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Journey of Amul
1946- Company inception
1948- Milk collection reaches 5000 litres/day
1955- Manufacturing of milk powder and butter
1965- Creation of national dairy development board
1973- Creation of GCMMF (Gujarat cooperative milk
marketing federation )
1996- Manufacturing of ice cream
2005- Milk collection reaches 62 lakhs litres/day
.
History
• Realization of the dream began with the Kaira District Cooperative Milk
Producers‘ which processes milk purchased from local village producers
for distribution to Bombay, and now also sells other dairy products under
the trade name AMUL throughout India .
• KDCMP was founded by Varghese Kurien and Tribhovandas Patel Union on
December 14, 1946 As a brand name Amul with the blessing of
Vallabhai Patel and the inspiration of former Union Finance Minister
Morarji Desai
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cooperative structure.
1. Supply starts with farmers who
are members of village level
societies who buy a share of
the society and agree to sell
milk exclusively to that society
2.
3. Farmers take their milk to village
collection point twice a day
where their milk is measured
for quality and quantity and
they are paid immediately
4.
5. GCMMF provides each plants with
a monthly production plan
and coordinates distribution of Collection of milk at a village
products from the plants to society
nationwide distribution.
•
Business Model
Amul supply chain is based on
3 tiered cooperative
structure.
An umbrella brand is a brand that covers diverse kinds of products which are more or less
related.
AMUL Supply Chain
Distribution Network
• 5 lakh retail outlets
• Network of 3,500 distributers.
• 47 depot with dry and cold warehouses to buffer
inventory of the entire range of products.
• 25 lakh members farmers from 12,000 village
societies that feed into 12 district unions.
• GCMMF maintains cash transaction throughout
the supply chain which minimizes dumping
Distribution Network
• Wholesale dealers carry inventory that is just adequate
to take care of the transit time from the branch
warehouse to the their premises.
•
• The JIT (Just-in-Time) inventory strategy improves
dealers ROI (Return on Investment).
•
• All GCMMF branches engage in route-scheduling and
have dedicated vehicle operation
Strategy Formulation
• Amul and GCMMF adopted a number of strategies to
assure the growth of the dairy industry contingent
on the simultaneous development of supply and
demand
•
• Amul adopted a low price strategy to make their
products affordable and guarantee value to the
consumer
Strategy Implementation
• Low cost strategy - through innovating
technology
•
• Installed automatic milk collection unit
system
– Test of Fat and SNF
– Reduced time required for
collecting the milk
– Immediate payment to farmers
•
• GCMMF gets all supplier (milk farmers)
information through system integration
•
Amul and the unions retain tight control
over above stated process in order to
ensure efficiency and quality
Strategy Implementation
•
• Organized delivery animal feed and other supplies to the
village level societies
•
• Continuous implementation and development of good
practices across all elements of the network
•
• Bought “Kaizen” system for milk sour and acidity
improvement
Results
Amul compete successfully against MNCs like Nestle,
HLL, and Cadbury.
•
Amul collects 63 lakh litres of milk everyday
•
Amul have a total milk handling capacity of 99 lakh
litres/day.
•
Amul have 25 lakh producer members
•
• There are 11962 village societies associated with Amul.
(year- 2005-06)
Critical Success factor
• Use of technology to overcome problems
• Long-term commitment to develop supply and demand in
equitable manner.
• Efficient supply chain and operational management
• Ability to coordinate and control large network of people
• Continuous improvement program to improve quality
• Creation of Amul as a brand
Impact
Amul transform the Indian dairy industry by inspiring
other states
Amul provided livelihood to billions of farmers.
Amul contributed to India to become the largest milk
producer in the world
•
Vying for the Guinness Records