amul case.pptx

8/10/2019 amul case.pptx

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Advanced Supply Chain Management:

AMUL Transportation and Distribution

Channels

Submitted by:Group 1

IIFT Batch 2013-15


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Agenda

Introduction

Company Overview

E-Supply Chain Management

Components of E-SCM

Benefits of E-SCM

AMCUS Working Structure

Procurement Channel

Cold Storage Network

E-Supply Management

Supply and Distribution Network

Total Quality Management Model


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COMPANY OVERVIEWAmuls Inception and Business Model

AMULs INCEPTION

Launched in 1946

Prior to Amuls launch, Indian Dairy industry was dominated British Polson Dairy

In the protest against Polsons discriminatory policies, a non-cooperation movement was

launched

which eventually culminated in to the inception of Amul in late 1946

BUSINESS MODEL

Eliminating the middlemen

Division of Procurement unitson the basis of Societies(Amalgamation of villages)

On the Supply side, daily procurement of 3 million litres a day from 1.25 million milk suppliers, and

thus in 1994, it implemented Automatic Milk Collection Units (AMCUS)

On the Demand side, GCMMF (Gujarat Co-operative Milk Manufacturing Federation) controls the

manufacturing, distribution and marketing of milk and other related products

Low price strategy

Dual strategy of simultaneous development of the market and member farmers helped attain

sustainable competitive advantage. IT and TQM have significantly optimized operations at Amul


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4


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E-Supply Chain Management

Integrated Management Approach

Bi-directional flow of information and materials

Integrates trade partners throughout value chain

Complex networks established with trade partners

Procurement, sourcing, manufacturing and delivery

simplified

Analytics and forecasting at lowest echelon

Transportation and Logistics planning

Customer Order fulfillment assured


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Components of E-SCM

CUSTOMERORDER

ADVANCEDSCHEDULING

DEMANDFORECASTING`

TRANSPORTATIONLOGISTICS

DISTRIBUTIONPLANNING

ORDERCOMMITMENT


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BENEFITS OF E-SCM

Supports exchange of real time information

Platform independent

Web visibility & processing capability 24/7

Return on investment It has open internet application architecture which

allows for Rapid deployment & scalability combining

unlimited users in real time environment

Incorporates broadcast & active messaging Time Reduction

Improved efficiency, transparency and reduction in

wastage and pilferage


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BUSINESS SOLUTION

E-SCM to Amuls rescue

In order to address the scalability and integration issues, Amul started implementing a collection of

Technical and IT initiatives.

As a part of its E-SCM implementation, the following systems were introduced:

1. AMCUS

2. DISK

3. VSAT

4. GIS

5. Amul Cyber Store

Thus, over a period of 7 years, Amul introduced a

variety of end-to-end IT solutions to tightly integrate

the various components of its Supply Chain.

Supply Side -- Procurement

Milk Processing and Marketing

Demand Side - Distribution

Farmers

(Production)

Village Societies

(Procurement)

Milk Unions

(Milk Processing)

GCMMF

(Marketing)

Distributors

(Distribution)

Retailers

(Retailing)
http://localhost/var/www/apps/conversion/tmp/scratch_7/Amul%20Story.mp4


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AMCUS working structure

Amul has installed over 3000 Automatic milk collection system

units(AMCUS) at village societies to capture member information,

milk fat content, volume collected and amount payable to each

member.

Each farmer is given a plastic card for identification

Computer calculates amount due to farmer on the basis of fat

content

The value of the milk is then printed out on slip & handed over to

the farmer, who collects the payment from adjacent window With the help of IT, farmers receive their payment within minutes

Mentors assigned by Amul has helped easy transition from

traditional practices


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E-Supply Management

Amul makes over 10 million payment transactions daily.

On the logistics part, more than 5000 trucks move milk from

the villages to 200 dairy processing plants twice a day

according to a carefully planned schedule.

Its ERP software named as Enterprise Wide Integrated

Application System(EIAS) covers a plethora of operations like

market planning, advertising and promotion, distribution

network planning.

Each of Amulsoffices are connected via internet and all of

them send daily reports on sales and inventory to the main

system at Anand.

Amul has also connected all zonal, regional & member dairies

through VSAT


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VALUE CHAIN PROCESS


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ORGANISATION METRICS

How effective is Amul and its supply chain

(a) QUALITY MEASUREMENT ISSUES

METHOD USED: Kaizen Techniques of six sigma

Number of AMCUS installed

Satisfaction level of villagers is measured

Improvement in quality of milk (reduction in acidity and sour milk)

Planned activities for maintenance of machines

(b) COMMUNICATION EFFECTIVENESS

METHOD USED: INFORMATION COMMUNICATION TECHNIQUES

Reduced time delay in getting money.

Improved cash availability and reduced the need for loan.

Possibility of error was reduced.

Reduced Waiting time

(c) TRAINING AND SKILL DEVELOPMENT

Procurement system- integrator and knowledge sharing platform

Trained 2 or 3 operators by system provider


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GCMMFs Supply Chain


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THE CHANNEL NETWORK

Procurement channel- upstream flow

Distribution channel- downstream flow


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Procurement

Activities at the village level comprised developing and

servicing the VCSs.

Increasing milk collection, procuring milk, and transporting

it to the chilling and processing units twice a day.

The VCSs provided the farmers with good quality animal

feed, fodder, and other services like veterinary first aid.


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PROCUREMENT CHANNEL

On an average around thousand farmers come to sell milk at

their local co-operative milk collection center.

Each farmer has been given a plastic card for identification.

At the milk collection counter, the farmer drops the card into a

box and the identification number is transmitted to a personalcomputer attached to the machine.

The milk is then weighed and the fat content of the milk is

measured by an electronic fat testing machine.

Both these details are recorded in the PC. The computer thencalculates the amount due to farmer on the basis of the fat

content.

The value of the milk is then printed out on a slip and handed

over to farmer who collects the payment at adjacent window.


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COLD STORAGE NETWORK

Chillers in proximity of villages

Prompt transport to district facilities for furtherdispatch to consumers/ processing units.

Chilled trucks to transport processed products

Delivery to local chillers by insulated rail tankers andchilled trucks.

Refrigerators and freezers with retailers and

departmental stores to retain freshness.


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Distribution

GCMMF coordinated with various unions to get a regular supply of

milk and dairy products.

The processed milk and dairy products were procured from district

dairy unions and distributed through third party distributors.

To ensure quality and timely deliveries, GCMMF and the district

unions had several mechanisms in place.

The unions monitored the supplies of milk and the distribution of

finished products.


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DOWNSTREAM FLOW

First leg Manufacturing units to company depots using 9 and 18 MT

trucks

Frozen food-below 18C

Dairy wet-0-4C

Second leg Depots to WDs

Transport through insulated 3 and 5 MT TATA 407s

Third leg WDs to retailers

Transport through rickshaws according to the beat plan


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Reverse logistics

MILK CHURN

from dairy to VCS

POUCH MILK TRAYfrom retailer to dairy

BOTTLE

from retailer to dairy

DAMAGED PRODUCTS

from customer to retailer then to dairy


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Total Quality Management Model

There is improvement in quality of milk in term of acidity and

sour milk.

Sabor milk union records show 2% reduction in the amount of

the sour milk received from the union.

Improved microbiological quality of upcoming raw milk in the

form of methylene blue reduction.

This gives better shelf life to the product.

Program like Red Tag Day was launched for cleaning the milk

collection center.


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ADVANTAGES

Has E-SCM been useful to Amul?

After the implementation of AMCUS in 1995 and other IT initiatives, there have been a steady

and a healthy increase in the procurement of milk

Demonstrated benefits of the ICT platform:

Reduction in lead time

Reduction of pilferage

Reduction in human errors

On the spot payment for farmers (from

a week to a couple of minutes)

Reduction in wastage

Transparency in operation

Integration in operation

After calculating the economic benefits it is

found that the AMCUS benefits the farmer

community by saving Rs. 1159.4 million per

year.


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CONCLUSION

E-SCM has helped Amul achieve better efficiency in terms of inventory

management, reduce lead time, reduce processing time (by 90%) and

better distribution and reach.

AMCUS has ensured transparency in the process, which has lead tobetter relations with stakeholders.

FUTURE SCOPE

Agreement with Walmart to export milk to 15 countries

Mission for 2020, whose objectives are: Turnover of Rs. 27,000 crores

Milk production of 33.1 million litres / day

Milk drying capacity of 200 m3 / day

Introduction of banking and ATM services to enable milk societies to credit

payments directly to a sellersbank account Replacement of plastic cards with smart cards that enable one to use banking & ATM

facilities

Strong e-commerce push - JIT supply chain, online selling & distribution via

amulb2b.com


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amul case.pptx

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