What do you attribute success of AMUL to?

The Success of AMUL is attributed to the unique features like.

Characteristics Leadership

Elements Charisma, long term vision, commitment, trustworthy, selfless gain, strong managerial style (bordering on stubbornness), technocrat, panIndian vision/nationalism, persuasion Strategy & Business Farmer Orientation, technology, Model of AMUL cost leadership, product variety in later years Organization Network of cooperatives, National Dairy Development Board, nature of professional managers

Implementation Mechanisms Constantly raising the bar, promoting a can-do attitude, communication of the vision to farmers, consumers and the government

Operations & Supply Robust logistics, effective Chain production, implementation of state-of-art technology

Marketing

Gujarat Cooperative Marketing Federation

Milk

R&D focus, efficient supply chain, simultaneous development of suppliers & markets, financing projects from internal accruals Democratic governance of cooperatives, unique composition and role of board members of cooperatives, proactive role of the village societies High utilization of plant capacity, technology & automation for enhancing quality, TQM, adoption of modern manufacturing practices, coordination between unions & marketing federation Product mix, pricing, dealer network, managing supply and demand growth, advertisement

LEADERSHIP
Mr. Verghese Kurien showed main interest in establishing union who was supported by Shri Tribhovandas Patel who lead the farmers in forming the Co-operative unions at the village level. The Kaira district milk producers union was thus established in ANAND and was registered formally on 14th December 1946. Since farmers sold all the milk in Anand through a co-operative union, it was commonly resolved to sell the milk under the brand name AMUL. Presently Shri B. M. Vyas is M.D. of GCMMF, Anand & Shri Rahulkumar Shrivastav is M.D. of AMUL Plant, Anand

AMUL is co operative formed by 13 Unions. The board of directors list is mentioned below BOARD OF DIRECTORS: 1. Shri Ramsingh P. Parmar 2. Shri Rajendrasinh D. Parmar 3. Shri Shivabhai M. Parmar 4. Shri Maganbhai G. Zala 5. Shri Chandubhai M. Parmar 6. Shri Pravinbhai F. Solanki 7. Shri Dhirubhai A.Chavda 8. Shri Bhaijibhia A. Zala 9. Shri Mansinh K.Chauhan 10. Shri Bipinbhai M.Joshi 11. Smt. Madhuben D. Parmar 12. Smt. Sarayuben B. Patel 13. Shri Ranjitbhai K. Patel Chairman Vice Chairman Member Member Member Member Member Member Member Member Member Member Member

ORGANIZATION
AMUL is the successful Co-operative sector. The brand names itself indicates how AMUL is separated over the country and world. AMUL gets so many awards for its productivity and performance. AMUL is Asias no.1 and 2nd in world, which is a matter of pride for India. AMUL has a three level structure. The first level is called primary level. Here village societies are placed. The second level is district level where NDDB placed and the third level is state level where Federation placed Co-operation among this three level is necessary for achievement of goal.

AMUL is organized as a cooperative of cooperatives (i.e., each village society, a cooperative in itself, is a member of the AMUL cooperative) thereby deriving the advantage of scale and uniformity in decision making. AMUL established a group to standardize the process of organizing farmers into village societies. In addition to establishing the criteria for selecting members, the group had to train the VS to run the cooperative democratically, profitably and with concern for its members. This included establishing procedures for milk collection, testing, payment for milk purchased from member farmers and its subsequent sale to the union, accounting, ensuring timely collection and dispatch of milk on milk routes established by the union, etc. Milk procurement activity at AMUL comprises development and servicing of village societies, increasing milk collection, procurement of milk from societies & its transport to the chilling locations, and resolving problems of farmers and village societies. Their stated objective is to ensure that producers get maximum benefits. The Village Societies Division coordinates these activities. Milk collection takes place over a large number of pre-defined routes according to a precise timetable. The field staff of this division also helps village societies interface with the Union on various issues ranging from improvement of collection, resolving disputes, repair of equipments to obtaining financing for purchase of equipment etc. In addition, they are also responsible for the formation of new societies, which is an important activity at AMUL.

STRATEGY & BUSINESS MODEL OF AMUL

AMUL - Business Model A. The business model had to include both the costs and benefits of services that would be needed to deliver milk with high productivity as well as to assist farmers in improving their social environment. The success of the network depended on high collection rate of milk. This required increasing membership with more VSs (Village societies), raising the number of members per VS, and improving the milk yield (i.e., better cattle management), constant concern about the cost to farmers in the network and delivering quality to customers at low prices. The cooperative had decided as part of its value: to charge for each service provided to the supplier to purchase all milk that member farmers produced to sell liquid milk at affordable prices so as to serve a large number of consumers to develop and deliver services that will improve lives of people in the network to hire professional managers, to run the federation and unions, whose values included upliftment of rural poor. B. It is noteworthy that from the very beginning, in the early 1950s, AMUL adopted the Network as the basic model for long-term growth. Two aspects of this network deserve special Attention. 1. First, the network explicitly includes secondary services to the farmer-suppliers. 2. Second, several of the entities in the network are organized as cooperatives linked in a hierarchical fashion.

Figure A

C.

Market / Customers:

Suppliers: A majority of the suppliers are small or marginal farmers who are often illiterate, poor, and with liquidity problems as they lack direct access to financial institutions. Again, traditional market mechanisms are not adequate to assure sustenance and growth of these suppliers. Third Party Logistics Services: In addition to the weaknesses in the basic infrastructure, logistics And transportation services are typically not professionally managed, with little regard for quality and service. Even from the cursory description of the environment provided above, it should be clear that the traditional management practices of the west are not sufficient for success in emerging markets. 1. Many MNCs that ventured into India following the first phase of liberalization in 1990s found this at a great cost. The success of GCMMF and AMUL is in glaring contrast to the experience of these MNCs and thus provides an alternative business model that may be useful for others considering entry into emerging markets like India. 2. A schematic description of the business model showing the demand-supply linkages is presented in Figure A. 3. In addition to material flows, the figure shows major decisions, support services, and planning and coordination activities. 4. On the supply side, as mentioned earlier, the member-suppliers were typically small and marginal farmers with severe liquidity problems, illiterate and untrained. AMUL and other cooperative Unions adopted a number of strategies to develop the supply of milk and assure steady growth. Managing Third Party Service Providers: Well before the ideas of core competence and the role of third parties in managing the supply chain were recognized and became fashionable, these concepts were practiced by GCMMF and AMUL. From the beginning, it was recognized that the core activity for the Unions lay in processing of milk and production of dairy products. Accordingly, the Unions focused efforts on these activities and related technology development. The 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, some veterinary services etc. It is worth noting that a number of these third parties are not in the organized sector and many are not professionally managed. Hence, while third parties perform the activities, the Unions and GCMMF have developed a number of mechanisms to retain control and assure quality and timely deliveries. This is particularly critical for a perishable product such as liquid milk.

AMUL PRODUCTION PLANNING PROCESS AN OVERVIEW GCMMF (Gujarat Co Operative Milk Marketing Federation) is the marketing body of all Unions who manufacture and sell products under Brand name AMUL. 1. GCMMF according to the market survey and past sales predicts the sales for the next few months. 2. Accordingly the requirements at several depots (42 approx) spread across the country is decided. 3. PCM Program committee meeting is held at the start of every month (generally in the first week). 4. GCMMF projects its expected sales in the meeting. 5. The inventory available at each of the plants is taken into account. 6. Taking into consideration Past and Future/Predicted sales, the amount of milk expected to be procured, the total quantity of each product to be produced is roughly determined. 7. Depending on demographics of AMUL Dairies, GCMMF Depots and several other factors quantity of each product to be produced at each respective AMUL dairy is determined. I.e. PD Planned Dispatch is determined for each AMUL Union. 8. Accordingly Production Planning is done for each AMUL dairy.

OPERATIONS & SUPPLY CHAIN MANAGEMENT

SUPPLY CHAIN MANAGEMENT AT AMUL AMUL is producing several products for which it needs several Packing as well as ingredients materials. Hence there are total approx. 10000 items purchased by AMUL including both Packing and Ingredients. AMUL has maintained good relation with its supplier due to which a problem of stock out as well as disruption in production happens in very rare case. On the other side of supply chain Distributor, Retailers, Dealers comes which plays an important part to understand consumer behavior. Hence AMUL has developed good relation with its Distributors and deliver Finished product whenever it is been ordered at a time so that a customer cant switch over to other Brand. That is why AMUL is one of the successful Cooperative of Asia. In recent times AMUL has developed its AMUL Parlors, where all AMUL products are selling for better availability of products.

OPERATIONS Robust coordination is one of the key reasons for the success of operations involving such an extensive network of producers and distributors at GCMMF. Some interesting mechanisms exist for coordinating the supply chain at GCMMF. These range from ensuring fair share allocation of benefits to various stakeholders in the chain to coordinated planning of production and distribution. 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

Supply Chain at AMUL Chart showing supply chain at AMUL:-

As mentioned earlier, the strategy, design and practices in AMULs 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.

MARKETING DEPARTMENT (GCMMF)

Every organization that produces one or more products requires marketing of the products sell them in the market. It is only through marketing that people know about a

company's products. Hence marketing is considered as a key activity of organization. The organization requires sound marketing structure to carry on its marketing activities. However the concept of marketing is not confined only to selling of goods and services to customers. Instead the company tries to create and maintain the customer base through marketing. The marketing thus focus on the customer needs and wants in the market and emphasis on producing and selling only those goods, which have higher demand in market. The company mainly markets its products through advertising. Marketing uses various sales promotional tools to boost the sales of the company. The marketing department thus should have sound distribution channel and promotional system to make the marketing activities sound. Marketing Mix:The marketing mix is a set of four elements: Product, Price, Place and Promotion and this is decided by GCMMF. 1. Product:At AMUL, "GUJARAT CO-OPERATIVE MILK MARKETING FEDERATION LIMITED (GCMMF)" does the product planning at national level. It is the duty of GCMMF to plan the new product by conducting the market survey at the state and national level. However, issues of product lunch at the local level are taken care of by AMUL itself. The AMUL has set up the commercial department, which conducts the survey in the local areas through business. The new product decisions are also taken by the GCMMF. 2. Price:The prices of products of AMUL are also decided by the GCMMF. The GCMMF conducts the market survey to check the validity and feasibility of prices in the market and accordingly decides the prices of AMUL products. However, the price is inclusive of several

elements like, Cost of Milk, Labor Cost, Processing Cost, Packaging Cost, Advertising Cost, Transportation Cost, Sales Promotion Cost, Taxes etc. The GCMMF considers all these cost aspects and set them up in pricing structure to decide the jelling price of milk and milk products. 3. Promotion:AMUL promotes its products through newspaper, Television, hoardings etc. Television is the best media for advertising. The GCMMF however uses hoarding for advertising in local areas. Hoarding designed on the creative basis attract the customer more. 4. Place:AMUL has developed federation and AMUL parlors located in several parts of country. The GCMMF handles the works relating to managing of stocks and distributors in country. Thus GCMMF looks after the disbursement of products to the various marketing channel.

CONCLUSION: AMUL is a highly successful co-operative sector in India that is truly meant for the farmer. AMUL has a competitively established system. The four hands of AMUL are working successfully with the corporation. AMUL is famous for its Anand pattern of co-operative organization in world.