Story by : Anirudh Raheja
With over six decades of dominance in the dairy business, Amul’s supply chain is what helps it to maintain the lead.
Milk and dairy products have a very limited shelf life. They are highly perishable food products, and are dependent on a fail proof supply chain. What makes it complex is the involvement of thousands of people in a country that is not just big but also very diverse. Responsible for spurring India’s white revolution, the company has been striving to offer quality milk and dairy products. And, in a scenario where experts believe that the milk production in the country will reach 200 million Metric Tonnes (MT) per annum by 2020, growing at the rate of 4.5 per cent every year. With the kind of growth experts envisage, it is essential for a milk and dairy product giant like Amul, which is a Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF) brand, to further strengthen its supply chain; build a healthy and efficient logistics structure to ensure swift and timely transportation of the perishable products it manufactures. “Considering the fact that each truck (bulk carrier) has an average capacity of 7000-litres, 1100 trucks are approximately required to carry pouch milk to the market. Of the total milk receipt, 110 lakh litres of milk is sold in milk pouches,” says R.S. Sodhi, Managing Director, GCMMF. GCMMF has already installed a milk processing capacity of 240 lakh litres per day. It has been consistently increasing milk procurement at a CAGR of 10 per cent over the last decade.
Standard insulated tanker design for raw milk collection
Since its inception in the year 1946, milk and dairy products under the Amul brand have been an integral part of GCMMF. Based at Anand, GCMMF operates over 59 dairy plants across India. These plants receive more than 2000 milk tankers having a capacity that ranges between 20- and 25-kilolitre per day. From the 17 district level member unions of Gujarat, Amul has been procuring 160 lakh litres of milk per day. This comes from over 3.6 lakh farmers spread across 18,500 villages of Gujarat. For swift and efficient collection of milk, and across a vast landscape, so that it does not perish, GCMMF has introduced a standard design of insulated tankers of SS 304 internal surface. “By using such type of vehicles, we are able to maintain raw milk temperature in the range of four-degree to six-degree while in transit. This is sufficient to maintain milk quality as the tankers are received from distances as far as 400 km.” Sodhi explains. Thus, over a period of 24 hours, the storage of milk in tankers is subjected to no more than a one or two-degree centigrade temperature fluctuation.
Outsourcing trucks for supply of processed milk and dairy products
Unlike the SS tankers that are used to transfer raw milk, processed milk stored in packages, apart from the other dairy products that GCMMF produces, are distributed among four sub heads. Due consideration is given to their tendency to perish, and the distance they will travel until they are consumed. To maintain a robust mechanism to ensure timely delivery, rather than owning trucks directly, GCMMF is laying stress on outsourced vehicles. According to Sodhi, each vehicle is managed by GCMMF officials, and has to comply with the set terms and conditions. These terms and conditions are in line with the terms and conditions set by the relevant government authorities for the transportation of milk and dairy products in India. The advantage that GCMMF or Amul derives is that they can directly manage their logistics. GCMMF sources term their logistics structure as four traffic distribution highways. These are listed on the basis of fresh products, ambient products, refrigerated products and frozen products.
For fresh products like pouch milk, buttermilk and Dahi, insulated trucks are used for distribution. These trucks transport the products from the dairy plant to the final retail outlet in less than six hours. “To manage this highly time sensitive distribution, Amul has production facilities close to its major markets. This aids in covering the distribution of products within the 250 to 300 km radius of where the products are made,” expresses Sodhi. Open trucks or containers are deployed to transport products like milk powders, flavoured milk, UHT cream and milk under ambient product distribution. Refrigerated vans transport products like butter, cheese, cheese spread and ice cream. These are fitted with data loggers to track temperature, which has to be in the range of 0-4 degree throughout the journey. For ice cream and a few other frozen products, the temperature has to be maintained in the sub-zero range. From o to -18 degree. Data loggers are a must in such a case. Product units of ambient and refrigerated products are located in Gujarat. The supply chain for these products is accordingly designed to be swift and efficient. States Sodhi, “The pan-India distribution is covered from Gujarat in full truck loads whereas a multi modal transportation mode is used for ambient products transported to eastern and north eastern sectors. In case the demand is high, Amul also sources vehicles from the open market.”
Specially designed crates ensure efficient and safe transportation
To ensure milk pouches are not damaged during transit, specially designed milk crates are used by GCMMF. These make it ease to stack the crates in cold storage as well as in a refrigerated truck container. The crates are manually loaded in either case. For ice cream, GCMMF owns India’s largest cold chain with a fleet of more than 700 vehicles of various capacities depending upon the size of the market. The fleet is equipped with Vehicle Tracking System (VTS) and GPS technology. “Route optimisation of each vehicle is done through SAP, which facilitates to reduce the transportation cost and achieve a faster turnaround time, in the process improving overall efficiency,” Sodhi avers. Amul is also working towards expanding its ice cream manufacturing setup by setting up facilities closer to the markets. This will help GCMMF to cut down on freight cost and also reduce the associated risks.
Rolling out of the barn
A market leader in packed milk segment, contributing a good deal to GCMMF’s revenues are allied products such as ice cream, butter, etc. The biggest dairy plant of GCMMF is at Gandhinagar as of current. It has a milk processing capacity of 35 lakh litres per day. To feed a populous country like India, organisations like GCMMF need robust mechanisms, from the barn to the retailer. It is interesting therefore to understand how GCMMF’s business rolls out of a barn. Each member of the village dairy co-operative society visits the society premises to deliver raw milk. Raw milk is stored in bulk coolers of varied capacities. These ideally range between 5000 and 15000 kilolitres. Care is taken to ensure that the milk does not lose its freshness. Milk is thus chilled at less than four-degree. The intention is also to not let it spoil. It would not take much for the harsh external environment to spoil raw milk. Raw milk is subjected to qualitative tests such as FAT and SNF to ensure that it is unadulterated. The milk is then sent for further processing. It is transferred from bulk coolers to district co-operative union in insulated stainless steel milk tankers in less than two to three hours. To eliminate any chance of pilferage or adulteration during transit, GCMMF has introduced a pilferage proof locking system as a standard mechanism in tankers. “At the dairy plant, we check for Urea, Hydrogen peroxide, detergent adulteration along with 18 other tests to rule out any adulteration in milk,” explains Sodhi.
Designing a logistic matrix
Close to 10,000 wholesale dealers are selling Amul milk and milk products. The chain percolates down to another 10 lakh retailers pan-India. For FY15, GCMMF achieved a turnover of Rs.20,733 crore, up a whopping 159 per cent when compared to a turnover of Rs. 8,005 crore in FY10. States Sodhi, that his organisation aims to achieve a turnover of more than Rs.30,000 crore in FY20. Laying higher emphasis on operational efficiency, GCMMF has been conducting driver training programs twice every year. The syllabus includes a study and training in safe driving and hygiene. As the supply chain involves transportation of milk and dairy products, it is absolutely essential that hygiene is taken good care of. Working towards minimising transshipment and inter dairy product transfer, which would allow the organisation to reduce the carbon footprint even as it operates a large fleet as part of its cold chain, GCMMF, says Sodhi, is designing a logistic matrix to match the demand versus production facilities at various dairy plants. A big outcome expected is higher efficiency of logistics and reduction in costs. So, the next time you happen to pass by a banner of an Amul advertisement, and see a girl proudly posing with a slice of bread with Amul butter on it, please take some time out to think how an organisation based at Anand is feeding a populous nation with fresh and high quality milk and dairy products. The mantra of unity in diversity will be clear at once.
