Supply Chain

Management of AMUL

The Kaira District Co-operative Milk
Producers Union Limited, popularly known as
Amul Dairy is a US $1billion turnover
institution

It is a institution built up with a network of
over 10000 Village Co-operative Societies and
500,000 plus members

Managed by an apex cooperative
organization, Gujarat Co-operative Milk
Marketing Federation Ltd. (GCMMF), which
today is jointly owned by some 2.41 million
milk producers in Gujarat, India
Amul is the largest food brand in
India with an annual turnover of US
$1068 million (2007-08)

Amul is the largest producer of milk
and milk products in the world.
Sales Turnover US $ (million)
1994-95 355
1995-96 400
1996-97 450
1997-98 455
1998-99 493
1999-00 493
2000-01 500
2001-02 500
2002-03 575
2003-04 616
2004-05 672
2005-06 850
Amul
2007-08 1068
Before Amul
Polson dairy had monopoly rights
Exploitation of milk producers
Producers had to travel long distances to sell their
produce
Had to physically carry their produce
Agents decided the prices and the off-take
Summers- milk would go sour
Winters surplus milk unsold or sold at very low prices
Producers of Kaira district formed a cooperative to supply
milk directly to Bombay milk scheme
Decentralized milk collection
Village level cooperatives
First modern dairy established at Anand
Indigenous technology and R&D department
Foundation for Amul

Network Structure
Made up of various stakeholders-suppliers to retailers
Linked by a common interest of remaining competitive in
a demanding environment
Global optimum rather than local optimum
Strategies
Core competency
Help network partners
Information sharing


Dairy Cooperative Structure and
details for State of Gujarat
GCMMF
Gujarat cooperative milk marketing federation
Marketing entity for the state of Gujarat
42 regional distribution centers in India
5,00,000 retail outlets
Exports to more than 15 countries
NDDB (National Dairy Development Board)
NCDFI (National Co-Operative Dairy Federation of India)-
coordinate dairy activities nationally
Farmers
Village
Cooperative
Societies (with
Chilling Units)
Village
Cooperative
Societies
(without Chilling
Units)
Local
Restaurants/Othe
r Milk related
businesses
Milk Sold to
Village &
Local Residents
Milk Processing
Union &
Warehouses
Warehouses
Wholesalers/C&S
Retailers Home Delivery
Contractors
CONSUMERS
Network
Services
* Veterinary
Services
* Animal
Husbandry
* Animal
Feed Factory
* Milk Can
Producers
* Agriculture
University
* Rural Mgmt
Institute
* Trucking
Facilities
Chilling Plants
CONSUMERS
AMUL SUPPLY CHAIN
The Supply-Demand Linkages
***Source: IIM(A), Working Paper No. 2002-05-06
Coordination Mechanisms
Interlocking control

Coordination agency-unique role of federation

Supplier enhancement and network servicing

Fair share allocation of benefits

Spirit of co-operation


Total Quality Management
Friday departmental meetings

Training for transformational leadership

Application of hoshinkanri principles

Training for farmers and their families

Retail census
Key Initiatives
In 1994, decided on IT for competitive edge
Studied its existing functions and operations and
formulated an IT plan.
Aligned the Information strategy with business strategy.
Re-designed and re-organized the existing software
applications.
Output of one system should be input of another system
or vice-versa.

Problems faced
Indirect connection between Producers and Consumers

Could not forecast productivity accurately and timely

No direct connectivity between zonal, regional, member
dairies and head office




Role of Information Technology
Automatic Milk Collection System Units (AMCUS)

CEO of Amul Mr. B.M. Vyas said Amul is not a food
company ,It is an IT company in the food business.

Initially AMCUS was installed free of cost to convince
farmers

Enterprise-wide integrated application system (EIAS).

Covers market planning, advertising and promotion,
distribution network planning, stock control, sales and
accounting, budgetary control, quality control
management and co-operative service management

Role of IT (contd.)

Connected its zonal offices, regional offices and members
dairies through VSATs.
Each Amul office was connected by e-mail and all send a
daily report on sales & inventory to main system.
Geographic Information System (GIS)
Helps in getting zone wise data used for sales and
distribution planning.
Includes farmer-member census and animal census data.
Helps in monitoring veterinary health

Amuls IT Roadmap
Uses AMCUS for milk collection.
Implemented a customized ERP system which is used in
conjunction with GIS
Uses data analysis software for forecasting milk
production and increasing productivity.
Has connected all zonal, regional and member dairies
through VSAT.
One of the first five organizations to have web presence.
Has made IT education compulsory for all its employees.

Amuls IT Roadmap (Contd.)
Milk collection information from 10,000 villages is
collected
Dairies can make faster decisions in terms of production
and distribution planning
Disease control in 6700000 animals
Linked with 45 distribution offices and 3900 distributors
GCMMF cyber store-125 cities
Thank You