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AMUL
Business Model
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In a recent survey,
GCMMF ranked amongst the top ten FMCG firms in
the country
AMUL rated the second most recognized brand in
India amongst all Indian and MNC offerings
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What makes AMUL successful???
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Unique Characteristics
Inter-linkages between various environments that governedthe lives of marginal milk farmers and the unmet needs of theconsumers
Combined market and social development
Reduce the cost to the consumer while increasing the returnto the supplier
To be successful benefit of large number of consumers andsuppliers
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Goal long term development
Developing values in people and processes that were robust,
replicable and transparent.
Long term cost containment, world class deployment of
technological resources and
R&D and better leveraging of scarce resources.
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Business Model
Objective :
± Deliver profitable and equitable returns to a large
number of farmers for a long period of time
Additional objective
± Develop the supplier over the long term through
social change.
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Success depends on
High collection rate of milk
Required increasing membership with more village societies
Better Cattle management- Better milk yield
Ensure cost to farmers and high quality to customer at lowprices
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Values
Charge for eachservice providedto the supplier
Purchase all milkthat memberfarmersproduced
Professional
managers, to runthe federationand unions
Upliftment of rural poor
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Developing Demand
Consumers- Limited Purchasing power
Modest consumption levels of milk
Low cost price strategy
Products affordable & attractive
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Distribution Network
Dry and cold warehouses to buffer inventory
Transactions on an advance demand draft basis
Just-in-time inventory strategy improves dealers'
return on investment (ROI)
All branches -dedicated vehicle operations.
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Umbrella brand
Common brand for most product categories
produced by various unions: liquid milk, milk
powders, butter, ghee, cheese, cocoa products,
sweets, ice-cream and condensed milk
Avoided inter-union conflicts
Opportunity for the union members to cooperate in
developing products.
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Third Party Service providers
Unions' core activity -milk processing and the production of
dairy products.
Marketing efforts , brand development - By GCMMF
Logistics of milk collection, distribution of dairy products, sale
of products through dealers and retail stores, provision of
animal feed, and veterinary services By Third Parties
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Co-ordination
Large number of organisations and entities in the supply chain
GCMMF and the unions play a major role in achieving control
Interlocking control - The board is drawn from the heads of all theunions, and the boards of the unions comprise of farmers electedthrough village societies
The federation handles the distribution of end products andcoordination with retailers and the dealers.
The unions coordinate the supply side activities.
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Best practices
Small group activities or quality circles at the federation
TQM program at the unions
Improvement programs across to a large number of membersand the implementation rate is consistently high
For example, every Friday, Meeting without fail, between
10.00 a.m. and 11.00 a.m to discuss quality concerns
Village societies becoming individual improvement centres
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