Role of GCMMF

GCMMF is primary responsible for distribution of milk and dairy products from unions to the customers. GCMMF follow generally two kind of strategy (1) Development of strong customer base for low valued segments and (2) Introduction of high valued items in developed low valued segments. GCMMF never relies upon heavy advertisement of its product and market all the products under the name of AMUL only. It believes in increasing efficiency of the advertising and not in increasing budget of advertising. All we know about Amul advertisement is of the Cartoon girl who markets product by making fun of recent issues and encouraging people everywhere. This development of common identity is at the core of the GCMMF’s marketing strategy. GCMMF also plays a key role in working with the Unions to coordinate the supply of milk and dairy products. In essence, it procures from multiple production plants, which in turn procure from the Village Societies registered with each Union. GCMMF distributes its products through third party distribution depots that are managed by distributors who are exclusive to GCMMF. These distributors are also responsible for servicing retail outlets all over the country. GCMMF sales staff manages this process. Retailing of GCMMF’s products takes place through the FMCG retail network in India most of whom are small retailers. Liquid milk is distributed by vendors who deliver milk at homes. Since 1999, GCMMF has started web based ordering facilities for its customers.

Use of Latest technology

AMUL has the large variety of product mix and producing them requires diverse skills and different types of processes. Most of the milk AMUL received daily is buffalo milk and supply of it varies according to the season. It is high in winter season whereas less in summer season. On the other hand demand of the milk is almost same in any season. Also cooperatives have been established with aim of purchasing any amount of milk that member want to sell. So sometime Amul has surplus supply of milk and sometime it has less supply of milk demand. Also there was no technology in the world to convert Buffalo milk in to the milk Powder. Engineers at Amul successfully developed commercial viable process for producing milk powder from buffalo milk. It has also developed baby food and cheese from the milk powder. Embryo transfer technology has helped to develop high yield breed of cattle in the country.B2C ordering portal, an ERP based supply chain planning system for the flow of material in the network, a net based dairy kiosk at village societies for taking dairy related information, automated milk collection information at more than 10,000 villages is available for unions to enable them to make faster decisions in terms of production & distribution planning and disease control in animals. Similarly, this is linked with information at all 45 distribution offices and 3900 distributors. This network is being extended to cover all related field offices in the network. The GCMMF cyber store delivers AMUL products at the doorsteps of the consumers in 125 cities across the country. The interesting thing to note here is that most of these technologies are developed in rural area where infrastructure availability and education among the people is very less and in spite of that most of the farmers use these technologies.

Overall AMUL has been successful to develop linkages among cooperatives and develop partnership among Milk Producers, processors and marketers. Such partnerships reduce the operational risk and help to understand the consumer through its reliable partners. It provides flexibility and makes the entire organization responsive to changing environment conditions. Amul model has successfully shown the management through cooperatives and how cooperatives can be used to build larger organization. One can learn many things from this model and apply it in business practices. The approach may be different but message remains same- Building organizations through cooperatives.

References:

1. Baviskar, B.S. (1988) “Dairy Cooperatives and Rural development in Gujarat,” in Who Shares?
2. Heredia, R. (1997) The Amul India Story, Tata McGraw Hill, New Delhi.
3. Kurien, V. (1997) The Unfinished Dream, Tata McGraw-Hill, New Delhi.
4. www.amul.com
5. Amul study by pankaj Chandra and Devnath tirupati

Written by,
Chintan Parikh
MBA Batch 2012-14
IIT Kanpur

- Gaston Bachelard

With its September issue, Team AG happily introduces the Junior AG team to its readers. It’s a moment of great pleasure for us to pass on the legacy with a belief that Junior team would shoulder the responsibility to take up the AG to greater heights, through even more vigor and enthusiasm. New team always brings with them the wider horizons, perspectives and ideas. We wish the Junior AG team all the success.

Junior AG team has right away introduced a column on B-Quiz, named as ‘Quizomania‘ in their first edition of Avant Garde. This column will try to capture the happenings in the business world and much more. Let’s see what more do they have in store for us in the upcoming editions.

With the Mid semester fever getting off, the temperament of IITK has risen with the commencement of the annual sports meet “Udhgosh’12”. With the hot air balloon, adventure sports and live screening of T20 matches the stage is setting up for most awaited events of the year, the cult-fests Antragini’12 and Impressions’12.

August and September saw many ups and downs as the parliament debated over the ‘mother of all scams the coal-block hitting India on face. Even before this debate could settle down, the announcement of 100% FDI on retail turned out to be the biggest news-maker stealing the show.

The untimely demise of the engineer for the White Revolution Dr. Kurien, the nation had another big blow. With controversial anti-Islamic movie reaching to masses and the case of threatening of north east people over MMS, SMS and social media, again resumed the debate over implementing the mechanism to check the content on communication channels. It can be fatal tool if got into wrong hands.

On the lighter side India’s official entry to Oscars, Barfi was able to generate hopes that Cinema in India is marching towards the much awaited overhaul. As we release this edition most us are eyeing on the India combating Pakistan in T20 super eight which irrespective of its result would be a pleasure to watch.

Articles covered in this edition are:

Team AG feels pleasure in sharing the achievement of our Alumni, as Siddhartha Gupta and Aditi Makol, MBA batch of 2010 have made their Alma mater proud by coming up as winners of the Capgemini Super Techie Show. Capgemini Super Techies show aired on ETNow is India’s first reality TV series for IT professionals where they get a platform to showcase their tech talent to the world.

With the 100% recent FDI roll-out in parliament, the stage is set for the foreign investors to boost the organized retail sector in India. Mukul Joshi of MBA 2013 batch tries to evaluate how already the organized sector has impacted the way people shop in India. He brings out a case analysis on a traditional market cluster (bazaar) for Jaggery in Punjab, as a miniature.

India is a land of diversity. This calls for responsible behavior by the citizens of the country. Nishu Navneet of MBA 2014 batch brings out the recent incidents of mass exodus of Northeastern communities, having to leave their workplaces to return back to their hometowns. He talks about the prejudice and racial discrimination committed on the people coming from other states which have been occurring quite frequently over the years.

Whole nation is mourning over the sad demise of Dr. Verghese Kurien. As a tribute to this maestro, Chintan of MBA 2014 batch brings out an article discussing his contributions to the nation. In the first part of this two article series he discusses about the inception of Amul and formation of co-operative societies for villages. He also talks about the famous Operation Flood that brought about the White Revolution in our country.

Tarun Goel of MBA 2013 batch shares his internship insights and experiences in operations domain at BEHR India, Pune. Hailing from mechanical engineering background he talks about his two months stint working in a Core Company and on the project of his interest.

We hope that you like this edition of Avant Garde.

For the motivation of Junior AG Team, do post your comments on the articles in the “Add Comment” section. Awaiting your comments, criticism and appreciation.

Till the next issue, wish you a Happy Reading!

Team AG.

Inception of Amul

About some 100 kms from Ahmedabad lies a small city named Anand. The city is known as the Milk Capital of India due to presence of the famous Amul Dairy there. Amul – one of the most famous Dairy brands of our country came into existence in 1946. During that time there was only one dairy in the district of Anand and in Gujarat known as Polson Dairy which had been established in 1930. Polson Dairy was providing superior quality dairy products to up-market consumers. However it was involved in the exploitation of Indian farmers by not providing sufficient amount to them for milk and also not allowing them to sell milk to other vendors. Indian national leader Sardar Patel along with agitated farmers of that area initiated a non-cooperation movement against this process in the year 1946 and this lead to the foundation of Amul on 14^th December 1946. Initially it supplied milk and other dairy products without any formalized distribution network or any supply chain in place. The brand name Amul had not been adopted at that time and it was called KDCMPUL (Kaira District Cooperative Milk Producer’s union Limited). It started initially with two dairy co-operative societies and 247 liters of milk only.

Dr. Verghese kurien and Amul

It was on 13^th May 1949, a young engineer who had just completed his Masters Degree in Dairy Engineering arrived at Anand to serve the bond period against the government scholarship for his education. His name was Mr. Verghese Kurien, later to be known to the whole world as Dr. Verghese Kurien. At the start of it all, he served there just to complete his required period and was ready to leave Amul after that but he was persuaded to stay back at Amul by Mr. Tribhuvandas Patel – the founder of KDCMPUL. He along with Mr. Patel started developing co-operatives in the Kheda district. The role of co-operatives was to procure the milk from the farmers and to pay the farmers their appropriate amount according to the quality of milk. Further detailed operation cycle of the co-operatives is explained in the following section. Mr. Kurien however wanted to give KDCMPUL a unique name which could be easily pronounced by all and which could also help in growth of the union. Suggestions were asked from various employees and farmers for an appropriate name. Soon, a quality control supervisor recommended the name “Amulya” which is derived from a Sanskrit word meaning priceless and implies unmatchable excellence. The name was modified to “Amul” to make the union also a part of this name and hence brand AMUL- Anand Milk Union Limited, came into existence.

Operation of Co-operative Model

Amul formed several co-operative societies for a group of villages. These co-operative societies had the task of collecting milk from the village farmers twice a day. The payment was made to the farmers according to the fat content in the milk. Sufficient steps (such as standard fat measurement machine, surprise checks, educating farmers etc.) were taken to prevent malpractices and enhance the overall process.  These milk cans were then transferred to nearby Milk Chiller Unit on the same day. It was kept in storage there for few hours then they were transferred for the pasteurization and finally to the cooling and packaging unit. After that milk was delivered to the wholesale distributor and then to the retailers and finally to the consumer thus following two-level distribution marketing channel.  The upstream supply chain was entirely designed by Dr. Kurien and Mr. Tribhuvandas Patel – as a result of which the co-operative mechanism kept getting better and by the end of 1960 Amul had become a success story in Gujarat.

Fig 1. Flow Diagram of Amul Co-operatives Operation

Operation Flood – The white Revolution

The year was 1964 when our Prime Minister Mr. Lal Bahadur Shastri was invited to Anand to inaugurate the new cattle-feed plant of Amul. He was supposed to return back by end of the day but after reaching Anand he insisted to stay there to learn about the success of the co-operatives. He visited almost all the co-operatives with Dr. Kurien and was impressed with the process with which Amul was sourcing the milk from farmers and at the same time helping them to improve their economic condition. Later, he returned to Delhi and asked Dr. Kurien to replicate the Amul pattern across the country. The combined effort resulted in creation of the National Dairy Development Board (NDDB) in the year 1965. Dr. Kurien took charge of NDDB and began the herculean task of replicating the overall pattern of the working at Anand to other parts of the country. By this time the demand for milk was growing at a faster rate than the supply of milk. India could have easily become the largest importer of milk like Sri Lanka were, had sufficient steps not been taken at that time by the Indian government and NDDB. Money was the biggest problem faced by NDDB during that period and was a critical resource needed to revolutionize the milk industry. To deal with it, NDDB tried to pursue World Bank for loans and other grants with no conditions at all. When the President of World Bank came to India in 1969, Dr. Kurien told him – “Give me money and forget about it”. A few days later, World Bank approved the loan for NDDB without even a single condition. This help was part of an operation, later known as Operation Flood – which was done to replicate the Anand working pattern across India. Operation Flood was subsequently implemented in India in three phases adding around 0.1 million co-operatives and 5 million milk producers. Dr. Kurien also took several other measures such as developing milk powder, developing several varieties of dairy products, emphasis on the health of cattle and development of vaccines etc. In 1973, he also set up GCMMF (Gujarat co-operative milk marketing federation) – an individual marketing unit of Amul to sell the Amul as a brand in India as well as abroad. He also founded IRMA – Institute of Rural Management Anand in 1979, to pass on the gained knowledge to future generations and to place rural India on the front map.

As a result of these combined efforts, Amul currently boasts of 15 million milk producers pouring their milk in 1,44,246 dairy co-operative societies across the country – a huge chain that has resulted in us being  the largest milk producing country today.

This has been the story of a young engineer who was born in Calicut and was later known as the father of White Revolution and was honored with some of the most prestigious Government awards like Padma Vibhushan, Ramon Magsaysay and Krushi Ratna etc. He took his last breath on 9^th December 2012 but he will always be remembered for his immense contribution to the farmers, to the Amul Brand and to the millions of consumers of dairy products.

Chintan Parekh

Batch of MBA 2014

References:

1. www.amul.com

2) What does word cherry Picking means in terms of bargaining?

3) Which Smartphone operating system is also known as ‘ ice cream sandwich”

4) Hub and spoke distribution strategy is effectively used by the companies to cater to the rural and semi urban market. Name the Leading Automobile Indian car manufacturer who is using this strategy to supply his one of the car model to the semi urban and rural part of India. Also specify the name of the car

5) Identify which company does below logo represent?

6) Name the celebrity who endorses Fast track, Flying Machine jeans, Herbalife, Fair and lovely for men, Sangam suitings

7) DER TRANSACTED HARD
Unscramble/Rearrange the above letters for a two word name of a global financial institution.

8 ) Which Indian Logistic company takes care of the distribution of a Popular Global processed-food brand Baskins-Robbins?

9) Brantly, Kaman, Hiller and MD are companies that make what?

10) What type of products are Cerenia, Palladia and Simplicef (all Pfizer brands)?

11) Identify the person

12) Name the term used for depreciating a company's intangible assets?

13) This term is derived from the Greek word 'Oikanomia' means "House Management". What is it?

14) What are "Blind Ads" in HR parlance?

15) Identify the Logo

(Hint: it is an advertising company)

Compiled By,

Team Avant Garde,

IME, IIT Kanpur

2 – Bargaining by going from store to store to get the best deal

3 – Android – 4.0

4 – Tata Nano

5 – Carrefour is one of the biggest European retailers, and it’s also French for crossroads. The logo symbolizes this word via two opposite arrows. They also added the first letter of the name, because if you look closely you’ll see the letter C in the negative space between the two arrows.

6 – Virat Kohli

7 – Standard charted

8 – Snow man logistics

9 – Helicoptors

10 – Animal Health brands

11 – Shasi Ruia

12 – Amortization

13 – Economy

14 – Recruitment advertisements that does not have the name or identity of the Employer

15 – Clear Channel

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