Amul Case Study

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AMUL - A case study on IT in SCM

A live case of Use of IT

Amul is a leading food brand in India. It offers a wide range of products like milk, milk powder, butter, ghee, cheese, chocolates, Shrikhand, ice cream and many more. The brand name AMUL is derived from the Sanskrit word "Amoolya", meaning priceless. The first products with the Amul brand name were launched in 1955. Since then, they have been in use in millions of homes in all parts of India, and beyond. Today Amul is a symbol of many things: Of high quality products sold at reasonable prices, of availability, of service. Amul has been accredited with ISO 9001 and HACCP Certification by QAS, Australia-the first food company in Asia to receive the HACCP Certification

"Amul" is a well-acknowledged and live example of making a strong use of IT Formed in the year 1946, Amul initiated the dairy co-operative movement in India and formed an apex co-operative organization called the Gujarat Cooperative Milk Marketing Federation (GCMMF). Today, this movement is being replicated in 70,000 villages in over 200 districts in India, transforming the rural landscape. This co-operative revolution has made India the largest producer of milk in the world today. Amul is also one of the largest and most celebrated food brands in India. GCMMF markets its products through 50 sales offices throughout India; and distribution is done through a network of 4,000 stockists who, in turn, supply 500,000 retail outlets. The complexity of logistics can be visualized in terms of: millions of litres of milk to be collected from millions of village members. Interestingly, milk is a perishable commodity; hence a strong coordination function is required in storing, processing and distributing the milk in required time.

The case of Amul's supply chain is noteworthy simply because the movement has not only lead to efficient collection of milk but, more importantly, has used IT to create higher profits for milk producers.

Role of Information Technology

IT has played a critical role in the development of the Amul brand. The logistics behind the coordination of approximately six million liters of milk per day from numerous village co-operative societies throughout Gujarat, and storing, processing and producing of milk products at various district dairy societies, is carried out with clock-precision. In these, IT plays a critical role. The installation of over 3,000 Automatic Milk Collection System Units (AMCUS) at village societies to capture member information, milk fat content volume collected, and amount payable to each member, has proved invaluable in ensuring fairness and transparency throughout the entire organization.

GCMMF is an apex co-operative organization that comprises affiliated member dairies/district milk unions, each having its own manufacturing unit. These member dairies in turn collect milk from members who supply milk twice a day to the respective village co-operative societies. To meet the challenge of growing business, IT was decided as the thrust area that would streamline the production and collection process and the processing of milk products. This is where the installation of AMCUS made the entire operation look simple. As milk is a highly perishable commodity in the supply chain, the AMCUS initiative is vital for the operations. More importantly, this initiative has increased the trust and transparency for IT in rural areas'.

On an average, around thousand farmers come to sell milk at their local cooperative milk collection center. Each farmer is 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 personal...
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