For Jayashree Parmar (Parmar), a 35-year-old housewife from Samarkha in Kheda District in the state of Gujarat, Western India,

the day began at 5.00 am. Every morning, she collected milk from the cows her family owned and delivered it to the village cooperative society (VCS). Even at such an early hour, the society would be abuzz with activity; several people would be waiting in a queue carrying containers of milk. When it was Parmar's turn, the milk she had brought would be tested for its fat content and measured. The VCS would collect the milk and give her a slip, which she would exchange for money at the next counter. Evenings would see a rerun of the same process. She earned Rs. 1204 a day, a useful supplement to her family's income.

And what was more remarkable was the fact that the milk that Parmar and others like her supplied and the products made from it, could eventually find their way to the shelves of WalMart stores in the US as Amul (Anand Milk Union Limited) products. Amul, one of the most successful brands in India, was the brand name for the dairy products marketed by the Gujarat Co-operative Milk Marketing Federation (GCMMF).

GCMMF collected 5.71 million liters of milk a day from vendors like Parmar. Its revenues were Rs. 29.22 billion in the financial year 2004-05 (Refer to Exhibit I for GCMMF's revenues between 1995 and 2005). GCMMF's supply chain activities began at the VCS where the milk was collected. Chilling units, processing plants, and packaging also formed part of the supply chain. GCMMF with its range of products that included butter, cheese, milk powder, sweets, ice creams, and buttermilk, managed to successfully compete with multinationals like Unilever's subsidiary Hindustan Lever, and Nestl in the Indian market It had also expanded globally to countries in the Middle East, Africa, and to the US. The export earnings of GCMMF were Rs. 1.15 billion in the financial year 2004-05.

GCMMF was owned by a chain of farmers who had formed a network of cooperative societies. Milk was collected from more than 2.4 million farmers in 11,615 villages twice a day, and tested, graded, and transported to the processing centers. GCMMF's products were marketed through 50 sales offices located across India to 4,000 stockists. These stockists supplied the products to more than 500,000 retail outlets.

According to Verghese Kurien (Kurien), former Chairman, GCMMF, "Amul is the epitome of a unique model of cooperative development called the Amul Pattern. It is also the spearhead of the cooperative movement in India. It has empowered farmers through skills of procurement, processing, marketing-and more recently of being in direct touch with the customer through retailing. This ensures not only fair returns for milk produced, but also a never before closeness to the market facilitating a real time feel of its pulse."

About GCMMF
The seeds of the cooperative movement, which helped turn India into the largest milk producer in the world by 2000, were sown in 1946 in Samarkha, when a farmers' meeting was called by Morarji Desai (Desai), (who later became the Prime Minister of India) on the advice of Vallabhbhai Patel (who became the first home minister of India). Desai and Vallabhbhai Patel assigned Tribhuvandas Patel (Patel), a local farmer and freedom fighter, the task of organizing the farmers into a cooperative unit. The cooperative found its place in history by becoming the first cooperative milk society in India that went on to break the system of middlemen. Earlier, in 1945, the distribution and supply of milk in Mumbai (earlier known as Bombay) was managed by Polson Dairy, which obtained the milk from Kaira district in Gujarat. Polson gave the milk producers a very low price for the milk. Patel encouraged the milk producers to form cooperatives to combat the monopoly of Polson Dairy...

GCMMF's Product Portfolio

GCMMF began as a milk supplier and slowly added new products to its portfolio. One of the first products that it produced was butter; skim milk powder followed and ghee (clarified butter) in 1955. Gradually, several other products were added. GCMMF sold different varieties of milk like full cream milk, semi-toned milk, and full- toned milk. The fat content in the milk was reduced and the fat removed was used to make products like cream and butter, which yielded higher margins. In the 1970s, GCMMF introduced cheddar cheese, a malt based beverage called Nutramul, and chocolates. Cheese spread was launched in 1983. In the same year, a sweet made of curd known as Shrikhand was also introduced...

GCMMF's Supply Chain

At the start of the GCMMF's supply chain were the farmers who supplied the milk to the VCSs. The district unions processed the milk and took care of making the final product.

GCMMF was the marketing agency for the products produced by different milk co-operative member societies in Gujarat and some unions in other states, which marketed their products under the brand name Amul. In 2005, GCMMF had 12 district milk unions, with each union having one or more manufacturing units producing different Amul products. GCMMF's large product portfolio called for efficient procurement and distribution in order to ensure product availability across the country. The essential elements of GCMMF's supply chain management included milk production, procurement, transportation, processing, packaging and distribution of final products like butter, cheese, ice-cream, etc. to the customers...

Procurement
Activities at the village level comprised developing and servicing the VCSs, increasing milk collection, procuring milk, and transporting it to the chilling and processing units twice a day. Earlier, one of the problems had been the inadequate feeding of animals, because of which milk production from them was low. The VCSs provided the farmers with good quality animal feed, fodder, and other services like veterinary first aid...

Processing
After the union received the milk, it was tested and if it was found to be of good quality, it was sent for processing. If the milk was found to have high acidity, it was used to make buttermilk. Raw milk was sent through a filter and clarifier and was pasteurized. For pasteurization, milk was treated at high temperatures for a specified time. This helped in destroying the pathogens and in maintaining the quality. After pasteurization, the milk was sent through a separation machine. Here the cream was separated and skimmed milk

was obtained. According to the demand, the unions packed the milk after it was pasteurized and sent for distribution. The cream was marketed as Amul Fresh Cream...

Distribution
GCMMF coordinated with various unions to get a regular supply of milk and dairy products. The processed milk and dairy products were procured from district dairy unions and distributed through third party distributors. To ensure quality and timely deliveries, GCMMF and the district unions had several mechanisms in place. The VCS constantly monitored the deliveries of the milk collected and ensured that the milk was picked up on time. The unions monitored the supplies of milk and the distribution of finished products...

The Road Ahead

By the end of 2005, GCMMF had become the largest producer of vegetarian cheese in the world, with exports of 600 tons in 2005. GCMMF's products found their way to several countries including the US, Australia, China, Mauritius, Hong Kong, Japan, and some countries in Africa. GCMMF's success in improving the economic status of poor farmers was appreciated by the World Bank, which sought its help to incorporate its cooperative and supply chain model in African countries. Neighboring countries like Sri Lanka and Pakistan sought GCMMF's help in replicating its model in their countries...