AMUL: THE TASTE OF INDIA word amul means "priceless" in Hindi.

The brand name "Amul," from the Sanskrit "Amoolya," meaning Precious was suggested by a quality control expert in Anand. INTRODUCTION TO AMUL: Amul formed in 1946, is a dairy cooperative in India. It is a brand name managed by an apex cooperative organisation, Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF), which today is jointly owned by some 2.8 million milk producers in Gujarat, India. Dr Verghese Kurien, former chairman of the GCMMF, is recognised as a key person behind the success of Amul. On 10 Aug 2006 Parthi Bhatol, chairman of the Banaskantha Union, was elected chairman of GCMMF. WHITE REVOLUTION: The Amul Pattern has established itself as a uniquely appropriate model for rural development. Amul has spurred the White Revolution of India, which has made India the largest producer of milk and milk products in the world. It is also the world's biggest vegetarian cheese brand. TURNOVER AND BRANCHES: Amul is the largest food brand in India and world's Largest Pouched Milk Brand with an annual turnover of US $1700 million (200910). Currently Unions making up GCMMF have 2.9 million producer members with milk collection average of 9.10 million liters per day. Besides India, Amul has entered overseas markets such as Mauritius, UAE, USA, Bangladesh, Australia, China, Singapore, Hong Kong and a few South African countries. Its bid to enter Japanese market in 1994 did not succeed, but now it has fresh plans entering the Japanese markets. Other potential markets being considered include Sri Lanka. COMPANY PROFILE: TYPE INDUSTRY FOUNDED HEADQUARTERS : COOPERATIVE : DAIRY : 1946 : ANAND, INDIA

KEY PEOPLE

: CHAIRMAN, KHEDA DISTRICT COOPERATIVE MILK PRODUCERS UNION LIMITED (KDCMPUL)

REVENUE EMPLOYEES CONSIST OF 2.8 WEB SITE

: $2.15 BILLION (2010-2011) : 735 EMPLOYEES OF MARKETING ARM. HOWEVER, REAL POOL MILLION MILK PRODUCERS: : WWW.amul.com

HISTORY OF AMUL: The india District Co-operative Milk Producers' Union was registered on December 14, 1946 as a response to exploitation of marginal milk producers by traders or agents of existing dairies in the small town named Anand (is Kaira District of Gujarat). Milk Producers had to travel long distances to deliver milk to the only dairy, the Polson Dairy in Anand. Often milk went sour as producers had to physically carry the milk in individual containers, especially in the summer season. These agents arbitrarily decided the prices depending on the production and 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 it to Bombay city in turn. India ranked nowhere amongst milk producing countries in the world because of its limitations in 1946 British Raj. GCMMF TODAY: GCMMF is India's largest food products marketing organisation.[citation
needed]

. 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 affordable quality products. GCMMF markets and manages the Amul brand. From mid-1990s Amul has entered areas not related directly to its core business. Its entry into ice cream was regarded as successful due to the large market share it was able to capture within a short period of time primarily due to the price differential and the brand name. It also entered the pizza business, where the base and the recipes were made available to restaurant owners who could price it as low as 30 rupees per pizza when the other players were charging upwards of 100 rupees.

COMPANY INFO: The Gujarat Cooperative milk Marketing Federation Ltd, Anand (GCMMF) is the largest food products marketing organisation of India. It is the apex organization of the Dairy Cooperatives of Gujarat. This State has been a pioneer in organizing dairy cooperatives and our success has not only been emulated in India but serves as a model for rest of the World. Over the last five and a half decades, Dairy Cooperatives in Gujarat have created an economic network that links more than 2.8 million village milk producers with millions of consumers in India These cooperatives collect on an average 7.5 million litres of milk per day from their producer members, more than 70% of whom are small, marginal farmers and landless labourers and include a sizeable population of tribal folk and people belonging to the scheduled castes. The turnover of GCMMF (AMUL) during 2008-09 was Rs. 67.11 billion. It markets the products, produced by the district milk unions in 30 dairy plants,The farmers of Gujarat own the largest state of the art dairy plant in Asia Mother Dairy, Gandhinagar, Gujarat which can handle 2.5 million litres of milk per day and process 100 MTs of milk powder daily.. GCMMF (AMUL)s Total Quality Management ensures the quality of products right from the starting point (milk producer) through the value chain until it reaches the consumer. Ever since the movement was launched fifty-five years ago, Gujarats Dairy Cooperatives have brought about a significant social and economic change to our rural people. The Dairy Cooperatives have helped in ending the exploitation of farmers and demonstrated that when our rural producers benefit, the community and nation benefits as well. The Gujarat Cooperative Milk Marketing Federation Ltd. cannot be viewed simply as a business enterprise. It is an institution created by the milk producers themselves to primarily safeguard their interest economically, socially as well as democratically. Business houses create profit in order to distribute it to the shareholders. In the case of GCMMF the surplus is ploughed back to farmers through the District Unions as well as the village societies. This circulation of capital with value addition within the structure not only benefits the final beneficiary the farmer but eventually contributes to the development of the village community. This is the most significant contribution the Amul Model cooperatives has made in building the Nation.

THREE TIRE-MODEL FOR AMUL: The Amul Model is a three-tier cooperative structure. This structure consists of a Dairy Cooperative Society at the village level affiliated to a Milk Union at the District level which in turn is furthler federated into a Milk Federation at the State level. The above three-tier structure was set up in order to delegate the various functions, milk collection is done at the Village Dairy Society, Milk Procurement & Processing at the District Milk Union and Milk & Milk Products Marketing at the State Milk Federation. This helps in eliminating not only internal competition but also ensuring that economies of scale is achieved. As the above structure was first evolved at Amul in Gujarat and thereafter replicated all over the country under the Operation Flood Programme, it is known as the Amul Model or Anand Pattern of Dairy Cooperatives. Responsible for Marketing of Milk & Milk Products Responsible for Procurement & Processing of Milk Responsible for Collection of Milk Responsible for Milk Production Village Dairy Cooperative Society (VDCS) The main functions of the VDCS are as follows:

Collection of surplus milk from the milk producers of the village & payment based on quality & quantity

Providing support services to the members like Veterinary First Aid, Artificial Insemination services, cattle-feed sales, mineral mixture sales, fodder & fodder seed sales, conducting training on Animal Husbandry & Dairying, etc.

Selling liquid milk for local consumers of the village Supplying milk to the District Milk Union

Thus, the VDCS in an independent entity managed locally by the milk producers and assisted by the District Milk Union. District Cooperative Milk Producers Union (Milk Union): The main functions of the Milk Union are as follows:

Procurement of milk from the Village Dairy Societies of the District Arranging transportation of raw milk from the VDCS to the Milk Union.

Providing input services to the producers like Veterinary Care, Artificial Insemination services, cattle-feed sales, mineral mixture sales, fodder & fodder seed sales, etc.

Conducting training on Cooperative Development, Animal Husbandry & Dairying for milk producers and conducting specialised skill development & Leadership Development training for VDCS staff & Management Committee members.

Providing management support to the VDCS along with regular supervision of its activities. Establish Chilling Centres & Dairy Plants for processing the milk received from the villages. Selling liquid milk & milk products within the District Process milk into various milk & milk products as per the requirement of State Marketing Federation.

Decide on the prices of milk to be paid to milk producers as well on the prices of support services provided to members.

State Cooperative Milk Federation (Federation) The main functions of the Federation are as follows:

Marketing of milk & milk products processed / manufactured by Milk Unions. Establish distribution network for marketing of milk & milk products. Arranging transportation of milk & milk products from the Milk Unions to the market. Creating & maintaining a brand for marketing of milk & milk products (brand building). Providing support services to the Milk Unions & members like Technical Inputs, management support & advisory services.

Pooling surplus milk from the Milk Unions and supplying it to deficit Milk Unions. Establish feeder-balancing Dairy Plants for processing the surplus milk of the Milk Unions. Arranging for common purchase of raw materials used in manufacture / packaging of milk products.

Decide on the prices of milk & milk products to be paid to Milk Unions. Decide on the products to be manufactured at various Milk Unions (product-mix) and capacity required for the same.

Conduct long-term Milk Production, Procurement & Processing as well as Marketing Planning. Arranging Finance for the Milk Unions and providing them technical know-how. Designing & Providing training on Cooperative Development, Technical & Marketing functions. Conflict Resolution & keeping the entire structure intact.

Today, we have around 176 cooperative dairy Unions formed by 1,25,000 dairy cooperative societies having a total membership of around 13 million farmers on the same pattern, who are processing and marketing milk and milk products profitably, be it Amul in Gujarat or Verka in Punjab, Vijaya in Andhra Pradesh or a Nandini in Karnataka. This entire process has created more than 190 dairy processing plants spread all over India with large investments by these farmers institutions. These cooperatives today collect approximately 23 million kgs. of milk per day and pay an aggregate amount of more than Rs.125 billion to the milk producers in a year. IMPACT OF AMUL MODEL: The three-tier Amul Model has been instrumental in bringing about the White Revolution in the country. As per the assessment report of the World Bank on the Impact of Dairy Development in India, the Anand Pattern has demonstrated the following benefits:

The role of dairying in poverty reduction The fact that rural development involves more than agricultural production The value of national ownership in development The beneficial effects of higher incomes in relieving the worst aspects of poverty The capacity of dairying to create jobs The capacity of dairying to benefit the poor at low cost The importance of commercial approach to development The capacity of single-commodity projects to have multi-dimensional impacts The importance of getting government out of commercial enterprises The importance of market failure in agriculture The power & problems of participatory organisations The importance of policy

ACHIVEMENTS OF AMUL: 1. The dairy cooperatives have been able to maintain democratic structure at least at the grass-root level with the management committee of the village level unit elected from among the members in majority of the villages. 2. The dairy cooperatives have also been instrumental in bridging the social divide of caste, creed, race, religion & language at the villages, by offering open and voluntary membership.

AMUL BRAND BUILDING: GCMMF (AMUL) has the largest distribution network for any FMCG company. It has nearly 50 sales offices spread all over the country, more than 3,000 wholesale dealers and more than 5,00,000 retailers. AMUL is also the largest exporter of dairy products in the country. AMUL is available today in over 40 countries of the world. AMUL is exporting a wide variety of products which include Whole and Skimmed Milk Powder, Cottage Cheese (Paneer), UHT Milk, Clarified Butter (Ghee) and Indigenous Sweets. The major markets are USA, West Indies, and countries in Africa, the Gulf Region, and [SAARC] SAARCneighbours, Singapore, The Philippines, Thailand, Japan and China. In September 2007, Amul emerged as the leading Indian brand according to a survey by Synovate to find out Asia's top 1000 Brands.[10] In 2011, Amul was named the Most Trusted brand in the Food and Beverages sector in The Brand Trust Report, published by Trust Research Advisory. India's top 20 brands: Amul is No. 1 PRODUCTS OF AMUL: Amul's product range: Milk powders, milk, butter, ghee, cheese, Masti Dahi, Yoghurt, Buttermilk chocolate, ice cream, cream, shrikhand, paneer, gulab jamuns, flavoured milk, basundi, Nutramul brand and others. In January 2006, Amul plans to launch India's first sports drink Stamina, which will be competing with Coca Cola's Powerade and PepsiCo's Gatorade. In August 2007, Amul introduced Kool Koko, a chocolate milk brand extending its product offering in the milk products segment. Other Amul brands are Amul Kool, a low calorie thirst quenching drink; Masti Butter Milk; Kool Cafe, ready to drink coffee and India's first sports drink Stamina. Amul's sugar-free Pro-Biotic Ice-cream won The International Dairy Federation Marketing Award for 2007

MASCOT: Since 1967 Amul products' mascot has been the very recognisable "Amul baby" (a chubby butter girl usually dressed in polka dotted dress) showing up on hoardings and product wrappers with the equally recognisable tagline Utterly Butterly Delicious Amul.The mascot was first used for Amul butter. But in recent years in a second wave of ad campaign for Amul products, she has also been used for other product like ghee and milk. ADVERTISING FOR AMUL: In 1966, Amul hired Sylvester daCunha, then managing director of the advertising agency AS to design a new ad campaign for Amul Butter. daCunha designed an add campaign as series of hoardings with topical ads, relating to day-to-day issues.[14] The campaign was widely popular and earned a Guiness world record for the longest running ad campaign in the world. Since the 1980s, cartoon artist Bharat Dabholkar has been involved with sketching the Amul ads, who rejected the trend of using celebrities in advertisement campaigns. Dabholkar credited chairman Varghese Kurien with creating a free atmosphere that fostered the development of the ads.[15] Despite encountering political pressure on several occasions, daCunha's agency has made it a policy of not backing down. Some of the more controversial Amul ads include one commenting on Naxalite uprising in West Bengal, on the Indian Airlines employees strike, and the one depicting the Amul butter girl wearing a Gandhi cap. Amul hired for the brands of Amul milk, chocolates, paneer, ghee, ice-cream. CASE STUDY ON AMUL: 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. 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?

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.

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.

Developing demand : At the time Amul was formed, consumers had limited purchasing power, and modest consumption levels of milk and other dairy products. Thus Amul adopted a low-cost price strategy to make its products affordable and attractive to consumers by guaranteeing them value for money.

Introducing higher value products: Beginning with liquid milk, GCMMF enhanced the product mix through the progressive addition of higher value products while maintaining the desired growth in existing products.

Despite competition in the high value dairy product segments from firms such as Hindustan Lever, Nestle and Britannia, GCMMF ensures that the product mix and the sequence in which Amul introduces its products is consistent with the core philosophy of providing milk at a basic, affordable price.

The 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.

GCMMF 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 GCMMF'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.

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.

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.

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.

Establishing best practices: 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.

In developing these practices, the federation and the unions 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.

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.

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.

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.

Kaizens at the unions have helped improve the quality of milk in terms of acidity and sour milk. (Undertaken by multi-disciplined teams, Kaizens are highly focussed 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.

The most impressive aspect of this large-scale roll out is that improvement processes are turning the village societies into individual improvement centers.

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.

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. -