, obsolescence or theft. b) Ordering costs are those costs associated with placing an order, including expenses related to personnel in a purchasing department, communications and the handling of the related paperwork. Lowering these costs would be accomplished by placing a small number of orders, each for a large quantity. Unlike carrying costs, ordering costs are generally expressed as a monetary value per order.
c) Stock-out costs include sales that are lost, both short and long term. These charges are probably the most difficult to compute, but arguably the most important because they represent the costs incurred by customers (internal or external) when inventory policies falter. Failure to understand these costs can lead management to maintain higher (or lower) inventory levels than customer requirements may justify.
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PURPOSE OF INVENTORY MANAGEMENT

1. To maintain independence of operations Provide optimal amount of cushion between work centers Ensure smooth work flow 2. To allow flexibility in production scheduling 3. To meet variation in product demand 4. To provide a safeguard for variation in raw material or parts delivery time Protect against supply delivery problems (strikes, weather, natural disasters, war, etc.) 5. To take advantage of economic purchase-order size
BENEFITS OF INVENTORY MANAGEMENT 1. 2. 3. Reduced stocking costs resulting from efficient matching of requirements to stock Re-order recommendations highlight urgent needs. Help prevent Stock-outs. Instant access to 24 month usage pattern aids decision making reveals trends. Old
data easily purged. 4. 5. 6. 7. 8. 9. Automatic capture on audit trail of all stock movement details helps resolve Instant month-end valuation of receipt, issues adjustment etc. Rapid stock and work-in progress evaluation. True multi-location without constraints. Easy monitoring of slow moving stocks. Automation of inventory checking cycles ensures that items are not forgotten.
Improves accuracy 10. Automatic tracking of scrap rates and recalculation of safety levels reduces effort, improves control 11. ABC analysis system focused attention on high value stock holdings.
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INVENTORY CONTROL TECHNIQUES

Inventory control techniques are employed by the inventory control organization within the framework of one of the basic inventory models, viz. Fixed order quantity systems or fixed order period system. Inventory control techniques represent the operational aspect of inventory management and help realize the objectives inventory management and control. Several techniques of inventory control are in use and it depends on the convenience of the firm to adopt of the techniques. What should be stressed, however, is the need to cover all items of inventory and all stages, i.e. from the stage of receipt from supplies to the stage of their use. The techniques are most commonly used are the following, Economic Order Quantity (EOQ) Continuous Review Periodic Review Systems Hybrid system Economic Order Quantity (EOQ) How much to order Major decision area where focus on decision regarding how much Quantity to order at a time is important case of inventory management. Number of techniques has been developed to help managers in this decision. Most widely used technique is Economic order Quantity. This represents the size of an order for which the total cost is minimum economy in purchasing. Total cost for this purpose consist 2 major costs a) Ordering cost or procurement cost. b) Carrying / Holding cost. Where, These two types of cost are opposed to one another. The ordering cost decrease while carrying cost increases with every increase in Qty of purchase order. So the management has to take decision that there will be balance between 2 opposing cost to have EOQ with minimum total cost. How to calculate EOQ:1) Mathematical approach calculate by formula. 2 AB EOQ = -------(in units) C S
Where,
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A = Annual usage in units B = Cost of placing an order C = cost per unit S = Carrying cost as a percentage of Aug inventory. If EOQ determined in terms of rupees where annual usage expressed in rupees by formula Annual usage = annual usage unit unit cost. Continuous Review A continuous review (Q) system, sometimes called a reorder point (ROP) system or fixed order-quantity system, tracks the inventory of an item each time withdrawal is made to determine whether it is time to reorder. In practice, these reviews are done are done frequently and are often continuous. At each review, a decision is made about an items inventory position. If it is judged to be too low, the system triggers a new order. Inventory Position= On-Hand inventory + Scheduled receipt Backorders IP = OH + SR BO When demand is certain When demand & lead time are constant. The downward-sloping line represents the onhand inventory, which is being depleted at a constant rate. When it reaches reorder point, a new order is placed. The on-hand inventory continues to drop throughout lead time until the order is received. At that time, this marks the end of the lead time, on hand inventory jumps up. A new order arrives just when the inventory drops to 0. The time between orders is the same for each cycle.
IP IP Q IP Order received
On-hand inventory
OH
Order Placed L TBO TBO L L TBO 19 Time
When demand is uncertain In reality demand & lead times are not always predictable. This system operates when demand is variable and uncertain. We assume that the variability in lead times is negligible and, therefore, can be treated as constant. The wavy downward-sloping line indicates the demand varies from day to day. Its slope is steeper in the second cycle, which means the demand rate is higher during this time period. The changing demand rates means the time between order changes, so TBO1TBO2TBO3. Because of uncertain demand, sales during lead time are unpredictable, and safety stock is added to hedge against lost sales. This addition is why re-order level is higher in this than the reorder level of certain demand.
Periodic review system

An alternative inventory control system is the periodic review (P) system, sometimes called a fixed interval recorder system or periodic record system. In this system an items inventory position is received periodically rather than continuously.
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Hybrid Systems
Various hybrid inventory control systems merge some but not all features of the P & Q systems. There are two types Optional Replenishment System Base-stock system Optional Replenishment System It is used to review the inventory position at fixed time interval and, if the position has dropped to (or below) a predetermined level, to place a variable size order to cover expected needs. Base-stock system In this system replenishment order is issued each time when withdrawal is made, for the same amount of withdrawal.
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CHAPTER 3 ORGANIZATION PROFILE
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AMUL means "priceless" in Sanskrit. A quality control expert in Anand suggested the brand name Amul, from the Sanskrit Amoolya, Variants, all meaning "priceless", are found in several Indian languages. Amul products have been in use in millions of homes since 1946. Amul Butter, Amul Milk Powder, Amul Ghee, Amulspray, Amul Cheese, Amul Chocolates, Amul Shrikhand, Amul Ice cream, NutrAmul, Amul Milk and Amulya have made Amul a leading food brand in India. Today Amul is a symbol of many things. Of high-quality products sold at reasonable prices, of the genesis of a vast co-operative network, of the triumph of indigenous technology, of the marketing savvy of a farmers' organization and have a proven model for dairy development. Symbol of Amul is a ring of four hands, which are coordinated each other .The actual meaning of this symbol is coordination of hand of different people by whom this union is now at top. First hand is for the farmers (producers), without whom the organization would do not existed. Farmers are the inspiration of the AMUL the taste of India. Second hand is for the representatives of processors by whom the raw milk processed into different finished products. Third hand is for marketers without whom the product would have not been able to reach to the customer. Fourth hand is for customers without whom the organization could not carry on because they are the people who consume the product. The union of Amul would not have been the second biggest successful company in the world without the coordination of the above four hand
The Birth of Amul

Milk, The inspiration behind a revolution Over six decades ago the life of a farmer in Kaira was very much like that of farmers anywhere else in India. His income was derived almost entirely from seasonal crops. Many poor farmers faced starvation during off-seasons. Their income from milch buffaloes was undependable. The milk marketing system was controlled by contractors and middlemen. As milk is perishable, farmers were compelled to sell their milk for whatever they were offered. Often they had to sell cream and ghee at a throwaway price.
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They were in general illiterate. But they could see that the system under which contractors could buy their produce at a low price and arrange to sell it at huge profits was just not fair. This became more noticeable when the Government of Bombay started the Bombay Milk Scheme in 1945. Milk had to be transported 427 kilometers, from Anand to Bombay. This could be done only if milk was pasteurized in Anand. After preliminary trials, the Government of Bombay entered into an agreement with Polsons Limited to supply milk from Anand to Bombay on a regular basis. The arrangement was highly satisfactory to all concerned except the farmers. The Government found it profitable; Polsons kept a good margin. Milk contractors took the biggest cut. No one had taken the trouble to fix the price of milk to be paid to the producers. Thus under the Bombay Milk Scheme the farmers of Kaira District were no better off ever before. They were still at the mercy of milk contractors. They had to sell their milk at a price the contractors fixed. The discontent of the farmers grew. They went in deputation to Sardar Patel, who had advocated farmers co-operatives as early as 1942. Sardar Patel reiterated his advice that they should market their milk through a co-operative society of their own. This co-operative should have its own pasteurization plant. His advice was that the farmers should demand permission to set up such a co-operative. If their demand was rejected, they should refuse to sell their milk to middlemen. Sardar Patel pointed out that in undertaking such a strike there should be some losses to the farmers as they would not be able to sell their milk for some time. If they were prepared to put up with the loss, he was prepared to lead them. The farmers deputation readily accepted his proposal. Sardar then sent his trusted deputy, Mr. Morarjibhai Desai, to Kaira District to organize milk co-operative and a milk strike if necessary. Mr. Desai held a meeting in Samarkha village on January 4, 1946. It was resolved that milk producers cooperative societies should be organized in each village of Kaira District to collect milk from their member-farmers. All the milk societies would federate into a Union which would own milk processing facilities. The Government should undertake to buy milk from the Union. If this wasnt done, the farmers would refuse to sell milk to any milk contractor in Kaira District.
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The Government turned down the demand. The farmers called a milk strike. It lasted 15 days. Not a drop of milk was sold to the milk merchants. No milk reached Bombay from Anand, and the Bombay Milk Scheme almost collapsed. After 15 days the milk commissioner of Bombay, an Englishman, and his deputy visited Anand, assessed the situation and accepted the farmers demand.This marked the beginning of the Kaira District Cooperative Milk Producers Union Limited, Anand. It was formally registered on December 14, 1946. Its objective was to provide proper marketing facilities for the milk producers of the district. The Union began pasteurizing milk in June 1948, for the Bombay Milk Scheme just a handful of farmers in two village co-operative societies producing about 250 liters a day. An assured market proved a great incentive to the milk producers in the district. By the end of 1948, 432 farmers had joined village societies, and the quantity of milk handled by the Union had increased to 5000 liters a day. In the early stages, rapid growth brought in its wake serious problems. Their solution provided the stimulus for further growth. For example, as the co-operative movement spread in the district, it was found that the Bombay Milk Scheme could not absorb the extra milk collected by the Union in winter, when buffaloes yielded an average of 2.5 times their summer yield. Thus by 1953, the farmer-members had no regular market for the extra milk produced in winter. They were again forced to sell a large surplus at low rate to middlemen. The only remedy was to set up a plant to process the extra milk into products like butter and milk powder. The logic of this step was readily accepted by the Government of Bombay and the Government of India, except for a few doubting Thomases. The government of India helped the Union to get financial help from UNICEF and assistance from the Government of New Zealand under the Colombo Plan. Technical aid was provided by F.A.O. A Rs.50 lakh factory to process milk powder and butter was blueprinted. Its foundation stone was laid by the then President of India the late Dr. Rajendra Prasad on November 15, 1954. The project was completed by October 31, 1955, on which day the late Pandit Jawaharlal Nehru, the then Prime Minister of India, declared it open. The new dairy provided a further fillip to the co-operative movement among milk producers. The union was thus enabled to organize more village cooperative societies and to handle more and more milk each year. This event also brought a breakthrough in dairy technology as the products were made processing buffalo milk for the first time in the world. Kaira Union introduced the brand Amul for marketing its product range. The word Amul is derived from Sanskrit word Amulya which means priceless or precious. In the subsequent years Amul made cheese and baby food on a large commercial scale again processing buffalo milk creating a history in the world.
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1964 was the turning point in the history of dairy development program in India. Late Shri Lal Bahadur Shastri, the then Prime Minister of India who visited Anand on 31s October for inauguration of Amuls Cattle Feed Plant, having spent a night with farmers of Kaira and experiencing the success wished and expressed to Mr Kurien, then the General Manager of Amul that replicating Amul model throughout our country will bring a great change in the socio-economic conditions of the people. In order to bring this dream into reality, 1965 The National Dairy Development Board (NDDB) was established at Anand and by 1969-70 NDDB came out with the dairy development program for India popularly known as Operation Flood or White Revolution. The Operation Flood program, even today, stands to be the largest dairy development program ever drawn in the world. This saw Amul as model and this model is often referred in the history of White Revolution as Anand Pattern. Replication of Anand Pattern has helped India to emerge as the largest milk producing nation in the world.
The Amul Model

The Amul Model of dairy development is a three-tiered structure with the dairy cooperative societies at the village level federated under a milk union at the district level and a federation of Establishment of a direct linkage between milk producers and consumers by eliminating member unions at the state level. Middleman. Milk Producers (farmers) control procurement, processing and marketing
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The Amul model has helped India to emerge as the largest milk producer in the world. More than 13 million milk producers pour their milk in 1, 28,799 dairy cooperative societies across the country. Their milk is processed in 176 District Co-operative Unions and marketed by 22 State Marketing Federations, ensuring a better life for millions.
The Organization An Overview

GCMMF Overview: Gujarat Cooperative Milk Marketing Federation (GCMMF) is India's largest food products marketing organization. It is a state level apex body of milk cooperatives in Gujarat which aims to provide remunerative returns to the farmers and also serve the interest of consumers by providing quality products which are good value for money.
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Gujarat Cooperative Milk Marketing Federation Ltd (GCMMF) is the largest Organization in FMCG industry engaged in marketing of milk & milk products under the brand names of AMUL and SAGAR with an annual turnover exceeding Rs 5000 crores. GCMMF is a unique organization. It's a body created by Farmers, managed by competent professionals serving a very competitive and challenging consumer market. It is a true testimony of synergistic national development through the practice of modern management methods. Vision: GCMMF will be an outstanding marketing organization, with specialization in marketing of food and dairy products both fresh and long life with customer focus and IT integrated. The network would consist of over 100 offices, 7500 stockiest covering at least every Taluka. Head quarter servicing nearly 10 lakhs outlets with a turnover of Rs.10, 000 Cr and serving several co-operatives. GCMMF shall also create markets for its products in neighboring countries. Mission: We at GCMMF endeavor to satisfy the taste and nutritional requirements of the customer of the world through excellence in the marketing by our committed team. Through cooperative networking, we are committed to offering quality product that provides best value for money.
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Number of Producer Members
6,34,675
Number of Village Dairy Cooperative Societies 1163 Total Milk Handling Capacity Milk Collection (Daily Average 2010-11) Milk Drying Capacity Whey Drying Capacity Cattle Feed Manufacturing Capacity 2.4 Million liters per day 1.5 Million liters 100 Mts per day 60 Mts per day 1100 Mts per day
Sales Turnover
Sales Turnover 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 Rs (Million) 5090 4690 4880 5460 6000 7090 8220 10770 13780 16950 21110 US $ (in million) 113 100 102 116 138 160 202 272 310 360 469
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Organization Structure:
Organization Structure is divided into two parts: External Organization Structure Internal Organization Structure
External Organization Structure
External Organization Structure is the organization structure that affects the organization from the outside. The following is internal organization chart of Amul.
State Level Marketing Federation
District Milk Product Union Ltd
Village Milk Product Union Ltd
Villagers
External Organization Structure Chart
As we know, GCMMF is unit of Gujarat Milk Marketing Federation, which is a cooperative organization. The villagers of more than 10000 villages of Gujarat are the bases of this structure. They all make village milk producers union, district level milk producers union and then a state level marketing federation is established. The structure is line relationship, which provides easy way to operation. It also provides better communication between two stages
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Internal Organization Structure:
The following is internal organization chart of Amul: Chairman
Managing Director
General Manager
Asst. General Manager
Internal Organization Structure Chart
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Production Function:
Expansion of the production technology and changes in technical field is going to bring out revolution in the industry sector which eventually gives stand to study and favors the come backing subject i.e. production and management. Production and operation management is planning, organizing, staffing, directing and controlling of all the production system that portion of organization that converts inputs into products and services. In general production system takes raw material, personnel, machines, buildings and other resources and produce products and services. The core of production system is its conversion subsystem where in workers; raw materials are used to convert inputs into products and services. This production department is at heart of the firm, as it is able to produce low cost products and superior quality in timely manners. Thus, there arises enormous need of giving due importance to this department as a whole and a strong concrete base being foundation pillars of a manufacturing organization, if the intention is to succeed domestically and globally.
Operating AnalysisAmuls only source of raw material is Village Milk societies. Milk is brought from such village milk societies every morning and evening. This milk is then sent to the dairy plant. In the dairy plant the milk is processed i.e. it is made free from germs.
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Milk Processing
The entire process of milk can be divided into following steps:
Milk Processing Chart
Distribution Network:
Most producers work with marketing intermediaries to bring their products to market. The marketing intermediaries make up a marketing channel also called distribution channel. Distribution channels are sets of interdependent organizations involved in the process of making a product or service available for use or consumption. The Head Office of GCMMF is located at Anand. The entire market is divided in 5 zones. The zonal offices are located at Ahmadabad, Mumbai, New Delhi, Kolkata and Chennai.
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Moreover there are 49 Depots located across the country and GCMMF caters to 13 Export markets. A zero level of channel also called a direct marketing channel consists of a manufacturer selling directly to the final customers. A one level channel; contains one selling intermediary such as retailer to the final customers. A two level channel two intermediaries are typically wholesaler and retailer. A three level channel are typically wholesaler, retailer and jobber in between. GCMMF has an excellent distribution. It is its distribution channel, which has made it so popular. GCMMFs products like milk and milk products are perishable. It becomes that much important for them to have a good distribution.
Distribution Chart
We can see from above figure that GCMMF distribution channel is simple and clear. The products change hands for three times before it reaches to the final consumer. First of all the products are stored at the Agents end who are mere facilitators in the network. Then the products are sold to wholesale dealers who then sell to retailers and then the product finally reaches the consumers.
Distribution Chart
34
Amuls Supply Chain
Farmer s
Village
Cooperative Societies (Without
Network Services Milk Processing
Village Cooperative Societies
Local Restaurants/Ot her Milk related Chilling
Milk Sold to Village & Local
Union &
* Veterinary
Services * Animal Husbandry * Animal Feed
Warehouses
Wholesalers/C&S Retailers Home Delivery Contractors CONSU CONSUM
Factory
* Milk Can Producers *
35
Plants
First plant is at ANAND, which engaged in the manufacturing of milk, butter, ghee, milk powder, flavored milk and buttermilk.
Second plant is at MOGAR, which engaged in manufacturing chocolate, nutrAmul, Amul Ganthia and Amul lite
36
Third plant is at Kanjari, which produces cattle feed.
Fourth plant is at Khatraj, which engaged in producing cheese.
Today, twelve dairies are producing different products under the brand name Amul. Today Amul dairy is no. 1 dairy in Asia and no. 2 in the world, which is matter of proud for Gujarat and whole India.
37
AMUL PRODUCTS
Product Name: Amul Gold Packing: Poly Pack - 500ml, 1000ml, 5 Ltr Shelf Life: 48 Hours from the date of packing Storage condition: Under Refrigeration (Below 8C)
Product Name: Amul Taaza Packing: Poly Pack - 500ml, 1000ml, 200ml, 5 Ltr Shelf Life: 48 Hours from the date of packing Storage condition: Under Refrigeration (Below 8C)
Product Name: Amul Butter
Packing: 100g, 500g, 50g, 20g, 8.1g

Shelf Life: Best before 12 months from packaging Storage condition: At 4C or below
Product Name: Amul Lite Packing: 100g, 500g, 200g
Shelf Life: Best Before 6 months

Storage condition: Under Refrigeration below 10 C
38
Product Name: Delicious Table Margarine Packing: 100g, 500g, 200g tub & Single serve pack Shelf Life: 9 months under refrigeration Storage condition: Store Under Refrigeration under 10 C
Product Name: Amul Cooking Butter Packing: 100g, 500g, 50g, 20g, 8.1g Shelf Life: Best before 6 months from packaging Storage condition: At 4C or below
Product Name: Amul Processed Cheese Packing: Cheese Block( 200g,400g, 1 kg) Cheese Tins (400g NEOE,EOE),EOE tin has an easy open end Cheese Slices (200g,400g,750g), Amul A+ Cheese Slices 200g Cheese Chiplets (200g, 500g and 1 kg) Shelf Life: 9 Months for Cheese Tins and Cheese Chiplets and 6 Months for Cheese Blocks and Cheese Slices Storage condition: Refrigerated at 4C or below.
Product Name: Amul Emmental Cheese Packing: Amul Emmental Cheese is available in a 400 gm pack for the comsumer and a large wheel (5.5 Kg) for the institutional segments. Shelf Life: 45 days from date of packaging Storage condition: Refrigeration temperature i.e. 4 Centigrade to 8 Centigrade 39
Product Name: Amul Gouda Cheese Packing: Amul Gouda Cheese is available in a 250 gm pack for the comsumer and a larger wheel of 1 Kg for the institutional segments. Shelf Life: 6 Months from date of packaging Storage condition: Refrigeration temperature i.e. 4 Centigrade to 8 Centigrade
Product Name: Amul Cheese Spread Packing: Amul Cheese Spread Tub 200g (Plain, Pepper, Garlic,) Shelf Life: Storage condition:
Product Name: Amul Pizza Mozarella Cheese

Packing: 1 kg Pack, 200g pack Shelf Life: 6 Months from date of packaging Storage condition: To be stored in the deep fridge compartment of the refrigerator.
Product Name: Amul Gold

Packing: 1000 ml Shelf Life: 180 days when stored in cool and dry place Storage condition: Ambient
40
Product Name: Amul Taaza Packing: 1000 ml, 500 ml & 200 ml Shelf Life: 180 days when stored in cool and dry place Storage condition: Ambient
Product Name: Amul Calci+ Milk Packing: 1000 ml & 200 ml Shelf Life: 120 days when stored in cool and dry place Storage condition: Ambient
Product Name: Amul Lite Milk Packing: 1000 ml, 200 ml Shelf Life: 180 days when stored in cool and dry place Storage condition: Ambient
Product Name: Amul Kool Koko Packing: 200 ml Glass Bottle, 250 ml Can & 200 ml Tetra Shelf Life: 180 days when stored in cool and dry place Storage condition: Ambient
41
Product Name: Amul Kool Milk Shaake Packing: Can: 220ml and Tetra: 180ml Shelf Life: Best before 180 days from date of packing Storage condition: Needs no refrigeration until opened
Product Name: Nutramul Energy Drink Packing: Shelf Life: Best before 180 days from date of packing Storage condition: Needs no refrigeration until opened
Product Name: Amul Masti Spiced Butter Milk Packing: 200 ml & 1 Litre in Tetrapak Shelf Life: 180 days when stored in cool and dry place Storage condition: Ambient
Product Name: Amul Kool Cafe Packing: 200 ml Glass Bottle, 250 ml Can & 200 ml Tetra Shelf Life: 180 days when stored in cool and dry place Storage condition: Ambient
42
Product Name: Amul Kool Lassee Packing: 200 ml & 1 Litre in Tetrapak Shelf Life: 120 days when stored in cool and dry place Storage condition: Ambient
Product Name: Amul Prolife Probiotic Lassee Packing: 200 ml Glass Shelf Life: Best Before 10 days from Packaging Storage condition: Keep Under Refrigeration below 8 C
Product Name: Amul Prolife Buttermilk
Packing: 1 Litre Plastic Bottle

Shelf Life: 7 days when stored below 8 Celsius Storage condition: Chilled
Product Name: Amul Stamina Packing: 200 ml Tetra Pack, 250 ml Can( Orange & Lime)
Shelf Life: Best before 120 days from packaging Storage condition: Cool and dry place
43
Product Name: Amul PRO Packing: 500g Glass Cube Jar & 500g Refill Shelf Life: Best before 12 months from the date of manufacture Storage condition: Ambient
Product Name: Amul Ice Cream

Packing: Cone Cup 120 ml, 100ml, 80 ml & 50 ml 125 ml, 100 ml, 80 ml, 90 ml & 40 ml
Plastic 1 litre, 750 ml, 500 ml, 125 ml, 100 ml, 80 ml Container & 60 ml Stick 70 ml, 60 ml, 40 ml Bulk / catering packs (5 litre, 4 litre), take home packs (2.2 litre, 1.5 litre, 1.25 litre, 1 litre), combo packs (750 ml+750ml Free) and family packs (500 ml, 250 ml)
Take Home
Shelf Life: Best before 12 months from the date of manufacture Storage condition: -18C or below Product Name: Amul Flaavyo Packing: 125 ml, 500 ml cup, 5 ltr Bulk pack Shelf Life: Best Before 6 months from Packaging Storage condition: Keep Under -18C
44
Product Name: Amul Malai Paneer Packing: Diced Paneer - 100 g, 200 g & 1 kg , Block Paneer - 200 g & 1 kg Shelf Life: Best before 6 months Storage condition: Stored Frozen
Product Name: Amul Masti Dahi

Packing: Poly Pack - 200 gm, 400 gm, 1 kg , PP Cup 200 gm, 400 gm, 100 gm Shelf Life: Best Poly Pack - 7 Days from the date of packaging PP Cup - 15 Days Storage condition: Under Refrigeration (Below 80C)
Product Name: Amul Probiotic Dahi

Packing: 200g & 400g Shelf Life: Best before 6 months Storage condition: Under Refrigeration (Below 8C)
Product Name: Amul Flaavyo Yoghurt Packing: 100 g Cup Shelf Life: Best Before 15 days from Packaging Storage condition: Under Refrigeration (Below 8C)
45
Product Name: Amul Ghee Packing: Pouch: 500 ml & 1 Ltr Tin: 200ml, 280ml, 500ml, 1Lrt, 2 Ltr and 5 Ltr Refill: 200ml, 500ml and 1 Ltr PET Jar: 200ml & 500 ml Bulk Pack :10 Kg Plastic Bucket , 15 Kg Tin Shelf Life: Pouch Packing: 9 Months Tin Packing : 12 Months Refill Packing : 9 Months Jar Packing : 6 Months Bulk Packing : 12 Months Storage condition: Dry and Cool place
Product Name: Sagar Ghee Packing: Pouch: 500ml & 1 Ltr & Tin: 1 Ltr, 2Ltr & 5 Ltr Shelf Life: Pouch Packing: 9 Months & Tin Packing: 12 Months Storage condition: Dry and Cool place
Product Name: Amul Cow Ghee Packing: Pouch: 500 ml & Tin: 1 Ltr Shelf Life: Pouch Packing: 9 Months & Tin Packing: 12 Months Storage condition: Dry and Cool place
Product Name: Amulspray Packing: 1 Kg Pouch / Tin, 500g Pouch / Tin/ Refill, 200g Pouch / Refill, Rs 10 Pack, Rs 5 Pack Shelf Life: 12 months Storage condition: Ambient
46
Product Name: Amulya Packing: 1 Kg Pouch, 500g Pouch / Refill, 200g Pouch / Refill, Rs 10 Pack, Rs 5 Pack Shelf Life: 12 months Storage condition: Ambient
Product Name: Sagar Skimmed Milk Powder Packing: 500g Pouch Shelf Life: 12 months Storage condition: Ambient
Product Name: Sagar Tea & Coffee Whitener Packing: 42 g Pouch pack & 10 kg Jar Shelf Life: 12 months Storage condition: Ambient
Product Name: Amul Full Cream Milk Powder Packing: 1 Kg Pouch / Tin, 500g Pouch / Tin/ Refill, 200g Pouch
Shelf Life: 12 months

Storage condition: Ambient
47
Product Name: Nutramul Packing: 500g Refill Shelf Life: 12 months Storage condition: Ambient
Product Name: Amul Shrikhand Packing: 100g, 200g, 500g, 1 Kg, 10 Kg, 20 Kg Shelf Life: 6 months when stored at 0 C Storage condition: Refrigerated
Product Name: Amul Gulab Jamun Packing: 1 kg (26 units of Gulab Jamun), 500 g (13 units of Gulab Jamun) Shelf Life: Best before 9 months from packaging Storage condition: Cool and dry place
Product Name: Amul Basundi Packing: 500 ml Tetrapak, 1 Lit Tetrapak Shelf Life: 180 days when stored in cool and dry place Storage condition: Ambient
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Product Name: Amul Avsar Ladoo Packing: Each box contains 15 Ladoos, Net weight 500g Shelf Life: 45 Days Storage condition: Store in a cool and dry place
Product Name: Amul Mithai Mate Packing: 400 g Tin: For Household Consumption. , 7.5 kg Tin: Bakery and Institutions, 280 kg Barrel : For Industrial Use like Biscuit and Chocolate manufacturing etc Shelf Life: 400 g Tin : Best before 12 months, 7.5kgTin : Best before 6 months, 280 kg Barrel : Best before 3 months Storage condition: cool and dry place
Product Name: Amul Rejoice Assorted Chocolate Gift Packs Packing: Amul Rejoice assorted chocolate 135g, 173g, and 412g Shelf Life: 9 months Storage condition: 15 C, dry place
Product Name: Amul Cooking Chocolate Packing: 500g, 10 kg, 20 kg Shelf Life: 12 months Storage condition: 15 C, dry place
49
Product Name: Amul Chocolate Packing: Milk Chocolate 12g, 22g, 35g
Fundoo Milk Chocolate 12g, 30g Dark Chocolate 35g Fruit & Nut 40g, 2x150g
Almondbar 35g Shelf Life: 12 months Storage condition: 15 C, dry place
Product Name: Amul Chocozoo Packing: Chocozoo Tub : 500g, Chocomini Tub : 300g, Chocozoo Tin : 232g, Chocozoo Birthday pack : 81g, Chocozoo Elegant Pack : 93g, Chocozoo pack of three : 27g Shelf Life: 12 months Storage condition: 15 C, dry place
Product Name: Utterly Delicious Chocolate Syrup Packing: Chocolate syrup 650g plastic bottle, Chocolate syrup 3kg plastic Jar Shelf Life: 6 months Storage condition: Ambient, refrigerate after opening
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Product Name: Amul wafer chocolates Packing: Amul Bindaaz wafer 15g (chocolate flavor). Amul Bindaaz wafer 15g (strawberry flavor). Shelf Life: 9 months Storage condition: 15 C, dry place
Product Name: Amul Fresh Cream

Packing: 200 ml : For Household Consumption 1 Ltr : For Caterers, Hotels, Restaurants and Institutions. Shelf Life: 200ml : Best before 120 days from packaging when stored in a cool and dry place 1 Ltr : Best before 120 days from packaging when stored in a cool and dry place Storage condition: Cool and dry place
Product Name: Amul Pouch Butter Milk Packing: Poly Pack - 500ml Shelf Life: 48 Hours from the date of packing Storage condition: Under Refrigeration (Below 8C)
51
Amul product history
Amul 1956
Ice cream 1996
Chocolates 1973
Shrikhand 1980
Fresh Milk 1956
Milk Power 1958
Cheese 1962
Breadspread
Ghee 1956
Fat Free Dessert 2002
Nutrauamul 1973
Gulabjamun 1997
UHT Range 1980/99
Amulspray 1968
Cheese Spread 1986
Cow Amul Butter Ghee 1956 2002
Softy Mix 2001
Eclairs 2001
Gulabjamun mix 1999
Condensed Milk 1996
Amul WMP 1960
Paneer 1997
Amul Lite 1994
Amul Shakti 2003
Kulfi Mix 2001
Buttermilk 1998
Amulya 1987
pizza Cheese 1998
Margarine 2004
Chocozoo 2005
Laddoo 2004
fresh Curd 1999
Amul IMF 1&2 2001 Instant FCMP 2002
Emmental Cheese 1999
Basundi 2005
Flavoured Milk 2001
Frozen Pizza 2002
Khoa 2006
Fresh Cream 2002
Gouda Cheese 2002
Kool Cafe 2005
52
CHAPTER 4 RESEARCH METHODOLOGY
53
Research Meaning:
A sane inventory management is of great necessity in any business organizations. The future of business organizations depends upon how the top management defines and considers inventory in relationship with the companys objectives or service levels. Knowing factors that push to a purchasing behavior and meeting customers needs remain a crucial matter for the growth and survival in nowadays competitive market. Baki et al add that todays competitive marketing environment forces producers and customers to get closer to each other. This means organizations should give a great importance to customers needs and listen to their voices, and suppliers and customers should be closer and closer to each other in order to produce goods or services based on the customer needs. Therefore, manufacturers and service producers need an effective planning and control system for a powerful coordination in between all stages of the organizations (processes, and other). The implementation and the use of an effective planning and control system in an organization improve productivity and performance of distribution, while decreasing waiting times. The enterprise resource planning (ERP) systems are examples of the most strategic tools, which provide robust tools for planning, coordination and control of the processes in all organizations.
Research Design
A research design is a plan that specifies the objectives of the study, method to be adopted in the data collection, tools in data analysis and hypothesis to be framed. A research design is an arrangement of condition for collection and analysis of data in a manner that aims to combine relevance to research purpose with economy in procedure.
Nature of Data
The approach of this study consists of combining research into primary and secondary data. Secondary data, that is, the literature phase of the research has essentially been provided in the previous chapters. The theoretical part or the literature of the study is represented by the debate of various parameters relative to inventory management and customer service management. This is of a vital importance in the sense that it provides a measured explanation concerning inventory management and customer service management in a business logistics environment where globalization, technological innovation and changing societal expectations negatively or positively impact on the growth and survival of business organizations on one side and manufacturing industries logistics on the other. Primary data has also been analyzed in the form of an empirical study. In this phase, manufacturing industries in Gauteng Province (especially in Pretoria and Johannesburg) were included in the study. In light of the above, it has to be indicated that the respondents in this population (manufacturing industries in Gauteng Province) were precisely those dealing with inventory management and customer service management.
54
Employees or managers of business organizations that were approached were typically in manufacturing industries logistics according to sectors.
Research Type
Descriptive research, also known as statistical research, describes data and characteristics about the population or phenomenon being studied. Descriptive research answers the questions who, what, where, when, "why" and how... Although the data description is factual, accurate and systematic, the research cannot describe what caused a situation. Thus, Descriptive research cannot be used to create a causal relationship, where one variable affects another. In other words, descriptive research can be said to have a low requirement for internal validity. The description is used for frequencies, averages and other statistical calculations. Often the best approach, prior to writing descriptive research, is to conduct a survey investigation. Qualitative research often has the aim of description and researchers may follow-up with examinations of why the observations exist and what the implications of the findings are.
Sampling Size and technique

Size of the sample: It refers to the number of items to be selected from the universe to constitute as a sample. In these study 1 warehouse, 1 distributor & 25 retailers of Amul in Silchar has been taken. Sample design: The sampling technique used in this study is simple random sampling method. This method is also called as the method of chance selection. Each and every item of population has equal chance to be included in the sample. Questionnaire: The questions are arranged logical sequence. The questionnaire consists of a variety of questions presented to the employees for the response. Dichotomous questions, multiple choice questions, rating scale questions were used in constructing questionnaire.
55
CHAPTER 4
DATA ANALYSIS AND INTERPRETATION
56
Inventory Movement Data a) Inventory flow from distributor to retailer
Amulya 10 kg jar
15 level of inventory 10 5 Outwards 0 1 2 3 4 5 6 days Closing Balance Opening Balance Inwards
Opening Inwards Outwards Closing Balance Balance Standard 2.345207 Deviation 10.5 Mean
1.602082 0 0 0.833333 9.6666667 1.6329931
Amulya 25 Kg bag
40 level of inventory 30 20 10 0 1 2 3 4 5 6 days Closing Balance Opening Balance Inwards Outwards
Opening Inwards Balance Standard Deviation Mean

0.983192 0 35.8333 0
Outwards Closing Balance

2.345208 1.5 3.204163 34.33333
Amul A+ Cheese Slice 200 gm

level of inventory 150 100 50 Outwards 0 1 2 3 4 5 6 days Closing Balance Opening Balance Inwards
Opening Inwards Outwards Closing Balance Balance Standard Deviation 54.02838 Mean 64.33333
0 0 8.93868 8.5 54.13470 75.83333
57
Cheese Chiplet 200gm

160 140 120 100 80 60 40 20 0 1 2 3 4 5 6 days level of inventory Opening Balance Inwards Outwards Closing Balance
Opening Balance Standard Deviation 9.786044 Mean 128.16666
Inwards Outward s
0 0 4.27395 3.66666
Closing Balance
9.93478 124.5
Opening Balance Standard Deviation Mean

10.50714 61
Inwards Outwards Closing Balance

0 0 4.89897 4 7.26636 57
0 0 4.08248 1.66666 5.47722 10
58
Cheese Tin 400gm

70 60 50 40 30 20 10 0 1 2 3 4 5 6 days level of inventory Opening Balance Inwards Outwards Closing Balance
0 0 7.27782 5.83333 14.88175 34.66666
Almond bar 35gm

400 350 level of inventory 300 250 200 150 100 50 0 1 2 3 4 5 6 days Closing Balance Outwards Opening Balance Inwards
Opening Inwards Outwards Closing Balance Balance Standard Deviation Mean

142.4078 86 0 0 135.7743 59 10.32795 27
Pizza Cheese 200 gm

50 level of inventory 40 30 20 10 0 1 2 3 4 5 6 days Outwards Closing Balance Opening Balance Inwards

0 44 0 0 0 0 0 44
59
Amul milk chocolate 20 gm

600 500 400 300 200 100 0 1 2 3 4 5 6 days level of inventory Opening Balance Inwards Outwards Closing Balance
Opening Inwards Outwards Closing Balance Balance Standard Deviation 108.9293 Mean 408
0 0 36.48013 55 97.07522 353
0 0 8.16496 3 8.164965 223
Bindazz Wafers 18gm box

36.7423 15 19.125 10 43.01976 80
60
Bindazz Wafers 18gm jar

0 0 73.4846 30 0 241
Choco Zoo 12x300gm Tub


27.24273 76 24.4949 10 4.84768 6 26.72576 80
Choco Zoo 12x500gm Tub

10 level of inventory 8 6 4 2 0 1 2 3 4 5 6 days Closing Balance Outwards Opening Balance Inwards
0 0 0.408248 0 0.408248 8
61
0 0 60.22181 87 112.1903 1343
0 0 55.01151 32 19.043809 25
Opening Balance Standard Deviation 24.494897 Mean 70

0 0 24.4949 10 0 60
62
Fruit N NUT 40gm

0 0 10.32796 7 10.32795 27
0 0 9.62808 5 1.224744 10
Milk Chocolate 35 gm
600 level of inventory 500 400 300 200 100 0 1 2 3 4 5 6 days Closing Balance Opening Balance Inwards Outwards

76.9686 447 0 0 20.89657 37 57.94393 411
63
Rejoice Assorted 135 gm


0 5 0 0 0 0 0 5
Utterly Chocolate Syrup 650 ml

level of inventory 8 6 4 2 0 1 2 3 4 5 6 days Closing Balance Opening Balance Inwards Outwards

0 6 0 0 0 0 0 6
Amul Fresh Cream 1ltr


0 89 0 0 0 0 0 89
64
Amul Fresh Cream 200ml


0 9 0 0 0 0 0 9
Amul Butter 100gm

Opening Inwards Balance Standard Deviation 1465.734 1837.117 Mean 7925 750

214.588 1091 1516.305 7799
Amul Butter 500gm

2000 level of inventory 1500 1000 500 0 1 2 3 4 5 6 days Opening Balance Inwards Outwards Closing Balance
0 0 130.259 179 297.1514 859
65
Mithai Mate

456.8129 474 665.6646 2158
Amulspray 1kg Pch

357.189 324 121.639 188 635.32146 1699
Amulspray 18 gm Pch
Opening Balance Standard Deviation 1054.8994 Mean 7556

0 0 654.343 458 465.7948 7098
66
Amulspray 200 gm Pch

6000 level of inventory 5000 4000 3000 2000 1000 0 1 2 3 4 5 6 days Outwards Closing Balance Opening Balance Inwards

297.0056 843 1053.245 3922
Amulspray 200gm Refill

0 0 268.842 328 592.4689 1798
Amulspray 20gm pch


0 4950 0 0 0 0 0 4950
67
Amulspray 36gm pch

30000 level of inventory 25000 20000 15000 10000 5000 0 1 2 3 4 5 6 days Opening Balance Inwards Outwards Closing Balance
Opening Inwards Balance Standard Deviation 3066.791 1290.065 Mean 18919 526.6667

1843.126 2048 1256.769 17398
Amulspray 500gm pch


263.951 1600 318.9984 200

69.2023 194 258.7292 1606
Amulspray 500gm Refill

1400 1200 level of inventory 1000 800 600 400 200 0 1 2 3 4 5 6 days Closing Balance Outwards Opening Balance Inwards

47.07866 82 143.6328 1022
68
Amulspray 500gm tin


126.580 708 0 0 63.01428 54 145.847 654
Amulya 18gm Pch


739.599 4672 0 0 282.1829 370 590.748 4302
Amulya 1Kg Pch


208.834 839 122.4745 50

76.57785 151 191.709 738
69
Amulya 200gm Pch


224.927 1155 0 0 64.7611 111 174.200 1044
Amulya 20gm Pch


0 2016 0 0 0 0 0 2016
Amulya 25gm Pch

900 800 700 600 500 400 300 200 100 0 1 2 3 4 5 6 days level of inventory Opening Balance Inwards Outwards Closing Balance

0 856 0 0 0 0 0 856
70
Amulya 36gm Pch

Opening Balance Standard Deviation Mean

16319.245 19682

11757.55 9600 3078.02 6318 15117.81 22964
Amulya 475gm Pch

300 level of inventory 250 200 150 100 50 0 1 2 3 4 5 6 days Closing Balance Outwards Opening Balance Inwards

0 281 0 0 0 0 0 281
Amulya 500gm Pch


893.354 1512 534.864 472 236.2147 202 888.296 1781
71
Amulya 50gm Pch

300 level of inventory 250 200 150 100 50 0 1 2 3 4 5 6 days Outwards Closing Balance Opening Balance Inwards

0 256 0 0 0 0 0 256
Amulya 900gm Pch

1600 1400 level of inventory 1200 1000 800 600 400 200 0 1 2 3 4 5 6 days Closing Balance Outwards Opening Balance Inwards

353.395 954 296.226 225 160.7699 169 325.6878 1010
Amul Lite 200gm

70 level of inventory 60 50 40 30 20 10 0 1 2 3 4 5 6 days Closing Balance Outwards Opening Balance Inwards

23.001 29 26.12789 10.66667

16.32993 17 22.294 23
72
Nutramul 500gm Refil


0 13 0 0 0 0 0 13
Amul Ghee 1Ltr Refill


58.718 149 0 0 28.556 28 56.705 122
Amul Ghee 1Ltr Tin

140 120 level of inventory 100 80 60 40 20 0 1 2 3 4 5 6 days Closing Balance Outwards Opening Balance Inwards

26.044 104 24.4949 10 4.806246 6 22.662 108
73
Amul Ghee 5Ltr Tin


3.829 40 4.898979 2

1.974842 2 3.311 41
Basundi

0 22 0 0 0 0 0 22
Kool Bottle 200ml


433.439 9921 391.9184 160

80.95431 64 434.854 10017
74
Kool Caf Can 250ml


0 576 0 0 0 0 0 576
Kool Koko 250ml


0 597 0 0 0 0 0 597
Kool Milk Shaake Can 220ml


0 842 0 0 0 0 0 842
75
Amul Calci 1Ltr


0 48 0 0 14.69694 6 14.696 42
Amul Gold 1Ltr


75.227 164 0 0 50.30474 25 58.511 137
Amul Shakti 1ltr


0 80 0 0 0 0 0 80
76
Amul Taaza 1Ltr


1952.172 2201.817 6011 1400

342.070 990 1745.202 6422
Amul Taaza 200ml

2000 level of inventory 1500 1000 500 0 1 2 3 4 5 6 days Opening Balance Inwards Outwards Closing Balance

0 1525 0 0 0 0 0 1525
Amul Taaza 500ml


499.215 2144 293.938 120 199.0698 480 591.134 1784
77
Amul Kool Lassee 200ml

level of inventory 200 150 100 50 0 1 2 3 4 5 6 days Closing Balance Opening Balance Inwards Outwards

0 144 0 0 0 0 0 144
Gulab Jamun 1kg tin


5.465 35 9.797959 4

5.205766 4 4.996 36
Gulab Jamun 500gm tin

level of inventory 150 100 50 0 1 2 3 4 5 6 days Opening Balance Inwards Outwards

21.522 111 29.39388 12

11.183 8 17.996 115
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Total flow of different inventories

50000 Amulya 10 kg jar 45000 Amulya 25 Kg bag Amul A+ Cheese Slice 200 gm Cheese Chiplet 200gm 40000 Cheese Slice 200gm Cheese Spread 200gm Cheese Tin 400gm 35000 Pizza Cheese 200 gm Almond bar 35gm Amul milk chocolate 20 gm 30000 Amul milk chocolate 22 gm Bindazz Wafers 18gm box Bindazz Wafers 18gm jar 25000 Choco Zoo 12x300gm Tub Choco Zoo 12x500gm Tub 20000 Choco Zoo 3-pack 27gm Choco Zoo 60x81gm Birthday Dark Chocolate 35gm 15000 Fruit N NUT 40gm Fruit N NUT 150gm Milk Chocolate 35 gm 10000 Rejoice Assorted 135 gm Utterly Chocolate Syrup 650 ml Amul Fresh Cream 1ltr 5000 Amul Fresh Cream 200ml Amul Butter 100gm Amul Butter 500gm 0 DAY 1 DAY 2 DAY 3 DAY 4 DAY 5 DAY 6 DAY 7
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b) Inventory flow from retailer to customers

Amul has divided Silchar town into 6 bits these are College road, Sonai road, Hailakandi road, Central road, Tarapur & Malugram. Each bit has pre-determined day of delivery.
DAY BIT
MONDAY TUESDAY WEDNESDAY THURSDAY FRIDAY SATURDAY
College road Sonai road Hailakandi road Central road Tarapur Malugram
I.
College Road
Information regarding the flow of inventories of retailers of College Road are given below
1st Retailer
100 90 80 70 60 50 40 30 20 10 0 1 2 3 4 5 6
Almond bar 35gm Bindazz Wafers 18gm jar Choco Zoo 60x81gm Birthday Amul Butter 100gm Amul Butter 500gm
80
120 100 80 60 40 20 0 1 2 3
2nd Retailer
Amul Butter 100gm Amul Butter 500gm Amulspray 18 gm Pch Amulspray 1kg Pch Amulspray 200 gm Pch
4 5 6 Almond bar 35gm Choco Zoo 3-pack 27gm Choco Zoo 60x81gm Birthday Dark Chocolate 35gm Amul Butter 100gm Amul Butter 500gm Mithai Mate Amulspray 18 gm Pch Amul Taaza 1Ltr 1 2 3 4 5 6
70 60 50 40 30 20 10 0
3rd Retailer
4th Retailer
140 120 100 80 60 40 20 0 1 2 3 4 5 6
Amul Butter 100gm Mithai Mate Amulspray 18 gm Pch Amulspray 200 gm Pch Amulspray 500gm pch Amulya 36gm Pch Amul Taaza 1Ltr Amul Taaza 500ml
81
120 100 80 60 40 20 0 1 2 3
5th Retailer
Almond bar 35gm Choco Zoo 3-pack 27gm Dark Chocolate 35gm Mithai Mate Amulspray 18 gm Pch Amulspray 200 gm Pch Amulya 36gm Pch Amulya 500gm Pch
II.
Sonai road
Information regarding the flow of inventories of retailers of Sonai Road are given below
1st Retailer
60 50 40 30 20 10 0 1 2 3 4 5 6
Amul Butter 100gm Amul Butter 500gm Mithai Mate Amulspray 1kg Pch Amulspray 200 gm Pch Amulspray 36gm pch Amulya 36gm Pch Amul Taaza 1Ltr
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70 60 50 40
2nd Retailer
Cheese Slice 200gm Amul milk chocolate 20 gm Choco Zoo 3-pack 27gm Amul Butter 100gm Mithai Mate
30 20 10 0 1 2 3 4 5 6
Amulspray 36gm pch Amulya 18gm Pch Amulya 36gm Pch
35 30 25 20 15 10 5 0 1 2 3
3rd Retailer
Amulspray 18 gm Pch Amulspray 1kg Pch Amulspray 200 gm Pch Amulspray 36gm pch Amulya 36gm Pch Amul Taaza 1Ltr
40 35 30 25 20 15 10 5 0 1 2 3
4th Retailer
Cheese Tin 400gm Amul milk chocolate 20 gm Choco Zoo 3-pack 27gm Amul Butter 100gm Amul Taaza 1Ltr Amul Taaza 500ml
83
40 35 30 25 20 15 10 5 0 1 2 3
5th Retailer
Amul milk chocolate 20 gm Choco Zoo 60x81gm Birthday Milk Chocolate 35 gm Amul Butter 100gm Kool Bottle 200ml Amul Gold 1Ltr Amul Taaza 1Ltr Gulab Jamun 1kg tin
III.
Hailakandi road
Information regarding the flow of inventories of retailers of Hailakandi Road are given below
140 120 100 80 60 40 20 0 1 2 3
1st Retailer
Amul Butter 100gm Mithai Mate Amulspray 200gm Refill Amulya 18gm Pch Amulya 36gm Pch Amul Taaza 500ml 4 5 6
84
120 100 80 60 40 20 0 1 2 3
2nd Retailer
Cheese Tin 400gm Amulspray 200gm Refill Amulya 36gm Pch Amul Ghee 1Ltr Refill Amul Taaza 1Ltr Amul Taaza 500ml
40 35 30 25 20 15 10 5 0 1 2 3
3rd Retailer
Amulspray 500gm pch Amulya 1Kg Pch Amulya 500gm Pch Amulya 900gm Pch Amul Ghee 1Ltr Refill
4 5 6
40 35 30 25 20 15 10 5 0 1 2 3
4th Retailer
Cheese Tin 400gm Almond bar 35gm Choco Zoo 3-pack 27gm Milk Chocolate 35 gm Amul Butter 100gm Amul Butter 500gm Mithai Mate Amulspray 36gm pch
85
40 35 30 25 20 15 10 5 0 1 2 3
5th Retailer
Cheese Chiplet 200gm Amul Butter 100gm Amul Butter 500gm Amulspray 36gm pch Amulya 36gm Pch Amul Taaza 1Ltr
IV.
Central road
1st Retailer
140 120 100 80 60 40 20 0 1 2 3 4 5 6
Cheese Spread 200gm Amul milk chocolate 20 gm Amul Butter 100gm Amulspray 36gm pch Amulspray 500gm pch Amulspray 500gm tin Amulya 36gm Pch Amul Taaza 1Ltr
86
140 120 100 80 60 40
2nd Retailer
Amul A+ Cheese Slice 200 gm Cheese Tin 400gm Amul milk chocolate 20 gm Choco Zoo 3-pack 27gm Amul Butter 100gm Amul Butter 500gm Mithai Mate Amulspray 36gm pch
20 0 1 2 3 4 5 6
Amulya 1Kg Pch Amulya 36gm Pch
70 60
3rd Retailer
Amulspray 200 gm Pch Amulspray 36gm pch Amulspray 500gm pch
50 40 30 20 10 0 1 2 3 4 5 6
Amulspray 500gm tin Amulya 1Kg Pch Amulya 36gm Pch Amulya 500gm Pch Amul Taaza 1Ltr Amul Taaza 500ml Gulab Jamun 500gm tin
80 70 60 50 40 30 20 10 0 1 2 3
4th Retailer
Amul Butter 100gm Amulspray 1kg Pch Amulspray 200 gm Pch Amulspray 36gm pch Amulya 1Kg Pch
87
30 25 20 15 10 5 0 1 2 3
5th Retailer
Cheese Chiplet 200gm Cheese Tin 400gm Choco Zoo 3-pack 27gm Amul Butter 100gm Amulspray 1kg Pch Amulspray 200 gm Pch Amulspray 200gm Refill Amulya 1Kg Pch Amulya 500gm Pch Amul Taaza 1Ltr Amul Taaza 500ml
V.
Tarapur
160 140 120 100 80 60 40 20 0 1 2 3
1st Retailer
Amul Butter 100gm Mithai Mate Amulya 36gm Pch
88
60 50 40 30 20 10 0 1 2 3
2nd Retailer
Amulspray 1kg Pch Amulspray 200 gm Pch Amulspray 36gm pch Amulya 36gm Pch Amul Taaza 1Ltr
60 50 40 30 20 10 0 1 2 3
3rd Retailer
Amul Butter 100gm Amul Butter 500gm Mithai Mate Amulspray 1kg Pch Amulya 1Kg Pch Amul Taaza 1Ltr 4 5 6
45 40 35 30 25 20 15 10 5 0 1 2 3
4th Retailer
Mithai Mate Amulspray 36gm pch Amul Taaza 1Ltr Amul Taaza 500ml
89
30 25 20 15 10
5th Retailer
Amul A+ Cheese Slice 200 gm Amul milk chocolate 20 gm Amul Butter 100gm Amul Butter 500gm
5 0 1 2 3 4 5 6 Mithai Mate
VI.
Malugram
Information regarding the flow of inventories of retailers of Malugram Road are given below
80 70 60 50 40 30 20 10 0 1 2 3
1th Retailer
Amul Butter 100gm Amulspray 1kg Pch Amulspray 36gm pch Amulya 1Kg Pch
90
30 25 20 15
2nd Retailer
Cheese Tin 400gm Amul Ghee 1Ltr Refill Amul Taaza 1Ltr
10 5 0 1 2 3 4 5 6 Almond bar 35gm Choco Zoo 3-pack 27gm Dark Chocolate 35gm Mithai Mate Amulspray 18 gm Pch Amulspray 200 gm Pch Amul Taaza 1Ltr 1 2 3 4 5 6 Amul Taaza 500ml
35 30 25 20 15 10 5 0
3th Retailer
60 50 40
4nd Retailer
Amulspray 200 gm Pch 30 20 10 0 1 2 3 4 5 6 Amulspray 36gm pch Amulya 36gm Pch Amul Taaza 1Ltr
91
140 120 100 80
5nd Retailer
Cheese Tin 400gm
60 40 20 0 1 2 3 4 5 6
Amul Butter 100gm Amulspray 36gm pch
Amulya 36gm Pch
Satisfaction level of retailers regarding the distribution of Amul products Are you satisfied with the distribution of amul products?
14 12 10 8 6 4 2 0 Strongly agree Agree Neither agree nor disagree Disagree Strongly Disagree
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Findings
1. Warehouse a) They use Pull System of replenishment process. b) Generally they place order weekly but in case of shortage they place order on due date. c) They use optional replenishment system technique for inventory control. d) The lead time is three days. e) The orders grouped for dispatch is on the basis of location of distributors. f) They measure your warehouse performance on the basis of On-time Dispatch, On-time delivery, Inventory acuracy & Unit handled. g) The rate of obsolesce is less than 10%.
2. a) b) c) d) e) f)
Distributor They use Pull System of replenishment process. They place order three times in a week. They use periodic review system technique for inventory control. The lead time is 24 hrs. The orders grouped for dispatch is on the basis of location of retailers. The rate of obsolesce is more than 10%.
3. a) b) c) d) e)
Retailers They use Pull System of replenishment process. They place order one time in a week. They use periodic review system technique for inventory control. The lead time is one week. The rate of obsolesce is more than 10%.
The Overall findings are as follows:1. The retailers are not satisfied with the distribution of Amul products. 2. There is monopoly in the market due to the presence of only one distributor in the Silchar market. 3. Amul warehouse is not providing all the SKUs regularly.
93
4. When there is excess of inventory, they use to dump their products in the lower leg (specially Amul Taza). 5. As per Amul officials the obsolesce rate is less than 10%. But as per the distributor & retailers it is more than 10%.
Suggestions
1. As the retailers are not satisfied with the distribution of Amul products, the efficiency level of distribution should be increased. And the distribution should be done more than once in a week. 2. Proper forecasting should be done by Amul officials to overcome overstocking & stock out problem. 3. They should provide regularly all those SKUs which they have already provided to the consumers. 4. The Amul officials should take feedback from the retailers & consumers to understand their needs & wants. 5. Amul officials should take strict steps to stop this monopoly.
Conclusion
Inventory is a quantity or store of goods that is held for some purpose or use (the term may also be used as a verb, meaning to take inventory or to count all goods held in inventory). Inaccurate inventory counts can cost you sales and delay shipments past the promise date. Out-of stock items as well as overstocked items in inventory can be devastating to your business. Additionally, an overstated or understated inventory valuation can result in incorrectly reported assets within your financial statements. Inventory Management offers comprehensive reporting capabilities to keep you on top of inventory status. Centralized inventory management consolidates inventory information by tracking lot numbers, on-hand levels and expiration dates, making the re-ordering process more efficient. It also enables simultaneous tracking and documenting supplies during studies to reduce redundant data entry and increase workflow efficiency. So the biggest challenge Amul has to deal with was managing the continuous flow of all SKUs in the Silchar market to have competitive edge over the competitors.
94
APPENDIX
95
(QUESTIONARE) (Warehouse) Dear Sir/Madam I am a student of Dept. of Business Administration of Assam University, Silchar. I am doing my project in operations management on the topic INVENTORY STRATEGY FOR PROCESSING INDEPENDENT DEMAND. For the completion of the project I kindly request your valuable opinion& suggestion & I expect your co-operation also to fill the questionnaire given below. I assure you that the information furnished will be strictly confidential & used for academic purpose only. (Sagardwip Dey)
1. What is the replenishment process? Pull System Push system 2. How frequently you place order in C&F/Plant? Weekly Fortnight Any other ___________________________ 3. What inventory control system you are using? Continuous review system Periodic review system Optional replenishment system Base stock system Any other _______________ 4. What is the lead time? 24hrs 48hrs 1 week 15 days Any other ______________ 5. Different stock keeping units do you currently having in your following products? I. Amul Butter 20g ______ 50g _______ 100g______ 500g____ II. Amul Cheese 400g ______ III. Amul Gold 1L ______ IV. Amul Taza 1L _______ 200 ml ______ 500 ml ______ V. Amul Kool Cafe 200ml glass bottle _______ 250ml can________ VI. Amul Kool Lassee 200ml _____ VII. Amul Spray 1kg _____ 200gm_____ 500gm _____ VIII. Amullya 1kg _____ 200gm_____ 500gm _____ IX. Amul Mithai Mate 400g Tin ____ X. Amul Chocolate a) Milk chocolate 12g _____ b) Fundoo milk chocolate 12g _____ c) Dark chocolate 35g _____ d) Fruit & Nut 40g _____ e) Almond Bar 35g _____ XI. Amul chocolate Syrup 650g plastic bottle ______ XII. Amul Bindaaz wafer 15g _____ XIII. Amul Fresh cream 200 ml ______ 1L _____
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Amul Rejoice Associated chocolate 135g _____ 173g _____ 412g _____ 6. How are orders grouped for dispatch? By location of distributors / stock list / customer On first booked first dispatch basis irrespective of location & item By similar items By route Any other ____________________ 7. How you measure your warehouse performance On-time Dispatch On-time delivery Inventory acuracy Accuracy of invoice Stock outs Mismatch / error in dispatch Warehouse cycle time Customer complains Unit handled Value handled Do not measure Any other _________ 8. What is the average replenishment time for the dealers/distributors? 24hrs 48hrs 1 week 15 days Any other ______________ 9. What is the rate of obsolete inventory? <10% 10-25% 25-50% >50%
XIV.
97
(QUESTIONARE) (Distributor) Dear Sir/Madam I am a student of Dept. of Business Administration of Assam University, Silchar. I am doing my project in operations management on the topic INVENTORY STRATEGY FOR PROCESSING INDEPENDENT DEMAND. For the completion of the project I kindly request your valuable opinion& suggestion & I expect your co-operation also to fill the questionnaire given below. I assure you that the information furnished will be strictly confidential & used for academic purpose only. (Sagardwip Dey)
1. What is the replenishment process? Pull System Push system 2. How frequently you place order ? Weekly Fortnight Any other ___________________________ 3. What inventory control system you are using? Continuous review system Periodic review system Optional replenishment system Base stock system Any other _______________ 4. What is the lead time? 24hrs 48hrs 1 week 15 days Any other ______________ 5. Different stock keeping units do you currently having in your following products? XI. Amul Butter 20g ______ 50g _______ 100g______ 500g____ XII. Amul Cheese 400g ______ XIII. Amul Gold 1L ______ XIV. Amul Taza 1L _______ 200 ml ______ 500 ml ______ XV. Amul Kool Cafe 200ml glass bottle _______ 250ml can________ XVI. Amul Kool Lassee 200ml _____ XVII. Amul Spray 1kg _____ 200gm_____ 500gm _____ XVIII. Amullya 1kg _____ 200gm_____ 500gm _____ XIX. Amul Mithai Mate 400g Tin ____ XX. Amul Chocolate f) Milk chocolate 12g _____ g) Fundoo milk chocolate 12g _____ h) Dark chocolate 35g _____ i) Fruit & Nut 40g _____ j) Almond Bar 35g _____ XV. Amul chocolate Syrup 650g plastic bottle ______ XVI. Amul Bindaaz wafer 15g _____ XVII. Amul Fresh cream 200 ml ______ 1L _____
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Amul Rejoice Associated chocolate 135g _____ 173g _____ 412g _____ 6. How are orders grouped for dispatch? By location of distributors / stock list / customer On first booked first dispatch basis irrespective of location & item By similar items By route Any other ____________________
XVIII.
7. What is the average replenishment time for the retailers? 24hrs 48hrs 1 week 15 days Any other ______________ 8. What is the rate of obsolete inventory? <10% 10-25% 25-50% >50%
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(QUESTIONARE) (Retailers) Dear Sir/Madam I am a student of Dept. of Business Administration of Assam University, Silchar. I am doing my project in operations management on the topic INVENTORY STRATEGY FOR PROCESSING INDEPENDENT DEMAND. For the completion of the project I kindly request your valuable opinion& suggestion & I expect your co-operation also to fill the questionnaire given below. I assure you that the information furnished will be strictly confidential & used for academic purpose only. (Sagardwip Dey)
1. What is the replenishment process? Pull System Push system 2. How frequently you place order? Weekly Fortnight Any other ___________________________ 3. What inventory control system you are using? Continuous review system Periodic review system Optional replenishment system Base stock system Any other _______________ 4. What is the lead time? 24hrs 48hrs 1 week 15 days Any other ______________ 5. What is the rate of obsolete inventory? <10% 10-25% 25-50% >50% 6. Product movement Products Day1 Day2 Day3 Day4 Day5 Day6
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7. Are you satisfied with the distribution of amul products? Strongly agree Agree Neither agree nor disagree Strongly Disagree
Disagree
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BIBILOGRAPHY
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BOOKS Chopra, Sunil and Peter Meindl, 2007, Supply Chain Management Strategy, Planning and Operation, 3rd Edition , Pearson Education. KRAJEWSKI L J & RITZMAN L P, 2007, Operations management. Strategy and Analysis, 8th edition, ADDISON-WESLEY. Stevenson, William J, 2005, Production Operations Management. Boston, MA: Irwin/McGraw Hill. Bose D, 2006, Inventory Management, 4th Edition, PHI Private Limited. Muller (2003), Essentials of inventory management, [online] Available: http://www.books.co Kothari C.R., 2004, Marketing Research, 2nd Edition, New Age international Publisher WEBSITES http://www.amul.com http://www.scribd.com
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INVENTORY STRATEGY FOR PROCESSING INDEPENDENT DEMAND

Under the guidance of

DEPARTMENT OF BUSINESS ADMINISTRATION

JN SCHOOL OF MANAGEMENT STUDIES

DEPARTMENT OF BUSINESS ADMINISTRATION ASSAM UNIVERSITY

Dated, Silchar The 16th May, 2012

Dated, Silchar The 16th May 16, 2012

Amul products Amul product history

INTRODUCTION OF THE STUDY

OBJECTIVE OF THE STYDY

SCOPE OF THE STUDY

CHAPTER 2 CONCEPTUAL & THEORITICAL FRAME

MEANING AND DEFINITION OF INVENTORY

RISKS & COST ASSOCIATED WITH INVENTORIES

THE COSTS OF HOLDING INVENTORY

Understanding inventory management

Historical review of inventory management

PURPOSE OF INVENTORY MANAGEMENT

INVENTORY CONTROL TECHNIQUES

Order Placed L TBO TBO L L TBO 19 Time

Periodic review system

CHAPTER 3 ORGANIZATION PROFILE

The Birth of Amul

The Amul Model

The Organization An Overview

Number of Producer Members

External Organization Structure

State Level Marketing Federation

District Milk Product Union Ltd

Village Milk Product Union Ltd

External Organization Structure Chart

Internal Organization Structure:

The following is internal organization chart of Amul: Chairman

Asst. General Manager

Internal Organization Structure Chart

Milk Processing Chart

Amuls Supply Chain

Village Cooperative Societies

Local Restaurants/Ot her Milk related Chilling

Milk Sold to Village & Local

Wholesalers/C&S Retailers Home Delivery Contractors CONSU CONSUM

Third plant is at Kanjari, which produces cattle feed.

Fourth plant is at Khatraj, which engaged in producing cheese.

Product Name: Amul Butter

Packing: 100g, 500g, 50g, 20g, 8.1g

Product Name: Amul Lite Packing: 100g, 500g, 200g

Shelf Life: Best Before 6 months

Product Name: Amul Pizza Mozarella Cheese

Product Name: Amul Gold

Product Name: Amul Prolife Buttermilk

Packing: 1 Litre Plastic Bottle

Product Name: Amul Ice Cream

Product Name: Amul Masti Dahi

Product Name: Amul Probiotic Dahi

Shelf Life: 12 months

Almondbar 35g Shelf Life: 12 months Storage condition: 15 C, dry place

Product Name: Amul Fresh Cream

Amul product history

Ice cream 1996

Fresh Milk 1956

Milk Power 1958

Fat Free Dessert 2002

UHT Range 1980/99