GOING TO MARKET REPORT ON AMUL MILK

Name of the student D.prabakaran Debasree saha Geetika juneJa Priyanka munjal Siddhanth Akshay gupta Submitted to Subject Submitted on Marks Allotted Remarks(if any)

PG Roll No: PG20112231 PG20112099 PG20112246 PG20112244 PG20112062 PG20112136

MS.RUCHI SHAH GOING TO MARKET 15-04-2012

Sec F D D D F E

ACTUAL OBSERVATION

NAME: AJAY PAL YADAV TRADER: RP TRADERS MOBILE NO: 987334884, 9990775999

TABLE OF CONTENTS

Sr. No. 1. 2. 3. 4. 5. 6. 7. 8. 9.

CONTENTS
Introduction of AMUL Identify Distribution Channel Structure of channel partners , their margins ,commissions Physical distribution Management Information flow between the producer and channel partners Analysis Conclusion Observation and suggestion References

Page No. 5-6 7-13 14-20 21-26 27-30 31-33 34 35 36

EXECUTIVE SUMMARY The project basically covers identifying the distribution channel which comprises of the structure of Amul milk which is a three tier structure- Village dairy cooperative society, District cooperative milk producers union and state cooperative milk federation. The product form basically comes into the liquid packed form and how the organization carries out its logistics management and the safety of the Amul milk. We have also discussed about the structure of channel partners and their commissions and the margins by contacting the concerned person from Amul milk organization and getting to know about the margins and the commissions. The project report also includes the pricing and marketing strategies their feedback. The report also summarizes the Physical distribution management that describes the designing and setting up of the channel, Warehousing, Logistics management, Distribution cast and the Payments. We have also covered the information flow between the producers and the channels partners regarding the inventory, payment and the sales data. After analyzing the contents we have summarized as in the analysis concerned as supply management which basically includes the order fulfilling time, minimum order quantity, and payment made through the Amul organization. Demand management which comprises of the period of the shortage and the excess and the speed of processes for complaints regarding the supplies and how Amul milk carries out them well.

INTRODUCTION

Amul is the name of a dairy cooperative in India. Derived from the Sanskrit word "Amulya," Amul means invaluable. Formed in 1946, it is a brand name managed by an Indian cooperative organisation, Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF), which today is jointly owned by 3.03 million milk producers in Gujarat, India. Amul is based in Anand, Gujarat and has been a successful example of cooperative organization. Amul spurred the White Revolution in India which in turn made India the largest producer of milk and milk products in the world. It is also the world's largest vegetarian cheese brand. Amul is the largest food brand in India and world's largest pouched milk brand with an annual turnover of US $2.2 billion. Currently Unions making up GCMMF have 3.1 million producer members with milk collection average of 9.10 million litres per day. Besides India,

Gujarat Cooperative Milk Marketing Federation Ltd. (GCMMF) is India's largest food product marketing organization with annual turnover (2010-11) US$ 2.2 billion. Its daily milk procurement is approx 12 million lit (peak period) per day from 15,712 village milk cooperative societies, 17 member unions covering 24 districts, and 3 million milk producer members.

It is the Apex organization of the Dairy Cooperatives of Gujarat, popularly known as 'AMUL', which aims to provide remunerative returns to the farmers and also serve the interest of consumers by providing quality products which are good value for money. Its success has not only been emulated in India but serves as a model for rest of the World. It is exclusive marketing organization of 'Amul' and 'Sagar' branded products. It operates through 47 Sales Offices and has a dealer network of 5000 dealers and 10 lakh retailers, one of the largest such networks in India. Its product range comprises milk, milk powder, health beverages, ghee, butter, cheese, Pizza cheese, Ice-cream, Paneer, chocolates, and traditional Indian sweets, etc

Year of Establishment Members No. of Producer Members No. of Village Societies Total Milk handling capacity per day Milk Collection (Total - 2010-11) Milk collection (Daily Average 2010-11) Milk Drying Capacity Cattle feed manufacturing Capacity Sales Turnover -(2010-11)

1973 17 District Cooperative Milk Producers' Unions (15 Members & 2 Nominal Members) 3.03 Million 15,712 13.67 Million litres per day 3.45 billion litres 9.2 million litres (peak 12 million) 647 Mts. per day 3690 Mts. per day Rs. 9774 Cr. (US $2.2 Billion)

CHAPTER -1 IDENTIFY THE DISTRIBUTION CHANNEL

IDENTIFYING DISTRIBUTION CHANNEL

STRUCTURE

The Amul Model is a three-tier cooperative structure. This structure consists of a Dairy Cooperative Society at the village level affiliated to a Milk Union at the District level which in turn is further federated into a Milk Federation at the State level. The above three-tier structure was set up in order to delegate the various functions; milk collection is done at the Village Dairy Society, Milk Procurement & Processing at the District Milk Union and Milk & Milk Products Marketing at the State Milk Federation. This helps in eliminating not only internal competition but also ensuring that an economy of scale is achieved. As the above structure was first evolved at Amul in Gujarat and thereafter replicated all over the country under the Operation Flood Program, it is known as the Amul Model or Anand Pattern of Dairy Cooperatives. Responsible for Marketing of Milk & Milk Products Responsible for Procurement & Processing of Milk Responsible for Collection of Milk Responsible for Milk Production

THREE TIER STRUCTURE

VILLAGE DAIRY COOPERATIVE SOCIETY(VDCS)

DISTRICT COOPERATIVE MILK PRODUCERS UNION( MILK UNION)

STATE COOPERATIVE MILK FEDERATION

Village Dairy Cooperative Society (VDCS) The main functions of the VDCS Collection of surplus milk from the milk producers of the village & payment based on quality & quantity Providing support services to the members like Veterinary First Aid, Artificial Insemination services, cattle-feed sales, mineral mixture sales, fodder & fodder seed sales, conducting training on Animal Husbandry & Dairying, etc. Selling liquid milk for local consumers of the village Supplying milk to the District Milk Union

Thus, the VDCS in an independent entity managed locally by the milk producers and assisted by the District Milk Union. District Cooperative Milk Producers Union (Milk Union) The main functions of the Milk Union are as follows: Procurement of milk from the Village Dairy Societies of the District Arranging transportation of raw milk from the VDCS to the Milk Union. Providing input services to the producers like Veterinary Care, Artificial Insemination services, cattle-feed sales, mineral mixture sales, fodder & fodder seed sales, etc. Conducting training on Cooperative Development, Animal Husbandry & Dairying for milk producers and conducting specialized skill development & Leadership Development training for VDCS staff & Management Committee members. Providing management support to the VDCS along with regular supervision of its activities. Establish Chilling Centers & Dairy Plants for processing the milk received from the villages. Selling liquid milk & milk products within the District Process milk into various milk & milk products as per the requirement of State Marketing Federation. Decide on the prices of milk to be paid to milk producers as well on the prices of support services provided to members.

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State Cooperative Milk Federation (Federation) The main functions of the Federation are as follows: Marketing of milk & milk products processed / manufactured by Milk Unions. Establish distribution network for marketing of milk & milk products. Arranging transportation of milk & milk products from the Milk Unions to the market. Creating & maintaining a brand for marketing of milk & milk products (brand building). Providing support services to the Milk Unions & members like Technical Inputs, management support & advisory services. Pooling surplus milk from the Milk Unions and supplying it to deficit Milk Unions. Decide on the prices of milk & milk products to be paid to Milk Unions. Decide on the products to be manufactured at various Milk Unions (product-mix) and capacity required for the same.

Its divided into two parts: 1. External organization structure 2. Internal organization structure EXTERNAL ORGANISATION STRUCTURE Its the structure that affects the organization from outside. STATE LEVEL MARKETING FEDERATION

DISTRICT MILK PRODUCT UNION LTD

VILLAGE MILK PRODUCT UNION LTD

VILLAGERS GCMMF is a unit of Gujarat Milk marketing Federation which is cooperative organization. The villagers of more than 10000 villages of Gujarat are the bases of this structure. They all make village milk producers union, district level milk producers union and then a state level marketing

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federation is established. The structure is line relationship which provides easy way to operation. It also provides better communication between two stages. INTERNAL ORGANISATION STRUCTURE The following is the inter organization chart:

CHAIRMAN

MANAGING DIRECTOR

GENERAL MANAGER

ASSISTANT GENERAL MANAGER

PERSONNEL

FINANCE

PRODUCTION

MARKETING

SALES

PRODUCT FORM

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Amul milk comes in concerned packed form; its the pasteurized milk that meets the PFA standards for the respective type of the milk. Its packaging is basically in poly pack 500 ml , 1000ml ,5 its(in selected market only and it contains fat(%)6.0 min, snf(%)9.0 min. Amul milk can be used within 48 hours from the date of packaging when kept under refrigeration below 8c. Its most hygienic milk available in the market. It is pasteurized in state of the art processing plants and the pouch packed to make it conveniently available to the consumers.

SAFETY OF AMUL MILK

Gujarat cooperative Milk marketing federation, the owner of Amul brand welcomed nationwide survey on milk adulteration by FSSAI and opposed the findings on skimmed milk powder. Amul milk is backed with team of highly qualified professionals to offer to the prestigious consumers. They are easy to consume and are present easily in the market. Its scientifically tested for its purity before its delivery. As its pure and safe to consumers, affordable, and available in safe packaging. The Amul milk packets are transported considering all the concerned factors so, that there occur no losses. They are transported in baskets so as they reach safely the wholesalers, retailers and then finally the consumers.

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CHAPTER -2
STRUCTURE OF CHANNEL PARTNERS-THEIR MARGINS, COMMISSION

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STRUCTURE OF CHANNEL PARTENERS THEIR MARGINS

THE CHANNEL NETWORK Distribution channel
GCMMF Head office Manufacturing

First leg(from manufacturing units)

Depot...1

Depot...n

Second leg

WD1

WDn

Third leg

Retail...n Retail1

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Downstream flow Procurement Channel

Distribution

GCMMF Head office

MU1

MU...n

VCS1

VCSn

Village1

Villagen

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THE MANAGEMENT OF THE CHANNEL

The network Milk is procured from the villages and collected at Village Cooperative Societies (VCS), from there the milk is taken to manufacturing units where the milk is processed into various products. The products are then transporters to the company Depots located in various parts of the country. The products are then sent to Wholesale Distributors (WD) and from there to the retailers. The following procedure is undertaken: Milk is procured twice a day from 2 million from Gujarat alone The payment is made under twelve hours of procurement There are 10000 village cooperative societies There are 3600 wholesale distributors in the country 45 depots The C&F agents are not fixed and are decided by the local company offices There are aprox.4,50,000 retailers spread all over India Total house hold consumers covered are 100,000 The milk procured per day is 5 million liters Where the total capacity of operation is 7 million liters per day The peak processing till date has been 6 million liters per day These co operative societies are bound to supply there produce only to GCMMF

Enterprise resource planning: the company at has implemented an ERP program as low as Rs. 3 corers in collaboration with TCS ltd. The company uses it, the data right from the procurement from the farmers till the delivery of goods to the retailers is fed into the system. The software enabling the channel members to use for the synchronized working and best possible utilization of the available resources maintains details regarding the inventory management. Upstream Channel in which milk is procured from the farmers to the manufacturing units. 1. In the first step, the milk is taken to the VCS by the farmers on foot or bicycles in small quantities 2. The second step involves the transportation of milk from the co-operatives to the manufacturing units this is done in special trucks which are equipped with tankers to carry milk.

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Downstream Channel, it is the distribution part of the supply chain, from the manufacturing units to the retailers.

1. First leg of transport is from the manufacturing unit to the company depots. This is done using 9 and 18 MT trucks any lesser quantity will be uneconomical to the company therefore is some time the quantity ordered is lesser then club loading is done which means that the product ordered is supplied with some other products. a. Frozen food the temperature of these trucks is kept below -18C b. Dairy wet the temperature of these trucks is kept between 0-4C 2. Second leg is from the depot to the WDs, this transport is carried out in insulated 3 and 5 MT TATA 407s here a permanent dispatch plan (PDP) is prepared where the distributor plans out the quantity of various products to be ordered on a particular date. 3. Third leg this is the flow of good from WDs to retailers, a beat plan is prepared and transportation is done on auto-rickshaws, rickshaws and bicycles. MARGINS One of the main factors, which keep the distributors motivated, is the margin. Usually the margins offered by the company are 8% & it is raised to 8.5%. Volume wise this comes out to be a big figure since Amuls product has a good demand in the market. However compared to the other companies the margins are still lower since the new players in the market offer a much higher margin. But the very fact that Amuls products have good demand in the market motivates the distributors to stock it. Amul being a cooperative cannot afford to give heavy monetary incentives. Amuls Products are considered to be value for money since the company does not believe in Charging high margins. In fact all monetary incentives are just the short run means to Promote the companys product. In order to keep the Channel members motivated in the long run, Amul builds on the concept of Trade Marketing which makes the dealers and the distributors believe that the companys products are worthy of being pushed in the market.

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CONFLICTS AND CO-OPERATION AMONG CHANNEL MEMBERS

CONFLICTS Ownership of assets: Previously the company used to give the cooling equipment on lease to the retailers, when the company wanted the stuff back; the retailer disagreed to comply and created issues of ownership. Stocking issues: The company doesnt want the retailers to stock the competing brand in the company leased fridges, which at times s hard to manage as retailers tend to do it often. Replacement of products: The deterioration in the product calls for fail in replacement by the company this major issue of vertical conflict. Credit policy: Compared to the market, the companys credit period is less that specially incase of institutional sales is very important. Packaging: The channel members for easy storing demand a better quality of packaging. Replenishment: The replenishment of the stocks is not prompt in case of amul cheese and all hard selling items. Margins: The Company provides least margins to all the channel members. For e.g. The retailers margin in case of butter is 8% as compared to Britannias 12% CO-OPERATION AMONG CHANNEL MEMBERS Amul quality circles: The members of the local channel meet together every month to share issues and the achievements of the channel members. This is an ongoing activity facilitated by the company offices in different locations; this enables the channel members to learn together and reduces the horizontal conflicts among the WDs. Pilot salesmen scheme: To reduce the financial burden of the distributors this scheme is run whereby half the cost of the salesmen is born by the company and the rest half by the distributor Scheduling of sales: The WDs provides Schedule of the distributors sales men to the retailers so that the retailers can plan out and place the orders in advance. Agreement defining rights: The company makes the distributors sign an agreement where the areas of operation for each of the distributors are defined, therefore avoiding any conflict amongst the distributors regarding their areas of operation. MARKETING STARTEGIES AND THE FEEDBACK Amul has Competitive sustainable advantage (CSA) over its competitors. Amuls CSA lies in its procurement part ,the ability to collect 447,000 liters of milk every day from 2.12 million farmers ,convert them into goods worth Rs 6 cr. and distribute them to 5,00,000 retailers across country ,is not easy. No other dairy in India has such a sustainable procurement network. Managing the large scale supply chain of Amul which begins from milk producer and ends with supply to customer from retailer is very critical job. It requires lot of dedication and hard work from all members of the corporation and also distributors and retailers across country. It is not that Amul had a successful campaign, many of its ads backfired. One advertisement meant to
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target Marathi segment during Ganpati festival had to be removed under political pressure. In another incident on advertisement in which Amul girl was wearing Gandhi cap had to be again removed. The key to retaining their competitive advantage lies in keeping focused on the basic business principles: Be Customer-Driven Adapt quickly to the changing environment. Anticipate change and act today to meet tomorrow's challenges. The Federation has invested substantially over the last few years in improving the quality of its products and services, keeping in mind the emerging challenges of globalization.

Their core business is marketing branded food products to household consumers. Their success has been grounded in two strengths: Distribution network, serving more than five lakh retail outlets. Superior product quality - 'Value for money' The key to maintaining these two competitive advantages rests on their ability to attract and retain the very best manpower. In this age of intensive competition, only dedicated and committed professionals can successfully manage their business.

PRICING STRATEGIES:
At the time Amul was formed, consumers had limited purchasing power, and modest consumption levels of milk and other dairy products. Thus Amul adopted a low-cost price strategy to make its products affordable and attractive to consumers by guaranteeing them value for money. Despite competition in the high value dairy product segments from firms such as Hindustan Lever, Nestle and Britannia, GCMMF ensures that the product mix and the sequence in which Amul introduces its products is consistent with the core philosophy of Providing products at lower prices. Amul mainly follows: Premium and indicating high value Competitive pricing with good value Low pricing but high value for money All strategies are focused on giving value to the customer

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CHAPTER -3 PHYSICAL DISTRIBUTION MANAGEMENT

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PHYSICAL DISTRIBUTION MANAGEMENT:

DESIGNING AND SETTING UP CHANNEL:

MANUFACTURED UNIT

PACKING AND LABELLING

FRANCHISING

DISTRIBUTORS

DEALERS

RETAILERS

The channel has been designed by professional managers and technocrats. Later this design has been approved by higher official. The vast and complex supply chain stretches from small supplier to large fragmented market. Management of this network is more complex by the fact that GCMMF is directly responsible for smaller chain and with a number of third party players playing a large role. Technology effectiveness: The extent of IT usage includes a B2C ordering portal, an ERP based supply chain planning system for the flow of material in the network, a net based dairy kiosk at some village societies (for dissemination of dairy related information), automated milk collection stations at village societies and a GIS based data network connecting villages societies to markets. Milk collection information at more than 10,000 villages is available to all dairies (or Unions) to enable them make faster decisions in terms of production & distribution planning, and disease control in more
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than 6,700,000 animals. This is linked with information at all 45 distribution offices and 3900 distributors. This network is being extended to cover all related field offices in the network. The GCMMF cyber store delivers AMUL products at the doorsteps of the consumers in 125 cities across the country. Amuls IT strategy by providing application software Dairy Information System Kiosk (DISK) to facilitate data analysis and decision support in improving milk collection. There are plans to introduce features like Internet banking services and ATMs which will enable the milk societies to credit payments directly to the sellers bank account. Distributors can place their orders on the website www.amul2b.com especially meant for accepting orders from stockiest and promoting Amuls products via e-commerce. WAREHOUSING: AMUL has the largest cold chain network in India (i.e. 18000 refrigerators) as compared to any other company. The chemical components of milk are water, SNF and solids. Milk is very perishable product so it has to be consumed within 24 hours. In order to avoid wastage AMUL converts the milk in to SNF and milk solids by evaporating the water, which comprises up to 6070% of milk contents. This is possible only if the distribution channel right from the producer to

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the consumer is well organized.

Cold Storage is an extremely essential component in the Federations distribution process. Unfortunately, availability of efficient cold storage facilities is grossly inadequate in our country. To cope up with the increasing need of suitable cold stores closer to our markets, we have continued our Endeavour of creating the Federations own cold stores this year in various locations across the country. We now own 24 state of the art cold rooms of different sizes. Yes there is a C&f agent for distributing amul pouch. LOGISTIC MANAGEMENT: All GCMMF branches engage in route scheduling and have dedicated vehicle operations Depots with dry and cold warehouses to buffer inventory of the entire range of products. Wholesale
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dealers carry inventory that is just adequate to take care of the transit time from the branch warehouse to their premises. This just-in-time inventory strategy improves dealers' return on investment (ROI). All GCMMF branches engage in route scheduling and have dedicated vehicle operations. Inventory or the perishable goods kept by the distributor/ dealer should be in good condition which means a detail of storage space & Refrigeration facility is to be provided. Refrigeration system should have deep freezers, cold room & walk in coolers. Details of the delivery vehicle, which includes Light Commercial Vehicles, Matador, 3 Wheeler Van, Tricycle Van & Hand/Push cart. The number & model of each of the vehicle needs to be furnished to the company. Policy regarding unsold/spoilt goods If product crosses the shelf life, the retailer bears the costs. If the product gets spoilt during the transportation or if there is any customer Complaint, Amul bears costs. Unsold goods are not returned to the manufacturer. No reverse logistics.

DISTRIBUTION COST AND PAYMENTS: Managing Third Party Service Providers: Well before the ideas of core competence and the role of third parties in managing the supply chain were recognized and became fashionable, these concepts were practiced by GCMMF and AMUL. From the beginning, it was recognized that the core activity for the Unions lay in processing of milk and production of dairy products. Accordingly, the Unions focused efforts on these activities and related technology development. Marketing efforts (including brand development) were assumed by GCMMF. All other activities were entrusted to third party service providers. These include logistics of milk collection, distribution of dairy products, sale of products through dealers and retail stores, some veterinary services etc. Supplier Enhancement and Network servicing:Their objective is to ensure that producers get maximum benefit and to resolve all their problems. They manage the procurement of milk that comes via trucks & tankers from the VSs. They negotiate annual contracts with truckers, ensure availability of trucks for procurement,
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establish truck routes, monitor truck movement and prevent stealing of milk while it is being transported. Simultaneous Development of Suppliers and Customers: From the very early stages of the formation of AMUL, the cooperative realized that sustained growth for the long-term was contingent on matching supply and demand. The member-suppliers were typically small and marginal farmers with severe liquidity problems, illiterate and untrained. AMUL and other cooperative Unions adopted a number of strategies to develop the supply of milk and assure steady growth. First, for the short term, the procurement prices were set so as to provide fair and reasonable return. Second, aware of the liquidity problems, cash payments for the milk supply was made with minimum of delay.

For the long-term, the Unions followed a multipronged strategy of education and support. Only part of the surplus generated by the Unions is paid to the members in the form of dividends. A substantial part of this surplus is used for activities that promote growth of milk supply and improve yields. These include provision of veterinary services, support for cold storage facilities at the village societies etc. In parallel, the Unions have put in place a number of initiatives to help educate the members. GCMMF transacts on an advance demand draft basis from its wholesale dealers instead of the cheque system adopted by other major FMCG companies. This practice is consistent with GCMMF's philosophy of maintaining cash transactions throughout the supply chain and it also minimizes dumping.

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CHAPTER -4 INFORMATION FLOW BETWEEN PRODUCERS AND CHANNEL PARTNERS

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COMMUNICATION /INFORMATION FLOW- PRODUCER-CHANNEL PARTNER REGARDING

Communication or Information flow Producers Regarding INVENTORY DATA PAYMENT DATA SALES DATA Channel partners

Amul products are available in over 500,000 retail outlets across India through its network of over 3,500 distributors. There are 47 depots with dry and cold warehouses to buffer inventory of the entire range of products. GCMMF transacts an advance demand draft basis from its wholesale dealers instead of the cheque system adopted by the other major FMCG companies. The practice is consistent with GCMMFs philosophy of maintaining cash transactions throughout the supply chain and it also minimizes dumping. Wholesale dealers carry inventory that is just adequate to take care of the transit time from the branch warehouse to their premises. This just in time inventory strategy improves dealers return on investment (ROI). All GCMMF branches engage in route scheduling and have dedicated vehicle operations Every day Amul collects 447000 liters of milk from 2.12 million farmers (many illiterate) converts the milk into branded, packaged products and delivers worth Rs 6 cr. (Rs 60 million) to over 500,000 retail outlets across the country Its supply chain is easily one of the most complicated in the world. Coordination Given the large number of organizations and entities in the supply chain and decentralized responsibility for various activities, effective coordination is critical for efficiency and cost control. GCMMF and the unions play a major role in this process and jointly achieve the desired degree of control.

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Buy-in from the unions is assured as the plans are approved by GCMMF's board. The board is drawn from the heads of all the unions, and the boards of the unions comprise of farmers elected through village societies, thereby creating a situation of interlocking control. The federation handles the distribution of end products and coordination with retailers and the dealers. The unions coordinate the supply side activities.

These include monitoring milk collection contractors, the supply of animal feed and other supplies, provision of veterinary services, and educational activities. Managing third party service providers From the beginning, it was recognized that the unions' core activity lay in milk processing and the production of dairy products. Accordingly, marketing efforts (including brand development) were assumed by GCMMF. All other activities were entrusted to third parties. These include logistics of milk collection, distribution of dairy products, sale of products through dealers and retail stores, provision of animal feed, and veterinary services. It is worth noting that a number of these third parties are not in the organized sector, and many are not professionally managed with little regard for quality and service. This is a particularly critical issue in the logistics and transport of a perishable commodity where there are already weaknesses in the basic infrastructure. AMUL IS THE COMPANY WHICH OPERATES THEIR SUPPLY CHAIN THROUGH INTERNET Amul has installed over 3000 automatic milk collection system units (AMCUS) at village societies to capture member information, milk fat content, volume collected and amount payable to each member. Each member is given a plastic card for identification Computer calculates amount due to farmer on the basis of fat content. The value of milk is then printed out on slip and over to the farmer, who collects the payment from adjacent window. With the help of IT farmers receive their payment within minutes.

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INITIATIVES IN E-COMERCE Amul has linked distributers to the network and also incorporated web pages of top retailers on their website Distributors can place their order on website amulb2b.com It practices just in time supply chain management with six sigma accuracy.

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CHAPTER -5

ANALYSIS

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CRITICAL ANALYSIS SUPPLY MANAGEMENT

The main stakeholders are milk producers, the milk consumers, and the people involved in logistics. 1. GCMMF took the responsibility of taking care of the secondary needs of the milk producer. It took initiative to educate the milk producer, provide them with the knowledge of better development. 2. GCMMF also ensured that good quality milk is supplied to the consumers. A number of chiller plants were established near the collection center. 3. A major role to be played by the logistic system. GCMMF had to ensure the quality of the milk products. In this third party logistics were hired. The union kept a watch on the performance of the logistic system. The milk was transported in refrigerated containers. Efforts are made to ensure timely delivery of products. Such a thing was crucial in this case as the goods were crucial.

ORDER FULFILLMENT TIME Its basically the time from the point of the sales inquiry to the delivery of the product to the customer. It is basically the time taken by the organization to respond to the customer orders. The order is processed as quickly as possible so that the trust of the consumers is maintained and many orders can be processed. MINIMUM ORDER QUANTITY Basically minimum order quantity is the minimum size of an order specified by a supplier. The minimum order that is fulfilled depends on the supplier requirements and the company Amul has no objections on it. PAYMENT The payment is made frequently as soon as the goods are supplied. No issues arise regarding the payment process which is basically brought out into the consideration concerned.

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DEMAND MANAGEMENT

In common terms demand management is the planning methodology used to manage forecast demand; its basically process of controlling economic demand to avoid recession. It can also be formulated as proactive management of work initiatives (demand) with business constraints (supply). It includes the variables related to demand of products by the retailers. It includes: 1. Demanded products 2. Excessive demand Demanded products mean that the amount of products offered by the retailers on regular basis whereas excessive demand occurs occasionally. Company basically focuses on the routine products so as to maintain a link with the retailers and then finally the consumers which are the regular buyers. CREDIT The factor consists of one variable that is credit policy, adopted by the companies as per the research company; hardly prefer credit sales unlike many other industries. TRADE PROMOTION This factor consists of trade promotion policy. It is taken separately so as to understand the attitude of retailers towards the policies employed by the companies. It is important factor from companys point of view. SPEED OF PROCESS FOR COMPLAINTS REGARDING SUPPLIES

Amul handles the complaints in a personal manner; it has a complaint box stratified at complaints. In and the consumers can log in and post there concerned problems or the complaints which are taken care off as soon s possible .The company also mentions contact numbers to talk to its executives in case of the requirements.

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CONCLUSION Amul is the largest co-operative movement in India with 2.2 million (approx) milk producer organized in 10,552 (approx) co operative societies. Amul is the market leader in milk, butter cheese, ice cream, and saturated fats. Amul follows an unique business model , which aims at providing value for money products to its consumer, while protecting the interest of the milk producing farmers who are all it supplier as well as owner. Despite giving the farmer cooperative, Amul has given multinational run for their money. In milk amul has remained the undisputed market leader since its inception in 1955, by offering qualitative products at competitive price. In other categories amul has nullified the late mover advantage through aggressive pricing, better quality, innovative promotion and superior distribution.

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OBSERVATIONS: Amul has loyal cooperatives that provide milk only to them, over time the relationship of trust has built up with these people that amul leverages now. Transport channel is strength as the transporters have grown with the company overtime the bonding with them enables the company to give least margins when it comes to the distributors in the industry, lowering the costs. The company believes that there is an ongoing demand in the market and therefore no promotions are needed to increase the sales, also the fact this would affect the cost of the product the company doesnt undertake many promotion schemes. The not being a profit driven organization, is able to provide products at the least price in the industry, and is able to give least channel margins as the channel members earn through volumes and not through high margins.

COMMENTS AND SUGGESTION: Amul should go in for exclusive outlets in at least all the shopping malls coming up these days and any location where footfalls are large in number. The advantages of this channel will be:

I. Full range display ii. Easier to promote new products iii. Easy to push impulse purchase products iv. Brand building will be facilitated Trade promotion should be formulated for newly launched products instead of just tagging them onto best sellers. The company should start a home delivery where a particular household will order full range of products required by it over a period of time. For this the company could provide a deliveryman with cycle to reach the different houses. In order to motivate the channel members it is also very essential for the company to increase the margins for the hard selling items e.g. Amul dahi where it faces competition from Nestle & Mother dairy. In order to remain sensitive to market demand, it is essential for the company to place additional salesmen on the field since the brand as such commands a high demand in the market but fails to match it with the supply.

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REFERENCES
1. http://www.rediff.com/money/2005/sep/23spec.htm
2. http://www.gazhoo.com/doc/200906270108397950/Amul++Marketing+Strategy+%26+Distribution+Metho dology 3. http://toi.amul.com/cs-36annual_18aug2010.html 4. www.amul.com/m/about-us 5. www.amul.com 6. www.scribd.com/doc/38575601/12/organisation structure 7. www.fiestalife.com/supply chain management- amul milk farmers 8. http://www.authorstream.com/Presentation/aSGuest47465-408047-supply-chain-management-amulcase-stud-study-business-finance-ppt-powerpoint/ 9. http://www.rediff.com/money/2005/sep/23spec.htm

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