Supply Chain Management – Amul, Milk Farmers and Logistic System – Case Study

Amul (Anand Milk Union Limited) was formed in 1946. During that time there was an acute shortage of milk in India. One a bottle of milk per family per day was allowed by the government.

To address this shortfall Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF) came up with a unique idea of making improvement to the Supply Chain of milk in such a way so as to cut down the dumping and wastage of milk.

Amul produces around 450000 litres of milk every day. And over 2 million milk farmers are associated with this brand currently.

Amul Supply Chain Management - Amul Shops on Major Railway Stations as a Result of Leading Supply Chain

Amul Supply Chain Management – Amul Shops on Major Railway Stations as a Result of Leading Supply Chain

Improvement in distribution network

  • Amul slowly opened 47 milk storage depots to buffer inventory.
  • 500000 retail outlets were opened across the country
  • Around 3500 distributor of Amul products across the country.

GCMMF started transacting in form of advance Demand Drafts and Cash in order to maintain the liquidity of the firm. This in turn helped both the suppliers and the consumers in a big way.

“Suppliers got their money on time and thus were more and more willing to work for AMUL, and consumers got a better quality of milk because dealers were able to hold only that much quantity of milk of which they were capable of paying in terms of cash”

Supply Chain Management - Amul

The Business Model

The business model was simple. There was a need to find out all the parties involved in the Business model. The main stake holders are the Milk Producers, the Milk Consumers and the people involved in logistics.

  • GCMMF took the responsibility of taking care of the secondary needs of the Milk producers. It took initiative to educate the milk producers, provide them with the knowledge of better Animal Husbandry System.
  • GCMMF also ensured that good quality milk was supplied to the consumers. A number of chiller plants were established near the collection center.
  • A major role was to be played by logistic system. GCMMF had to ensure quality of the milk products. In this regard generally ‘third party’ logistic system was hired. The union kept a watch on the performance of the logistic system. The milk was transported in refrigerated containers. Efforts were made to ensure the timely delivery of products. Such a thing was crucial in the case of Amul as the products catered by them are perishable.

As a result of this collaboration Amul has been able to enhance the production of milk and be a part of White-Revolution.

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One Comment

  1. i want to start business as milk distributor..

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