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Report on amul
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REPORT ON
“AMUL”
BY
GROUP TWO
Under the guidance of
Asst. Prof. MRS.VIJASHRI GURME
In the fulfillment of
ENTERPRISE ANALYSIS-DESK RESEARCH SUBJECT
UNIVERSITY OF PUNE
YEAR 2015-2016
DEPARTMENT OF MBA
MIT COLLEGE OF ENGINEERING
PUNE – 411038
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MAEER’S
MIT COLLEGE OF ENGINEEERING ‘S
Centre for Management Studies and Research
Certificate
This is to certify that the work entitled a project report on an Enterprise
“AMUL” has been successfully completed by the Group Members of
Group Two of MBA I Shift I of MITCOE CMSR during the year 2015-
16.This report has thus been approved as it satisfies the academic
requirements.
Mrs.Vijashri Gurme Dr.Prof .A.R.Mancharkar
(Associate Professor) (Head of the Department)
MITCOE CMSR MITCOE CMSR
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ACKNOWLEDGEMENT
With immense pleasure, I would like to present this project report for” Enterprise Analysis-Desk
Research”
As a student of “MITCOE CMSR”,Pune,,I would like to express my gratitude to all those who
gave me the encouragement to complete this project report.
I also thank Mrs.Vijayashri Gurme Mam for her guidance.
My heartfelt gratitude to the Head Of Department Dr.Prof.A.R.Mancharkar Sir for his
continuous support and guidance.
However, I accept the sole responsibility for any possible error of omission and would be
extremely grateful to the readers of this project report if they bring such mistakes to my notice.
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TABLE OF CONTENTS
Sr.No Subject Page
No.
1 Introduction 5-6
2 Enterprise History & Background 7-18
2.1History
2.2Key-People
2.3Vision-Mission
2.4 Members Of Board Of Directors
2.7CSR Initiatives
3 Organization 19-34
3.1Organization Structure
3.2 Production Function
3.3 Distribution Network:
3.4Growth And Challenges
3.5 Certifications
3.6Quality Management System Initiatives
4 Markets 35-39
4.1 Market segmentation
4.2Products
4.3ProductLines
4.4 Market share
4.5 Advertising Strategy
5 Financials 40-41
5.1 Sales Turnover
5.2 Balance Sheet
6 Governance 42-45
6.11.Philosophy
6.2.Action taken by SEBI if any
6.3.Insider trading issues
6.4 CRISIL Rating
6.5 Awards Won
7 Conclusion 46
8 Bibliography 47
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CHAPTER 1
INTRODUCTION
Amul means "priceless" in Sanskrit. The brand name "Amul" from the Sanskrit "Amoolya" was
suggested by a quality expert in Anand. Variants, all meaning priceless are found in several
Indian language. Amul products have been in use in millions of homes since 1946. Amul Butter,
Amul Milk Powder, Amul Ghee, Amul Spray, Amul Cheese, Amul chocolates, Amul Shrikhand,
Amul Ice cream, Nutranmul, Amul Milk and Amulya have made Amul a leading food brand in
India. Turnover Rs. 25 billion in 2002. Today Amul is a symbol of many things of high quality
products sold at reasonable prices of the genesis of a vast co-operative network of the triumph of
indigenous technology of the marketing savvy of a farmer's organization, and of a proven model
for dairy development.
The revaluation started as awareness may the farmers that grew and matured into a protest
movement and determination to liberate them. Over four decades ago the life of a farmer in
Kaira district was like that of his counterpart anywhere also in India. Income from dairy was
under pendable. Private trades and middleman controlled the marketing and distribution of milk.
As milk is perishable, farmers were compelled to sell it for what every they were offered. In this
situation, the one who gained was the private traders. Gradually the realization downed on the
farmers that the exploitation by the readers could be checked do only if they if they marketed
their product themselves. To do this they need some sort of organization this realization this
realization is what led to the establishment of Kaira District Cooperative Milk producer Union
Limited (Popularly known as Amul), which was formally registered on December 14, 1946.
Private traders and middleman controlled the marketing and distribution of milk. As milk is
perishable, farmers were compelled to sell it for what every they were offered. In this situation,
the one who gained was the private traders. Gradually the realization downed on the farmers that
the exploitation by the traders could be checker do only if they marketed their product
themselves. To do this they need some sort of organization this realization is what led to the
establishment of Kaira District Cooperative Milk producer Union Limited (Popularly known as
Amul), which was formally registered on December 14, 1946.
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The Kaira Union started Pasteurizing milk for the Bombay milk scheme in June 1948. An
assured market proved a great incentive to milk producers of the district by the end of 1948,
more than 400 farmers joined in more village societies and the quantity of milk handled by union
increase from 250 to 5000 liters per day.
As the movement spread in the district, it was found that the BombayMilk Scheme could not
absorb the extra milk collected by the Kairaunion in summer when the production on an average
was 2.5 times more than summer. Even by 1953, the farmer's embers have no assured market for
the extra milk produced summer. The remedy was to setup a plant to process milk into products
like butter and milk powder. A five Million Rupees Plant to manufacture milk powder and butter
was competed in1955. In 1958 the factory was expanded to manufacture sweetened condensed
milk. Two year later a new wing was added for manufacture of 25000 tons of roller derived baby
food and 600 tons of cheese per year. This cheese was based on the formula developed with the
assistance of Central Food Technology Research Institute (CFTRI),Mysore. It was the first time
in world that baby food and cheese where made by buffalo milk on a large commercial scale.
Another r milestone was the completion as a project to manufacture balanced cattle food. The
plant was donated by OXFAM under the freedom from hunger campaign of the FAO.
To meet the requirement for defense the Kaira Union was asked by the Government of India in
1963 to setup additional drying capacity. A new dairy capable of producing 40 tons of milk
powder and 20 tons of butter a day was speedily completed. It was declared open in 1965. Since
then Amul has covered any miles on the road of success. Its members success of the federation
can be estimated from the fact the income of the rural household of the Kaira district is being
derived from dairying.
Now federation is India's largest food products marketing organization. It is a state level apex
body of milk cooperative Gujarat. More that 12districts cooperative milk producers union are its
members, which include 11,132 villages societies. Federation has helped for the products they
produce. More that 2.28 million producer members are beneficent of the unions.
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CHAPTER 2
ENTERPRISE HISTORY AND BACKGROUND
2.1 HISTORY OF AMUL
In the 1940s, in the district of Kaira of the State of Gujarat, India, a unique experiment was
conducted that become one of the most celebrated success stories of India. At that time, in
Gujarat, milk was obtained from farmers by private milk contractors and by a private company,
Polson's Dairy in Anand, the headquarters of the district. The company had a virtual stranglehold
on the farmers, deciding the prices both of the procured as well as the sold milk. The company
arranged to collect, chill and supply milk to the Bombay Milk Scheme, which supplied milk to
the metropolis of Bombay, and to cities in Gujarat, Polson's Dairy also extracted dairy products
such as cheese and butter. Polson's Dairy exploited its monopoly fully; the farmers were forced
to accept very low prices for their products, and the decisions of the company regarding the
quality and even the quantity of the milk supplied by the farmers were final.
In 1946, inspired by Sardar Vallabhbhai Patel, a local farmer, freedom and social worker, named
Tribhuvandas Patel, organized the farmers into co-operatives, which could procure milk from the
farmers, process the milk and sell it in Bombay to customers including the Bombay Milk
Scheme, Purely by chance, in 1949, a mechanical engineer named Verghese Kurien, who had
just completed his studies in engineering in the USA, came to India and was posted by the
Government of India to a job at the Dairy Research Institute at Anand.
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Settling down in Anand was hardly a part of his career plans; however, a meeting with
Tribhuvandas Patel changed his life and changed India's dairy industry. What Mr. Patel
requested of Dr. Kurien was hardly to bring about such a revolution. All the wanted was help in
solving various problems with bringing into working order some of the equipment just purchased
by his co-operative, especially the chilling and pasteurizing equipment. These items of
equipment malfunctioned, leading to the rejection of large quantities of milk by the Bombay
Milk Scheme.
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Dr. Kurien's involvement with the Kaira District Co-operative Milk Producers' Union Limited
(KDCMPUL; the registered name of the co-operative) grew rapidly. Initially he merely provided
technical assistance in repairing, maintaining and ordering new equipment but subsequently he
became involved with the larger sociological issues involved in organizing the farmers into co-
operatives and running these co-operatives effectively. He observed the exploitation of farmers
by the private milk contractors and Poison's Dairy, and noted how the co-operatives could
transform the lives of the members. The most important feature of these co-operatives is that
they run purely as farmer's co-operatives, with all the major decisions being taken by the farmers
themselves. The co-operatives are not 'run' by a separate bureaucracy with vested interests of its
own; the farmers are truly in charge of their own decisions. Any farmer can become a member
by committing to supply a certain quantity of milk for a certain number of days in a year and
shall continue to be a member only if he keeps up this commitment.
Each day, the farmers (or actually, in most cases, their wives and daughters) bring their milk to
the village collection centers where quantity of milk is checked in full view of all and quality
(milk fat content) is checked using a simple device, again in full view of all. The farmers are paid
in evening for the milk they supplied in the morning, and in the morning for the evening's milk.
This prompt settlement in cash is a great attraction to the farmers who are usually cash starved.
Thanks to the above system, there are no disputes regarding quantity or quality of the milk
supplied by each farmer. It was soon realized that it was not enough to merely act as the
collection and selling for the farmers. A variety of support services were also required to enable
the farmers continue selling milk of adequate quality and to avoid disasters such as the death of
their cattle(of a family owning just one or two cattle and depending on its/their milk for
their income, death of cow could indeed be a disaster). The farmers were progressively given
new services such as veterinary care for their cattle, supply of good quality cattle feed, education
on better feeding of cattle and facilities for artificial insemination of their cattle. All these were
strictly on payment basis; none of services were free. This experiment of organizing farmers into
co-operatives was one of the most successful interventions of India. A very loyal clientele was
built up who experienced prosperity on a scale they could not have dreamt of 10 years earlier.
With good prices paid for their milk, raising milch cattle could become a good supplementary
source of revenue to many households.
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The co-operatives were expanded to cover more and more areas of Gujarat and in each area, a
network of local village level co-operatives and district level co-operatives were formed on a
pattern similar to that at Anand (the so called Anand Pattern). In 1955,KDCMPUL changed its
name to Anand Milk Union Limited, which lent itself to a catchy abbreviation, Amul, which
meant priceless in Sanskrit. The word was also easy to pronounce, easy to remember and carried
a wholly positive connotation. It became the flagship brand name for the entire dairy products
made by this union.
In 1954, Amul built a plant to convert surplus milk produced in the cold seasons into milk
powder and butter. In 1958, a plant to manufacture cheese and one to produce baby food were
added-for the first time in the world, these products were made from buffalo milk. Subsequent
years saw the addition of more plants to produce different products. Starting from a daily
procurement of 250litres in 1946, Amul had become a milk giant with a large procurement base
and a product mix that had evolved by challenging the conventional technology.
In his visit to Anand in 1965, the then Prime Minister of India, Lal Bhadur Shastri, was
impressed by what he saw-a system that procured, processed and delivered high quality milk to
distant markets cost efficiently. Shastri could also see the difference that the income from milk
had made to the standard of living of farmers in the area.
What impressed him the most was that Amul had done all this without Government assistance in
market contrast to number of Government sponsored dairy programs that were doing poorly in
terms of procuring and marketing good quality milk and boosting farmer's incomes. Shastri
asked Dr. Kurien to replicate Anand's success allover India.
A pattern similar to the Anand Pattern was to be built in other states of India. This was carried
out under a program launched by the Government of India, entitled "Operation Flood". The
operation was a body formed by the Government of India with this specific objective coordinated
by the National Dairy Development Board (NDDB),a body formed by the Government of India
with this specific objective.
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GUJARAT COOPERATIVE MILK MARKETING FEDERATION GCMMF: AN
OVERVIEW
The GCMMF is the largest food products marketing organization of India. It is the apex
organization of the dairy cooperatives of Gujarat. It is the exclusive marketing organization for
products under the brand name of Amul and Sager.[15] Over the last five and a half decades, dairy
cooperatives in Gujarat have created an economic network that links more than 3.1 million
village milk products with millions of consumers in India. Gujarat Cooperative Milk Marketing
Federation Ltd. (GCMMF) is India's largest food product marketing organization with annual
turnover (2014-15) US$ 3.4 billion. Its daily milk procurement is approx 14.85 million lit per
day from 18,536 village milk cooperative societies, 17 member unions covering 31 districts, and
3.37 million milk producer members. More than 70% of the members are small or marginal
farmers and landless laborers including a sizeable population of tribal folk and people belonging
to the scheduled castes.
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2.2 KEY PEOPLE OF AMUL
FOUNDER – DR. VERGHESE KURIEN
Dr. Verghese Kurien was born on November 26, 1921 to an affluent Syrian Christian family in
Calicut (now Kozhikode), Kerala. His father Puthenparakkal Kurien was a civil surgeon in
British Cochin and his mother was a highly educated woman as well an exceptional piano player.
He was named after his uncle Rao Sahib P.K Verghese. Dr Kurien joined Loyola College in
Madras and attained his degree in B.Sc in Physics. He was also very active in sports and
represented the college in cricket, badminton, boxing and tennis. He went to the United States of
America on government scholarship where he pursued his degree in Master of Science in
Mechanical Engineering (Distinction). He returned to India after completion of his studies and
on May 13, 1949 he headed for Anand, a place in Kaira district of Gujarat where he was
supposed to spend five years as an officer of the Dairy division in return for the scholarship paid
by the government. On arriving at Anand, he found that the farmers were being exploited by the
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distributors of milk and the entire region was controlled by a shrewd but clever businessman
called as "Pestonjee Edulji" who marketed Polson butter.
Looking at the struggle of these people to survive and mesmerized by the personality of their
leader Tribhuvandas Patel who was trying to unite the farmers and form a cooperative movement
against the exploitation, Dr. Kurien left his government job and joined forces with Tribhuvandas
Patel and the farmers to start the Milk Cooperative movement in the region registered under the
name of Kaira District Cooperative Milk Producers Union Ltd (KDCMPUL), which was later
renamed to now popular "Amul". He worked towards bringing a White Revolution in India and
executed the much needed program of "Operation Flood". Dr. Verghese Kurien married Susan
Molly Peter on June 15, 1953 and they had one daughter Nirmala Kurien and a grandson,
Siddharth. Dr. Kurien was the man responsible for turning India from a milk deficient country to
the largest producer of milk in the world today. Under his inspiring leadership many important
institutions were established namely the GCMMF (Gujarat Cooperative Milk Marketing
Federation Ltd) and NDDB (National Dairy Development board which played a significant role
in shaping the Dairy Cooperative movement across the country and led the replication of Anand
model of cooperative dairy practiced all over the country.
Dr. Kurien always regarded himself as an employee of the farmers who would do anything to
bring prosperity in their favor. In his service of over fifty years he attained 15 honorary degrees
from different institutions of the world as he believed that learning should never stop. His
enduring personality, spirit, undying charisma and conviction of turning the impossible into
possible won him many accolades such as the Ramon Magsaysay Award for Community
Leadership (1963), Padma Shri (1965), Padma Bhushan (1966), Krishi Ratna Award (1986),
World Food prize (1989), Padma Vibhushan (1999), Economic Times award for Corporate
Excellence (2001) and several other awards, but the best award that the people of the country
gave him was the title "Milkman of India". After a lifetime of struggle and conviction towards
serving the nation Dr. Verghese Kurien breathe his last on 9 September 2012 due to brief illness
at Anand. Dr. Verghese Kurien will always be remembered as the person who redefined the
meaning of milk as a powerful tool for economic development.
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2.3 MEMBERS OF THE BOARD
CHAIRMAN JETHA PATEL
Jetha Patel, chairman of the Himmatnagar-based Sabarkantha District Co-operative Milk
Producers Union Limited popularly known as Sabar Dairy was elected as chairman of Gujarat
Co-operative Milk Marketing Federation (GCMMF) that markets brand Amul.
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CEO AND MD
R.S. SODHI
Mr. R. S. Sodhi has been the Managing Director at Gujarat Cooperative Milk Marketing
Federation since January 4, 2011. Mr. Sodhi served as In charge Managing Director of Gujarat
Cooperative Milk Marketing Federation from June 2010 to January 4, 2011 and also served as its
Chief General Manager. He serves as a Director of Gujarat Cooperative Milk Marketing
Federation. He has been a Non-Executive Director at Kaira Can Company Limited since
February 2011 to December 20, 2014.
2.4 VISION
Amul’s vision is to provide more and more satisfaction to the farmers, employees and
distributers
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MISSION
We at GCMMF (Gujarat Co-operative milk Marketing Federation) endeavor to satisfy the taste
and nutritional requirements of the customers of the world, through excellence in marketing by
our committed team. Through co-operative networking, we are committed to offering quality
products that provide best value for money.”
2.5 CORPORATE SOCIAL RESPONSIBILITY (CSR)
Corporate social responsibility (CSR) has been defined as the commitment of business to
contribute to sustainable economic development working with employees, their families, the
local community, and society at large to improve their quality of life, in ways that are both good
for business and good for development.
To meet with the CSR it is expected that a business in its entire procurement-production-
processing-marketing chain should focus on human development involving the producer,
the worker, the supplier, the consumer, the civil society, and the environment.
CSR INITIATIVES BY AMUL
Amul Relief Trust
Tree Plantation
a) Amul Relief Trust:
A devastating earthquake (Richter scale – 7.9) hit Gujarat on 26th January 2001. The epicentre
of the quake was located in Kutch district. It caused death of thousands of people, tens of
thousands were injured, hundreds of thousands were rendered homeless and damage of billions
of Rupees was done.
GCMMF formed a specific organization named "Amul Relief Trust" (ART) under the
Chairmanship of Dr. V. Kurien in 2001 with a donation of Rs. 50 Millions for reconstruction of
the school buildings damaged in the 2001 earthquake in the Kutch area.
The Trust reconstructed 6 schools damaged by the above earthquake at a cost of Rs. 41.1
millions in Kutch area. Four of these schools started re-functioning from the last two academic
sessions and the other two schools from the current session.
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A school reconstructed by Amul Relief Trust in the earthquake affected Ratadia Village in
Mundra Taluka of Gujarat.
A school reconstructed by Amul Relief Trust in the earthquake affected Devpar Village
inMandvi Taluka of Gujarat.
b) Green Gujarat tree plantation campaign :-
The milk producer of Gujarat dairy cooperatives are conducting mass tree plantation drive every
year on independence day for last three years. The idea is “one member five tree (2009). The
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entire plantation activity is coordinated at all the three tiers of Anand pattern – at village, district
and state level dairy cooperatives. Amul Coops plant more than 311.98 lakhs trees.
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CHAPTER 3
ORGANIZATION
3.1 THE THREE-TIER "AMUL MODEL"
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 federated into a milk federation at the state level. Milk collection is done at the village dairy
society, milk procurement and processing at the District Milk Union and milk products
marketing at the state milk federation. The structure was evolved at Amul in Gujarat and
thereafter replicated all over the country under the Operation Flood programmed. It is known as
the 'Amul Model' or 'Anand Pattern' of dairy cooperatives.
The main functions of the VDCS are:
Collection of surplus milk from the producers of the village and payment based on quality and
quantity,
Providing support services to the members like veterinary first aid, artificial insemination
services, cattle-feed sales, mineral mixture sales, fodder and fodder seed sales, conducting
training on animal husbandry and dairying,
Selling liquid milk for local consumers of the village,
SUPPLYING MILK TO THE DISTRICT MILK UNION.
Marketing of milk and milk products processed/manufactured by Milk Unions,
Establish a distribution network for marketing of milk and milk products,
Arranging transportation of milk and milk products from the Milk Unions to the market,
Creating and maintaining a brand for marketing of milk & milk products,
Providing support services to the Milk Unions and members like technical inputs, management
support and advisory services,
Pooling surplus milk from the Milk Unions and supplying it to deficit Milk Unions,
Establish feeder-balancing dairy plants for processing the surplus milk of the Milk Unions,
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Arranging for common purchase of raw materials used in manufacture/packaging of milk
products,
Conduct long-term milk production, procurement and processing as well as marketing planning.
Arranging finance for the Milk Unions and providing them technical know-how.
Designing and providing training in cooperative development and technical and marketing
functions.
Conflict resolution and keeping the entire structure intact.
STATE COOPERATIVE MILK FEDERATION
The main functions of the federation are as follows:
Marketing of milk and milk products processed/manufactured by Milk Unions,
Establish a distribution network for marketing of milk and milk products,
Arranging transportation of milk and milk products from the Milk Unions to the market,
Creating and maintaining a brand for marketing of milk & milk products,
Providing support services to the Milk Unions and members like technical inputs,
management support and advisory services,
Pooling surplus milk from the Milk Unions and supplying it to deficit Milk Unions,
Establish feeder-balancing dairy plants for processing the surplus milk of the Milk Unions,
Arranging for common purchase of raw materials used in manufacture/packaging of milk
products,
Decide on the prices of milk and milk products to be paid to Milk Unions,
Decide on the products to be manufactured at Milk Unions and capacity required for the
same.
Conduct long-term milk production, procurement and processing as well as marketing
planning.
Arranging finance for the Milk Unions and providing them technical know-how.
Designing and providing training in cooperative development and technical and marketing
functions.
Conflict resolution and keeping the entire structure intact.
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3.2 ORGANIZATION STRUCTURE OF AMUL
Building an organizational network that would represent the farmers and the customers waste
most complicated task. A loose confederation was developed with GCMMF representing the
voice of the customers, the Unions representing the milk processors and the village societies
representing the farmers. Competition in the markets ensured that the entire network was
responding to the requirements of the customers at prices that were very competitive. The task of
ensuring that returns to the farmers was commensurate with the objectives with which the
cooperatives were setup was achieved through representation of farmers at different levels of
decision making throughout the network – the board of directors of societies, Unions and the
Federation comprised farmers themselves. In order to ensure that most returns from sales went
tithe producers, the intermediaries had to operate very effectively and on razor thin margins. This
turned out to be a blessing in disguise – the operations remained very “lean” and started to
provide cost based advantage to the entire network. AMUL established a group to standardize
the process of organizing farmers into village societies. In addition to establishing the criteria for
selecting members, the group had to train the Veto run the cooperative democratically, profitably
and with concern for its members. This included establishing procedures for milk collection,
testing, payment for milk purchased from member farmers and its subsequent sale to the union,
accounting, ensuring timely collection and dispatch of milk on milk routes established by the
union, etc. The Village Societies Division at AMUL acts as the internal representative of village
societies in their dealings with the Union. Cooperative development programmers at the village
level for educating & training its members have become an important part of the strategy to build
this extensive network. Milk procurement activity at AMUL comprises development and
servicing of village societies, increasing milk collection, procurement of milk from societies &
its transport to the chilling locations, and resolving problems of farmers and village societies.
Their stated objective into ensure that producers get maximum benefits. The Village Societies
Division coordinates these activities. Milk collection takes place over a large number of pre-
defined routes according to precise timetable. The field staff of this division also helps village
societies interface with the Union on various issues ranging from improvement of collection,
resolving disputes, repair of equipments to obtaining financing for purchase of equipment etc. In
addition, they are also responsible for the formation of new societies, which is an important
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activity at AMUL. In essence, the organization structure of AMUL allows effective utilization of
resources without losing the democratic aspiration of individual members. It is obvious that such
a system needs charismatic leadership to achieve consensus across issues – a process that has
long-term benefits for any organization. Marketing GCMMF is the marketing arm of the network
and manages the physical delivery and distribution of milk and dairy products from all the
Unions to customers. GCMMF is also responsible for all decisions related to market
development and customer management. These activities, which range from long-term planning
to medium-term and short-term operational decisions are described below. As mentioned earlier,
introduction of new products and choice of product mix and markets should be consistent with
the growth strategy, and synchronous with growth in milk supply.GCMMF’s demand growth
strategy may be characterized by two key elements: (I) developing markets for its high value
products by graduating customer segments from low value products, and (ii) maintaining a
healthy level of customer base for its base products (low value segment). This strategy often
requires GCMMF to allocate sufficient quantity of milk supply to low value products, thereby
sacrificing additional profits that could be generated by converting the same to high value
products. Interestingly, advertisement & promotion (a la FMCG) was not considered to be
enough of value addition and hence the budget was kept relatively small. Instead, GCMMF
preferred a lower price with emphasis on efficiency in advertising. In this context, GCMMF
provides umbrella branding to all the products of the network. For example, liquid milk as well
as various milk products produced by different Unions is sold under the same brand name of
AMUL. Interestingly, the advertising has centered on building a common identity (e.g., a happy
& healthy “cartoon” AMUL girl) and evoking national emotion (e.g., the key advertising slogan
says “AMUL- the Taste of India”). GCMMF also plays a key role in working with the Unions to
coordinate the supply of milk and dairy products. In essence, it procures from multiple
production plants (the thirteen Unions), which in turn procure from the Village Societies
registered with each Union. GCMMF distributes its products through third party distribution
depots that are managed by distributors who are exclusive to GCMMF. These distributors are
also responsible for servicing retail outlets all over the country. GCMMF sales staff manages this
process. Retailing of GCMMF’s products takes place through the FMCG retail network in India
most of whom are small retailers. Liquid milk is distributed by vendors who deliver milk at
homes. Since 1999, GCMMF has started web based ordering facilities for its customers. A well-
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defined supply chain has been developed to service customers who order in this manner.
Operations & Supply Chain Managements mentioned earlier, the strategy, design and practices
in AMUL’s network are strongly driven byte objective of establishing and operating an efficient
supply chain from milk production and procurement to product delivery to customers.
Management of this network is built around two key elements – (a) coordination of the diverse
elements of the network and (b) use of appropriate technology that includes product, process and
information technology and managerial practices and systems. In what follows, we describe
various features of these elements that have contributed tithe evolution of an efficient supply
chain. Coordination for Competitiveness Robust coordination is one of the key reasons for the
success of operations involving such an extensive network of producers and distributors at
GCMMF. Some interesting mechanisms exist for coordinating the supply chain at GCMMF.
These range from ensuring fair share allocation of benefits to various stakeholders in the chain to
coordinated planning of production and distribution. More importantly, the reason for setting up
of this cooperative is not amiss to anyone in this large network organization. Employees, third
part service providers, and distributors are constantly reminded that they work for the farmers
and the entire network strives to provide the best returns tithe farmers, the real owners of the
cooperative. It may be remembered that coordination mechanisms have to link the lives and
activities of 2.12 million small suppliers and 0.5 million retailers! There appear to be two critical
mechanisms of coordination that ensure that decision makings coherent and that the farmers gain
the most from this effort.
These mechanisms are:
• Inter-locking Control
• Coordination Agency: Unique Role of Federation Inter-locking Control Each Village Society
elects a chairperson and a secretary from amongst its member farmers of good standing to
manage the administration of the VS. Nine of these chairpersons (from amongst theses affiliated
to a Union) are elected to form the Board of Directors of the Union. The Chairperson of the
Union Board is elected from amongst these members. The managing director of the Union, who
is a professional manager, reports to the chairperson and the board. All chairpersons of all the
Unions form the Board of Directors of GCMMF. The managing director of GCMMF reports to
its Board of Directors. Each individual organization, the Union or GCMMF, is run by
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professional managers and highly trained staff. It must be pointed that all members of all the
boards in the chain are farmers who pour milk each day in their respective Village Societies. A
key reason for developing such an inter-locking control mechanism is to ensure that the interest
of the farmer is always kept at the top of the agenda through its representatives who constitute
the Boards of different entities that comprise the supply chain. This form of direct representation
also ensures that professional managers and farmers work together as a team to strengthen the
cooperative. This helps in coordinating decisions across different entities as well as speeding
both the flow of information to the respective constituents and decisions. Coordination Agency:
Unique Role of the Federation In addition to being the marketing and distribution arm of the
Unions, GCMMF plays the role of coordinator to the entire network within the State –
coordinating procurement requirements with other Federations (in other states), determining the
best production allocation for its product mix from amongst its Unions, managing inter-dairy
movements, etc. It works with two very clear objectives: to ensure that all milk that the farmers
produce gets sold in the market either as milk oars value added products and to ensure that milk
is made available to an increasingly large sections of the society at affordable prices. In addition,
it has to plan its production at different Unions in such a way that market requirement matches
with unique strengths of each Union and that each of them also gets a fair return on its capacity.
In this regard, GCMMF follows an interesting strategy. GCMMF, in consultation with all the
Unions, decides on the product mix at each Union location. Some considerations that govern this
choice are the strengths of each Union, the demand for various products in its region as well as
the country, long term strategy of each Union, procurement volumes at different Unions,
distribution costs from various locations etc. Demand for daily products and supply of milk vary
with the season. Further, demand and supply seasons run countertop each other making the
planning problem more complex. In making allocations to Unions, GCMMF are guided by two
main objectives – (I) maximize the network surplus, and (ii) maintaining equity among unions
for the surplus realized. In this regard, very often GCMMF is willing to sacrifice realizable
surplus and allocate products to “less efficient” Unions in order to achieve better balance in
surpluses accruing to the Unions.
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3.3 Production Function:
Explosion of the production technology and changes in technical field is going to bring out
revolution in the industry sector which eventually gives stand to study and favors the come
backing subject i.e. production and management.
Production and operation management is planning, organizing, staffing, directing and controlling
of all the production system those portion of organization that convert inputs into products and
services. In general production system takes raw material, personnel, machines, buildings and
other resources and produce products and services.
The core of production system is its conversion subsystem where in workers; raw materials are
used to convert inputs into products and services. This production department is at heart of the
firm, as it is able to produce low cost products and superior quality in timely manners.
Thus, there arises enormous need of giving due importance to this department as a whole and a
strong concrete base being foundation pillars of a manufacturing organization, if the intention is
to succeed domestically and globally.
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• Operating Analysis-
Amul‟s only source of raw material is Village Milk societies. Milk is brought from such village Milk
societies every morning and evening. This Milk is then sent to the dairy plant. In the dairy plant the
Milk is processed i.e. it is made free from germs.
· Milk Processing
The entire process of Milk can be divided into following steps:
Steps:
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3.4 Distribution Network
Most producers work with marketing intermediaries to bring their products to market. The
marketing intermediaries make up a marketing channel also called distribution channel. Distribution
channels are sets of interdependent organizations involved in the process of making a product or
service available for use or consumption.
The Head Office of GCMMF is located at Anand. The entire market is divided in 5 zones. The zonal
offices are located at Ahmedabad, Mumbai, New Delhi, Kolkata and Chennai. Moreover there are 49
Depots located across the country and GCMMF caters to 37 Export markets.
A zero level of channel also called a direct marketing channel consists of a manufacturer selling
directly to the final customers. A one level channel; contains one selling intermediary such as retailer
to the final customers. A two level channel two intermediaries are typically wholesaler and retailer. A
three level channel are typically wholesaler, retailer and jobber in between.
GCMMF has an excellent distribution. It is its distribution channel, which has made it so popular.
GCMMF‟s products like Milk and Milk products are perishable. It becomes that much important for
them to have a good distribution.
3.5 GROWTH AND CHALLENGES
From its inception with the formation of its first milk cooperative, AMUL network has sustained
unimpressive growth rate for more than 50 years culminating in the emergence of Indian dairy
industry as the world’s leading milk producer. However, it is unclear whether AMUL’s strategy
and practices that have worked well for long can maintain this growth trajectory in a changing
environment with globalization and increased competition. In this section we describe some of
AMUL’s initiatives and discuss briefly opportunities for growth and challenges that need to be
overcome. 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 bay two-pronged strategy – (a) growth in the number of member farmers by widening
its coverage with more village societies and increasing the membership in each society, and (b)
growth in precipitate milk supply from its members. This growth is achieved by increasing milk
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yields and by helping members raise their investments in cattle. It is worth noting that AMUL
has funded these support activities from its earnings (instead of repatriating them to the members
either as dividends or with a higher procurement price). It is expected that AMUL’s growth in
the immediate future will continue to rely on this strategy. However, in the new emerging
environment, several challenges have become apparent and AMUL network needs to evolve
proactive mechanisms to counter these threats. First, 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. Second, for a section of
its membership, dairy activity is 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. While this is a welcome development for the society as a whole, it is unclear whether
AMUL would be able to sustain it in the light of increased competition. By progressively
increasing the share of higher value products AMUL has been able to grow at a faster rate than
the growth in milk supply. AMUL has been rather cautious in implementing this strategy and has
always ensured retention of its customer base for liquid milk and low value products. With
slowdown in the growth of milk supply this strategy is likely to come under pressure and AMUL
will be forced to make some hard choices. More important, it is fairly clear that its low price,
cost efficient strategy may not be appropriate for the high value segment. Thus, AMUL may
have to adopt a dual strategy specific to its target markets, which in turn may lead to dilution in
focus. A part of AMUL’s growth has come from diversification into other agric-products such as
vegetable oils, instant foods etc. In some of these initiatives AMUL adapted its successful
cooperative organization structure, but the experience to date has been somewhat mixed. More
recently, the network is exploring conventional joint venture arrangements with suitable partners
for diversification into areas such as fast food and specialty chocolates. While it is too early to
assess the success of these ventures, challenges involved are becoming quite visible. For
example, diversification has resulted in expansion of the network with disparate elements, each
motivated by their own objectives. This in turn has led to a lack of focus within the network and
dilution in the commonality of purpose. These developments are likely to have serious
implications for coordination and control in the network. More important, shared vision and
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common goal was one of the main planks of AMUL’s growth during the past 50 years, and its
dilution is likely to adversely impact the network performance. Conclusion it is well recognized
that markets that are fragmented or producers that are too small to build competitive
infrastructures or those who are unable to manage technological changes in their operational
processes would benefit the most through a cooperative organization. Consequently large
number of cooperatives has taken roots amongst producers of food (especially those that are
perishable). However, there are interesting cooperative formations in India and China that are
starting to emerge amongst small producers in auto-components (especially those serving the
replacement markets), amongst small scale dyeing communities and the power-loom operators in
the textile industry. In these cases, the producers are coming together to develop a common
brand that is based on stringent quality certifications that would distinguish them from other
small producers and for usage of common property resources. The example of AMUL provides a
number of lessons for such organizations to compete successfully in the face of increasing
globalization and competition. More generally, the AMUL case presents a successful model for
operating in emerging economies characterized by either large under-developed suppliers and/or
markets with high potential. The largest segment of the market in emerging economies desires
value for money from its purchases. Development of such markets requires careful nurturing and
a long-term approach. Initial success in these markets is typically based on a low price strategy
(providing value for money) supported by cost leadership. This strategy helps to grow the market
exponentially by focusing on the largest segment of the population, the middle and the lower
middle class. In this context, it is important for global players to note that the value proposition
perceived by consumers is influenced to a large extent by the state of markets and the economy
and cultural factors. Development of an appropriate value proposition suitable for large mass
markets in India requires thorough understanding of the environment and a focus on costs. This
in turn, requires designing the organization structure and practices in a manner that it delivers
continued market share through cost leadership. AMUL is a good example of this strategy. Firms
that are able to develop control processes through better use of operational practices and supply
chain coordination are the ones that are able to serve large volumes and enjoy top line growth in
revenues. Development of suppliers likewise requires nurturing with a long-term perspective. It
is interesting to note that this was achieved by AMUL through a process of education and social
development activities - activities that are not usually considered to be standard business
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practices. This type of ‘out of the box’ vision is essential for developing innovative mechanism
in new, unfamiliar environments where building of relationship with consumers goes much
beyond marketing messages and useful product offerings. Environments with underdeveloped
markets and suppliers (as in the case of AMUL) add one more dimension of complexity relating
to the relative pace of growth of these two areas. Through its pricing strategy, AMUL has been
able balance the growth in markets and suppliers and has achieved some degree of
synchronization. Otherwise, gaps between demand and supply would require complementary
strategies. The AMUL example is also instructive for multinational companies and others
contemplating operations in emerging markets by taking advantage of the local small and
medium enterprises. In such cases large businesses are built by forging linkages with these
enterprises thereby changing the boundaries of the entering firm. Such a partnership reduces the
operational risk while providing a credible source of understanding the behavior of the consumer
through the experience of partners. It also provides operational flexibility and makes the network
responsive to changes within and outside. To be effective it is important that decision-making be
decentralized tithe extent possible, with appropriate coordination mechanisms to ensure
consistency in the system. The leadership of such organizations has always been larger than life
and has been seen to playa important role in the building of the society even today. Firms that is
able to overcome the hesitation of deploying IT for achieving operational excellence in emerging
economies gain considerably from its network effect. Most firms either automate decision
making to such an extent that it eliminates local initiatives (as many SAP implementations in
India are finding out that it has added more rigidity in decision making as opposed to using it in
conjunction with a more flexible “telephone” mode of communicating) or use manual systems
that lead to inaccurate data based decision-making. What works best is IT for information
sharing and evaluating complex tradeoffs while making decisions locally. Yet another strong
trend in these economies is to use IT for managing the interface between the market and the
supplier of goods and services. In this article, using the example of AMUL, we have presented a
robust business model for operating in large emerging economies characterized by
underdeveloped markets, infrastructure and suppliers. Cooperative network with interlocking
arrangement as in GCMMF is one example of success in managing such complex supply chain.
Of course, the long-term challenges in such cases into bring more members into the network and
increase their capabilities
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3.6 CERTIFICATIONS
We - The motivated and devoted work-force of AMUL- are committed to produce wholesome
and safe foods of excellent quality to remain market leader through deployment of quality
management systems, state-of-art-technology, and innovation and eco-friendly operations to
achieve delightment of customers and betterment of milk producers.
3.7 QUALITY MANAGEMENT SYSTEM INITIATIVES
The initiation of Total Quality Management (TQM) way back in 1994 was to work with the well-
known quality management initiatives which have proven to be effective elsewhere to create a
culture of transparency, openness and leadership in the organization. Realizing that with
emerging competition, doing business would become more exciting yet extremely competitive
which would require at time not only a whole set of new skills and competencies but quick
adaptability to change without much stress or turbulence. As a very unique measure Amul
extended all the TQM initiatives to its business partners whether it was the farmer producer in
the village or a wholesale distributor in a metro town or it’s most sophisticated production unit.
From the strength of Total Quality Management initiative Amul went on to implement Quality
Management System of International Standard. Amul has been the first dairy in India to get
accredited with certification of ISO 2200:2005 & ISO 9001 for its operations and plants. Further
Amul has set an example that village Dairy Co-operative Societies could also achieve this
milestone as these societies are accredited with ISO 9001:2000 – a remarkable achievement in
the history of India
Amul Plants are certified by Agricultural and Processed Food Exports Development Authority
(APEDA) for export of dairy products to international markets. Gujarat Co-operative Milk
Marketing Federation (GCMMF) which markets and exports dairy products under the brand of
“Amul” has bagged award 11th time for excellent performance in exports of dairy products from
APEDA - 2008-09, IMC Ramakrishna Bajaj National Quality Award – 2003, "Best Best of All"
Rajiv Gandhi National Quality Award - 1999, The International Dairy Federation Marketing
Award (2007) for Amul pro-biotic ice-cream launch.
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The plants are also periodically audited for Hygiene and Quality Management Systems
by various agencies like Export Inspection Agency (EIA), Armed Forces, various Indian
Statutory Bodies, International statutory Bodies and Quality Management Agencies.
Amul Dairy has been recipient of countless awards for its outstanding efforts in processing and
providing quality products to consumers thereby enhanced income in to the hands of dairy
farmers. Some of these awards are the Best Productivity Performance Awards for three
consecutive years from 1985 and Sustained productivity Performance Award in 1988-89 from
National Productivity Council, Government of India, Indian Merchants’ Chamber Award - for
Outstanding Performance in the field of R&D of Food Processing Industries Based on
Agricultural Products -1988, again Best Productivity Performance Awards 1994-99 from
National productivity Council, G. D. Birla International Award - Outstanding Contribution to
Rural Upliftment , Sahkari Vikas Ratna Award – awarded on the occasion of Indian Co-
operative Centenary Celebration for the outstanding contributions in the field of Dairy Co-
operative movement in Asia – 2005, National Energy Conservation Award – 2009 from Ministry
of Power, Government of India.
We at AMUL are committed to produce safe and wholesome food to continually remain as the
market leader by providing food products delighting customer expectations and bestow safety.
We strive to achieve this by, Improving raw milk quality, Applying innovative technology for
manufacturing food products, Employing quality and food safety management practices to,
manufacture food products in a eco-friendly environment, Meeting applicable statutory and
regulatory requirements, Effectively communicate and constantly improve professional skills of
employees emphasizing continuous improvement of quality and food safety issues. Amul has
implemented the Quality Management System of international standard to offer ‘invaluable’
products to national and international customers. Its plants are certified for ISO 22000:2005 for
excellence in food safety management system.
Amul’s primary village cooperative societies are the first ‘grass root level’ organizations
in the rural sector to achieve ISO 9001 : 2000 certification in India, perhaps in the world. This
has been possible because of Amul’s continued commitment to offer consumers excellent
products from the house of Amul.
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The focus on health and hygiene, housekeeping, village chilling units, management of village co-
operative societies, rapid transportation of raw milk to dairy plant, accelerated milk handling at
the dairy reception dock has retained the freshness of milk being received at dairy plant. To
sustain and rebuild on this effort, training programs are organized for all the stakeholder groups
involved in the ‘milk procurement chain’, namely, milk producers, village society personnel and
dairy plant personnel. Laboratories are equipped with state of the art equipment and well trained
professionals.
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CHAPTER 4
MARKETS
4.1 MARKETING SEGMENTS
Market segmentation is a process of identifying groups of buyers with different
desires or requirements. - PHILIP KOTHLER
Marketing segmentation is a process in marketing of grouping a market( i.e.
customers) into smaller sub groups. these markets are termed as niche market or
specialty markets.
The purpose of segmentation for Amul is to identify and target prime customers
group
(e.g - 20% that accounts for 80% of your sales ) so that they get max returns from a LTD
marketing budget.
Different Marketing segments of Amul as per major customers.
KIDS:- Ice cream , chocolate, milk, sweets, Safal fruit drinks.
HOUSE WIVES:- Dhara edible oil, milk, Safal tomato ketchup mix fruit jams, Amul
cheese, Amul spray.
CALORIE CONSCIOUS:- Amul lite, Dhara health, Sagar skimmed milk powder.
YOUTHS:- sweets, ice-cream, milk, cheese, chocolates.
4.2 PRODUCTS OF AMUL
MAIN PRODUCTS
Bread spread
pure ghee
milk powder
sweetened condensed milk
sweets
fresh milk
curd products
Amul ice cream
chocolates and confectionary
brown beverage
milk drinks
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health beverage
4.3 PRODUCT LINE OF AMUL
Bread spreads Pure ghee
Amul butter Amul pure ghee
Amul lite Sagar pure
Low fat bread Ghee
Spread Amul cow ghee
Amul cooking
Bread spreads Pure ghee
Amul butter Amul pure ghee
Amul lite Sagar pure
Low fat bread Ghee
Spread Amul cow ghee
Amul cooking
Category Market share Market position
Butter 85% 1
Milk powder 40% 1
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4.5 MARKET SHARE
Product wise market share
Product wise market share of Amul company is categorized above in the table which
has product wise category and its markt share and percentage
Amul butter is sold at very high rate in India mainly in north side of India
consumption of amul butter is greater because the parathas and various dishes are
served with butter, its market share is greatest in india
milk powder is also consider as the substitute of amul where the rate of the share is
slight less than butter.
icecream is loved by kids and adults as well so the consumption is higher and is sold
at great rate everywhere.
chocolate drinks and chocolate is loved and consumed at very high rate.
Region wise market share
The gujrat cooperative milk marketing federation (GCMMF) which owns the Amul
brand is eyeing a larger slice in rapidly growing package milk market of national
capital region.
Amul has setup its largest dairy with a processing capacity of 30 lakhs liter a day at
Dehradun at Haryana to serve the NCR market.
Delhi and NCR are largest milk market in country where Amul has double its milk
sales to around 24 LLPD(lakh liters per day) in past 3 years.
Amul entered Delhi market in 2003 with sales of 1 lakh liters a day. Delhi accounts
for 27% of Amul dairy cell of 90 lakh liters across country.
Cheese 50% 1
Icecream 24.75% 2
Sweets 50% 1
Chocolate drink 90% 1
Chocolate 10% 3
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Amul will be investing another 250 crores in 2 dairy of 10 LLPD in next 2,3 years.
Amul is also increasing its procurement through farmer co in Haryana Rajesthan and
Uttarpradesh, presently Amul procures about 12 lakh liters a day from farmers in 3
northern state.
4.6 ADVERSTISING BY AMUL
Amul has two agencies that look after its entire range of products namely FCB Ulka and Da
cunha.
FCB Ulka looks after a broad range of products namely, Amul Lite Breadspread, Amul
Shrikhand, Amul Chocolates, Amul Paneer, Amul SnowCap Softy Mix Ice cream, Amul/Sagar
Ghee, Amul Infant Milk Formula 1 & 2, Sagar Tea and Coffee whitener,Amul Spray Infant Milk
Food, Amul Mithaee, Amul Gulab Jamun, Amulya Dairy Whitener, Mithaimate Sweetened
Condensed Milk, Amul Ice cream, Sagar Skimmed Milk Powder and Amul Whole Milk Powder.
Da Cunha looks after the Amul butter. Da Cunha also prepares the very popular Amul butter
billboard campaigns, which we see at various locations. Over and above the Amul butter, Da
Cunha also looks after the Amul Cheese, Cheese spread, Gouda Cheese, Emmental Cheese,
Masti Dahi and Butter, Amul Slim-n-Trim, Amul Taaza and Amul Gold (all different brands of
Milk), Amul Fresh Cream, Amul Chocolate Milk, Amul Fresh Milk and Nutramul.
FCB Ulka also looks after the corporate campaign.
AMUL SLOGANS
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CHAPTER 6
GOVERNANCE
6.1 PHILOSOPHY
Matching demand and supply.
Vast & strong supply chain network.
Developing demand.
Introducing higher value products.
Umbrella branding strategy.
e-initiative strategy.
6.2 ACTION TAKEN BY SEBI IF ANY:-
The Amul Company is always loyal to their customers, they never involved in any
scam or controversy, and also all their transactions are clean and up to date.
So SEBI never took any action towards them.
INVOLVEMENT IN SCAMS
The Amul India company had never involved in any scam.
6.3 INSIDER TRADING ISSUES:-
This post regarding to facebook
On 10th October, NehaTomar, a regular Amul Gold Milk consumer, posted the pictures of a
foam-like substance that came out of the tumbler when her mother-in-law tried to make cheese
out of the spoilt milk. She appealed to everyone not to consume the "deadly milk" and that strict,
stringent action be taken against Amul.
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6.4 CRISIL RATING
Rating Rationale
Gujarat Co-operative Milk Marketing Federation Ltd
Total Bank Loan Facilities Rated Rs.5689 Million
Long Term Rating CRISIL:- AAA/Stable(Reaffirmed)
Short Term Rating CRISIL:- A1+(Reaffirmed)
6.5 AWARDS
Amul a co-operative society and its co-operation has led many different awards in its favour.
Magsaysay award for community leadership presented in manila.
Philippines to Shri Tribhuvandas Patel, Shri D N Khurody and Shri V. Kurien
1964: “Padmabhusan” award given to Shri T.K. Patel 1965: “Padmshri” awarded was given
to V. Kurien, general manager, by the president of India.
1987: “Best Productivity” awarded by national productivity council for the year 1985-86
awarded to Amul dairy.
1988: “Best Productivity” awarded for the second successive year 1986-87 by the president
of India, Mr. R. Venkatrao to kaira union.
1993: “ICA” Memenoto towards genuine and self-sustaining cooperative worldwide ICA
regional office for Asia and pacific, New Delhi, 1996.
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1999: G.B.Birla award. Moreover the Amul union has achieved the prestigious ISO 9001-
2000 and HACCP Certificate and effects are got to obtain ISO 14000.
1999: Best of All" Rajiv Gandhi National Quality Award for the year,
2003: The Gujarat Co-operative Milk Marketing Federation Ltd. has emerged as the top
scorer in the service category of the prestigious IMC Ramkrishna Bajaj National Quality
Award.
2006-07: GCMMF has bagged award for excellent performance in exports of dairy products
from
Agricultural and Processed Food Exports Development Authority (APEDA).
2007: Amul Pro-Biotic Ice-cream Gets No. 1 Award At World Dairy Summit.
2008: Amul Pro-Biotic Ice-cream Gets No. 1 Award At World Dairy Summit.
2009: Amul Bags Srishti G-cube Award For Good Green Governance.
2010: GCMMF receives Srishti's G-Cube Award.
Dr. V.Kurien honoured with Life Time Achievement Award.
Amul receives Green Globe Foundation Award.
2011-12: ET-Corporate Citizen Award of the Year 2010-11 to GCMMF 2013: GCMMF wins
the SAP Award for Customer Excellence (SAPACE) 2013 under the category of "Best Run
Award in Finance"
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CHAPTER 7
CONCLUSION
THE SECRET OF AMUL’S SUCCESS
The system succeeded mainly because it provides an assured market at remunerative prices for
producers' milk besides acting as a channel to market the production enhancement package.
What's more, it does not disturb the agro-system of the farmers. It also enables the consumer an
access to high quality milk and milk products. Contrary to the traditional system, when the profit
of the business was cornered by the middlemen, the system ensured that the profit goes to the
participants for their socio-economic upliftment and common good.
Looking back on the path traversed by Amul, the following features make it a pattern and model
for emulation elsewhere.
Amul has been able to:
Produce an appropriate blend of the policy makers farmers board of management and the
professionals: each group appreciating its rotes and limitations.
Bring at the command of the rural Milk producers the best of the technology and harness its fruit
for betterment.
Provide a support system to the Milk producers without disturbing their agro-economic systems.
Plough back the profits, by prudent use of men, material and machines, in the rural sector for the
common good and betterment of the member producers. Even though, growing with time and on
scale, it has remained with the smallest producer members. In that sense, Amul is an example par
excellence, of an
intervention for rural change.
The Union looks after policy formulation, processing and marketing of Milk, provision of
technical inputs to enhance Milk yield of animals, the artificial insemination service, veterinary
care, better feeds and the like - all through the village societies. Basically the union and
cooperation of people brought Amul into fame i.e. AMUL (ANAND MILK UNION LIMITED),
a name which suggest THE TASTE OF INDIA.
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Amul (Anand Milk union ltd.) is based on four hands, which are coordinated with each other.
The actual meaning of this symbol is co-ordination of four hands of different people by whom
this union is at the top position in Asia.
First hand is of farmers, without whom the organization would not have existed.
Second hand is of processors, who process the row material (Milk) into finished goods.
Third hand is of marketer, without whom the product would have not reached the customers.
Fourth hand is of customers, without whom the products would have not carried on.
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CHAPTER 8
BIBLIOGRPAPHY
Books:
i Marketing Management (12th Edition) – Philip Kotlar
ii. Research Methodology – C. R. Kothari
Websites:
i. www.google.co.in
ii. www.wikipedia.com
iii. www.amul.com.
iv. www.marketresearch.com
