Organization Study of KOMUL, Kolar

PART A CHAPTER - 1
INDUSTRY PROFILE
Introduction- Dairy Industry
Dairy industry is an important industry in India. The country is the worlds largest milk producer, accounting for more than 13% of the worlds total milk production. It is the worlds largest consumer of dairy products, consuming almost 100 percent of its own milk production. Dairy products are a major source of cheap and nutritious food to millions of people in India. It is the only acceptable source of animal protein for large vegetarian segment in Indian population particularly among landless, small and marginal farmers and women. Dairying has been considered as one of the activities aimed at alleviating the poverty and unemployment especially in the rural areas where it is rain-fed and drought-prone region.

History of Dairy Industry

The development of Indian dairy industry took its shape after the white revolution. The white revolution has increased the milk production from 17 million tons (1950-1951) to 110 million tons (2008-2009) Dr. Verghese Kurien engineered the white revolution in India. He was the chairman of the Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF) and his name was synonymous with the Amul brand. Operation Flood (white revolution), was done in 3 phases. Operation Flood: Operation Flood has helped farmers, direct their own development, placing control of the resources they create in their own hands. A National Milk Grid, bridges 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 price consumers pay. GCEM, Department of Management Studies Page 1

Organization Study of KOMUL, Kolar The bedrock of Operation Flood has been village milk producers cooperatives, which procure milk and provides inputs and services, making modern management and technology available to members. Operation Floods objectives included: Increase milk production (a flood of milk) Augment rural incomes Fair prices for consumers

Programme Implementation: Operation Flood was implemented in three phases. Phase I Phase I (19701980) was financed by the sale of skimmed milk powder and butter oil donated by the European Union (then the European Economic Community) through the World Food Programme. NDDB planned the programme and negotiated the details of EEC assistance. During its first phase, Operation Flood linked 18 of Indias premier milk sheds with consumers in Indias major metropolitan

cities: Delhi, Mumbai, Kolkata and Chennai; thus establishing mother dairies in four metros. Operation flood, also referred to as White Revolution was a gigantic project propounded by Government of India for developing dairy industry in the country. The Operation Flood 1 originally meant to be completed in 1975, actually the period of about nine years from1970-79, at a total cost of Rs.116 crore. As start of operation Flood-1 in 1970 certain set of aims were kept in view for the implementation of the programmers. Improvement by milk marketing was made by organizing dairy sector in the metropolitan cities including Bombay, Calcutta, Madras, and Delhi.

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Organization Study of KOMUL, Kolar The objectives of commanding share of milk market and speed up development of dairy animals respectively hinter lands of rural areas with a view to increase both production and procurement. Phase II Operation Flood Phase II (19811985) increased the milk sheds from 18 to 136; 290 urban markets expanded the outlets for milk. By the end of 1985, a self-sustaining system of 43,000 village cooperatives with 42.5 lakh milk producers were covered. Domestic milk powder production increased from 22,000 tons in the pre-project year to 1, 40,000 tons by 1989, and the increase coming from dairies set up under Operation Flood. In this way EEC gifts and World Bank loan helped promote self-reliance. Direct marketing of milk by producers co-operatives has increased by several million liters a day. Phase III Phase III (19851996) enabled dairy cooperatives to expand and strengthen the infrastructure required to procure and market increasing volumes of milk. Veterinary first-aid health care services, feed and artificial insemination services for cooperative members were extended, along with intensified member education. Operation Floods Phase III consolidated Indias dairy cooperative movement, adding 30,000 new dairy cooperatives to the 42,000 existing societies organized during Phase II. Milk sheds peaked to 173 in 1988-89 with the numbers of women members and Womens Dairy Cooperative Societies increasing significantly. Phase III gave increased emphasis to research and development in animal health and animal nutrition. Innovations like vaccine for Theileriosis, bypassing protein feed and urea-molasses mineral blocks, all contributed to the enhanced productivity of milk animals.

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Organization Study of KOMUL, Kolar The market of milk industry in India: The Beginning of organized milk handling was made in India with the establishment of the Military Dairy Farms (oldest in Allahabad, 1889), the salient features of the market of milk industry so far have been: Long distance refrigerator rail-transport of milk from AMUL to Mumbai since 1945. Handling of milk in co-operative Milk Union (oldest: Allahabad, 1913) established all over the country on a small scale in the early stages. Pasteurization and bottling on a large scale for organized distribution was started at Aarey (1950), Worly (1961), Calcutta (Haringhata, 1959), Delhi (1959), Chennai (1963), etc. Establishment of milk plant under the five-year plan for dairy Development all over India. These were taken up with the dual object of increasing the national level of milk consumption and ensuring better return to the primary milk producer. Their main aim was to produce more, better and cheaper milk.

Growth of Dairy Industry in India India has become the worlds No. 1 milk producing country, with output in 19992000 (marketing year ending March 2000) forecasted at 78 million tonnes. The annual rate of growth in milk production in India is between 5-6 per cent, against the worlds at 1 per cent. Indias annual milk production has more than trebled in the last 30 years, rising from 21 million tonnes in 1968 to an anticipated 80 million tonnes in 2000.

The country's estimated milk production for the year 2010-11 is 121 million tonnes, close to 17 percent of world milk production. Last year, the annual milk production stood at 112 million tonnes. World milk production increased to 710 million tonnes in 2010, an increase of 1.6 percent over previous year.

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Organization Study of KOMUL, Kolar India's milk production increased from 21.2 million MT in 1968-69 to 66.2 million MT in 1995-96 and to 121.7 million MT in 2010-11.Per capita availability of milk was around 276 grams per day in 2010-11 increased from 195 grams per day in 1995-96, up from 112 grams per day in 1968-69.India's milk production increased over 4% annually during 2000-01 to 2010-11 surpasses the 1.6% growth in population; the net increase in availability is around 2.4% per year. Table1.1: Showing the year and estimated milk production. Year 1970 1980 1990 2000 2010 Estimated milk production (million tonnes) 21.2 44.8 63.1 82 121

Chart 1.1: Showing the year and estimated milk production.

Estimated Milk Production

150 million tonnes 100 50 0 1970 1980 1990 year 2000 2010 estimated milk production (million tonnes)

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Organization Study of KOMUL, Kolar This rapid growth and modernization is largely credited to the contribution of dairy cooperatives, under the Operation Flood (OF) Project, assisted by many multi- lateral agencies, including the European Union, the World Bank, FAO and WFP (World Food Program). In the Indian context of poverty and malnutrition, milk has a special role to play for its many nutritional advantages as well as providing supplementary income to some 70 million farmers in over 5, 00,000 remote villages. Milk is the raw material of the dairy industry, which cannot be created artificially and stored for a long time. The term Milk Market refers to the fluid whole that is sold to the individuals usually for direct consumption. The dairy industry has come up to the present stage because of well-planned, effective and coordinated efforts of the National Dairy Development Board, co-operative of the Government. National Dairy Development Board lays down rules and regulations to be followed by the various co-operative milk societies. Amul (Anand Milk Union Limited) was a

pioneer in starting a co-operative milk producers society and thereafter many cooperative societies where started. World Bank also had given credit of Rs.78 Crores for starting another society as AMUL in 1975.

Salient Features of Indian Dairy Sector

In Livestock sector, Dairy is one of the high growth areas. The Dairy sector contributes 68 percent and in order to meet the target of 6 percent growth rate, milk group has to show a minimum growth rate of 5 percent. Dairying has shown a growth of 3.5 per cent, and is projected to grow at 3 per cent only during 2009 on account of overall recession. Despite high growth rate in production, per capita availability of milk in India is only 245 gms / day, which is much lower than world average 285 gms/ day.

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Organization Study of KOMUL, Kolar India is among the worlds largest and the fastest growing market for milk and milk products. The market size in value terms is rupees 2000 billion (USD 47.6 billion) and growing at nearly 7.5% annually. Organized sector handles 10-12 million tonnes of packed liquid milk & 5-7 million tonnes of value added milk products while the unorganized sector handles 22-24 million tonnes of value added milk products. Due to competitive farm gate prices, huge opportunity exists in export of milk and value added milk products ,especially milk powders to neighboring countries where domestic production cannot meet demand. The production capacities have increased of the Dairy by-products such as Casein, Whey and Lactose, which are exported. Growth is organized F & G retail has created the demand for processed milk products with longer shelf life. This has increased the necessity for large continuous equipment manufacturers, which could help to increase the scale of operations and reduce the manufacturing cost. Dairy Scenario with its growing herd-size, steady rise in herd quality, productivity and increasing mechanization will attain phenomenal growth in near future. Improved herd health, productivity and milk output are the need of the day.

Latest Developments in Dairy Industry

Indian Dairy Industry is the largest milk producer all over the world, around 100 million MT Indian Dairy Industries value of output amounted to Rs. 1179 billion in 2004-05 which approximately equals combined output of paddy and wheat. With 1/5th of the worlds bovine population.

In India the Milch animals constitutes 45% indigenous cattle, 55 % buffaloes, and 10% cross breed cows

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Organization Study of KOMUL, Kolar Intensive Dairy Development Programmed (IDDP): The Schemes, modified under this programmes are on the basis of the recommendation of the evaluation studies which were launched during Eighth Plan period and is being continued throughout the Eleventh Plan with an outlay of Rs. 32.49 core for 2009-10. Strengthening Infrastructure for Quality and Clean Milk Production (CMP): This is a centrally sponsored scheme which was launched in October 2003, which had the main objective of improving the quality of raw milk produced at the every village level in the India. Dairy Venture Capital Fund- This is introduced in the Tenth Five Year Plan to bring about structural changes in unorganized sector, which would measure like milk processing at village level, marketing of pasteurized milk in a cost effective manner, quality or the up gradation of traditional technology to handle commercial scale using modern equipments and management skills. Evolution of Karnataka Milk Federation Karnataka Milk Federation (KMF) was instituted in 1984, by federating the 13 milk unions in the state and thus forming the state level apex organization. As a cooperative apex body of the state of Karnataka, it represents dairy farmers organization and also implements dairy development activities to achieve the following objectives: To build village level institutions in co-operative sectors to manage the dairy activities To ensure provision of milk production inputs, processing facilities and dissemination of know-how Provides assured and remunerative market for the milk produced by the farmer members To facilitate rural development by providing opportunities for self-employment at village level, preventing migration to urban areas, introducing cash economy and opportunity for steady income Provide quality milk to urban consumers.

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Organization Study of KOMUL, Kolar

List of Co-operative Milk Producers under Karnataka Milk Federation 1) Kolar Milk Union(KOMUL) 2) Bangalore Milk Union (BAMUL) 3) Mandya Milk Union 4) Mysore Milk Union 5) Hassan Milk Union 6) Belgaum Milk Union 7) Shimoga Milk Union 8) Tumkur Milk Union 9) Gulbarga Milk Union 10) Dharwar Milk Union 11) D K Milk Union 12) Bijapur Milk Union 13) Bellary Milk Union

Bangalore Dairy, a joint venture of UNICEF, Government of India and Government of Karnataka was dedicated to the people of Karnataka on 23rd January 1965 by the then Honble Prime Minister Late Shri Lal Bahadur Shastriji. Sprawling over an area of 52 acres, the Dairy had an initial capacity to process 50,000 liters of Milk per day. This dairy was handed over to the Karnataka Dairy Development Corporation (KDDC) in December 1975 as a part of Rural Milk Scheme of Mysore, Hassan and Kudige under Operation Flood-II and then transferred to Karnataka Milk Federation (KMF) in May 1984 as a successor of SDD.

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Organization Study of KOMUL, Kolar

CHAPTER-2 COMPANY PROFILE

Kolar-Chikkaballapura District Co-operative Milk Producers Union Ltd., (KOMUL) is Karnatakas 2nd highest Milk Producing District organization. It is a District level apex body of milk cooperatives in Karnataka, which aims to provide remunerative returns to the farmers by eliminating the middlemen and also serve the interest of consumers by providing quality Milk & milk products, which are good value for money. Once the District was named as Land of Gold & Silk, is making inroads in Quality Milk Production. It is KOMUL first installed Bulk Milk Coolers & Community Milking Machines at Society level in the state of Karnataka to get the quality milk required for UHT milk packed at Kolar Dairy under the brand name of Nandini GoodLife. Nandini is a brand name for KOMUL, which is operating under KMF.

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Organization Study of KOMUL, Kolar

2. A. Background and inception of the company.

Animal Husbandry is the most preferred allied activity in the district, which contributes substantially to the total income of the district and dairy farming forms the major activity in this sector. Dairy development activity in the district was initiated during the year 1975 under IDA assistance as a part of Bangalore Milk Union Ltd. [BAMUL]. Subsequently, the district was bifurcated from the operational area of BAMUL to form a separate milk union called Kolar Milk Union [KOMUL] with effect from 01-04-1987. The KOMUL has a milk processing plant at Kolar with a handling capacity of 25,000ltrs/ day [LPD] and three chilling at Chintamani, Gowribidanur, Sadli with handling capacity of 1,00,000 LPD, respectively. At Kolar, the dairy is manufacturing Butter, Ghee,Peda, Curds, Cheese, Masala Butter Milk, and UHT Milk in addition to pasteurized toned milk and full cream milk. UHT milk is being sold under the brand name of Nandini Good Life and Nandini-Smart while all other products are sold under the brand name of Nandini. The KOMUL started marketing of liquid milk in polythene sachets in entire Kolar district and in a part of Bangalore City since 1994. Recently it has entered Chennai market also selling nearly 5,000 LPD.

KOMUL Milestones
1987 Bifurcation of the district from an operational area of Bangalore Milk Union Ltd. (BAMUL) to form a separate milk union 1987 Establishment of first Women Dairy Co-operative Society in the Union. 1989 1990 1991 1991 Inauguration of Sadali chilling center. Initiation of milk marketing at Inter-dairy rate. Inauguration of Gowribidnur chilling center. KMF handed over chilling centers at Kolar, Sadali, Chintamani and Gowribidnur to Kolar Milk Union Ltd.

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Organization Study of KOMUL, Kolar 1994 Inauguration of full-fledged dairy at Kolar with a processing capacity of 1 Lakh Liter per day. 1995 1998 1999 1999 2000 2001 Inauguration of Administrative Building in the Dairy campus. Inauguration of Cheese Plant. Union started marketing Nandini Good life Milk. Expansion of processing capacity of Chintamani chilling center. Outside the state, entry into the Chennai for Milk marketing. Inauguration of Animal Disease Diagnostic Laboratory at Chintamani chilling center campus. 2001 2001 Installation of AMC Units at DCS level. For the first-time in the history of Karnataka, inauguration of BMC centers in the jurisdiction of KOMUL 2001 Kolar-Chikkaballapura management System 2001 2001 2001 2002 2003 Union started marketing MastiDahi. Expansion of Tetrapak Unit. Inauguration of Community Machine Milking Parlors (centers). Started implementation of TIFAC Project. Union bagged National Productivity Council Award again 2nd Place. 2004 2004 Union bagged National Productivity Council Award 2nd Place. So far the day maximum milk procurement in the history is 3rd December 2004(7,38,838 Kgs) 2005 2006 2006 2007 Inauguration of 100th BMC centers in the jurisdiction of KOMUL. Union bagged Best Co-operative Union Award in the state. Establishment of Producers Welfare Trust. Expanded UHT Processing Capacity from existing 0.40 LLPD to 1.5 LLPD. GCEM, Department of Management Studies Page 12 Dairy certified for ISO-9002 Quality

Organization Study of KOMUL, Kolar 2008- Sep 2008-Dec Union started to supply Goodlife milk to Indian army Union received Energy Conservation Award both from Central and State Governments. 2008-Dec KOMUL was renamed to KOLAR CHIKKABALLAPURA COOPERATIVE MILK PRODUCERS SOCIETIES UNION LTD 2009-March Installed and Commissioned the following TFA-A1 500ml Fino Packing machine 3600 Ltrs/hour TFA-A1 200ml Fino packing machine 2100 Ltrs/hour 2009 -April 2009 -May Introduced Good life milk 200ml fino packets to market. Launched New 100ml Brik UHT variant Milk called Sampoorna with Fat 4.5% & SNF 8.5% to market. 2009 -June KOMUL Achieved the highest milk procurement of 7, 45,446 Kgs of Milk on 08/06/2009. 2009 1st Place in National Energy Award and 2nd place in State Energy Conservation Award. 2010 Enhanced UHT plant for 2.5 lakhs litres per day packing

2. B. Nature of business carried

The nature of business of KOMUL is processing of milk and procuring of milk from the milk producing co-operative society. The plant carries out its functions of processing the milk and distributing the milk continuously and regularly.

2. C. Vision, Mission, and Quality Policy

VISION "Wish to grow into a model milk co-operative in the country"

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Organization Study of KOMUL, Kolar Vision 2020

Kolar-Chikkaballapura will collect 20 Lakh Lts. of Milk/day. Entire Milk will be collected through Bulk Milk Coolers, Computerized systems at villages. Kolar-Chikkaballapura Milk Quality will be a Global Benchmark. Milk Products manufactured from Kolar Raw Milk will be of International Standards.

MISSION Kolar-Chikkaballapura Milk Union continuously procure good quality milk by providing remunerative price & technical inputs to producers and supply good quality of Milk & Milk Products to the consumers. It also strives to achieve top position in the dairy industry by improving the financial position of the union. To provide assured and remunerative market for all the milk sold by the farmer members. To provide hygienic milk and milk products to urban consumers. To eliminate middlemen and organize institutions owned and managed by the milk producers by themselves, by employing professionals. . Quality Policy KOMUL continuously strives to improve their internal quality & operating system by educating milk producers & motivating work force to achieve customer satisfaction. KOMUL has obtained certification for ISO: 9001-2000 Quality Management System and they are in the process of upgrading the System to ISO-22000.

Quality Policy Objective Statement of KOMUL is as follows: Every job operation will be done by everyone in right time & rightly at first time.

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Organization Study of KOMUL, Kolar VALUES

Honesty Discipline Quality Hard Work Mutual Trust & Belief Transparency Co-operation & Team Work

2. D. Product Profile.
KOMUL (Nandini) is one of the well-known brand in the country. The union offers few products to its customers. The products are as follows: Table 2.d.1: Showing Product Profile of KOMUL. NANDINI TONED MILK: Karnatakas highest selling and most preferred milk.3% fat and 8.5% SNF content make this milk the best choice for all purposes. Available in 250 ml, 500 ml and 1 liter pouches across Karnataka. Homogenized variant also available5 litre and 6 litre pouches available in selected markets.

NANDINI HOMOGENISED MILK:

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Organization Study of KOMUL, Kolar

Badam, Pista, Elachi and Banana. Sterilised flavoured milks with rich creamy feel and great taste. Available in 200 ml take away bottles.

FULL CREAM MILK:

The Fresh Full Cream Milk available in the brand name "Nandini" is rich, creamier and tastier milk that contains 6% Fat and 9 % SNF. The Full Cream Milk is suitable for preparing home-made sweets and savouries and comes in 500 ml and 1 litre packs.

CURD:

Fresh curd that tastes just like traditional home made curd. Can be consumed as such or in combination with cooked rice or added as an ingredient in certain dishes. Available in 200g and 500 g pouches

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Organization Study of KOMUL, Kolar

BUTTER:

Made from fresh pasteurized cream for delectable taste, smooth texture and butter some delight. Tasty enough to relish in a variety of ways. Available in 500 g slabs.

GHEE: Nandini ghee is made from pure butter. It is fresh and pure will a delicious flavour. Hygienically

manufactured and packed in a special pack to retain the goodness of pure ghee. Shelf life of 6 months at ambient temperature.

This is available in 200ml, 500ml, 1-liter sachets, 5-liter tins and 15kg tins.

PEDA: Mouth-watering peda made from pure milk. One bite is enough to fill the heart with its creamy milk flavor. Available in 25 g, 50 g sachets and 100 g, 250 g pack.

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Organization Study of KOMUL, Kolar MASALA BUTTERMILK:

Fresh butter milk blended with quality spices to give that enlivening spicy tang of traditional spiced butter milk. A drink recommended after meals, for easy digestion. Masala buttermilk is manufactured and sold in the summer season, especially form month of March to July, the only period during which it gets demand. Available in 200 ml Tetra Brik packs and 200 ml pouches.

MILK POWDER:

Dissolve just 3 tablespoons full in 180 ml of lukewarm water and your glass of delicious sweetened milk is instantly ready. Processed with ultra modern spray drying technology that makes the whitener completely miscible in hot or lukewarm water, leaving no lumps behind. Available in 25 g, 50 g. tear-away sachets, 200 g, 500 g, 1 kg metalized aluminum bowed laminated film pouches, 10 kg HDPE containers and 25 kg craft paper bags with poly liner.

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Organization Study of KOMUL, Kolar

ICE CREAMS:

Creamy delicacy to excite the most joyous moments. Available in 100 ml cups and 500 ml, 1250 ml, 5000 ml family packs.

ULTRA HIGH-TEMPERATURE HEAT-TREATED MILK:

It refers to ultra-high temperature heat-treated Milk. The concept of UHT milk is absolute i.e. bacteria free besides retaining the nutritional quality of milk. During the process, milk is exposed to a temperature of 137c for 4 sec and immediately cooled a room temperature packing it aseptically. GCEM, Department of Management Studies Page 19

Organization Study of KOMUL, Kolar At present two types of UHT Milk are being produced one Nandini Good Life with 3.6% fat and 8.5% SNF and another one is Nandini Smart with 1.5% fat and 9% SNF. Nandini Smart being low fat products good for health conscious people. Both the milks can be stored for at least 45 days at room temperature. It needs no boiling before drinking on an average 25,000 of both the Milk is being sold per day. Constituters Nandini Good Life Nandini Smart Fat 3.6% Minerals 3.5% Proteins 10.7% Lactose 4.3% Water 87.5% Total Solids 12.1%

1.5%

3.95%

0.75%

4.3%

89.5%

10.5%

It also includes GOOD LIFE SLIM Skimmed milk is 99.5% fat free. Cows pure milk, homogenized, skimmed, UHT processed milk, bacteria free in a tamper proof tetra-fine pack which keeps this milk fresh for 60 days without refrigeration until opened. Its available in 500ml pack.

2. E. AREA OF OPERATION
The major area of operation of Nandini is at National level. Nandini (KOMUL) has a long tradition of maintaining the highest quality standards, rights from selection of raw milk to processing and packaging of end products. The reason why its products are much in demand nationally and are sold and distributed regularly to states like Andhra Pradesh, Tamil Nadu, Kerala, Maharashtra, Goa and all over the Karnataka. In Sep 2008 KOMUL started supplying good life milk to Indian army.

2. F. OWNERSHIP PATTERN
KOMUL is a District level Co-operative society, which operates under KMF (State level Co-operative society).
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Organization Study of KOMUL, Kolar

SL No.

CATEGORY

NO. OF SHARES

OF

SHARE

HOLDINGS

Promoters holdings Promoters

8,60,00,000

94.16

Non-promoters holdings Institutional investors i.e. banks,financial institutions

35,65,000

3.90

Others Public

12,00,000

1.31

Employees Total

5,62,700 9,13,27,700

0.63 100

2. G. COMPETITORS INFORMATION
KOMUL has various competitors in the market such as: Nandi Tirumala Heritage Swastik Shruthi Arokya Nilgiris Jersey Dodla GCEM, Department of Management Studies Page 21

Organization Study of KOMUL, Kolar

NANDI: Nandi milk products Pvt ltd was started in the year 1997. It was under the care of Sri.S.P.Y.Reddy. The industry is located at Nandyal-kurnool highway road in Kurnool district. It is an industry that procures milk from four districts. From the year 1997-2009 the company has developed the business day to day. The company not only improves the brand name but also it is overtaking the competitors brands.

TIRUMALA: Tirumala Milk Products Private Limited is a professionally managed company engaged in the manufacture of a wide range of Dairy Products which include Milk in Sachets, Sweets, Flavored Milk, Curd in Cups and Sachets, Milk Powder, Butter, Ghee and Butter Oil both in bulk as well as in consumer packs. Established in 1998, Tirumala Milk Products (P) Ltd. is one of the fastest growing Private Sector Enterprises in India with a team of dedicated professionals. The company has one of the most modern and versatile plants in the Indian Dairy Industry with stateof-the-art technology. Tirumala Milk Products (P) Ltd. products meet stringent quality control tests and cater to the premium segment of the market for Dairy Products. Tirumala Milk Products (P) Ltd. is presently implementing an expansion programme and proposes to launch new products in the near future. Presently Tirumala market presence is in Andhra Pradesh, Karnataka and Tamil Nadu. They handle 7 Lakh liters of milk per day in our packing stations and dairy plant, which is the single largest plant inthe state of Andhra Pradesh. Tirumala Registered Office is located at Narasarao Pet, GuturDist and Corporate Office is located at Ameerpet, Hyderabad.

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Organization Study of KOMUL, Kolar Tirumala Milk Products (P) Ltd. sells a rich, varied offering of nutritious, tasty and healthy food products under well-known brand. Taste, health, convenience, reliability and vitality for consumers are key characteristics.

HERITAGE:
The Heritage Group, founded in 1992 by Sri Nara Chandra Babu Naidu, is one of the fastest growing Private Sector Enterprises in India,with four-business divisions viz., Dairy, Retail, Agri, and Bakery under its flagship Company Heritage Foods (India) Limited (HFIL). The annual turnover of heritage Foods crossed Rs.1096 crores in 20102011. Presently Heritages milk products have market presence in Andhra Pradesh, Karnataka, Kerala, Tamil Nadu, Maharastra and Orissa and its retail stores across Bangalore, Chennai and Hyderabad. Integrated agri operations are in Chittoor and Medak Districts and these are backbone to retail operations and the state of art Bakery division at Uppal, Hyderabad, Andhra Pradesh.

Dodla
Dodla Dairy Limited a Public Limited company established by a well-known family from Nellore district of Andhra Pradesh in the year 1998. It Procures, Process and sell milk and milk products across 66 locations in India. The Company Head Quarter is located at Hyderabad, Andhra Pradesh of India.

Dodla Dairy is an ISO 22000 : 2005 and ISO 50001:2011 (EnMS) Certified Organization. The company is having 7 state of art technology Processing Plants, 28 chilling centres, 15 Bulk Milk Chillers and 17 Associate Chilling Centers . The company has a wide distribution network across pan India. The products and services are offered through 16 Sales offices.

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Organization Study of KOMUL, Kolar The company offers a wide range of Milk Products Comprising Fresh Milk , Butter, Ghee, Paneer, Curd, Flavoured Milk, Milk sweets, Ice Cream and Skim Milk Powder. All the products are conveniently packed in different pack sizes and types to suit various needs of consumers.The company has grown multifold rapidly during the past one and half decade and has become a popular dairy company in India. The consistent growth of the organization reflects the consumer confidence and strength of the company.

The company has gained the competitive advantage over the other players by delivering the highest Quality dairy products to the consumers. Now, the company is prepared to face the future challenges by upgrading its systems and infusing new technology .

2. H. INFRASTRUCTURAL FACILITIES
KOMUL dairy is situated in the industrial estate besides the national highway (NH-4) a prime locality occupying a vast and ample space of 25 acres of land it is noise free zone. The main building consists of administrative department, finance department and MIS department. Beside the main building, a canteen and other building where marketing and purchase departments are situated. The internal parts of the departments are arranged in such a way that there is sufficient space for office work and arrangements are made for proper ventilation. Other Facilities Clean milk production Emergency facility First aid facility Mobile veterinary facility Training and development facility to DCS(Dairy Co-Operative Societies) Vision programmed-under taken from NDDB(National Dairy Development Board) Mass Vaccination programme against Foot and Mouth Disease. GCEM, Department of Management Studies Page 24

Organization Study of KOMUL, Kolar Vaccination against Thelariasis. Animal Disease Diagnostic Laboratory. Fodder development programmes

2. I. ACHIEVEMENTS/AWARDS
In recognition of the varied initiatives, KOMUL was conferred with several awards and accolades. Some prominent awards received are as under KOMUL bagged National Productivity Council Award 2nd Place. KOMUL bagged best co-operative union Award in the state. KOMUL achieved the highest milk procurement of 7, 45,446 Kgs of milk on 8/06/2009. 1st place in National Energy Award and 2nd place in State Energy Conservation Award. Kolar-Chikkaballapura Dairy with 3 Milk Chilling Centers is certified for ISO-9001: 2000 quality management system and they are in the process of upgrading the system to ISO-22000. Winner of Best Productivity Awards

Achievements
1. Community Milking Machines first time in India. 2. Highest number of BMCS in the village after Gujarat. 3. UHT Tetrapak plant first in Karnataka with variants Good Life, Smart, & Slim. 4. Union has implemented Rain-Water Harvesting System. 5. Union has implemented Total Energy Managementat Dairy. 6. Kolar-Chikkaballapura Dairy with 3 Milk Chilling Centers is Certified for ISO9001: 2000. 7. Farmers Health Insurance.-Yashaswini

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Organization Study of KOMUL, Kolar

2. J. WORK FLOW MODEL

Manufacturing process (End to End) Chart 2.J.1: Showing Work Flow Model RAW MILK

MILK INLET

MILK STORAGE TANK

CHILLED WATER INLET

PASTURIZATION COOLING SYSTEM

MILK INLET

CHILLED WATER OUTLET

MILK OUTLET

CREAM MILK

BUTTER SECTION

GHEE

PACKAGING

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Organization Study of KOMUL, Kolar

Preliminarily the raw milk is collected in the stores department. Then the milk goes through a process in production department where the milk and milk products are produced. Produced products are clearly checked and packed in accordance to the quality required. This process will carry on by quality control department. Finally the products which are ready for sales are sent to sales and marketing department to distribute it to the consumers through various distribution channels like milk parlors, milk depots, and other retail outlets.

2. K. FUTURE GROWTH AND PROSPECTS

Future growths of KOMUL are as follows: To establish a high- tech production plant in chikkaballapura district. To establish hi-tech parlors at chintamani. To establish ATM (All Time Milk) in all taluk levels. Expansion of kolar chilling center. To introduce clean milk production (CMP) at all levels. To introduce Dairy Animal Management (DAM). To introduce Total Quality Management (TQM) program in all levels. To introduce Total Energy Management Program (TEM). To introduce the cluster concept to increase the consumption. Comprehensive training programs for DCS (District Co-operative Society) personnel and milk union personnel.

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CHAPTER-3 MCKINSEYS 7S MODEL

The 7s model is better known as Mc-Kinseys 7s, because the two persons who developed this model, Tom peters and Robert waterman, have been consultants at McKinseys and co. at that time. They published their 7s model in their article structure is not organization (1980) and in their books the art of Japanese managements (1981) and In search of exclusive (1982).

Chart 3.1: Mc-Kinseys 7s Frame work

The model consists of seven elements. Those seven elements are distinguished in so called hard Ss and soft Ss. The hard elements are feasible and easy to identify. They are strategy, structure and system of the organization. The four soft Ss are hardly feasible. They are highly determined by the people at work in the organization i.e., style, staff, skills and shared values

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3. a. STRUCTURE:
The structure followed in KOMUL is Functional Structure. It ensures maximum use of principal of specialization. Since the workers are performing a limited number of functions, their efficiency would be very high. Chart 3.a.1: Showing Organization structure

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Organization Study of KOMUL, Kolar

KOMUL mainly has the following departments: 1) Procurement and input department 2) Production department 3) Quality control department 4) Marketing department 5) Finance department 6) Management information system department 7) Administration and Personnel department 1) PROCUREMENT AND INPUT DEPARTMENT The operational efficiency is reflected on procurement prices paid to the member producers. KOMUL is offering the most remunerative milk procurement price to member producers. Annual average Milk procurement for the years 2009-2010 is 7.30 lakhs liters per day. During the seasonal time it has procured to the peak of 8.0 lakhs liters per day.

2) PRODUCTION DEPARTMENT The production department of the Kolar dairy performs the function of developing procedures to transform a set of input elements of raw material like milk, money, machine into specified output like curds, butter, ghee, Peda, masala butter milk etc. in assigned quality and best in order to achieve the organizational goals successfully.

3) MARKETING DEPARTMENT KOMUL has a well established marketing department, under the control of the marketing manager. The manager is responsible for marketing and sales of milk and milk products. The manager is responsible for selling to the target markets, framing the plans and policies to achieve the marketing goals and manager is also responsible for forecasting the demands for their products in the market.

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Organization Study of KOMUL, Kolar 4) FINANCE DEPARTMENT

Finance department is very important in an organization. It is not just confined to raising funds, but extends beyond it to control the over utilization of funds and helps to monitor the utilization of funds rose. This function influences the operation of other essential functioning areas of the firm such as production, marketing and personal.

5) ADMINISTRATION AND PERSONAL DEPARTMENT

The administrative manager heads the administration department. The manager comes under the general manager. The administrative department of KOMUL holds all the official work. The administrative manager reports to the general manager, then the general manager to the managing director (who is the chief of administrative department).

6) QUALITY CONTROL DEPARTMENT

The quality control department in the plant performs the function of using the best raw materials and other inputs, measuring and checking for maintaining then assured standards. KOMUL represent quality, purity and freshness. The quality policy of KOMUL is to maintain a leading position and also to build high level of customers over their products by providing high consumer surplus.

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3. b. SYSTEM:
A system refers to formal process and procedures are used to manage the organization. The systems followed in KOMUL are as follows.

INVENTORY CONTROL SYSTEM: KOMUL maintains FIFO (first in first out) method to control the inventory in the plant. Here the inventory is maintained correctly as it contains only perishable products.

MILK BILLING SYSTEM: KOMUL maintains a weekly milk billing system. It has four cycles in a month. They are from 1-7, 8-15, 16-23 and 24 to end of the month.

COLD STORAGE SYSTEM: KOMUL has a cold storage machine called silo machine where the milk is stored at 4degree to 5degree Celsius.

3. c. STRATEGY:
Strategy is a plan or course of action in allocating resources to achieve identified goals over time.

PRICING STRATEGY: Price is an important element in the marketing mix. The right price can be determined through research and by adopting test marketing techniques. A price policy is thus a standing answer of the firm. If competition is mainly on price basis, then each company prices its product at the same level as its products at same level of prices of competition.

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Organization Study of KOMUL, Kolar DISTRIBUTION STRATEGY: The Union has their own vehicles for distribution of milk to various places which is an advantage for the company. The milk distribution vehicles supply milk even during times of lorry strikes without any delay. PROCUREMENT STRATEGY: The Union procures milk from the farmers by giving fair prices to them. Procurement of milk is twice a day, morning and evening. Milk is collected in dairy which is set up in every village from their milk is taken to the Union.

3. d. STYLE:
Style is the way in which key managers behave in achieving organizational goals, that is the management style. The leadership style followed in KOMUL is PARTICIPATIVE STYLE. Participative leadership style is the styles where the subordinates are given equal importance in participation of improvising the organization and also in the betterment of the organization. The decision taken by the top management is in coordination with the subordinates. In the organization, some of the decisions are taken with the mutual consultation of the top management and the middle level management. These decisions are through mutual exchange of knowledge and the experience of the employees. The top management consults their immediate subordinates in case of any important decisions, which are of strategic in nature. Implementation: Participation in the meeting: Employees must take part in any meeting conducted by the company to discuss companys future plans. And employees are allowed to express their opinion, view and ideas. Recognition programme (Office day): Employees who have suggested the best ideas in making a decision related to any functional area and every year management select best employee, they will be awarded by both monetary and non-monetary benefits. GCEM, Department of Management Studies Page 33

Organization Study of KOMUL, Kolar

3. e. STAFF:
Staff refers to the number and type of people employed by the organization. The people in the organization are very dedicated and work towards the improvement of the organization. Staff members as on 01 January 2012 Type of staff Managerial staff Number of staff 98 Technical staff 362 Non-technical staff 760 Unskilled 300 Duties and Responsibilities Manages the funds Handling situations. Supervising. Planning. Getting things done. Providing assistance to lower cadre. Manufacturing of products in time. Ensuring quality. Training the staff. Ensuring quality. Examining the work done. Maintaining cleanliness Providing assistance to superior staff. Ensuring safety Providing information to top level. TOTAL 1520 the difficult

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3. f. SKILL:
A skill refers to the fact that employees have the skill needed to carry out the companys strategy. Here the employees are further divided into four categories. Type of staff Managerial staff Number of employees 98 Skills required Leadership skills Conflict resolution skills Decision making Communications skills Managerial skills Learning skills Analytical and logical thinking skills Problem-solving management

Technical staff

362

Computer knowledge Secretarial skill Accounting skill Communication Writing Managerial skills Learning skills Follow the instructions Complete the work which is assigned in time.

Non-technical staff

760

Unskilled

300

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Organization Study of KOMUL, Kolar This first category contains the people who are in the top-management level the second category consists of the supervisors office assistants etc. The third category consists of the employees at the operational level.

The first category consist of the people who are in the decision making process in KOMUL these people are highly qualified.

The second category is related to office work and fieldwork. These people are also trained in Computer Applications, secretarial skills, accounting skills etc.

The third level and forth level people consist of the employees who are actually into the operation these People are also trained into fields like checking the quality of milk processing packing etc.

STRATEGIES TO COVER SKILL GAPS: KOMUL co-operative society conducts training program i.e both on the job training and off the job training which increases the knowledge and skill of the employee while performing the job.

On-the-job training method KOMUL provides on the job training according to the need. For this method of training, they invite experts from various training institutions. This type of training will be conducted once in three months/six months/a year. On-the-job training method, which is adopted by KOMUL, is coaching. Coaching: The trainer is placed under a particular supervision who functions as a coach in training the individuals according to organization requirements. To give coaching they invite experts from National Dairy Development Board (NDDB) and sometimes top managers of the organizations.

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Organization Study of KOMUL, Kolar Off the job training Under off the job training method, trainee is separated from the job situation. Here employees can place his entire concentration to learn rather than spending time in performing job.

Vestibule training Under this method, actual work condition is stimulated in a classroom. KOMUL sends its employees to National Dairy Development Board (NDDB), confederation for Indian industries (CII) and NDDB Anand for technical training. This type of training is commonly used for individuals for technical and clerical jobs.

3. g. SHARED VALUES:
The core or fundamental values that are widely share in the organization and serve as guidelines that are important, these values have great meaning because they focus attention and provide broader sense of purpose.

The values of the organization are

Honesty Discipline Quality Hard Work Mutual Trust & Belief Transparency Co-Operation & Team Work

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CHAPTER - 4 SWOT ANALYSIS

SWOT analysis is the scan of internal and external environment it is an important part of the strategic planning process. Environmental factors internal to the firm usually can be classified as Strengths (S) or Weaknesses (W), and that external to the firm can be classified as Opportunities (O) or Threats (T). Such an analysis of the strategic environment is referred to as a SWOT analysis. The SWOT analysis provides information that is helpful in matching the firm's resources and capabilities to the competitive environment in which it operate. As such, it is instrumental in strategy formulation and selection. The following diagram shows how a SWOT analysis fits into an environmental scan:

Chart 4.1: Swot Analysis

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Organization Study of KOMUL, Kolar

STRENGTHS Biggest milk co-operative union in Karnataka Established brand of products, providing quality products from a long time. KOMUL attends to the complaints of consumers immediately. Strong physical infrastructure to support current and future requirements. KOMUL pays the highest price for the milk collected from farmers in India and loyalty among the brand. Popular brand known from many years. Various new technologies implemented for production of milk. Timely delivery. The company is having functional structure, this helps in effective management and control, and there is distribution of work.

WEAKNESS

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Organization Study of KOMUL, Kolar Less focus on innovative new products and no R&D programmes. Slow decision making process and high manpower overheads. Rivalry among sister unions. Promotions strategies are not effective. Inadequate Knowledge about brand positioning strategies. Due to Government interference between company management activity there is a delay in successful strategy Lack of flexibility in system. Not concentrating on advertisements. Lack of personalized service to channel members.

OPPORTUNITIES

The union is facing challenges from the private entrants, who are mainly thriving on unfair trade practice. They procure milk at less cost, without bothering the welfare of the producers and without extending any technical inputs for improving milk production. They market milk by resorting to unhealthy and unethical practice deceiving the unsuspecting consumers. The union wants to counter this in a positive manner by trying to improve its efficiency of operation and market promotion. It wants to become well trenched in the market as a market leader

They expand their business because of the wide market for the large number of customers. KOMUL Provides employment opportunity for people. In joint Co-operation with KMF the union is trying to market its UHT Milk to South Asian Countries like SriLanka, Singapore etc.

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Organization Study of KOMUL, Kolar THREATS

Competition from private co-operative dairies. Entry of MNCS into dairy industry. Lack of awareness about the various products of KOMUL among the people. Unethical marketing practices of private brands in the market.

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