A PROJECT/ SUMMER TRAINING REPORT ON

“Study of Supply Chain Management in the Consumer

Segment Product of Perishable Goods with special
reference to AMUL Milk.”
In partial fulfillment of the requirements
for the award of the degree
of
Master in Business Administration (MBA)

Submitted by
Santanu Rai
AKTU Roll. No. 2001060700143

Submitted to
Mr. Chandrashekhar Singh
Assistant Professor

School of Management Sciences, Varanasi

Affiliated to
(Dr. A.P.J. Abdul Kalam Technical University , Lucknow)

Session-2021-22

CERTIFICATE BY THE FACULTY GUIDE OF THE

INSTITUTE
 DECLARATION

I hereby declare that the information presented in this Project Report is correct to

the best of my knowledge and the analysis is as per the norms and guidelines

provided for the report. I have utilized the requisite concepts and applied the

required methodologies to analyze the data collected to reach the conclusion

present in the report.

I claim the report to be my indigenous work and has not been published anywhere else.

Santanu Rai

MBA (III Semester)

Roll No-2001060700143
 ACKNOWLEDGEMENT

A large number of individuals have contributed directly and indirectly in this synopsis. I am
thankful to all of them for their help and encouragement.

My sincere gratitude to Mr. Chandra Shekhar Singh (Assistant Professor) and all the
MBA faculties for their support and guidance in completion of this Project Report .

I express my sincere thanks to my parents & friends for the inconstant support and
suggestions to accomplish my goals.

Last but not the least I thank God for his love and grace that enabled me to complete this
Project report.

Santanu Rai

MBA (III Semester)

Roll No-2001060700143
 INDEX
SR.NO PARTICULARS

1 Executive summary

2 Introduction and history

 History
 Introduction to Indian dairy industry
3 Literature review & problem statement:-
 Literature review and problem statement
 Market size and growth
 Major players
 Packaging technology
 Regulatory framework
 Company profile
 Amul in abroad
 GCMMF
 Birth of Amul
Data processing & analysis:-
 Data analysis for retailers
 Data analysis for customers
 Process description
 Product mix of Amul
 Amul plant
 The channel network
 Procurement channel
 Anand Patten
 SMC and market logistic
 Amul parlor's
 Selection, motivation and evaluation of channel members
 Conflict and cooperation among channel members
4 Process description:
 Product information
 Sales and profit
 Distribution channel of Amul
 Transportation method
 Competitors analysis
6 Learing & findings and suggestions

7 Conclusion and bibliography

8 Appendix
EXECUTIVE SUMMARY

In today’s competitive world while entering in the market it is very necessary to have
good knowledge of the potential of a particular market. The growth of a company is
invariably determined not just by its strategy, but on how it responds to the challenges it
encounters. Over the decades AMUL has successfully countered several challenges that
have come its way with innovative responses and continuous improvement, which have
enabled it to remain stable and even convert some of these challenges into opportunities.
It is the culture of endurance that has accorded AMUL the insight and focus to deal with
the current economic environment. Drawing from its inner strength and beliefs, AMUL
responded by launching several initiatives across all its operations in various geographies
that are helping the group achieve growth even in current times. It is also this very
strategic culture that will propel AMUL to continue on its growth trajectory in years to
come.

The report provides a comprehensive insight into the company and also about the
company’s SWOT analysis. This report mainly studies in detail the various product mix
strategies of the company and also focuses on the segmentation of both company based
and industry based and helps in analysing the company’s competitive advantage and the
reason behind its success.
HISTORY

In early 1940’s a farmer in Kaira district, as elsewhere in India, derived his income almost
entirely from seasonal crops. The income from milk was paltry and could not be depended
upon. The main buyers were milk traders of Polson Ltd.-a privately owned company that

enjoyed monopoly for supply of milk from Kaira to the Government Milk Scheme Bombay.
The system leads to exploitation of poor and illiterate farmers by the private traders.

However, when the exploitation became intolerable, the farmers were frustrated. They
collectively appealed to Sardar Vallabhbhai Patel, who was a leading activist in the freedom
movement. Sardar Patel advised the farmers to sell the milk on their own by establishing a
cooperative union, instated of supplying milk to private traders. Sardar Patel sent the farmer
to Shri Morarji Dasai in order to gain his Co-operation and help. Shri Dasai held a meeting at
‘Samrkha’ village near Anand, on January 4, 1946. He advised the farmers to from a society
for collection of the milk.These village societies would collect the milk themselves and also
decided prices for that which would be profitable for them. The district union was also from
to collect the milk from such village cooperative societies and to sell them. It was also
resolved that the government should asked to buy milk from the union.
However, the government did not seem to help farmer by any means. It gave the negative
response by turning down the demand for the milk. To respond to this action of government,
farmer of Kaira district went on a milk strike. For 15 days not a single drop of milk was sold
to the traders. As a result the Bombay milk scheme was severely affected. The milk
commissioner of Bombay then visited Anand to assess the situation. Finely he decided to
fulfill the farmers demand.

Thus their cooperative unions were forced at village and district level to collect and sell milk
on a cooperative basis, without the intervention of government. Mr. Verghese Kurien had
main interest in establishing union who was supported by Shri Tribhuvandas Patel who
convinced farmers in forming the cooperative unions at thevillage level. ‘The Kaira District
Co-operative Milk Producers’ Union’ was thus established in Anand and was registered
formally under section 10 of Bombay Act VII of 1925 on December 14, 1946. Since then
farmers are selling all the milk in Anand through cooperative union. In 1955 it was
commonly decided the sell milk under the brand name ‘Amul’

At the initial stage only 250 liters of milk was collected everyday. But with the
growing awareness of the benefits of the co-operative-ness the collection of milk increased.
Today Amul collect 50, 00,000 liters of milk everyday. As the milk is perishable commodity
it became difficult to preserve milk for a longer period. Besides when the milk was to be
collected from the far places there was a fear of spoiling of milk. To over come this problem
the union thought to develop the chilling unit at various junctions, which would collect the
milk and could chill so as preserve it a for a longer period. Thus, today Amul has more than
168 chilling centers in various villages. Milk is collected from almost 1097 societies.      

With the financial help from UNICEF, assistance from the government of New
Zealand under the Colombo plan, of Rs. 50 million for factory to manufactory milk powder
and butter. Dr. Rajendara Prasad, the president of India laid the foundation on November 50,
1954. Shri Pandit Jawaharlal Nehru, the prim minister of India declared it open at Amul dairy
on November 20, 1955.
 A plant to manufacture balanced cattle feed was formally commissioned on October
31, 1964 by Shri Lalbahadur Shastri, the Prime Minister of India. At the request of the
government of India, a new dairy with a capacity to manufacture 40 tons of milk powder and
20 tons of butter a day was completed in 1963. This was meant to meet the requirement of
India’s defense forces. The dairy was declared open by ShriMorarji Desai in April, 1965. in
1974, the Kaira Union setup a plant to manufacture high-protein weaning food, chocolate and
malted food at Mogar, about 8 km south of Anand.

 In September, 1981, the second cattle feed plant at ‘Kanjari’ were started. The
succesion of the co-generation project on September 11, 1985, marked a milestone on the
energy front when two gas turbine generators of 1.5 MW each based on natural gas, were
commissioned. On October 31, 1992, Dr. V. Kurien chairman, National Dairy Development
Board, laid the foundation of Kaira Union’s third dairy with a processing capacity of 6.5 lakh
liters of milk a day. Work on the third dairy and cheese plant at ‘Khatraj’ with capacity for 20
Metric Ton of cheese per day, began in February, 1994. Also in 1994, Kaira Union put up
bread spread plant at ‘Mogar’ with the assistance from National Dairy Development Board.
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.
 Members: 13 district cooperative milk producers'
Union
No. of Producer Members: 2.6 million
No. of Village Societies: 12,792
Total Milk handling capacity: 10.16 million litres per day
Milk collection 2.38 billion litres
Milk collection 6.5 million litres
Milk Drying Capacity: 594 Mts. per day
Cattle feed manufacturing Capacity: 2640 Mts per day
About Machinery

In AMUL – 3 production of powder, Butter and Milk are being done

continuously. These productions are done by latest machineries equipped with
computer system and it is handled by one technicians.

- The Milk pasteurizer machines belong to Alfa level company of Pune

- Powder plant machineries belong to L & T Larson and Turbo company of
India
- Butter production machineries belong to S.G.company of switrzland and
other
- Butter manufacturing production machineries belong to Simon Feres com.of
France
LITERATURE REVIEW & PROBLEM STATEMENT:-

ORGANISATION STRUCTURE OF AMUL

Board of Director

CHAIRMAN

MANAGING CHAIRMAN

GENERAL MANAGER

ASSISTANT GENERAL MANAGER

MANAGER

DEPUTY MANAGER

ASSISTANT MANAGER
 SENIOR EXECUTIVE

SENIOR OFFICER

SENIOR ASSITANT

WORKERS

Grade ( Ato E)

.
INTRODUCTION TO THE INDIAN DAIRY INDUSTRY

 The world's biggest dairy producing country is growing fast and looking to become an
export powerhouse despite major quality problems...

A Note to our Readers: the following information on India's dairy sector is reproduced from
India Infoline.com. India is the world's largest milk producing country and is growing fast,
with an eye toward becoming a major dairy exporter. This article is helpful reading for
anyone interested better understanding.

CONSUMER HABITS AND PRACTICES

Milk has been an integral part of Indian food for centuries. The per capita availability
of milk in India has grown from 172 gm per person per day in 1972 to 182gm in 1992 and
203 gm in 1998-99.This is expected to increase to 212gms for 2008. However a large part of
the population cannot afford milk. At this per capita consumption it is below the world
average of 285 gm and even less than 220 gm recommended by the Nutritional Advisory
Committee of the Indian Council of Medical Research.

There are regional disparities in production and consumption also. The per capita availability
in the north is 278 gm, west 174 gm, south 148 gm and in the east only 93 gm per person per
day. This disparity is due to concentration of milk production in some pockets and high cost
of transportation. Also the output of milk in cereal growing areas is much higher than

elsewhere which can be attributed to abundant availability of fodder, crop residues, etc which
have a high food value for milky animals.

In India about 46 per cent of the total milk produced is consumed in liquid form and
47 per cent is converted into traditional products like cottage butter, ghee, paneer, khoya,
curd, malai, etc. Only 7 per cent of the milk goes into the production of western products like
milk powders, processed butter and processed cheese. The remaining 54% is utilized for
conversion to milk products. Among the milk products manufactured by the organized sector
some of the prominent ones are ghee, butter, cheese, ice creams, milk powders, malted milk
food, condensed milk infants foods etc. Of these ghee alone accounts for 85%.
 It is estimated that around 20% of the total milk produced in the country is consumed
at producer-household level and remaining is marketed through various cooperatives, private
dairies and vendors. Also of the total produce more than 50% is procured by cooperatives
and other private dairies.

While for cooperatives of the total milk procured 60% is consumed in fluid form and rest is
used for manufacturing processed value added dairy products; for private dairies only 45% is
marketed in fluid form and rest is processed into value added dairy products like ghee,
makhan etc.

Still, several consumers in urban areas prefer to buy loose milk from vendors due to
the strong perception that loose milk is fresh. Also, the current level of processing and
packaging capacity limits the availability of packaged milk.

The preferred dairy animal in India is buffalo unlike the majority of the world market,
which is dominated by cow milk. As high as 98% of milk is produced in rural India, which
caters to 72% of the total population, whereas the urban sector with 28% population
consumes 56% of total milk produced. Even in urban India, as high as 83% of the consumed
milk comes from the unorganized traditional sector.

Presently only 12% of the milk market is represented by packaged and branded
pasteurized milk, valued at about Rs.8, 000 crores. Quality of milk sold by unorganized
sector however is inconsistent and so is the price across the season in local areas. Also these
vendors add water and caustic soda, which makes the milk unhygienic.
Market Size and Growth

Market size for milk (sold in loose/ packaged form) is estimated to be 36mn MT valued at
Rs470bn. The market is currently growing at round 4% pa in volume terms. The milk surplus
states in India are Uttar Pradesh, Punjab, Haryana, Rajasthan, Gujarat, Maharashtra, Andhra
Pradesh, Karnataka and Tamil Nadu. The manufacturing of milk products is concentrated in
these milk surplus States. The top 6 states viz. Uttar Pradesh, Punjab, Madhya Pradesh,
Rajasthan, Tamil Nadu and Gujarat together account for 58% of national production.

Milk production grew by a mere 1% pa between 1947 and 1970. Since the early 70's, under
Operation Flood, production growth increased significantly averaging over 5% pa.

About 75% of milk is consumed at the household level which is not a part of
commercial dairy industry. Loose milk has a larger market in India as it is perceived to be
fresh by most consumers. In reality however, it poses a higher risk of adulteration and
contamination.

The production of milk products, i.e. milk products including infant milk food, malted
food, condensed milk & cheese stood at 3.07 lakh MT in 2008. Production of milk powder
including infant milk-food has risen to 2.25 lakh MT in 2008, whereas that of malted food is
at 65000 MT. Cheese and condensed milk production stands at 5000 and 11000 MT
respectively in the same year.

Major Players

The packaged milk segment is dominated by the dairy cooperatives. Gujarat Co-operative
Milk Marketing Federation (GCMMF) is the largest player. All other local dairy cooperatives
have their local brands (For e.g. Gokul, Warana in Maharashtra, Saras in Rajasthan, Verka in
Punjab, Vijaya in Andhra Pradesh, Aavin in Tamil Nadu, etc). Other private players include J
K Dairy, Heritage Foods, Indiana Dairy, Dairy Specialties, etc. Amrut Industries, once a
leading player in the sector has turned bankrupt and is facing liquidation.
Packaging Technology

Milk was initially sold door-to-door by the local milkman. When the dairy co-
operatives initially started marketing branded milk, it was sold in glass bottles sealed with
foil. Over the years, several developments in packaging media have taken place. In the early
80's, plastic pouches replaced the bottles. Plastic pouches made transportation and storage
very convenient, besides reducing costs. Milk packed in plastic pouches/bottles have a shelf
life of just 1-2 days, that too only if refrigerated. In 1996, Tetra Packs were introduced in
India. Tetra Packs are aseptic laminate packs made of aluminum, paper, board and plastic.
Milk stored in tetra packs

and treated under Ultra High Temperature (UHT) technique can be stored for four months
without refrigeration. Most of the dairy co-operatives in Andhra Pradesh, Tamil Nadu,
Punjab

and Rajasthan sell milk in tetra packs. However tetra packed milk is costlier by Rs5-7
compared to plastic pouches. In 2008-00 Nestle launched its UHT milk. Amul too relaunched
its Amul Taaza brand of UHT milk. The UHT milk market is expected to grow at a rate of
more than 10-12% in coming years.
Regulatory Framework

The dairy industry was de-licensed in 1991 with a view to encourage private
investment and flow of capital and new technology in the segment. Although de-licensing
attracted a large number of players, concerns on issues like excess capacity, sale of
contaminated/ substandard quality of milk etc induced the Government to promulgate the
MMPO (Milk and Milk Products Order) in 2008. Milk and Milk Products Order (MMPO)
regulates milk and milk products production in the country. The order requires no permission
for units handling less than 10,000 litres of liquid milk per day or milk solids up to 500 TPA.
MMPO prescribes State registration to plants producing between 10,000 to 75,000 litres of
milk per day or manufacturing milk products containing between 500 to 3,750 tones of milk
solids per year. Plants producing over 75,000 litres per day or more than 3,750 tones per year
of milk solids have to be registered with the Central Government. The stringent regulations,
government controls and licensing requirements for new capacities have restricted large
Indian and MNC players from making significant investments in this product category. Most
of the private sector players have restricted themselves to manufacture of value added milk
products like baby food, dairy whiteners, condensed milk etc.

All the milk products except malted foods are covered in the category of industries
for which foreign equity participation up to 51% is automatically allowed. Ice cream, which
was

earlier reserved for manufacturing in the small-scale sector, has now been de-reserved. As
such, no license is required for setting up of large-scale production facilities for manufacture
of ice cream.

Subsequent to de-canalization, exports of some milk based products are freely allowed
provided these units comply with the compulsory inspection requirements of concerned
agencies like: National Dairy Development Board, Export Inspection Council etc. Bureau of
Indian standards has prescribed the necessary standards for almost all milk-based products,
which are to be adhered to by the industry.
Proposal to Amend the MMPO

A proposal to raise the exemption limit for compulsory registration of dairy plants,
from the present 10,000 litres a day to 20,000 litres, is being considered by the Animal
Husbandry Department. The 75,000-litre limit is likely to be raised either to 100,000 litres or
125,000 litres in the amended order. The new order would also do away with the provision
for re-registration.

Penetration of milk products

Western table spreads such as butter, margarine and jams are not very popular in
India. All India penetration of butter/ margarine is only 4%. This is also largely represented
by urban areas, where penetration is higher at 9%. In rural areas, butter/ margarine have
penetrated in 2.1% of households only. The use of these products in the large metros is
higher, with penetration at 15%.

Penetration of cheese is almost nil in rural areas and negligible in the urban areas. Per capita
consumption even among the cheese-consuming households is a poor 2.4kg pa as compared
to over 20kg in USA. The lower penetration is due to peculiar food habits, relatively
expensive products and also non-availability in many parts of the country. Butter, margarine
and cheese products are mainly manufactured by organized sector.

Similarly, penetration of ghee is highest in medium sized towns at 37.2% compared to

31.7% in all urban areas and 21.3% in all rural areas. The all India penetration of ghee is
24.1%. In relative terms, penetration of ghee is significantly higher in North and West, which
are milk surplus regions. North accounts for 57% of ghee consumption and West for 23%,
South & East together account for the balance 20%. A large part of ghee is made at home and
by small/ cottage industry from milk. The relative share of branded products in this category
is very low at around 1-2%.

Milk powder and condensed milk have not been able to garner any significant
consumer acceptance in India as indicated by a very low 4.7% penetration. The penetration is
higher at

8.1% in urban areas and lower at 3.5% in rural areas. Within urban areas, it is relatively
higher in medium sized towns at 8.5% compared to 7.7% in large metros.
Export Potential

India has the potential to become one of the leading players in milk and milk product
exports. Location advantage: India is located amidst major milk deficit countries in Asia and
Africa. Major importers of milk and milk products are Bangladesh, China, Hong Kong,
Singapore, Thailand, Malaysia, Philippines, Japan, UAE, Oman and other gulf countries, all
located close to India.

The major export products: - The products of Amul is being exported in the 40 countries
of the world . Many of the products are now available in the U.S.A , Gulf countries and
Singapore. Amul products are being exported to the Singapore since last three decades .
undoubtedly , Amul is the preferred taste of Indians in the Gulf countries.

Low Cost of Production:

Milk production is scale insensitive and labour intensive. Due to low labour cost, cost of
production of milk is significantly lower in India.

Concerns in export competitiveness are Quality: Significant investment has to be

made in milk procurement, equipments, chilling and refrigeration facilities. Also, training has
to be imparted to improve the quality to bring it up to international standards.

Productivity: To have an exportable surplus in the long-term and also to maintain cost
competitiveness, it is imperative to improve productivity of Indian cattle.

There is a vast market for the export of traditional milk products such as ghee, paneer,
shrikhand, rasagulas and other ethnic sweets to the large number of Indians scattered all over
the world.
Indian (traditional) Milk Products

There are a large variety of traditional Indian milk products such as

Makkhan - unsalted butter. Ghee - butter oil prepared by heat clarification, for longer shelf
life. Kheer - a sweet mix of boiled milk, sugar and rice. Basundi - milk and sugar boiled
down till it thickens. Rabri - sweetened cream. Dahi - a type of curd. Lassi - curd mixed with
water and sugar/ salt. Channa/Paneer - milk mixed with lactic acid to coagulate. Khoa -
evaporated milk, used as a base to produce sweet meats. The market for indigenous based
milk food products is difficult to estimate as most of these products are manufactured at
home or in small cottage industries catering to local areas.

Consumers while purchasing dairy products look for freshness, quality, taste and texture,
variety and convenience. Products like Dahi and sweets like Kheer, Basundi, Rabri are
perishable products with a shelf life of less than a day. These products are therefore
manufactured and sold by local milk and sweet shops. There are several such small shops
within the vicinity of residential areas. Consumer loyalty is built by consistent quality, taste
and freshness. There are several sweetmeat shops, which have built a strong brand franchise,
and have several branches located in various parts of a city.

Branding Of Traditional Milk Products

Among the traditional milk products, ghee is the only product, which is currently marketed,
in branded form. main ghee brands are Sagar, Milkman (Britannia), Amul (GCMMF), Aarey
(Mafco Ltd), Vijaya (AP Dairy Development Cooperative Federation), Verka ( Punjab Dairy
Cooperative), Everyday (Nestle) and Farm Fresh (Wockhardt).

With increasing urbanization and changing consumer preferences, there is possibility

of large scale manufacture of indigenous milk products also. The equipments in milk
manufacturing have versatility and can be adapted for several products. For instance,
equipments used to manufacture yogurt also can be adapted for large scale production of
Indian curd products (dahi and lassi). Significant research work has been done on dairy
equipments under the aegis of NDDB.
 Mafco Limited sells Lassi under the Aarey brand and flavored milk under the Energee
franchise (in the Western region, mainly in Mumbai). Britannia has launched flavored milk in
various flavors in tetra packs.

GCMMF has also made a beginning in branding of other traditional milk products
with the launch of packaged Paneer under the Amul brand. It has also created a new umbrella
brand "Amul Mithaee", for a range of ethnic Indian sweets that are proposed to be launched
the first new product Amul Mithaee Gulabjamun has already been launched in major Indian
markets.

Western Milk Products

Western milk products such as butter, cheese, yogurt have gained popularity in the Indian
market only during the last few years. However consumption has been expanding with
increasing urbanization.

Butter

Most Indians prefer to use home made white butter (makkhan) for reasons of taste and
affordability. Most of the branded butter is sold in the towns and cities. The major brands are
Amul, Vijaya, Sagar, Nandini and Aarey. Amul is the leading national brand while the other
players have greater shares in their local markets. The latest entrant in the butter market has
been Britannia. Britannia has the advantages of a wide distribution reach and a strong brand
recall.

Priced at par with the Amul brand, it is expected to give stiff competition to the existing
players. In 2008-00 the butter production is estimated at 4 lakh MT of this only 45K MT is in
the white form used for table purposes rest all is in the yellow form.
 COMPANY PROFILE

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, Amul spray, Amul Cheese, Amul
Chocolates, Amul Shrikhand, Amul Ice cream, Nutramul, Amul Milk and Amulya have
made Amul a leading food brand in India. (Turnover: Rs. 25 billion in 2002). 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.

AMUL IN ABROAD

. Besides India, Amul has entered overseas markets such as Mauritius, UAE, USA,
Bangladesh, Australia, China, Singapore, Hong Kong and a few South African countries. Its
bid to enter Japanese market in 1994 did not succeed, but now it has fresh plans entering the
Japanese markets [6]. Other potential markets being considered include Sri Lanka.
 GCMMF

The Gujarat Cooperative Milk Marketing Federation Ltd, Anand (GCMMF) is the largest
food products marketing organization of India. It is the apex organization of the Dairy
Cooperatives of Gujarat. This State has been a pioneer in organizing dairy cooperatives and
our success has not only been emulated in India but serves as a model for rest of the World.
Over the last five and a half decades, Dairy Cooperatives in Gujarat have created an
economic network that links more than 2.8 million village milk producers with millions of
consumers in India and abroad through a cooperative system that includes 13,141 Village
Dairy Cooperative Societies (VDCS) at the village level, affiliated to 13 District Cooperative
Milk Producers’ Unions at the District level and GCMMF at the State level. These
cooperatives collect on an average 7.5 million litres of milk per day from their producer
members, more than 70% of whom are small, marginal farmers and landless labourers and
include a sizeable population of tribal folk and people belonging to the scheduled castes. The
turnover of GCMMF (AMUL) during 2008-09 was Rs. 67.11 billion. It markets the products,
produced by the district milk unions in 30 dairy plants, under the renowned AMUL brand
name. The combined processing capacity of these plants is 11.6 million litres per day, with
four dairy plants having processing capacity in excess of 1 million Litres per day. The
farmers of Gujarat own the largest state of the art dairy plant in Asia – Mother Dairy,
Gandhinagar, Gujarat – which can handle 2.5 million litres of milk per day and process 100
MTs of milk powder daily. During the last year, 3.1 billion litres of milk was collected by
Member Unions of GCMMF. Huge capacities for milk drying, product manufacture and
cattle feed. Ever since the movement was launched fifty-five years ago, Gujarat’s Dairy
Cooperatives have brought about a significant social and economic change to our rural
people. The Dairy Cooperatives have helped in ending the exploitation of farmers and
demonstrated that when our rural producers benefit, the community and nation benefits as
well.
 GCMMF: An overview

Members: 13 district cooperative milk producers'

Union

No. of Producer Members: 2.9 million

No. of Village Societies: 15,322

Total Milk handling capacity: 13.07 million litres per day

Milk collection (Total - 2009-10): 3.32 billion litres

Milk collection (Daily Average 9.10 million litres

2009-10):

Milk Drying Capacity: 647 Mts. per day

Cattlefeed manufacturing 3740 Mts per day

Capacity:
 BIRTH OF AMUL

The birth of Amul at Anand provided the impetus to the cooperative dairy movement in the
country. The Kaira District Cooperative Milk Producers’ Union Limited was registered on
December 14, 1946 as a response to exploitation of marginal milk producers by traders or
agents of existing dairies in the small town named Anand (in Kaira District of Gujarat). Milk
Producers had to travel long distances to deliver milk to the only dairy, the Polson Dairy in
Anand . Angered by the unfair and manipulative trade practices, the farmers of Kaira District
approached Sardar Vallabhbhai Patel (who later became the first Deputy Prime Minister and
Home Minister of free India) under the leadership of the local farmer leader Tribhuvandas
Patel. Sardar Patel advised the farmers to form a Cooperative and supply milk directly to the
Bombay Milk Scheme instead of selling it to Polson (who did the same but gave low prices
to the producers). He sent Morarji Desai (who later became Prime Minister of India) to
organize the farmers. In 1946, the farmers of the area went on a milk strike refusing to be
further oppressed. Thus the Kaira District Cooperative was established to collect and process
milk in the District of Kaira in 1946. Milk collection was also decentralized, as most
producers . were marginal farmers who were in a position to deliver 1-2 litres of milk per
day. Village level cooperatives were established to organize the marginal milk producers in
each of these villages. The Cooperative was further developed & managed by Dr. V Kurien
along with Shri H M Dalaya . in 1973, the Gujarat Co-operative Milk Marketing Federation
was established. The Kaira District Co-operative Milk Producers’ Union Ltd. which had
established the brand name AMUL in 1955 decided to hand over the brand name to GCMMF
(AMUL). With the creation of GCMMF (AMUL), we[who?] managed to eliminate
competition between Gujarat’s cooperatives while competing with the private sector as a
combined stronger force. GCMMF (AMUL) has ensured remunerative returns to the farmers
while providing consumers with products under the brand name AMUL.
DATA PROCESSING & ANALYSIS:-

Data Analysis For Retailers:-

1) Number of retailers stocking Amul milk.

Answer No. of Percentage

respondents
Yes 55 20%
No 114 80%

Y
e
s

3
3
%

Yes

N
o

N
o

6
7
%

Interpretation:
 rd
• The above graph indicates that only 1/3 of the retailers are selling Amul milk.
• It shows that Amul milk brand is not popular among the retailers.
 2) Sizes of Amul milk packets retailers preferred to store.
(Out of 169 retailers only 55 were buying Amul milk.)

Answer No. of
respondents
250ml 0
500 ml 32
1 Ltr 23
5 Ltr 0

5 Ltr 0

1 Ltr 23

500 ml 32

250ml 0

0 5 10 15 20 25 30 35

No. of respondents

Interpretation:

• The above graph shows that most of the retailers preferred to stored 500 ml and 1 Ltr
pouch of Amul milk as per the customer demand.
• In case of 5 Ltr. Pouch there was no customers demand.
• 250 ml pouches were not available to retailers.
 3) Reasons for Amul milk not stored by retailers.

(Out of 169 retailers 114 were not buying Amul milk.)

No. of
Answer
respondents
Absence of packaging date 6
Low margin 75
No replacement for leakage 20
No distribution 13

No distribution 13

No replacement for
20
leakage

Low margin 75

Absence of packaging
6
date

0 10 20 30 40 50 60 70 80

No. of respondents

Interpretation:

• From above graph it is clear that half of the retailers were not satisfied with Amul
replacement and margin policy.
• Some retailers responded about absence of packaging date.
• Very less retailers complained about distribution network
 4) Preference of retailer’s to milk brand.

BRANDS RESPONDENTS
Amul 15
Mother
dairy 77
manali 45
Tabala
milk 6
Others 26

Others 26

tabala 6

manali 45

motherdry 77

Amul 15

0 10 20 30 40 50 60 70 80 90

RESPODENT
.
Interpretation:
• The above graph shows that the motherdairy is most preferable brand in all.
• Some retailers also prefers tabala and others brands.
 5) Sources from where retailers get Amul milk

(Out of 169 retailers only 55 were buying Amul milk.)

Answer No. of Percentage

respondents
Distributors 52 95 %

Other suppliers 3 5%

Interpretation:
• Almost all retailers said that they purchased milk from Amul
distributors.
 6) Retailer’s satisfaction with Amul distributor.

(Out of 169 retailers only 55 were buying Amul milk)

Answer No. of Percentage

Respondents
Yes 34 62 %
No 21 38 %

N
o

3
8
%

Yes

Yes No
62%

Interpretation:

• Graph shows that most of the retailers were satisfied with the service provided by the
Amul distributors.
 7) Awareness among retailers about different Sales Promotional activities for Amul milk.
(Out of 169 retailers only 55 were buying Amul milk.)

Activities Aware Not aware

Price off 37 18
Free samples 13 42
Credit facility 16 39
Advertisement 49 6
P-O-P Displays 41 14
Coupons 50 5

60
50 6 14 5
18
40
42 39
30
49 50
20 37 41
10 16
13
0
Price off Free samples Credit facility Advertisement P-O-P Coupons
Displays

Aware Not aware

Interpretation:

• The graph shows that retailers were aware about the sales promotion activity that Amul
carried out, but some respondents were unaware about various activities.
• Most of the retailers were aware about advertisement and coupons scheme during
festivals.
• Credit facility and free samples were not provided to single retailers.
 8) Interest of retailers in wholesale distribution of Amul milk.

Answer No. of Percentage

respondents
Yes 27 16 %
No 142 84 %

Y
e
s

1
6
%

Yes
No

N
o

8
4
%

Interpretation:

• Graph represents the interest of the retailers to start Amul milk distribution .The questions
asked to increase the retail coverage.
• Most of the retailers were not interested.
• Only 16% of the retailers were ready to start Amul distribution.
 9) Awareness among retailers for Amul Parlor (APO) and its benefits.
(Out of 169 retailers only 118were questioned as they had large store.)

Answer No. of Percentage

respondents
Yes 70 59 %
No 48 41 %

N
o

4
1
%

Ye
s

No

Y
e
s

5
9
%

Interpretation:

• APO is the outlet where you get Amul milk and milk products and it helps to increase the
market share. This question asked to the retailers who were strong enough in capital.
• From graph it can be interpreted that the awareness about APO is very low.
 10) Interest of retailers in opening an Amul Parlor (APO).
(Out of 169 retailers only 118 were questioned as they had large store.)

Answer No. of Percentage

respondents
Yes 15 13 %

. No 103 87 %

Yes
13%

Yes

No

N
o

8
7
%

Interpretation:

• The graph represent that very less number of retailers were interested to start APO.
 11) Consumer’s expectation from Amul milk.
(Out of 169 retailers only 55 were buying Amul milk.)

ATTRIBUTE RESPONDENTS
Good quality 7
Clear packaging date 23
Availability 25

Availability 25

Clear packaging date 23

Good quality 7

0 5 10 15 20 25 30

RESPODENT

Interpretation:

• The question asked to the retailers where the Amul milk is being sale, and tried to collect
feedback of customers about Amul milk.
• More customers were having complaints about the clear date of packaging and
availability.
• Some customers were not happy with quality of milk.
 12) Ratings from retailers for attributes of Amul milk.
(Out of 169 retailers only 55 were questioned as they buying Amul milk.)
Attribute
Brand
Rating Quality Availability Packaging Margin
image

Very good 37 48 34 5 0
Good 13 7 15 2 0
Average 5 0 0 48 0
Bad 0 0 6 0 0
Very bad 0 0 0 0 55
Total 55 55 55 55 55

60
0 0 0 0
50 5 7 6
0

13 15
40

30 48
55
48
20 37 34
10
2
0 5 0
Quality Brand image Availability Packaging Margin

Very good Good Average Bad Very bad

Interpretation:
From the above graph it can be concluded that

• QUALITY: Most of the retailers were satisfied with Amul milk quality.
• BRAND IMAGE: The graph shows that Amul is having good brand image.
• AVAILABILITY: Most of the retailers were satisfied with the Amul milk distribution.
• PACKAGING DATE: Most of the retailers were not satisfied about not printing of
packaging date and they were facing a problem regarding same.
• MARGIN: All retailers were not satisfied with the margin policy given by Amul.
6.2 DATA ANALYSIS FOR CUSTOMERS:-

1) Number of customers purchasing Amul milk.

Answer No. of Percentage

respondents
Yes 30 32%
No 65 68%

Y
e
s

3
2
%

Yes

N
o

N
o

6
8
%

Interpretation:

• The above graph indicates that only 32% of the customers are purchasing Amul
milk.
• It shows that Amul milk brand is not popular among the customers.
 2) Ratings from customers for attributes of Amul milk.
(Out of 95 customers only 30 were questioned as they buying Amul milk.)
Attribute
Brand
Rating Quality Availability Packaging Price
image

Very good 18 25 16 5 6
Good 9 5 9 2 13
Average 3 0 0 15 11
Bad 0 0 5 8 0
Very bad 0 0 0 0 0
Total 30 30 30 30 30

35
30 0 0 0 0 0
3 5 5
8
25 0 11
9
20 9

15 15
25 13
10 18 16
2
5
5 6
0
Quality Brand image Availability Packaging Price

Very good Good Average Bad Very bad

Interpretation:
From the above graph it can be concluded that

• QUALITY: Most of the customers were satisfied with Amul milk quality.
• BRAND IMAGE: The graph shows that Amul is having good brand image.
• AVAILABILITY: Most of the customers were satisfied with the Amul milk distribution.
• PACKAGING DATE: Most of the customers were not satisfied about not printing of
packaging date and they were facing a problem regarding same.
• PRICE: Some customers were not satisfied with the price given by Amul.
3) Preference of retailer’s to milk brand.

BRANDS RESPONDENTS
Amul 15
motherdairy 44
manali 11
tabala 8
Others 17

17
Others

8
tabala

11
manali

44
motherdairy

15
Amul

0 5 10 15 20 25 30 35 40 45

RESPODENTS
.
Interpretation:
• The above graph shows that the motherdairy is most preferable brand in all.
• Some customers also prefers tabala and others brands.
 1. Data Analysis for Sales Promotion Activity:-
We carried sales promotion activity at two places of nallasopara city
1. Shri prastra
2. Apna nagar

Store name Sales(Ltr)

Initially Day 1 Day 2 Day 3 Day 4 Day 5 Day 6 Day 7
Sai 0 10 5 5 5 5 5 5
Vaishali 0 15 15 15 15 15 15 15
New hanuman 5 20 15 15 15 15 15 15
Hanuman 15 30 25 25 25 25 25 25
Durga 5 10 10 8 8 8 8 8

Sales (Ltr)
35

30 30

25 25 25 25 25 25 25
sai
20 20
vaishali
15 15 15 15 15 15 15 15 15 hanuman

10 10 new
8 8 8 8 8 8 hanuman
5 5 5 5 5 5 5 5 Durga

0 0
initially Day 1 Day 2 Day 3 Day 4 Day 5 Day 6 Day 7

Interpretation:
• Most of the retail outlets were not interested in Amul milk selling, but after
launching coupons scheme, not only sales shoot up by considerable amount initially
but also remain constant for next days.

• In case of Sai and Vaishali retail outlet they were not interested in Amul milk selling
but now they are selling 20 Ltr of milk daily. And they said if response will remain
same they will increase milk order.
PROCESS DESCRIPTION:

PRODUCT MIX OF AMUL

Breadspreads:

 Amul Butter
 Amul Lite Low Fat Breadspread

Cheese Range:

 Amul Pasteurized Processed Cheddar Cheese

 Amul Processed Cheese Spread
 Amul Mozarella Cheese
 Amul Emmental Cheese
 Amul Gouda Cheese
 Amul Malai Paneer (cottage cheese)
 Utterly Delicious Pizza

Mithaee Range (Ethnic sweets):

 Amul Shrikhand (Mango, Saffron, Almond Pistachio, Cardamom)

 Amul Amrakhand
 Amul Mithaee Gulabjamuns
 Amul Mithaee Gulabjamun Mix
 Amul Mithaee Kulfi Mix

UHT Milk Range:

 Amul Taaza 3% fat Milk

 Amul Gold 4.5% fat Milk
 Amul Slim-n-Trim 0% fat milk
 Amul Chocolate Milk
 Amul Fresh Cream
 Amul Snowcap Softy Mix

Pure Ghee:
  Amul Pure Ghee
 Sagar Pure 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
 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 3% fat
 Amul Smart Double Toned Milk 1.5% fat

Curd Products:

 Amul Masti Dahi (fresh curd)

 Amul Butter Milk

Amul Icecreams:

 Royal Treat Range (Rajbhog, Cappuchino, Chocochips, Butterscotch, Tutti Frutti)

 Nut-o-mania range (Kaju Drakshi, Kesar Pista, Roasted Almond, Kesar Carnival,
Badshahi Badam Kulfi, Shista Pista Kulfi)
 Utsav Range (Anjir, Roasted Almond)
 Simply Delicious Range (Vanilla, Strawberry, Pineapple, Rose, Chocolate)
  Nature's Treat (Alphanso Mango, Fresh Litchi, Anjir, Fresh Strawberry, Black
Currant)
 Sundae Range (Mango, Black Currant, Chocolate, Strawberry)
 Millennium Icecream (Cheese with Almonds, Dates with Honey)
 Milk Bars (Chocobar, Mango Dolly, Raspberry Dolly, Shahi Badam Kulfi, Shahi
Pista Kulfi, Mawa Malai Kulfi, Green Pista Kulfi)
 Cool Candies (Orange, Mango)
 Cassatta
 Tricone Cones (Butterscotch, Chocolate)
 Megabite Almond Cone
 Frostik - 3 layer chocolate Bar
 Fundoo Range - exclusively for kids
 SlimScoop Fat Free Frozen Dessert (Vanilla, Banana, Mango, Pineapple)

Chocolate & Confectionery:

 Amul Milk Chocolate

 Amul Fruit & Nut Chocolate
 Amul Eclairs

Brown Beverage:

 Nutramul Malted Milk Food

 AMUL PLANTS

1. First plant is at ANAND, which engaged in the manufacturing of milk, butter, ghee,
milk powder, flavored milk and buttermilk.

2. Second plant is at MOGAR, which engaged in manufacturing chocolate, nutramul,

Amul Ganthia and Amul lite.

3. Third plant is at Kanjari, which produces cattelfeed.

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

THE CHANNEL NETWORK

Procurement Channel (Upstream flow)

Distribution GCMMF

Head office

MU…1 MU...n

VCS…1 VCS…n

Village…1 Village…n
THE ANAND PATTERN
 Distribution channel

GCMMF Manufacturing

Head office

First leg(from manufacturing units)

Depot...1 Depot...n

Second leg

WD…1 WD…n

Third leg

Retail...n
Retail…1

Downstream flow
 Downstream Channel, it is the distribution part of the supply chain, from the manufacturing
units to the retailers.

• First leg of transport is from the manufacturing unit to the company depots. This is
done using 9 and 18 MT trucks any lesser quantity will be uneconomical to the company
there for is some time the quantity ordered is lesser then club loading is done which means
that the product ordered is supplied with some other products.
• Frozen food the temperature of these trucks is kept below -18˚C
• Dairy wet the temperature of these trucks is kept between 0-4˚C

• Second leg is from the depot to the WD’s, this transport is carried out in insulated 3
and 5 MT TATA 407’s here a permanent dispatch plan (PDP) is prepared where the
distributor plans out the quantity of various products to be ordered on a particular date.

• Third leg this is the flow of good from WD’s to retailers, a beat plan is prepared and
transportation is done on auto-rickshaws, rickshaws and bicycles.

Amul products are available in over 500,000 retail outlets across India through its network of
over 3,500 distributors. There are 47 depots with dry and cold warehouses to buffer
inventory of the entire range of products.

GCMMF transacts on an advance demand draft basis from its wholesale dealers instead of
the cheque system adopted by other major FMCG companies. This practice is consistent with
GCMMF's philosophy of maintaining cash transactions throughout the supply chain and it
also minimizes dumping. All GCMMF branches engage in route scheduling and have
dedicated vehicle operations Depots with dry and cold warehouses to buffer inventory of the
entire range of products

Wholesale dealers carry inventory that is just adequate to take care of the transit time from
the branch warehouse to their premises. This just-in-time inventory strategy improves
dealers' return on investment (ROI). All GCMMF branches engage in route scheduling and
have dedicated vehicle operations.
 Policy regarding unsold/spoilt goods

• If product crosses the shelf life, the retailer bears the costs.
• If the product gets spoilt during the transportation or if there is any customer
complaint, Amul bears costs.
• Unsold goods are not returned to the manufacturer.
• No reverse logistics.
 SCM AND MARKET LOGISTICS

THE BUSINESS MODEL

 The strategy, design and practices in AMUL’s network are strongly driven by the objective
of establishing and operating an efficient supply chain from milk production and
procurement to product delivery to customers. Management of this network is built around
two key elements –

1. Coordination of the diverse elements of the network and

2. Use of appropriate technology that includes product, process and information technology and
managerial practices and systems.

Simultaneous Development of Suppliers and Customers: From the very early stages of
the formation of AMUL, the cooperative realized that sustained growth for the long-term was
contingent on matching supply and demand. The member-suppliers were typically small and
marginal farmers with severe liquidity problems, illiterate and untrained. AMUL and other
cooperative Unions adopted a number of strategies to develop the supply of milk and assure
steady growth.

 First, for the short term, the procurement prices were set so as to provide fair and reasonable
return.
 Second, aware of the liquidity problems, cash payments for the milk supply was made with
minimum of delay.
For the long-term, the Unions followed a multipronged strategy of education and support.
Only part of the surplus generated by the Unions is paid to the members in the form of
dividends. A substantial part of this surplus is used for activities that promote growth of milk
supply and improve yields. These include provision of veterinary services, support for cold
storage facilities at the village societies etc. In parallel, the Unions have put in place a
number of initiatives to help educate the members.

Managing Third Party Service Providers:

 Well before the ideas of core competence and the role of third parties in managing the supply
chain were recognized and became fashionable, these concepts were practiced by GCMMF
and AMUL. From the beginning, it was recognized that the core activity for the Unions lay
in processing of milk and production of dairy products. Accordingly, the Unions focused
efforts on these activities and related technology development. Marketing efforts (including
brand development) were assumed by GCMMF. All other activities were entrusted to third
party service providers. These include logistics of milk collection, distribution of dairy
products, sale of products through dealers and retail stores, some veterinary services etc.

Coordination for Competitiveness

Robust coordination is one of the key reasons for the success of operations involving such an
extensive network of producers and distributors at GCMMF. Some interesting mechanisms
exist for coordinating the supply chain at GCMMF. These range from ensuring fair share
allocation of benefits to various stakeholders in the chain to coordinated planning of
production and distribution. More importantly, the reason for setting up of this cooperative is
not amiss to anyone in this large network organization. Employees, third part service
providers, and distributors are constantly reminded that they work for the farmers and the
entire network strives to provide the best returns to the farmers, the real owners of the
cooperative. It may be r emembered that coordination mechanisms have to link the
lives and activities of 2.12 million small suppliers and 0.5 million retailers!

There appear to be two critical mechanisms of coordination that ensure that decision making
is coherent and that the farmers gain the most from this effort.

These mechanisms are:

 Inter-locking Control: - The objective for developing such an inter-locking control

mechanism is to ensure that the interest of the farmer is always kept at the top of the agenda
through its representatives who constitute the Boards of different entities that comprise the
supply chain. This form of direct representation also ensures that professional managers and
farmers work together as a team to strengthen the cooperative. This helps in coordinating
decisions across different entities as well as speeding both the flow of information to the
respective constituents and decisions.
 Coordination Agency: Unique Role of Federation:- In addition to being the marketing and
distribution arm of the Unions, GCMMF plays the role of a coordinator to the entire network
within the State – coordinating procurement requirements with other Federations (in other
states), determining the best production allocation for its product mix from amongst its
Unions, managing inter-dairy movements, etc. It works with two very clear objectives:
1. To ensure that all milk that the farmers produce gets sold in the market either as milk or as
value added products and
2. To ensure that milk is made available to increasingly large sections of the society at
affordable prices.

Supplier Enhancement and Network servicing:- Their objective is to ensure that

producers get maximum benefit and to resolve all their problems. They manage the
procurement of milk that comes via trucks & tankers from the VS’s. They negotiate annual
contracts with truckers, ensure availability of trucks for procurement, establish truck routes,
monitor truck movement and prevent stealing of milk while it is being transported.

Technology for Effectiveness:-

Technology or knowledge that was embodied in products, processes, and practices became
an important factor in delivering effectiveness to the network of cooperatives. One
distinguishing feature of AMUL (in comparison with other similar cooperatives globally) is
the large variety in their product mix. Most of its plants are state of art and automated.

AMUL’s innovations in the areas of energy conservation and recovery have also contributed
to reduction in cost of its operations. AMUL also indigenously developed a low cost process
for providing long shelf life to many of its perishable products.

The extent of IT usage includes a B2C ordering portal, an ERP based supply chain planning
system for the flow of material in the network, a net based dairy kiosk at some village
societies (for dissemination of dairy related information), automated milk collection stations
at village societies and a GIS based data network connecting villages societies to markets.
Milk collection information at more than 10,000 villages is available to all dairies (or
Unions) to enable them make faster decisions in terms of production & distribution planning,
and disease control in more than 6,700,000 animals. This is linked with information at all 45
distribution offices and 3900 distributors. This network is being extended to cover all related
field offices in the network. The GCMMF cyber store delivers AMUL products at the
doorsteps of the consumers in 125 cities across the country.

Now, going back to the supply chain of Amul, Amul has gone the e- commerce way. The 1st

initiatives taken for an ERP system was in ’94. Tata Consultancy Services was hired to
guide in

its implementation. The implementation project was named as Enterprise- wise Integrated

Application System (EIAS). Automatic Milk Collection System units (AMCUS) at village
societies

were installed in the first phase to automate milk producers logistics. Amul also connected its
zonal

offices, regional offices and member’s dairies through VSATs for seamless exchange of

information. 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. There are plans
to

introduce features like Internet banking services and ATMs which will enable the milk
societies to

credit payments directly to the seller’s bank account. Distributors can place their orders on
the

website www.amul2b.com especially meant for accepting orders from stockists and
promoting

Amul’s products via e-commerce

 TQM (Total quality management) at the grassroots has been a strong movement to develop
leadership, operational and strategic capabilities in the entire network – farmers, village
cooperatives, dairy plants, distributors and wholesalers and retailers. Key elements of this
TQM movement have been:

 Friday Departmental Meetings : Each Friday, at a prescribed time, everyone in the network
(from the farmers to the carry & forwarding agents) joins their respective departmental
meeting to discuss quality initiatives and share policy related information.
 Training for Transformational Leadership so that individuals are able to control their
thoughts, feelings and behavior and take more responsibility in one’s life and surrounding
environment.
 Application of Hoshin Kanri principles to bring about a bottom-up setting of objectives –
aligning policies for effective management of Unions & village societies on hand with those
of channel member on the other hand. ISO/HACCP certification was obtained for all the
Unions and each village society is in the process of obtaining the same.
 Training for farmers and their families emphasizing the need for good health care for not
only cattle during its pregnancy and feeding but also for expecting and feeding mothers and
the whole family. This effort has brought about a significant social change towards such
issues in villages that have cooperative milk societies.
 Retail Census: GCMMF undertakes a census of all retail outlets (over 500,000) to evaluate
customer perceptions and distribution efficacy of their network. This is being done by
wholesalers in their respective territories at their own cost. This information is used for
policy deployment exercise.

THE NETWORK
 Milk is procured from the villages and collected at Village Cooperative Societies (VCS),
from there the milk is taken to manufacturing units where the milk is processed into various
products.

The products are then transporters to the company Depots located in various parts of the
country. The products are then sent to Wholesale Distributors (WD) and from there to the
retailers.

THE FACT SHEET

 Milk is procured twice a day from 2 million from Gujarat alone

 The payment is made under twelve hours of procurement
 There are 10000 village cooperative societies
 There are 3600 wholesale distributors in the country
 45 depots
 The C&F agents are not fixed and are decided by the local company offices
 There are aproxx. 4,50,000 retailers spread all over India
 Total house hold consumers covered are 100,000
 The milk procured per day is 5 million liters
 Where the total capacity of operation is 7 million liters per day
 The peak processing till date has been 6 million liters per day
 These co operative societies are bound to supply there produce only to
GCMMF
 Amul products are available in over 500,000 retail outlets across India
through its of over 3,500 distributors.
 47 depots with dry and cold warehouses to buffer inventory of the entire
range of products
 AMUL PARLOURS (DIRECT DISTRIBUTION)

With products being highly perishable, the supply chain ought to have to maintain correct
temperature, humidity etc and the chain should move fast.

To reach out its consumers more directly and let them the total brand experience, Amul has
come up with Amul parlors. These are called “Utterly delicious parlors”. They have come up
in major cities like Ahmadabad, Bangalore, Baroda, Delhi, Mumbai, Hyderabad and Surat
already, and many more starting up real soon. Till date there are about 400 Amul parlors
across the country. These parlors are set at prominent locations such as campuses of Infosys,
Wipro, IIM-A, IIT-B, temples, Metros etc.

Amul has franchisee plans in regards of the Amul parlors. This might start pretty soon, since
the talk is almost at the end.

Facts

– 2300 Amul Parlors in 2007-08

– Goal of setting up 10,000 outlets by March 2010
 Selection, Motivation & Evaluation of Channel Members

Selection:

The company takes into consideration a host of factors while selecting the channel members.
This is because GCMMF believes that selection of channel members is a long run decision &
the rest of the decision regarding the supply chain depends upon the efficiency & coverage
by the channel members. The following are the host of factors considered by the company in
selecting the channel members:

 Authentication is required by the regarding the identity of the channel members, which
includes the name & address, photograph of the location.

 Proof of solvency which requires name & address of the channel member’s bankers

 Safety of the inventory, which means that the distributor/ dealer should get the stock of
the company insured.

 Inventory or the perishable goods kept by the distributor/ dealer should be in good
condition which means a detail of storage space & Refrigeration facility is to be provided.
Refrigeration system should have deep freezers, cold room & walk in coolers.

 Details of the delivery vehicle, which includes Light Commercial Vehicles, Matador, 3
Wheeler Van, Tricycle Van & Hand/Push cart. The number & model of each of the vehicle
needs to be furnished to the company.

 GCMMF acknowledges the fact that it needs to be sensitive to the market demands. For
this it requires that a number of salesmen needs to be present on the field. The salesmen too
are divided into various categories like the Field salesmen & Counter salesmen. Also the
 details of Clerical Staff & Mazdoors are to be provided. The technical competence of the
salesmen needs to be mentioned

 Details of the product kept of other companies have to be provided. The annual sales of
these products too have to be mentioned. Also details of complementary products & product
lines need to be mentioned.

 Dealers of the company must carry a good reputation. This is due to the fact that the
company believes reputation of the dealer affects the clientele.

 Market coverage by the distributors needs to be defined which includes details of

Geographic coverage & Outlets per market area.

 The company also requires the dealers to furnish any Advertising & Sales initiative
undertaken by them on behalf of the company.
 Motivation of Channel Members

GCMMF strongly believes in maintaining a good relationship with the channel members so
that they are genuinely motivated to work for the company. Also if the channel members are
motivated, they can also initiate advertising & sales promotion schemes on behalf of the
company. However to keep the channel members motivated to work, the company has to
incur certain costs but the benefits of it are felt in the long run. The following are the
motivation programs run by the company:

Distributors

 One of the main factors, which keep the distributors motivated, is the margin. Usually the
margins offered by the company are 8% & it is raised to 8.5%. Volume wise this comes out
to be a big figure since Amul’s product has a good demand in the market. However
compared to the other companies the margins are still lower since the new players in the
market offer a much higher margin. But the very fact that Amul’s products have good
demand in the market motivates the distributors to stock it.

 Amul being a cooperative cannot afford to give heavy monetary incentives. Amul’s
products are considered to be value for money since the company does not believe in
charging high margins. In fact all monetary incentives are just the short run means to
promote the company’s product. In order to keep the Channel members motivated in the long
run, Amul builds on the concept of “Trade Marketing” which makes the dealers & the
distributors believe that the company’s products are worthy of being pushed in the market.

 The company is organizing various Total Quality Management initiatives & workshops.
Here various counseling measures are undertaken by the company to improve the overall
working of the distribution network.
 Vision and mission statement: the company cascades down the vision to the various
channel members, this is done through various events organized by the company at different
locations where the values of the company are made clear and enforced to the channel
members. Also the fact that Amul being a cooperative society cannot afford to spend
exorbitantly on such events therefore it has a very traditional way of organizing these get
together which leaves an impact on the members.

 Amul yatras: this includes taking the channel members on a guided tour of the
manufacturing and procuring facilities in Gujarat. So that the channel members can have an
experience of the working of the company and can pick up some quality measures that can
help them to synchronize and improve their own functioning at various levels. This in turn
help the company to co ordinate the entire value chain, as the channel members understand
the various constraints and liberties the company goes through. The company has already got
the Rajiv Gandhi award for quality.

The Retailers

 Trade schemes: these are undertaken by the company only for the hard selling items e.g. Ice
creams, flavored milk etc. for these the company raises the margins by 2%, also schemes like
good packaging incase of butter and cheese is undertaken by the company. However this is
only a short-term initiative to push the products of the company.

 Glow boards: the company puts up glow boards at the retailer and pays the major portion of
the cost.

 Schedule of the salesmen: they provide the retails with this schedule so the retailers can pre
estimate the quantities of the various products needed.

 Infrastructure facilitation: the company facilitates the retailers to buy freezers and fridges
by formulating an easy payment program and a commitment to buy back the equipment at a
reasonable price when the value of the equipment has depreciated.
 Evaluation of channel members

 Beat plan: this plan is generated for the various product categories i.e. diary dry,
diary wet, Dhara and ice cream. A weekly schedule is prepared for various markets and the
retailers the turnover for each of the product is calculated for the wholesale dealers.

 Cumulative performance: the performance of the dealers is averaged out over a

period of three years where a comparison is made of the present performance vis-à-vis the
previous ones.

 Target versus achievement: the performance and the targets are compared and
therefore the gaps are identified which help in evaluating the WD and planning for the next
year as well. This is done for each of the product category.

 Other criterion

o Details of the bank guaranty

o Photographs of the offices
o Details of the WD salesmen and the product lines he deals in
o The computerization facility available
o The storage space
o Refrigeration facility with photograph
o Details of the delivery vehicle with photograph
o Summary of the monthly potential sales of markets
o Summary of the product wise monthly sales potential of institutions
 Conflicts And Co-Operation Among Channel Members

Conflicts

 Ownership of assets: Previously the company used to give the cooling equipment on
lease to the retailers, when the company wanted the stuff back; the retailer disagreed to
comply and created issues of ownership.

 Stocking issues: The company doesn’t want the retailers to stock the competing
brand in the company leased fridges, which at times s hard to manage as retailers tend to do it
often.

 Replacement of products: The deterioration in the product calls for fail in

replacement by the company this major issue of vertical conflict.

 Credit policy: Compared to the market, the company’s credit period is less that
specially incase of institutional sales is very important.

 Packaging: The channel members for easy storing demand a better quality of
packaging.

 Replenishment: The replenishment of the stocks is not prompt in case of amul

cheese and all hard selling items.

 Margins: The Company provides least margins to all the channel members. For e.g.
The retailer’s margin in case of butter is 8% as compared to Britannia’s 12%
 CO-OPERATION AMONG CHANNEL MEMBERS

 Amul quality circles: The members of the local channel meet together every month
to share issues and the achievements of the channel members. This is an ongoing activity
facilitated by the company offices in different locations; this enables the channel members to
learn together and reduces the horizontal conflicts among the WDs.

 Pilot salesmen scheme: To reduce the financial burden of the distributors this
scheme is run whereby half the cost of the salesmen is born by the company and the rest half
by the distributor

 Scheduling of sales: The WD’s provides Schedule of the distributor’s sales men to
the retailers so that the retailers can plan out and place the orders in advance.

 Agreement defining rights: The company makes the distributors sign an agreement
where the areas of operation for each of the distributors are defined, therefore avoiding any
conflict amongst the distributors regarding their areas of operation.
 PRODUCT INFORMATION

PRODUCT-AMUL GOLD PASTEURISED FULL CREAM MILK

WEIGHT- 500 ml Nett

PRICE- Rs. 16

FAT-6.0 AND SNF-9.0

NUTRITIONAL INFORMATION

Serving size 200 ml

Amount per 100 ml
Energy 87 kcal

Energy from fat 54 kcal

Total fat :6g Phosphorus :130 mg

Saturated fat : 3.7g Sodium :50 mg
Cholesterol :16 mg Thiamine :42 mcg
Total carbohydrate :5.0g Rivoflavin :120mcg
Added sugar :0g Niacin :100mcg
Protein :3.3g Folic acid :7.5 mcg
Calcium :150mg Vita(retinol) :85mcg
 VOLUME PURCHASED

Total volume distributed by distributer to dealers in Badarpur Bodor-800-1000 liter

Total volume purchased by each dealers- 160-180 liters (i.e. total no of packets of amul gold
milk purchased by each dealer)- 320-360

Total volume purchased by each retailers-10-12 liter (20-25 packets)

 SALES AND PROFIT

Sales and profit for Distributer

Total volume of milk distributed by distributer -800-1000 liters(i.e. total no of packets

distributed 400-450 approx)

Profit margin for distributer per liter-60 paise

Total profit for each distributer- 480-600 Rs

Sales and profit for dealers

Total sale done by each dealer- 160-180 liters

Profit margin for each dealer per liter-40paise

Total profit generated by each dealer-64-72 Rs

Sales and profit for retailers

Total sales done by each retailers-10-12 liters

Profit margin for retailers per litre-50paise

Profit generated by each retailers- 5-6 Rs

DISTRIBUTION CHANNEL OF AMUL MILK

MANUFACTURED UNIT

PACKING AND LABELLING

DISTRIBUTORS

DEALERS

RETAILERS

CUSTOMERS
 STOCK REPLENISHMENT CYCLE

Since milk is a fast moving consumer goods daily used by each household in India. So Amul
gold pasteurised full cream milk is supplied by distributer everyday to dealers and retailers.
Stock is purchased within 24 hours (early in the morning).

TRANSPORATION METHODS

They manage the procurement of milk that comes via trucks & tankers from the VS’s to
manufacturing unit and then to distributers and dealers .They negotiate annual contracts with
truckers, ensure availability of trucks for procurement, establish truck routes, monitor truck
movement and prevent stealing of milk while it is being transported.
 COMPETITOR ANALYSIS

The main competitor of Amul is Mother dairy in Delhi. Most of the market share is
captured by mother dairy products (55% (approx) market of pasteurized full cream milk is
covered by Mother dairy

product % of market share

Amul 30
Mother dairy 55
others 15
 market share

15

mother dairy
amul
others

55
30

AMUL PESTEURIZED FULL CREAM VS MOTHER DAIRY

PASTEURISED FULL CREAM MILK
 VS

AMUL MOTHER DAIRY

Price 16Rs 17Rs
Weight 500 ml 500 ml
Margin for distributors’ 60paise/liter 60paise/liter
Margin for dealers 40paise/liter 40paise/liter
Margin for retailers 50paise/liter 50paise/liter

Sales and profit of Mother dairy pasteurized milk

Mother diary full cream milk is purchased in more quantity as compared to Amul full cream
pasteurized milk.
For distributor

Total quantity of mother dairy full cream pasteurized milk is distributed by distributor at
-2300-2500 liters

Profit margin for distributer-60paise/liter

Total profit generated by distributer- 1380Rs-1500

For dealers

Total quantity purchased by each dealer at 400-500 liters

Profit margin for dealers-40paise/liter

Total profit generated by dealers-160-200Rs

For retailers

Total quantity purchased by each retailer at Badarpur Boder-25-30 liters

Profit margin for retailers- 50paise/liter

Total profit generated by retailer-12.5-15Rs

Table of total Sales done each channel member

Channel member Amul (in liters) Mother dairy(in liters)

By distributer 800-1000 2300-2500
By dealers 160-180 400-500
By retailers 12-15 25-30
 Table of profit generated by each member per day

Channel member Amul(in Rs) Mother dairy(in Rs)

For distributor 480-500 1380-1500
For dealers 64-72 160-200
For retailers 10-12 12-15

As compared to amul, mother dairy has more market share and more quantity of mother
dairy full cream pasteurized milk is distributed and supplied by channel members. Hence
more profit is generated by each channel member inspite of having equal margin on each
product.

LEARINGS

It was a great opportunity to carry a research project on such a reputed organization which
gave me a good learning experience and knowledge about the products and industry.

Another very crucial area that needs mention is the experience I gained while talking to and
interacting with people. This has been a truly enriching experience because interacting with
people with varied profile helped in enriching my communication skills
FINDINGS

 Lack of Awareness in consumers. Many people are not know about Amul chocolates
specially children and teenagers.

 As I found that the main product of Amul is Milk and company firstly wants to
capture maximum market share in milk market which is approx. 66%, after it Amul is
concentrating upon butter & cheese which has market share of approx. 88%, so it is not
concentrating upon chocolates.
 There is lack of Sales Promotional Activities i.e. free tattoo, extra weight, toys, quiz
contest etc.

 Cadbury is main competitor and strategically better performer then Amul.

 I find the main thing is that “Amul” brand name has very good image in consumer’s
mind and they consider it as Pure & Good Product.

 People who have tasted Amul Chocolate are not ready to purchase the same again.

SUGGESTIONS

 First and foremost Amul should take proper action in order to improve service,
because although being on a top slot in Butter and milk supplies it does not get the
sales in chocolate, which it should get.

 Company should use brand ambassador which attracts each age segment i.e. Saniya
Mirza, Shaktimaan, Amitabh Bacchan, Superman, Krrish, Jadoo etc.

 Amul should give local advertisements apart from the advertisements given at the
national level. Local advertisement must mention the exclusive Amul shops of the
city.
  Try and change the perception of the people through word of mouth about Amul in
advertisements, because they are the best source to reach Children and families.

 Though Amul chocolate advertisements are rarely shown on television yet many
people could recall it as per the data of research. It shows that there is only need to
give advertisement only to rememorize customers. Because Amul is very strong
brand name.

 Company should launch chocolate in new attractive packing to change image of

Amul chocolate in consumers mind.

 Company should introduce sales promotion schemes like free weight, pranky,
tattoo, contest, free gifts etc.

 Advertisement can be done with the help of animations that attracts children and
teenagers because chocolates are consumed largely in this segment.

CONCLUSION

 As Amul is a very huge organization' it has maximum market share in milk

 The company must make policy for replacment of product's
 The company must call a meeting of retailers time to time
 Amul should look Oberlin towards the increment in profit margin of distributors and
retailers
 Amul should provide credit facilities for retailers and distributors
 The overall management of Amul is so superior that they manage the overall system
in 750 employees
 Amul must come up with new promotional activities such that the people become
aware of Amul milk like Tazza n Gold
BIBLIOGRAPHY

Books:

i. Marketing Management (12th Edition) – Philip Kotlar

ii. Research Methodology – C. R. Kothari

Websites:

i. www.google.co.in

ii. www.wikipedia.com

iii. www.amul.com.

iv. www.marketresearch.com

v. www.dairy.com

ANNEXURE

QUESTIONNAIRE:-

(Retailer Survey)

Name of the shop: __________________________________________________

Retailer Name: ____________________________________________________
Address: __________________________________________________________
1) Do you stock Amul milk? a) Yes
b) No

2) If yes, what is the size of Amul milk packets do you preferred to store?
a) 250 ml
b) 500 ml
c) 1 Ltr
d) 5 Ltr.

3) If No, Why?
a. Absence of packaging date
b. Low margin
c. No replacement for leakage
d. Low distribution

4) Which is the most preferable brand of packaged milk that you stock?
 Amul
 motherdairy
 manali
 tabala
 Others
5) From where do you get Amul milk?

a) Distributors
b) Other
suppliers

6) Are you satisfied with Amul distributor?

a)
Yes
b)
No

7) Do you know which Sales promotional activities does the company undertake for
Amul milk?

a) Price off d) Free samples

b) Credit facility e) Coupons
c) Advertisement f) P-O-P Displays

8) Are you interested in distribution of Amul milk?

a) Yes
b) No

9) Are you aware of Amul Parlor (APO) and its benefits?

a)
Yes
b)
No

10) Are you interested in opening an Amul Parlor (APO)

a)
Yes
b)
No
11) What is consumer’s expectation from Amul
milk? a) Good quality
b)
Packaging
c)
Availability

12) Give your ratings to following attributes of Amul milk.

Very good Good Average Bad Very bad

a) Quality
b) Brand image
c) Availability
d) Packaging
e) Margin
QUESTIONNAIRE:-

(Customer survey)

Name of the shop:

__________________________________________________
Retailer Name:
____________________________________________________
Address:
__________________________________________________________

1) Do you know about Amul?

Yes No

2) What are the products of Amul you use very frequently?

Butter Cheese Shrikhand Milk Powder

Dahi Milk Ice-Cream Butter Milk

3) Do you regularly get the Amul Milk?

Yes No
4) Which brand’s milk do you like most?

Amul Katraj Chitale Gokul

Other (Specify)……………………..

5) Do you know about Amul God and Taaza?

Yes No

6) How is the taste of Amul milk?

Poor Satisfactory Excellent

7) How is the taste of Amul Tazza?

Poor Satisfactory Excellent

8) What about the price of Amul milk?

Low Average High

1. Do you like the home delivery scheme of Amul Milk?

Yes No

2. Give your ratings to following attributes of Amul milk.

Very good Good Average Bad Very bad

f) Quality
g) Brand image
h) Availability
i) Packaging
j) Price

3. Any suggestion about Amul milk: