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ORGANISATION UNDERSTANDING

THE PANCHMAHAL DISTRICT CO-OPERATIVE MILK PRODUCERS’

UNION LTD. GODHRA

By

Gyaneshwar Ranjan and Amarkant Sinha

Organisational Traineeship Segment (OTS)

PRM2004-06

INSTITUTE OF RURAL MANAGEMENT ANAND



2005

ACKNOWLEDGEMENT

We are thankful to our host organisation “The Panchmahal District Co-operative Milk

Producers’ Union Limited” for giving us the opportunity to carry out our

Organization Traineeship Segment (OTS) of our PRM course. We are grateful to Dr.

R. S. Patel, Managing Director,“The Panchmahal District Cooperative Milk

Producers’ Union Limited” for providing us with the opportunity to understand the

market and functioning of the dairy. We owe special words of thanks to our Reporting

Officers Dr. A. K. Panchal and Mr. R. J. Mehta for helping us during the progress of

the work and providing us valuable insights.

We are also very thankful to the other staffs of various other departments who helped

us during the study of the organization. And we extend our heartiest thanks to all the

personnel of “The Panchmahal District Cooperative Milk Producers’ Union Limited”

who cooperated with us during the study of the organization.

Finally, we thank to our faculty guide, Prof. S.N. Biswas for offering helpful

suggestions and comments. Prof S.N. Biswas has guided us in this project through his

invaluable constructive suggestions without which we would not have been through

this project.

Amarkant Sinha (25054)

Gyaneshwar Ranjan (25070)

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EXECUTIVE SUMMARY

Students’ Name : Gyaneshwar Ranjan and Amarkant Sinha

Organisation : The Panchmahal District Co-operative

Milk Producers' Union Limited, Godhra

Reporting Officer : Dr. A. K. Panchal and Mr. R. J. Mehta

Faculty Guide : Prof. S. N. Biswas

Project Title : Organization Understanding

Scope of study: The scope of our study included understanding of the structure,

functions and interface with the external environment of “The Panchmahal District

Co-operative Milk Producers' Union Limited, Godhra”. The study also includes the

chilling centers, the cattle feed plant and the dairy cooperative societies associated

with the dairy.

Objectives:

To have understanding of what an organization is all about.

To know its activities, its strength and weaknesses.

To understand how an organization comes into existence, how it grows, adapts

and absorbs changes and sustains itself.

To understand the interface between the organization and its external

environment.

To understand the perspectives and ethos of individuals as it exists in the

organization.

To understand the dynamics that comes into play at various levels in the

organization.

Methodology: Appreciative enquiry, semi structured interviews with stakeholders,

interviews, observation and informal discussions are the primary data sources, and the

secondary data sources consist of various documents mainly annual reports, financial

statements etc. available in the organization. The concepts of 7-S framework were

applied to gain a holistic understanding of the organization.

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Genesis: The Panchmahal District Co-operative Milk Producers' Union LTD., Godhra

popularly known as Panchmahal Dairy is a cooperative venture of the milk producers

of Panchmahal and Dahod districts. It was established in the year 1973 and during the

year of inception its milk procurement was 21,000 liters. The dairy was managed by

GDDC till 1982. The Panchmahal cooperative dairy development programme was

taken up under NDDB’S operation flood-II programme during September 1982.

During OF-II programmes the input activities viz. veterinary services, extension

programmes, Artificial insemination programmes were initiated.

Mission: The union as such does not have any explicit mission but the same is

reflected in its quality policy which states “we are committed to excellence, both in

providing the best quality inputs and services to our esteemed milk producers and

excellent quality of milk and milk products to patron consumers.

“We shall continue to adopt this state of the art technology, HACCP principles and

innovations for manufacturing products and providing congenial and healthy

environment to encourage excellence in every area.”

Strategies: Quality consciousness in the consumers created the demand of clean and

healthy milk having minimum bacterial load. The dairy is planning to be a leader in

the quality of milk and for that various measures such as installation of bulk milk

coolers, automatic milk collection station, computerization of DCS, providing

stainless steel cans, quick reception and testing of milk both at DCS and dairy dock

are undertaken.

Current Scenario: The Panchmahal District Co-Operative Milk Producers' Union

Ltd., Godhra is located at Lunawada Road, 2.5 Km. away from Godhra City. It is

mainly a liquid milk plant with installed capacity of 2 LLPD. But at present the dairy

is handling more milk than its installed capacity. In lean season it handles 2.5LLPD

and its handling capacity in flush season up to 3.25 LLPD. These figures also show its

level of procurement in those seasons. It is producing Liquid Milk, Ghee, Table

Butter, Dried Milk & Dried Milk Products, i.e. Skimmed Milk Powder, Mithaee

Makers Powder, Gulab Jamun Mix & another important milk is Flavoured Milk as a

very high demand. The Panchmahal Dairy is manufacturing its products under the

brand names “AMUL” & “PANCHAMRUT". It was awarded with HACCP & ISO

9002 certificates for its high quality products & production polices by Quality

Assurance Service QAS, Australia in the year 2003.

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The profit and loss account statement of milk shed reveals the increasing business and

increased returns to its members continuously. The financial viability of milk union is

becoming stronger and stronger day by day. Total turn over of the Panchmahal Dairy

during the year 2004-2005 was ('000 Rs.) 1,75,90,39. Total profit made was ('000 Rs)

5998.

TABLE OF CONTENTS

1. INTRODUCTION ERROR: REFERENCE SOURCE NOT FOUND

1.1 Name Error: Reference source not found

1.2 Location and Topographical Conditions Error: Reference source not found

1.3 Objective of the Panchmahal Dairy Error: Reference source not found

2.0 ENVIRONMENT ERROR: REFERENCE SOURCE NOT FOUND

3.0 TECHNOLOGY ERROR: REFERENCE SOURCE NOT FOUND

4.0 CENTRALITY ERROR: REFERENCE SOURCE NOT FOUND

5.0 LINE AND STAFF FUNCTIONS ERROR: REFERENCE SOURCE NOT

FOUND

6.0 THE PANCHMAHAL DAIRY FROM THE 7-S FRAMEWORK ERROR:

REFERENCE SOURCE NOT FOUND

6.1 Shared value Error: Reference source not found

6.1.1 Core values Error: Reference source not found

6.1.2 Vision Error: Reference source not found

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6.4.1 Management of information system Error: Reference source not found

6.4.2 Management by objective at the Panchmahal dairy Error: Reference source not

found

6.5.1 Individual initiative Error: Reference source not found

6.5.2 Risk tolerance Error: Reference source not found

6.5.3 Direction Error: Reference source not found

6.5.4 Integration Error: Reference source not found

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6.5.5 Management support Error: Reference source not found

6.5.6 Control Error: Reference source not found

6.5.7 Identity Error: Reference source not found

6.5.8 Conflict tolerance Error: Reference source not found

6.5.9 Communication pattern Error: Reference source not found

6.6.1 Productivity flexibility Error: Reference source not found

6.7.1 Recruitment process Error: Reference source not found

6.7.2 Induction Error: Reference source not found

6.7.3 Training activities Error: Reference source not found

6.7.4 Performance appraisal system Error: Reference source not found

6.7.5 Promotion and transfer Error: Reference source not found

6.7.6 Worker and management relations Error: Reference source not found

6.7.7 Employee turn-over rate Error: Reference source not found

7. DEPARMENTS ERROR: REFERENCE SOURCE NOT FOUND

7.1 Personnel and administrative department Error: Reference source not found

7.2 Procurement Department Error: Reference source not found

7.3 Purchase Department Error: Reference source not found

7.4 Production Department Error: Reference source not found

7.5 Store Department Error: Reference source not found

7.6 Marketing Department Error: Reference source not found

7.6.1 Functioning of Marketing Department Error: Reference source not found

7.6.2 Customer Handling Procedure Error: Reference source not found

7.6.3 Future strategies of Marketing Department Error: Reference source not found

7.7 Quality control department Error: Reference source not found

7.8 Project and input department Error: Reference source not found

7.8.1 Artificial Insemination and Veterinary services Error: Reference source not

found

7.8.2 Supply of Fodder Seeds Error: Reference source not found

7.8.3 Women cooperative dairy societies Error: Reference source not found

7.8.4 Women Extension Workers Error: Reference source not found

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7.8.5 Women Dairy Cooperative Leadership Programme Error: Reference source not

found

7.9 Accounts department Error: Reference source not found

8.0 FINANCIAL ANALYSIS ERROR: REFERENCE SOURCE NOT FOUND

9. PERFORMANCE INDICATORS ERROR: REFERENCE SOURCE NOT

FOUND

10.0 SWOT ANALYSIS OF THE ORGANISATION ERROR: REFERENCE

SOURCE NOT FOUND

11.0 LEARNING ERROR: REFERENCE SOURCE NOT FOUND

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APPENDIX 1 ERROR: REFERENCE SOURCE NOT FOUND

APPENDIX 2 ERROR: REFERENCE SOURCE NOT FOUND

APPENDIX 3

Error: Reference source not found

viii



List of Tables

Serial No. Page No.

1. Present Status of the Panchmahal Dairy 3

2. Board of Directors 4

3. Induction Schedule 20

4. Type of milk sold 29

5. Financial Ratios 36

6. Share Capital 38

7. Number of Societies Organized 38

8. Total Sales 39

9. Societies Come under A. I. 39

10. Numbers of A. I. Performed 40

11. Fodder Seed Sales 41

ix



Lists of Figures

Serial No. Page No.

1. Emery and Trist Framework 5

2. Perrow’s Technology Classification 6

3. The 7-S Framework 9

4. Miles and Snow’s Model 12

5. Competitive Strategies Framework by Michel Porter 13

6. Procurement-cum-distribution Channel. 25

7. Sale of Liquid Milk per Day 29

8. Manufacturing of Milk Products 30

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1. INTRODUCTION

1.1 Name

The name of the organisation is “The Panchmahal District Co-operative Milk

Producers' Union Ltd” (PDCMPUL), Godhra.

1.2 Location and Topographical Conditions

The Panchmahal dairy is located at Lonawada Road, 2.5 km away from Godhra town

in Panchmahal district. The dairy procures milk from the producers who live in 1600

villages of Panchmahal and Dahod districts. These are the backward districts of

Gujarat, where 90% people are tribal and in which 60% people live below poverty

line. The average rainfall of the districts are 600 to 750 mm but it rains irregularly

therefore the districts have to face draught frequently. Most of the land is rain-fed

land and the farmers have to depend upon the monsoon. Apart from this, the most of

its functioning areas (especially Dahod) are hilly and therefore, the transportation cost

is higher in collecting milk from the scattered villages. Again, it can't be said that the

Panchmahal dairy is situated at strategic location in term of getting any large market

xi



for its produces but with its own efforts and also with GCMMF, it is continuing

scaling up the sales through exploring new areas such as Indore, Dahod, etc.

1.3 Objective of the Panchmahal Dairy

• To procure raw milk from the societies and execute effective marketing of the

milk and milk products after processing the raw milk in order to uplift the

social and economical status of the producers.

• To ensure better & remunerative market for milk to milk producers round the

year.

• To provide veterinary aids to the members at their door step through routine

mobile veterinary routes and also to attend emergency call, besides providing

facilities of artificial insemination.

• To arrange an effective training for the members of the union & related

societies to minimize the cost of milk produced at village level.

• To create direct or indirect employment to enhance milk production activities.

• To supply balanced cattle feed as per requirement of milk producers at

reasonable rates.

• To provide technical inputs to the milk producers for producing clean milk at

village level.

• To execute various social welfare programmes for the upliftment of the

members as well as the societies as a whole.

1.4 History and Development

The Panchmahal District Co-operative Milk Producers' union was organized at

Godhra in May 1973. Initially, the dairy used to collect 21,000 liters of milk from the

40 villages of Panchmahal district. Milk used to be procured and delivered to the

adjacent district union in Kheda and Baroda on account of lack of processing facilities

at Godhra. Only bordering villages were availing these benefits of arrangements. So,

in order to increase to a larger numbers of farmers of deep-seated villages, a milk

processing plant with 30,000 LPD capacities was established at Godhra in 1977.

xii



The union was managed by GDDC till 1982. The dairy development programmes on

the lines of the Anand pattern was undertaken under operation flood II programmes

during the year 1982-83. The capacity of the milk processing plant was further

expanded to one lakh LPD.

Under Operation Flood III programme it was proposed to procure milk from 725

DCS. The procurement expected to be of 90,000 liters by the end of 1992. The

proposed financial outlay under OF III programme for the union was Rs. 3.15 lakh,

which involved investment on chilling centers, expansion of existing dairy plant,

technical input service and support to villages’ dairy cooperatives.

In the year 1999 - 2000 the organization received ISO 9002 and HACCP certificates

by an industrial agency QAS. Where ISO 9002 stands for the Quality Management

System of the milk and milk products such as milk powder, butter, butter milk, ghee

and gulab jamun mix, and HACCP covers the safety and quality management system

for the manufacturing of milk and milk products.

The average milk collection per day during the year 2004-05 was 2,58,000 liters from

1,600 milk producers cooperative societies. Solid Not Fat (S.N.F.) and Fat are the two

main bases on which the milk is priced with the maximum of Rs. 205 Fat/Kg for

buffalo milk.

Table No. 1- Present Status of the Panchmahal Dairy

State Gujarat

District Panchmahal and Dahod

Address The Panchmahal District Co-operative Milk

Producers' Union Ltd” (PDCMPUL,

Lonawada Road, Godhra - 389001

Type of Products Double Toned Milk, Single Toned Milk,

Standardized Milk & Whole Milk, Skimmed

Milk Powder, Ghee, Better, Flavored Milk

and Gulab Jamun Mix

Product Brand Name Panchamrut and Amul

Marketed By GCMMF and Itself

Milk Handling Capacity

Capacity utilization

2 Lakh Litres/Day

100%

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Pasteurization Capacity 30000 Litres/Hour

Capacity of animal feed plant

Capacity utilization

100 tones / day

100%

Capacity of Powder Plant 16 Mt/Day

Capacity of Ghee Plant 12 Mt/Day No. of Milk Routes for procurement 75

No. of Village Level Society 1600

Staff Strength(permanent) 492

No. of Agents 235

The capacity utilization animal plant is 100%. The capacity utilization fluctuates

according to the demand. In February it worked at 200% capacity during peak. The

dairy is handling more milk per day than its installed capacity of 2LLPD. The powder

plant remains closed in the lean season of milk production.

1.5 Governing Structure

The Panchmahal District Co-operative Milk Producers' Union Limited is governed by

20 members Board of Directors. Out of these fifteen are elected members and rest five

are nominated or ex-officio members; one from NDDB, two from GCMMF, District

Registrar (Co-operative Society) and Managing Director. The Chairman comes from

the 15 elected members. Detail of the Board of Directors is given below.

Table no. 2 - Board of Directors (2004-05)

Shri Bhupendrasinh Prabhatsinh Solanki Chairman

Shri Shanabahi Galabhai Patel Director

Shri Kanubhai Somabhai Patel Director

Shri Narvatsinh Khatusinh Chauhan Director

Shri Ravjibhai Shankarbhai Patel Director

Shri Ganeshbhai Mathurbhai Patel Director

Shri Magansingh Ratansinh Baria Director

Shri Rameshbhai Devjibhai Patel Director

Shri Vasantkumar Kantilal Pandya Director

Shri Bachubhai Somabhai Parmar Director

Shri Indrajitsinh Pramodsinh Parmar Director

Shri Ranvirsinh Raysinh Solanki Director

Shri Jiviben Virabhai Patel Director

Shri Ilaba Jayadrathsinh Parmar Director

SMT. Sumanben Kalsing Bhabhor Director Shri J. G. Pandya District Registrar

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Shri Jayen Mehta Representatie of GCMMF

Shri Atulkumar Agrawal Representatie of GCMMF

Dr. Mohan Namjoshi Representative of NDDB

Dr. R. S. Patel Managing Director

2.0 ENVIRONMENT

The environment of an organization identifies everything outside an organization’s

boundaries. The “general environment” encompasses conditions that may have an

impact on the organization, but their relevance is not overtly clear whereas the

“specific environment” is that part of the environment that is directly relevant to the

organization in achieving its goals. It includes producer members, customers,

competitors, G.C.C.M.F. and government regulatory agencies.

The environment that the Panchmahal Milk Union faces is of the placid-clustered

type according to the classification by Emery and Trist.

xv

C H A R A C T E R I S T I C S

PLACID-RANDOMIZED PLACID-CLUSTERED Relatively stable

Low uncertainty

Changes slow and random

Less attention to environment

Relatively stable

Threats slow but clustered

Relatively more attention to environment

Centralized structures

DISTURBED-REACTIVE TURBULENT FIELD

More complex and changing

Many competitors with one or more

rgan domin organizations dominant

More flexibility needed to counteract

environme environment and competitors

More decentralized structures

Most dynamic and uncertain

Change ever-present

Elements in the environment create a

compounded change effect

Highest order of flexibility and innovation

needed to counteract

Figure 1: Emery and Trist Framework



After introduction of MMPO in 2002, the environment in dairy sector has become

very dynamic. Now any major player can enter into the milk shed of another

established player and try to entice its produces. In the case of the Panchmahal Milk

Union, major competition is faced from the “Sanchi Dairy” besides other small

players such as local doodhiyas. Still, in the local market of operations, the

Panchmahal dairy is the dominant player. To be more effective in such environment,

the organization needs to be more flexible and more decentralized as compared to its

existing form.

3.0 TECHNOLOGY

The technology refers to the information, equipment, techniques and processes

required to transform inputs into outputs in the organization. According to Perrow

technology can be defined “as the action that an individual perform upon an object,

with or without the aid of tools or mechanical devices, in order to make some change

in that object.” According to his classification, the Panchmahal Dairy employs a

routine technology. It is easy to analyze the problems. There is mass production. The

routine technology can be accomplished best through the standardized coordination

and control.

xvi

Craft Non-routine

Routine Engineering

Task Variability

Few Exceptions Many Exceptions

ProblemAnaly

zability

Welldefined

&

Illde fi

ned

&

Analyzable

Unanaly za

ble



Figure 2: Perrow’s Technology Classification

The technology used by the dairy is of routine type in which there is very low scope

of any change from the procedure followed. There is mass production and personnel

in production department keep on performing same task. The technology at the union

is characterized by low task variability. There are few exceptions and people do the

same job in the same way most of the time. There is high formalization and

centralization. The span of control is high and the coordination and control is done by

planning and rigid rules in the organization.

4.0 CENTRALITY

We tried to analyze the different centralities of the Panchmahal dairy on the basis of

the framework given by Prof. Katar Singh and Prof. Debiprasad Mishra.

4.1 Member Centrality

In this region, most of the villagers are very poor and their livelihood depends on

agriculture and animal husbandry. Selling milk is the main business of the villagers

after farming. Even, rainfed agriculture becomes secondary livelihood option due to

the infrequent rainfall and subsequent drought. A major portion of the family income

depends on the income of pouring milk. The Panchmahal dairy returns 83 paise/rupee

of milk to the producers. This is the reason of high practice of rearing cattle in the

household and pouring milk in the society. The average household has 4 to 6 cattle.

Therefore, member centrality is high with the dairy business in this area.

4.2 Patronage Centrality

The products of the Panchmahal dairy sell at the brand names of Amul and

Panchmrut. Amul is the market leader in the dairy sector and continuing progressing

ahead. Panchmrut is also a well know brand in its domain and no other brand is its

closed competitor. Under the cooperative principle, the Panchmahal dairy procures

milk whatsoever producers want to sell. In this way, it procures the high percentage of

milk quantity from 1600 villages out of total 1900 villages in its domain. Therefore, it

can be said that it has captured the large factor market (here raw liquid milk) and has

xvii



the capacity to dictate the local market. So, the patronage centrality is also high. But,

there is a need of market development as well as new market for catering the growing

milk procurements.

4.3 Domain Centrality

In this region, this sector constitutes a major business, as there is no any other

industry in this region except one automobile industry in the Halol Taluka of

Panchmahal. The Panchmahal dairy gives the major contribution in the GDP of the

region. People of 1600 villages out of 1900 villages are attached with the dairy and

get direct benefit from it.

5.0 LINE AND STAFF FUNCTIONS

Line function is directly involved in the main functions, that is, manufacturing

products or delivering services. Its contribution is most comprehensive to the

organization. In this organization the line functions are procurement, production and

marketing of milk and milk products.

The staff function is a specialist function and is not directly involved in the production

process. Its main function is to provide support to the line function. This function

extends across organization and helps make the line function most effective. Typical

staff function includes administrative, training, personnel, accounts, purchase, store

etc.

Here in this organization, it is seen a clear cut demarcation between staff and line

department, both in terms of culture and attitude of the employees. The employees in

the line departments think that they are the ones who do all the important work, but it

is the employees from the staff department who enjoy more power and are close to the

management. Therefore, it is found that there exists a bit of grudge among the line

staffs. When we talked to the staff people, we found that some of them were candid

enough to admit that they are close to the power centre as they look after the finances

and also the personnel policies. Moreover the line employees think that the staff

people have a comfortable job as they have routine life and their work schedule is also

xviii



fixed from 9 A.M to 5 P.M. on the other hand the line people have to work in shifts

and the shifts changes every week.

6.0 THE PANCHMAHAL DAIRY FROM THE 7-S FRAMEWORK

Figure 3: 7-S Framework

Figure 3: 7-S Framework

6.1 Structure

Organization structure defines how tasks are to be allocated, who reports to whom,

and the formal coordinating mechanisms and interaction patterns that will be

followed. Organization structure has three components: complexity, formalization and

centralization. Complexity refers to the degree of differentiation that exists within the

organization. Horizontal differentiation considers the degree of horizontal

separation between the units. The horizontal differentiation was high as the

organization is having various plants located at different places. The Panchmahal

dairy had commissioned a 100 MT/day capacity Cattle Feed Plant at Khandia, in

xix



Shehra Taluka in November 2004. The organization has three chilling centres located

at Lunawada (Chopda), Limdi and Shivrajpur. For providing artificial insemination a

Frozen Semen Station was also established in the dairy premises. At present there is

1600 Dairy Cooperative Societies working under the organisation.

Vertical differentiation refers to the depth of the organizational hierarchy. The

vertical differentiation is high in production department but it is low in other

departments.

Formalization refers to the degree to which jobs within the organization are

standardized. There are explicit job descriptions, lots of organizational rules and

clearly defined procedures covering work processes in the organization. There is very

less scope of doing anything beyond the laid down rules.

Centralization refers to the degree to which decision making is concentrated at a

single point in the organization. It is concerned with the dispersion of authority to

make decisions within the organization. In the Panchmahal dairy, most of the

financial powers rest with “Board of Directors”. The diagram of organization

structure has been given in Appendix 1.

The main functions of the organisation are:

1. Procure milk from Panchmahal and Dahod areas

2. Selling milk and milk products to the nearby markets

3. Providing cattle improvement facilities to the farmers through veterinary camps

and member education

4. Providing cattle feed

5. Group insurance schemes under the cooperative setup for the farmers in LIC of

India.

6. Provide different welfare activities to the members under the co-operative

principle of social concern with the help of the Government of Gujarat and other

funding agencies such as UNICEF, GEDA etc.

The plant has been divided into following sections according to their functions: Dairy

dock and processing, Engineering, Internal audit, Purchase, Care taking, Security (on

contract), Marketing, Quality control, Transport pool, and Central store, Accounts,

Establishment, Information, Projects and Inputs and Cattle feed plant.

There is departmentalization by virtue of horizontal differentiation in the Panchmahal

dairy. The above-mentioned sections have been segregated to the ten departments:

Personnel & Administration (P&A), Marketing, Account, Procurement, System,

xx



Production, Purchase & Storage (P&S), Engineering, Projects & Inputs (P&I) and

Quality & Control (Q&C). The different departments are segregated on the basis of

their functions and specializations.

The elite departments are the Procurement Department and the P&A (Personnel and

Administration) Department. They derive this distinction on the basis of their

criticality to the organisation or their closeness to the power centres. The Procurement

department personnel are in close contact with the Board of Directors and hence have

a network centrality. The P&A department is dominant by virtue of its powers in the

various administrative matters.

6.2 Strategy

Strategy refers to the determination of long-term goals and objectives of the

organization, and the adoption of courses of action and the allocation of resources

necessary for carrying out these goals. Strategy can be viewed as premeditated or as

something that can become clear only over the time. Strategy considers both means

and ends.

The main strategy followed by the organization is market` differentiation strategyunder which the organization is trying to offer higher quality products and also new

products. By using techniques like advertising, market segmentation and prestige

pricing the organization is becoming more and more market oriented. The other main

strategy applied by the organization is that of cost control. This is mainly done by

reducing the wastage and other expenditures those are unnecessary in nature.

When we see the strategies followed by the organization from the view point of

“Miles and Snow” (1960s) then the organization will come under the category of

Analyzers. Under this strategy the goals become stability and flexibility in the

changing environment. It has achieved stability over the years of its functioning as a

significant player in the local market. Also, it needs flexibility to change itself quickly

according to the changing environment in which it operates. Being an Analyzer type

of organization, it refrains from taking risks, and tries to get maximum benefits out of

the opportunities offered by the market. It waits for performance of new products

launched by other players and if they succeed, the organization quickly offers that

product in the market. The structure is moderately centralized and there is tight

xxi



control over current activities. The Panchmahal dairy started manufacturing Amul’s

masti dahi and amul’s kool flavoured milk after it became successful in the market.

The dairy is smaller in comparison to other sister dairies so it can’t afford to take risks

as prospectors. The dairy wants to minimize risk while maximising the profit.

Figure 4: Miles and Snow’s Model

ANALYZER

Goals Environmen

t

Structural

Characteristics

Stabilityand

Flexibility

Changing

Moderately CentralizedControl

Wait and follow

approach

Minimize risk

maximise

opportunity

PROSPECTOR

Goals Environment Structural

Characteristics

Flexibility Dynamic

Loose Structure Low division of

labour

Decentralized

Low formalization

DEFENDER

Goals Environmen

t

Structural

Characteristics

Stability

and

Efficiency

Stable Tight Control

Extensive division

of labour

High formalization

Centralized

REACTOR


Characteristics

All good

things at all

times

As perceived Hybrid of

other

three strategies

Lack of clarityon strategy

xxii



Lower Cost Differentiation

ANALYZER

Goals Environmen

t

Structural

Characteristics

Stabilityand

Flexibility

Changing

Moderately CentralizedControl

Wait and follow

approach

Minimize risk

maximise

opportunity

PROSPECTOR


Characteristics

Flexibility Dynamic

Loose Structure Low division of

labour

Decentralized

Low formalization

DEFENDER

Goals Environmen

t

Structural

Characteristics

Stability

and

Efficiency

Stable Tight Control

Extensive division

of labour

High formalization

Centralized

REACTOR


Characteristics

All good

things at all

times

As perceived Hybrid of

other

three strategies

Lack of clarityon strategy

xxiiiFocused

Low-Cost

Strategy

Focused

Differentiation

Strategy

Overall

Low-Cost

Leadership

Strategy

Broad

Differentiation

Strategy

Best-Cost

Provider

M

ARKETTARGET

TYPE OF COMPETITIVE ADVANTAGE

BEING PURSUED



A Broad

Cross-Section

of Buyers

A Narrow

Buyer Segment

Figure 5: The Five Generic Competitive Strategies Framework by Michel

Porter

The Panchmahal dairy follows a Best-Cost Provider Strategy

Strategic Target: At present the Panchmahal dairy is targeting customers of all the

strata of income, which can be understood from the type of milk it is selling to

consumers. The dairy is having milk with 1.5% fat for lower end consumers and it is

having whole milk with 6% fat for higher end consumers.

Basis of competitive advantage: The dairy is having competitive advantage over

“doodhiyas” who are its main competitor. The dairy is able to supply milk to

consumers through out the year where as it is not so with doodhiyas.

Product Line: The dairy is having wide line of products to cater people from

different strata. It is also manufacturing milk products besides milk of different types.Product Range: A wide array of products ranging from common milk products to

products like flavored milk, gulab jamun mix, ghee, etc.

Production Emphasis: Various cost cutting measures with newer advanced

technology have been taken in past. The dairy tries to utilize all the by-products which

is formed during the production process.

Marketing Emphasis: The dairy has the emphasis on providing better quality

products to consumers at less marketing cost. The quality of the products is

maintained despite of high quality of the products. The Panchmahal dairy has not

xxiv



increased the price of the milk for four years and strived to maintain the same price in

spite of increase in costs of various inputs.

Sustenance of the strategy: Developing a sustainable competitive advantage by

simultaneously cutting costs and improving product attributes.

Another important part of the strategy reflects from its short-term planning, which

contains the goals that the Panchmahal dairy aims to complete in next two to three

years. Following are the various targets that it envisages to achieve in coming years.

These targets are revised on an annual basis and if need arises, changes are

incorporated in the plan.

• The Amul Kool flavoured milk processing plant's capacity will be doubled to

meet the demand of flavoured milk.

• The Amul brand milk has become popular and to meet the demand of this

brand at Indore, Bhopal and Dhar, the milk union, with the financial assistance

from GCMMF, packaging plant has been set-up at Devas in M.P.

• Branded cattle feed varieties mainly the Panchamrut, Panchamrut Special and

Panchmrut Super Special will be made in 25, 50 and 65 kilogram packs.

• The Bye-pass Protein Feed Production will also commence in near future.

• The area- specific Panchamrut Mineral Mixture containing required nutrients

will be manufactured and provided in easy to handle packs of 1 and 5

kilogram.

• Use of Bio-fertilizer will be encouraged and therefore Vermi Composting

Demonstration Farms will be established.

• Bulk Milk Chilling Units will be established in the remote areas of Dahod, at

Kharedi and Dhanpur.

• The District Co-operative Society (DCS) procuring 500 LPD or more milk

will be provided with Bulk Chilling Unit, on demand.

• Installation of a new Spray Drying Plant to manufacture ''Amulya'' powder

milk which is undergoing at present.

• Installation of used self-clarifier and cream separator of ''waste falia'' to

manufacture excellent milk products.

• Augmenting the capacity of the ETP plant from 4.5 lakh litres per day to 12

lakh litres per day.

xxv



• Undertaking research under the technical guidance of the GCMMF to

manufacture '' Amul Basundi''.

• Initiating the ''Heifer Project'' for the ideal rearing of the female calf.

6.3 System

6.3.1 Management of Information System

An information system may be a system that creates information and manages the

same for the stakeholders of the system to provide an ambience to take some informed

decisions. The Panchmahal dairy has developed MIS system, data from the different

departments like Marketing, Production, and Purchase etc is analyzed to generate

reports which is of immense benefit to the management while taking critical decisions

on the operational and tactical issues of the Union. The core processes are normally

attached to the objective of the organization and do not change very often.

The support processes are those that provide support to core processes to happen.

These processes provide either indirect or direct support to the core processes and

directly influence the actors and its properties.

Management processes formulate strategies and even identify the process rules,

logics, processes itself.

MIS has become a one of the important systems in the Panchmahal dairy after the

initiative of the GCMMF. The MIS department has only two employees one of whom

is at the rank of deputy manager and the other is of clerical rank.

6.3.2 Management by Objective at the Panchmahal dairy

In order to achieve performance targets based upon participation of each department,

the Panchmahal dairy is following the policy of management by objectives (MBO).

Under this system targets are set for each department by the consensus of all the

employees. These objectives are then reviewed on a monthly basis and based upon

that are revised again. For example, a typical MBO for accounts department would be

about reduction of expenses in the department and then there would be a comparison

with previous month whether there was an increase or decrease. This helps all the

departments in reviewing their performances and since objectives are set by

consensus there is unanimity in achieving them.

6.4 Style

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Some of the key characteristics along which the style of the Panchmahal dairy was

captured as follows:

6.4.1 Individual Initiative

Individual initiative in employees varies from department to department as different

departments have different scope of responsibilities assigned to them. Also since the

most of the systems and procedures are already established scope for individual

initiative is also limited.

6.4.2 Risk Tolerance

Risk tolerance is low in the Panchmahal dairy, as most of the decisions require the

approval of the Board of Directors. All the decisions, which involve capital

expenditure of more than Rs. 50,000, cannot be approved even by the GM and require

the permission of board of directors.

6.4.3 Direction

In this dairy, the management uses various tools to facilitate direction and uses

Management by Objectives (MBO) on a monthly basis for setting targets to be

achieved by various departments. Besides this, top hierarchy provides regulation to its

sub-ordinates whenever required.

6.4.4 Integration

There is reasonable degree of integration amongst various departments in the

Panchmahal dairy. Various projects run in the dairy with the coordination of one and

other departments where Personnel & Administration plays major role in integrating

them with the help of Management Information System (MIS).

6.4.5 Management support

Management support is one of the strengths at the Panchmahal dairy as managers are

in constant touch with their subordinates providing timely directions and support to

their subordinates.

6.4.6 Control

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Since, it is a cooperative organisation there are many rules and regulations, stipulated

by the act and byelaws, which it needs to comply with. Approval from registrar is

required for all the important matters concerned with employees.

6.4.7 Identity

There exist multiple subcultures within the organisation largely on the basis of

departments. An integrated organizational identity is not very strong and employees

generally view themselves as the employees of a particular department rather than of

the organisation as a whole.

6.4.8 Conflict tolerance

In order to handle conflicts and grievances of employees in a constructive manner,monthly and bimonthly meetings of employees and management representatives take

place where they are encouraged to express their views and differences. Management

also tries to find solutions to such conflicts and grievances before they get aggravated.

6.4.9 Communication pattern

There is an existence of scalar chain in the Panchmahal dairy, most of the

communication pattern follows the hierarchical chain of authority. The

communication flow is mostly downward from the top management to the middle

management and so on.

6.5 Skills

6.5.1 Productivity flexibility

Based upon the demand conveyed by the marketing department after integrating the

requisition put forward by the agents and GCMMF, the production department

produces the daily demand. This daily demand is highly fluctuating and keeping inmind the fact that the installed capacity of the plant is only about 2 lakh LPD; the

production department displays a commendable flexibility in handling such a

fluctuating demand. It converts the surplus milk in the skimmed milk powder and

other milk products as and when necessary after meeting the regular demand of liquid

milk.

6.5.2 Quality assurance

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Quality assurance is one of the strengths of the Panchmahal dairy. It follows quality

standards of the highest order in the production and delivery of various products. It

has earned ISO 9000, QAS and HACCP certification in recognition of its

commitment towards quality.

6.6 Staff

6.6.1 Recruitment process

The recruitment for the technical and non-technical staffs is done by the Personnel &

Administration (P&A) department. The recruitment committee consists the following

members:

- Board of Directors

- Managing Director

- Departmental Head

- Outside Expert from NDDB & GCMMF Ltd.

- D. G. M. (P&A)

Source of Recruitment:

- Internal advertisement within the dairy.- Internal candidates by way of promotion of higher posts and

- Employment Exchange,

- Advertisement in reputed newspapers.

- Campus interview for technical post.

The qualifications and eligibility for recruitment to the various posts excluding

technical posts are the same as they were at the time of the establishment of the

Union. Some officials expressed the need for their revision particularly in the light of

the growing professionalism in the industry. The cumbersome procedure that requires

the approval of the Registrar of Cooperative Societies and has to be routed through

the Board of Directors is the biggest impediment in the revision of outdated eligibility

criteria as perceived by some officials. Surprisingly some of the forms which were

there in circulation thirty years ago are still in use in the dairy as we have found in the

engineering department where still they opt for I.T.I. qualified persons when

engineers are willing to work in the department.

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Procedure of Recruitment

The recruitment in the Panchmahal dairy is based on the principle of internal

selections i.e. only employees from within the Union are invited for the required posts

in the first case. If an internal selection is not possible then the recruitment is done

through selection of employees from its sister concerns i.e. the other milk Unions

under GCMMF.

Only if the above two methods fail to yield any result, an open interview is conducted

after placing an advertisement in regional newspapers and magazines. After receiving

applications, the personnel department scrutinizes them and prepares a list of

candidates for written test / interview for all the posts. Now a day, the selection of

technical persons is being done through the campus interview in the reputed colleges

as we have found in the case of technical officers in production department who are

being recruited from “Dairy Technology College” and also in case of veterinary

officers who are recruited through campus interview from “Veterinary College” of

“Anand Agriculture University”.

6.6.2 Induction

Induction is required for the purpose of introducing person to people with whom he is

going to work. To make person aware of the general policies, of the company certify

all doubts and provide him job instruction.

In Panchmahal Dairy, the induction process is working for officers & managerial

level only. The induction period is of two days.

Schedule of Induction:

Sr. No. Day Department Time

Head

Sign

of

Head

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1

2

3

4

5

6

7

8

9

10

First

First

First

Second

Second

Second

Second

Second

Second

Second

P & A

Recess

Co-op. Dep.

Prod. / Eng.

Laboratory

Marketing

Account

Recess

Purchase

Store / Soc./ Chem.

9 to 1

1 to 2

2 to 5

9 to 10

10 to 11

11 to 12

12 to 1

1 to 2

2 to 3

3 to 5

Table 3: Induction Schedule

6.6.3 Training activities

Both in-house and outhouse trainings are conducted for imparting trainings of various

kind to employees.

The Personnel and Administration (P&A) department makes a yearly schedule for

conducting various training programmes at the beginning of every year and thus the

trainings are carried out according to this preplanned yearly schedule.

6.6.4 Performance appraisal system

Performance appraisal means to motivate employees for better performance by

providing good incentives, promotions services & more payment. By the records of

whole year the organization will appreciate their employees.

The personnel department conducts performance appraisal of all, the employees every

year through the immediate supervisor. The personnel department sends performance

appraisal forms to the departmental heads and requests them to return with full details

within 30 days. After receiving the forms, the HOD (P & A) prepares a brief report of

all the employees and places it before the Managing Director for review and

comments.

In the PDCMPUL, performance appraisal system is applied through the basis of

following criteria:

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1. Job Performance 2. Knowledge of Job

3. Accuracy of work 4. Use of working time

5. Conduct on the job 6. Ability to learn

7. Capacity and willingness to develop 8. Report with supervisor

9. Initiative 10. Innovativeness

11. Trustworthiness (Integrity) 12. Leadership Quality

If there is any lacuna find in technical knowledge, the concerned employee is sent for

appropriate training programme.

6.6.5 Promotion and transfer

The dairy has introduced two types of promotion policy (1) merit cum seniority

promotion (ii) time scale promotion.

As the time of promotion, the employees' confidential report, performance appraisal

report, qualification, experience, departmental head's report, and work motivation

factors are analyzed. The employees have to appear for an interview before the

selection committee. So far as time bound promotion is concerned, if a particular

employee completed his / her stipulated service tenure with above terms and

conditions he is eligible to get time bound promotion. In case the existing posts are

not available for time bound promotion, the dairy gives them time scale in the present

post with some additional responsibility.

The Dairy motivates its employees from time to time through several steps.

i) To give certain authority as per rules.

ii) Praise the employees on their work performance.

iii) Monetary rewards for good contribution and suggestions.iv) Providing fringe benefits.

v) Providing health insurance schemes and other developmental activities.

6.6.6 Worker and management relations

Worker management relations are healthy and harmonious at the Panchmahal dairy.

There is no union of workers here. The joint meeting of the various departments helds

generally monthly or bimonthly to sort out any differences or to settle any policy

matter relating to one-another. The employees have responded enthusiastically and

xxxii



the work culture is excellent which can be exhibited through our following

observations.

- Employees have developed good confidence in the work and management.

- They willingly carry out higher responsibilities.

- They have reached target within the time.

- Employees motivate each others.

- Team building and organizational spirit are excellent.

- Productivity and quality of work have increased.

- There is a good industrial relations system.

6.6.7 Employee turn-over rate

Employee turn over rate had been almost nil in the general cadre and the number of

employees have remained nearly constant since few years. The reason for this low

turnover rate can be assigned to it being a semi government organisation. The

employees prefer the sense of job security here to the opportunities of growth on the

basis of performance in private organisation. But, the turn over rate of the technical

employees' especially dairy technologists is quite high due to the low salary package

as well as slow and steady growth.

6.7 Shared value

6.7.1 Core values

Core value of the Panchmahal dairy is welfare of the farmers. Farmers have to be

provided secured and viable market for their milk. Farmers are given the top priority

in all decision-makings. Besides this, the organization has to ensure supply of milk

and milk products to the consumers in Panchmahal, Dahod and its nearby areas

regularly and at competitive price.

In one study conducted it was found that 83% of money earned by the dairy goes back

to farmers.

6.7.2 Vision

Vision of the organization is to improve the socio-economic status of the rural mass

engaged in the profession of the dairy farming and cattle management through

cooperative.

xxxiii



The Panchmahal dairy makes persistent effort to attain the goals through participation

in management by farmers particularly by small farmers and landless agricultural

laborers with the technical help from the NDDB. The organization wants to achieve

goals by including all the aspects of dairying, animal production, health coverage,

feed and fodder development and marketing of the milk products.

6.7.3 Mission

The union as such does not have any explicit mission but the same is reflected in its

quality policy, which states, “We are committed to excellence, both in providing the

best quality inputs and service to our esteemed milk producers and excellent quality

of milk and milk products patron consumers.

“We shall continue to adopt this state of the art technology, HACCP

principles and innovations for manufacturing products and providing congenial and

healthy environment to encourage excellence in every area.”

It shows the Panchmahal dairy's total commitment to maintain consistency in quality

of products and services, application of innovative techniques and the state of the art

in technology, developing motivated and dedicated workforce, application of quality

and food safety management systems and ensuring continual improvement.

7. DEPARMENTS

7.1 Personnel and administrative department

The various functions performed by this department are:

To implement training program for various employees of different

departments.

To provide required manpower with skills

Implementation of reward system

To create ideal work environment

Arrange for the payment of salaries

Implementation of appraisal system and human resource management

practices system

Recruitment and training of the new employees.

xxxiv



7.2 Procurement Department

The procurement department is one of the most important departments in any dairy

since it is responsible for bringing the basic raw material i.e. milk from the producers

to the milk union. The procurement department decides the area of the operation,

villages from which it would procure milk in consultation with other departments and

also decides the routes on which vehicle would ply to fetch the milk from the

producers. It gives a contract to a transporter to run its vehicle on one route or a no. of

routes. It decides the timing at which each vehicle would collect the milk from the

dairy cooperative societies and would reach to the dairy union. The milk is collected

at the dairy cooperative societies in cans. The milk vehicle reaches at the village at a

fixed time and collects it. The cans bear the name of the dairy cooperative society.

The vehicle collects all the cans from the route assigned to it and then it brings them

to the dairy where they are emptied at the dairy dock.

The procurement department also provides technical equipments to the society and

provides services for their maintenance. A procurement supervisor constantly checks

the accounts as well as functioning of the society. If sometimes any problem crops up

in the society the procurement department tackles it.

The chief functions performed by procurement department are:

• To ensure timely and regular supply of milk from the producers to the dairy

union

• To ensure that the dairy cooperative societies are functioning well and

maintaining norms specified by the dairy union.

• To provide technological help to the dairy societies

• To make efforts to maximize the milk procurement especially in the lean

season.

• To ensure that the milk reaches safely to the union without deterioration in the

milk quality and accordingly make arrangements for transport etc.

Currently the capacity of the Panchmahal Dairy is to process 2 lakh liters per day

while it is only able to procure somewhere 1.5 lakh liters in lean season and up to 3.25

lakh liters in flush season. During 2004-05, the Milk Union registered an increase of

8% in milk collection with an average collection of 2.58 lakh liters of milk everyday

and on an average paid Rs.191 per kilo fat for the milk purchased from the milk co-

xxxv



operative societies. Since, the work of the expanding the capacity of the milk

processing plant from the existing 2 lakh liters per day to 4 lakh liters per day is on

the verge of completion, the procurement department plans to implement the

following strategies with the help of Project & Input department to increase the

procurement in the current future.

• To give a better price to the producers.

To motivate farmers to bring milk to the societies.

To enhance and speed up veterinary services in the villages.

To review its artificial insemination program for which they have also hired a

consultant from NDDB.

To form an alliance with leading banks such as Bank of Baroda to provideloan to the farmer for milch animal.

Better provision of other input services such as cattle feed, fodder seeds etc. to

the farmers at subsidized rates.

Figure 6: Procurement-cum-distribution channel.

The milk which is collected in the dairy cooperative societies are brought to the dairy

through vans or mini trucks. The job of transportation of milk and milk products have

been outsourced to local transporters. In this way the dairy is able to reduce the cost.

The milk in the dairy is then pasteurized and standardized according to the demand in

the market. Then it is packaged in different types of packs and then it is stored in the

xxxvi

DCS

Panchmaha

l

Dairy

Agent

s

Consumer

s

Through Contract Vans

Through Insulated Milk Vans

Through Contract Vans



chilling room till the time it is transported for the consumption to the towns. There

agents receive the milk according to their indents and then they sell these milk to

consumers.

7.3 Purchase Department

An indent is raised by the concerned department, which is sent to stores. From stores

department it is sent to purchase department which sends it to general manager

(G.M)/managing director (M.D) for approval. If approved then an enquiry is raised by

the purchase department to the suppliers to submit quotations on or before due date.

After receiving the quotation, a quotation opening committee that consists of clerks

each from purchase and account department opens the quotation and sends it to the

purchase department.

The quotation has details of material specification, price, suppliers name and other

details. A comparative statement is prepared by the purchase department which is

analyzed by purchase manger and suitable recommendation is given by him. It is

further sent to the concerned department which checks if there is any deviation from

originally raised indent and gives his opinion on the comparative statement. It is then

sent to purchase committee, which consists of managers from production, accounts,

procurement, purchase and general manager. For any decision at least 3 managers

should be present out of which presence of purchase and accounts head is must.

The meeting of purchase committee is held every Tuesday where decisions as to how

much material is to be purchased and from whom is taken, thereafter it is sent to M.D

for approval. If approved it is sent for audit. Auditor audits it and sends it to purchase

head, which places purchase order to the supplier to supply goods within a fixed

period. Material is received at stores department, which sends information to the

concerned department as well as quality control department in case of chemicals and

films. After inspection a Goods Received Note (GRN) is prepared which consists of

all the details about the material. This GRN is sent to the concerned department head

for clearance, which comes to the purchase department head along with GRN and bill.

Purchase head sends invoice and GRN to the accounts department.

xxxvii



7.4 Production Department

There are 150 persons working in this department headed by Deputy General

Manager.The Production Department comprises of the main area of the dairy. It could

be divided into following sub-sections:

1. Reception Dock

2. Processing section

The processing plant can be further subdivided into following categories:

• Fluid Milk Processing

• Butter Section

•

Ghee Section• Chhach Section

• Powder Plant Section

• Flavoured Milk Section

• Gulab Jamun Mix Section

The detail of the each section has been given in the Appendix.

7.5 Engineering DepartmentThe Engineering Department is concerned with the maintenance of the equipments

and taking care of any breakdown. The engineering department is also responsible for

disposal of wastes and waste treatment facility. The various sections which are taken

care by the Engineering Department are:

1. Refrigeration Section

2. Boiler Section

3. Air Compression Section4. Electrical Section

5. Effluent Treatment Plant

6. Staff Quarter Maintenance (Electric and Water Supply)

For water supply it has its own boring and it also takes water from the Godhra

Municipal Corporation. For electrical supply it has to depend on the Gujarat State

Electricity Board (GSEB).

xxxviii



7.5 Store Department

At present, the Deputy General Manager of the Engineering department also heads

store. The basic function of stores is to store and issue material as per the request

made by any department and to manage the inventory.

For issuing any material store requisition form is sent by the department and on that

basis material is issued if it is available in the stores. The stores department is also

responsible to send a daily report of inventory at the end of the day to the

management. It also prepares monthly, quarterly and annual reports. For the purpose

of easy, different cost centers are formed and each material is assigned to a cost center

so as to trace it properly. For the purpose of inventory the stores are using valuation

FIFO method.

7.6 Marketing Department

The various functions performed by marketing department are:

• To arrange for the supply of the milk and milk products manufactured by the

Panchmahal dairy in the market.

• To supply demand of milk and milk products to the production department.

• To make sure that retailers get timely and regular supply of milk and other

products.

• To handle customer complaints about any defects in the products.

• To carry out various sales and promotion activities.

• To implement incentive systems for retailers.

Table 4- Type of milk sold by the dairy and its composition

Name of variant Fat content SNF content

Amul Gold (FCM) Min 6% Min 9.1%

Amul Shakti (Standardized) Min 4.5% Min 8.5%

Panchamrut (Toned) Min 3% Min 9%

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Double toned milk "Health" (DTM) Min 1.5% Min 9%

Figure 7: Sale of Liquid Milk Per Day (in liters)

36000

96000

66000 Ahmedabad +

Indore(Federation)

Mother Dairy, Gandhinagar

Local Sales

In the year 2004-05, the Panchmahal dairy has sold 198000 liters of liquid milk

besides 92 lakh bottles of sterilized flavoured Amul Kool (Kesar, Elaichi, Rose and

Coffee). The rest of the milk is converted into milk products and skimmed milk

powder (SMP).

xl



Figure 8: Manufacture of Milk Products (in MT)

628

2161

2671

76 Table Butter

Milk Powder

Ghee

Gulabjamun Mix

During the year 2004-05 under review, on an average 66000 litres of liquid milk per

day was supplied to the local customers. And 36000 liters Amul brand milk was daily

supplied to Ahmedabad and Indore. Besides 92 lakh bottles of sterilized flavoured

Amul Kool were manufactured in the year. In addition, the Milk Union daily sold

96000 liters of milk per day to the neighbouring Milk Unions and Mother Dairy,

Gandhinagar. The Union also met the demand of local consumers supplying 9 lakh

liters of butter milk under the brand name of Panchamrut Goras.

A pride in place for the Union is the sale and export of Panchamrut Ghee. The Ghee

worth Rs. 2 Crores was exported to the Gulf countries that mainly include Abu Dhabi,

Dubai, Bahrain and Oman. During the year under annual report, 2671MT Ghee was

produced and 2478 MT Ghee supplied to consumers. The Union also Produced 2161

MT Milk Powder, 628 MT Table Butter, 76 MT of Gulab Jamun Mix of which 1316

MT, 528 MT and 78 MT were sold respectively.

The Panchmahal dairy is currently marketing its milk and milk products under the

brand name Amul and Panchmarut . The marketing is done through the help of

GCMMF and through its own department.

xli



7.6.1 Functioning of Marketing Department

The marketing department chiefly operates through retailers/ agents who give the

entire demand to the marketing department. While doing the assessment of the total

demand, the demand of each individual retailer as well as private shops is taken into

consideration. The agents get milk according to the indents raised by them. The

transport vehicle which is hired by the dairy is used for transport of milk from the

dairy to the agents of different towns. The agents wait for the vehicle at the pre-

decided place for getting their indents. The agents get milk in crates of the dairy. The

agents have to return the crates during the return journey of the vehicle. At present,

the retailers get the commission of 40 paisa per liters for all type of milks. At present

for a person to be a retailer/ agent he has to first apply to the union with giving the

security money of Rs. 15000.

Customers can be divided into two categories – institutional and general retail

customers. Institutional customers include hospitals, hotels, canteens, hostels andmanufacturing units in and around city. The retail customers are served through

established agent network in city.

7.6.2 Customer Handling Procedure

There is no formal arrangement for taking customer feedback directly from the

customers however the union handles customer’s complaints through retailers. For

this purpose each lot is given a machine number and the date of packaging and onesample from each lot is maintained by the quality control department. On customer

complaints two persons one from marketing and the other from quality department

examines who is at fault. It could be because of the mistake in the distribution channel

or even the customer may be at fault. However we observed that most of the retailers

were not happy about the way union handles their complaints about leakage. They

also showed their dissatisfaction on the commission that they get on selling milk as

the commission for the agents had not been revised since 2000.

xlii

Customers

GeneralInstitutiona

l



7.6.3 Future strategies of Marketing Department

• Increase the coverage and awareness of consumers through education and

publicity by print and electronic media (hoarding, ad poles and electronic

boards).

• Increase coverage through home delivery system.

• Add new markets like Indore, Dewas, Jabalpur, etc.

• Add new rural markets in Panchmahal and Dahod districts.

• Increase outlets in all the existing towns.

7.7 Quality control department

In the Panchmahal Milk Union, the Quality Control Department is concerned with the

assurance of the quality of the products made at the plant and checking the quality of

the raw materials received by them. It has got a laboratory, both at the dock level and

the main laboratory at the plant level. The various tests conducted at this laboratory

are:

Organoleptic Tests.

Chemical Tests.

Bacteriological Tests.

Following are the main functions performed by the various sections of QA

department:

• Grading of incoming raw milk.

• Raw milk testing.

• Testing of outgoing pasteurized milk.

• Testing of processed milk stored in storage tank or silo.

• Cream testing.

• Butter Milk Testing.

• Standardization of Fluid Milk.

• Checking of the strengths of chemicals.

• Checking the weight, film thickness, prints and length of the pouches for city

supply milk.

• Checking the parameters of effluents generated.

xliii



7.8 Project and input department

This is one of the most active departments of the Panchmahal dairy. It has obtained a

reputed place through implementation of the various welfare schemes with the help of

Government of Gujarat, GWSSB, GEDA and UNICEF. The various programmes are

being executed by the Senior Manager with the help of 68 other staffs. Some schemes

are as following:

• Animal Breeding and Health Care

• Animal Nutrition Scheme

• Human Resource Development Programmes

• Milch Animal Distribution Scheme

• Mini Village Water Supply Scheme

• Rural Sanitation Mart Scheme

• Community TV Scheme

• Cattle Insurance Scheme

• Janashree Bima Yojana

• Universal Health Insurance Scheme

• Promoting Solar Energy Technologies.

7.8.1 Artificial Insemination and Veterinary services

Under the Animal Breeding Program, total 749 milk co-operatives were covered and

122000 animals have been artificially inseminated. 68% of these animals gave birth to

about 28000 female calves as reported.

The main objectives of this service are:

To provide quality A. I. Service for producing genetically superior animals to

meet future production needs.

To Promote a Sustainable Professionally managed / A. I. and animal health /

production service Network.

• Decision on charges for different kinds of treatments / interventions.

• Regular visit of Union Veterinarians / Pvt. Veterinarians to the DCSs.

• Approach for Vaccinations & other Technical Advise.

xliv



• Creation of Veterinary Service Zone (VSZ) with Union veterinarians & search

for Pvt. Veterinarians.

• Awareness of farmers with the concept of VSZs.

7.8.2 Supply of Fodder Seeds

• Procurement & supply of good quality fodder seeds.

• Competitive cost & timely supply.

• Induction of new varieties of fodder seeds.

• Urea treatment of straw & feeding of crop residues.

• Advise to Milk Producers regarding feeding of Calf, Heifer, pregnant animals,

Cows / Buffaloes in milk & Dry.

At present the union has one cattle feed plant which is located at Khandia with a

capacity of 100 MTD. The cattle feed plant in peak demand season worked at 200%

of installed capacity. The union is manufacturing three types of cattle feed

1. Balanced cattle feed

2. High energy feed

3. Pregnancy ration.

7.8.3 Women Cooperative Dairy Societies

There are 42 women cooperative dairy societies which give milk to the union. The

formation of these women dairy cooperative was done by the union. A Woman can

carry the messages of better husbandry, better veterinary care, better feeding & better

breeding of animals to other Women. Special attention is given to educate women

about various tasks involved in the milk production such as

• Care, management & feeding of animals.

• Feeding during growth, pregnancy, lactation, dry period & under different

conditions like flood & drought.

• Disease & Pest problems.

• First signs of heat in cattle & buffalo.

• Detection of heat.

xlv



• Right time of insemination.

• Conception after calving.

7.8.4 Women Extension Workers

For development of Women Dairy Cooperatives role of trained, efficient &

intelligent women extension workers is vital. For that union started cooperative

development program, which was designed to strengthen the role of Women members

in the Control & Governance of the Dairy Cooperatives. Under this following steps

were undertaken:

Men were educated about the role of Women in Dairying.

Women were motivated to join Dairy Cooperatives.

Assert their rights as members.

Attend meetings with extension workers.

Take payment from the DCS.

Encouraged to stand for membership of Managing Committee.

7.8.5 Women Dairy Cooperative Leadership Programme

The various objectives of this program undertaken by the Panchmahal milk union are

as follows:

Raise percentage of active Women members in Dairy Cooperatives.

Presence of elected leaders at every level.

Numbers & status of Women employees.

Thrift & credit cooperatives of Women. (Leader & Leadership skills)

Working together not only increases the family income but also brings about

significant change in the health of Women & girls, Literacy standards of adult

Women, Education of girls, and Women’s status in the family / society.

Accounts Department

The chief functions performed by the accounts department are

• To make arrangements for the payment of salaries of the employees.

• To make arrangement for the timely payment to the suppliers.

xlvi



• To maintain the accounts book and all records.

• To prepare annual balance sheet and profit and loss statements.

The accounts department deals with all the financial matters of the dairy union. Itkeeps track of day-to-day financial transactions of the dairy and prepares reports

accordingly. It prepares daily, monthly and quarterly reports, which are used by the

senior management. It gets all the data pertaining to sales, and expenses from various

departments and accordingly prepares report.

8.0 FINANCIAL ANALYSIS

Net profit margin ratio is quite low all the years because high fat price is paid to the

producers for their milk. And all the benefit is transferred to them. In a study

conducted by the managing director of the dairy it was found that 83% of the money

earned is again goes back to farmers. The current ratio of the dairy is less than 1 at

present which is not a healthy sign. The dairy should return some of the loans which it

had incurred and get some long term debt if it has liquidity crunch. Acid test ratio for

the bank is also very less. The debt-equity ratio has increased in the current financial

year because of the huge loan taken from N.D.D.B for the future perspective plan.The top management should plan strategically for getting higher return on investment

because the return is low as well as it has decreased in the current year.

Table 5: Financial Ratios

Ratios* 2002-03 2003-04 2004-05

Current ratio 1.106 0.95378 0.9571

Acid test ratio 0.740 0.689 0.614

Debt-equity ratio 0.4596 0.4771 1.3

Inventory (stock) turnover ratio - 9.29 8

Return on Investment (ROI) 0.0063 0.0066 0.00502

Gross profit margin 0.00484 0.00655 0.00644

xlvii



Note: The Balance-sheet and Profit and Loss Account have been given in

the Appendix 2. Assets Schedules and Accounting Procedure are

also attached with it.

Current Assets

Current Ratio = --------------------------------

Current Liabilities

Quick Assets (Current Assets – Inventories)

Acid-test Ratio = ------------------------------------------------------------

Current Liabilities

Debt

Debt-equity Ratio = ------------------

Equity

Cost of Good Sold

Inventory Turn-over Ratio = ---------------------------

Average Inventory

Net Profit after Tax

Return on Investment (ROI) = ----------------------------

Total Assets

Gross Profit

Gross Profit Margin = ------------------------

Net Sales

xlviii



9. PERFORMANCE INDICATORS

9.1 Share Capital

Table 6

The share capital has been constantly increasing over the years in the dairy. Actually

the dairy deposits a part of profit each year in the share capital. There had been

increase of over 5% every year in the share capital.

9.2 Societies Organized

Table 7

xlix



At present there are around 1600 societies associated with the dairy out of which

around 1375 societies are registered societies. Out of total registered societies 42

societies are women societies which have been working very well since inception.

Out of 1375 societies, 1350 societies are regular societies and doing daily transactions

with the dairy.

9.3 Sales Patterns

The dairy sales is showing increasing trend over the years. There was an increase of

over 5% in 2004-05 over the previous year. Besides liquid milk the dairy also

manufacture various products which is sold through GCMMF in all the parts of

country.

11348

18000Table 8

9.4 Societies Covered under A.I

l



Table 9

749 societies were covered under A.I. in the year 2004-05. The artificial insemination

is done to improvise the local hardy breeds and this also helps in the increasing the

milk yield of the animals. The dairy provides facilities such as veterinary aids, de-

worming, cheaper and timely veterinary treatment at the door steps of the farmers.

9.5 Artificial Insemination Performed

There was an increase of over 15% in A.I. performed by the Para- vets and vets of the

dairy. The local unemployed youths were trained by the dairy to perform A.I. in the

animals. These people get money from the dairy on every successful A.I. done. The

step of employing youths for this purpose has yielded good result in improving local

breeds.

Table 10

li



9.6 Fodder Seed Sales

There had been increasing trend in the fodder seed sold by the dairy. These fodder

seeds are cultivated in the fields by the farmers. The availability of this fodder has

increased the milk yield from the animals and it has been increasing the income of the

farmers. Main fodder seed sold by the dairy is Hybrid Napier Bajra, Deennath grass

e.t.c

Table 11

lii



PROGRESS REPORT

(Technical Input Activities)

Sr.

No. Particulars

2000-

01

2001-

02

2002-

03

2003-

04

1 No. of societies covered under AI 616 620 672 720

2 Number of AI performed 74781 84095 105395 106356

3 Number of mobile emergency Vety. Units 32 38 38 38

4 Societies covered under VFA programme 722 710 630 720

5 Total number of animals treated through Emergency Calls 85515 92705 102415 106448

6

Total number of animals treated through Vet. First Aid

Center 34483 28857 33050 52069

7 Animals Vaccination against F.M.D 40001 99156 106000 110000

8 No. of animals covered under Group Cattle InsuranceScheme 11775 13633 15314 12820

9

No. of animals covered under Group Members Insurance

Scheme 17913 18275 21133 31000

10 Quantity of cattle feed sold (MT) 6936 5634 7364 8805

11 Quantity of fodder feed sold (MT) 77 60 68 71

12

Member trained under Village Self Development

Programme

Members 15356 15868 12219 12180

Chairmen - MCM 1048 804 1143 1318

Secretaries 328 67 55 58

PROGRESS AT A GLANCE

Sr.

No. Particulars 2000-01 2001-02 2002-03 2003-04 2004-05

1 Primary Co-operative Societies Organised 1421 1458 1508 1566 1600

liii



2 No. of Registered Societies 1320 1336 1339 1347 1411

3 No. of Member Societies 984 977 1063 1066 1241

4 No. of Farmer Members (' 000) 178 180 189 194 208

5 Paid up Share Capital (Rs.' 000) 27746 30767 33468 35319 37186

6 Funds (Rs.' 000) 201509 215680 245691 286084 329863

7 Daily Avg. Milk Procurement (' 000kgs) 211 207 236 239 2588 Total Milk Purchase (' 000kgs) 77187 75476 86150 87235 94188

9 Milk Purchage value (' 000) 893379 857803 970452

106778

8 1228584

10 Daily Avg. Milk Sale (' 000Ltrs.)

Local Sale 68 63 60 63 66

Sale through GCMMF 11 15 18 38 36

11 Total Production of Ghee (MT) 2298 2440 2708 2671 2671

12 Total Ghee Sale (MT) 2179 2772 2766 2813 2477

13 Total Production of Milk Powder (MT) 1952 1527 2024 1785 2161

14 Total Milk Powder Sold (MT) 1979 1015 1715 1907 131615 Total Production of Table Butter (MT) 336 407 382 322 628

16 Total Table Butter Sale (MT) 319 355 354 327 573

17 Total Sales (' 000 Rs.) 1134810

111619

5

126754

3

148926

0 1568745

18 Profit (' 000 Rs.) 3935 4652 5136 5757 5998

19 Dividend 12% 12% 12% 12% 12%

20 Working Capital (' 000 Rs.) 88822 57380 33034 38090 122393

21 Audit Class A A A A A

liv



10.0 SWOT ANALYSIS OF THE ORGANISATION

RESOURCE STRENGTHS AND

COMPETITIVE CAPABILITIES

RESOURCE WEAKNESSES AND

COMPETITIVE DEFICIENCIES

Large procurement areas (Panchmahal &

Dahod districts)

Untapped liquid milk market in vicinity

(Indore, Dewas, Dahod, etc.)

Strong brand image (Amul) support

Starting exporting milk products

High Production Flexibility

High Utilization of Fixed Assets

High range of Products

Excellent Quality of Products

Committed Workforce

Strong procurement base

Strong welfare services

Excessive control by the Federation

and the State Government

Limited Capacity of the Plant

Lack of trained professionals

Procurement Constraints

Limited financial muscle

Underdeveloped MIS

Unclear local market strategy

Per society low procurement base

Poor advertisement for Panchamrut brand

value

Low retailers base and no wholeseller

POTENTIAL OPPORTUNITIES POTENTIAL EXTERNAL THREATS

Breed improvement potential

Growth of the Milkshed in terms of

productivity and producer base

Extension of product range

Moving up the value chain to exploit

brand image

Strengthening export market

Increasing processing capacity

Extend social welfare programmes

Intensification of competition in its

markets especially local markets

Erosion of procurement base due to entry

by other players in its Milkshed

Cheaper imports due to lifting of QRs

lv



REFERENCE• Robbins, Stephens P., “Organization Theory: Structure, Design and

Application”, Third Edition, Prentice Hall of India, 2001.

• “ Annual Report: The Panchmahal District Co-operative Milk Producers'

Union LTD.,Godhra”, 2003-04 and 2004-05.

•“ Reports from MIS department and Projects & Inputs departments ”, The

Panchmahal Districts Co-operative Milk Producers' Union LTD., Godhra.

lvii



APPENDIX 1

ORGANISATION STRUCTURE

BOARD OF DIRECTORS

MANAGING DIRECTOR

General Manager General Manager

Dy. MGR (A/C) Sys. Off. Asstt. Mgr SR. Manager Chilling centers (3)

Acct. Officer Asstt. Officer (MKT) Manager (P&I)

Dy. Manager (Vety)

Asstt. Acct. Officer Asstt.

Vety. Supdt.

Asstt. A/C SR. Clerk SR. Very. Supdt

Vety. Officer

Dy. GM Dy. GM Dy.GM Asstt.GM Manager Purchase Officer

(P&D) (Prod.) (Engg.) (Procurement) (QC)

Officer ASO AGM D.M. officer M.P.O. Asstt. MGR Assistant

Asstt. Off. SS DY. MGR Engineer Asstt. M.P.O JR Asstt.

JR. Asstt Guard Suptd. Operator Supervisor SR. Chemist Clerk

T.O. Chemist

Worker

lviii



APPENDIX 2

THREE YEARS BALANCE SHEET

Liabilities 2002-03 2003-04 2004-05

SHARE CAPITAL 50000000 50000000 50000000

Authorised

500000 Shares of Rs. 100 each

Subscribed and fully paid 33468300 35319500 37186400

RESERVES

Reserve Fund 96218916 111952140 115114083

DEPRICIATION 149472044 174131828 212749188

Loans (Secured)

NDDB Perspective plan loans 67832312 56171280 158498939

Current Liabilities & Provisions 485902377 665056076

Deposits 17850313 19285601 18852805

Due to Societies 110010560 144235318 199233480

O/S Against Expenses/ Purchase 45723220 53103473 68574682Sundry Creditors 25155412 25342294 52469283

Provision for income tax 6393285 10393285 14500000

Bank of Baroda OD 53289810 17427830 55829597

State bank of India OD 33418955 6202680 15596229

Bank of Baroda CC 4 0000000

PDC Bank Ltd OD 12687034 14911896

Bill discounting – Bank A/c 150000000 195000000 200000000

Profit- Loss Account

Current year profit 5135967 5756670 5998472Total 806656128 869233795 1194603158

lix



Assets 2002-03 2003-04 2004-05

FIXED ASSETS 303736067 405785507 558062618

Gross value as per schedule 2 column 5 269396691 342626436 543310219

Work under construction 34339376 63259071 14752399

INVESTMENTS( as per schedule-3) 16260000 20760000 20760000

STOCK 150287157 107577170 203279040

Trading stock 131989648 87437892 169059475

Store material 18297509 20139278 34219565

ADVANCES & DEBTORS 162484986 123974038 175116560

Deposit 2922162 5335595 9386187

Due from societies 13066104 23943838 32269334

Advances 6351866 5322929 19459492

Trade debtors 73564206 19559670 31632688

Sundry Debtors 61657189 61754324 73304584

Income Tax deposits 4923459 8057682 9064275

CASH & BANK BALANCES 173887918 211137080 237384940

Cash-on- Hand 2277846 1981019 4029104With bank current, fixed deposit& saving

account & post saving account 171610072 209156061 233355836

Total 806656128 869233795 1194603158

lx



PROFIT AND LOSS ACCOUNTS OF THREE YEARS

EXPENDITURE 2002-03 2003-04 2004-05

To opening stock 117549939 131989648 87437892

To Purchases 1047396712 1153914406 1325198558

To excise expenses 2260910 1293725 1316079

To research and extension expenses 5053112 5130633 6792484

To Processing expenses 21014481 22473451 31305843

To packing Expenses 52971571 80326434 85265466

To electricity & fuel Expenses 37617815 43098267 49525056

To salary and wages expenses 46267800 51022486 51808734

To staff PF, Gratuity & other benefits 12155783 14320504 14454077

To repairs & Maintenance Exp. 9982966 11832720 12705026

To marketing Exp. 13061862 12691549 12814818

To postage, telephone etc. 1924604 2205871 2275789

To insurance premium 711756 916439 1354091

To rent, rates and taxes 231344 201494 212389

To audit fees expenses 3007545 3344992 3080814

To miscellaneous expenses 1127225 1507634 1589087

To interest and bank commission 29936278 25048269 21031710

To depreciation 12089402 24818911 40766539

To income tax provision 1000000 4000000 4106715

To net profit 5135967 5756670

599847

2

Total 1420497072 1595894103 1759039639

INCOME 2002-03 2003-04 2004-05

By Sales 1267543076 1489259832 1568744845

By sundry income 20964348 19196379 21235319

By closing stock 131989648 87437892 169059475

Total 1420497072 1595894103 1759039639

J.J. Shah Dr. R.S. Patel Bhupendrasinh P.Solanki

Gen. Manager Managing Director Chairman

As per report attached

P. N. Desai

Special Auditor (Milk), Godhra

lxi



ASSETS SCHEDULE -2 (BALANCE SHEET) 31-03-2005

INVESTMENT- SCHEDULE: 3 (BALANCE SHEET) 31-03-2005

Serial

number

Particulars Amount Rs.

1 The Panchmahal district co-operative bank ltd, Godhra

10000 shares each Rs 10/

1,00,000

2 GCMMF, Anand 16160 shares each Rs 1000/- 16160000

3 KRIBHCO New Delhi 10 shares each Rs 100000/ - 1000000

4 IFFCO New Delhi 25 Shares Each RS 100000/ 2500000

5 Shree Mahi Panchmahal Sahakari Sugar Ind Ltd., GODHRA

100 shares each Rs 10000/

1000000

TOTAL 20760000

1. SIGNIFICANT ACCOUNTING POLICIES

Name of

the assets

Gross

value

31-03-2004

Addition

during the

year

Deducti

on

during

the year

Gross

value 31-

03-2005

Total

depreciati

on

31-03-2004

Depreciat

ion

during

the year

Deducti

on

during

the year

Total

depre

ciation

31-03-2005

Net block

31-03-

2005

Land 7330107 1666964 - 8997071 - - - - 8997071

Buildings 99229751 52339246 - 151568997 40727123 8467225 - 49194348 102374649

Plant and

machinery

183602308 142758310 2362790 323997828 97429088 27614287 1970210 123073165 200924663

Can crates 20647140 2275839 238680 22684299 16962 969 1163975 178969 17947975 4736324

Vehicles 5084290 800770 - 5885060 3114334 502594 3616928 2268132

Dead stock 26732840 1910120 - 28642960 15898314 2711654 - 18609968 10032992

Cattle feed

plant and p

exchanges

- 1534004 - 1534004 - 306804 - 306804 1227200

Total 342626436 203285253 2601470 543310219 174131828 40766539 2149179 212749188 330561031

lxiii



A. Basis of accounting:

The accounts are prepared on accrual basis in accordance with generally accepted

accounting principles.

B. Fixed Assets:

Fixed assets are started at cost. Accumulated depreciation is shown as fund.

C. Depreciation:

Depreciation on fixed assets is provided for on written down value method.

D. Capital Work in Progress:

The cost incurred for projects under commissioning and other fixed assets, the

construction/ installation / acquisition of which is not completed, are included under

the capital work in progress and the same are classified to the respective assets on its

completion except in the cases where the project accounts are settled.

E. Investments:

Investments are stated at fair market value or cost price whichever is lower.

F. Contingent Liability:

Contingent liabilities are not provided for and are disclosed by way of notes.

G. Valuation of Inventories:

Stock of Stores & Store and Trading material, Stock of Raw material, Material in

progress and finished goods are valued at cost or market value whichever is lower.

H. Retirement Benefit:

Regular contribution to Provident Fund, Super Annuation & Gratuity is made. Theliability towards gratuity and super annuation for its employees are funded with Life

Insurance Corporation of India.

I. Deferred Tax Liability:

Deferred tax asset/liability is not calculated but charged off to P&L A/C as and when

due.

2. CONTINGENT LIABILITIES

lxiv



A. Disputed liabilities for exercise Rs. 7.08 lakhs plus interest.

B. Disputed income tax liabilities Rs. 54.30 lakhs plus interest.

Jaswant J. Shah Dr. R. S. Patel Bhupendrasinh P. Solanki

General Manager Managing Director Chairman

P. N. Desai

Special Auditor (Milk), Godhra Directors

lxv



APPENDIX 3

FLOW DAIGRAM FOR MILK RECEPTION

MILK FROM CHILLING CENTERS TO RMRD

Producers

Milk Collection Booth

Booths near the dairy Mini truck, tractor in chilling center

Weighing, Grading

Sampling

Chilling

Transfer to the tankers

R M R D

Raw Milk Tanks

lxvi



FLOW DIAGRAM OF MILK PASTEURIZER

Chilled whole milk from raw milk storage tank ↓

Balance tank

↓ ← Pump

Musslion filter

↓

Regeneration - I ( 40°- 45°C )

↓Duppler filter

↓

Cream Seperator → Cream →Cream Pasteurizer↓

Regeneration - II ( 60°- 65°C )

↓

Regeneration - I ( 78°- 82°C )

↓Holding tubes ( 15 Sec )

↓Regeneration - II

↓

Regeneration - I↓

Chilled Water Section

↓Storage Tank

lxvii



FLOW DIAGRAM FOR TABLE BUTTER

Pasteurized Cream ( 38 - 45 % Fat )

↓

Chilling & Ageing at 10º C ( overnight )↓

Churning ( 15 rpm ) 3 - 4 times

↓Sampling

↓Churning ( 28 rpm )

↓

Breaking Stage

↓

Churning ( 15 rpm ) → Removal of butter milk

↓Colour Addition ( Annatto colour @ 0.9% )

↓

Addition of Water (10º C ) ↓

↓Forward & Reverse churning ( 5 / 2 min at 15 rpm )

↓Removal of washed water

↓Free Working

↓Salting ( addition at @ 2.5% )

↓Churning ( 9 rpm )

↓Sampling ( 1st moisture )

↓Water Addition ( for desired percentage )

↓

Churning ( 9 rpm )↓

Churning ( 4 rpm )

↓

Final Sampling ( for final moisture )

↓Unloading in trolleys

↓Packaging in machine & Storage

lxviii



FLOW DIAGRAM FOR GHEE

Cream for tank ( 12º C / 4 h )

↓

C B M Machine↓

Butter → Butter Milk

↓Spiro Heater ( 60º C )

↓Melted Butter Tank ( MBT )

↓Duplex Filter

↓

Serum Separator → Serum↓

Butter ( 92% fat )

↓Butter Melting Vat ( BMV )

↓ ← Pump

Ghee Kettle ( 113 - 119º C & 3.5 kg / cm ( max) )

↓Filter ( 4 Nylon filter - 60 mesh & 1 Nylon filter - 120 mesh )

↓Clarifiers ( 105 - 110º C )

↓Ghee Storage Tank ( GST )

↓Filters ( 160 mesh Nylon )

↓Packaging & Storage

lxix



FLOW DIAGRAM FOR CHHASH MAKING

Pasteurized ( Skim Milk )

↓

Heating ( 30 - 37°C )

↓

Inoculation Mother Culture at 0.8% acidity, @ 1%

↓

Standardization ( water addition for SNF % maintained )

↓

Processing ( 60 - 65°C / 15 sec )

↓

Chilling up to 10°C

↓Storage Tank

↓Packaging 500 ml pouch

↓

Storage ( below 5°C )

lxx



FLOW DIAGRAM FOR SKIMMED MILK POWDER

Skim Milk

↓

Balance Tank ↓

Filter

↓Feed Pump

↓

Berometric Leg condenser ( 20°C )

↓

Pre Heater - 1 ( 30°C )

↓

Pre Heater - 2 ( 40°C )↓


↓


↓

Low Temperature Pasteurization ( LTP ) ( 78°C )

↓

Holding Tube ( 16 sec )

↓

Calendria - 1↓

Vapour Seperator - 1 ( 60 - 63°C / 650 mm Hg )

↓Calendria - 2

↓

Vapour Seperator - 2 ( 55 - 58°C / 700 mm Hg )

↓Calendria - 4

↓

Vapour Seperator - 4 ( 50 - 55°

C / 720 mm Hg )↓

Finisher

↓

( For WMP ) Homogenization ←Vapour Seperator - F ( 45 - 50°C / 760 mm

Hg )

↓Condensed Milk Balance Tank

lxxi



FLOW DIAGRAM FOR FLAVOURED MILK

Receiving Milk

↓

Filtration↓

Cooling ( 5º C ) & Storage

↓

Pre-Heating (60º C )

↓

Homogenization ( 78 - 82º C / 15 sec )

↓

3 or 4 can in milk ← Cooling & Storage ( 5º C ) in Vertical Tank

↓ ↓

Mixing accurate quantity → Balance Tank of Sugar, Colour & Flavour

↓Vacuum Filling ( manually )

↓Sterilization ( 120º C / 30 min )

↓Slow Cooling At Room Temperature

↓Bulk Packing by machine with polythene

↓

Carton Packing ( manually )

↓

Storage

lxxii



FLOW DIAGRAM FOR TREATMENT OF DAIRY WASTE WATER

Waster water from plant↓

Collection in primary tank (PH 10)

↓Sump house

↓

Sludge ← Some Settled ← Lifted to phase tank & mixed with CaCO3

PH

Drying Tank Particles adjusted to 7.5

↓

Primary Settling Tank ( mixed with Alum )↓Mixing & Agitation

↓ → Sludge Removal

Aeration tank

Sludge Deposition ↓

Clarifier

-------------------------------------------------

↓ ↓Floating matter is send to Disposal of treated

Sludge during tank water / effluent

lxxiii

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