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  1. 1. Supply ChainManagement of AMUL
  2. 2. The Kaira District Co-operative MilkProducers Union Limited, popularly known asAmul Dairy is a US $1billion turnoverinstitutionIt is a institution built up with a network ofover 10000 Village Co-operative Societies and500,000 plus membersManaged by an apex cooperativeorganization, Gujarat Co-operative MilkMarketing Federation Ltd. (GCMMF), whichtoday is jointly owned by some 2.41 millionmilk producers in Gujarat, India
  3. 3. Amul Sales Turnover US $ (million)Amul is the largest food brand in 1994-95 355India with an annual turnover of US 1995-96 400$1068 million (2007-08) 1996-97 450Amul is the largest producer of milk 1997-98 1998-99 455 493and milk products in the world. 1999-00 493 2000-01 500 2001-02 500 2002-03 575 2003-04 616 2004-05 672 2005-06 850 2007-08 1068
  4. 4. Before Amul Polson dairy had monopoly rights Exploitation of milk producers Producers had to travel long distances to sell their produce Had to physically carry their produce Agents decided the prices and the off-take Summers- milk would go sour Winters –surplus milk unsold or sold at very low prices
  5. 5. Foundation for Amul Producers of Kaira district formed a cooperative to supply milk directly to Bombay milk scheme Decentralized milk collection Village level cooperatives First modern dairy established at Anand Indigenous technology and R&D department
  6. 6. Network Structure Made up of various stakeholders-suppliers to retailers Linked by a common interest of remaining competitive in a demanding environment Global optimum rather than local optimum Strategies  Core competency  Help network partners  Information sharing
  7. 7. Dairy Cooperative Structure and details for State of Gujarat
  8. 8. GCMMF Gujarat cooperative milk marketing federation Marketing entity for the state of Gujarat 42 regional distribution centers in India 5,00,000 retail outlets Exports to more than 15 countries NDDB (National Dairy Development Board) NCDFI (National Co-Operative Dairy Federation of India)- coordinate dairy activities nationally
  9. 9. AMUL SUPPLY CHAIN FarmersVillage Village Local Milk Sold toCooperative Cooperative Restaurants/Othe Village &Societies Societies (with r Milk related Local Residents(without Chilling Chilling Units) businessesUnits) Network Milk Processing Chilling Plants Services Union & * Veterinary Warehouses Services * Animal Warehouses Husbandry * Animal Feed Factory Wholesalers/C&S * Milk Can Producers Retailers Home Delivery * Agriculture Contractors University * Rural Mgmt Institute CONSUMERS CONSUMERS * Trucking
  10. 10. The Supply-Demand Linkages ***Source: IIM(A), Working Paper No. 2002-05-06
  11. 11. Coordination Mechanisms Interlocking control Coordination agency-unique role of federation Supplier enhancement and network servicing Fair share allocation of benefits Spirit of co-operation
  12. 12. Total Quality Management Friday departmental meetings Training for transformational leadership Application of hoshinkanri principles Training for farmers and their families Retail census
  13. 13. Key Initiatives In 1994, decided on IT for competitive edge Studied its existing functions and operations and formulated an IT plan. Aligned the Information strategy with business strategy. Re-designed and re-organized the existing software applications. Output of one system should be input of another system or vice-versa.
  14. 14. Problems faced Indirect connection between Producers and Consumers Could not forecast productivity accurately and timely No direct connectivity between zonal, regional, member dairies and head office
  15. 15. Role of Information Technology Automatic Milk Collection System Units (AMCUS) CEO of Amul Mr. B.M. Vyas said ”Amul is not a food company ,It is an IT company in the food business.” Initially AMCUS was installed free of cost to convince farmers Enterprise-wide integrated application system (EIAS). Covers market planning, advertising and promotion, distribution network planning, stock control, sales and accounting, budgetary control, quality control management and co-operative service management
  16. 16. Role of IT (contd.) Connected its zonal offices, regional offices and members dairies through VSATs. Each Amul office was connected by e-mail and all send a daily report on sales & inventory to main system. Geographic Information System (GIS) Helps in getting zone wise data used for sales and distribution planning. Includes farmer-member census and animal census data. Helps in monitoring veterinary health
  17. 17. Amul’s IT Roadmap Uses AMCUS for milk collection. Implemented a customized ERP system which is used in conjunction with GIS Uses data analysis software for forecasting milk production and increasing productivity. Has connected all zonal, regional and member dairies through VSAT. One of the first five organizations to have web presence. Has made IT education compulsory for all its employees.
  18. 18. Amul’s IT Roadmap (Contd.) Milk collection information from 10,000 villages is collected Dairies can make faster decisions in terms of production and distribution planning Disease control in 6700000 animals Linked with 45 distribution offices and 3900 distributors GCMMF cyber store-125 cities
  19. 19. Thank You