SALES & DISTRIBUTION ASSIGNMENT ON

AMUL
 AMUL

 Formed in 1946, is a dairy cooperative movement in India with 250 liters of milk per
day , with name Kaira district cooperative milk producers union.
 Brand name Amul is managed by a Gujarat Co-operative Milk Marketing Federation Ltd.
(GCMMF).
 Today Amul dairy is no.1 dairy in Asia and no.2 in world which is matter of proud for
Gujarat and whole India.
 It has more than 150 chilling centers in various villages.

Reasons for success of Amul are:

 Robust supply chain

 Low cost strategy
 Diverse product mix
 Strong distribution network
 Technology and e- initiatives

SALES
During the year, sales of Federation registered a quantum growth of 19.3% to reach Rs. 8005.36
crores (Rs. 80 billion). Last year, turnover was Rs. 6711.31 crores (Rs. 67.11 billion). This is an
extremely impressive growth when viewed from the perspective of draught effect and resultant
drop in milk procurement as well as 27.7% growth that we achieved in the year 2008-09.

Federation has justified its undisputed leadership in milk business by achieving sales growth in
pouch milk category by more than 21% and achieving average sales volume of 38.30 LLPD
(lakh litres per day). The Sales growth in value terms is 32% from existing markets only. We
have achieved number one status in pouch milk sales in Delhi this year. With this achievement,
Amul Milk has emerged as the largest selling brand of milk in all major metro markets of Delhi,
Mumbai,KolkataandAhmedabad.

Masti Dahi sales grew at an impressive rate of 46%. Ice-cream sales registered a value growth
of 22%. Amul Cheese sales increased by 20%. UHT milk also grew strongly at 14% along with
Fresh Cream registering 39% growth. Beverage sales grew by 23% and chocolate sales
registered an encouraging growth of 30%.

DISTRIBUTION

Amul range of products continues to penetrate deeper and deeper across the country
simultaneously through four distribution highways created with specialist distributors handling
ambient milk products, chilled milk products, fresh milk products and frozen products. This
unique combination of managing distribution highways has always been a huge competitive
advantage.

Distributors are considered to be Marketing Managers of Federation in true sense. To develop

Self Leadership amongst each individual distributor, a major initiative called SLDP (Self
Leadership Development Program) has been implemented since last year.

Distributors along with their stake-holders undergo a Vision Mission Strategy (VMS) workshop
at their level which would eventually integrate each of them in the process of organization’s
strategic planning and enable them to manage their own business efficiently by meeting the
challenges of competitive environment. In the process, Distributor prepares his Mission
statement and business plan for next few years.

To get exposure to our network of cooperative Institutions, we organize Amul Yatra for our
channel partners. Distributors and major retailers from across the country come to Anand in
Amul Yatra programm. So far more than 7700 distributors and other channel partners have
visited Anand in Amul Yatra. This year too the initiative continued with inclusion of more
distributors and retailers.
 Most producers work with marketing intermediaries to bring their products to market.
The marketing intermediaries make up a marketing channel also called distribution channel.
Distribution channels are sets of interdependent organizations involved in the process of making
a product or service available for use or consumption.

The Head Office of GCMMF is located at Anand. The entire market is divided in 5
zones. The zonal offices are located at Ahmadabad, Mumbai, New Delhi, Kolkata and Chennai.
Moreover there are 49 Depots located across the country and GCMMF caters to 13 Export
markets.

A zero level of channel also called a direct marketing channel consists of a manufacturer
selling directly to the final customers. A one level channel; contains one selling intermediary
such as retailer to the final customers. A two level channel two intermediaries are typically
wholesaler and retailer. A three level channel are typically wholesaler, retailer and jobber in
between.

GCMMF has an excellent distribution. It is its distribution channel, which has made it so
popular. GCMMF’s products like milk and milk products are perishable. It becomes that much
important for them to have a good distribution.
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.

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.

Sales turnover from 1994-2009

Sales turnover Rs.in million US$ in million
1994-95 11140 355
1995-96 13790 400
1996-97 15540 450
1997-98 18840 455
1998-99 22192 493
1999-00 22185 493
2000-01 22588 500
2001-02 23365 500
2002-03 27457 575
2003-04 28941 616
2004-05 29225 672
2005-06 37736 850
2006-07 42778 1050
2007-08 52554 1325
2008-09 67113 1504