OPERATIONS MANAGEMENT

(OM202)

GROUP PROJECT

(Term-II, Batch 2020-22)

SUBMITTED BY: SUBMITTED TO:

Ankit Gupta (PGMA2009)
Khyati Bakshi (PGMA2027)
Priya Dey (PGMA2034)
Sudha Kumari (PGMA2051)
Vishakha Singh (PGMA2055)
(Prof) Dr. Saurabh Tiwary
Jaipuria Institute of Management,
Noida

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 BACKGROUND OF ORGANISATION
Amul agreeable was enrolled on 19 December 1946 as a reaction to the misuse of negligible
milk makers by brokers and specialists in little urban areas. The costs of milk were self-
assertively decided at that point. The public authority had given Polson a viable imposing
business model in milk assortment from Kaira and its resulting supply to Mumbai. Angered by
the unreasonable exchange rehearses, the ranchers of Kaira moved toward Sardar Vallabhbhai
Patel under the administration of nearby rancher pioneer Tribhuvandas K. Patel. He encouraged
them to shape an agreeable (Kaira District Co-employable Milk Producers' Union) and supply
milk straightforwardly to the Bombay Milk Scheme rather than Polson (who did likewise
however give them low prices).[13] He sent Morarji Desai to put together the ranchers. In 1946,
the milk ranchers of the territory went on a strike which prompted the setting up of the helpful
to gather and measure milk.[12] Milk assortment was decentralized, as most makers were
peripheral ranchers who could convey, probably, 1–2 liters of milk for every day. Cooperatives
were framed for every town, too.[14] By June 1948, the KDCMPUL had begun sanitizing milk for
the 'Bombay Milk Scheme'. Under the caring administration of Tribhuvandas Patel, in 1973,
Amul commended its 25th Anniversary with Morarji Desai, Maniben Patel and Verghese Kurien.

AMUL’s Operation Strategy

Amul has very effectively aligned its business and operational models to achieve its vision since
its launch.

SUPPLY CHAIN
Amul has effectively managed both upstream and downstream partners in establishing one of
the most complex supply chains across the globe. The producers bring milk to the village
cooperatives (foot/bicycle), which is then transported to the unions by specialized trucks. From
the union’s production facility, milk is transported to wholesale distributors who then transport
the milk to retailers in specialized trucks.
All of these processes are outsourced to third party logistics and retail partners to ensure
efficient execution. A stringent verification process and guarantees for the safety of the milk
products are required from channel members before they are on-boarded to the network.
To the wholesalers and retailers, Amul offers reasonable margins on a high volume good. It
offers support in demand prediction, reducing the potential bullwhip effects that might arise
from inexperienced sales partners. It also offers easy repayment programs for capital
investments in infrastructure (freezers etc.) by the retailers.

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ORGANIZATIONAL ALIGNMENT
The heads of the village cooperatives sit on the management of the union at the district level.
The heads of the unions at the district level comprise the governing board for the federation.
This board appoints the chairman of Amul diary. This strategy has effectively ensured that the
management has “skin in the game”.
The incentive structure is also aligned in that its rewards suppliers who generate the most
amount of business, which is judged based on a mix of the quality and quantity of milk supplied.

INCREASING THE SUPPLY OF MILK

As we saw in the e-choupal case, increasing the supply of product leads to better economies of
scale (optimizing sunk costs). To this end, the unions provide various aids to the milk producers
(like cattle-feed, veterinary aid, technical training) obtained at a low cost due to large scale
sourcing, to increase supply. Aids are also aimed at overall community development.
Bridging Gaps in a Fragmented/Unstable Supply Side Market
Given the fragmented nature of the producers, supply tends to vary based on various factors,
but demand remains fairly constant. The unions have invested in cold storage facilities to
ensure that surpluses can be stored and redistributed to village level centers that are facing a
shortage of supply, efficiently reducing supply instabilities.

TECHNOLOGY INITIATIVES
An automatic Milk Collection System was established that could identify and test the
quality/quantity of milk. This leads to time saving since over 1000 producers enter a village
cooperative each day and increased transparency.
Enterprise-wide Integrated Application Systems were used to align various sub software
systems in place. A Geographic Information System was also established to view supply
disparities in real time. Cyber stores have been recently launched as well.

MARKETING/ADVERTISING CAMPAIGN
One of the most interesting things about Amul is how a dairy cooperative evolved into a social
commentator through their advertisements. The cartoon is usually having the Amul mascot
(Amul Girl) in a current context with a catchy tagline. These ads have now become an
establishment of their own right, elevating Amul’s brand image from just a dairy cooperative to
a household name outside the dairy products context.

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PRODUCT DIVERSIFICATION
Amul diversified into various dairy products such as milk powders, butter, cheese, yogurt, ice
creams and a number of other variations specific to the Indian market. It has managed to
capture significant market share in others. This move was highly strategic once the brand image
(quality at affordable prices) and distribution chains were established – a clear indication of
successful horizontal integration.

ADOPTION OF TECHNOLOGY BY AMUL

An automatic Milk Collection System was established that could identify and test the
quality/quantity of milk. This leads to time saving since over 1000 producers enter a village
cooperative each day and increased transparency.
Enterprise-wide Integrated Application Systems were used to align various sub software
systems in place. A Geographic Information System was also established to view supply
disparities in real time. Cyber stores have been recently launched as well.
Amul use the advance technology to process its products

1). ELECTRONIC MILK TEST

Before pasteurizing the milk, the samples are taken to the
laboratory. In the laboratory with the help of machine
called electronic milk tester, the proportion of SNF & FAT is
checked with phosphate solution. When the color of the
milk become yellow, it is sent for pasteurization.

2). METHYLINE BLUE REDUCTION TEST

This test is conducted for checking for how long the
milk will remain fresh. To check this, 10 ml of milk
is taken and 1 ml of METHYL solution is added to it.
It is then kept under water at 57 degree Celsius.
After one hour if the solution losses its color then it
is called raw milk. If the solution remains the same
even after 5 hours than it is considered fresh milk,
which remains constant for a long period of time.

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3) PASTEURIZING AND
STANDARDIZING
To pasteurize the milk means to
kill the germs in the milk by a
particular method which was
invented by a scientist called
JAMES PASTEUR and so the
name pasteurization. In the
pasteurization method the milk
is first heated at 72-degree c to
76-degree c for 15 seconds and
then it is immediately cooled
below 4-degree c by this
method they destroy the
pathogenic bacteria present in
the raw milk. But if the right
degree of temperature is not
provided there are chances that
milk might contain germs. After
this process some milk goes to
separator machine and
remaining is proportionately sent for standardization.

STANDARDIZATION PROCESS
bifurcates the milk in 3
categories varying according
to the SNF & FAT contents.
The equipment named OSTA.
Auto Standardization Adjusts
the FAT directly. The
computer is just ordered
whether gold or standard
milk is to be rationed and the
same will be received with
appropriate contents.

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 Ready milk= Pasteurized + Standardized

4) SEPARATION PROCESS
Separator machine separates two kinds of
products, skimmed milk and cream, through
channels. There are 100 disks fixed in
separator machine, which revolve at 5000
rpm (revolution per minute). It is taken to the
tanks, which has the capacity of 20000 liters.
Whenever the milk is needed from the tank, it
is tested in the laboratory and the deficit
proportion FAT is added by mixing cream. This process continues for 24 hours

5) QUALITY CHECK
Pasteurized milk is sent to the quality Assurance
laboratory of the dairy plant. Within 14 seconds the FAT
& SNF proportion is received regarding 30 lack liters of
milk. The total investment put into the lab by the dairy
plant is Rs. 6 crores.
The laboratory only checks and analyses the powder,
milk and ghee. There is a separate ice cream analyzing
laboratory.

6) PACKAGING PROCESS
After the milk is sent for the packaging
to the milk packing station in the dairy
plant. In the milk packaging stations
there are huge pipelines and behind
them there is polyfil machine from
which the material to pack milk comes
out. From each of these 12 machines
100 pouches are packed in one single minute

7) STORAGE
Then the milk is sent to the cold storage of the dairy
where the milk is stored until it is dispatched. Here
the milk is stored is temperature ranging from 5-
degree c to 10-degree c, it is maintained with the

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 help of exhaust fans having silicon chips. About 40000 liters of milk is dispatched from
the cold storage of the dairy plant every day. The damaged pouches are kept aside and
the milk is once again put to the tank.

REVENUE GENERATION BY AMUL

Dairy major, Amul marketer, Gujarat Co-operative Milk Marketing Federation Ltd has registered
a turnover of ₹38,542 crore for the financial year 2019-20, shown a growth of 17 per cent over
previous year.
The sales turnover has jumped by nearly five times in the past decade from ₹8,005 crore in
2009-10 to ₹38,542 crore in 2019-20. The rise is attributed to the dairy major's rapid expansion
in both - processing capacities and product portfolio.
The group turnover of the dairy giant combining the turnover of all the constituent member
unions and GCMMF for all products sold under the Amul brand has exceeded ₹52,000 crore, or
$7 billion, the dairy cooperative informed after its 46th Annual General Meeting (AGM) held in
Anand on Saturday.
GCMMF has set a goal to achieve a group business turnover of ₹1 lakh crore by 2024-25 -
eyeing a slot in the top three dairy players in the world.

AMUL’S GROWTH
Amul was ranked 18th largest dairy organization of the world in 2011, which has improved to
9th currently. Ramsinh Parmar, chairman, GCMMF informed that during the last decade, milk
procurement has witnessed a phenomenal increase of 138% from 90.93 Lakhs Liters Per Day
(LLPD) in the year 2009-10 to 215.96 LLPD in the year 2019-20.
"This enormous growth was a result of the high milk procurement price paid to our farmer-
members which has increased by 127% from ₹337 per kg fat in the year 2009-10 to ₹765 per kg
fat in the year 2019-20," Parmar stated.
He further added that during this global pandemic, Amul cooperatives have converted the crisis
into an opportunity.

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"In the lockdown period, milk unions of Gujarat procured an additional 35 lakh liters of milk per
day, which means, we have given around ₹800 crore extra to the rural milk producers," Parmar
said.
Jetha Bharwad, Vice Chairman, GCMMF expressed confidence of India retaining its numero-uno
position in milk production in the world with an annual growth rate of 5.5% during the last
three to four years as against global milk production growth of 2%.

SELF-SUFFICIENT
India contributes almost 50 per cent of the global growth in milk production. He added that
India produces milk worth ₹8 lakh crores which is more than the total value of all pulses and
grains put together.
"As a nation, we are now completely “Atmanirbhar” or self-sufficient in the dairy sector, since
our dairy farmers produce enough milk to fulfill the country’s demand for milk and dairy
products," he said.
On the Government of India's ₹15,000 crore dairy infrastructure fund for the establishment of
supply chain and dairy plants for enhancing the dairy and milk processing capacity, R S Sodhi,
Managing Director, GCMMF said that the fund will support Indian dairy industry to build around
4 to 5 crore liters of extra processing capacity.
"These extra five crore liters of milk collected and processed by the organized dairy industry will
provide livelihood to approximately 30 lakh people in rural India. This is really the need of the
hour, when hundreds of thousands of people have migrated back to their villages from urban
centers," Sodhi said.
Since past year saw lot of engagement and speculations about India joining the global trade
alliance putting milk producers' interests at risk, the GCMMF Board and Chairman on behalf of
the 36 lakh milk producer members of Gujarat, expressed gratitude to the central government,
for not joining the Regional Comprehensive Economic Partnership (RCEP) and considering the
interests of 10 crore dairy farmers of the country.

PRODUCTS
Bread spreads:
 Amul Butter
 Amul Lite Low-Fat Bread spread
 Amul Cooking Butter

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Cheese Range:
 Amul Pasteurized Processed Cheddar Cheese
 Amul Processed Cheese Spread
 Amul Pizza (Mozzarella) Cheese
 Amul Shredded Pizza Cheese
 Amul Emmental Cheese
 Amul Gouda Cheese
 Amul Malai Paneer (cottage cheese)
 Utterly Delicious Pizza
Mithai Range (Ethnic sweets):
 Amul Shrikhand (Mango, Saffron, Almond Pistachio, Cardamom)
 Amul Amrakhand
 Amul Mithaee Gulabjamuns
 Amul Mithaee Gulabjamun
 Amul Mithaee Kulfi Mix
 Avsar Ladoos
UHT Milk Range:
 Amul Shakti 3% fat Milk
 Amul Taaza 1.5% fat Milk
 Amul Gold 4.5% fat Milk
 Amul Lite Slim-n-Trim Milk 0% fat milk
 Amul Shakti Toned Milk
 Amul Fresh Cream
 Amul Snowcap Softy Mix
Pure Ghee:
 Amul Pure Ghee
 Sagar Pure Ghee
 Amul Cow Ghee
Infant Milk Range:
 Amul Infant Milk Formula 1 (0-6 months)
 Amul Infant Milk Formula 2 (6 months above)
 Amulspray Infant Milk Food
Milk Powders:
 Amul Full Cream Milk Powder
 Amulya Dairy Whitener
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  Sagar Skimmed Milk Powder
 Sagar Tea and Coffee Whitener
Sweetened Condensed Milk:
 Amul Mithaimate Sweetened Condensed Milk
Fresh Milk:
 Amul Taaza Toned Milk 3% fat
 Amul Gold Full Cream Milk 6% fat
 Amul Shakti Standardised Milk 4.5% fat
 Amul Slim & Trim Double Toned Milk 1.5% fat
 Amul Saathi Skimmed Milk 0% fat
 Amul Cow Milk
Curd Product
 Yagi Sweetened Flavored Dahi (Dessert)
 Amul Masti Dahi (fresh curd)
 AmulMasti Spiced Butter Milk
 Amul Lassee
Amul Ice creams:
 Royal Treat Range (Butterscotch, Rajbhog. Malai Kulfi
 Nut-o-Mania Range (Kaju Draksh, Kesar Pista Royale. Fruit Bonanza, Roasted Almond)
 Nature's Treat (Alphanso Mango, Fresh Litchi, ShahiAnjir, Fresh Strawberry, Black
Currant, Santra Mantra, Fresh Pineapple)
 Sundae Range (Mango, Black Currant, Sundae Magic, Double Sundae)
 Assorted Treat (Chocó bar, Dollies, Frostik, Ice Candies, Tricone, Choco crunch,
Megabyte, Cassata)
 Utterly Delicious (Vanilla, Strawberry, Chocolate, Choco chips, Cake Magic)

Chocolate & Confectionery:

 Amul Milk Chocolate
 Amul Fruit & Nut Chocolate
Brown Beverage:
 Nutramul Malted Milk Food
 Amul Kool Flavored Milk (Mango, Strawberry, Saffron, Cardamom, Rose, Chocolate)
 Amul Kool Cafe
 Amul Kool Koko

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  Amul Kool Milk Shaake (Mango, Strawberry, Badam, Banana)
Health Beverage:
 AMUL PRO: Malt based food.

CLASSIFICATION OF AMUL’S DEPARTMENTS

All activities related to sales and marketing are carried out by the commercial department.
Most of the AMUL products are sold through GCMMF. GCMMF works as a media for selling
AMUL products. Commercial department is link between AML and GCMMF; GOMME is also the
largest buyer of AMUL products. The second largest buyer of AMUL products is the Indian
Army. There’s no intervention of federation while dealing with the Army Main products that are
sold to the Indian Army are Ghee, White Milk Powder, butter, Cheese, and Nutria Amul. The by-
products are sold to Vadilal ice-Cream. AMUL also markets some products a small level by itself
AMUL self-milk and buttermilk on its own. All transactions with the Indian Anny are carried by
Commercial Department

COMMERCIAL DEPARTMENT PROCESS FLOWCHART

GCMMF / AMUL

PLANNED DISPATCH

PRODUCTION PLANNING DONE ACCORDINGLY

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 COMMERCIAL DEPT DECIDES PRODUCT PRICING/DISPATCH TIME/BEST ROUTE /MAX QUANTITY IN
TRUCKS

TRANSPORTERS ON CONTRACT WITH GOMME

DIL

DESPATCH INFORMATION LETTER

FPS/TIMISPORTERS/COMMERCIAL DEPARTMENT

TRANSPORTER HAS TO PICE UP THE FINISHED PRODUCTS

FPS EMPLOYEE RECEIVES DIL FROM TRANSPORTER AVAILABUTY OF GOODS IS CHECKED IN STORES

ADMINISTRATION
The main work of administration department any company is to appoint right people at right
time and then supervise them. In AMUL there is a combined administration and Human
Resources Development department. The Administration department ale performs all activities
related to human resources development.

SALARY ACCOUNT
This is subsection of Accounts department. All accounting related to salaries and wages.
Provident fund, pension insurance, gratuity etc. is done in this department

AUDIT
There are two dit decrements at AMUL. One is the internal audit department and the other is
the government aide department as the name suggests government. Auditing is done by a
certified auditor Internal unit work is given to an outside accountancy firm. Pre-auditing and
Post auditing different vouchers are done in this department.

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MIS
It is a subsection of the Accounts department. It is called MS Management Information System
A the information’s that are required in different departments are first developed in

AMUL’S LAYOUT
Facility layout is an arrangement of different aspects of manufacturing in an appropriate
manner as to achieve desired production results. Facility layout considers available space, final
product, safety of users and facility and convenience of operations. An effective facility layout
ensures that there is a smooth and steady flow of production material, equipment and
manpower at minimum cost. Facility layout looks at physical allocation of space for economic
activity in the plant. Therefore, main objective of the facility layout planning is to design
effective workflow as to make equipment and workers more productive.
AMUL plant is indigenously worked out with facilitation of various production processes and
production of multi products under one plant. The total plot is nearly about 2.27 kms Separate
buildings are provided with required arrangements of machine tools handling and computers
connection through the control room to fit for varying product manufacturing departments
The plant is engaged in producing milk, ice creams, milk powder and ghee. Entire department is
uniquely provided with facilities for the processing each product. There are four production
department and packaging departments pertaining to each product respectively.

INVENTORY MANAGEMENT BY AMUL

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Every day Amul collects 447,000 liters of milk from 2.12 million farmers (many illiterate),
converts the milk into branded, packaged products, and delivers goods worth Rs 6 crore (Rs 60
million) to over 500,000 retail outlets across the country.
To manage its inventory Amul use a systematic approach to sourcing, storing, and selling
inventory—both raw materials and finished goods. And the inventory management is one of
the complicated tasks for Amul.
Amul use Enterprise Resource Panning (ERP) with the collaboration of TCS Ltd and by using this
technique Amul manages its data right from the procurement till the fill delivery to the retailers
is fed into the system. This enables the channel members to best utilize the resources and
maintain inventory in an efficient manner.

 Automatic milk collection system units (AMCUS) at village society were installed in the
first phase to automate milk production logistics.
 AMCUS facilities to capture member information, milk fat content, volume collected,
and amount payable to each member electronically.
 Amul also connected its zonal offices, regional offices and member's dairies through
VSATS.
 The customized ERP- EIAS has been implemented across the organization integrating
various operational departments.
 Amul is also using Geographic Information Systems (GIS) for business planning and
optimization of collection processes.
 Indian Institute of Management - Ahmedabad supplemented Amul's IT strategy by
providing an application software – Dairy Information System Kiosk (DISK) to facilitate
data analysis and decision support in improving milk collection.
 The kiosk would also contain an extensive database on the history of cattle owned by
the farmers, medical history of the cattle, reproductive cycle and history of diseases
 Farmers can have access to information related to milk production, including best
practices in breeding and rearing cattle
 As a large amount of detailed history on milk production is available in the database the
system can be used to forecast milk collection and monitor the produce from individual
sellers.

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 QUALITY PARAMETERS TAKEN BY AMUL
The initiation of Total Quality Management (TQM) way back in 1994 was to work with the well-
known quality management initiatives which have proven to be effective elsewhere to create a
culture of transparency, openness and leadership in the organization.
Amul has been the first dairy in India to get accredited with certification of ISO 2200:2005 & ISO
9001 for its operations and plants. Further Amul has set an example that Village Dairy Co-
operative Societies could also achieve this milestone as these Societies are accredited with ISO
9001:2000 a remarkable achievement in the history of India

• AMUL, is committed to produce safe and wholesome food to continually

remain as the market leader by providing food products delighting customer
expectations and bestow safety.
• They strive to achieve this by Improving raw milk quality, applying innovative
technology for manufacturing food products, Employing quality and food
safety management practices to, manufacture food products in an eco-
friendly environment.
• Meeting applicable statutory and regulatory requirements, effectively
communicate and constantly improve professional skills of employees
emphasizing continuous improvement of quality and food safety issues.

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HYGIENIC & CLEAN MILK PRODUCTION DRIVE:
The primary village dairy co-operative societies operate every morning and evening for the
village farmers. Milk delivered by a producer is measured and a sample is drawn for a quality
testing. Each center is equipped with an electronic milk tester for testing quality of milk,
automatic weighing machine for weighing of milk with data processing facilities.

BULK MILK CHILLERS:

As a part of Amul's quality movement Bulk Milk Chillers are introduced at primary village co-
operative society level. This system has drastically improved the microbiological quality of milk,
therefore better return to farmers and good quality of products to consumers. Special trainings
are imparted to dairy co-operative personnel for better management of Bulk Milk Chillers.

ANIMAL DISEASE DIAGNOSTIC LABORATORY:

The mobile and immobile laboratories have contributed to clean milk production drive in
routine and emergencies especially in cases of plant or chemical poisoning and diseases
claiming sudden death of animals, prompt and accurate diagnosis of the disease to keep the
Livestock in sound health, taking adequate preventive measures to avert major outbreak of
diseases by diagnosing the disease at an early stage.
planning for appropriate feeding strategy with the help of complete analysis of metabolic
profile of the animal; improving infertility by timely remedial measures; timely detection of sub-
clinical cases of mastitis and control the incidences, assessing efficacy of vaccination could be
determined by detection vaccination titers.

CHALLENGES FACED BY AMUL

SHORTAGE OF FEED/FODDER
There is an excessive number of unproductive animals which compete with productive dairy
animals in the utilization of available feeds and fodder. The grazing area is being reduced
markedly every year due to industrial development resulting in shortage of supply of feeds and
fodder to the total requirement. Ever increasing gap between demand and supply in feeds and
fodder limits performance of dairy animals. Moreover, provision of poor quality of forage to
dairy cattle restricts animal production system. The low capability of purchasing feeds and
fodder by the small and marginal farmers and agricultural laborer’s engaged in dairy

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development result in inadequate feeding. Non-supplementation of mineral mixture results in
mineral deficiency diseases. High-cost Feeding reduces the profits of the dairy industry.

BREEDING SYSTEM
Late maturity, in most of the Indian cattle breeds, is a common problem. There is no effective
detection of heat symptoms during oestrus cycle by the cattle owners. The calving interval is on
the increase resulting in a reduction in efficiency of animal performance. Diseases causing
abortion leads to economic loss to the industry. Mineral, hormone and vitamin deficiencies lead
to fertility problems.

HYGIENE CONDITIONS
Many cattle owners do not provide proper shelter to their cattle’s leaving them exposed to
extreme climatic conditions. Unsanitary conditions of cattle shed and milking yards, leads to
mastitis conditions. Unhygienic milk production leads to a reduction in storing quality and
spoilage of milk and other products.

HEALTH
Veterinary health care centers are located in far off places. The ratio between cattle population
and veterinary institution is wider, resulting in inadequate health services to animals. No
regular and periodical vaccination schedule is followed, regular deworming programmed is not
done as per schedule, resulting in heavy mortality in calves, especially in buffalo. No adequate
immunity is established against various cattle diseases.

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