amul-the taste of india
TRANSCRIPT
AMUL- THE TASTE OF INDIA
INTRODUCTION:
Since the turn of 19th century, Cooperatives have existed as dominant forms of organization in the dairy industry around the world. Sometimes they have played the role of developing infant industry while at other times they have been used to strengthen weak production bases in an environment where market failures tend to be higher for marginal producers.
In some other cases, a network of small producers have organized themselves to better market their products. Management of these cooperatives has also led to some interesting managerial insights for managers in emerging as well as developed economies.
Large emerging economies, e.g., India and China, have complexities that range from development of markets (where the largest segment of population is the one which has low purchasing power) to integration of low cost suppliers who are predominantly very small. For firms that aspire to conduct substantial business in such markets, such complexities have to be recognized and then overcome. The challenge is to understand the linkages between markets and the society. This would also require development of a new business model that helps a firm grow in such environments.
The Kaira District Milk Cooperative Union or AMUL in India is an example of how to develop a network of firms in order to overcome the complexities of a large yet fragmented market like those in emerging economies by creating value for suppliers as well as the customers. AMUL has led the milk dairy revolution in India that has now emerged as one of the largest milk producers in the world AMUL means "priceless" in Sanskrit. The brand name "Amul," from the Sanskrit word "Amoolya" which means “priceless” in various Indian languages. Some cite the origin as an acronym to (Anand Milk Union Limited). Amul products have been in use in millions of homes since 1946. Amul Butter, Amul Milk Powder, Amul Ghee, Amulspray, Amul Cheese, Amul Chocolates, Amul Shrikhand, Amul Ice cream, Nutramul, Amul Milk and Amulya have made Amul a leading food brand in India. (Turnover: Rs. 37.74 billion in 2005-06). 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 techniques of a farmers organisation. And of a proven model for dairy development in India.
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AMUL- THE TASTE OF INDIA
Since its inception in 1946, the movement called Amul has represented and championed the interests and aspirations of millions of voiceless farmers. It has brought stability to their household incomes with something to fall back upon when income from cultivation and other sources fail to meet expectations. It has given economic independence to rural women – thus empowering them to feed and educate her children, including the girl child.
Further, all these have been done at a minimal level of investment. The difference that two milch buffaloes or cows can bring to the livelihoods of an impoverished rural household – given an assured market and fair returns for the produce – is probably more significant than any other rural employment programme.
Amul has been able to achieve this. Amul also provides wholesome nutrition at value for money prices to urban consumers who would otherwise only know either unscrupulous purveyors of cheap products of suspect quality or avaricious multinationals hell bent upon extracting every possible rupee of rent from the food economy of the country.
We must realize that today, we are the flag bearers of a uniquely successful experiment – of a movement that not only provides stability to marginal farm incomes, but also nurtures and lends security to the socio-economic future of the nation. In this light, it becomes our sacred duty to nurture and take forward this movement. This can be achieved only when we display unbroken solidarity and cooperate among ourselves to further this noble cause.
We must never forget that we have actively taken this onerous responsibility upon our shoulders. It is not something that has been thrust upon us. This makes it all the more important for us to show that together, we can do justice to this great movement inspired by Sardar Vallabhbhai Patel and shaped by Sri. Tribhuvandas Patel and Dr. Verghese Kurien.
However, we must be on constant guard against parochial interests that may try to pull us down. Our efforts in this regard will be surely rewarded if we remember that the cause we are serving is much loftier than any short term interest that a feeble mind may conjure up.
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AMUL- THE TASTE OF INDIA
HISTORY:
The Kaira District Cooperative Milk Producers’ Union Limited was established on December 14, 1946 as a response to exploitation of marginal milk producers in the city of Anand (in Kaira district of the western state of Gujarat in India) by traders or agents of existing dairies. Producers had to travel long distances to deliver milk to the only dairy, the Polson Dairy in Anand – often milk went sour, especially in the summer season, as producers had to physically carry milk in individual containers. These agents decided the prices and the off-take from the farmers by the season.
Milk is a commodity that has to be collected twice a day from each cow/buffalo. In winter, the producer was either left with surplus unsold milk or had to sell it at very low prices.
Moreover, the government at that time had given monopoly rights to Polson Dairy (around that time Polson was the most well known butter brand in the country) to collect milk from Anand and supply to Bombay city in turn (about 400 kilometers away). India ranked nowhere amongst milk producing countries in the world in 1946.
The producers of Kaira district took advice of the nationalist leaders, Sardar Vallabhbhai Patel (who later became the first Home Minister of free India) and Morarji Desai (who later become the Prime Minister of India). They advised the farmers to form a cooperative and supply directly to the Bombay Milk Scheme instead of selling it to Polson (who did the same but gave low prices to the producers).
Thus the Kaira District Cooperative was established to collect and process milk in the district of Kaira. Milk collection was also decentralized, as most producers were marginal farmers who would deliver 1-2 litres of milk per day. Village level cooperatives were established to organize the marginal milk producers in each of these villages. The first modern dairy of the Kaira Union was established at Anand (which popularly came to be known as AMUL dairy after its brand name).
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AMUL- THE TASTE OF INDIA
Organization structure:
It all started in December 1946 with a group of farmers keen to free themselves from intermediaries, gain access to markets and thereby ensure maximum returns for their efforts. Based in the village of Anand, the Kaira District Milk Cooperative Union (better known as Amul) expanded exponentially. It joined hands with other milk cooperatives, and the Gujarat network now covers 2.12 million farmers, 10,411 village level milk collection centers and fourteen district level plants (unions) under the overall supervision of GCMMF.
There are similar federations in other states. Right from the beginning, there was recognition that this initiative would directly benefit and transform small farmers and contribute to the development of society. Markets, then and even today are primitive and poor in infrastructure.
Amul and GCMMF acknowledged that development and growth could not be left to market forces and that proactive intervention was required. Two key requirements were identified.
The first, that sustained growth for the long term would depend on matching supply and demand. It would need heavy investment in the simultaneous development of suppliers and consumers. Second, that effective management of the network and commercial viability would require professional managers and technocrats.
To implement their vision while retaining their focus on farmers, a hierarchical network of cooperatives was developed, which today forms the robust supply chain behind GCMMF’s endeavors? The vast and complex supply chain stretches from small suppliers to large fragmented markets.
Management of this network is made more complex by the fact that GCMMF is directly responsible only for a small part of the chain, with a number of third party players (distributors, retailers and logistics support providers) playing large roles.
Managing this supply chain efficiently is critical as GCMMF's competitive position is driven by low consumer prices supported by a low cost system.
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AMUL- THE TASTE OF INDIA
DISTRIBUTION NETWORK:
Amul products are available in over 500,000 retail outlets across India through its network of over 3,500 distributors. There are 47 depots with dry and cold warehouses to buffer inventory of the entire range of products.Amul’s transacts on an advance demand draft basis from its wholesale dealers instead of the cheque system adopted by other major FMCG companies. This practice is consistent with Amul’s philosophy of maintaining cash transactions throughout the supply chain and it also minimizes dumping.
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 Distribution expansion in emerging markets of Small Towns continued to be a major initiative of Amul. Almost 500 new Distributors were inducted as Channel partners – mostly in Small Towns.
At the same time, to cope up with the fast emergence of Organized Retail in India, suitable Distribution model was developed during the year for servicing Modern Format Stores. Along with the changes in ‘consumption occasions’, distribution was expanded to Highways, Railways, Airports, Bus stations, Schools, Colleges, Industrial Canteens etc.
Over recent years, Amul has successfully introduced new product lines. This year, in order to leverage their distribution network strengths, to optimize market supervision expenditures, to achieve increasing efficiency while keeping the distribution infrastructure lean, focused and productive, Amul amalgamated its different distribution networks. Today, they operate an efficient distribution infrastructure consisting of 46 sales offices, catering to 3,000 distributors and five lakh retailers. Almost every Amul stockist has visited Anand to participate in a unique programme called 'Amul Yatra'. During this programme, stockists are exposed to the Amul’s Philosophy, the culture of Cooperation, as well as operational Systems and Processes. Amul also invites distributors and salesmen from all over the country to Anand for a training program focused on the cooperative’s philosophy and developing their selling skills.
The Amul Yatra Program ensures that their Distributors visit Anand, thereby, imbibing an appreciation of cooperative philosophy and culture as well as operational systems and processes. Top Retailers of the Country also participate in Amul Yatra. So far, 2779 Distributors, 1654 Distributors’ salesmen and 1490 top Retailers have participated in Amul Yatra.
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AMUL- THE TASTE OF INDIA
Operations & Supply Chain Management:
Every day Amul collects 447,000 litres of milk from 2.12 million farmers (many illiterate), converts the milk into branded, packaged products, and delivers goods worth Rs 6 crore (Rs 60 million) to over 500,000 retail outlets across the country. Its supply chain is easily one of the most complicated in the world. How do managers at Amul prevent the milk from souring?
GCMMF has an extensive sales and distribution system and a cold chain network starting from the milk producer and ending at the eventual consumer It had a dealer network of 3600 dealers and 400,000 retailers, one of the largest such networks in India. A cold chain had been established that linked all these dealers and retailers. The cold chain consisted of:
A set of chillers near each village that could ensure chilling of milk Quick transportation to the district Union facilities where the milk could be
further chilled and dispatched to the consumers or to the processing units for conversion into milk products; Chilled trucks which could transport the milk products such as butter and cheese in
refrigerated condition from the factories; Local chilling of milk to ensure its quick distribution to the customers through a
network of trucks in many cities so that most consumers could have their milk sachets by 6 A.M. if not earlier;
Deep freezers and refrigeration equipment in the dealers’ premises to keep the products cold and prevent their deterioration; and
Facilities in super markets and even larger retail stores to keep the products fresh.
The strategy, design and practices in AMUL’s network are strongly driven by the 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 to the evolution of an efficient supply chain.
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AMUL- THE TASTE OF INDIA
Coordination for Competitiveness:
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 any one 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 to the 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 making is 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 those VS 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 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.
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AMUL- THE TASTE OF INDIA
Coordination Agency: Unique Role of the Amul
In addition to being the marketing and distribution arm of Amul, GCMMF plays the role of a 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 or as value added products and to ensure that milk is made available to an increasingly large section 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 counter to each other making the planning problem more complex. In making allocations to Unions, GCMMF is guided by two main objectives – (i) maximizing 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.
Managing the supply chain:
Even though the cooperative was formed to bring together farmers, it was recognized that professional managers and technocrats would be required to manage the network effectively and make it commercially viable.
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Coordination:
Given the large number of organizations and entities in the supply chain and decentralized responsibility for various activities, effective coordination is critical for efficiency and cost control. GCMMF and the unions play a major role in this process and jointly achieve the desired degree of control. Buy-in from the unions is assured as the plans are approved by GCMMF's board. The board is drawn from the heads of all the unions, and the boards of the unions comprise of farmers elected through village societies, thereby creating a situation of interlocking control.
The federation handles the distribution of end products and coordination with retailers and the dealers. The unions coordinate the supply side activities. These include monitoring milk collection contractors, the supply of animal feed and other supplies, provision of veterinary services, and educational activities.
Managing third party service providers:
From the beginning, it was recognized that the unions' core activity lay in milk processing and the production of dairy products. Accordingly, marketing efforts (including brand development) were assumed by GCMMF. All other activities were entrusted to third parties. These include logistics of milk collection, distribution of dairy products, sale of products through dealers and retail stores, provision of animal feed, and veterinary services.
It is worth noting that a number of these third parties are not in the organized sector, and many are not professionally managed with little regard for quality and service. This is a particularly critical issue in the logistics and transport of a perishable commodity where there are already weaknesses in the basic infrastructure.
GCMMF had excellent relationships with what could be called super markets in India (actually these were just large departmental stores) which stocked their products, especially cheese, butter, milk powder, sweets and, in some cases, milk. Walk in to any Amul or Gujarat Cooperative Milk Marketing Federation (GCMMF) office, and you may or may not see a photograph of Mahatma Gandhi, but you will certainly see one particular photograph.
It shows a long line of Gujarati women waiting patiently for a union truck to come and collect the milk they have brought in shining brass matkas.The picture is always prominently displayed. The message is clear: never forget your primary customer. If you don't, success is certain. The proof? A unique, Rs 2,200 crore (Rs 22 billion) enterprise.
PRODUCTION TECHNIQUES:
Service to customers required the following: better and newer “products”, “processes” that would deliver the low cost advantage to the network and “practices” that would ensure high productivity and delivery of the right product at the right time. Thus technology or knowledge that was embodied in products, processes, and practices became an important factor in delivering effectiveness to the network of cooperatives. One distinguishing feature of AMUL (in comparison with other similar cooperatives globally) is the large variety in their product mix. Producing them not only requires diverse skills but also knowledge of different types of processes. AMUL dairy led the way in developing many of these products and establishing the processes for other member Unions. Equally impressive are the achievements on process technology. While several continuous innovations to equipment and processes have been done at AMUL, the most significant one has been the development of processes for using buffalo milk to produce a variety of end products. Gujarat (and most of India) is a buffalo predominant area. As more farmers joined the cooperatives, the need to develop a mechanism for storage of increasing quantities of milk became intense. Moreover, the cooperative was established on the promise that it would buy any quantity of milk that a member farmer wanted to sell. The need to store milk in powder form increases as excess milk quantities in winter seasons could then be used in lean summer seasons. Moreover, demand for liquid milk was not growing along with growth in milk production. No technology, however, existed worldwide to produce powder from buffalo milk.
Engineers at AMUL successfully developed a commercially viable process for the same – first time in the history of global diary industry. Subsequently, it also developed a process for making baby food out of this milk powder. It has also developed a unique process for making good quality cheese out of buffalo milk thereby converting a perceived liability into a source of comparative advantage the task was done through process technology research. Most of its plants are state of art and automated. Similar efforts in the area of “embryo transfer technology” have helped create a high yield breed of cattle in the country. AMUL’s innovations in the areas of energy conservation and recovery have also contributed to reduction in cost of its operations. AMUL also indigenously developed a low cost process for providing long shelf life to many of its perishable products. One of the key strengths of GCMMF & AMUL can surely be characterized as development of processes that allow them to implement these practices across a large number of members.
QUALITY INTIATIVES:
A key source of competitive advantage has been the enterprise's ability to continuously implement best practices across all elements of the network: the federation, the unions, the village societies and the distribution channel. Looking at the emerging trends of liberalization and impact of WTO, GCMMF looked at all its operations, strengths and weaknesses as well as opportunities available, and came to the conclusion that it had to become more customer centered (rather than merely being farmer or supplier centered, as was the case hitherto). This required paying close attention to the customer needs and quality. GCMMF realized that it was not enough that GCMMF itself was wedded to these ideas; the entire supply chain had to conform. Hence it launched a “Total Quality Management” or TQM to ensure the high quality of the products from the starting point (the village farmer who supplied milk) right through the value chain until it reached the consumer. This meant the need for the involvement of farmers, transporters, factory personnel, wholesalers and retailers, each of whom had a role to play. For example, if the retailer did not take care with his refrigeration, the product could deteriorate, leading to a bad name for GCMMF and for its brand Amul.
The GCMMF proactively embarked upon Total Quality Management as change management initiatives to strengthen all its functional processes to effectively combat emerging competition. It undertook successfully a number of TQM initiatives like Kaizen, Housekeeping, Small Group Activities, Hoshin Kanri (Policy Deployment) across the organization.
Amul realized doing business would become more exciting yet extremely competitive which would require at times not only a whole set of new skills and competencies but quick adaptability to change without much stress or turbulence. The initiation of TQM 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. In developing these practices, Amul and its federations and union’s have adapted successful models from around the world. It could be the implementation of small group activities or quality circles at the federation. Or a TQM program at the unions. Or housekeeping and good accounting practices at the village society level.
Realizing that unless the TQM initiatives are accepted by all the business partners, the same would remain ineffective. 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. GCMMF, the apex marketing body of well known Amul, Sagar and Dhara brands of products is a Cooperative Federation of more than 2 million milk producers of Gujarat. Pioneered by Dr. Verghese Kurien, the father of white revolution, GCMMF is today nation's largest food company with an annual turnover exceeding Rs 3700 Crores.
More important, the network has been able to regularly roll out improvement programs across to a large number of members and the implementation rate is consistently high. During the last six years, GCMMF has carried out a comprehensive change process to ensure we are always one step ahead. What began as a TQM
movement gradually became a movement for management of change in the entire value chain. GCMMF’s Management of Change (MOC) initiative was launched in six areas: cleanliness of the dairy co-operative societies, planning and budgeting of the dairy co-operative society, artificial insemination service, and quality testing and milk measurement by the dairy co-operatives, animal feeding and management practices and self leadership development.
They have firmly established Hoshin Kanri or Policy Deployment Workshops as a medium of communicating our plans in a way that involves all their employees. In their Mother Dairy Gandhinagar plant, Hoshin Kanri has helped ensure that each employee is aware of the Amul's short, medium and long term plans. Many of their Unions have introduced Apex Steering Council (ASC) meetings in which all departmental and divisional heads review, discuss and address key organizational issues. At this forum, business progress and TQM-related approaches like kaizen and Small Group Activity are shared. For example, every Friday, without fail, between 10.00 a.m. and 11.00 a.m., all employees of GCMMF meet at the closest office, be it a department or a branch or a depot to discuss their various quality concerns. Each meeting has its pre-set format in terms of Purpose, Agenda and Limit (PAL) with a process check at the end to record how the meeting was conducted. Similar processes are in place at the village societies, the unions and even at the wholesaler and C&F agent levels as well.
For their distributors, the TQM movement is evident in Amul Quality Circles. They have trained their entire field sales force in the required Strategic Facilitation skills equipping them with a sharper business perspective, which takes into account the complexities of changing market dynamics. In order to take stock of the way Amul function within a broader industry perspective, they invite an eminent business school professor to audit and benchmark their operations. This Performance Audit will help them to know where they stand in the industry and to take any necessary corrective steps, making them more competitive in the FMCG environment.
One dimension of the Performance Audit involves feedback from all their employees on their current work situation, measuring areas of pain and satisfaction. This Organizational Climate Survey is the second dimension conducted in five years and allows comparison of the scores. Based on the findings - which is shared in the Hoshin Kanri meetings - areas with low scores are identified. Using Small Group Activity principles, teams are formed to develop creative solutions to tackle these problems within a given time frame.
In the year 2006 Amul called the first All-India meeting of House Keeping coordinators to review housekeeping progress across the country. Following the Japanese '5S' principle, the movement had been initiated in 1995 to improve the quality of the work place. In this meeting it was decided to take housekeeping to their distributors, leading to higher hygiene standards at all GCMMF distributor warehouses.
Employees of GCMMF have done more than 1.60 lakhs Kaizen since May, 1995 which has impacted in bringing in a culture of continuous improvement. The housekeeping initiatives have helped keeping the offices/warehouses neat, clean and more productive, be it is the Office premises or the godowns or even Computers. More
than 150 SGAs (Small Group Activity) have been carried out in cross functional groups to address the problem and pain areas of the organization, be it an issue of sales, marketing, HR or IT. The organization has implemented a customized ERP for seamless integration of its 40 odd sales offices from Jammu to Port-Blair and Head Office. All its wholesale dealers are computerized and GCMMF is moving on a B2B model for integration interface with its dealers be it for placing order for buying its products, sharing information or for tracking logistic of dispatch/receipt of goods.
One of the unique initiatives has been in terms of involvement of its wholesale dealers in a common platform to address issues of market/customers. All the wholesale dealers from across the country have visited Anand in a unique programme called "AMUL YATRA". In the next phase, the organization has already started inviting the salesmen of these wholesale dealers for this programme. It also intends to invite the top retailers of various cities/towns to Anand. The purpose is not as much to orient them to GCMMF's business plans, but to inculcate a super-ordinate goal in their heart that when they are associated with AMUL, they are working for a modest milk producer in the rural hinterland of the country and that is what true progress is about. GCMMF has more than 200 Amul Quality Circles in the country where all the above wholesale Dealers meet in group on every third Saturday of the month to discuss their business, quality initiatives and also pain areas. This has impacted tremendously not only in communication but also in improving the transparency in the organization.
GCMMF has also embarked upon for last 4 years, 'Hoshin Kanri' a ployment initiative where more than 100 Officers/Heads participate twice in a year to review its business goals/processes and implement new initiatives. These are further cascaded to the wholesale dealers in different territories in a two day exercise called Vision Mission Strategy (VMS) Workshop. These initiatives have resulted common understanding of goals, eliminating communication barrier. The initiative of TQM six years back has made the organization efficient whether it be in launch of brands, or in implementing ERP's or expanding its distribution network. More striking feature of GCMMF's TQM experience is the integration of its business linkages at the village level to the forward linkage through its sales offices/wholesale dealers in the market.
Kaizens at the unions has helped improve the quality of milk in terms of acidity and sour milk. (Undertaken by multi-disciplined teams, Kaizens are highly focused projects, reliant on a structured approach based on data gathering and analysis.) For example, Sabar Union's records show a reduction from 2.0% to 0.5% in the amount of sour milk/curd received at the union.
Examples of benefits from recent initiatives include reduction in transportation time from the depots to the wholesale dealers, improvement in ROI of wholesale dealers, implementation of Zero Stock Out through improved availability of products at depots and also the implementation of Just-in-Time in finance to reduce the float.
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, wholesalers and retailers.
Key elements of this TQM movement is
Friday Departmental Meetings: Each Friday, at a prescribed time, every one in the network (from the farmers to the carry & forwarding agents) joins their respective departmental meeting to discuss quality initiatives and share policy related information.
Training for Transformational Leadership so that individuals are able to control their thoughts, feelings and behavior and take more responsibility in one’s life and surrounding environment.
Application of Hoshin Kanri principles to bring about a bottom-up setting of objectives – aligning policies for effective management of Unions & village societies on hand with those of channel member on the other hand. ISO/HACCP certification was obtained for all the Unions and each village society is in the process of obtaining the same.
Training for farmers and their families emphasizing the need for good health care for not only cattle during its pregnancy and feeding but also for expecting and feeding mothers and the whole family. This effort has brought about a significant social change towards such issues in villages that have cooperative milk societies.
Retail Census: GCMMF undertakes a census of all retail outlets (over 500,000) to evaluate customer perceptions and distribution efficacy of their network. Interestingly, this is being done by wholesalers in their respective territories at their own cost. This information is used for policy deployment exercise.
MARKETING STRATEGY:
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. 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) develop 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 most of whom are small retailers. Liquid milk is distributed by distributed by vendors who deliver milk at homes. Since 1999, GCMMF has started web based ordering facilities for its customers. A well-defined supply chain has been developed to service customers who order in this manner.
Financial Strategy:
AMUL’s finance strategy is driven primarily by its desire to be self-reliant and thus depend on internally generated resources for funding its growth and development. This choice was motivated by the relatively underdeveloped financial markets with limited access to funds, and the reluctance to depend on Government support and thus be obliged to cede control to bureaucracy.
AMUL’s financial strategy may thus be characterized by two elements: (a) retention of surplus to fund growth and development, and (b) limited/ no credit, i.e., all transactions is cash basis only. For example, payment for milk procured by village societies is in cash and within 12 hours of procurement (most, however, pay at the same time as the receipt of milk). Similarly, no dispatches of finished products are made without advance payment from distributors etc. This was particularly important, given the limited liquidity position of farmer/suppliers and the absence of banking facilities in rural India.
This strategy strongly helped AMUL implement its own vision of growth and development. It is important to mention that many of the above approaches were at variance with industry practices of both domestic and MNC competitors of AMUL.
LAST 10 YEARS FIANCIAL RESULTS:
Sales Turnover Rs (million) US $ (in million)1996-97 15540 4501997-98 18840 4551998-99 22192 4931999-00 22185 4932000-01 22588 5002001-02 23365 5002002-03 27457 5752003-04 28941 6162004-05 29225 6722005-06 37736 850
Financial outlook:
Amul recorded a 30% growth in turnover this year, despite stiff competition from multinational companies and big domestic players in the milk and dairy business. Gujarat
Cooperative Milk Marketing Federation Ltd, which markets Amul products, is expected a turnover of Rs 3,600 crore during 2005-06 from Rs 2,900 crore last year sales
During the year, sales of Amul registered a growth of 29 percent to reach Rs. 3773.55 crores (Rs.37.74 billion) including consignment sales of Rs.39.42 crores (Rs.0.39 billion). This is a very robust growth rate shown by Amul against the industry average. The members' union of the GCMMF registered nine per cent growth in milk procurement during this year. Amul has done remarkably well in most of the value added consumer packs. Sales of Amul Milk in pouches increased by 31 percent. UHT Milk has grown in value terms by 12 percent with a 60 percent market share which contributed Rs 900 crore to the kitty, up from Rs 626 crore last year.
Amul Ice cream achieved a sales value growth of 18 percent, and strengthened its position as the undisputed market leader with 35 percent market share. Sales of Masti Dahi grew by 25 percent. The sales of the Amul Cheese range increased by 18 percent. Products like Amul Masti Spiced Buttermilk, Flavoured Milk, Amul Fresh Cream, Paneer and Mithaimate demonstrated their potential to become dominant brands in the coming few years.
New products like Amul Basundi, Stamina, Yogi Flavoured Yoghurt, Kool Café etc. was launched during this year and did pretty well in the current year while diversifying their portfolio of offerings to the consumer further milk procurement in 2005-06 had reached an average of 6.40 million kg a day. Similarly, Amul ghee clocked 18 per cent growth and Amul curd 25 per cent.
Expansion plans:
Amul plans to continue its business expansion with the same vision and spread and achieve 20 per cent growth during the coming year and reach sales turnover of Rs 4,500 crore. r. Amul expects milk procurement to touch 120 lakh litres per day by 2010 from the present 80 lakh litres. Pakistan is being evaluated as a potential market for Amul milk. Pakistan with annual imports up to 20,000 tonnes of milk, is an obvious target for fresh liquid milk to be ferried from Jamnagar to Karachi in a matter of one hour, once the Governments agrees. Amul is looking foray into Sri Lanka because of its proximity to Tamil Nadu and, is a potential candidate to export liquid milk, given that it imports 60,000 tonnes of liquid milk .
AMUL is also planning big on retail. Amul is actively considering retailing fresh and frozen vegetables, fruits and fruit products to make optimum use of an extensive distribution network across the country. Where as in the domestic market Amul has firmed up plans for further expansion of its fresh milk business.
While Gujarat continues to be the biggest sourcing point for milk, Amul is now procuring raw milk from Maharashtra, Karnataka, Andhra Pradesh, Madhya Pradesh,
Rajashthan, Orissa, West Bengal, Jammu and Kashmir and Punjab. Apart from Gujarat, Amul milk is now available in 12 cities across six States. Amul will expand its fresh milk markets to Kanpur and Lucknow this year. Distribution in the North will be backed by setting up a dairy processing plant in Delhi, which also includes an ice cream plant.
Advertisement and Promotion by AMUL:
AMUL has shown itself to be a remarkably savvy in its advertisement and promotional campaigns. It has coined truly memorable slogans such as the one for butter: “Utterly Butterly Delicious”; for edible oils: “Dhara, Shudh Dhara”, emphasizing its purity; a campaign titled “The Taste of India” for all its products, featuring Indian recipes and life style; a campaign to promote drinking of milk, purely based on the nutritional value and the taste. It was the first Indian company to put up advertisement hoardings (bill boards) based on a topical and current news item that almost brought traffic to a stop.
The hoardings, started in 1967, were changed weekly and every week it had a current and a new theme. They have continued till this day. For example, during the emergency in 1976-77, when forced sterilizations were done under government compulsion, the Amul hoarding read: “We have always practiced compulsory sterilization”. When UK was having the problem of the Mad Cows’ Disease, GCMMF came out with an ad titled “Union Jacked by Mad cows”. These advertisements, topical, witty and humorous, served the purpose of high recall, powerful appeal and a sustained awareness of the products.
In ice creams, GCMMF emphasized in its advertisements that its ice cream was entirely vegetarian, made of pure milk and that it did not have any gelatin content unlike that made by many of its competitors (Indian ice creams usually contained vegetable oils and gelatin in addition to milk, so that in a sense, they were frozen desserts rather than ice creams). The aim of the ads was not merely to stimulate interest, but also to expand the markets so that ice creams would not be seen as a food for the rich. AMUL sponsored television programmes as well. It was the sponsor, from the very beginning, of one of India’s most widely watched and appreciated programmes, named Surabhi, in India’s largest television network, the State run Doordarshan.
Doordarshan had a reach of more than 85 percent of India’s population, and its programmes commanded viewerships exceeding 60 percent, far more than any of the cable networks which in case had a limited reach in cities and towns. Surabhi was a programme of one hour’s duration beamed at 9 P.M. on Sundays and featured India’s culture and traditions.
The programme had started the concept of posing questions at the end of each programme and inviting readers to give their replies, with handsome prizes for correct replies. The innovation was such a success that many viewers watched the programme for this feature, and their replies were so much in number that it almost choked the postal system (a typical programme drew about 50,000 to 100,000 replies!). AMUL also sponsored a popular show, called Amul India Show on Star TV, and beamed at 10 A.M. on Sundays, was a very popular programme.
AMUL has sponsored two well-received feature films. The first film was titled “Manthan” and featured the exploitation of village farmers and the formation of co-operatives. It was, in a sense, the story of GCMMF itself. The second film, titled “Sardar” featuring the life of Sardar Vallabhbhai Patel, the first home minister of Indian and, known as the “Iron Man of India”, brought about the unification of the different princely states of India. In addition, AMUL has produced a number of TV campaigns of 30 to 60 seconds’ duration, on some or many of its products.
AMUL has also launched a new website WWW.AMUL.TV for streaming its feature films, television shows, advertisements, etc to the Internet community. At present this page contains feature films like Manthan – The Churning and Mamuli Ram, Information clips like Amul India Story and Amul Product TV Commercials, and entertainment series like Amul Surabhi episodes. The idea of this site is to have a continuous play of the above as per the programme schedule, which will be online within a short period of time.
Technology and e-initiatives:
GCMMF's technology strategy is characterized by four distinct components: new products, process technology, and complementary assets to enhance milk production and e-commerce. Few dairies of the world have the wide variety of products produced by the GCMMF network. Village societies are encouraged through subsidies to install chilling units. Automation in processing and packaging areas is common, as is HACCP certification. Amul actively pursues developments in embryo transfer and cattle breeding in order to improve cattle quality and increases in milk yields.
GCMMF was one of the first FMCG (fast-moving consumer goods) firms in India to employ Internet technologies to implement B2C commerce. Today customers can order a variety of products through the Internet and be assured of timely delivery with cash payment upon receipt.
Another e-initiative underway is to provide farmers access to information relating to markets, technology and best practices in the dairy industry through net enabled kiosks in the villages. The extent of IT usage includes a 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 in more than 6,700,000 animals. Similarly, this is linked with information at all 45 distribution offices and 3900 distributors. This network is being extended to cover all related field offices in the network. The GCMMF cyber store delivers AMUL products at the doorsteps of the consumers in 125 cities across the country.
GCMMF has also implemented a Geographical Information System (GIS) at both ends of the supply chain, i.e. milk collection as well as the marketing process. Farmers now have better access to information on the output as well as support services while providing a better planning tool to marketing personnel.GCMMF has further advanced its Information Technology solutions by enhancing its customized ERP System (EIAS & Web EIAS) to smoothen its supply chain management and to improve operational efficiencies. It has also successfully deployed process driven Enterprise Resource Planning (ERP) software system at its own unit, Mother Dairy, Gandhinagar in order to bring efficiency in manufacturing processes.
COMPETITORS:
The nature of competition varied among the different products. In the case of liquid milk, competition is from private dairies and contractors. There is also competition from
newly emerging private dairies that had started supplying milk to the consumers as well as sweet makers. There is intense competition for the supply of milk, which was sought after, especially in the festival seasons, by the sweet makers who derived large profits from the sale of their sweets. Consumers are generally not very particular about the brand of liquid milk, so the sale depends to a large extent on dealers push. However, there is scope to establish differentiation through appraising the customers thru the quality of initial milk itself, but also the quality of the supply chain, which ensured the stability of milk.
For butter and cheese, new entrants were making their mark. Britannia, a firm engaged in manufacture and sale of biscuits, has entered into foods business, and more particularly in milk and milk related products such as butter. Britannia had introduced new forms of cheese such as cheddar cheese slices, and supported its products with extensive advertising campaigns. It was believed that advertisements played a powerful role in the demand for particular brands of butter and cheese.
The sweet market was highly fragmented, with numerous small time local operators producing their own brands and unbranded forms of sweets. The sales of sweets soars in the festival seasons, drawing milk supply by offering higher prices. Other food companies such as Hindustan Lever Ltd. (HLL), a subsidiary of Unilever’s, and Nestlé had also entered into the business of ready made or near ready sweets (such as gulab jamun, which just needed to be deep fried to get it ready). Branded ready or near ready sweets were advertised and heavily promoted through campaigns such as through mail orders to housewives.
The ice creams market is a potential market in India, witnessing the entry of numerous players. The national scene was dominated by Hindustan Lever with its Kwality and Walls brands, accounting for about 45 percent of the market. GCMMF was the other national player, with about 30 percent of the market. There were, in addition, very powerful regional players such as Vadilal Ice Creams in the Western India who commanded substantial (in excess of 30 percent) of the regional market shares. Ice creams were largely promoted through local promotions, hoardings (billboards) and advertisements. In ice creams, positioning and promotions are not the only things.
Indian ice cream market is likely to expand very rapidly. The Indian consumer is changing. They will not just stick to milk. Ice creams will no longer be made at home. A large number of consumers with disposable incomes will seek value added products, including ice cream. Targeting such consumer is important.
Basic strategy is to make them locally and market them locally through local network. Emphasis must be on quality. Devotion to quality must be total and constant. Edible oils are of two types: loose and branded. Loose oil constitutes the bulk (perhaps about 70 percent) of the total market. Among the branded oils, there are many which are just local brands with little brand recall, but just serves the purpose of being put in a tin with a name on top. The main branded players are Dhara and ITC’s oil division, with many brands. It is believed that with increasing discretionary income, the tastes of consumers would swing more to the branded end of the market. Most of the
advertisements were either on the purity platform or on the health platform (zero cholesterol or low cholesterol). In the processed fruits and vegetable foods business, there are numerous players, many are regional. The largest player is Hindustan Lever, which is moving away from its soaps and detergents business to foods business in the last two years; it had undertaken a massive expansion through acquisitions, the most notable of them being in the tea, ready to cook flour, bread and ice cream businesses. Hindustan Lever was considered to be a well-run company, with aggressive marketing styles and a highly result oriented culture. It was one of the largest ad spenders of India. It had recently announced its so-called Millennium Plan, which envisioned a growth rate of 100 percent every four years, most of it coming from its food business. It owned many powerful brands such as Kisan in the ketch ups and jams. Nestlé, a subsidiary of the MNC of the same name, was another major player. Nestlé India had a turnover of Rs.15.4 billion in 1998-99. Its main business segments were: beverages with its flagship brand of Nescafe (30 percent), milk based products including infant milk products and infant cereal products (38 percent), chocolate (15 percent) and ready to cook food products such as sauces, ketchups, soups, pickles and instant snacks (15 percent). Nestlé and its brands were well established in India and commanded a large brand loyalty. For example, its instant coffee, Nescafe, its chocolate malted drink Milo, its infant milk food Lactogen, infant cereal Nestum, its food products with an umbrella brand of Maggie, its milk products such as Everyday and Tea Mate (whiteners), Milk Maid (condensed milk) and a number of brands in the chocolates. Nestle had diversified into different milk products such as liquid milk, curd and butter, and was making huge investments in the dairy related businesses.
Cadbury’s and Heinz were the other players but their presence in the processed food sector in India was small. Heinz had acquired some formidable brands suchas Farex (infant cereal) and Complan (health drink) from Glaxo. These were well known brands in India. Cadbury’s presence was mainly in the chocolate market. It could be expected that these companies would also expand their operations in the coming years.
As Amul also entered the sports drink market they also compete against the international giants like Pepsi and Coca Cola.
AMUL’S MARKET POSTIONING
CATEGORY MARKET SHARE MARKET POSITION
Liquid Milk N.A 1Full fat milk N.A 1Semi toned milk N.A 1Fully toned milk N.A 1ButterAmul Butter 85 1Amul Lite, a low fat butter 80 1Amul Ghee 8 2Sagar Ghee (two different brands)
10 1
Milk Powder
Amul Spray, infant milk food
65 1
Amul Milk Powder, instant full cream milk powder
80 1
Sagar, skimmed milk powder
60 1
Amulya, dairy whitener 40 1
Cheese
Amul pasteurized processed cheddar cheese
50 1
Amul cheese spreads in three flavors
50 1
Amul Mozzarella Cheese, pizza cheese
90 1
AMUL EMMENTAL CHEESE
100 1
Amul Paneer, cottage cheese to be used in Indian curries
90 1
Amul cheese powder 90 1
Ice Creams
Amul Ice Creams 30 2
Sweets
Amul Shrikhand 50 1Amul Mithai Gulab Jamun 50 1
Amul Mithai Mate, condensed milk
50 1
ChocolatesAmul Chocolates in a wide variety of flavors
10 3
Chocolate Drinks
Nutramul 15 4Edible OilsDhara Edible Oils, groundnut, vegetable (mustard)
12 4
Dhara Health, a low cholesterol oil
13 3
PRODUCTS:
Amul offers various varieties of products. But Amul’s core product is milk and milk products. Amul manufactures product like milk powder, ice creams, butter cheese, health drink, ghee, baby food, curd, chocolates and confectionaries. Amul’s offers quality products priced at a reasonable price. Most of the Amul products are either market leaders or dominant brands in their particular categories. The following is the list of products offered by Amul.
List of Products Marketed
Bread spreads:
Amul Butter Amul Lite Low Fat Bread spread Amul Cooking Butter
Cheese Range:
Amul Pasteurized Processed Cheddar Cheese Amul Processed Cheese Spread Amul Pizza (Mozzarella) Cheese Amul Shredded Pizza Cheese Amul Emmental Cheese Amul Gouda Cheese Amul Malai Paneer (cottage cheese) Utterly Delicious Pizza
Mithaee Range (Ethnic sweets):
Amul Shrikhand (Mango, Saffron, Almond Pistachio, Cardamom) Amul Amrakhand Amul Mithaee Gulabjamuns Amul Mithaee Gulabjamun Mix Amul Mithaee Kulfi Mix Avsar Ladoos
UHT Milk Range:
Amul Shakti 3% fat Milk Amul Taaza 1.5% fat Milk Amul Gold 4.5% fat Milk Amul Lite Slim-n-Trim Milk 0% fat milk Amul Shakti Toned Milk Amul Fresh Cream Amul Snowcap Softy Mix
Pure Ghee:
Amul Pure Ghee Sagar Pure Ghee Amul Cow Ghee
Infant Milk Range:
Amul Infant Milk Formula 1 (0-6 months) Amul Infant Milk Formula 2 ( 6 months above) Amulspray Infant Milk Food
Milk Powders:
Amul Full Cream Milk Powder Amulya Dairy Whitener Sagar Skimmed Milk Powder Sagar Tea and Coffee Whitener
Sweetened Condensed Milk:
Amul Mithaimate Sweetened Condensed Milk
Fresh Milk:
Amul Taaza Toned Milk 3% fat Amul Gold Full Cream Milk 6% fat Amul Shakti Standardized Milk 4.5% fat Amul Slim & Trim Double Toned Milk 1.5% fat Amul Saathi Skimmed Milk 0% fat Amul Cow Milk
Curd Products:
Yogi Sweetened Flavoured Dahi (Dessert) Amul Masti Dahi (fresh curd) Amul Masti Spiced Butter Milk Amul Lassee
Amul Ice creams:
Royal Treat Range (Butterscotch, Rajbhog, Malai Kulfi) Nut-o-Mania Range (Kaju Draksh, Kesar Pista Royale, Fruit Bonanza, Roasted
Almond)
Nature's Treat (Alphanso Mango, Fresh Litchi, Shahi Anjir, Fresh Strawberry, Black Currant, Santra Mantra, Fresh Pineapple)
Sundae Range (Mango, Black Currant, Sundae Magic, Double Sundae) Assorted Treat (Chocobar, Dollies, Frostik, Ice Candies, Tricone, Choc crunch,
Megabite, Cassatta) Utterly Delicious (Vanilla, Strawberry, Chocolate, Choco chips, Cake Magic)
Chocolate & Confectionery:
Amul Milk Chocolate Amul Fruit & Nut Chocolate
Brown Beverage:
Nutramul Malted Milk Food
Milk Drink:
Amul Kool Flavoured Milk (Mango, Strawberry, Saffron, Cardamom, Rose, Chocolate)
Amul Kool Cafe
Health Beverage:
Amul Shakti White Milk Food
DESCRIPTION OF PRODUCTS:
The following is the description of the products offered by Amul
Amul Pasteurized Butter:
AMUL BUTTER is made from Butter, Common Salt, permitted natural colour Annatto.
Special Features :
Made from fresh cream by modern continuous butter making machines. Marketed in India since 4 decades.
Composition:
Milk Fat 80% Moisture 16% Salt 2.5% Curd 0.8%
Calorific Value:
720 kcal. /100g
AMUL LITE: A Low Fat Low Cholesterol Bread Spread
Unlike Butter & Margarine, Amul Lite is a low-fat, low-calorie & low-cholesterol bread spread, hence a healthier substitute. It contains 26% less fat and calorie content as compared to butter or margarine.
Special Features:
Since Amul lite is low in calories, you can maintain your slim-trim shape without sacrificing on the taste.
Amul lite is a low-fat and low-cholesterol product and less cholesterol means less chance of heart diseases. It is specially suited for elderly people & those with health complications for whom the consumption of high cholesterol and high saturated fat products is restricted.
Amul Lite is low in saturated fats & high in PUFA for a "healthy heart". Amul Lite contains "Omega-6 & Omega-3 fats" which maintain healthy
cholesterol levels. Amul Lite is fortified with Vitamins A & D, essential for good vision & healthy
skin It is manufactured in a fully automated, ISO 9000 certified plant under strict
hygienic conditions.
Product Application:
Amul Lite is ideal spread for toasts, sandwiches & bread. It can be used for topping on parathas, pav-bhaji, pulao, khichri, soups etc and also for household baking, preparation of cakes etc.
Delicious Table Margarine:
Table Margarine is characterized by a physical consistency similar to butter and is commonly known as butter-substitute.
Margarine is prepared exclusively from vegetable oils and fats
Product Attributes:
Prepared from Refined Vegetable Oil. Total fat content is 80% min. Contains Zero Cholesterol, hence suitable for cardiac patients. Fortified with Vitamins A & D Manufactured in an ISO 9000 certified plant under strict hygienic conditions. The
product is completely untouched by human hand Shelf life 6 months under refrigeration.
Product Applications:
For use as a butter-substitute in all applications. Suitable for use as a cooking medium. Can be heated to high temperatures. Ideal as a spread on bread/toasts/sandwiches For shallow frying or sautéing (frying quickly in a little fat). For use as topping on variety of items, pav-bhaji, parathas, khichri, pulao, soups
etc.
Amul Pasteurized Processed Cheddar Cheese:
AMUL PASTEURISED PROCESSED CHEDDAR CHEESE is made from Cheese, Sodium Citrate, Common Salt, Citric Acid, permitted natural colour - Annatto. Emulsifier and Class II preservatives.
Special Features:
Made from graded cow/buffalo milk using microbial rennet
Composition:
Fat 27% Moisture 45% Proteins 23% Added salt 2.5%
Calorific Value:
340 kcal. /100g
Amul Cheese Spreads:
AMUL CHEESE SPREAD is made from Soft Cheese, Cheddar Cheese and Common Salt.
Special Features:
Highly acceptable product made from the most modern dairy plant through a special formulation.
Composition:
Fat 18-20% Moisture 60% Protein 14-15% Addes Salt 1.8% Sodium Citrate 2.5% Calorific value : 240 kcal./100g
Amul Emmental Cheese:
This famous cheese with a Swiss taste owes its name to the Emmental valley, near Berne in Switzerland. In this famous valley, the tradition of Cheese-making has flourished in the skilled hands of sennen, the local Alpine cowherds. The production of Cheese in Emmental valley can be traced to as far back as 1290 AD.
One of the most striking features of Emmental is the `holes' or the `eyes', as they are popularly called. Amul Emmental Cheese has a sweet-dry flavour and hazelnut aroma. This cheese is normally available in the form of a wheel, having convex edges and is covered with a dry-hard rind which is golden-yellow in colour. This rind is to be removed before consumption. Emmental is a ready to eat platter cheese and goes best with wines & cocktails. As opposed to the commonly available processed cheddar cheese, Emmental is actually a `live' cheese, i.e. it has live bacteria, which continue the ripening process, even after the cheese is packed and placed on the retail shelves. However, it is a 100% vegetarian coagulating enzyme.
Storages & Handling Instructions:
At all levels this product is to be stored at ordinary refrigeration temperature i.e. 4 degrees Centigrade to 8 degree Centigrade. This is the same temperature at which Amul Butter is stored
The consumers are advised to keep the product outside the refrigerator for 30 minutes before eating it, in order to get the full aroma and taste.
Composition:
1. Moisture 43% 2. Fat (On dry matter) 46% 3. Salt 1.5%
Amul Pizza Mozzarella Cheese:
Special Features:
Amul, which is the largest selling brand of Cheese in India, is introducing genuine Mozzarella Cheese for the first time in the country.
Amul Pizza Cheese has Moist, Soft, Elastic texture and has a very timely surface sheen and when fresh, it has a slightly salty blandish taste and pleasant aroma. Because of its stretchability, i.e. ability to form strings when hot, this cheese is ideal for preparing Lasagna, Veal Cutlet, Alla Parmagnia and as a topping on pizzas.
When baked along with pizzas, it melts uniformly, beautifully engulfing all other ingredients of the pizza surface.
Mozzarella is an excellent source of milk proteins, which are palatable
Ingredients:
Milk, Common Salt, 100% Vegetarian Coagulating Enzymes.
Composition:
Fat on dry matter > 30% but < 40% Moisture > 45% but <52% Salt > 1.1% - 1.6%
Amul Ice Creams:
AMUL ICE CREAM is made from Milk and Milk products, Sugar, Stabilizers & Emulsifiers.
Special Features:
Various varieties of Ice Cream can be made from the basic mix by addition of required amount of permissible colours and flavours. Dry fruits and nuts would be used for making premium varieties of Ice Cream.
Flavours:
Vanilla, Strawberry, Pineapple, Orange, Rose, Mango, Chocolate, Honey-Dew-Melon, Tutti Frutti, Litchi, Kesar Pista, Kaju Draksh, Butterscotch, Chocochips, Rajbhog and Cashew Break.
Composition:
Milk Fat 13.5% to 14.5% Total Solids 40% to 41% Sugar 15% Approx. Acidity 0.17% to 0.19% Protein 3.9% to 4.1%
Food Energy Value:
Calories per 100 ml -196.7 kcal
Amul Shrikhand:
Amul shrikhandis made from Chakka, Sugar and flavouring agents/fruits (Elaichi, Saffron, Mango pulp)
Special Features:
Shrikhand is a traditional sweet. It is the only pasteurized Shrikhand available in the country with smooth texture and extended shelf life. Made from most modern dairy equipment
Composition:
Fat 5.5% Milk solid-not fat 13.5% Sugar 40% Flavouring agent 2.5% Mango pulp
Calorific Value:
260 kcal. /100g
Gulab Jamun Mix:
AMUL MITHAEE GULAB JAMUN MIX is made from Whole Milk Powder, Tartaric Acid, and Sodium Bicarbonate
Special Features:
Amul Mithaee Gulabjamun Mix is a mixture of all the required ingredients to produce tasty, softer and delicious Gulabjamuns. It gives relief from mixing different ingredients.
Approximate Composition:
Moisture: 80% Fat 12.0%
Amul Chocolates:
AMUL CHOCOLATE is made from Sugar, Cocoa Butter, Milk Solids, Chocolate mass
Composition:
Milk Fat 2% Sugar 55% Total Fat 32.33% (Milk Fat + Cocoa Fat) Cocoa Solids 7.5% Milk Solids 20%
Brands:
Amul Milk Chocolate Amul Almond bar Amul Fruit n Nut Amul Fundoo Amul Bindaaz
Amul Basundi:
Amul Basundi is concentrated milk based product with added sugar, flavours and condiments.
Special Features:
Prepared from best quality milk and other ingredients Rich in nutrition and Zero Bacteria Packed in convenient aseptic pack (Tetra Pak packaging materials) Long shelf life - 6 months from date of manufacturing Can be stored at room temperature and does not require refrigeration till opened. Zero wastage. Use as much you require. Consistency in quality and available round the year. Economically priced (Value for money)
Ingredients:
Fat - 11%, Milk Solids - 25%, Sugar - 9%
Calorific value:
205 Calories per 100ml
Applications:
Simple and best - Chilled and garnished Amul Basundi can be served as food companion or dessert.
Make your delicious Kheer, Payasam, Gajar Halwa, Seviya, Kulfi, Rabdi, Milk Shakes in a minute.
To make kheer, just add boiled rice to Basundi
To make home made Kulfi / Ice cream
Make Ras-malai by adding channa based balls
Can be used to soak Malpua instead of sugar syrup
With Gulabjamun - Soak Gulabjamun in Basundi instead of sugar syrup.
Nutramul:
Nutramul Malted Milk Drink is made from malt extract, milk solids, sugar, cocoa powder, emulsifying agents, sodium bicarbonate and added flavour
Special Features:
Amul's Nutramul has the highest protein content among the entire brown beverage powders sold in India and is the only one in India with BIS certification mark
Composition:
Fat 6.5% Carbohydrates 70% (Starch, sugar) Moisture 2% Protein 11.5% Cocoa 8%
Amul Shakti Health Food Drink;
Amul Shakti, unlike other wheat and barley based drinks, is a unique combination of Milk and natural goodness of Kesar (Saffron) & Almond. Amul Shakti, a complete food in a drink, is ideally balanced for the nourishment and health of the entire family.
Amul Shakti also contains essential Amino Acids, Vitamins, Minerals and Micronutrients that are needed for building up internal immunity and maintaining good health. This unique formulation of Amul Shakti also helps in maintaining intelligence and mental power.
Amul Shakti twice a day would meet the extra nourishment ideally required by studying Children, Sportspersons, Busy Executives, Travelers, the Aged, Convalescents, the expecting and lactating mothers.
The product is available in two flavors:
Kesar-Almond Chocolate
Amul / Sagar Pure Ghee:
Amul Pure Ghee is made from Milk Fat.
Special Features:
Made from fresh cream. Has typical rich aroma and granular texture. An ethnic product made by dairies with decades of experience. A rich source of Vitamin A, D, E and K.
Composition:
Milk Fat 99.7% Moisture 0.3%
Calorific Value:
900 kcal. /100g
Amul Mithai Mate:
Amul Mithai Mate Sweet Condensed Milk is made from Sugar & Milk solids.
Special Features:
Produced on the only continuous condensing plant in the country. The product contains no preservatives
Product Characteristic:
Free flowing and smooth texture. White to creamy colour and pleasant flavour.
Use of Product:
The product can be used to manufacture Ice Creams, Confectioneries like Toffees, Biscuits and Sweets.
Composition:
Sweetened Condensed Milk Total Milk Solids 31% minimum Fat 9.0% minimum Added Cane Sugar 40.0% minimum Partly Skimmed Sweetened Condensed Milk Total Milk Solids 28.0% minimum Fat 3.0% to 9.0% minimum Added Cane Sugar 40.0% minimum
Amul Masti Dahi:
Amul Masti Dahiis made from Pasteurized Toned Milk
Special Features:
Only packed curd available in market, made in the hygienic way in modern processing plant. Made with special culture to give a smooth, mild acidic taste and pleasant flavour consistently.
Approximate Composition:
Fat 3.5% SNF 8.5%
Amul Malai Paneer:
Amul Malai Paneer is equivalent to cream cottage cheese of western products.
Special features:
Can be kept good in the deep freeze for 6 months. Amul Malai Paneer is available in already cut cubes form which saves preparation
time of housewives as well as reduces losses due to crumbling.
The best quality Malai Paneer with quality assurance of Amul is the only national brand of Paneer available in India since 1997. It is also exported to US, Gulf as well Singapore & Japan markets regularly.
"Richer, Softer, Better" Paneer made out of fresh milk. Composition of Amul Malai Paneer is as under.
Higher fat content (26-27%) and lower moisture content than other loose Paneer available in the market. This gives Amul Malai Paneer smooth, uniform texture and softness that most consumers desire.
Automated production process giving Hygienic Malai Paneer unlike the locally made Paneer & being sold in open.
Most convenient form of diced / Block Malai Paneer which can be stored in deep freeze for usage at any time.
Within 10 minutes of thawing in lukewarm water the Amul Malai Paneer regains its softness.
Amul Spray Infant Milk Food:
AMULSPRAY INFANT MILK FOOD is made from partially skimmed milk, sugar, minerals and vitamins.
Special Features:
Product formulated on guidelines set by Codex Commission of WHO/FAO. Marketed in India since last 25 years.
Vitamins:
A, D, K B group, C
Minerals: Calcium, Magnesium, Phosphorus, Iron, Copper, Iodine, Manganese, Zinc, And Calorific Value: 450 kcal. /100g or 1880 KJ/100g.
Composition:
Milk Proteins 22% Milk Fat 18% Carbohydrates Lactose 32% Sucrose 18%
Amul Instant Full Cream Milk Powder:
AMUL INSTANT FULL CREAM MILK POWDER (Spray Dried) is made from Toned Milk, Vitamins A, and D
Special Features:
The product has more milk fat as compared to normal milk powders. It is packed under an atmosphere of Nitrogen. The product is creamy white in colour: Marketed in India since last 3 decades.
Composition:
Milk Fat 26% to 28%. Protein 26% Carbohydrates 37% Minerals 6% Moisture 3%
Calorific Value:
500 kcal. /100gm - Every 60g of powder contains minimum 1300 I.U. Vitamin A and 200 I.U. Vitamin D.
Sagar Skimmed Milk Powder:
Sagar Skimmed Milk Powder (Spray Dried) is made from Skimmed Milk
Special Features :
The product is readily soluble in lukewarm water. It is especially useful for diet preparations or for use by people on low calorie and high protein diet.
Composition:
Milk Fat (Max) 1% Milk Protein 35% Carbohydrates 51% Minerals 7% Moisture 3.5%
Calorific Value:
350 kcal/100 gm
Sagar Tea Coffee Whitener:
Sagar Tea & Coffee Whitener is made from Milk Solids, Sugar and Hydrogenated Vegetable Oils.
Special Features:
Sagar Tea and Coffee Whitener, is a specialty product, to be used primarily for making rich and tasteful tea and coffee. It is a high value for money offering for the health conscious
USP:
Affordable whitener for the health conscious
Approximate Composition:
Vegetable Fat 10% Milk Fat 10% Milk Protein 20% Carbohydrates 50% Minerals 5%
Amulya Dairy Whitener:
AMULYA DAIRY WHITENER is made from partially skimmed milk and sugar.
Special Features:
Packed under an atmosphere of Nitrogen, has excellent natural miscibility (without the use of lecithin), has a fine granular texture. A convenient alternative to condensed milk. Marketed in India since last 6 years.
Composition:
Milk Fat 20% Milk Protein 21% Lactose 33% Sugar 18% Minerals 5% Moisture 3%
Calorific Value:
470 kcal. /100gm
Amul Gold Milk:
Amul Gold is Long Life standardized milk.
Special Features:
It is processed with a technology called UHT (Ultra High Temperature), hence also known as UHT milk. Notwithstanding popular misconception, UHT technology does not involve any use of preservatives. The UHT treatment ensures zero microbial activation, while preserving the maximum flavour, taste, and nutritional value. The aseptic packaging system protects the product from air and light and guarantees a long shelf life of 180 days without refrigeration.
Amul gold is ideal for making sweet dishes (like kheer, payasam etc.) and for setting curds. It is also ideal for drinking straight from the pack for kids and adolescents who simply love its creamy taste sans the inconvenient cream layer! Amul Gold comes in convenient 1 litre and 500ml packs.
.Composition:
4.5% fat 8.5% SNF
Amul Taaza Double Toned Milk:
Amul Taaza is Long Life double toned milk.
Special Features:
It is processed with a technology called UHT (Ultra High Temperature), hence also known as UHT milk. Notwithstanding popular misconception, UHT technology does not involve any use of preservatives. The UHT treatment ensures zero microbial activation, while preserving the maximum flavour, taste, and nutritional value. The aseptic packaging system protects the product from air and light and guarantees a long shelf life of 180 days without refrigeration.
Amul Taaza and is ideal for tea and coffee whitening and for setting curds. It is also just right for drinking straight from the pack for those who would like to enjoy the taste the goodness of natural while avoiding the hazards of too much fat!. Amul Taaza comes in convenient 1 liter, 500ml and 200ml packs.
Composition:
1% fat 9% SNF
Amul Lite Slim and Trim Milk
Amul Lite is Long Life skimmed milk.
Special Features:
It is processed with a technology called UHT (Ultra High Temperature), hence also known as UHT milk. Notwithstanding popular misconception, UHT technology does not involve any use of preservatives. The UHT treatment ensures zero microbial activation, while preserving the maximum flavour, taste, and nutritional value. The aseptic packaging system protects the product from air and light and guarantees a long shelf life of 180 days without refrigeration.
Amul Lite Milk is a unique offering to health conscious milk lovers. It gives you all the proteins, vitamins and minerals of natural milk without your having to imbibe unnecessary flab in the deal! Amul Lite Milk comes in convenient 1 liter, 500ml and 200ml packs.
Composition:
0% fat 8.7% SNF
0% cholesterol
Amul Shakti Toned Milk:
Amul Shakti is Long Life toned milk.
Special Features:
It is processed with a technology called UHT (Ultra High Temperature), hence also known as UHT milk. Notwithstanding popular misconception, UHT technology does not involve any use of preservatives. The UHT treatment ensures zero microbial activation, while preserving the maximum flavour, taste, and nutritional value. The aseptic packaging system protects the product from air and light and guarantees a long shelf life of 180 days without refrigeration.
Amul Shakti is the ideal multipurpose milk. Growing children love its taste while benefiting from its comprehensive nutrition. Amul Shakti comes in convenient 1 litre and 500ml packs
Composition:
3% fat 8.5% SNF
Amul Masti Spiced Buttermilk:
Amul Masti Spiced Buttermilk is the Best Thirst Quenching Drink which is Free of Colour, Preservatives, Acids and Sucrose Sugar (unlike Cola drinks)
Special Features:
Unlike carbonated soft drinks, Amul Masti Spiced Buttermilk is 100% Natural and Sucrose Free without any color or preservative added.
It is a low fat product with lower sodium salt content. It contains protein with almost 50% lower calorie than soft drinks. The spices and condiments added to the product enhance its taste and flavour. Available in convenient and attractive, take-away tamper proof 200 ml Tetra Pak Brik
with 120 days shelf life at ambient temperatures. Presently available in India only.
Ingredients:
Milk Solids Common Salt,
Spices and Condiments
permitted stabilizer
Dhara Edible Oils:
Dhara is largest selling brand of edible oils in India. Dhara is the brand of National Dairy Development Board, Anand, India.
Product Range:
Dhara Groundnut Oil Dhara Mustard Oil Dhara Refined Vegetable Oil Dhara Health Refined Sunflower Oil Dhara Fit-n-Fine Refined Soyabean Oil
OTHER PRODUCTS:
Utterly Delicious Pizza:
Amul Cooking Butter:
Kulfi Mix:
Amul Mithaee Gulab Jamuns:
Amul Lassee:
Amul kool (flavored milk):
Fresh Cream:
Masti Soups:
Gouda Cheese:
Amul Chocolate Milk:
EXPORTS:
Amul is a very well known name in exporting circle.Amul is the biggest exporter in the dairy sector in India as well in world.Amul exports its products in Nepal, Bangladesh, Hong Kong, Singapore, West Asia, Gulf cities like Dubai, Kuwait Muscat, Malaysia, Jakarta, Australia, Canada, USA and also some African countries.Amul is also going to export their products to Pakistan and Srilanka because of its huge dairy market which can
be exploited and also due to the close proximity to India. Amul’s exports have increased by 35% this year from 20% registered last year. Amul exported Rs 134.23 crore worth of dairy products during the year, the highest-ever by any dairying business in India.
EMPLOYEES:
For AMUL the employees are the 2.5 million milk producers who every day delivers the milk to the village cooperative societies in village cooperatives societies there are 11,000 employees and the member consists of 10,000 employees. Beside this professional employees recruited to manage 50 sales offices across India.
INNOVATION:
When it comes to innovation Amul is very innovative whether it is the product they offer or the price they offer. Amul has various innovative flavours in their ice cream range and also their products be it milk, health drink cheese butter or even heat to eat products.Amul has been a pioneer in innovation by offering quality products at a reasonable price and also their eye catching advertising campaigns relating to topical or current issues. But the latest innovative thing they come up with is the online Amul ice
cream cyber store and Amul online super store for their other range of products besides ice creams.
AMUL ICE CREAM CYBER STORE:
Amul ice cream cyber store is a unique online facility provided by Amul where a customer can order ice cream from the various flavours of ice cream offered by Amul from his home through internet. But there is a condition that the value of the order must be of RS.300 per order. When the customer orders online he is a given order no and the order is confirmed by Amul representatives with the customer. Home delivery is free if the order is placed within the municipal limits of city from the order is been placed. The time period for the delivery of the order is subjected to time period desired by the customer and another condition is that the payment for the order should be in cash. Thus Amul has come up with a unique innovative idea which saves the customer a considerable amount of time and the products are delivered at the doorstep of the customer.
AMUL ONLINE SUPERSTORE:
Amul online super store is similar to Amul ice cream cyber store expect that a customer can order various products offered by Amul other than the ice cream. Here the customer can order from the variety of products offered by Amul like Amul butter, chesse, gulab jamun mix mithai mate, shrikhand, ghee, milk powder baby food, chocolates and health drinks. The condition for placing the orders is same but the customer has to order a price value of RS.200 per order. The conditions for delivering the products is also same as the conditions for the ice-cream cyber store. This is facility is not only available to customers in India but also abroad like USA, Gulf Countries, Singapore etc.
Amul "Utterly Delicious" Parlours :
Amul also has started with new retail venture called the “Amul Utterly Delicious” parlours where a customer can come sit, relax and enjoy Amul products and also buy them.Amul has plans to create a large chain of such outlets (10000 by 2010) to be managed by franchisees throughout the country. Amul is now planning a nationwide
rollout of such outlets through franchise operators. At an average expenditure of Rs 50,000 a parlour, the project will cost approximately Rs 50 crore.
Amul "Utterly Delicious" Parlours
Amul has already started some parlours in various locations of the country
1. The Somnath Temple2. National Institute of Design3. Infosys Technologies in Bangalore, Mysore & Pune4. Wipro campus in Bangalore5. Ahmedabad Municipal Corporation6. Surat Municipal Corporation7. Delhi Police8. Gujarat State Road Transport Corporation9. Delhi metro rail corporation
Amuls Action Plan for Production enhancement:
Amul target is to increase milk procurement per day to touch 120 per litre by 2010.So to achieve such ambitious target Amul has come up with an action plan.
Strategy
Improve the production potential of indigenous breeds of cattle such as Sahiwal, Gir, Rathi and Kankrej and breeds of buffalo such as Murrah, Mehsana and Jaffarbadi through appropriate selection programme
Cross non-descript cattle with Holestein Friesian in areas with adequate feed and fodder and with Jersey in resource-poor areas
Increase the production and use of high quality feed appropriate to local conditions
Increase production and availability of green and ensiled fodder Encourage unions, NGOs and cooperatives to put common property area under
improved pasture and fodder tree Expand first-aid coverage through village level societies Increase vaccination of animals against HS, BQ and FMD Develop Mastitis and Brucellosis control strategies Develop National Animal Production and Health Information System and Disease
Free Zones in the country
Action Plan:
Breeding
Increase productivity of cows and buffaloes Increase per centage of animals in milk Expand AI coverage Increase inseminations Reduce AI per conception Take up genetic improvement programmes in selected milk sheds to supply
semen of evaluated bulls to all milk sheds
Animal Health and Veterinary Services
Create first-aid facilities in DCSs Increase vaccination for HS and BQ Increase de-worming of animals Promote mastitis control Undertake Brucellosis control activities in affected areas Promote use of GIS in AI and veterinary health services Create Disease-free Zones by
- Undertaking Mass vaccinations - Ear-tagging and passbooks
- Animal movement management- Effective outbreak management - Sero-monitoring
Disease control in Animals
- Enactment of national legislation for Prevention of Infectious and Contagious Diseases in Animals
Animal Nutrition
Raise installed cattle feed plant capacity Raise cattle feed plant utilizations capacity Increase and strengthen quality control laboratories Increase number of mineral mixture plant Increase production and utilizations quality fodder seeds
Husbandry Extension
Enable dairy cooperatives to operate as full-service extension centers for their members by providing
- Introduction and support of technology - Link actively with union's technical experts
SOCIAL RESPONSIBILITY:
The basic philosophy of Amul is the development of its owners, the milk producers who form the cooperative and also the development of the rural areas. Amul’s philosophy is to combine India’s greatest asset, the power of its people, with professional management, in a vertically integrated cooperative structure that establishes a direct linkage between those who produce the milk and those who consume it. By placing the farmers in command, as the owner of the cooperative, it involves him in the process of development. Amul through its various foundations, institutes carries out various
socially responsible works for the betterment of the framers and the rural community in large.
TRIBHUVANDAS FONDATION:
Mr. Tribhuvandas Patel was the chairman from the day the cooperative was established until July 1973 when he retired of his own accord. After his retirement he established a foundation named after him for the people of Kaira district whose welfare he had assiduously promoted, a tremendous demonstration of affection.
The Tribhuvandas Foundation is dedicated to improve conditions and standards of living in Kaira villages. Tribhuvandas was more familiar with these. He had often walked through the villages, eating, drinking and resting in the homes of the villager’s .What he desired foremost was health care for mothers and small children in the villages. He wished this to be made made available not only to ‘cooperative’ households, but mainly to those non-shareholders families who were below poverty line.
The Tribhuvandas Foundation was registered as a charitable trust on July 29; 1975.NDDB viewed the Foundation’s programmme as a pilot project for an integrated rural development. The project was designed to enable to enable village milk cooperatives to build into their own organization programme for health care, nutrition, environmental improvement and family viability. As Amul did with the primary cooperatives, the Foundation requires participating villagers to collaborate actively, and the programme’s success depends more on them than anything else. The Foundation provides professional advice to the villagers and train them using scientific approach for problem solving.
The core of the foundation is the family welfare programme and health care for mothers and children. It requires the services of three sets of workers: mobile healthcare teams, the village health worker (VHW) and the village infant worker (VIW), Mobile health care teams constitute professional nurses supported by doctors who visit various villages once a week and serious cases of health problems are referred to the foundations hospital in Rajodupora village, just outside Anand. But the key function is of the village health worker who is selected unanimously by the villagers themselves. The villagers also select the village infant workers from the village itself.
The village health worker is responsible for treating simple illnesses among the villagers .The foundation buys the medicines from companies whose price are most reason able and supplies it to the VHW .although village health workers are supported by staff and field workers from the foundation they are largely self reliant, dispensing
curative and preventive medicine .they visit the nearest training centre once a week to submit their reports and pass on any new information.
The village infant workers are assigned a village infant day care centre or balwadi where the trained village infant worker take care of the children the age of five years, whose mother are ill or out at work. The village infant worker is trained by the foundation in child development, behavior and child psychology. The foundation also organizes family planning services and conducts intensive campaigns for immunization against the six most common diseases like polio, tetanus measles, diphtheria, tuberculosis.
The foundation apart from heath care programmes provides facilities for clean drinking water poverty and unemployment. The foundation arranges for bank loans for starting new business and they also provide loans for women choosing to make handicrafts. The foundation provides the raw materials and designs and handles the marketing of the products and returns the profit to the woman as labour charges supplementing their family income which increases their standard of living and making them self reliant. The primary objective of the foundation is to educate villagers in such a way that they can bring back the benefits of their villages and lead a satisfying life in the midst of all those people whose lives they have helped to transform.
AMUL RELIEF TRUST:
When a devastating earthquake (Richter scale – 7.9) hit Gujarat on 26th January 2001. The epicenter 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 and villages damaged in the 2001 earthquake in the Kutch area. The Trust reconstructed 6 schools damaged and adopted to village to
rehabilitate the people displaced by the earthquake at a cost of Rs. 41.1 millions in Kutch area four of these schools started refunctioning from the last two academic sessions and the other two schools from the current session. The Relief Trust contributes financially or they donate their products as a relief measure whenever natural calamity occurs in the country.
COOPERATIVE DEVELOPMENT:
During the last six years, Amul has been implementing Internal Consultant Development (ICD) intervention for developing self-leadership among member producers – thereby enabling them to manage their dairy business efficiently leading to their overall development.
During this year, Amul continued to implement the module on Vision Mission Strategy (VMS) for primary milk producer members & Village Dairy Cooperatives. Facilitated by specially trained consultants, 1081 Village Dairy Cooperative Societies (VDCS) have already conducted their Vision Mission Strategy Workshops, prepared their Mission Statements & Business Plans for next five years. Amul review this business plan every year under VMS annual revisit programme and facilitate VDCS to prepare action plan for next year to propel the momentum gained through VMS.
The VMS module has prompted milk producers to initiate activities at villages such as Water management, Planned Animal Breeding, Animal Feed management, Improved member services management, Information Technology Integration and Networking, which have very far-reaching and long-term effects on the milk business. This planned management of milk production at milk producers’ level and planned VDCS management will not only help producer members to increase economic returns from their milk business but also help VDCS management to face competition.
Continuing the Cleanliness drive at village level, Amul has identified & imparted training to 8505 Core groups comprised of milk producers and Management of the VDCS till December 2006. To enhance the level of Cleanliness this year 5803 VDCS celebrated Red Tag Day on the 2nd of October and Amul also awarded the best performing VDCS.
As a part of the Breeding Services Improvement Programme, Amul continued implementation of the module of Improvement in Artificial Insemination (AI) Services and imparted training to 198 Core groups at village level and have decided to cover all the VDCS under Breeding Services with this module over the next year. To boost this movement, Amul is also conducting Mass De-worming campaign.
Further, Amul implemented the AI Audit Competition during the year and in the process, identified & awarded the best performing VDCS and AI Workers. In order to increase awareness about dairy industry scenario and impart leadership skills to the Chairmen& Secretaries of the Village Dairy Cooperatives, Amul conducted a Chairmen&
Secretaries’ Orientation Programme at Mother Dairy, Gandhinagar. During the year 826 Village Dairy Cooperative Societies have been covered involving 1596 Chairmen& Secretaries of the Village Dairy Cooperatives.
During the year, Amul continued to encourage increased participation of women milk producers in the Dairy Cooperative Societies. To develop their skills and leadership qualities, Amul organized two Self Managing Leadership (SML) Programme at Prajapita Brahmakumaris, Mount Abu. 2071 women resource persons along with Chairmen and Secretaries of 524 VDCS were involved.
In order to strengthen knowledge and skill base of young girls and women of the villages about milk production management and to motivate them to implement scientific milch animal breeding, feeding and management methods for their animals, Amul with technical collaboration and resources of Anand Agriculture University, initiated “Mahila Pashupalan Talim Karyakram” for women resource persons of the member unions.
AWARDS:
Ramakrishna Bajaj National Quality Award
The Gujarat Co-operative Milk Marketing Federation Ltd. has emerged as the top scorer in the service category of the prestigious IMC Ramakrishna Bajaj National Quality Award - 2003. This recognition has once again reiterated GCMMF's commitment to quality and excellence. The biggest strength of GCMMF is the trust it has created in the minds of consumers regarding the quality of its products. GCMMF and its brand Amul stand for guaranteed purity for whatever products it produces.
GCMMF has bagged this award for adopting noteworthy quality management practices for logistics and procurement. Over the years, it has established an efficient supply chain that penetrates even the remotest corners of the country. The information systems of the Federation are comprehensive and include details on product quality, delivery performance, supplier quality, disaster recovery and all essential commercial areas, the citation reads.
The Ramakrishna Bajaj National Quality Award is based on framework and principles almost similar to the Malcolm Baldrige Award that is given by the President of the United States to businesses - manufacturing and service, small and large - and to education and healthcare organizations that apply and are judged to be outstanding in seven areas: leadership, strategic planning, customer and market focus, information and analysis, human resource focus, process management, and business results.
INTERNATIONAL CIO 100 AWARDS FOR RESOURCEFULNES
GCMMF is a winner of the prestigious international CIO 100 award from IDG's CIO Magazine, USA. The 2003 CIO 100 award recognizes the organizations around the world that excel in positive business performance through resourceful IT management and best practices. This CIO International IT excellence Award has recognized the Cooperative Movement & its Leadership under the "Amul" brand, initiated by Dr. V Kurien, Milkman of India, who’s main Motto is to build Indian Society economically &
literally strong through innovative cooperative resourceful network, so as to provide quality service & products to the end consumers and good returns to the farmer members.
This award has also given direction that IT need to be encouraged & adopted more & more at grass root level and bridge the digital divide through proper training, re-training so as to bring radical change & benefit to the Indian society. Amul inspired all the employees of GCMMF Enterprise to sustain the challenges as a "Change Agent" by excelling their IT skills in order to transform the people around them towards IT Integration (e-Vision) on both the ends of supply chain (Village level Farmer to end consumer). This award also motivated the each & every member dairy, Amul's wholesale distributors, retailers, transporters and suppliers who have supported whole-heartedly the IT initiatives of GCMMF.
Village Societies ISO 9002 certification:
The Village Dairy Cooperatives of the Kaira District Cooperative Milk Producers Union Limited, Anand (AMUL) become the first such rural institution to obtain ISO certifications - when in the first phase 50 village co-operatives got ISO 9002 through the Quality Assurance Systems, Australia. With continued efforts, so far 250 village cooperatives have obtained ISO 9002.
AMUL- THE BRAND:
THE success of the Amul brand name has, no doubt, could distil reasons why Amul is a name widely recognized and respected, not just in cities and towns, but in villages as well.
Probably the easy, but nonetheless wrong, answer is that Amul has been advertised well. Certainly it has helped that those responsible for keeping the Amul name in the
public eye have used considerable imagination and, if I do say so, ‘The taste of India’ is nothing short of brilliant. However, there is much more to it.
Umbrella brand:
The network follows an umbrella branding strategy. Amul is the common brand for most product categories produced by various unions: liquid milk, milk powders, butter, ghee, cheese, cocoa products, sweets, ice-cream and condensed milk.
Amul's sub-brands include variants such as Amulspray, Amulspree, Amulya and Nutramul. The edible oil products are grouped around Dhara and Lokdhara, mineral water is sold under the Jal Dhara brand while fruit drinks bear the Safal name.
By insisting on an umbrella brand, GCMMF not only skillfully avoided inter-union conflicts but also created an opportunity for the union members to cooperate in developing products.
How AMUL Transformed Into a Brand:
A successful consumer product is the object of thousands, even tens of thousands of transactions every day. In these transactions, the brand name serves in lieu of a contract. It is the assurance to the buyer that her specifications will be met. It is the seller’s assurance that quality is being provided at a fair price.
If Amul has become a successful brand – if, in the trade lingo, it enjoys brand equity – then it is because they have honoured contract with consumers for close to fifty years.
The tough part of the use of a brand as a contract is that every day is a renewal; if, just once, the brand fails to meet the customer’s expectations or, more exactly, if it fails to delight the customer, then the contract loses its value.
If Amul’s sales continue to rise, it is because that contract has been honoured, again and again. It is a fact that when they first thought of exporting to West Asia and even to the United States, it was because of the loyalty of Amul customers who, even when far from home, still craved our ‘taste of India’.
What goes into the ‘contract’ that is a brand name? First is quality. No brand survives long if its quality does not equal or exceed what the buyer expects. There simply can be no compromise. That’s the essence of the contract. In the case of a food product, this means that the brand must always represent the highest hygienic, bacteriological and organoleptic standards. It must taste good, and it must be good.
Second, the contract requires value for money. If customer buys an Amul product, she gets what she pays for, and more. They have always taken pride in the fact that while they earn a good income for their owners – the dairy farmers of Gujarat – they don’t do it at the cost of exploiting the consumer. Even when adverse conditions have reduced supplies of products like butter, they have resisted the common practice of raising prices, charging what the market would bear. Rather, they have kept prices fair and done their best to ensure that retailers do not gain at the consumers’ expense.
The third element of the contract is availability. A brand should be available when and where the customer wants it. There is no benefit achieved in creating a positive brand image, and then being unable to supply the customer who wants to buy it. In case of AMUL over the years they have built what is probably the nation’s finest distribution network. They have reach hundreds of cities and towns through a cold chain that not only ensures that their products are available, but they reach the customer at the farthest end of the country with the same quality as you would find in Ahmedabad or Vadodara.
The fourth part of the contract is service. AMUL is dedicated and committed towards total quality. But, occasionally, they may make a mistake – or, our customer may think we’ve made a mistake, and the customer, as they say, is always right. That is why, for Amul, every customer complaint must be heard – not just listened to. And, every customer complaint must be rectified to the extent humanly possible.
For close to fifty years now, Amul has honoured its contract with the consumer. The contract that is symbolized by the Amul brand means quality. It means value for money. It means availability. And it means service.
How did the Amul brand become what it is? The first products with the Amul brand name were launched in 1955. Since then, they have been in use in millions of homes in all parts of India, and beyond.
Today Amul is a symbol of many things: Of high quality products sold at reasonable prices, of availability, of service. There is something more, though, that makes the Amul brand special and that something is the reason for their commitment to quality and value for money.
Amul is the brand name of 2 million farmers, members of 10,000 village dairy cooperative societies throughout Gujarat. This is the heart of Amul, it is what gives strength to Amul, and this is what so special about Amul.
In the early days of Kaira Union there was no dearth of cynics. Could ‘natives’ handle sophisticated dairy equipment? Could western-style milk products be processed from buffalo milk? Could a humble farmers’ cooperative market butter and cheese to sophisticated urban consumers?
The Amul team – farmers and professionals – confounded the cynics by processing a variety of high-grade dairy products, several of them for the first time from buffalo milk, and marketing them nationally against tough competition
What began way back in 1946 was really an effort to carve out a truly Indian company that would have the involvement of millions of Indians and place direct control in the hands of the farmers. It was a mandate for producing, owning and marketing and above all, building your own truly Indian Brand. And it was successful. Amul, therefore, is a brand with a difference.
AMUL’s Journey towards Excellence:
AMUL’s journey towards excellence is marked by some critical understanding of the business environment in large emerging economies like India where markets have to
be developed by combining efficiency related initiatives with increasing the base of marginal suppliers and consumers.
The essence of AMUL’s efforts were as follows:
It combined market and social development in an emerging economy. It recognized the inter-linkages between various environments that governed the lives of marginal milk farmers and the unmet needs of consumers. It also changed the supply chain paradigm in order to reduce the cost to the consumer while increasing the return to the supplier.
It realized that in order to achieve their objectives, it had to benefit a large
number of people – both suppliers and consumers. While large scale had the danger of failure due to poor control and required more resources, it also had the advantage of creating a momentum that would be necessary to bring more people into the fold and thereby help more suppliers and consumers.
It also realized that its goal could only be achieved in the long run and this required developing values in people and processes that were robust, replicable and transparent.
It also realized that the cooperative would not be independent and viable in the face of competition if it were not financially sound. This implied that AMUL had to develop distinct capabilities that would deliver competitive advantage to its operations.
This would include long term cost containment, world-class deployment of technological resources and R&D, and better leveraging of scarce resources
Amul's secret of 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 agrosystem 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 roles 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 and
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.
GUJARAT COPERATIVE MILK MARKETING FEDERATION
Gujarat Cooperative Milk Marketing Federation (GCMMF) is India's largest food products marketing organization. It is a state level apex body of milk cooperatives in Gujarat which aims to provide remunerative returns to the farmers and also serve the interest of consumers by providing quality products which are good value for money.
GCMMF was the sole marketing agency for the products produced by the different milk co-operative member societies of the State of Gujarat and for those of other States marketing their products under the brand name Amul. The farmers had realized that marketing was the key to the success of the Anand Pattern and to their success when they had control over the marketing system. The results are evident. Today, GCMMF is India's largest food products marketing organization with an annual sales turnover exceeding Rs 22 billion (about US$ 483.5 million). The Amul brand is among the most popular brands in the country. The following is the details of GCMMF
Members: 12 district cooperative milk producers' Union
No. of Producer Members: 2.5 million
No. of Village Societies: 11,962
Total Milk handling capacity: 9.91 million litres per day
Milk collection (Total - 2005-06): 2.28 billion litres
Milk collection(Daily Average 2005-06): 6.3 million litres
Milk Drying Capacity: 511 metric Tons per day
Cattle feed manufacturing Capacity: 2340 Mts per day
HISTORY OF GCMMF:
In the 1940s, in the district of Kaira in the State of Gujarat, India, a unique experiment was conducted that became one of the most celebrated success stories of India. At that time, In Gujarat, milk was procured 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. Polson’s Dairy chilled the milk and supplied it to the city of Bombay. It also extracted dairy products such as cheese and butter.
In 1946, under inspiration from a leading freedom fighter, Mr. Vallabhbhai Patel (who belonged to Gujarat and who later became the Home Minister of the Central Government), Mr. Tribhuvandas Patel, a local farmer, freedom fighter and social worker, organized the farmers into co-operatives. These co-operatives would procure milk from the farmers, process the milk and sell it in Gujarat and in Bombay.
In 1949, purely by chance, a dairy engineer, named Dr. Verghese Kurien, who had just completed his studies in dairy engineering in the U.S.A., came to India and was posted by the Government of India to a job at the Dairy Research Institute at Anand. A chance meeting between Dr. Kurien and Mr. Tribhuvandas Patel changed Dr. Kurien’s life and the course of India’s dairy industry. Though the purpose of this meeting was to simply to elicit some technical help from Dr. Kurien on commissioning some of the equipment just purchased by his co-operative, especially the chilling and pasteurizing equipment, the two men instantly struck a rapport.
After the commissioning problem was solved, Dr. Kurien’s involvement with the Kaira District Co-operative Milk Producers’ Union Limited (that was the name of the co-operative registered) grew very rapidly and it soon extended to 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 Polson’s Dairy and understood how co-operatives could transform the lives of the members.
At first, the main activity was collection and processing of the milk brought everyday by the member farmers to the local office of the co-operative. It was soon realized that it was not enough to merely act as the collection and selling agents for the farmers.
A variety of support services were required to enable the farmers to continue selling their milk of adequate quality and to avoid disasters such as death of their cattle (for a family owning just one or two cattle and depending on its milk for their income, death of cattle could indeed be a disaster).
The farmers were progressively given new services such as veterinary care for their cattle, supply of cattle feed of good quality, education on better feeding of cattle and facilities for artificial insemination of their cattle. All these were strictly on payment
basis: none of the services were free. This experiment of organizing farmers into co-operatives was one of the most successful interventions in India.
A very loyal clientele of member farmers was built up who experienced prosperity on a scale they could not have dreamt of ten years earlier, since with good prices paid for their milk, raising milch cattle could become a good supplementary source of revenue to many households. 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).
Kaira District Co-operative Milk Producers’ Union became better known by the brand name of the products marketed by it (Amul) than by the name of the co-operative itself. In 1954, Kaira District Co-operative Milk Producers’ Union 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. Subsequent years saw the addition of more plants to produce different products.
In 1973, the milk societies/district level unions decided to set up a marketing agency to market their products. This agency was the GCMMF. It was registered as a co-operative society on 9 July 19734. It had, as its members (ordinary share holders), the district level milk unions. No individual could become a shareholder in GCMMF. Starting from a daily procurement of 250 litres per day in 1946, 1946, GCMMF had become a milk giant with the milk procurement at about 6.3 million litres per day in 2005-06 with 12 dairy plants all over the State of Gujarat.
Objectives and Business philosophy of GCMMF:
The main stakeholder of GCMMF is the farmer member for whose welfare GCMMF exists. GCMMF states that its main objective is the 'carrying out of activities for the economic development of agriculturists by efficiently organizing marketing of milk and dairy produce, veterinary medicines, vaccines and other animal health products, agricultural produce in raw or processed form and other allied produce.
GCMMF aims to market the dairy and agricultural products of co-operatives through:
Common branding Centralized marketing Centralized quality control Centralized purchases and Efficient pooling of milk.
GCMMF has declared that its business philosophy is as follows:
To serve the interests of milk producers and To provide quality products that offer the best value to consumers for
money spent.
The biggest strength of GCMMF is the trust that it has created in the minds of its consumers regarding the quality of its products. Amul stands for guaranteed purity of whatever products it produces. None of its products are adulterated. In India, where such trust is hard to come by, this could provide a central anchor for GCMMF's future business plans.
Organizational structure of GCMMF:
GCMMF is a lean organization, a strategy that is believed to provide it with a cost advantage. At its headquarters in Anand, four general managers (GMs) and four assistant general managers (AGMs) assist the managing director (MD). The four AGMs look after the functions of marketing, systems, co-operative services and technical projects, respectively. The four GMs are in charge of marketing (dairy products), human resources development and marketing (Dhara and new business), finance and quality assurance, respectively.
The whole country is divided into five zones, each headed by a zonal manager responsible for the sales of all products within his zone. These managers report to the MD but functionally each also reports to the various AGMs/GMs at the headquarters. There are 50 sales offices spread across the country (of which only two are in Gujarat); a sales manager heads each office and is assisted by sales officers and field salespersons. The
entire country has been represented in this structure. GCMMF has one overseas office in Dubai.
GCMMF = Gujarat Co-operative Milk Marketing Federation; MUs = Member Unions; VCs = Village Co-operatives
The Anand Pattern :
The Anand Pattern is an integrated cooperative structure that procures, processes and markets produce. Supported by professional management, producers decide their own business policies, adopt modern production and marketing techniques and receive services that they can individually neither afford nor manage.
The Anand Pattern succeeds because it involves people in their own development through cooperatives where professionals are accountable to leaders elected by producers.
The institutional infrastructure village cooperative, dairy and cattle feed plants; state and national marketing is owned and controlled by farmers. Anand Pattern cooperatives have progressively, linked producers directly with consumers.
The milk cooperatives under Operation Flood follow the Anand Pattern, which was pioneered by Dr Kurien when he was General Manager of the Kaira District Cooperative Milk Producers' Union Limited, Anand. The success of the operation demonstrated that democratic institutions in villages within a specific economic sector could help an entire village community to develop themselves.
Dr Kurien nurtured the Union from a daily collection of 500 liters a day in 1948 to one million liters a day in early 1990. He helped set up similar District Cooperative Unions in six other districts of Gujarat which eventually federated to an apex body, the Gujarat Cooperative Milk Marketing Federation Limited. An establishment which Dr Kurien now heads as Chairman. The Federation covers more than 1.5 million milk producer families
Maximizing farmer profit and productivity through cooperative effort is the hallmark of the Anand Pattern.
NATIONAL DAIRY DEVELOPMENT BOARD:
The National Dairy Development Board (NDDB) was created in 1965, fulfilling the desire of the then Prime Minister of India - the late Lal Bahadur Shastri - to extend the success of the Kaira Cooperative Milk Producers' Union (Amul) to other parts of India. That success combined the wisdom and energy of farmers with professional management to successfully capture liquid milk and milk product markets while supporting farmer investment with inputs and services. The National Dairy Development Board has been constituted as a body corporate and declared an institution of national importance by an Act of India's Parliament.
The National Dairy Development Board -- initially registered as a society under the Societies Act 1860 -- was merged with the erstwhile Indian Dairy Corporation, a company formed and registered under the Companies Act 1956, by an Act of India's Parliament - the NDDB Act 1987 (37 of 1987), with effect from October 12, 1987. The
new body corporate was declared an institution of national importance by the Act. The general superintendence, direction, control and management of NDDB's affairs and business vests with the Board of Directors
The National Dairy Development Board (NDDB) was founded to replace exploitation with empowerment, tradition with modernity, stagnation with growth, transforming dairying into an instrument for the development of India's rural people
NDDB began its operations with the mission of making dairying a vehicle to a better future for millions of grassroots milk producers. The mission achieved thrust and direction with the launching of “Operation". A programme extending over 26 years and which used World Bank loan to finance India's emergence as the world's largest milk producing nation. Operation Flood's third phase was completed in 1996 and has to its credit a number of significant achievements.
NDDB owns 96,000 dairy cooperatives integrated through a three tier cooperative structure - "The Anand Pattern", owned by more than ten million farmers; procure an average of 16.5 million litres of milk every day. The milk is processed and marketed by 170 milk producers' cooperative unions which, in turn, own 15 state cooperative milk marketing federations.
Since its inception, the Dairy Board has planned and spearheaded India's dairy programmes by placing dairy development in the hands of milk producers and the professionals they employ to manage their cooperatives. In addition, NDDB also promotes other commodity-based cooperatives, allied industries and veterinary biologicals on an intensive and nation-wide basis.
PRINCIPLES OF NDDB:
Cooperation is the preferred form of enterprise, giving people control over the resources they create through democratic self-governance.
Self-reliance is attained when people work together, has a financial stake, and both enjoy the autonomy and accept the accountability for building and managing their own institutions
Progressive evolution of the society is possible only when development is directed by those whom it seeks to benefit.
All beneficiaries, particularly women and the less privileged must be involved in cooperative management and decision making
Technological innovation and the constant search for better ways to achieve our objectives is the best way to retain our leading position in a dynamic market
Methods change to reflect changing conditions, our purpose and values must remain constant.
OPERATION FLOOD
INTRODUCTION:
The success of Operation Flood, the largest dairy development programme in the world, in substantially increasing milk production and rural incomes in India is now recognized as one of the important example of how to alleviating rural poverty in the world. Operation Flood has already provided productive jobs to about 7 million rural families organized into 70,000 village dairy co-operatives, 170 district dairy unions and 25 state level federations.
Milk production is an extremely labour intensive occupation. In many countries of the world, including India, it is the most productive way of converting crop residues and agricultural by-products into valuable food. Dairy development programmes in India are
based on the development of indigenous breeds of cattle and buffaloes and local feeds which do not include grains suitable for human consumption.
HISTORY:
Launched in 1970, Operation Flood has helped dairy farmers direct their own development, placing control of the resources they create in their own hands. A National Milk Grid links milk producers throughout India with consumers in over 700 towns and cities, reducing seasonal and regional price variations while ensuring that the producer gets a major share of the consumers' rupee. It also helped eradicate the need for middlemen thereby As a result of the cooperative structure the whole exercise of production and distribution of milk and milk products has become economically viable for farmers to undertake on their own instead of surrendering a majority of the profit to corrupt middlemen. . Operation Flood has been instrumental in helping the farmer’s mould their own development. The bedrock of Operation Flood has been village milk producers’ cooperatives, which procure milk and provide inputs and services, making modern management and technology available to members
Operation Flood's objectives:
Increase milk production ("a flood of milk") Augment rural incomes Fair prices for consumers
INSTITUTE OF RURAL MANAGEMENT:
The Institute of Rural Management, Anand (IRMA) was established in December 1979, with the support of the central government the Gujarat government, and NDDB and IDC. It was first of its kind. IRMA’S fully residential campus is located on a60-acre site leased from the Gujarat government as a favor by the Gujarat agricultural university and NDDB. IRMA’S objectives are to educate and train graduates to manage the income generating and development activities of rural producers, to conduct training course for those who perform specific managerial functions in rural enterprises, to undertake basic research into the process of rural management in order to augment the existing store of knowledge, to research problems in the rural sector in order to improve the management of rural enterprises and finally to provide consultancy services to rural enterprises and organization in the cooperative sector and other sectors.
The students who join the institute spend two years on the course, of which the crucial segment is the ten weeks in their first year during which they are engaged in fieldwork.
Fieldwork consists of small groups of student living in rural areas with limited facilities. Here they become familiar with the realities in which the management theories and concepts that they have studied is tested. They begin to comprehend the sources and manifestations of rural poverty.
They are exposed to the problems of economic and social struggles and to the inequitable distribution of facilities. They study in depth the functioning of rural institutions in their proper settings. They even help out if a problem arises in managerial institutions and give better point of views.
For this they have to discipline themselves strictly to observe and understand, to listen and reflect, until their perceptions have been verified. When students have successfully completed the course they are awarded a diploma and they are placed in rural organizations approved by IRMA by the placement cell of the institute in consultation with NDDB.
Profile of Mr.Verghese Kurien
Dr. Verghese Kurien is better known as the "father of the white revolution" in India. He is also called as the Milkman of India. Dr. Varghese Kurien was the architect behind the success of the largest dairy development program in the world, christened as Operation Flood. He was the chairman of the Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF) and his name was synonymous with the Amul brand.
Born on 26th November, 1921 in Kozhikode, Kerala, Dr. Verghese Kurien graduated with Physics from Loyola College, Madras in 1940. Subsequently, he did his B.E. (Mechanical) from the Madras University and went to USA on a government scholarship to do his Masters in Mechanical Engineering from Michigan State University. In between, he completed special studies in engineering at the Tata Iron and Steel Company Institute at Jamshedpur, Bihar, in February 1946 and underwent nine months of specialized training in dairy engineering at the National Dairy Research Institute of Bangalore.
Dr. Verghese Kurien returned from America in 1948 and joined the Dairy Department of the Government of India. In May 1949, he was posted as Dairy Engineer
at the Government Research Creamery, a small milk-powder factory, in Anand, Gujarat. Around this time, the newly formed cooperative dairy, Kaira District Cooperative Milk Producers' Union Limited ((KDCMPUL), was engaged in battle of survival with the privately owned Polson Dairy, which was a giant in its field. Enthused by the challenge, Dr. Verghese Kurien left his government job and volunteered to help Shri Tribhuvandas Patel, the Chairman of KDCMPUL, to set up a processing plant. This led to the birth of AMUL and the rest is history.
In 1965, the then Prime Minister Lal Bahadur Shastri, created the National Dairy Development Board (NDDB) under the leadership of Dr. Verghese Kurien to replicate the success story of Amul throughout the country. In 1973, Dr. Kurien set up GCMMF (Gujarat Cooperative Milk Marketing Federation) to market the products produced by the dairies. Under Dr. Kurien's stewardship India became the largest producer of milk in the world.
During his illustrious career, Dr. Verghese Kurien won many accolades and awards. These include: Ramon Magsaysay Award for Community Leadership (1963), Padma Shri (1965), Padma Bhushan (1966), Krishi Ratna Award (1986), Wateler Peace Prize Award of Carnegie Foundation (1986), World Food Prize Laureate (1989), International Person of the Year (1993) by the World Dairy Expo, Madison, Wisconsin, USA, and Padma Vibhushan (1999).
Growth and Challenges:
From its inception with the formation of its first milk cooperative, AMUL network has sustained an impressive 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.
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 by a 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 per capita milk supply from its members.
This growth is achieved by increasing milk 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 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. 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 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 agri-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 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.
SWOT ANALYSIS OF INDIAN DAIRY INDUSTRY:
Strengths :
Demand profile: Absolutely optimistic. Margins: Quite reasonable, even on packed liquid milk. Flexibility of product mix: Tremendous. With balancing equipment, you can keep
on adding to your product line. Availability of raw material: Abundant. Presently, more than 80 per cent of milk
produced is flowing into the unorganized sector, which requires proper channelization.
Technical manpower: Professionally-trained, technical human resource pool, built over last 30 years
Weaknesses :
Perishability: Pasteurization has overcome this weakness partially. UHT gives milk long life. Surely, many new processes will follow to improve milk quality and extend its shelf life.
Lack of control over yield: Theoretically, there is little control over milk yield. However, increased awareness of developments like embryo transplant, artificial
insemination and properly managed animal husbandry practices, coupled with higher income to rural milk producers should automatically lead to improvement in milk yields.
Logistics of procurement: Woes of bad roads and inadequate transportation facility make milk procurement problematic. But with the overall economic improvement in India, these problems would also get solved.
Problematic distribution: Yes, all is not well with distribution. But then if ice creams can be sold virtually at every nook and corner, why can’t we sell other dairy products too? Moreover, it is only a matter of time before we see the emergence of a cold chain linking the producer to the refrigerator at the consumer’s home!
Competition: With so many newcomers entering this industry, competition is becoming tougher day by day. But then competition has to be faced as a ground reality. The market is large enough for many to carve out their niche.
Opportunities :
"Failure is never final, and success never ending”. Dr Kurien bears out this statement perfectly. He entered the industry when there were only threats. He met failure head-on, and now he clearly is an example of ‘never ending success’! If dairy entrepreneurs are looking for opportunities in India, the following areas must be tapped:
Value addition: There is a phenomenal scope for innovations in product development, packaging and presentation. Given below are potential areas of value addition:
o Steps should be taken to introduce value-added products like shrikhand, ice creams, paneer, khoa, flavored milk, dairy sweets, etc. This will lead to a greater presence and flexibility in the market place along with opportunities in the field of brand building.
o Addition of cultured products like yoghurt and cheese lend further strength - both in terms of utilization of resources and presence in the market place.
o A lateral view opens up opportunities in milk proteins through casein, caseinates and other dietary proteins, further opening up export opportunities.
o Yet another aspect can be the addition of infant foods, geriatric foods and nutritionals.
Export potential: Efforts to exploit export potential are already on. Amul is exporting to Bangladesh, Sri Lanka, Nigeria, and the Middle East. Following the new GATT treaty, opportunities will increase tremendously for the export of agri-products in general and dairy products in particular.
Threats :
Milk vendors, the un-organized sector: Today milk vendors are occupying the pride of place in the industry. Organized dissemination of information about the harm that they are doing to producers and consumers should see a steady decline in their importance.
The study of this SWOT analysis shows that the ‘strengths’ and ‘opportunities’ far outweigh ‘weaknesses’ and ‘threats’. Strengths and opportunities are fundamental and weaknesses and threats are transitory. Any investment idea can do well only when you have three essential ingredients: entrepreneurship (the ability to take risks), innovative approach (in product lines and marketing) and values of quality/ethics).The Indian dairy industry, following its delicensing, has been attracting a large number of entrepreneurs. Their success in dairying depends on factors such as an efficient yet economical procurement network, hygienic and cost-effective processing facilities and innovativeness in the market place. All that needs to be done is: to innovate, convert products into commercially exploitable ideas.
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 a large number of cooperatives have taken roots amongst producers of food (especially those that are perishable). 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 a 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 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 to the 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 play an important role in the building of the society even today.
Firms those are 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.
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 AMUL is one example of success in managing such complex supply chain.
BIBLIOGRAPHY
BIBLIOGRAPHY
BOOKS REFERRED:
THE AMUL INDIA STORY BY RUTH HEREDIA
SITES REFERRED :
WWW.AMUL.COM
WWW.NDDB.COM
WWW.INDIADAIRY.COM
WWW.GOOGLE.COM
WWW.MSN.COM
