Distribution Structure of

By Group 6:

Aina Naseem | Parth Sarthy Garg| Raghav Kathuria | Sanat Pandey | Saumya Srivastava | Tanvi Gupta |
 Introduction
• Formed in 1946, is a dairy cooperative movement in
India.

• Brand name managed by Gujarat Co-operative Milk

Marketing Federation(GCMMF)

• Jointly owned by 2.79 million milk producers in

Gujarat

• Spurred the White Revolution of India, which has

made India the largest producer of milk and milk
products in the world.
Introduction
Organisation- Overview

Source: http://www.amuldairy.com/index.php/the-organization/an-overview
Product Portfolio
Channel design & number of players
Village Dairy Cooperative societies (VDCS) Total 1713 Cooperative Societies

Chilling Plants of Amul Total 8 Plants to cater to Delhi-NCR

Distributors 391 distributors in Delhi- NCR

Retailers 18,000 retailers in Delhi- NCR

End Customer
Retailer/ customer penetration
 Amul entered the Delhi market in 2003 and accounts for 27 per cent of Amul’s daily sales of 90 lakh
litres across the country.

 Amul is the leader in packaged branded milk segment in top three metros of India, which include
Delhi, Mumbai and Kolkata.

 Amul commands a 46 per cent share in the pouched milk sales in the NCR region followed by
Mother Dairy with sales of around 18 LLPD

 Mother Dairy still enjoys largest share in overall liquid milk market in Delhi with sales of 27 lakh
litres per day. The liquid milk market in the capital is more than 55 to 60 lakh litres per day. Amul is
trying hard to increase its share in liquid milk markets in metro cities.

 Amul has set up its largest dairy with a processing capacity of 30 lakh litres a day (LLPD) at
Dharuhera in Haryana to serve the NCR market

Source: http://www.thehindubusinessline.com
Role of Intermediaries
Village
Corporate Plants Distributors Retailers
Society

Amul Chilling Plants

Receive and Store Milk
• The chilled milk of the co-operative societies are transported to Amul Dairy Plant through road milk
tankers once in a day. These milk tankers are insulated to safeguard the quality of milk. A tanker carries
three to four societies’ milk together which helps in achieving economy in transportation of milk.

Process Milk
• Refine
• Package
• Process
Distributors
Village
Corporate Plants Distributors Retailers
Society

Collect milk from the plant.

• Jaipur plant

Distribute the milk to the retailer

• 240 retailers
• South Delhi Area
• 7 APOs

Provide transportation
• Plant to distributor (Truck)
•Distributor to retailer (4 cars)

Maintain a sales force

• 40-50 employees
• Out of which 10 were sales force people.

Record Maintenance
•Maintain records in the Distributor Management System (DMS) which is facilitated by the company.
Source: Interview with the distributor at Kesari Enterprises - Munirka
 Village

Retailers
Corporate Plants Distributors Retailers
Society

Order and Receive Milk

• From distributor of the area
• Lead time is 2-3 hours
Breaking Bulk
• Large cartons of the products are broken down by the retailers into smaller quantities to meet individual consumption
needs.

Holding Stock
• Retailers maintain a stock of goods in the form of inventory that allows instant availability of the product to the
consumers.

Promotional Support
• Direct touch with the end consumers
• Recommending products where brand loyalty is not strong or for unbranded products

Flow of information
• Creating and Managing a channel of information from manufacturer to the consumer
• Information from consumer to manufacturer
Margins
According to our meetings with distributors and data collected from

the company, these were the figures of margin.

Milk Type Margin for distributor (in Rs/litre) Margin for retailers (in Rs/litre)

Amul Full Cream (Gold) Rs. 1.80 Rs. 1.20

Amul Tonned Milk Rs. 1.80 Rs. 1.20

Amul Cow Milk Rs. 2.10 Rs. 1.80

Franchise System (Requirements & Returns)
PAYMENT/CREDIT TERMS GIVEN BY
DISTRIBUTORS IN MARKET
Setting up an Account:
• The distributor asks to open an account even if credit doesn't enter the discussion.
• It's easier to place and track orders, and invoicing becomes easier when the distributor keeps
retailer information on a database.

Credit:
• Distributors may extend credit to retailers who show they're good for the money.
C period of 15 days and he gives a credit period
• Distributor gets the material from Amul on a credit
of 10 days to the retailer.

Invoicing:
• The distributor may present an invoice upon receiving product, and that starts the payment
schedule.
• If you paid upon placing the order, the invoice serves as a receipt and packing slip. But if you have
credit, everything revolves around that invoice.
 Territory Design In Delhi NCR
• Retailer per distributor ranges from 45 -120. (1 Beat covers about 40 outlets.)

• Database of retailers is transferred.

• 8 Depots for Milk Procurement and 1 Warehouse in Azadpur for other products.

• 7 - 8 people are employed who work under the distributors to visit retailers.

• Each territory has 6 - 7 APOs.

R E TA I L E R S 1 8 , 0 0 0

DISTRIBUTORS 391

DEPOT 4
Infrastructure Required By Distributors

• Distributor Management System - Robust IT

mechanism helps to collect orders and places
them quickly from the company. (Stocky)

• 3 - 4 Mini Trucks for transportation.

• 3 - 4 Cold Storage Refrigerators.

• Storage Space - 90 sq. ft.

Logistics Network
 Automation and technology deployment at each dairy cooperative
society has enabled instant calculation of fat content in the milk
deposited by farmers, and thereby the price due to them.

 Farmers supply the milk to village Dairy cooperative societies,

which further supplies the milk to district milk cooperative union.

 VDC societies without chilling plants, transport the milk to the

chilling plants.

 Milk from these chilling plants is then transported to district milk

cooperative union where milk is further refined, pasteurized and
made ready for consumption.

 It is then sent to GCMMF warehouses, where the pricing and

package designing is done.
 Milk is then forward it to distributers/wholesalers.
 The process has been optimized through six sigma processes
and the practice of just in time.
 GCMMF also tells the district unions what to produce on the
basis of its demand and supply study.
 There are around 5000 trucks that move between the chilling
plants and the processing plants twice a day in a most optimum
manner.
 Moreover the milk products are transported through
refrigerated trucks owing to the need of keeping the products
refrigerated at all times.
Support provided to Distributors by AMUL
Providing management support & regular supervision .

Establish distribution network

Recruiting sales force for the distributors.

Conflict Resolution & keeping the entire structure intact.

Providing Credit and Payment facilities.

Establish distribution network

Major points of conflict

Margin

Poor / Untimed Supply

Compensation Claims

Bad Behaviour of Suppliers

Forced Supply of Products

Major problems / issues identified by you
Margin Problem

Late Supply of Products

Forced Supply of Products

Compensation for Loses

Complaints from Customer

Crates in Bad Condition

Refrigerator Demand