SUPPLY CHAIN MANAGEMENT OF

AMUL INDIA

SUBMITTED BY
ARJUN C
15AD02
 TABLE OF CONTENTS

S. NO Contents Page No.

1. Company Profile 3

2. Products 3

3. Key Suppliers 6

4. Key Process 6

5. Process Chart 7

6. Market size & Location 8

7. Transport Model 8

8. Financials 9

9. Innovation 11

10. Supply Chain Diagram 12

11. Conclusion 13

12. References 13
 1. COMPANY PROFILE

Amul is an Indian dairy cooperative, based at Anand in the state of Gujarat. Founded in 1946, the brand is
today managed by the Gujarat Co-operative Milk Marketing Federation Ltd (GCMMF) which is jointly
owned by about 3,000,000 milk producers in the state.

Amul the co-operative was formed as a response to the exploitation of marginal milk producers by agents
and traders of the existing dairy in the state. The co-operative has gone from strength to strength, on the
back of the inspired leadership of Mr.Tribhuvandas Patel, the Founder Chairman and Dr.Varghese
Kurien, who was entrusted with the task of running the dairy from 1950.

The Amul model has helped India to emerge as the largest milk producer in the world. More than
15,000,000 milk producers contribute their milk in 144,500 dairy cooperative societies across the country.
The milk is processed in 184 district co-operative unions and marketed by 22 state marketing federations,
ensuring a better life for millions.

Amul India has registered quantum growth of 187% in last six years, which implies an impressive
cumulative average growth rate (CAGR) of 19.2% during this period. In just last three years, Amul
achieved impressive growth of 67% to register turnover of Rs. 23,004 crores during 2015-16

2. PRODUCTS

There are wide ranges of products from Amul and these products are used by millions of homes in India,
as it is said rightly as "Taste of India". It consists of wide ranges of products which are outlined below.

Amul Bread Spreads Range includes:

Amul Butter made up of pure milk fat. It consists of 100g, 500g, 50g, 20g, and 8.1g packing. It can be
eaten with bread, paratha, roti, nans, and sandwiches.

Amul Lite is a low cholesterol, low calorie and low fat bread spread. It is available in 100g, 500g, and
200g packing. It is been used for topping on parathas, pav-bhaji, and also for preparation of cakes.

Delicious Table Margarine is the substitute of butter. Margarine is prepared from vegetable oils and fats.
It contains zero cholesterol and fortified with vitamin A & D. 100g, 500g, 200g tub & single serve pack
are available.

Amul Beverage Range includes:

Amul Kool Millk Shaake comes with four awesome flavors which are Banana, Mango, Strawberry and
Badam. The price of this is Rs. 22 for 220 ml can. These are also sold in tetra pack in three flavors i.e.
Mango, Strawberry and Banana. The price of this is Rs 15 for 180 ml tetra brick. It is rich in nutrients and
is the healthiest drink against any other soft drinks.

Amul Kool is very tasty and healthy drink and come with five flavors i.e. Kesar, Elaichi, Rose, Mango,
and Strawberry. Available in 200ml glass bottle, 200ml tetra pack, 250ml can, and 1 litre tetra pack.
 Amul Kool Caf is tonned milk flavored with coffee. It is very good and convenient for parties, picnics,
etc. Available in 200ml glass bottle, 200ml tetra pack, 250ml can.

Amul Kool Koko is chocolate flavor milk. It is available in 200 ml glass bottle, 250 ml can, 200 ml tetra
pack.

Nutramul is an energy drink and available in 200ml glass bottle.

Amul Kool Chocolate Milk is chocolate flavored milk and is available in 200 ml & 1 litre tetra pack.

Amul Kool Flavored Bottled Milk comes in four flavors which are Elaichi, Kesar, Rose, and Badam. It is
very delicious and healthy drink. It is also available in 200 ml tetra pack.

Amul Kool Flavored Tetra pack comes in four flavors which are Elaichi, Kesar, Rose, and Badam. It is
very delicious and healthy drink. It is also available in 200 ml pet bottle & glass bottles.

Amul Masti Spiced Buttermilk is a 100% natural drink and free from artificial Color, preservatives, acids
and sugar. It is available in 200ml Tetra, 500ml and 1 litre tetra. The price of this is Rs. 8, Rs. 15, and Rs.
30 respectively.

Amul Kool Lassee is refreshing milk natural drink. It can be served at any convenient place like parties,
picnic and during hot summer.

Amul Stamina is an energy drink which contains electrolytes, vitamin C, minerals, calcium, milk
proteins. It is essential for body growth and muscle building. It is available in 200 ml tetra pack and 250
ml can.

Amul Prolife Probiotic Lassee is a flavored drinking yogurt made up of natural ingredients. It comes in
four flavors i.e. Rose, Cumin, Mango, and Pineapple.

Amul Prolife Butter Milk contains probiotic bacteria which help in improving immunity and digestion. It
is natural drink and very good for health.

Amul Powder Milk Range includes:

Amul Spray is used as an infant milk substitute for feeding bottles. It is made from partially skimmed
milk. It contains Vitamins A, D, K, B, C and minerals, Calcium, Magnesium, Phosphorus, Iron, Copper,
Iodine, Manganese and Zinc.

Amul Instant Full Cream Milk Powder is made from toned milk. It has more milk fat as compared to
normal milk powder.

Sagar Skimmed Milk Powder is made from skimmed milk. It is non-fat and rich in protein.

Sagar Tea Coffee Whitener is made from Milk Solids, Sugar and Hydrogenated Vegetable Oils. It is
mainly used for making tea and coffee.
 Amulya Diary Whitener is made from partially skimmed milk and sugar. It is used in preparing Tea,
Coffee, Sweets, Curd, Cakes, etc.

Amul Fresh Milk Ranges includes: Amul Fresh Milk, Amul Gold Milk, Amul Taaza Double Toned
Milk, Amul Lite Slim and Trim Milk, Amul Fresh Cream, Amul Shakti Toned Milk, Amul Calci+, Amul
Buttermilk

Amul Cheese Range includes: Amul Cheese Spreads, Amul Emmental Cheese, Amul Pizza Mozzarella
Cheese, Gouda Cheese

Amul Ghee Range includes: Amul /Sagar Pure Ghee, Amul Pure Ghee, Amul Yellow Cow Ghee, Amul
Cooking Butter.

Amul Dhai Range includes:

Amul Flaavyo Frozen Yoghurt is made from natural ingredients and fortified with vitamins. It contains
probiotic bacteria which helps digestion and immunity improvement. It comes in five flavors i.e. Mango,
Pineapple, Strawberry, Vanilla and Misti Doi.

Amul Masti Dahi is made from Pasteurized Toned Milk and no preservatives. It is rich in nutrition as it
contains all goodness of milk. It can be consumed directly or can make Lassee, Dahi Rice, Dahi Wada,
etc.

Pro-biotic Dahi helps to improve immune function of the body and maintain healthy digestion system. It
also helps to build stronger bones and teeth.

Amul Dessert Range includes:

Amul Shrikhand is prepared from fresh curd. It comes in many flavors namely Elaichi, Kesar, Mango,
Badam Pista, Amrakhand, Rajbhog, Butter Scotch, Strawberry, Pineapple, etc. It also contains fruits, nuts,
cardamom, and saffron. Amul Shrikhand is available at cheapest rate and the quality is very good for taste
and it is very hygienic.

Amul Mithaee Gulab Jamoon is made from Pure Khoa. It is available in 1 kg & 500gm.

Amul Basundi Kesar Elaichi is a traditional Gujarati dessert which is made from condensed milk. It can
be consumed directly or used for preparing Kheer, Kulfi, Milk Shakes, etc. This is available in 500 ml &
1 litre tetra pack.

Amul Avsar Ladoo is made from high nutrious besan and pure amul ghee. It is very useful during any
occasion or festival.

Amul Mithai Mate is a Sweetened Condensed Milk made from pure milk fat. It can used to prepare
Kheer, laddoo, Rasmalai, Baked Products, Cakes, Toppings etc. For household consumption 400gm tins
are available. It is made from pure milk solids, sugar and contains no preservatives. It can used to prepare
Ice Creams, Toffees, Biscuits and Sweets, etc.
 Amul Chocolates include: Amul Fruit n Nut Chocolate Congrats Pack, Amul Chocozoo, Amul
Cooking Chocolate Dark Choco Slab and Milk Choco Slab, Amul Rejoice Assorted Chocolate, Amul
Wafer Chocolate Bindaaz, Amul Chocolate Syrup

Amul Ice-cream includes: Simply Delicious Range, Natures Treat, Sundae Range, Cassata

Other products of Amul include: Amul Bhaji Pav, Amul Bun, Amul Butter Cookies, Amul chocolate
Cookies, Amul Fruity Bread, Amul Milk Bread, Amul Multi Grain Bread, Amul Whole Wheat Bread

3. KEY SUPPLIERS
Suppliers are typically illiterates, poor and with liquidity problems as they lack direct access to financial
institutions, being aware of this fact, cash payment is made to farmers with minimum day. Everyday
Amul Collects approx 16.97 million liter of milk per day from 18,545 village milk cooperative societies,
18 member unions covering 33 districts, and 3.6 million milk producer members.

4. KEY PROCESS

In the Amul model, farmers own the company that controls the post-production stages of procurement,
processing, and marketing of milk and milk products. Democratic elections are held every three years to
elect members of the management committees who then elect their chairman. This ensures active
participation of farmers in decision-making, transparency, and democratic management. Membership in
the cooperative is open to all farmers who own a cow and are able to provide an annual supply of 700
liters of milk. Amul provides support for animal husbandry, breeding services and veterinary services. It
operates an animal feed factory, makes its own milk cans, and appropriate vehicles to ensure the right
temperature and humidity. An agriculture university and a rural management institute are also part of the
Amul set-up. In the event of droughts, Amul also subsidizes animal feed.

Amuls presence on Global Dairy Trade (GDT) platform in which only the top six dairy players of the
world sell their products, has earned respect and recognition across the world. By selling milk powders on
GDT, Gujarat Co-operative Milk Marketing Federation Ltd (GCMMF) could not only realize better prices
as per market demand but it also firmly established Amul in the league of top dairy players in world trade.

Consumers

State Corporation
Milk Marketing Federation

District Milk Co-operation Union

Village Dairy Co-operation Union

Milk Producers
 5. PROCESS CHART

Milk Producers

Daily Payment of Milk

First Aid Price

Animal Feed Profit Sharing

Fodder Seeds Dairy Products

Village Dairy Co-operatives

Farmer Education Milk Producers Profit Share

Collection Weighing/ Grading Regular Payment

Veterinary Services
Milk Producers
Training & Supervision
Cattle Feed & Fodder
Seeds
Transport
Milk Producers

District Dairy Co-operative Union

Milk Producers

Feed Manufacturing Processing & Packaging Dairy Products

Milk Producers

Marketing Distribution
Milk Producers

Consumer
Milk Producers
6. MARKET SIZE & LOCATION

Amul is now world's 13th largest dairy organization and has registered a 67 per cent growth in turnover to
Rs 24,800 crore during 2015-16. The cooperative passes on every 80 paisa from every rupee earned on
the sale of Amul products to its dairy farmers grown by 187 per cent during the past six years.

BT Research & Ace Equity

Amul operates through 56 Sales Offices and has a dealer network of 10000 dealers and 10 lakh retailers,
one of the largest such networks in India. It also has its overseas office at Dubai.

Amul is segmented across mass population of different age groups and demography throughout India and
20 other countries to which it exports. This is because Amul is not only present in Ice cream, but also in
Milk, Butter, Cheese and other such products. As it has a very deep product portfolio, it does not
differentiate in its customers but uses a mass marketing principle.

Similarly, the target audiences are the regular middle class people. This is because higher end customers
do have a lot of high end products as an alternative in ice cream. However, for other products like Butter
and cheese, both high end and low end customers is the target.

In terms of positioning, Amul has top of the mind positioning because it is the first brand which comes in
mind when talking of Ice cream, milk, cheese, butter or any other milk based products.

7. TRANSPORT MODEL

Amul follows a distinctive transportation model as far as its transportation is concerned. The major
production units of Amul are located in Gujarat. Major distribution hubs are located in and around the
periphery of the production units. Since Amul produces majorly perishable goods, it becomes mandatory
 to follow a proper and smooth transportation of goods. Physical distribution is a very important part of the
whole business.

Milk is procured from the villages and collected at the Village Co-operative societies (VCS).From there
milk is taken to the manufacturing units where the milk is processed into various products. The products
are then transported to the company depots located in various parts of the country. The products are then
sent to the wholesale distributors (WD) and from there to the retailers. It is then available in over
1,000,000 retail outlets across India through its network of over 3600 distributors. The wholesale
distributors carry inventory that is just adequate to take care of the transit time from the branch ware
house to their premises. This just-in-time inventory strategy improves the distributors ROI.

There are two channels involved in the supply chain of Amul.

Upstream channel i.e. the procurement channel for milk from the farmers to the manufacturing units.

i. First the milk is taken to the VCS by the farmers on foot or bicycles in small quantities. The new VCS
in Maharashtra have rapid milk chillers.

ii. Then milk is transported from co-operatives to the manufacturing units via special trucks equipped
with tankers to carry milk once a day. A tanker carries three to four societies milk together which
helps in achieving economy in transportation of milk. Geo-remote sensing based vehicle tracking
system has been put in use for efficient handling of Road Milk Tankers carrying milk to Dairy Plant.

Downstream channel i.e. the distribution channel from manufacturing units to retailers.

i. First the products are taken from manufacturing units to the depots. This is done by using trucks. The
frozen food is kept at a temperature below -18C, while milk is kept between the temperatures of 0-4C

ii. From depots to the WDs the transportation is done using trucks. A permanent dispatch plan (PDP) is
prepared as per the demand of various products.

iii. Finally the goods are to be transported from the WDs to the retailers. The beat plan is prepared and
the transportation is done by auto-rickshaws, rickshaws and bicycles. Amul has also integrated their
transport system with railway cooling units to improve transport cost and its supply. Milk is a product
which has time band for consumption; hence it needs to reach the retailers early morning. The location
of the trucks is monitored through cell-phones. While distribution, if the transportation vehicle breaks
down, it is the transporters responsibility and he arranges for a back-up to minimize delay.

8. FINANCIALS

During the financial year of 2015-16, Amul achieved a turnover of Rs.4825 crores which is an increase of
17% higher than the previous year.
It sold 15000 MT Butter, 16444 MT Amul Spray, 4415 MT Ghee, 3448 tons flavored milk from Anand
plant besides 994 MT sales of Amulya and whole milk powder. It sold 13438 MT Cheese, 5123 MT
Whey Powder and 2863 MT Paneer from Katraj plant. From Mogar plant it sold 2314 MT Chocolate,
9066 MT Amul Lite/ Delicious, 740 MT Amul Pro and 84 MT Sweets.

During the financial year it also exported more than 2475 MT different milk products worth Rs. 70 crores
to different countries.

Amul Annual Reports, 2016

9. INNOVATION

Amul has constantly been innovating be it launching new products, creative marketing campaigns or
challenging traditional societal trends to come up with better ones.

In the 1960s, Amul became the first brand in the world to make skimmed milk powder from buffalo
milk. Also with its three-tiered cooperative structure, Amul changed from traditional operations to a more
cost-efficient and effective structure.

One of the biggest contributors to Amuls success in the last 2 decades is the installation of the Automatic
Milk Collection Unit Systems (AMCUS). Introduced in 1996, AMCUS has drastically reduced the
process time for paying milkmen after milk collection to a matter of minutes from a week before that.

In the early 90s when the Government of India imposed quantitative restrictions on importing food
products, Amul saw an opportunity in making milk collection channels more efficient within the country.
With this objective built AMCUS, a robust IT system to make buying and selling transactions transparent.

Traditional system time consuming

Before AMCUS was introduced, a milkman would go to the milk collection centre with a paper-made
passbook. The passbook contained details like identification number, fat percentage of milk and volume
of milk. The volume of milk was recorded in the passbook and a small sample was stored in plastic
bottles for measurement of the fat content. The testing of the milk for fat content was conducted later and
the milkman would be paid approximately a week later when all the data was collated. The system also
had many loopholes which led to corrupt and fraudulent practices.

IT to the rescue

Under the new system, when a milkman brings milk to collection centre, he is given a plastic card for
identification. The card is inserted into an electronic reader which feeds his identification number to the
attached computer. Next, the milk is weighed and the fat content of the milk is measured by an electronic
fat testing machine which is also fed into the computer. The computer instantly calculates the amount due
to the farmer on the basis of the fat content and a printed slip is handed over to the farmer who collects his
payment from an adjacent window. The units are compatible with multiple languages and are available in
Gujarati and Marathi, the languages spoken by Amuls vendors.

For its continuous innovation, the brand won the CNN-IBN Innovating for Better Tomorrow
Award and World Dairy Innovation Award in the year 2014.
10. SUPPLY CHAIN DIAGRAM OF AMUL

Farmers

Village Village Local Restaurants/ Milk Sold to

Cooperative Cooperative Other Milk related Village & Local
Societies (with Societies (without businesses Residents
Chilling Units) Chilling Units)

Chilling Plants
Network Services
*Veterinary Services Milk Processing
*Animal Husbandry Union & Warehouses
*Animal Feed
Factory
*Milk Can Producers GCMMF
*Agriculture Warehouses
University
*Rural Management
Institute Wholesalers
*Trucking Facilities

Retailers Home Delivery

Contractors

Consumers Consumers
11. CONCLUSION

The benefits of efficient supply chain management by Amul includes reduced lead time, faster inventory
turnover, accurate forecasting and better working capital utilization. It also helped in reducing the
dependency on distribution center management personnel resulting in minimization of training costs and
errors. Stock outs were also completely eliminated.

12. REFERENCES

i. Amul Website: http://www.amuldairy.com

ii. Indian Brand Equity Foundation: https://www.ibef.org/industry/indian-food-industry/showcase/amul

iii. GCMMF Press Release: http://www.amul.com/files/pdf/GCMMF-Press-Release-for-Annual-General-

Meeting-on-17th-June-2016

iv. Indian Study Channel- Amul: http://www.indiastudychannel.com/resources/157161-Various-

categories-of-products-from-Amul.aspx

v. Amul: An Experiment in Rural Economic Development, S. P. Singh, Macmillan.