Supply Chain Management

Amul Supply Chain Management

OBJECTIVE OF THE STUDY

1. To study the supply chain of Amul.

2. To study the complexity of supply chain in case of perishable products.
3. To study the use of IT technology in supply chain of Amul.

Introduction about Amul

Amul is an Indian dairy cooperative, based in Anand, Gujarat. The word Amul is
derived from the Sanskrit word Amulya, meaning invaluable. The co-operative is also
sometimes referred to by the unofficial backronym: Anand Milk Union Limited. Formed
in 1946, it is a brand name managed by an Indian cooperative organisation, the
Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF), which today is jointly
owned by 3.03 million milk producers in Gujarat.

The Kaira District Co-operative Milk Producers' Union was registered on December 1,
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
(brand) dairy in Anand. Often milk went sour as producers had to physically carry the
milk in individual containers, especially in the summer season. The prices
of buffalo and cow milk were arbitrarily determined. Moreover, the government at that
time had given monopoly rights to Polson Dairy to collect milk from Anand and supply
it to Bombay city in turn

The success of the dairy co-operative movement spread rapidly in Gujarat. Within a
short span five other district unions – Mehsana, Banaskantha, Baroda, Sabarkantha
and Surat were organized. In order to combine forces and expand the market while
saving on advertising and avoid a situation where milk cooperatives would compete
 Supply Chain Management

against each other it was decided to set up an apex marketing body of dairy
cooperative unions in Gujarat. Thus, in 1973, the GCMMF 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).

History of Amul

During the fourth decade of the 19th century, the basic sources of income for farmers
of the Kaira district was farming and selling milk. At that time there was great demand
of milk in Bombay. The biggest purchaser of milk was Polson Ltd. It was a privately
owned dairy that produced milk products and also supplied milk to various regions of
the state. It enjoyed monopoly. All farmers of the Kaira district were at the mercy of
the milk traders who dictated the process; they had nowhere to turn to.

This unfair system spread widespread discontent amongst the farmers. Hence they all
decided and appealed to Shri Sardar Patel, a great leader of India’s freedom
movement, for help. Shri Sardar Patel advised them to market milk through a co-
operative society that was operated by them individually. He sent his very trusted
person, Shri Morarji Desai to organize the farmers. At a meeting held at Samarkha (a
village near Anand) on January 4, 1946, it was resolved that milk co-operative
societies would be organized in each village of Kaira district to collect milk from the
producers and bring it to the district union. The government should be asked to buy
milk from the union.

When the government turned down the demand, Kaira district’s farmers organized a
milk strike for 15 days, not a single drop of milk was sold to traders. The Bombay Milk
Scheme was badly affected. The milk commissioner of Bombay visited Anand,
assessed the situation and decided to concede to the farmers’ demands.

Thus, KDCMPUL – Kaira District Co-operative Milk Producers’ Union Limited, came
to existence. It was formally registered on December 14, 1946.
 Supply Chain Management

During winter season, the quantity of milk received was very high. But the Bombay
Milk Scheme did not accept the excess milk brought in by the farmers. Hence, this
forced the farmers to sell excess milk to traders, which gave them very nominal amount
for this quantity. This led to the decision to set up a plant to pasteurize milk. In the
beginning there were only few farmers supplying about 250 liters of milk everyday.

With the financial help from UNICEF, assistance from the government of New Zealand
under the Colombo plant, and technical assistance provided by FAO for Rs. 5 million,
planning for the factory to manufacture milk powder and butter was done.

Dr. Rajendra Prasad the then President of India laid the foundation on November 15,
1954. On October 31, 1955, Pandit Jawaharlal Nehru, the then Prime Minister of India,
declared the plant open. In 1958, the plant expanded. It produced sweetened
condensed milk. Two years later, Shri Morarji Desai, the then Finance Minister,
inaugurated a new wing designed to manufacture 600 tons of cheese and 2500 tons
of baby food per year. This was the first time in the world that cheese and baby food
was processed and produced from buffalo’s milk on a large and commercial scale.

A plant to manufacture balanced cattle feed, donated by OXYFAM, was formally

commissioned on October 31, 1964, by Shri Lal Bahadur Shastri the then Prime
Minister of India, at Boriavi. KDCMPUL then set up a plant to manufacture high protein
weaning food, chocolate and malted drink at Mogar, about 8 kms south of Anand.

AMUL means "priceless" and it comes from the Sanskrit word “Amoolya. This brand
name suggested by a quality control expert in Anand. Variants, all meaning "priceless",
are found in several Indian languages. Amul products have been in use in millions of
homes since 1946. Amul Butter, Amul Milk Powder, Amul Ghee, Amulspray, Amul
Cheese, Amul Chocolates, Amul Shrikhand, Amul Ice cream, Nutramul, Amul Milk and
Amulya have made Amul a leading food brand in India. (Turnover: Rs. 42.78 billion in
2006-07). 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
 Supply Chain Management

indigenous technology, of the marketing survey of a farmers' organisation. And have

a proven model for dairy development.

Today there are twelve dairies producing products under the brand name of AMUL.
AMUL is now Asia’s largest dairy brand and it is the world’s second largest firm
producing dairy products.

FOUNDER OF THE COMPANY

Mr. Verghese Kurien showed main interest in establishing union who was supported
by Shri Tribhuvandas Patel who lead the farmers in forming the Cooperative unions at
the village level. The Kaira district milk producers union was thus established in
ANAND and was registered formally on 14th December 1946.

Since farmers sold all the milk in Anand through a co-operative union, it was commonly
resolved to sell the milk under the brand name AMUL.
 Supply Chain Management

Supply Chain of Amul

Supply chain of Amul has been divided into two parts :-

The first one is the collection chain and the second one is the Supply chain. The
collection chain starts from weighing the milk to determination of the fat content in the
milk to finally calculation of the purchase price. While the supply chain starts from
storing the milk to processing the milk to finally distributing the milk.

Procurement Cycle

AMUL is a dairy cooperative in the western India that has been primarily, through its
innovative practices, for India to become the world’s largest milk producer. The
distinctive features of this paradigm involves managing a large decentralized network
of suppliers and producers, simultaneous development of markets and suppliers,
lean and efficient supply chain, and breakthrough leadership. Every day Amul
collects 447,000 litres of milk from 2.12 million farmers, converts the milk into
 Supply Chain Management

branded, packaged products, and delivers goods worth Rs 6 crore (Rs 60 million) to
over500,000 retail outlets across the country. To implement their vision while
retaining their focus on farmers, a hierarchical network of
cooperatives was developed, this today forms the robust supply chain behind
GCMMF’s endeavors.
The vast and complex supply chain stretches from small suppliers to large
fragmented markets. Management of this network is made more complex by the fact

that GCMMF is directly responsible only for a small part of the chain, with a number
of third party players (distributors, retailers and logistics support providers) playing
large roles. Managing this supply chain efficiently is critical as GCMMF's competitive
position is driven by low consumer prices supported by a low cost system of
providing milk at a basic, affordable price.

Distribution Chain

The distribution network

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
 Supply Chain Management
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. 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.

THE BUSINESS MODEL

From the very beginning, in the early 1950s, AMUL adopted the network as the basic
model for long-term growth.
• The network explicitly includes secondary services to the farmer
-suppliers.
• Several of the entities in the network are organized as cooperatives linked in a
Hierarchical fashion.

Customers:
In comparison with developed economies, the market for dairy products in Indiais still
in an evolutionary stage with tremendous potential for high value products such as
icecream, cheese etc. The distribution network, on the other hand, is quite
reasonable with access to rural areas of the country. Traditional methods practiced
in western economies are not adequate to realize the market potential and
alternative approaches are necessary to tap this market.

Suppliers:
A majority of the suppliers are small or marginal farmers who are often
illiterate, poor, and with liquidity problems as they lack direct access to financial

institutions. Again, traditional market mechanisms are not adequate to assure

sustenance and growth of these suppliers.
 Supply Chain Management

Third Party Logistics Services:

In addition to the weaknesses in the basic infrastructure, logistics and transportation

services are typically not professionally managed, with little regard for quality and
service. In addition to outbound logistics, GCMMF takes responsibility
for coordinating with the distributors to assure adequate and timely supply
of products. It also works with the Unions in determining product mix, product
allocations and in developing production plans. The Unions, on the other hand,
coordinate collection logistics and support services to the member-farmers. In what
follows we elaborate on these aspects in more detail and provide a rationale for
the model and strategies adopted by GCMMF.

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. This practice continues today with
many village societies making payments upon the receipt of milk. For the long-term,
the Unions followed amul tip ronged strategy of education and support. For example,
only part of the surplus generated by the Unions is paid to the members in the form
of dividends Managing Third Party Service Providers: Unions focused efforts on
these activities and related technology development. The marketing efforts were
assumed by GCMMF. All other activities were entrusted to third parties. These
include logistics of milk collection, distribution of dairy products, sale of products
through dealers and retail stores, some veterinary services etc. It is worth noting that
a number of these third parties are not in the organized sector, and many are not
professionally managed. Hence, while third parties perform the activities, the Unions
and GCMMF have developed a number of mechanisms to retain control and assure
 Supply Chain Management
quality and timely deliveries. This is particularly critical for a perishable product such
as liquid milk.

Amul Inclusion of IT Technology in Supply Chain

Amul, the biggest dairy industry in India has, in association with Prompt Group, has
taken up this initiative to make this dream come true through a common software
system that has already been running quite successfully in Gujarat.

Biggest IT Integration In The History Of Dairy Industry

Indian dairy sector forms the biggest part of Indian economy and also the largest milk
producer across the globe. Major revenue is earned through this sector in India. It is
because of the underlying fact that the entire rural population, which contributes to
over half of the total Indian population, drives the dairy sector in India. It is only
because of the farmers that the dairy industry has been blooming exponentially. If the
farmers all over the country are brought together on a single platform, the Indian dairy
industry will surpass all other giants around the world. It is a big challenge to bring
about such transformation and maybe next to impossible. But as they say, well begun
is half done. Amul, the biggest dairy industry in India has, in association with Prompt
Group, has taken up this initiative to make this dream come true through a common
software system that has already been running quite successfully in Gujarat.
 Supply Chain Management

Amul had two key concerns,

1. First, how to include milk producer in this process and

2. Second, how to benefit them with digital technology

The milk procurement process is run by three major stakeholders, farmers, milk
cooperative societies, and milk unions. To connect and all of them in a single platform
and bring about transparency, AMCS provides various mechanisms.

Farmers IoT

A farmer is provided with Farmers App that enables him to keep track of his entire
business. It shows him how much quantity of milk he is giving to the milk society in
morning and evening, what is the amount of fat and SNF, how much he was paid,
amount credited in his account, complete passbook of his bank account, compare how
much milk he gave last month/ year, how much fat SNF was there and how much
cattle feed did he buy from milk society. It gives full information of transactions with
milk societies imparting easy business management.
 Supply Chain Management
“Our objective is to reach out to all 18,500 village cooperative societies through this
app. It will enable us to link farmers and his village to a product made out of his milk
being sold anywhere in India.” as quoted by Sodhi. Thus, Amul AMCS software is an
extremely significant project in Cow to Consumer process.

Access to Centralized Data

The peculiarity of this project is that there exists just one AMCS software in entire
Gujarat. A centralized data management system is maintained at one place for data
analysis, milk production estimation in any district or village or route, to identify and
analyze milk production variation based on seasonal and climatic conditions and for
future milk production estimations. Earlier, officials had to commute and visit each and
every village to meet farmers to discuss their concerns and solve them. But now,
thanks to Amul AMCS project, they can monitor, all activities going on in any district

or village sitting at one place and based on that, take necessary actions. They can
also manage and respond to farmers’ complaints and issues centrally.

Cashless Society

One salient and eminent feature that Amul AMCS offers is Cashless Society.
Previously, payments to farmers were made on a weekly or bi-monthly basis. Owing
to Digital India initiative, it will become easy to deposit money directly into farmers’
accounts as they will be automatically linked to milk society’s bank account. Besides,
farmers will receive instant notifications whenever payment is credited to their
accounts. Hence, AMCS project stands extremely important for all these activities in
coming days. A milk producer, basically a farmer, can keep track of his business and
all the essential information useful for future decision making, altogether proving to be
favorable.

The beneficiaries of this project will be all the stakeholders like farmers, district union
officers, and the Federation. Apart from this, the whole system will become
transparent. RS Sodhi, while congratulating the entire team including members of milk
 Supply Chain Management
societies for their invaluable contribution, district union officials for supporting this
initiative wholeheartedly and Prompt Group for taking up this project, implementing
and making it possible, expressed his wish that the Amul AMCS reaches out to all the
milk societies all over Gujarat.

There’s no doubt that Amul AMCS project has brought in digital transformation
throughout many villages in Gujarat. The mindset of people is changing and so is the
nation. India is on its way to bridge the gap and become a developed nation. And with
the help of Amul AMCS project, it will turn possible to what seemed to be next to
impossible on the surface.

Amul Strategic Partnership with IBM

With the government of India announcing nationwide lockdown on March 24 due to

the outbreak of COVID-19, Amul, one of the biggest FMCG company in India, was in
a major fix. With its complex supply chain, the company witnessed an unforeseen
surge in the demand for dairy products and a steep decline for frozen products. With
the frozen supply chain lying idle, and the dairy supply chain under pressure, Amul
maximized the use of recourses and infrastructure by deploying the frozen one for
delivering dairy products overnight.

"The pandemic situation was extremely critical for us since this is an essential service.
But thanks to our integrated IT infrastructure, during the lockdown, our supply chain of
3.6 million farmers, 18,700 societies, 5,000 milk tankers going to 200 chilling stations,
 Supply Chain Management
making 750 SKU, then going to 62 branches and 10,000 distributors and one million
retailers, I knew exactly what was happening at every point- where tankers are being
stopped, in which village milk has not been collected, and which market tankers could
not go. Technology is being used every day by everyone, but during the lockdown, it
was very critical for us," says RS Sodhi, Managing Director, GCMMF Ltd (AMUL).

With the objective to integrate all its members and federation on a single enterprise
platform and enable end-to-end visibility of its supply chain - all while supporting
business growth, Gujarat Cooperative Milk Marketing Federation (GCMMF), owner of

the popular brand Amul, signed a 10-year partnership with IBM back in 2009, which
has been renewed for another 10-years. It covered Business Transformation in the
form of ERP implementation for GCMMF and 14 Member Unions, provision of
Infrastructure and Application Management Services. IBM conducted an IT
architecture and strategy study and developed an IT strategy roadmap for GCMMF.

Kamal Singhani, Managing Partner, Global Business Services, IBM India/South Asia,
explains, "To meet GCMMF objectives, one of the biggest parts has been supply chain
solutions that have been woven around our ERP solutions. It is going beyond financial
balancing and is responsible for the inventory supply for the entire business.

The entire technology infrastructure has been created around the planning landscape,
to ensure it helps them sustain and continue to maintain the pace. Besides, GCMMF
has deployed various high end IT point solutions like milk procurement, milk testing,
warehouse management and even POS solutions."

Amul has a very complex supply chain, which is multi-layered and multi-dimensional.
Unlike other manufacturing units, Amul's supply chain does not start from a factory or
an ancillary supplier. It starts from the source of the milk production - the cattle and
the milk suppliers. It required a super agile, extremely responsive and scalable
platform that would be able to provide complete control and real-time visibility to their
complex 24-hour logistics process. A complete disaster recovery solution, given the
highly perishable nature of the products in question, was a must. In case of an incident,
 Supply Chain Management
the solution would need to get the processes back on their feet with minimum
downtime, and the distribution channels to be always up and running for maximum
customer benefit.

Lingraju Sawkar, General Manager, Global Technology Services, IBM India/South

Asia, says "For GCMMF, we created a private cloud implementation with a data centre
infrastructure and a disaster recovery infrastructure which backs up automatically.
Whenever there is any intervention needed or an issue on the production side, it fills
the Disaster Recovery (DR) on an automatic basis and the systems run seamlessly

between production and DR. It is monitored and managed 24/7 by remote technology
at our command centres so the operations are constantly being carried out."

The strategy was planned around five business transformation initiatives that would
provide the foundation for the growth plans. The IT initiatives that were identified were
designed to enhance visibility and transparency across the value chain while
improving operational efficiency. SAP technology solutions were chosen for IT
infrastructure and applications, ERP solution and distributor management in a Village
Co-operative Society context, business analytics solutions for advanced planning
capabilities, and an IT infrastructure to provide an integrated platform for better
visibility for the entire distribution chain. This infrastructure would assure better
disaster recovery and business continuity solutions. Scalability and flexibility were
identified as the most critical objectives and a custom plan was designed to help
upgrade to reliable, scalable and flexible transaction processing systems that support
growth. While GCMMF started its ERP Infrastructure journey on IBM Power Systems
a decade ago, it has been transitioned to POWER9 servers to support growth vision
and help expand operations across many co-operative societies.

Over the last ten years, this adoption has delivered a tenfold growth at GCMMF's
business. GCMMF has improved Amul products' data accuracy and enabled a
smoother integration with the distributor management system. IBM cognitive capability
has also enabled continuous mobile-based applications and automation compliance
 Supply Chain Management
for managing applications. In addition to running a seamless milk and milk products
supply operation, it has provided clarity and visibility into the daily logistics and
inventory process.

Commenting on the renewal of the contract, Singhani, explains "we need to be focused
on converting this supply chain to a smart supply chain, a more resilient and more self-
healing supply chain." The other focus would be introducing lots of AI and ML in their
supply chain and as a result, bringing lots of cost savings as well as the ability and
resilience to grow multi fold in the next ten years. With IBM's help, Amul is integrating

new technologies with farmers and retailers. the company is integrating each
distribution retails- each shop, down to each item that is being sold.

Logistics Drivers

Inventory

 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.
 AMUL 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 AMUL's philosophy of maintaining cash transactions
throughout the supply chain and it also minimizes dumping.
 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 AMUL branches engage in route scheduling and have dedicated
vehicle operations.
 Supply Chain Management

Transportation:

Amul follows a distinctive transportation model as far as its transportation is

concerned. The major production units of Amul are located in Gujarat. Major
distribution hubs are located in and around the periphery of the production units.
Since Amul produces majorly perishable goods, it becomes mandatory to follow a
 Supply Chain Management
proper and smooth transportation of goods. Physical distribution is a very important
part of the whole business.

Milk is procured from the villages and collected at the Village Co-operative societies
(VCS). From there milk is taken to the manufacturing units where the milk is
processed into various products. The products are then transported to the company
depots located in various parts of the country. The products are then sent to the
wholesale distributors (WD) and from there to the retailers. It is then available in over
1,000,000 retail outlets across India through its network of over 3600 distributors.
While for Amul pouch milk, there are 17 distributors. The wholesale distributors carry
inventory that is just adequate to take care of the transit time from the branch ware
house to their premises. This just-in-time inventory strategy improves the distributors’
ROI.
There are two channels involved in the supply chain of Amul.
1) Upstream channel i.e. the procurement channel for milk from the farmers to
the manufacturing units
a. First the milk is taken to the VCS by the farmers on foot or bicycles in
small quantities. The new VCS in Maharashtra have rapid milk chillers.
b. Then milk is transported from co-operatives to the manufacturing units
via special trucks equipped with tankers to carry milk once a day. A
tanker carries three to four societies’ milk together which helps in
achieving economy in transportation of milk. Geo-remote sensing
based vehicle tracking system has been put in use for efficient handling
of Road Milk Tankers carrying milk to Dairy Plant.
2) Downstream channel i.e. the distribution channel from manufacturing units
to retailers
a. First the products are taken from manufacturing units to the depots.
This is done by using 9 to 18 MT trucks. The frozen food is kept at a
temperature below -18C, while milk is kept between the temperature of
0-4C
b. From depots to the WD’s the transportation is done using insulated 3-5
MT TATA 407’s. A permanent dispatch plan (PDP) is prepared as per
the demand of various products.
 Supply Chain Management

c. Finally the goods are to be transported from the WD’s to the retailers.
The beat plan is prepared and the transportation is done by auto-
rickshaws, rickshaws and bicycles
The vehicles have a carrying capacity of 750-850 crates and one crate consists of 40
pouches of 500ml each. The vehicles start leaving the plant at 19:00. All the crates
which are placed in the vehicles have some ice cubes in them, so as to increase
their shelf life. The truck drivers are responsible for the loading and unloading of the
crates.
Aside from using the fleet of trucks , Amul has also integrated their transport system
with railway cooling units to improve transport cost and its supply to Delhi. It has tied
up with Adani Logistics to have a dedicated train to transport milk daily from
Dudhsagar Diary of Mehsana to Delhi. This train transport uses 50 wagons with a
capacity of 24,000 litres each
Amul has more than 49 depots with dry and cold warehouse for entire storage of
products and the largest cold chain network in India with 18000 refrigerators.
Milk is a product which has time band for consumption; hence it needs to reach the
retailers early morning. For up-country distribution, the dispatch time of milk is between
3-8pm, depending on the location, while for local distribution in Ahmedabad the
dispatch timings is between 8pm to midnight. The location of the trucks are monitored
through cell-phones.
While distribution, is the transportation vehicle breaks down, it is the transporters
responsibility and he arranges for a back-up to minimize delay.
3) Upstream channel i.e. the procurement channel for milk from the farmers to
the manufacturing units
a. First the milk is taken to the VCS by the farmers on foot or bicycles in
small quantities. The new VCS in Maharashtra have rapid milk chillers.

b. Then milk is transported from co-operatives to the manufacturing units

via special trucks equipped with tankers to carry milk once a day. A
 Supply Chain Management
tanker carries three to four societies’ milk together which helps in
achieving economy in transportation of milk. Geo-remote sensing
based vehicle tracking system has been put in use for efficient handling
of Road Milk Tankers carrying milk to Dairy Plant.
4) Downstream channel i.e. the distribution channel from manufacturing units
to retailers
a. First the products are taken from manufacturing units to the depots.
This is done by using 9 to 18 MT trucks. The frozen food is kept at a
temperature below -18C, while milk is kept between the temperature of
0-4C
b. From depots to the WD’s the transportation is done using insulated 3-5
MT TATA 407’s. A permanent dispatch plan (PDP) is prepared as per
the demand of various products
c. Finally the goods are to be transported from the WD’s to the retailers.
The beat plan is prepared and the transportation is done by auto-
rickshaws, rickshaws and bicycles
The vehicles have a carrying capacity of 750-850 crates and one crate consists of 40
pouches of 500ml each. The vehicles start leaving the plant at 19:00. All the crates
which are placed in the vehicles have some ice cubes in them, so as to increase
their shelf life. The truck drivers are responsible for the loading and unloading of the
crates.
Aside from using the fleet of trucks , Amul has also integrated their transport system
with railway cooling units to improve transport cost and its supply to Delhi. It has tied
up with Adani Logistics to have a dedicated train to transport milk daily from
Dudhsagar Diary of Mehsana to Delhi. This train transport uses 50 wagons with a
capacity of 24,000 litres each
Amul has more than 49 depots with dry and cold warehouse for entire storage of
products and the largest cold chain network in India with 18000 refrigerators.
Milk is a product which has time band for consumption; hence it needs to reach the
retailers early morning. For up-country distribution, the dispatch time of milk is between
3-8pm, depending on the location, while for local distribution in Ahmedabad the
dispatch timings is between 8pm to midnight. The location of the trucks are monitored
through cell-phones.
 Supply Chain Management

While distribution, is the transportation vehicle breaks down, it is the transporters

responsibility and he arranges for a back-up to minimize delay.

Cross Functional Drivers

Information

 AMUL is the first company in the co-operative form to adopt the e-revolution. In
this information communication-Entertainment age, the barriers between the
business organization and consumers, between manufacturers and end-users
are all breaking down.
 This is what was started fifty years back by AMUL by eliminating the
‘middlemen’ and bringing the ‘producers’ closer to the ‘consumers’. The
organization believes in innovations in product as well as process.
 The adoption of the electronic milk testers to ensure efficient testing and
measurement of milk constituents is a step in this direction.
 This is first organization to have its own website - www.amul.com They have
nationwide cyber stores, functioning in some 120 cities, and an AMUL cyber
stores gifting service capable of serving consumers in more than 220 cities, on
special occasions.
 This has been possible by creating an IT network, which links the production
centres with sales offices and dealers by VSAT and e-mail connectivity.

Obstacles in Supply Chain

1. Information Processing Obstacles

No timely reporting of diseased animals.
 Supply Chain Management

2. Pricing Obstacles
Due to price hikes, increase in private firms, forward buying.

3. Fodder Problem
Unhygienic condition of cattle, not proper infrastructure, cooling system.

4. Milk Processing Obstacles

Decrease in quality and quantity of fodder due to globalization, water scarcity
gives bad yield.
 Supply Chain Management

Conclusion

Overall Amul is doing exceptionally well in managing its supply chain with its
inclusion of latest IT Technology and infrastructure. Amul is near to match its supply
chain strategy with competitive strategy to achieve a strategic fit position in their
supply chain. Some of the obstacles like fodder problem and milk quality can be
improved if Amul tries to supply good quality cattle food / fodder to the milk
producers with zero profit.