Name of the student Ashish Garg Himani Oberai Mehak Saini Arun Kaushal Haider Ali Naqvi Mukesh

Verma Rishi Mishra

PG Roll No: PG20111134 PG20111136 PG20111145 PG20111140 PG20111139 PG20112168 PG20111142

Submitted to Subject Submitted on Marks Allotted Remarks(if any)

Bhavna Aggarwal OE 3RD January, 2012

ACKWOLEDGEMENT:
We would like to express our special thanks of gratitude to our teacher Mrs. Bhavna Aggarwal who gave us the golden opportunity of understanding the supply chain management of any organization and then prepare a report on it. We understand the operations of organization and came to know about their distribution centers and suppliers. Thanks to all our group members for their contribution and support in this report.

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TOPIC COMPANY OVERVIEW PRODUCT PORTFOLIO PRODUCTION PROCESS SUPPLY CHAIN MANAGEMENT a) DISTRIBUTION PROCESS b) INTRODUCTION OF IT c) CHANNEL NETWORK d) DIRECT RETAILING QUALITY MANAGEMENT PROBLEMS SUGGESTIONS

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COMPANY OVERVIEW: AMUL

The Kaira District Cooperative Milk Producers Union Limited was established on December 14, 1946 as a response to exploitation of marginal milk producers in the city of Anand by agents of existing dairies. Producers had to travel long distances to deliver milk to the only dairy, the Polson Dairy in Anand often milk went sour, especially in the summer season, as producers had to physically carry in individual containers. These agents decided the prices and they off-take from the farmers by the season. Milk is a commodity that has to be collected twice a day from each cow/buffalo. In winter, the producer was either left with surplus unsold milk or had to sell it at very low prices. Moreover, the government at that time had given monopoly rights to Polson Dairy (at that time Polson was the well-known butter brand) to collect milk from Anand and supply to Bombay city in turn. India ranked nowhere amongst milk producing countries in the world in 1946. The producers of Kaira district took advice of the nationalist leaders, Sardar Vallabhbhai Patel and Morarji Desai and they advised the farmers to form a Cooperative and supply directly to the Bombay Milk Scheme instead of selling it to Polson. Thus the Kaira District Cooperative was established to collect and process milk in the district of Kaira. Milk collection was also decentralized as most producers were marginal farmers who would 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 first modern dairy of the Kaira Union was established at Anand (which popularly came to be known as AMUL dairy after its brand name). Starting with a single shared plant at Anand and two village cooperative societies for milk procurement, the dairy cooperative movement in Gujarat had evolved into a network of 3.03 million milk producers members who are organised in 15,712 villages. These Village Societies supply milk to 17 independent dairy cooperatives (called Unions) in 24 districts. AMUL is one such Union. Milk and milk products from these Unions are marketed by a common marketing organization (called Federation). GCMMF has 42 regional distribution centres in India, serves over 5,00,000 retail outlets and exports to more than 15 countries. All these organizations are independent legal entities yet loosely tied together with a common destiny .Interestingly, the Gujarat movement spread all over India and a similar structure was replicated in two national organizations, the National Dairy Development Board (NDDB) and the National Co-operative. Dairy Federation of India (NCDFI) were established to coordinate the dairy activities through cooperatives in all the States of the country. The former provides financing for development while the latter manages a national milk grid and coordinates the deficit and surplus milk and milk powder across the states of India. Today AMUL is a symbol of many thingsOf high-quality products sold at reasonable prices Of developing and coordinating a vast co-operative network. Of making a strong business proposition out of serving a large number of small and marginal suppliers.

Of the triumph indigenous technology and the marketing savvy of a farmers' organisation.

PRODUCT PORTFOLIO Fresh Milk

Amul Shakti Milk, Amul Taaza Milk, Amul Gold Milk, Amul Lite Slim-n-Trim Milk, Amul Shakti Toned Milk, Amul Fresh Cream, Amul Snowcap Softy Mix Powder Milk

POWDER MILK
Amul Infant Milk Formula 1 (0-6 months) Amul Infant Milk Formula 2 (6 months above) Amulspray Infant Milk Food Amul Full Cream Milk Powder Amulya Dairy Whitener Sagar Skimmed Milk Powder Sagar Tea and Coffee Whitener

For Cooking
Amul Pure Ghee Sagar Pure Ghee Amul Cow Ghee Amul Malai Paneer Mithai MatePro-biotic Dahi Masti Dahi Utterly Delicious Pizza Desserts Amul Shrikhand (Mango, Saffron, AlmondPistachio, Cardamom) Amul Amrakhand Amul Mithaee Gulabjamuns mix

Amul Mithaee Kulfi Mix Avsar Ladoos

Amul Ice creams

Royal Treat Range Nut-o-Mania Range Utsav Range Simply Delicious Range Nature's Treat Sundae Range Millennium Ice cream Milk Bars (Chocobar, Mango Dolly, Raspberry Dolly, ShahiBadam Kulfi, Shahi Pista Kulfi, Mawa Malai Kulfi, Green PistaKulfi) Cool Candies Cassatta Tricone Cones Megabite Almond Cone Frostik Fundoo Range SlimScoop Fat Free Frozen Dessert

Chocolate & Confectionery

Amul Milk ChocolateAmul Fruit & Nut Chocolate

Milk Drink
Amul Kool Flavoured Milk

Health Beverage
Amul Shakti White Milk Food

Ready to Serve Soups

Masti Tomato SoupMasti Hot & Sour Soup

PRODUCTION PROCESS
Process management is a series of techniques, skills, tools, and methods used to control and manage a business process within a large system of organization. The term is most commonly used in business analysis, productivity studies, and systems engineering. The purpose of process management is to clearly identify and document all the steps and actions taken to complete a process. Amul also follows a production process of milk which is a core ingredient of all its product. This production process has various steps which are explained as follows:1) Collection Of Raw Milk Raw milk is collected from different co-operatives in Gujarat. Around 13.67 million litres of milk is collected by Village Dairy Co-operative from its producer members on the bases of quantity and quality. Before the processing, this milk is sent to the laboratory for fat and SNf the milk is seprated from the raw milk. The milk is taken from chilling centres to Ahmedabad with the helps of trucks. After the collection of the samples the milk is sent to laboratories for 2 types of testsa) ELECTRONIC MILK TEST Before pasteurizing the milk samples in the laboratory are tested with Electronic Milk Tester to test the fat and SNF proportion with phosphate solution. The fixes the standard for fat and SNF MILK SNF FAT COW 8.5% 4.5% BUFFALO 9% 6% When the colour of milk changes to yellow, it is sent for pasteurization. b) METHLYNE BLUE REDUCTION TEST This test is conducted to check how long milk will remain fresh. To check this 10ml of milk is taken and 1ml of methyl solution is added to it. It is then kept under water at 57 degree celsius. After 1 hour if milk losses its colour then it is raw milk and if the solution remains same for 5 hours then milk is considered as fresh milk which remains constant for longer period of time. After laboratory gives green signal and conforming raw milk at the reception dock is brought into the house connected with the pump is sent to the milk processing plant. This

is sent chilled below 4 degree celisus and then the milk is stored in milk silos. After that milk is processed, this has 2 steps2) Milk processing stages i) Pasteurizing To pasteurize the milk means to kill germs in the milk by a particular method called pasteurization. In this method milk is first heated at 72 degree Celsius to 76 degree Celsius for 15 seconds and then immediately cooled below 4 degree Celsius by this method they will kill the pathogenic bacteria present in the raw milk. After this if all the germs are not destroyed then milk is sent to eparator machine and remaining is sent for Standardization . ii) Standardization

Standardization bifurcates the milk into 3 categories on the basis of SNF, Fat contents. The instrument named as OSTA automatically adjusts the fat. The computer then ordered that whether the milk is gold or standard milk to be rationed and the same is received in the market with appropriate contents. 3) Separation Process Separator machine separates 2 kinds of products, skimmed milk and cream through channels. There are 100 discs fixed in the machine which revolves at 5000 rpm speed and is connected with a tank which has a capacity of 20,000 litres. Whenever milk is needed it is taken from the tank and sufficient amount of fat is added to it to convert it into cream. This process continues the whole day. 4) Quality Check The Pasteurized milk is sent to Quality Assurance laboratory of dairy plant. The total investment done by Amul in lab is of 6 crores. Within 14 seconds the Fat and SNF proportion is received for 30 litres pack of milk. The lab only checks and analyse for powder milk, milk and ghee. There is separate lab for ice-cream analyses. 5) Packaging Process After this milk is sent for packaging to the milk packing station in the dairy plant where huge pipelines are fitted and behind them there is polyfil machine from which the material in which milk is to be packed comes out. From each machine 100 packets of milk are packed in 1 minute. 6) Storage Then the milk is sent to cold storage of the dairy where the m,ilk is stored until it is dispatched. The storage temperature ranges from 5 degree Celsius to 10 degree Celsius and is maintained through exhaust fans.

PRODUCTION PROCESS OF MILK POWDER

For converting milk into powder first all the water content in the milk is evaporated in the condensing plant. By this process they get condensed milk which is sent to drying plant. The drying plant is divided into many floors to enable the use of plant. Firstly, the condensed milk is put into the 1st floor of the plant with 200 degree Celsius air by this if any water is remained in the condensed milk will be removed and milk comes in powder form. Then this powder milk is put into calendared machine where it is turned into real milk powder. Then this real milk powder is then put into a dense vessel where the lumps if created will be removed out and fine real milk powder will come out. Then the Quality Assurance lab will check and analyse the quality standards and then different flavours such as chocolate, elaiche sugar- free powder are added. There after packed in tin and boxes and then stored in storage department

SUPPLY CHAIN MANAGEMENT

Supply chain management is the management of a network of interconnected businesses involved in the ultimate provision of product and service packages required by end customers. Supply chain management spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point of origin to point of consumption DISTRIBUTION PROCESS

COMPANY

FRANCHISE WHOLESALER

RETAILER

SHOPKEEPER

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 system from its wholesale dealers. 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. All GCMMF branches engage in route scheduling and have dedicated vehicle operations. Introduction of IT in Supply Chain Management in Amul A need for IT was felt to make the operations competitive and streamline the collection and the production process of milk and milk products with the help of IT tools. In 1994 Amul decided to leverage on the strength of ERS system. After this Amul studied their existing functions and operations to formulate an IT plan for spread heading its growth in future. With the IT tools Amul decided to connect its regional and field offices through e-media. ENTERPRISE RESOURCE PLANNINGThe Company has implemented ERS program in collaboration with TCS Ltd. The Company uses it for recording the data right from collection from farmers till the delivery of goods to the retailer is fed into the system. The software enabling the channel members to use for the synchronized working and best possible utilization of resources maintains details regarding the inventory management. GEOGRAPHIC INFORMATION SYSTEM In addition to ERS, Amul is using GIS for business planning and optimization of collection processes. IIM Ahmedabad supplemented Amuls IT strategy by providing application software- Dairy Information System Kiosk to facilitate data analysis and decision support in improving milk collection. The Kiosk would contain an extensive database on the history of the cattle owned by the farmer, medical history of the cattle, her reproductive cycle and history of diseases. Beside this farmers can have access to information related to milk production. Along this there were other plans such as introduce features of internet banking and ATMS which will enable milk societies to credit payments directly payments to the sellers account. CHANNEL NETWORK Procurement Channel- upstream flow Distribution channel- downstream flow Upstream Flow is the one where the milk from the farmer is procured to the manufacturing units.

On an average the company collects milk from the local farmers at their local co-operative centres. Each farmer has given a plastic card for identification. At milk collection counter, the farmer drops their card into a box and the identification number is transmitted to a personal computer attached to the machine. The milk is then weighed and the fat content is measured by electronic fat testing machine. Details are recorded in the computer and it calculates the total amount due to the farmer. The value of the milk is then printed out on a slip and over to the farmer to collect the amount from the next window. COLD STORAGE NETWORK- This step involves transportation of milk from cooperative societies to the districts. This is done with the help of chillier trucks to dispatch the processed units to the departmental stores and retailers. DOWNSTREAM FLOW is the distribution channel in supply chain. This means from supply chain to retailers.

First Leg of transport is from the manufacturing unit to the company depots. This is done by using 9 and 18 MT trucks and any lesser quantity will be uneconomical to the company therefore sometime the quantity ordered is lesser then club loading which means that the product ordered is supplied with is other products. Frozen Food the temperature of these trucks is kept below -18 degree Celsius. Dairy Wet the temperature of these trucks is kept between 0-4 degree Celsius.

Second Leg of transport is used from the depot to the Wholesale Dealer; this transport is carried out in insulated 3 and 5 MT TATA 407s. Here a Permanent Dispatch Plan is prepared where the distributor plans out the quantity of various products to be ordered on a particular date. Third Leg is the flow of goods and services from Wholesale Dealer to the Retailor; a Beat Plan is prepared and transportation is done on auto-rickshaws, rickshaws and bicycles.

DIRECT RETAILING Amul has recently entered into the business of Direct Retailing through Amul Utterly Butterly Delicious parlours created in major cities. Amul has plan to create a large chain of such outlets to be managed by franchisees throughout the country. At present there are more than 6,000 outlets with turnover of 10,000 crores.

QUALITY MANAGEMENT AMUL is committed to produce wholesome and safe foods of excellent quality to remain market leader through deployment of quality management systems, state-of-art-technology,

and innovation, eco-friendly operations to achieve delightment of customers and betterment of milk producers. In 1994 Amul initiated to adopt Total Quality Management Techinques in their organisation to create a culture of transparency, openness, leadership in the organization. Realizing the emerging competition, Amul extended all the TQM initiatives to its business partners whether it was the farmer producer in the village or a wholesale distributor in a metro town or its most sophisticated production unit without any change in their system. From the strength of Total Quality Management initiative Amul implemented Quality Management System of International Standard. Amul has been the first dairy in India to get accredited with certification of ISO 2200:2005 & ISO 9001 for its operations and plants and also set an example for village Dairy Co-operative Societies as they have also achieved this milestone as these societies are accredited with ISO 9001:2000 a remarkable achievement in the history of India. The steps taken for quality improvement are as follows:FOOD SAFETY POLICY As Amul, is committed to produce safe and wholesome food, so therefore Amul strive to achieve this by: Improving raw milk quality; Applying innovative technology for manufacturing food products; Employing quality and food safety management practices to manufacture food products in a eco-friendly environment; Meeting applicable statutory and regulatory requirements; Effectively communicate and constantly improve professional skills of employees emphasizing continuous improvement of quality and food safety issues. Hygienic & Clean Milk Production Drive The primary village dairy co-operative societies operate every morning and evening for the village farmers. Milk delivered by a producer is measured and a sample is drawn for a quality-testing. Various training programmes, especially on quality management system, good management practises in animal husbandry are imparted on continuous basis to member producers, dairy co-operative personnel and personnel at dairy plants. Bulk Milk Chillers As a part of Amuls quality movement Bulk Milk chillers are introduced at primary village co-operative society level. This system has drastically improved the microbiological quality of milk, therefore better return to farmers and good quality of products to consumers. Special trainings are imparted to dairy co-operative personnel for better management of Bulk Milk Chillers.

Road Milk Tankers The chilled milk of the co-operative societies are transported to Amul Dairy Plant through road milk tankers. These milk tankers are insulted to safeguard the quality of milk. A tanker carries three to four societies milk together which helps in achieving economy in transportation of milk. These tankers are thoroughly cleaned at every unloading of milk at Dairy Plant and certified for its hygiene for transportation of milk by QC personnel. This system has almost wiped out any possibility of spoilage to milk. Chilling milk at grass root level and transportation of the same in road milk tankers have reduced microbial load in raw milk which in turn has reduced processing costs in terms of energy, thereby better return to farmer producers. Amul Research and Development Association is a centre of excellence in the field of research and development of cattle breeding and animal health care. It provides quality semen for artificial insemination program; impart training to inseminators, prevention and control of diseases. Animal Disease Diagnostic Laboratory The mobile and immobile laboratories have contributed to clean milk production drive in routine and emergencies especially in case of accurate diagnosis of the disease to keep the livestock in sound health, taking preventive measures to avert major outbreak of diseases by diagnosing the disease at an early stage; planning for appropriate feeding strategy with the help of complete profile of the animal; improving infertility by timely remedial measures; assessing efficacy of vaccination could be determined by detection vaccination titters. Animal Nutrition Amuls focus on balanced cattle feed supplies to its dairy farmers has helped in better productivity and cattles free from problems associated with malnutrition. Quality of life Assured market for their milk and daily income round the year from milk has improved the quality of life of farmers. The role village dairy co-operative societies in the overall development of the villages have brought better social infrastructures in the villages such as roads, communication system, schools, health centres, water facilities, banks etc.

PROBLEMS FACED BY AMUL 1) 2) 3) 4) Indirect connection between producers and consumers. Could not forecast productivity accurately and timely. Containers in transported through trucks are sometimes not cleaned properly. Credit limits for the farmers is less which creates problems for them.

5) Amul is not enhancing its market for its other milk products such as chocolates which he can do easily

SUGGESTIONS 1) Amul as has already stared Direct Retailing through parlours so it should increase their supply of products and give offers to the retailers so that increase in sale will reflect. 2) Amul should increase its advertisements and advertise about its new range of products such as low fat, sugar free ice-creams. 3) It should also go for tie up with banks for assistance to its producer farmer members so that they can have ATM facilities and Internet banking facilities.