Amul Supply Chain

About this essay

It is the distribution part of the supply chain. From the manufacturing units to the retailers. First leg of transport is from the manufacturing unit to the company depots. This is done using 9 and 18 MT trucks any lesser quantity will be uneconomical to the company therefore sometimes the quantity ordered is lesser than club loading which means that the product ordered is supplied with some other products Frozen food the temperature of these trucks is kept below –18 degree celsius Dairy wet the temperature of these trucks is kept between 0-4 degree Celsius Second leg is from the depot to the wholesale dealers, this transport is carried out in insulated 3 and 5 MT TATA 407’s .

A permanent dispatch plant (PDP) is prepared where the distributor plans out the quantity of various products to be ordered on a particular date. Wholesale dealers carry inventory that is just adequate to take care of the transit time from the branch warehouse to their premises. This just-in-time inventory strategy improves dealers’ return on investment (ROI).

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All GCMMF branches engage in route scheduling and have dedicated vehicle operations. Third leg ie the flow of good from wholesalers to retailers; transportation is done on auto rickshaws, rickshaws and bicycles.


  • Managing large decentralized network of supplier and producer
  • Simultaneous development of markets and suppliers
  • Lean and efficient supply chain
  • Charge for each service provided to supplier
  • Purchase all milk that member farmers produced
  • Sell liquid milk at affordable prices so as to serve a large number of customers
  • Develop and deliver services that will improve lives of people in the network
  • Hiring professional managers , to run the federations and unions, whose values included upliftment of rural poor
  • Codification of raw material in an easy to understand manner
  • Payment to milk suppliers in time and whenever they needed
  • Quality check at every level
  • Educating suppliers about things that improve quality
  • Business process ownership through supply chain
  • Using modern technology
  • Sophisticated breeding technique for better production

Performance metrics of Amul Supply chain

  • Quantity of milk collected each day
  • Reduction in transportation time from the depots to the wholesale dealers
  • Improvement in ROI of wholesale dealers
  • Implementation of Zero Stock Out through improved availability of products at depots
  • Float Reduction (Implementation of Just-in-Time in finance to reduce the float)
  • Average procurement price paid to producers by unions
  • Total payout to milk producers

How is visibility and Velocity achieved?

Amul products are available in over 500,000 retail outlets across India through its network of over 3,500 distributors.

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There are 47 depots with dry and cold warehouses to buffer inventory of the entire range of products, which will help in efficient product flow (Product Velocity). GCMMF transacts on an advance demand draft basis from its wholesale dealers instead of the cheque system adopted by other major FMCG companies. This practice is consistent with GCMMF’s philosophy of maintaining cash transactions throughout the supply chain and it also minimizes dumping (Cash Velocity).

Some of the ways in which visibility is achieved by Amul is

  • Small group activities or quality circles at the federation
  • TQM program at the unions
  • Housekeeping and good accounting practices at the village society level
  • Every Friday between 10.00 a.m. and 11.00 a.m., all employees of GCMMF meet at the closest office, be it a department or a branch or a depot to discuss their various quality concerns.

How can we know that Amul Supply Chain is integrated?

Given the large number of organizations and entities in the supply chain and decentralized responsibility for various activities, effective coordination which improves the velocity in the supply chain along with efficiency and cost control. GCMMF and the unions play a major role in this process and jointly achieve the desired degree of control. Buy-in from the unions is assured as the plans are approved by GCMMF’s board.

The board is drawn from the heads of all the unions, and the boards of the unions comprise of farmers elected through village societies, thereby creating a situation of interlocking control.The federation handles the distribution of end products and coordination with retailers and the dealers. The unions coordinate the supply side activities. These include monitoring milk collection contractors, the supply of animal feed and other supplies, provision of veterinary services, and educational activities. All these activities make Amul supply chain a robust one.

Cite this page

Amul Supply Chain. (2016, Nov 27). Retrieved from

Amul Supply Chain
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