SIGNIFICANCE OF INVENTORY MANAGEMENT IN VITA MILK PLANT, AMBALA CITY HARYANA

1. SIGNIFICANCE OF INVENTORY
MANAGEMENT IN VITA PLANT,
AMBALA CITY

2. INTRODUCTION
Type -
Cooperative
Industry -
Dairy
Founded -
1970, Jind (Haryana)
Operations Started
1973, Ambala (Haryana)
Revenue -
INR 120 Crore (Ambala Plant)
Daily sale of around Rs. 35-40 lakhs
Unions -
6 Registered unions

3. Key facts
• The Company has three tier system comprising Milk Producer Societies at
the village level, Milk Producers Co-operative Union at the district level
and the State Milk Federation as an apex body at the State level.
• Tag Line is “VITA the Hallmark of Quality”.
• Accreditation with ISO 9001:2008 and ISO 22000:2005 Certified Unit.
• The Entire Labor is on daily wages (as per Labor Law) and they work
round the clock 24 hours a day.
• The new administrative staff is recruited on Contractual Basis.
• They don’t give any Credit facilities to their suppliers & distributors.
• They purchase milk only from the farmers & total milk capacity of the
plant is 5,50,000 liter's per day.
• It works as an Independent body with no Government Intervention in their
day-to-day operations.

4. objective
• A readymade market to milk producers at their doorstep.
• To give remunerative prices to the milk producers for milk.
• To make good quality milk & milk products available to the
consumers at reasonable price.
• To provide ghee, cattle feed, mineral mixture & seeds etc. to
village level milk cooperative societies for further sale to producer
members.
• To provide training (by outsourcing) to staff & milk producers for
business operation.
• To procure milk by forming village level milk cooperative societies
or through dairy farms.

5. products
• Milk (Full Cream Milk, Standard
Milk, Toned Milk, Double Toned
Milk and Flavoured Milk)
• Ghee
• Butter
• Sweets (Kaju Pinni & Kalakand)
• Kheer
• Curd
• Cheese
• Lassi
• Ice Cream
• Fodder

6. Organization structure
LEVEL
MEMBERS
State
Federation
District level Chairpersons,
Registrar of Co-operatives,
Technical Expert, CEO
District
Chairpersons of Village
Dairy Co-operative
Societies, BOD, MD
Village
Milk Producers, Managing
Committee
DECISION-MAKING0
• Price paid to district unions
(fixed across unions)
• Product mix and quantity
• Price paid to village
co-operative societies
• Membership
• Price paid to milk suppliers

7. Value chain process
Vita receives its raw material, i.e. Milk in the following two ways:
Milk
Collection
(3395 in nos.)
Farmer
s
Production of
Milk
Village
Cooper
ative
Societie
s
Distribution
Vita
Milk
Plant
Milk
Processing
Distrib
utors
Consuming
Retaile
rs
Consu
mers
Selling
The Products are sold by 250 no. of distributors, Institutions, Defence
Units, Districts Jails & 354 no. of milk booth network.

8. Value chain process
Farmers
Vita Milk
Plant
Distributors
Retailers
Consumers
• Vita does not provide any facility of transportation for the supply of
their products directly to the distributors.
• Distributors have to arrange for the transportation, i.e. the vehicles
on their own.
• The payment for the products is done in advance by the
distributors, i.e. no credit facility is available.
• The profit margin for the distributors is 25 paisa per litre and for the
retailers is Re.1 per litre.

9. Plants of vita milk
S. No. Milk Plants
Year of
establishment
1.
Jind
1970-71
2.
Ambala
1973-74
3.
Rohtak
1976-77
4.
Ballabgarh
1979-80
5.
Sirsa
1996-97
Products
Liquid Milk, Ghee,
Powder, Paneer, Dahi,
Lassi, Kaju Pinni Jaljeera,
Mango Drink.
Liquid Milk, Ghee ,Paneer
, Dahi, Lassi, Sterilized
Flavored Milk, Kheer, Milk
Cake, Ice Cream.
Liquid Milk, Ghee, Paneer,
Dahl, Lassi ,Table Butter.
Liquid Milk, Ghee, Paneer,
Dahi, Lassi.
Liquid Milk, Ghee,
Powder,Paneer,Dahi,
Lassi, Kaju Pinni.
Registered capacity
(TLPD)
150.0
120.0
250.0
250.0
110.0

10. Inventory management
The overseeing and controlling of the ordering, storage and use of
components that a company will use in the production of the items it
will sell as well as the overseeing and controlling of quantities of
finished products for sale.

11. Inventory management
• Inventory Management strategy used by Vita plant is the just-intime method, where company plans to receive items as they are
needed rather than maintaining high inventory levels.
• The milk that comes in is processed and then sent out for sale.
• Only during the peak periods, they store skimmed milk powder, so
that it can be used in the lag period.
• This storage is done at room temperature, in their own warehouses.
• White butter is stored in specially insulated cold storage
warehouses at -20oC which are taken on rent by floating tenders in
the market. Butter is stored for only 3-4 months and the overall
cost for holding the butter is around 8-10 lakhs.

12. Learning's
•
•
•
•
Acquired practical insights of the real-time business environment.
Learned the input and output for different processes.
Experienced the importance of working safely.
Understood the concept of milk processing & estimate overall
efficiency of the milk plant.
• Learned about the Logistics & Inventory management, time
management and working methods through interaction with the
Industry Experts.
• How to maintain healthy relationships with the suppliers and
distributors, in order to create a value of the brand in the
competitive world.

13. Images
2

14. 2
“Nothing ever becomes
real till it is
experienced”