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  • 1. Dharwad Milk Union Ltd. KMFIBMR - Hubli MBA- Programme. 1PROJECT REPORTATKARNATAKA MILK FEDARATION, DHARWAD.A Project Report submitted in partial fulfillment of theRequirements for the award of the degree ofMASTER OF BUSINESSADMINISTRATION(Industry Integrated)TOMADURAI KAMRAJ UINIVERSITY, MADURAIBYSAMARTHA.D.KReg. No. A8755209Under the guidance ofFACULTY GUIDEDr. Rajendra PrasadINSTITUTE OF BUSINESS MANAGEMENT & RESEARCHHUBLIJUNE 2009EXTERNAL GUIDEMr. K. B. Patil(HOD of Finance Department)
  • 3. Dharwad Milk Union Ltd. KMFIBMR - Hubli MBA, Programme. 3INDUSTRIAL PROFILEDAIRY INDUSTRY IN INDIADairy enterprise is an important occupation of farmer. In Indianearly 70% of the people depend on agriculture. It is the backbone ofIndia. Dairy is linked with agriculture industry to a large extent. Animalhusbandry in India is an essential part of agriculture. It is mainly a ruraloccupation closely associated with agriculture.DEVELOMENT OF DAIRY INDUSTRY IN INDIADuring the Pre-independence year there was no serious stress givento dairy industry. In 1886 the Department of Defense of the BritishGovernment established the dairy farms for the supply of milk to theBritish troops in Allahabad. Later, in 1920 serious steps were taken byMr. William Smith, an expert in dairy forming to improve the milkproduction There was discrimination done to the Indians hence this led tothe rise of the first milk union in India. In Luck now in 1937 called theLuck now milk producers Co-operative union Ltd.In 1946 AMUL (Anand Milk Udyog Ltd) was started in Gujarat tobring up the economic stability of villagers.The dairy and Animal Husbandry received serious attention afterthe independence. There were lot many of progressive steps taken by thegovernment through five year plans. This led to the formation of NationalDairy Development Board in 1965 & thus in 1970 he decided to Bring a “White Revolution” through out the country, Initially 10 states wereselected were for this purpose excluding Karnataka.
  • 4. Dharwad Milk Union Ltd. KMFIBMR - Hubli MBA, Programme. 4In Karnataka in 1974 an integrated project was launched torestructure and reorganize the dairy industry on Co-operative principle ofAMUL and to lay foundation for new direction in dairy industry.NATIONAL DARIY DEVELOMENT BOARD:HistoryThe NDDB was founded to replace exploitation withempowerment, tradition with Modernity, Stagnation with growth,transforming dairy into and instrument for the development of Indian‟srural people.The NDDB was established in 1965; the board is registered underthe Societies Registration Act and the public Trust Act, fulfilling thedesire of the Prime Minister of India – the late Lal Bahaddur Shastri toextend the success of the Kaira Co-operative Milk producers union(AMUL) TO OTHER PARTS OF India. Dr Vergese Kurien was thefounder chairman. The success combined the wisdom & energy offarmers with professional management to successful capture liquid milkand milk product markets while supporting farmer‟s investment withinputs and services.The GrowthNDDB began its operations with the mission of making dairying avehicle to a better future for millions of gross roots milk producers. Themission archived helped to launce „‟Operation Flood‟‟, a programmeextending over 26 years and with the help of World Bank Loan Indiabecome the world‟s largest milk producing country. As per March 2001India‟s 96000 Dairy Co-operative are integrated thorough a three Tier Cc-operative structure. The Anand pattern, which is owned by more than 10
  • 5. Dharwad Milk Union Ltd. KMFIBMR - Hubli MBA, Programme. 5million formers, procures an average of 1605 million liters of milkeveryday. The milk is processed and marketed by 170 milk producers co-operative unions which, in turn own 15 state co-operative milk marketingfederation. Since its establishment the dairy development board hasplanned and spearheaded India‟s Dairy programmer by placing dairydevelopment in the hands of milk producers and the professionals theyemploy to manage their co-operatives. In addition, NDDB also promotesother commodity based co-operative, allied industries and veterinarybiologically on an intensive and nation wide basis.Objectives of NDDB: To sponsor, promote, manage, acquire, construct or control anyplant or work, which promote projects of general public utilityrelation to dairying. To make information available on request to technical servicesto increase production of Milk. To prepare initial feasibility studies of dairying and other dairyrelated projects and undertake subsequent designing planningand start up those projects. To undertake research and development programme related toproduction and marketing of milk and milk products. To provide assistance for exchange of information to otherinternational agencies.
  • 6. Dharwad Milk Union Ltd. KMFIBMR - Hubli MBA, Programme. 6Services rendered by NDDB:NDDB provide the following services. Planning dairy and rural development projects. Organization of farmer co-operative societies. Setting up of dairy and cattle feed plants. Manpower planning and training. Applied research and development. Implementation of milk production enchantment programme.KARNATAKA MILK FEDERATIONThe first dairy in Karnataka was started in Kudige in Kodagudistrict in 1955, further in June 1974; an integrated project was launchedin Karnataka to restructure and reorganize the dairy industry on the co-operative principle and to lay foundation for a new direction in dairydevelopment.In 1975, the World Bank aided dairy development was initiated.The present Karnataka Milk Federation (KMF) came into existence in1984-as a result of merging of Karnataka Dairy Development Co-operation, small co-operatives and Karnataka Milk ProductionDevelopment and loose vendors.At the end of the March 1998, the network of 8023 Diary Co-operative Societies (DCS) have been established which are spread over166 taluks of the total 175 taluks in all 27 districts of Karnataka. Thereare 13 Milk Unions and Dharwad Milk Union (DMU) is one amongthem. There are 35 Chilling centers, 3 Farm coolers, 15 Liquid milk
  • 7. Dharwad Milk Union Ltd. KMFIBMR - Hubli MBA, Programme. 7plants and 2 Product dairies for chilling, processing, conservation andmarketing of milk. To supply cattle feed there are 4 cattle feed plants.Karnataka co-operative Milk Producers’ FederationLimited (KMF)KMF is the apex Body in Karnataka representing DairyCooperatives. It is the third largest dairy co-operative amongst the dairyco-operatives in the country.To impart training, institutes at Bangalore and regional traininginstitutes at Dharwad and Gulbarga are functioning. Three nitrogen plants(2 plants of 25 CPM and 1 plant of 5 CPM) are been set-up to supplynitrogen, which is used for Refrigeration purpose. Three diagnosticcenters have been set-up for monitoring diseases: three fodder farms atRajkunte, Kuttanahalli and Kodagu have been set-up to supply goodquality of fodder and seed production farm at Shahpur has been set-up.The federation giving details of the latest technology in dairyindustry etc is published „‟Ksheer Sagar‟‟ magazine monthly.KMF is a co-operative apex body in the state of Karnataka forrepresenting dairy organizations and also implementing dairydevelopment activities to achieve the following objectives. Providing assured and remunerative market for all the milkproduced by the farmer members. Providing hygienic milk to urban consumers. To build village level institutions in co-operative sector tomanage the dairy activities. To ensure provision of milk production inputs, processingfacilities and dissemination of know-how.
  • 8. Dharwad Milk Union Ltd. KMFIBMR - Hubli MBA, Programme. 8FUNCTIONS OF KMF Co-ordination of activities between the unions. Developing the markets for the increasing in milk production. To make the brand „‟Nandini‟‟ as a house hold name. Excellence in quality is to be maintained to lay a solidfoundation for wide Spread acceptance of „‟Nandini‟‟ products. To increase the market share of „‟Nandini‟‟.COMPANY PROFILE2.1) Dharwad Milk UnionDharwad Milk Union Limited (DHAMUL) is functional in themilk rich district of Belgaum in Karnataka. Its milk shed area includes thewhole district of Belgaum.The government of Karnataka established the Belgaum Dairy in1966 with a capacity of 10 LTPD (Litre Ton Per Day) and procurementof 3000 kgs per day. In 1985 it was taken over by the Dharwad MilkUnion (DHAMUL). On its joining the KMF in 1985, it became as part ofthe area in which the operation flood 3 was implemented. Under this anew dairy with a capacity of 60 LTPD was established at a cost ofRs.5.82 crores. A chilling center with a capacity of 20 LTPD and formcooler with a capacity of 60 LTPD was also established as a part of thisscheme.
  • 9. Dharwad Milk Union Ltd. KMFIBMR - Hubli MBA, Programme. 9Today the union is procuring milk from over 435 DCSs (DistrictCo-Operative Societies) of which 319 are functional. Their FunctionalDCSs of which 319 are functional. Their functional DCSs has shownsteady increase over the past few years with the member starting at 71787in November 1997. The effort of the union on the procurement side haslead to its procuring in an average of 461846 of its milk everyday.Bankers - Belgaum Dist Co- operative Bank, State Bank of Mysore,BelgaumMalprabha Gramhina BankAuditor – Shri M. R. Joshi & co. DharwadAsst. Auditor – Shri S. B. Devarmuni Asst. DirectorShri K. V. Joshi Senior AuditorFunctions of DHAMUL The main function of is to procure milk from villagers and paythem the right price. To educate the villagers about milk and its quality To make‟Nandini‟ as a part of daily life. To provide good quality of cattle feed, fodder, veterinary properlyand in an efficient manner. To see that the DCS‟s are carrying out their activities properly andin an efficient manner. To see that the milk is brought from DCS‟s to the chilling centersin the prescribed time. To look the account of the DCS‟s supervise the purchase processand market the milk and milk products.
  • 10. Dharwad Milk Union Ltd. KMFIBMR - Hubli MBA, Programme. 10Objectives of DHAMUL: Providing hygienic and good quality of milk to the consumers. To build the economic strength of the milk products in villages. To eliminate middlemen‟s in the business so that the milk productsreceive there appropriate share of bread. To educate the villages about the adulteration of milk and itsharmful effect on the body. To see that every citizen becomes healthy by consuming goodquality of milk. To make villagers self-viable and build self image.Process at DHAMULThe milk collected at DCS‟s is brought to the center thought carriestrucks etc. the quality and quantity of milk bought is checked at theReception center by a supervisor.A sample of milk is taken and is tested in a laboratory for fatcontent, Solid Not fat (SNF) acidity etc.As the milk is at room temperature is to be brought down to 40c to50c. so that it may check the growth of bacteria. To ensure this milk ispassed through a chilling chamber where the milk is chilled. Itstemperature is bought down and then the milk is stored in a tank called asRam Milk TankFrom this tank milk is pumped to a pasteurizing cell where themilk is heated up to 720c and 15seconds, so that all the bacteria andmicroorganisms may be killed and then the milk is simultaneously cooledto 40C to 5o C and is store in a „Pasteurized Milk Tank‟From here the milk is separated according to the requirement ofproduction of different types of milk and the remaining milk is used formanufacturing milk products.
  • 11. Dharwad Milk Union Ltd. KMFIBMR - Hubli MBA, Programme. 11Nature of business carriedOne of the core functions is procurement of milk, processing it andmarketing milk and milk products. DHAMUL markets its products underthe brand name Nandini.VISION, MISSION AND QUALITY POLICY OF THE DHAMUL:VISION STATEMENTDharwad Milk Union in committed to conserve to conserve energyand Maintain in the areas of plants by educating all the connected staffand thereby gaining competitive edge by reducing operation cost control,increasing market share of milk and milk products for prosperity ofproducers, consumers and employee for mutual help for nation andorganizations.MISSION STATEMENTAt DHAMUL we Endeavor to satisfy the taste and nutritionalrequirements of the customers. Through excellence in marketing byDHAMUL committed team, DHAMUL committed to offering qualityproducts that provide best value for product.QUALITY POLICY:To ensure pure, hygienic milk and milk products throughcontinuous improvement of quality standards.VALUES: Cleanliness Total quality maintenance Discipline Co-operation. Transparency
  • 12. Dharwad Milk Union Ltd. KMFIBMR - Hubli MBA, Programme. 12Product ProfileNandini Toned Fresh and Pure milkcontaining 3.0% fat and 8.5% SNF. Available in500ml and 1litre packs.Nandini Homogenized Milk is pure milkwhich is homogenised and pasteurized. Consistentright through, it gives you more cups of tea orcoffee and is easily digestible.Full Cream milk. Containing 6% Fat and 9% SNF.A rich, creamier and tastier milk, Ideal forpreparing home-made sweets & savouries.Cows pure milk, UHT processed bacteriafree in a tamper-proof tetra-fino pack which keepsthis milk fresh for 60 days without refrigerationuntil opened. Available in 500ml Fino and in200ml BricksA taste of purity. Nandini Ghee, made frompure butter. It is fresh and pure with a deliciousflavour. Hygienically manufactured and packed in aspecial pack to retain the goodness of pure ghee.Shelf life of 6 months at ambient temperatures. Available in 200ml,500ml, 1000ml sachets, 5lts tins and 15.0 kg tins.
  • 13. Dharwad Milk Union Ltd. KMFIBMR - Hubli MBA, Programme. 13Nandini Curd made from pure milk. Its thickand delicious. Giving you all the goodness ofhomemade curds. Available in 200gms and 500gmssachet.No matter what you are celebrating! Made frompure milk, Nandini Peda is a delicious treat for thefamily. Store at room temperature approximately 7days Available in 250gms pack containing 10 pieceseach.Great way to those soft and juicy jamoon treatsat home! Nandini Gulab Jamoon Mix is made fromNandini skimmed milk powder, maida, soji andNandini Special Grade Ghee. Available in 100gmsand 200gms standy pouch with a five layer foil lamination. Shelf life of 6months.Nandini spiced Butter Milk is a refreshinghealth drink. It is made from quality curds and isblended with fresh green chillies, green corianderleaves, asafoetida and fresh ginger. Nandini spicedbutter promotes health and easy digestion. It isavailable in 200 ml packs and is priced at most competitive rates, so thatit is affordable to all sections of people.
  • 14. Dharwad Milk Union Ltd. KMFIBMR - Hubli MBA, Programme. 14Sterilised flavoured milk, a nutritious and healthydrink and an all-season wholesome drink available infive different flavours - pineapple, rose, badam, pistaand natural orange. Apart from refreshing energy.Available in 200mlRich, smooth and delicious. Nandini Butter ismade out of fresh pasturised cream. Rich taste, smoothtexture and the rich purity of cows milk makes anypreparation a delicious treat.Available in 100gms(salted), 200gms and 500gms cartons both salted and unsalted,Area of operation - RegionalOwnership pattern.DHAMUL builds and runs under the co-operative institutions suchas District Co-operative Society. (DCS) National Dairy Development Board. (NDDB)
  • 15. Dharwad Milk Union Ltd. KMFIBMR - Hubli MBA, Programme. 15Competition AnalysisIn towards world every organization is in search of the marketpotential the Belgaum round about 5 lakh to 10 lakh population is their soa huge population city can be easily targeted by the competitors.The main competitor for every dairy is the milk man. They are theone who have captured major share of the milk supply because of theirlong term relationship and contacts they have maintained the customersdairies like Mata, Mahalaxmi, Gokul, Arokya & based on religiousmatters captured 5% of the market shares.Most of the companies tried to face the competition but they wherefailed.Firstly, DHAMUL was header in milk business, but now a daysbecause of entry of all these dairies it is facing lot of competition. Theneighboring state Maharashtra has entered into the mkt to complete mktthe brands like Mahalaxmi, Sahyadri are entered into the Belgaum mkt.Brief history about competitors of DHAMULThe Belgaumers taste new brands of milk every year Right now/till date there are 16 competitors in the mkt apart from Nandini. The 5major brands which are very competitive for Nadini are Mayur,Mahalaxmi, Arokya, Sahyadri and Aditya.Arokya Dairy: it procures most of the milk from south side of theBelgaum. It procures 10,000 litres of milk every day. It is located nearDesur a village of Belgaum district 10 kms away from city on NH4 A-they supply most of the procured milk to the city.
  • 16. Dharwad Milk Union Ltd. KMFIBMR - Hubli MBA, Programme. 16Mayur Dairy: It procures milk mainly from Taluka‟s at Belgaum districtnamely Chikkodi, Raibag & Athani they procure 25,000 litres per day. Itis located in Kolhapur & the supply milk to Belgaum as well as Kolhapurdistrict.The standard milk of Mayur dairy contents a fat of 6.5% & 9%with this fat & S.N.F they supply nearly 10,000 LTPD.Sahyadri milk: The dairy is located in Shinnolli Taluka, Chandgad &district Kolhapur. This is 15 kms away from Belgaum city. It procuresdairy about 30,000 LTPD which will be supplied in the Belgaum city aswell as in the Maharashtra state.Mahalaxmi Dairy: The Mahalaxmi dairy plant is located near Kolhapur,Maharashtra state which procure round about 15,000 to 20,000 LTPD &its target mkt area in Belgaum district, Gokak & in Maharashtrastate.Besides above main brands to other competitive brands like,Krishna, Gopal, Aditya, Arokya etc.Infrastructural facilities.Infrastructural facilities of DHAMUL are as follows. Security facilities. Canteen facilities. Shifts facilities-3shifts per day. Land 22 acresAchievements or awardsNo awards
  • 17. Dharwad Milk Union Ltd. KMFIBMR - Hubli MBA, Programme. 17Work flow Model(End to End) Production process has the following workflowmodel.DCSFresh Liquid MilkChillingStoringPasteurizationStoringPackingDispatchingSample Testing Fat and SNFSeparationHomogenization
  • 18. Dharwad Milk Union Ltd. KMFIBMR - Hubli MBA, Programme. 18
  • 19. Dharwad Milk Union Ltd. KMFIBMR - Hubli MBA, Programme. 192.11) Future growth and prospectusGovernment of Karnataka and NDDB has signed a memorandumof understanding during February 2000, for further strengthening thedairy development activities in Karnataka with an outlay of Rs.250crores. Consequent to the announcement of new lending terms andconditions by NDDB through an evolution of an action plan –perspective2010 to enable dairy co-operative to face the challenges of an increaseddemand for milk and milk products by focusing efforts. Enhancingproductivity, managing quality and building national information networkplans are under implementation. Reparing for ISO-9001 certification. Marketing quality improvement. Developing HACCP-hazards Analysis and Critical Control Points. Getting export grade milk powder Expansion of Gokak chilling centers
  • 20. Dharwad Milk Union Ltd. KMFIBMR - Hubli MBA, Programme. 20Part-BMcKensy’s 7S Model
  • 21. Dharwad Milk Union Ltd. KMFIBMR - Hubli MBA, Programme. 21Part-BMc Kensy’s 7S Frame WorkThe 7S model is better known as McKensy‟s 7S, because the twopersons who developed this model, Tom Peters and Robert Waterman, havebeen consultants at McKensy‟s and Co. at that time. They published their 7Smodel in their article “Structure is not Organization” (1980) and in their books“The art of Japanese Management” (1981) and “In Search of Excellence”(1982).The model consists of seven elements. Those seven elements aredistinguished in so called hard S‟s and soft S‟s. The hard elements are feasibleand easy to identify. They are Strategy, Structure and Systems of theorganization. The four soft S‟s are hardly feasible. They are highly determinedby the people at work in the organization i.e., Style, Staff, Skills and Sharedvalues
  • 22. Dharwad Milk Union Ltd. KMFIBMR - Hubli MBA, Programme. 221. StructureOrganizational StructureBoard of ManagementManaging DirectorProcurement& InputDeputyManagerAccountOfficerAccountAssistantGradeI, II, IIISupredentAdministrationClerksComputerOperatorsAttainderSecurityOfficerAssistantSecurityOfficerSecurityGuardsCanteenCooksManagerDeputyManagerP & IAssistantP & IExtension OfficerDeputyManagerF & FAgricultureOfficerAssistantsDeputyManagerVeterinaryAssistantManagerGradeI, II, IIIAdministrationAssistantManagerAssistantsGrade IHelperFinance PurchaseVeterinaryAssistants
  • 23. Dharwad Milk Union Ltd. KMFIBMR - Hubli MBA, Programme. 23Board of ManagementManaging DirectorOfficerAssistantsAssistantsGrade I,II, IIIClerksManagerAssistantsManagerMarketing OfficerM I S Marketing ManagerDairyHelpersDairySupervisorsOperatorsDeputyManager(Production)AssistantsManagerTechnicalOfficerHelpersTechniciansHelpersAssistantManagerEngineeringTechnicalOfficersDairySupervisorsI, II, IIIHelpersQualityControlTechnicalOfficerLabTechniciansHelpersStoresStoresOfficerStoresAssistantDriversTransportSupervisorClerks
  • 24. Dharwad Milk Union Ltd. KMFIBMR - Hubli MBA, Programme. 24DEPARTMENTS OF THE COMPANY1. Production department2. Administration department3. Engineering department4. Procurment & input department5. Stores department6. Security department7. Processing department8. Quality control department9. Finance department10. Markrting department11. Distribution departmentPRODUCTION DEPARTMENTProduction department is the main department wherein the raw materialis converted into finished into products. At DHAMUL production departmentis well planned & adequately equipped manufacturing set up where all thenecessary infrastructure is available. The quality of the product is alsodependant on the production procedure.In DHAMUL the raw milk is processed to form the good quality ofmilk. During the processing the milk is differentiated depending on the contractof FAT & SNF (Solids Not Fat)The different types of milk different in quality are
  • 25. Dharwad Milk Union Ltd. KMFIBMR - Hubli MBA, Programme. 25TYPES OF MILK FAT SNFFull Cream Milk 6% 9%Toned Milk 3% 8.5%Standardized milk 4.5% 8.5%Full Cream Milk 6% 9%Shubham milk 6% 9%The production procedure at DHAMUL is done under different stages. Thestages are as follows:1. COLLECTION OF MILK :-In this stage the milk is bought from the various district co-operativesocieties (DSC) to the main dairy in a can of 40 litters capacity in tempo‟s or inany other vehicles. The cans marked with two different colours to differentiatebetween the cow & the buffalo milk. One the milk is bought to the main dairyit undergoes into following process.2. UNLOADINGThe cans were unloaded is called as dock station. The cans are unloadedfrom the vans manually.3. ORGANOLEPTIC TESTThis test is carried out by a person manually without using any machinesbut using his sense organs like nose & hence it is called as organoleptic test.This test is conducted before the cans are weighed. In this test various sub-testsare conducted like: SMELLING (ODOUR) TEST:-A man at dock station or platform checks the acidic nature of milk bysmelling or tasting the raw milk. If the tasted milk has bad odors then the dairywill pay lower rate to such society members than the normal rate.
  • 26. Dharwad Milk Union Ltd. KMFIBMR - Hubli MBA, Programme. 26 EXTRANEOUS-MATTER APPERANCES:-In this test the raw milk is undergone into the test, which is conductedby the chemist. The chemist checks for two aspects mainly whether the milk iscontaminated or not & the milk is in liquid form or curd form. He also checksfor any extraneous matters like dust, flies etc. which lead to spoilage of milk. AICDIC TESTAs the payment to the suppliers or DSC depends mainly on FAT & SNFcontent in the raw milk. The supplier may add sugar to the milk so as toincrease the FAT & SNF content. Hence to avoid this adulteration sugar test isdone.Its procedure is 10ml of milk is shaken in a test tube & 1ml ofhydrochloric acid. Few crystals of resorcinol is mixed to it. The solution isshaken well & heated for five minutes. If solution turns organ color it isdemanded that sugar is mixed to it. STORAGE OF CHILLED MILK:-Once all the tests are over, the milk is allowed to store in the SILOS(Storage tank). So as to maintain its cold level of 4 degree celcious. Theunions having 7 storage tanks, 3 tanks are vertical with 30000 litters‟ capacityeach and the remaining 4 are horizontal among which 2 are having the capacityof 10000 litters each and other 2 of 15000 litters each. After chilling the milk ispassed through pasteurizer for pasteurization. PESTEURIZATION:-This step of production includes heating every partical of milk at 72degree celcious in 15 seconds and it cold in less then 4 degree celcious. Whenit is passing through pasteurization the cream is removed depending on thequality of the milk required (standardization).
  • 27. Dharwad Milk Union Ltd. KMFIBMR - Hubli MBA, Programme. 27 PACKING:-Once the pasteurization closed is conducted the next step is to pack themilk. The packing is done by the machine of fluid goods and were as it is donemanually in case of solid goods like pheda. The machine packs the raw milk intwo size that is 500ml and 1000ml pouches. These machines are automatic witha capacity of packing 10000 to 14000 pouches per hour. The speed can be evenaltered according to suitability. These machines are used to pack all differenttypes of milk in plastic bags. These plastics are polythene bags required forpacking milk is bought from Bangalore. STORAGE:-The last but not the process is the whole of production process isstorage. The milk packed in 500ml and 1000ml pouches are arranged in thecrates. Each cater contain 10 litters of milk. This caters are stored in cold roomwhich has a temperature of about 5 degree Celsius or below.ADMINISTRATION DEPARTMENT FUNCTOINS1. Maintenance of attendance.2. Establishment of billing.3. Maintenance of service records.4. Domestic enquiry.5. To maintain shifts timing.6. To look after recruitment process.7. Conducting training to the new employees and also to the existingonce.RESPONSIBILITIES OF ADMINISTRATION DEPARTMENT To look after the overall administration of time office management. Conducting training to the new employees and also to the existing once. To look after over recruitment process. To maintain shifts timings.
  • 28. Dharwad Milk Union Ltd. KMFIBMR - Hubli MBA, Programme. 28MARKETING DEPARTMENTThe marketing department is the nearest of any organization. In today‟shighly complex and competitive world, marketing is the tool, which has to bederived properly to sell the product. Marketing is the more of a complex joband it requires a great deal of the knowledge about the market that itscompetitors. The marketing management requires planning, analyzing,implementing and controlling of programmes designing to create, build andmaintain beneficial exchange with target buyers for the purpose of achievingorganization objective.OFFICE WORK:-1. Checking daily sales as per the respective agents.2. Finding new areas where there is demand for milk.3. Issuing tender and receiving application for opening new parlors andagencies.4. Fixing/organizing milk distribution routes.5. Sending of milk / milk products as per the indent.6. Keeping in track of the timing of vehicles and timely supply of milk.7. Collection of cash from agents and depositing the same to the milk.8. Attending complaints from the agents.9. Meeting agents to solve their problems.10. Draw new advertising strategy.FIELD WORK:-Sales promotional activities like advertisement in reality selling. Theproduct in the real marketing is very hard and tough job. The marketing officerhas to go the field and study the market and they have to plan the strategy. Themarketing mix plays a vital role while appointing the agents they take initialdeposit of Rs.2000 for Belgaum district and Rs.1000 in Goa. After receivingdeposit they issue bond to them. The bond consists of rules and regulation ofthe union.
  • 29. Dharwad Milk Union Ltd. KMFIBMR - Hubli MBA, Programme. 292. Strategy To serve as an instrument of the national to achieve self reliance in thedesign, development and Quality Production of DHAMUL Products tomeet the customer‟s changing and growing needs with special emphasison military requirements. In fulfillment as this objectives, the company shall regard itselffundamentally responsible design and developments, relying howeveron such relevant facilities as are available in other National institutionbut always holding itself basically responsible for the growth. To conduct its business economically and efficiently that it contribute itsdue share to the National Efforts to active self reliance and selfgenerating economy. Towards this end to develop, maintain an organization which willrapidly respond to and adopt the changing Matrix as socioeconomicrelationship and where in a climate as growing technical competence.Self discipline, mutual understanding deep commitment and sense ofbelongingness will be fostered and each employee will be encouraged togrow with accordance to his potential for the furtherance asorganizational goals. Consistent with the basic objectives of the state the personal departmentof the corporate office has adopted certain specific objectives, whichwill act as a source as inspiration and guidance in evolving per sonnetpolicies and roaming rules and regulations for growth and developmentor employees and to ensure their deep commitment and sense ofbelongingness to the company, and the objectives are stated below.1. Insure equality at all the levels and provide them the right workEnvironment, job satisfaction and professional challenges.2. Provide healthy blend or employee who have grown with originalthose Selected from outside
  • 30. Dharwad Milk Union Ltd. KMFIBMR - Hubli MBA, Programme. 303. SystemThe stores Department in DHAMUL follow the Codex system (CodedControl system). A card is maintained for each item and a number is allotted.The card is attached to each article consists of amount balance, date of issue,purchase etc. this is later recorded in separate ledger book. The inventories areof different kind ranging from mechanical, spares, packing items to animaldrugs etc.This department has the following services: It tries to maintain maximum and minimum level of inventory Ordinary and locally available commodities are maintained atminimum possible level.4. StaffingThe staff deals with the various personnel policies followed by theorganization. Below are given the personnel policies followed by theorganization.Personnel policies:There are around 240 employees working. There are various policiesfollowed. The Administrative department forms the policies.Recruitment and Selection:Due to registration, termination, retirement and transfers the concerneddepartment head will give the manpower requirements along with the jobdescription.The manpower sourcing is done through advertisement, manpowerconsultant, and employment exchanges and personnel reference.Promotion:Promotion is on the basis of seniority.
  • 31. Dharwad Milk Union Ltd. KMFIBMR - Hubli MBA, Programme. 31Induction:After an employee is employed in DHAMUL, he she has to makefamiliar to the union and also to know the objective, value, functions and theoperations. This helps the employees to interact with senior staff members fromvarious departments.Salaries and Employee Benefits:Gross salary:A regular staff member in the union will have a gross salary consistingof basic salary, dearness allowance, cca, house rent allowance and conveyanceallowance.Other facilities: Shift allowance Canteen facility5. SkillsThese are the distinctive competencies that are present in theorganization it is the design and development of products quality and service orviability of product. The employees in this organization also have all thedistinctive skills that are required for the undertakings of research anddevelopment activities. The DHAMUL is improving the employee‟s skills andtechniques through motivating them and giving proper training to them alsothrough giving proper working condition.6. Stylea) DHAMUL has top to bottom or top down style system.b) The style of organization is authoritarian. It means management cadrefollows authoritative.The indicators of the style are: Follows rules and orders Reliable and dependable
  • 32. Dharwad Milk Union Ltd. KMFIBMR - Hubli MBA, Programme. 32Decision making parameter for day-to-day operation:Top manager will tell marketing manager to collect informationregarding daily requi9rementsw of the sale of milk and milk products based ondemand. Then this information will provided to production departmentindicating production activities7. Shared ValuesThe core or fundamental values that are widely share in the organizationand serve as guidelines that are important, these values have great meaningbecause they focus attention and provide broader since of purpose.The values of the organizations are1) Customer Satisfaction2) Commitment to total quality3) Cost and time consciousness4) Innovative and creative5) Trust and team spirit6) Respect for individually7) Integrity
  • 33. Dharwad Milk Union Ltd. KMFIBMR - Hubli MBA, Programme. 33PART-CFINANCIAL STATEMENT ANALYSIS
  • 34. Dharwad Milk Union Ltd. KMFIBMR - Hubli MBA, Programme. 34ACCOUNTING POLICIES AND PRACTICES INDHARWAD MILK UNIONDharwad Milk Union (DMU) follows double entry system.The double entry system records both the aspects of transactionsand events. The accounting procedure, analysis transactions andevents in to debit and credit and records both the aspects in asystematic manner. The accounts have been prepared to complyin all material aspects with applicable accounting principles inIndia. The discussion on accounting policies and paractices inDMU covers the following issues:1) Fixed Assets2) Investments3) Capital Account4) Depareciation5) Current liabilities6) Profit and loss account7) Inventories
  • 35. Dharwad Milk Union Ltd. KMFIBMR - Hubli MBA, Programme. 35Accounting system:If an entity is to communicate financial information, it must have the ability of collectand appropriately arrange the necessary data. This requires the development of a process fortaking bits of information (inputs) and converting them into meaningful reports (outputs). Thesystematic process followed by a firm is accumulating and reporting its financialinformation is referred to as an accounting system. The type of accounting system used bya firm depends upon the type and information it needs. In effect, the output of an accountingsystem dictates the way that information is to be accumulated. An accounting system must beextremely flexible and capable of being tailored to the requirements of a particular firm.There is no single accounting system which can be followed by all firms.Accounting as the basis for decision making:The primary purpose of business activity is to make a profit, the business enterprise,regardless of its size operates by combining physical resources and individual talents toprovide a product or service for members of society. Hopefully, resources received by thefirm from the sale of its products or performance of its services exceed the capital and labourconsumed in producing the product or providing the service. To achieve this result, managersof a business enterprise are responsible for obtaining maximum advantage from use ofresources placed at their disposal. Managers need internal financial information to help themmake decisions regarding the use of the firms resources. Investors, creditors, and otheroutside parties need external financial information in order to make decisions regarding theirinterests in the firm.
  • 36. Dharwad Milk Union Ltd. KMFIBMR - Hubli MBA, Programme. 361. FIXED ASSETS :Accounting Policies : Fixed assets are stated at original cost. Fixed assets heldwith an intention of being used for production and providing goods andservices and which is not held for sale, for example fixed assets like, trainingcentre assets, Bore well, Canteen equipments, dairy equipments, Factorybuilding, furniture and fixture, milk parlour, office equipment, refrigerator,vehicles, weighing equipment etc.The fixed assets of DMU five year (1998-2003) is shown in Table 4.1Table 4.1Year Amount (Rs. in lakhs)1998-99 11061999-2000 10842000-01 10412001-02 99802002-03 9709Source : Annual Reports
  • 37. Dharwad Milk Union Ltd. KMFIBMR - Hubli MBA, Programme. 37The transactions relating to fixed assets which take place during a yearare suitable adjusted against the opening balance. The previous year balancewill be opening balance for current year. There is a decrease in the value offixed assets every year as evident from table.2)Investments :Accounting policies : Investment is keeping capital in assets for attaining thereturn from them other than those in which the enterprise is dealing. Theseinclude. KCC bank share, KMF shares, KMF central office, fixed deposit,KMF share govt., co-operative institution investments are classified intocurrent investments which is carried in the financial statement at the lower ofcost and fair value; and long-term investment which is carried in the financialstatement are stated at cost, after providing for any diminution in value.Investments made by DMU for five year (1998-2003) are shown inTable 4.2
  • 38. Dharwad Milk Union Ltd. KMFIBMR - Hubli MBA, Programme. 38Table - 4.2INVESTMENTS(Rs. in lakhs)Investments 1998-99 1999-00 2000-01 2001-02 2002-03Co-operativeinstitution0.25 0.25 0.25 0.25 0.25KCC bankshare6.87 6.87 6.87 6.87 6.87KMF sharesLDBF2.50 2.50 2.50 2.50 2.50KMF centraloffice2.20 2.20 6.20 6.20 6.20Fixed depost -- 9.73 21.39 20.13 21.02KMF shares -- -- 100.00 100.00 100.00Total 11.82 25.55 137.21 135.95 136.85Source : Annual Reports
  • 39. Dharwad Milk Union Ltd. KMFIBMR - Hubli MBA, Programme. 39Table 4.2 reveals that there has been an increase in investments, whichare used for stabilizing the liquidity position as well as strenghtening theprofitability position of DMU.3)Capital Account :Accounting policy : Capital is the amount invested by a proprietor or partnerin the business enterprise. The capital in a DMU is called share capital. Theshare capitals ae classified into A class-share capital, these are the farmersshare; and B clas-share capital is the shares of government authorities.The information relating to capital account of DMU is shown in Table 4.3Table 4.3 CAPITAL ACCOUNT(Rs. in lakhs)Investments 1998-99 1999-00 2000-01 2001-02 2002-03Reserves and supuls 475.77 475.77 478.08 489.32 489.32Share capital – A class 74.27 83.20 78.03 78.15 78.27Share capital-B class -- -- 200.00 200.00 200.00Share suspence -- -- -- 0.00127 0.00127Total 550.04 558.97 754.12 767.48 767.59Source : Annual Reports
  • 40. Dharwad Milk Union Ltd. KMFIBMR - Hubli MBA, Programme. 40Table 4.3 reveals that during the year 1998-99, 2000-2001 there wasincrease government shares. The Government observed that there wascontingent loss, it decided to investment a fixed amount of shares i.e. Rs. 2crores in DMU for its development. From 2000 onwords every year thegovernment started investing shares in DMU. A class shares are from farmerssocieties. There are 723 societies. Shares price is Rs. 1000 per share, shares @Rs. 1000 for each 2000 shares.4) Depreciation :Accounting Policy – Dharwad Milk Union follows Writen down value (WDV)method of depreciation method for depreciation. Depareciation is calculated onthe transactions relating to an asset which take place during a year (i.e.additions and sale of an asset) depreciation is ascertained as the rates given bythe valuers. This amount is transferred to profit and loss account.The information relating to depreciation account of Dharwad MilkUnion is shown in Table 4.4
  • 41. Dharwad Milk Union Ltd. KMFIBMR - Hubli MBA, Programme. 41Table 4.4DEPARECIATION ACCOUNT(Rs. in LakhsYEAR Dpreciation1998-99 46.171999-2000 45.912000-01 46.932001-02 49.112002-03 46.83Source : Annual ReportsTable 4.4 reveals that during the five years there is increase and decreasein the value of an asset to additions and sales of an asset.5) Curent liabilities.Accounting policies : current liabilities are treated as contingencies.Contingencies arise when uncertain conditions prevail. It includes grants otherliabilities salaries recovered security deposit, unpaid salary/wages, duties andtaxes, and sundry creditors.
  • 42. Dharwad Milk Union Ltd. KMFIBMR - Hubli MBA, Programme. 42The information relating to current liabilities of DMU is shown in Table 4.5:Table - 4.5Current liabilities(Rs. in Lakhs)YEAR Current liabilities1998-99 431.371999-2000 45.91369.752000-01 46.93387.582001-02 49.11454.252002-03 46.83611.39Source : Annual ReportsTable 4.5 reveals that during the year 1998-99 to 1999-2000 there isdecrease in value current liabilities. But from the year 1999-2000 to 2002-2003there is increase in value of current liabilities.
  • 43. Dharwad Milk Union Ltd. KMFIBMR - Hubli MBA, Programme. 436) Profit and loss Account :Accounting policies : The profit and loss account is treated as revenue. Itincludes all the expenses, purchases, sales and income. This accountingstandard deals with the various bases to be adopted in accounting the revenuein profit and loss account.The financial position of DMU for the last five years is shown in Table 4.6below-Table - 4.6Profit and loss account(Rs. in Lakhs)Year Profit Loss1998-99 -- 77.791999-2000 -- 71.332000-01 18.14 --2001-02 -- 232.712002-03 -- 50.26Source : Annual Reports
  • 44. Dharwad Milk Union Ltd. KMFIBMR - Hubli MBA, Programme. 44PART – DANNUAL REPORT
  • 45. Dharwad Milk Union Ltd. KMFIBMR - Hubli MBA, Programme. 45ANNUAL REPORTBALANCE SHEET FOR THE YERR 2007-2008PARTICULARS AMOUNT (Rs.) PARTICULARS AMOUNT (Rs.)To, openingbalanceTo, purchasesTo, manufacturingexpensesTo, vehicleTo, wages andsalariesTo, postage andtelegramTo, selling anddistributionTo, bank loanTo, technicalexpensesTo, grand total ofexpensesTo, profit80,56,515.2321,74,19,491.242,46,51,716.921,79,344.932,27,26,295.4531,97,145.321,28,98,156.1534,51,969.2033,75,948.7932,09,565.0014,04,269.59By, salesBy, other expensesBy, closing stock28,09,85,013.0336,10,597.021,59,74,807.77TOTAL 30,05,70,417.82 30,05,70,417.82
  • 46. Dharwad Milk Union Ltd. KMFIBMR - Hubli MBA, Programme. 46Balance Sheet ContinuedAs at 31-Mar-2007Capital Account (C/A)Reserves and SurplusShare CapitalShare SuspenseLoans (Liability)Secured LoansUnsecured LoansCurrent LiabilitiesGrantsInterest Short profit U/S68O.S.L.Other LiabilitiesSalary recoveriesSecurity Deposit A/cShort profit A/c U/s 68Duties and TaxesProvisionProfit and loss A/cOpening BalanceCurrent periodTotal4,04,19,718.911,27,94,200.001,53,016.41______________3,79,04,974.0089,727.07______________84,858.005,22,730.001,08,52,250.9218,85,688.846,40,426.3033,53,706.5010,12,300.0085,134.813,65,82,854.59_______________3,96,41,686.94( - ) 49,50,948.645,33,66,935.323,79,94,701.075,50,19,949.46( - ) 3,46,90,738.311,16,90,847.5-----continued
  • 47. Dharwad Milk Union Ltd. KMFIBMR - Hubli MBA, Programme. 47ANNUAL REPORT1-April-2007 to 31-March-2008As at 31 – Mar – 2008Application of foundFixed assetsFixed assetsWork in progressInvestmentsB D C C BANK SHAREBELGAUM DIST. CO. OPUNION LTD. BGMINDIAN FARMERS & FOC OP LTDI S B D HARAYANKMF SHARECurrent AssetDEFFERED INT (NDDB)INTERESTRECOVERABLE U/S 68MISAPPROPRIATIONRECOVERABLE DUE U/S68Closing StockDeposits (Assets)Loans and advances(Asset)Sundry DebtorsCash-in-HandBank AccountsD D F GRANTRECIEVABLETOTAL7,88,19,921.1449,98,387.00______________4,01,000.00_______________58,16,576.415,22,730.003,24,812.1910,12,300.0089,70,871.9519,71,972.506,93,827.3019,54,337.353,76,727.3557,29,318.0463,144.00_______________8,38,18,308.144,36,102.0025,100.001,0010,000.001,002,74,36,437.41_______________11,16,90,847.55-----Continued
  • 48. Dharwad Milk Union Ltd. KMFIBMR - Hubli MBA, Programme. 48Profit and Loss A/c1-April-2007 to 31-March-2008As at 31 – Mar – 2008Trading Account :Sales AccountsSale-cattle feedSale of milkSale of milk ProductSale of P & ISale other salesCost of sale :Opening stockAdd: purchase accountsLess: closing stockDirect ExperienceP & IWINGEXPERIENCEPROCE ANDMANUFACTURINGEXPESGross Profit :Income Statement :3,28,12,834.3528,28,34,885.462,11,51,953.1417,41,273.001,95,659.95______________75,26,736.8025,31,82,193.6989,70,871.95______________25,17,38,058.583,43,54,210.41_______________41,12,127.503,02,42,082.0133,87,36,605.9928,60,92,268.955,26,44,337.04Indirect IncomesOTHER INCOME 41,95,367.83-----continued
  • 49. Dharwad Milk Union Ltd. KMFIBMR - Hubli MBA, Programme. 49DHARWAD MILK UNION –Particulars 1-April-2007 to 31-March-2008Indirect ExperienceADMN. EXPERIENCEINTEREST ANDBANK CHARGESSELLING AND DISTEXPERIENCESTAFF EXPENSESBAD DEBTS A/CDEPRECIATION A/CEXP RELATING TOPREVIOUS YR.Net Profit44,27,632.6335,20,933.171,56,39,207.252,48,23,769.232,47,966.9532,09,787.0019,460.00_______________5,18,88,756.2349,50,948.64Present Sales StructureYear Avg Sales (Litres)2002-2003 47,3202003-2004 46,6962004-2005 454552005-2006 44,3312006-2007 43,1852007-2008 56,936
  • 50. Dharwad Milk Union Ltd. KMFIBMR - Hubli MBA, Programme. 50LEARNING EXPERIENCE GAINED IN THE KMF1. Got complete knowledge of quality testing.2. Method of maintaining accounts in proper manner.3. Learnt about the marketing strategy and sales promotion.4. To know about the types of milk and how can it will be stored in the coldstorage.5. Proper manner of maintaining punch cards and every time alert securitycenters.6. Learnt about the distribution channels it contains wide area of networkingalso speed of operation.7. Time Management.
  • 51. Dharwad Milk Union Ltd. KMFIBMR - Hubli MBA, Programme. 51FINDINGS AND SUGGESTIONS
  • 52. Dharwad Milk Union Ltd. KMFIBMR - Hubli MBA, Programme. 52FINDINGS OF THE STUDY ARE1) DMU has produced many milk products. It is truly remarkablegrowth, but some have been failed in making profits.2) DMU has incurred losses during five year i.e. 2000 to 2002except in 2003 there is profit.3) DMU has not adopted any of the sales promotional tools toimprove the sales performance and also it has not adoptedadvertisement and publicity satisfactory.4) It is true that the milk union has training centre to train villagersin regard to rear the cows and buffaloes and how to feed themand what are different types of cows and buffaloes and whattype of yielding animals are suitable for there villagers etc., Milkunion training centre is concentrating its attention on theincrease in milk capabilities of cows and buffaloes.5) DMU has failed in having effective management and skilledlabourers.6) It is found that trading and profit and loss account and balancesheet is not satisfactory for all these five years. The milk union’sgross profit and net profit is not at all improved but it has shownlosses continuously for the period of five years. And study haspointed out that assets and liabilities were increased duringthese periods.
  • 53. Dharwad Milk Union Ltd. KMFIBMR - Hubli MBA, Programme. 537) DMU has not made profits from five years, hence it could notdistribute dividend to its village primary co-operative membersocieties. This is in fact, not a healthy situation of the milk union.It truly reflects that, DMU is in effective in management andadministration of the Milk Union and this situation is notencouraging to village co-operative societies for its functioning.8) The current ratio of the DMU is not satisfactory. As a convention2:1 is considered to be satisfactory but the ratios of DMU showsless than standard ratio. It means the DMUs capacity todischarge the current obligation is not good. Least ratio is in theyear 2001-02 and highest ratio is in the year 1998-99.9) The quick or acid test ratio of DMU is also very unsatisfactory.As a convention a firm should have a quick ratio of 1:1 but theratios of DMU shows less than standard ratio. The first and thirdyear is some how manageable but other three years shows verypoor liquidity position.10) The stock turnover ratio of DMU shows that the DMU manageinventory efficiently. The ratio for the year 2000-2001 and 2001-02 shows very high and it shows blocking of capital etc.
  • 54. Dharwad Milk Union Ltd. KMFIBMR - Hubli MBA, Programme. 54SUGGESTIONSIn the light of the above findings, the following suggestions have beenmade to make the Dharwad co-operative Milk Producers Society Union Ltdsuccess.1) The loss making milk products must be stopped immediately.2) The quality and quantity of the milk products must be improvedand there must be product differentiation.3) The management must keep in mind the satisfaction ofprospective consumers.4) DMU has not made profits due to more number of employeesappointed in the Milk Union. This is one of the most importantfactors leading to incurring losses. So here it is being suggestedthat the number of employees should be decreased to theminimum possible extent.5) Expenditure made by the DMU is unnecessary. Union hassuffered net loss. It must check such expenses.
  • 55. Dharwad Milk Union Ltd. KMFIBMR - Hubli MBA, Programme. 55BIBLIOGRAPHY Human Resource Management-By Subba Rao P. Company Annual Report. http://www.7s model of Mckinsey.comANNEXURE Trading and profit and loss account & the balance sheet of DMU for the years1998-99 to 2002-03.CONCLUSIONIf these suggestions are implemented, the DMU‟s overall performancewill be improved further.