1. Supply Chain
Management of AMUL

2. The Kaira District Co-operative Milk
Producers Union Limited, popularly known as
Amul Dairy is a US $1billion turnover
institution
It is a institution built up with a network of
over 10000 Village Co-operative Societies and
500,000 plus members
Managed by an apex cooperative
organization, Gujarat Co-operative Milk
Marketing Federation Ltd. (GCMMF), which
today is jointly owned by some 2.41 million
milk producers in Gujarat, India

3. Amul
Sales Turnover US $ (million)
Amul is the largest food brand in 1994-95 355
India with an annual turnover of US 1995-96 400
$1068 million (2007-08) 1996-97 450
Amul is the largest producer of milk 1997-98
1998-99
455
493
and milk products in the world.
1999-00 493
2000-01 500
2001-02 500
2002-03 575
2003-04 616
2004-05 672
2005-06 850
2007-08 1068

4. Before Amul
 Polson dairy had monopoly rights
 Exploitation of milk producers
 Producers had to travel long distances to sell their
produce
 Had to physically carry their produce
 Agents decided the prices and the off-take
 Summers- milk would go sour
 Winters –surplus milk unsold or sold at very low prices

5. Foundation for Amul
 Producers of Kaira district formed a cooperative to supply
milk directly to Bombay milk scheme
 Decentralized milk collection
 Village level cooperatives
 First modern dairy established at Anand
 Indigenous technology and R&D department

6. Network Structure
 Made up of various stakeholders-suppliers to retailers
 Linked by a common interest of remaining competitive in
a demanding environment
 Global optimum rather than local optimum
 Strategies
 Core competency
 Help network partners
 Information sharing

7. Dairy Cooperative Structure and
details for State of Gujarat

8. GCMMF
 Gujarat cooperative milk marketing federation
 Marketing entity for the state of Gujarat
 42 regional distribution centers in India
 5,00,000 retail outlets
 Exports to more than 15 countries
 NDDB (National Dairy Development Board)
 NCDFI (National Co-Operative Dairy Federation of India)-
coordinate dairy activities nationally

9. AMUL SUPPLY CHAIN
Farmers
Village Village Local Milk Sold to
Cooperative Cooperative Restaurants/Othe Village &
Societies Societies (with r Milk related Local Residents
(without Chilling Chilling Units) businesses
Units)
Network Milk Processing Chilling Plants
Services Union &
* Veterinary Warehouses
Services
* Animal Warehouses
Husbandry
* Animal
Feed Factory Wholesalers/C&S
* Milk Can
Producers Retailers Home Delivery
* Agriculture Contractors
University
* Rural Mgmt
Institute CONSUMERS CONSUMERS
* Trucking

10. The Supply-Demand Linkages
***Source: IIM(A), Working Paper No. 2002-05-06

11. Coordination Mechanisms
 Interlocking control
 Coordination agency-unique role of federation
 Supplier enhancement and network servicing
 Fair share allocation of benefits
 Spirit of co-operation

12. Total Quality Management
 Friday departmental meetings
 Training for transformational leadership
 Application of hoshinkanri principles
 Training for farmers and their families
 Retail census

13. Key Initiatives
 In 1994, decided on IT for competitive edge
 Studied its existing functions and operations and
formulated an IT plan.
 Aligned the Information strategy with business strategy.
 Re-designed and re-organized the existing software
applications.
 Output of one system should be input of another system
or vice-versa.

14. Problems faced
 Indirect connection between Producers and Consumers
 Could not forecast productivity accurately and timely
 No direct connectivity between zonal, regional, member
dairies and head office

15. Role of Information Technology
 Automatic Milk Collection System Units (AMCUS)
 CEO of Amul Mr. B.M. Vyas said ”Amul is not a food
company ,It is an IT company in the food business.”
 Initially AMCUS was installed free of cost to convince
farmers
 Enterprise-wide integrated application system (EIAS).
 Covers market planning, advertising and promotion,
distribution network planning, stock control, sales and
accounting, budgetary control, quality control
management and co-operative service management

16. Role of IT (contd.)
 Connected its zonal offices, regional offices and members
dairies through VSATs.
 Each Amul office was connected by e-mail and all send a
daily report on sales & inventory to main system.
 Geographic Information System (GIS)
 Helps in getting zone wise data used for sales and
distribution planning.
 Includes farmer-member census and animal census data.
 Helps in monitoring veterinary health

17. Amul’s IT Roadmap
 Uses AMCUS for milk collection.
 Implemented a customized ERP system which is used in
conjunction with GIS
 Uses data analysis software for forecasting milk
production and increasing productivity.
 Has connected all zonal, regional and member dairies
through VSAT.
 One of the first five organizations to have web presence.
 Has made IT education compulsory for all its employees.

18. Amul’s IT Roadmap (Contd.)
 Milk collection information from 10,000 villages is
collected
 Dairies can make faster decisions in terms of production
and distribution planning
 Disease control in 6700000 animals
 Linked with 45 distribution offices and 3900 distributors
 GCMMF cyber store-125 cities

19. Thank You