Project on

Supply Chain Management of

Mother Dairy
Section C Vishwas Alse 12 FN-156 Loveraj Singh Sokhi 12 FN-069 Arindam Sarkar 12FNAnirvaan hosh 12!"-022

Contents
A#knowledgemen$ %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%& '(e#)$ive S)mmar* %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%+ ,n$rod)#$ion and -is$ori#al .a#kgro)nd o/ N!!0%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%5 -is$ori#al 0a#kgro)nd o/ "o$her !air*%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%5 1ro#ess o/ 1ro#)remen$ and !is$ri.)$ion o/ milk %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%2 Distribution Channels: %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%10 34AL,56 78N598L %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%11 S:85 Anal*sis /or $he S);;l* 7hain o/ $he 7om;an*< %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%12 SAFAL %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%1& Sa/al=s S);;l* 7hain<%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%1+ 7on#erns%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%15 0es$ 1ra#$i#es %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%16 Financial Analysis %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%1> 9e#ommenda$ions %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%19 9e/eren#es%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%21

Acknowledgement
The knowledge and contentment obtained from doing this project would not be complete without the mention of the following people. We would like to take this opportunity to thank our faculty mentor Lt. Gen D.V. Kalra for his superb guidance and cooperation in carrying out this project. The knowledge he shared on various aspects of Supply Chain anagement has helped us gain critical insights about the subject. !t is no e"aggeration that we would not have completed the project as per our objectives without his valuable support. We would like to appreciate the library and other staff of M! for providing us with the valuable resources which aided us in getting updated knowledge of the latest statistical software#s.

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Executive Summary
Supply chain management in any company is re$uired to achieve the topmost customer satisfaction in terms of fulfilling their demand by the effective use of available resources which includes various distribution channels% inventory and labour. The historical perspective of Supply Chain anagement says that it is the confluence of three powerful streams which are indicated as below & & & Sourcing% procurement and supply management aterials management 'ogistics and distribution

!n this study analysis is done on the above three aspects by taking the company other (iary as an e"ample. We have done the SW)T analysis of the company in the Supply Chain anagement *erspective following the brief history about +((, as well as other (airy. The current concerns faced and the best practices followed by the company were also studied in detail. !nformation related to the financial statements of the company was gathered from highly placed sources and scrutini-ed to obtain relevant insights regarding its working capital management. Finally we have recommended some measures to be taken to improve the Supply Chain anagement process at other (airy.

Introduction and Historical background of NDDB

The +ational (airy and (evelopment ,oard was founded in ./01% with the mission of organi-ing poor milk producers% thereby transforming dairying into an instrument for the economic development of !ndia#s rural people. The formation of the +((, stemmed from the vision of the then *rime inister of !ndia% the late 'al ,ahadur Shastri% to e"tend the success of the 2aira Cooperative ilk *roducer#s 3nion 4in the state of Amul5 to other parts of !ndia. +((, began its operations with the mission of making dairying a vehicle to a better future for millions of grassroots milk producers. The mission achieved thrust and direction with the launching of 6 )peration Flood7 in ./89% a program e"tending over :0 years and which used World ,ank loan to finance !ndia;s emergence as the world;s largest milk producing nation. (uring this period% dairy commodity surpluses were building up in <urope. !mports from <urope had already adversely affected the dairy industry in !ndia. !mports by individual players in !ndia would have resulted in a market glut and a fall in the prices throughout the country. With the backing of government policy% and with the assistance of the World Food *rogram% +((, imported food aid in the form of milk powder and butter oil% and marketed it under its own brand name. The surplus from these sales was invested in the e"pansion of the cooperative movement in the dairy industry. )peration Flood;s third phase was completed in .//0 and has to its credit a number of significant achievements. As on arch :990% !ndia;s .%.8%181 village dairy cooperatives federated into .89 milk unions and .1 federations procured on an average :..1 million liters of milk every day. .:.= million farmers are presently members of village dairy cooperatives. Since its inception% the (airy ,oard has planned and spearheaded !ndia;s dairy program by placing dairy development in the hands of milk producers and the professionals they employ to manage their cooperatives. !n addition% +((, also promotes other commodity> based Cooperatives% a l l i e d industries and veterinary biological on an intensive and nation> wide basis. +((,;s subsidiaries include other (airy% (elhi.

Historical Background of

ot!er Dairy

7 other (airy7 is the single largest brand of milk in !ndia as well as in Asia% marketing about :.: million liters of milk per day. other (airy commands =9? market share in the organi-ed sector in and around (elhi% primarily because of consistent $uality and service @ whatever be the crisis> floods% transport strike% curfew etc. other (airy% *atparganj% (elhi% is presently manufacturingA selling around B.1 lakh litres of toned milk through bulk vending shops. other (airy was the first (airy in the country to implement !S)>.=9C. 4<nvironment *erformance <valuation5 project. Thecomany;s Duality Assurance 'aboratory is !S)E!<C> .89:1F./// certified by +A,' 4+ational Accreditation ,oard for Testing and Calibration'aboratory5% (epartment of Science A Technology% !ndia. This provides
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assurance to the consumer in respect of Duality and Safety of products manufactured and marketed by other (airy. The +ational (airy (evelopment ,oard 4+((,5 commissioned other (airy in the first phase of )peration Flood in ./8=. Considering the success of (airy industry +((, established FruitA Gegetable *roject in (elhi in ./BB with 7SAFA'7 as its umbrella brand. With a view to separating the commercial activities from developmental activities% the +((, merged other (airy and the Fruit A Gegetable project into a wholly owned company named other (airy Fruit A Gegetable 'td 4 (FG'5 in April :999. This becomes the holding company of other (airy !ndia 'td 4 (!'5 @ a marketing company and other (airy Foods *rocessing 'td 4 (F*'5 @ a processing company. (F*' is a multi>unit company% with units at various locations in !ndia. other (airy% (elhi is one of the units of (F*'. The company is a highly trusted house hold name for its wide range of milk products like ilk% Flavoured ilk% !ce>Cream% (ahi% 'assi% Table ,utter% (airy Whitener% Hhee etc. The application for the award is being made for other (airy% (elhi unit. other dairy has taken up the concept of Total *roductive aintenance 4T* 5 wholeheartedly. The number of employees involved in 2A!I<+S and the no. of 2A!I<+S per employee are very encouraging. other (airy is a member of C!!>T* Club and the 2A!I<+S done by other (airy employees have been selected and presented in :nd% C rd % =th and 1th +ational 2ai-en Conferences held from time to time during the last three years. )ur T* efforts have resulted in increase in T,F and decrease in TTJ% $uality improvement% Cost reduction and reduction in accidents. other (airy has received 7,est *roductivity *erformance7 award for three consecutive years starting from./B8>BB to./B/>/9 and again from.//1>/0 to.//8>.//B from +ational productivity Council and a commendation Certificate for Jajiv Handhi +ational Duality Award% +ational <nergy Conservation Award > :99=% )il and Has Conservation Award > :99=% !ndian !nnovation Award > :99= and Safety !nitiative Award > :991. )ver the years% other (airy has not only served the daily need of milk of the consumers of (elhi% it has also e"tended its milk to other States like Karyana% 3ttar *radesh% aharashtra% Andhra *radesh A Hujarat and is e"panding its wings rapidly to serve the masses.

Strategically located other (airy booths across (elhi and +CJ make it convenient for you to pick up your daily re$uirement of ilk% Flavoured milk% ,utter% (ahi% 'assi% Cheese%

Chaas and mouthwatering ice>creams. Today%

other (airy has .=%999 retail outlets

and another B=1>odd booths.

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"rocess of "rocurement and Distribution of milk

other (airy sources its re$uirement of li$uid milk from dairy co>operatives and producer institutions. ilk is received from farmer co>operatives through insulated roadErail tankers at very low temperatures in order to retain freshness. Procurement Fresh milk is sourced directly from state level co>operatives and other (airy own +ew Heneration Co>operatives 4+HC5. ilk received from individual producer is checked for all basic $uality parameters meeting company specifications A re$uirements at respective collection A chilling centers. ilk is then supplied to the (airy units through insulated conditions to maintain the freshness. Chec"ing #uality At the dairy stringent hygienic standards are maintained. The milk in the tankers is first checked for $uality and freshness and then unloaded into huge insulated stainless steel storage tanks. These tanks have a capacity of . lakh liters each. )nce empty%
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ilk Tankers under refrigerated

the tankers are thoroughly cleaned and saniti-ed using acid and alkali. The presence of impurities like urea% preservatives and germs like bacteria are checked. All these tests ensure that only good $uality milk is accepted. Strict Duality checks are performed for all incoming ilk received at (airy units. These includes organoleptic 4Taster% )dor A Appearance5% *hysico>chemical 4e.g. Temperature% Foreign matter% ? Fat% ? S+F% ?Acidity% ? *rotein etc.5% microbiological 4e.g. ,JT5% also presence of any adulterations in ilk 4e.g. Formalin% urea% starch% sugar% Hlucose% maltode"trin% nitrate% Salt% Kydrogen *er>o"ide% neutrali-er% ammonium compounds and Fat adulterations5. Commodities% ingredients A packaging material used for our products are checked% approved and released by Duality functions as per company specifications and re$uirements. Processing The products are manufactured in state of the art manufacturing facilities using innovative *rocess A Technologies. The ilk received at the plant undergoes various processing steps before it reaches to the customer. 3nprocessed milk may contain small dirt particles invisible to the naked eye. !n order to remove these% the milk has to be processed. At mother dairy% the processing of milk is done by process automation whereby state of art microprocessor technology is adopted to integrate and completely automate all functions of the milk processing areas to ensure high product $uality% reliability and safety. There are four ways of milk processing> First% Clarification in which milk is spun at very high speed% removing all dust particles that are visible to naked eye. Second% Standardi-ation is done% which helps to maintain milk uniformity by raising or lowering its fat and S+F 4solid not fat5 percentage to a desired level. Third% homogeni-ation is used% which improves palatability of milk. Finally% pasteuri-ation which kills all the pathogenic bacteria present in the milk and thus% making it safe for consumption. *rocess control parameters are monitored% recorded and reviewed as per the Duality *lan to ensure right product right at first time. anufacturing processes are benchmarked against best>in>class standards towards continual improvement for infrastructure and system re$uirements. Dispatching After processing% the milk is chilled and stored in silos and further chilled to about : (egree Celsius by the glycol chilling system% and then dispatched to the ilk Shops in insulated road
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milk tankers. *rior to the milk being dispatched in tankers% it is tested for $uality to make sure that it meets the $uality standards. When the tanker arrives at the shop the milk is transferred into a large refrigerated tank. 8/ tankers in the morning and 81 tankers in the evening bring in milk from the regional collection centres. After collection the same tankers are utili-ed for the delivery of the processed milk to the vendors and outlets. other (airy has over B:9 ilk (istribution )utlets in the +ational Capital Jegion. <ach of these outlets place their demand by raising an invoice one day in advance. The demand is also calculated using the LCalendar# Scheme% in this depending on the pre>calculated seasonal demands the outlets place their orders accordingly. !n order to satisfy immediate demand% :9 to :1 tankers are provided with a buffer stock of 199 litres each day so that they can be mobili-ed to cater the demand in an area. To coordinate its operations all the tankers are e$uipped with KA radios. The strength of other (airy lies in adherence to systematic *rocess approach in the complete distribution chain to deliver product with highest $uality standards to our customers and consumers. This includes% .. Availability of standard guidelines A norms for warehousing% handling% storage and transportation re$uirements. :. ,enchmarking of Transportation vehicles for infrastructure and hygiene re$uirements C. ,enchmarking of CFA#s and (istributors for infrastructure and hygiene re$uirements =. ,enchmarking of ilk Shops for infrastructure and hygiene re$uirements 1. onitoring of $uality parameters 4e.g. hygiene% storage temperature5 of the distribution chain Distribution Channels: (istribution ChannelsF Token (istributionF Also% termed as 6 'ohe ki bhains M 4 etal ,uffalo5% is an automated milk vending machine. C)WF Container on Wheels or C)W is a manual milk distribution program in which cycle>rickshaws are employed for milk distribution. JetailersF The packaged milk is distributed via the retailer network throughout the city.

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Merchan$i%ing: The products are marketed through a chain of our own ilk Shops% retail outlets and mobile vending units maintaining best>in>class hygiene standards. !t is ensured that products are available% displayed appropriately and cold chain conditions are maintained to retain product $uality A freshness.

#uality Control
Stringent $uality control methodologies are employed in other (airy. The milk is tested for adulterations and $uality at the time of collection from the farmers. The ilk that comes from the collection points to the other (airy plant is ensured to have a temperature of not more than 8NC and is subjected to .1 product and $uality checks. The ilk $uality is checked repeatedly after each processing phase and the temperature is judiciously maintained less than 1NC always. ,efore the milk leaves the plant for the deliveryEdistribution outlets the milk is tested again. The temperature of milk in the delivery trucks is always maintained less than 8NC. All the trucks that deliver milk have specified guidelines to bring back .99 litres of milk after distribution. This is done in order to test the delivered milk and to ensure that the tankers are not adulterated during distribution. Since all the employed processing procedures are automated% no contamination by human hands takes place. To ensure milk freshness the collection and distribution points are always chosen such that the travel time between them is always less than C0 hours.
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S$%& Analysis for t!e Su''ly C!ain of t!e Com'any(

ost of the Analysis done as part of the SW)T framework were related to the Supply Chain anagement and are indicated as below

!t is difficult for any dairy company to achieve $uality along with efficient supply chain management strategy. other (airy was successful to a considerable e"tent in terms of having strengths related to product differentiation which has become a key value addition to the consumers. !ndia being the largest milk producer country in the world presents great opportunities to all the dairy companies. Kowever a company has to overcome the )perational hurdles as well as competitors to have sustained profits. !ts main competitor% Amul% is the leading dairy product company in !ndia which has spearheaded the white revolution and made the country the topmost milk producer companies in the world. The following are some of the facts and best practices about the company & !t has significant market share in the branded milk segment and offer#s high distribution margin compared to other (airy.

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The Supply chain efficiency of Amul is superior to all the dairy product companies and it has also inspired companies in other sectors. As a conse$uence it has a larger penetration compared to other (airy. The brand image of Amul is high compared to other (airy and it can be attributed o the advanced arketing and Advertising Strategies of the company. !t resolves the union struggles very easily by giving them opportunities in the development of the products

3sing indigenous technology Amul has a strong business inclination towards serving large number of small and marginal suppliers other (airy has done well in having good service reliability which made it a market leader in (elhi +CJ. !t should continue challenging with the e"isting as well as upcoming competitors to achieve a uni$ue position as he leading company in the sector in the +CJ market.

SA)A *
Safal as a Fruit and Gegetable 3nit F other (airy FAG *vt. 'td. 4Safal5 is a S,3 of other (airy. !t was set up in ./BB as a pilot project with the aim to provide remunerative prices to the farmers across the country thereby giving a thrust to the co>operative culture. !t achieves this mission by establishing a direct linkage between farmers and customers. Safal is the market leader in the organi-ed FAG retail business in (elhi +CJ where it sells other (airy Fruit AGegetable *vt. 'td an average of C99 TEday through a network of =99O e"clusive retail outlets under brand name SafalE Safal *ure Geg% supported by a state> of>the>art large and ultramodern C(F located in angolpuri% (elhi. Jetail )utlets are also present in ,angalore under the brand name Safal (aily Fresh. Safal has also a prominent presence in <"port market spread across =9 countries vi-.% 3SA% <urope% Jussia% iddle <ast% Asia and Africa and e"ports Fresh Fruits A Gegetables 4Hrapes% ,anana% Hherkin% )nion% etc.5% Fruit *ulp A Concentrate% Fro-en Fruits A Gegetables etc. Pro$uct #uality at Safal At other (airy onitor and Control the produce $uality during material receiving% processing and finished product stage against Company Standards A Specifications. )ur state of the art anufacturing )perations are certified for Duality anagement System 4!S) /99.F :99B5 and Food Safety anagement System 4!S) ::999F :9915. The Core purpose of 6SafalM is to bring Fresh% Fro-en and *rocessed Fruit A Gegetable Duality products that form daily diet of the people.

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Procurement Mo$el *rimarily all the items procured at the C(F 4Collection and (istribution Facility% angolpuri5 are divided into two groupsF .. +ational items are procured from different regions in !ndia . .: items % that are%mango% papaya% banana% orange% peas% apple% grapes% mausami% guava% potato% onion and tomato. :. Jegional items F All other items e"cept .: +ational !tems are procured from areas in and around .19>:99 km range of the (elhi>+CJ region.

Safal+s Su''ly C!ain(

As the vision and mission of the company deals only with providing benefits to the farmers directly% by eliminating the middle man in between. So% the produce is procured in four different waysF !. The first and most preferred procurement option is to buy directly from the farmers and in case% if one farmer is not able to supply the desired $uantity with desired $uality% then from farmers# Associations. !!. !!. The second preferred option is to employ a middleman between farmer and company% called as a vendor. other (airy Fruit AGegetable *vt. 'td !!!. !!!. The last preferred option is to procure from the andi% through a vendorP which is e"plained in the following diagramF

Vendor Farmer
Farmers

CDF Consumer association

Azadpu r Mandi

Safal Booth

Commissi on Agent

Vendor

Safal is only concerned with the A>grade produce procurement from vendors% thus minimi-ing company#s risk.

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Core strengths Safal#s two>decade>old e"pertise in supply>chain management is hard to match. !ts entire supply chain has been online since inception. This system is now being upgraded with a new enterprise resource planning software. !n the first phase% it will connect Safal#s various unitsP and in the ne"t% it will help connect the village collection centres. Safal#s weekly payments are done through the farmers# association bank account% from where individual farmers are issued che$ues. 7There is complete transparency. We know how much we will get and when% unlike in the mandi where payment schedules are not fi"ed and commissions to agents are as high .9>.1?%7 says 11>year>old +ilamber Tiwari of 2heda village in 3ttarakhand% who has been associated with Safal for almost .: years now. The rates are decided according to the demand>supply situation% but the procurement rate is usually higher than the mandi rate. Farmer benefit is the prime motive% and everything revolves around that. !t is their scale and procurement process that help them give the best pricesQlower than market rates for customers and higher than mandi rates for farmers. Safal#s success lies in the relationships and linkages it has established with farmers over the years. This ensures Safal is preferred over other buyers even if it is picking up less than .9? of a farmer#s entire produce. !n fact% Safal has emerged as a partner and advisor to farmers% right from the crop>planning stage to when the produce is harvested and sold. Safal#s e"pansion plan is based on leveraging its all>!ndia supply chain strength and its low> cost model of using rented and leased premises to sell its over .:1 fruit and vegetable varieties. With 8C1 direct procurement sources% .:%999 associate growers and more than .99%999 footfalls at its outlets everyday% Safal looks well>poised to take on the private players.

Concerns
!n :9.9% the Js .9%999>crore Hujarat Cooperative ilk arketing Federation 4HC F5 that markets Amul beat other (airy in the branded packaged milk% other (airy;s main business. !n spite of maintaining a world class supply chain% other (airy% it lost its market share to Amul even in its own turf% (elhi. The key problems identified areF a. &orro'e$ Goo$s: 3nlike Amul% other (airy does not have its own cooperative to source milk. !t finds it difficult to ensure consistent and $uality milk supply. Amul% with its own cooperatives% sells fresh milk in (elhi. ,ut other (airy procures milk from other cooperatives. This led to both $uality and $uantity issues. To make up for

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b.

c.

d. e. f.

the shortage% other (airy mi"ed fresh milk with milk produced from powdered milkQimpacting taste. Competition from M(Cs: Food giants like *epsi% 2rafts% K3' and +estle are eyeing the fast @ growing health food and drink market. +estle has come up with a variety of milk and milk products in the market which are targeted towards niche segment of health conscious people. These products are priced much higher but are positioned with benefits like 'ess fat Content and no re$uirement for refrigeration and boiling before consumption. Lo' profitability: Around 01? of the company#s revenues come from li$uid milk business which operates on low @ profit margin. B1? of the money that is earned by other (airy is paid back to the dairy farmers as procurement price. )egional appeal: The company is a strong brand in +CJ but has very limited presence in other parts of the country% unlike its closest rival Amul. !ie$ *an$s: A subsidiary of +((,% a Hovernment body% other (airy has limited freedom in critical decisions like setting tariffs and procurement price. +,ailability of Pro$ucts: Availability of other (airy products has also been an issue. Stocking is a perpetual problem. R other (airyS has such a good distribution channel Rin +CJSQit has not made great use of it%. other (airy;s archaic supply% logistics and poor forecasting tools were to blame. Stocking is a combination of capacity and inventory management parameters. Work is now on to improve both.

Best "ractices
a. other (airy has the heritage of producing $uality and safe products by making Hood anufacturing *ractices 4H *5 a part of their heritage. A goo$ manufacturing practice 4GMP5 is a production and testing practice that helps to ensure a $uality product. H * guidelines are not prescriptive instructions on how to manufacture products. They are a series of general principles that must be observed during manufacturing. When a company is setting up its $uality program and manufacturing process% there may be many ways it can fulfill H * re$uirements. !t is the company;s responsibility to determine the most effective and efficient $uality process.

b. Cleaning A Sanitation of the processing e$uipment is ensured using automatic Cleaning in *lace 4C!*5 systems by applying L1T# principles vi-. Technology% Time% Temperature% Turbulence and Testing. Clean-in-Place 4C P5 is a method of cleaning the interior surfaces of pipes% vessels% process e$uipment% filters and associated fittings% without disassembly.

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c. Critical control points 4CC*5% )perational *rere$uisite *rograms 4)*J*5 are identified for each process using scientific methodology and appropriate control measures are applied to ensure compliance of Duality and Food Safety re$uirements. d. other (airy has an enterprise>wide SA* software footprint that supports increased visibility and greater control across its fast>paced operations @ where procurement% processing% and distribution can all occur on a daily cycle. !mplementation of best practices by SA* like C>level e"ecutive support% full>time assignment of team members from each function and division% minimal customi-ation% have been carried out at other (airy. other (airy is an !S) /99.F:99B 4D S5% !S) ::999F:991 4FS S5 and !S) .=99.F:99= 4< S5 certified organi-ation. other (airy has Certificate of Approval from <"port !nspection Council of !ndia also. oreover% its Duality Assurance 'aboratory is certified by +ational Accreditation ,oard for Testing and Calibration 'aboratory 4+A,'5>(epartment of Science and Technology% Hovernment of !ndia.

e.

)inancial Analysis
Definitions *,!T> *rofit before interest and ta" C)HS>Cost of goods sold **<> *roperty *lant and <$uipment A*TJ> Accounts *ayable Turnover JatioT4 Cost of goods SoldEAccounts payable5 AJTJ> Accounts receivable turnover ratioT 4Sales JevenueEAccounts Jeceivable5 !+GTJ> !nventory Turnover ratioT4Cost of Hoods SoldE!nventory5 **<TJ> *roperty *lant and <$uipment Turnover JatioT4Sales JevenueE *roperty *lant and <$uipment5 AJT> Account receivable turnsT 4C01EAJTJ5 A*T> Accounts payable turnsT4C01EA*TJ5 **<T> *lant *roperty and <$uipment TurnsT 4C01E**<5
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!+GT> !nventory turnsT4C01E!+GTJ5 C:C> Cash to cash CycleT AJT O !+GT > A*T J)<> Jeturn on <$uity

We can see from the Financial statements. & !nventory as a whole has increased by :1? over from :9.9 to :9... Kence mother (iary needs to find means to optimi-e its supply chain and reduce held up inventory.
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Accounts *ayable Turns reduce by =.1? > Kence other (iary is paying off it#s debtors faster in :9.9 than :9..% hence not leveraging the money owed to creditors. !n :9.. it is holding back payments slightly longer. Kence it is slightly better off in :9.: using their resources for their operating cash flow. Accounts Jeceivable Turns reduce by .0.08? from :9.9 to :9.. hence other (iary is unable to receive money faster from debtors. !nventory turn reduces by 0.. ? from :9.9 to :9.. hence inventory is lying longer in :9.. than in :9.9. !t is unable to turnover its inventory throught he supply chain faster. Thus the C:C or time re$uired to convert cash to revenue is longer by /..?s in :9.. than in :9.9. The cash to cash cycle remains positive in both :9.. and :9.9. Kence other dairy is paying off its suppliers before the entire revenue from the sales of goods has completely materiali-ed. This gets reflected in the J)< where we see a reduction in J)< by :9.1. ? from :9.9 to :9...

,ecommendations
a. !t can organise various events the way Amul does its 6yatraM which includes taking the channel members on a guided tour of the manufacturing and procuring facilities in Hujarat. So that the channel members can have an e"perience of the working of the company and can pick up some $uality measures that can help them to synchroni-e and improve their own functioning at various levels. This in turn help the company to co ordinate the entire value chain% as the channel members understand the various constraints and liberties the company goes through. b. !ncreasing the margin of the distributor and making it atleast at par with Amul can help in attracting new and more efficient distributors as well as strengthen relationship with them c. !ncreasing the local procurement of milk to provide an ade$uate supply. The limitations that other (airy faces in terms of procuring milk is due to its dependence on suppliers rather than having its own Cooperative. This comes with huge transportation costs and wastage of milk due to reduced shelf life. We recommend other (airy to work on the backward integration for this problem. d. !nvesting in high yield cowsEbuffalos for e"isting farmers using a icro finance modelF Another issue which other (airy has faced over decades and which is also inherent in dairy farming in !ndia is the yield per cow. The yield per buffalo for !ndian cows is almost .EC times lower than that of any Kybrid or American cows like Uersey. Focusing on another backward integration
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techni$ue% we will suggest improving the $uality of buffalos by either introducing hybrid or pure breed% speciali-ed technological e$uipment. Factors such as fodder% environment% space availableEhead of cattle etc. you need to mention that too as it may be less e"pensive for the farmers or for the other (airy owned dairy to keep. We suggest use of another option too by the farmers who cannot afford to go commercial dairy farming instead of the present village dairy farming for milking higher yields. Since a majority of sourcing is done by marginal farmers who lack the capital for ac$uiring the costlier Kybrid breeds% other (airy could look at provision of micro> financing to these farmers. e. other (airy can also reap the benefits of Third *arty 'ogistics by tieing up with any 'ogistics company.

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,eferences
Supply Chain anagement by Sunil Chopra% *eter eindl and (G 2alra httpFEEwww.motherdairy.comE other(airy*agesEhome.asp" httpFEEwww.visa> asia.comEapEseaEcommercialEcorporatesEincludesEuploadsESupplyVChainV anagement VGisa.pdf httpFEEwww.slideshare.netEabhiauraEmarketing>management>.CB.1C81 SA* ,usiness Transformation Study of other (airy httpFEEarrow.dit.ieEcgiEviewcontent.cgiWarticleT.991Aconte"tTnitlotr

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