AMUL-The Taste of India

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Information about AMUL-The Taste of India

Published on March 13, 2014

Author: intruder2105


Dairy Industry: Dairy Industry AMUL-The Taste of India 3/13/2014 1 GROUP-6 PRESENTED BY-GROUP 6: PRESENTED BY-GROUP 6 PRESENTED BY- PALLAVI PRIYANKA PARTIK RAJ 3/13/2014 2 GROUP-6 Top 5 dairy Producing countries: Top 5 dairy Producing countries 3/13/2014 3 GROUP-6 TOP 5 MILK PROCESSORS: TOP 5 MILK PROCESSORS Company Name Country Market share in % of world milk production Milk Intake in million tonne Dairy turnover US $ Billion Fonterra Co-operative Group New Zealand 3.0% 21.6 16.4 Dairy Farmers of America USA 2.4% 17.1 13.0 Groupe Lactalis France 2.1% 15.0 16.9 Nestle Switzerland 2.1% 14.9 19.1 Dean Foods USA 1.7% 12.0 13.1 3/13/2014 4 GROUP-6 INDIAN DAIRY INDUSTRY: INDIAN DAIRY INDUSTRY Per capita milk Cooperative availability-132 g/day dairying Milk rationing and Countrywide Scarcity milk grid Dependent on Import Cutting out middlemen High intermediation Strengthening production, procurement, technology transfer Per capita milk availability-276 g/day 17% of global output Net exporter Increased share of Producers share in consumer price 1947 2012 White revolution 3/13/2014 5 GROUP-6 FACTS AND FIGURES: FACTS AND FIGURES #1 in milk production. Production-128 million tonnes in CY 2012 . Estimated to reach 170 million tonnes by 2020. Grew at a CAGR of 3.7% in the last decade. Milk is India’s largest agricultural commodity. UP Contribute to about 18% of milk production. 3/13/2014 6 GROUP-6 Milk Production in India: Milk Production in India 3/13/2014 7 GROUP-6 AMUL: AMUL 3/13/2014 GROUP-6 8 AMUL PRODUCTS: AMUL PRODUCTS Amul Milk Bread Spreads Cheese UHT Milk Beverage Range Amul Pro Ice Cream Panner Dahi Milk Powders Mithai Range 3/13/2014 9 GROUP-6 CONTD..: CONTD.. Mithai Mate Chocolates Nutramul Fresh Cream Pouch Butter Milk 3/13/2014 10 GROUP-6 TOP SELLING PRODUCTS OF AMUL: TOP SELLING PRODUCTS OF AMUL 3/13/2014 11 GROUP-6 THE THREE TIER STRUCTURE: THE THREE TIER 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 economies of scale is achieved 3/13/2014 12 GROUP-6 The First Tier - Primary village Co-operative Society: The First Tier - Primary village Co-operative Society An Anand Pattern village dairy cooperative society (DCS) is formed by milk producers. Any producer can become a DCS member by buying a share and committing to sell milk only to the society. Each DCS has a milk collection centre where members take milk every day. Each member's milk is tested for quality with payments based on the percentage of fat and SNF. At the end of each year, a portion of the DCS profits is used to pay each member a patronage bonus based on the quantity of milk poured. 3/13/2014 13 GROUP-6 District Union The 2nd Tier : District Union The 2nd Tier A District Cooperative Milk Producers' Union is owned by dairy cooperative societies. It is a Union of primary village co-operative societies within a district. The Union buys all the societies' milk, then processes and markets fluid milk and products. Union also provides a range of inputs and services to village co-operative societies and their members: feed, veterinary care, artificial insemination to sustain the growth of milk production and the cooperatives' business. Union staff train and provide consulting services to support village co-operative society leaders and staff. 3/13/2014 14 GROUP-6 The State Federation – 3rd Tier: The State Federation – 3rd Tier The cooperative milk producers' unions in a state form a State Federation which is an apex marketing body responsible for marketing of milk and milk products of member unions. The Federation also plays a role in the overall development of the district unions federated to it. Maximizing farmer profit and productivity through cooperative effort is the hallmark of the Anand Pattern. Functions- Marketing of milk & milk products processed / manufactured by Milk Unions. Establish distribution network for marketing of milk & milk products. 3/13/2014 15 GROUP-6 CONTD..: CONTD.. 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 Union . 3/13/2014 16 GROUP-6 RESOURCES: RESOURCES Liquid or fluid milk is the basic raw material for the dairy products industry . The milk is received via tanker trucks (or sometimes in cans) and is unloaded. Each tanker is checked for drug residues and temperature. The milk is filtered and stored in tanks/silos. Temperature of the milk should be less than 7 °C and held for no more than 72 hours. After storage, the milk is separated, the raw cream is stored in house or shipped elsewhere and the remaining milk is pasteurized. 3/13/2014 17 GROUP-6 TRANSFORMED AND TRANSFORMING RESOURCES: TRANSFORMED AND TRANSFORMING RESOURCES Production plant can be termed as transforming good. Items such as machinery, hardware, software, building, stores etc. fall under the category of transforming goods since they convert the raw material (milk) into the desired products. Milk is also a transforming resource. The raw product that is obtained from the production process is termed as the transformed good or transformed resource, cheese and butter are the transformed goods. Transforming goods are almost always less expensive than the transformed goods. 3/13/2014 18 GROUP-6 MILK PROCESSING: MILK PROCESSING 3/13/2014 19 GROUP-6 BUTTER MAKING PROCESS: BUTTER MAKING PROCESS 3/13/2014 20 GROUP-6 CHEESE MAKING PROCESS: CHEESE MAKING PROCESS 3/13/2014 21 GROUP-6 VALUE CHAIN: VALUE CHAIN 3/13/2014 22 GROUP-6 QUALITY: QUALITY TQM at the grassroots has been a strong movement to develop leadership, operational and strategic capabilities in the entire network – farmers, village cooperatives, dairy plants, distributors and wholesalers and retailers. Key elements of this TQM movement have been: Friday Departmental Meetings Training for Transformational Leadership Training for farmers and their families Application of Hoshin Kanri principles to bring about a bottom-up setting of objectives Retail Census 3/13/2014 23 GROUP-6 SPEED: SPEED 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. The GCMMF cyber store delivers AMUL products at the doorsteps of the consumers in 125 cities across the country. 3/13/2014 24 GROUP-6 DEPENDABILITY AND FLEXIBILITY: DEPENDABILITY AND FLEXIBILITY 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. Provides operational flexibility and makes the network responsive to changes within and outside. To be effective it is important that decision-making be decentralized to the extent possible, with appropriate coordination mechanisms to ensure consistency in the system. 3/13/2014 25 GROUP-6 COST: COST AMUL has taken many steps to bring down its production cost- Establishing a most modern automatic cattle feed plant at Kapdivav near Kapadwanj . They have planned to place large straw-reaper machines at the disposal of larger farmers as a part of ensuring mixed rationing of feed stuffs for animals. To ensure availability of dry fodder with high nutritional value, they are giving 50% subsidy in urea treatment of fodder. To combat increasing cost of production as also preserving environment, they are increasing use of bio-gas schemes. 3/13/2014 26 GROUP-6 INNOVATION: INNOVATION ARDA has been rendering various services like Artificial Insemination, Animal health care, breed improvement programme, fertility improvement programme, vaccination programme, deworming , etc. During 2013, through 12 Veterinary Centres, they have treated 6.92 lakh animals at their door steps. We produced 17.85 lakh semen doses of excellent quality at Semen Station, Ode. To ensure the number of infertile animals and induce increased interest to milk producers in dairying since last four years Fertility Improvement Programmes (FIP) have been put in place through ARDA 3/13/2014 27 GROUP-6 SUCCESS AND FAILURES: SUCCESS AND FAILURES AMUL’s growth during the past five decades has been fuelled primarily by growth in milk supply with corresponding pricing strategy to generate demand. This growth has been sustained by a two-pronged strategy – growth in the number of member farmers by widening its coverage with more village societies and increasing the membership in each society, and growth in per capita milk supply from its members. This growth is achieved by increasing milk yields and by helping members raise their investments in cattle. 3/13/2014 28 GROUP-6 CONTD..: CONTD.. A part of AMUL’s growth has come from diversification into other agri -products such as vegetable oils, instant foods etc. Exploring conventional joint venture arrangements with suitable partners for diversification into areas such as fast food and speciality chocolates. 3/13/2014 29 GROUP-6 CONTD..: CONTD.. Competitors are cutting into milk supply by offering marginally higher procurement prices thereby challenging the practice of provision of services for long-term growth in lieu of higher prices in the short-term. Its drawbacks include its need for enlightened and committed leadership (through its governing board), and capable management, which is sometimes difficult to ensure. The board is elected and may become politicized, detracting from sound cooperative and business practices. Further, antiquated laws governing cooperatives invite government interference and prevent use of financial markets for raising equity capital, thereby constraining expansion and growth to some extent. 3/13/2014 30 GROUP-6 PRINCIPAL WEAKNESS IN OPERATIONS: PRINCIPAL WEAKNESS IN OPERATIONS For a section of its membership, dairy activity is a stepping-stone for upward mobility in the society. Typically, such members move on to other occupations after raising their economic position through milk production. As a result, AMUL is unable to realize the full benefits of its long-term strategy, and finds new members (mostly marginal farmers) to replace those who have higher potential and capacity. 3/13/2014 31 GROUP-6 RECOMMENDATION: RECOMMENDATION INVEST IN HIGH YIELDING COWS/BUFFALOS FOR EXISTING FARMERS USING A MICRO FINANCE MODEL- Increase milk yield per cow from 10-15 litres per day to 25 litres per day yielding Farmers will earn more cows/buffalos Micro finance enables the farmers to invest for existing and upgrade their cattle. 3/13/2014 32 GROUP-6 THANK YOU: THANK YOU 3/13/2014 33 GROUP-6

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