CHAPTER 4

COMPUTER APPLICATIONS IN AMUL

This chapter describes the origin and growth of the Amul and its success

in dairy cooperatives, and the computer applications initiative of the Amul dairy

cooperatives.

4.1 GROWTH AND DEVELOPMENT OF AMUL

Kaira District Cooperative Milk Producers’ Union Ltd., Anand, popularly

known as ‘AMUL’ was formally registered on 14 December 1946 with five Dairy

Cooperatives. With the formation of the Dairy Cooperative Union (DCU), milk

producers ceased being exploited and started receiving lucrative prices for their

milk; tests determined the fat content of milk on which prices were based and

payment for milk was made twice a day. This resulted in milk producers joining

the village cooperatives as they saw the advantages and services they would be

entitled to as members. The cooperative societies affiliated with the Union thus

increased to eight in 1947. The Union had no processing facilities until 1948,

when it purchased an old, idle chilling plant in Anand. By the end of 1948, the

union was handling 5 000 litres of milk per day.

The number of affiliated village DCSs and their milk producer-members

kept increasing as did the quantity of milk procured from them. To cope with the

increasing milk collection, the Union purchased a new pasteurizing plant,

increasing the capacity to 18 000 litres of milk per day. In 1950, the Union sent its

first mobile veterinary team to villages as a part of its technical inputs programme

(support services). By 1955, the Union had 107 village cooperatives with 27 000
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producer members supplying about 39,000 litres of milk per day. The Union

acquired the necessary machinery from the United Nations Children’s Fund

(UNICEF) for pasteurization, butter and powder manufacture. These plants

started operating in 1956-1957. For the first time anywhere in the world, milk

powder was manufactured from buffalo milk. The Union also started

manufacturing condensed milk from buffalo milk in 1958. The products were then

sold under the new brand name AMUL.

The Union’s processing facilities were further expanded in 1960 by

installing a roller dryer for production of baby food and by adding a cheese

section. By this time, the Union had 195 village milk societies with more than

40, 000 milk producer members supplying about 65 000 litres of milk per day.

As AMUL grew, it also kept increasing the facilities for providing support

services to milk producers through the village cooperatives. As a part of this

scheme, it started a cattle feed factory in 1964. This occasion is of particular

significance, since the then Prime Minister who inaugurated the plant was

impressed with the performance of Anand Pattern Dairy Cooperatives (APDCs).

He encouraged the general manager of the Union to work on replicating the

Anand Pattern elsewhere in the country. This makes the genesis of the National

Dairy Development Board (NDDB), the Indian Dairy Corporation (IDC) and OF.

To meet increasing milk collection, the Union had to build a second dairy

in 1965. By then, in addition to processing milk, it had been manufacturing butter,

cheese, milk powders including baby food, ghee and by-products. Soon the

Union decided to manufacture chocolates, malted milk and high-protein extruded

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products and accordingly, started a separate unit in 1971 to this end. Around this

time, the Union started procuring cow milk as well. In 1970-1971, it procured

approximately 32 500 litres of cow and buffalo milk per day from 706 societies

with a producer membership of 180,000.

The Union thus continued to grow (see Table 4.1). This was possible

because they had adopted a dairy cooperative system that was highly conducive

to increased milk production as well as marketing. Its approach to dairying,

integrating milk production, procurement, processing and marketing provided all

the required facilities to perform these functions satisfactorily. Therefore, while

the milk producer members were happy with a guaranteed lucrative milk price

and other benefits year-round, the consumers were also highly satisfied to

continuously receive good quality milk at reasonable prices. The Union became

the largest milk-handling unit in Asia.

AMUL currently has more than 1,000 village dairy cooperatives with 0.7

million members and on an average procures 0.8 million litres of milk per day.

AMUL manufactures butter, powder, chocolate, condensed milk, and many other

milk by-products and markets them nationally and internationally. The

cooperative structure and the system established through the efforts of the

people of the town came to be known as the APDCs.

An important reason for AMUL acquiring greater significance than the

contemporary dairy cooperatives was that it not only organized milk producers,

but also tuned into the process of modernization and commercialization and dealt

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with issues of development and change. Training and extension education

played key roles at every stage in the entire process.

Table 4.1 SELECTED INDICATORS OF GROWTH AND DEVELOPMENT OF

AMUL- I (1950-1951 to 2009-2010; April-March)

1950- 1960- 1970- 1980- 1990- 1996- 2007- 2008- 2009-

Indicators
1951 1961 1971 1981 1991 1997 2008 2009 2010

No. of
(DCs) 33 195 706 895 917 970 1113 1147 1151

No. of 635.5
3.97 40.50 180.00 327.00 474.85 552.63 631.63 634.67
Members 9
(‘000)
Milk
Collected 498.0
from 5.00 23.91 118.00 169.58 264.83 268.49 401.71 468.58
DCSs 3
(‘000
tonnes)
Source: Annual Reports of Kaira District Cooperative Milk Producers’ Union Ltd.,
AMUL, Anand

4.2 FACTORS CONTRIBUTED TO AMUL’S SUCCESS

The entire system of APDCs is owned, controlled and managed by

member producers themselves. Since there is no interference of any outside

agency, the Cooperative Management Committee (CMC) enjoys complete

autonomy in decision-making. The CMC comprises elected members and one to

two nominated members. The CMC makes policy decisions whose

implementation is carried out by the executives. For proper implementation of

policies, the coordination between board members and executives is very

important and plays an effective role in the success of the cooperatives. These

milk producer members take part in each and every activity of the cooperative for
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the development of the institution, which ultimately leads to their own

development and benefits.

The cooperatives are not dependent on any outside agency since milk

collection, processing and marketing are integrated. Another reason for active

member participation is, the year round assured market and quality-based daily

produce and regular payment. For running the processing plant and other

management activities, the cooperative hires qualified professionals who are

always answerable to the CMC. One of the most important factors in the success

of the Anand Pattern is the provision of technical inputs, support services, at very

nominal prices, which are adjusted in the milk price.

One of the most effective factors that have contributed to the success of

the APDCs is the provision of a complete package of inputs and support services

necessary for enhancing milk production for their members at their door step and

at a very nominal cost. The package includes animal health care through both

regular and emergency visits by veterinary doctors, artificial insemination (AI),

balanced cattle feed, improved fodder seeds, extension education and training.

These support services are provided to all the producer-members on a

sustainable basis right from the creation of the milk producer organizations (see

Table 4.2). The sustainability of the support services is mainly owed to the fact

that expenditure on support services are borne indirectly by all the producers

themselves. These dairy cooperatives manage all of the day-to-day expenses for

milk procurement, processing and marketing. Similarly, for enhancing milk

production, they provide support services at a very nominal price, which are

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adjusted in the milk price. It is claimed that to make any system sustainable,

there should be some financial involvement and the felt-need of the beneficiaries.

This is also true in making these support services sustainable.

Table 4.2 SELECTED INDICATORS OF GROWTH AND DEVELOPMENT OF AMUL- II

(1950-1951 to 2009-2010; April-March)

1950- 1960- 1970- 1980- 1990- 1996- 2007- 2008- 2009-

Indicators
1951 1961 1971 1981 1991 1997 2008 2009 2010

No. Of
AI
5 26 523 735 809 846 1008 1015 1059

Centres

No. Of
AIs 0.58 9.08 157.55 285.07 681.5 645.72 844.80 860.45 894.79
Perform
ed (‘000)
No. of
mobile
veterinar
0 4 16 23 16 53 69 75 85
y
dispensa
ries

Sale of
balance
d cattle
0 0 36.86 82.33 132.9 136.97 154 165 172
feed
(‘000
tonnes)

Source: Annual Reports of AMUL, Anand

Education and training have played a vital role in the success of APDCs.

Continuous education and training among its members, elected leaders and

employees at every stage of organization, management, procurement,

processing, quality control, monitoring, accounting/bookkeeping and overall

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supervision have created significant awareness of their duties and

responsibilities and enhanced their sense of belonging.

Whenever any gaps between existing and desired skills are observed,

immediate remedial measures are taken by organizing a need-based training

programme. In sum, the AMUL model of the APDC is producer-oriented, people-

centred and holistic. It emphasizes integrated development of all the important

facets of the dairy industry; production, procurement, processing, pricing,

marketing, training and management. Moreover, it advocates the use of

appropriate technical, economic and institutional instruments to promote

smallholder dairy development.

4.3 SALIENT FEATURES OF APDCS

The salient features that have contributed to APDCs are as follows:

• A single commodity approach; handles only the milk business.

• Four-tier organizational structure; an integrated structure owned,

managed and controlled by milk producers members themselves, which handles

milk production, procurement, processing and marketing, and provides support

services for milk production enhancement.

• Democratically elected boards from among their members in all the four

tiers, i.e. the village DCS, the district milk union, the state federation and the

national federation. The board members are authorized to decide upon the

policies for total democratic governance.

• Employment of professionals by the cooperatives and professional

managers answerable to the cooperative boards.

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 • The basic philosophy of the Anand Pattern; combining the power of its

people with professional management in a vertically integrated cooperative

structure that establishes a direct linkage, eliminating all middlemen, between

those who produce the milk and those who consume it, either in the form of milk

or milk products. This structure transfers the largest share of consumers’ money

to the producers, creating an incentive to improve production. It supports

production by exposing farmers to modern technology. Placing the farmers in

command as the owners of their cooperative involves them in the process of

development. The democratic form of the cooperative provides an underpinning

for democracy in the country, through a foundation of a democratic institution

right down to the village level.

• Transparency maintained in business: by-laws providing continuous and

concurrent audit.

• Cash and regular payment to producers for the milk supplied by them.

• Awareness raised on clean milk production and animal husbandry

practices, which resulted in higher quality of milk production and breed

improvement.

4.4 COMPUTER APPLICATIONS IN AMUL

The successful utilization of IT and computer application in Amul has

aptly been described by Dr V Kurien, chairman, GCMMF and the man credited

for revolutionizing the co-operative movement. “Computers were not created to

solve the problems of poverty; hence it is futile to expect that the world will be a

better place if we all had access to computers and the Internet. But information is

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power and it stands to reason that if this power is shared equitably, all will

benefit.” There is no better example than Amul to prove this fact.

4.4.1 Role of Computer application

Computer application has played a critical role in the development of the

Amul brand. The logistics behind the co-ordination of approximately six million

litres of milk per day from about 10,675 separate village co-operative societies

throughout Gujarat, and storing, processing and producing of milk products at the

12 district dairy societies, is carried out with military-like precision.

It’s in these operations that Computer application plays a critical role. The

installation of over 3,000 Automatic Milk Collection System Units (AMCUS) at

village societies to capture member information, milk fat content, volume

collected, and amount payable to each member, has proved invaluable in

ensuring fairness and transparency throughout the entire organisation. The role

of Computer application in Amul is best summed up by B M Vyas, chief executive

officer, Amul (GCMMF) when he says, “Amul is not a food company, it is an IT

company in the food business.”

GCMMF is an apex co-operative organisation that comprises 12 affiliated

member dairies/district milk unions, with each having its own manufacturing unit.

These member dairies in turn have collectively about 2.1 million milk-producing

members who supply milk twice a day to the respective village co-operative

societies. As the collection and co-ordination of milk was a complex task, the

organisation needed a methodology to streamline operations. Further, following

the relaxation on food imports by the government of India, the Indian dairy sector
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faced a strong challenge from large organised dairies. To meet this challenge,

the Indian dairy sector needed a strategy to make its operations competitive.

Accordingly, IT was decided as the thrust area that would streamline the

production and collection process and the processing of milk products. This is

where the installation of AMCUS made the entire operation look simple.

For example, on an average, around thousand farmers come to sell milk

at their local co-operative milk collection centre. Each farmer is given a plastic

card for identification. At the milk collection counter, the farmer drops the card

into a box and the identification number is transmitted to a personal computer

attached to the machine. The milk is then weighed and the fat content of the milk

measured by an electronic fat testing machine. Both these details are recorded in

the PC. The computer then calculates the amount due to the farmer on the basis

of the fat content. The value of the milk is then printed out on a slip and handed

over to the farmer, who collects the payment at the adjacent window.

Earlier, members had passbooks containing details like identification

number, fat percentage of milk and volume of milk. The volume of the milk was

recorded in the passbook and a small sample was stored in plastic bottles for

measurement of the fat content. The testing of the milk was done at a later date

and the entire process used to take more than a week. In the current scenario,

with the help of IT, the farmers receive their payments within a matter of minutes.

Also, as the method is transparent, the likelihood of fraud has also decreased to

a large extent.

But all these initiatives have not come without challenges. For example, in
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the initial phases, to convince skeptical farmers, the AMCUS were installed free

of cost and the co-operative was requested to pay up only if they found the unit

satisfactory. However, the experiment paid off and these initiatives made farmers

aware to the benefits of the new system. Today, the application is being used in

over 3,000 rural locations.

Subbarao Hegde, Chief Information Officer, Amul - GCMMF says, “As milk

is a highly perishable commodity, the AMCUS initiative is vital for our operations.

Due to this automation, we are in a position to collect six million litres of milk per

day from around two million members. More importantly, this initiative has

increased the trust and transparency for IT in rural areas.” There are around

10,755 organised village co-operative societies in Gujarat, which are affiliated to

the respective district union or member dairies. Each member preserves the milk

in the cold storage, processing it and producing several products, which are then

sold under the Amul brand name. As all products have a limited shelf life, the

organisation’s ability to conduct its operations in a smooth way is much more

praiseworthy—especially when one considers the scale of the operations. Amul

makes about 10 million payments daily amounting to transactions worth Rs 170

million in cash. More than 5,000 trucks move the milk from the villages to 200

dairy processing plants twice a day, according to a carefully planned schedule. In

modern day lingo, it can be described as “Just-in-Time” supply chain

management with Six Sigma accuracy.

While Amul has always been at the forefront of Computerization

initiatives, the major thrust came only in 1994, when the organisation decided on

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‘Computerization’ as the key component needed to sharpen its competitive

advantage. Amul studied its existing functions and operations and formulated an

IT plan for spearheading its growth in the 21st century. The guiding principle

behind the exercise was to align the information strategy with the business

strategy of the organisation, and derive maximum benefits from computerisation.

During the implementation of the plan, Amul took a strategic decision to re-

design and re-organise the existing software applications. While implementing

the new software, care was taken to integrate the applications in such a manner

that once the information was captured at source, it could be leveraged for the

enterprises’ decision making process. The main focus was to ensure that the

output of one system could become input of another system and vice-versa and

thus providing a seamless flow of information.

4.4.2 AMCUS Business Model

Amul has taken computer initiative initially with the SKEPL (Shree

Kamdhenu Electronics Private Limited). The company provides integrated

solutions, marketed under the brand name “Akashganga”. This is called AMCUS

Business Model. AMCUS business model is centered on providing technology-

based products and services to help milk cooperatives become more efficient

and productive. AMCUS provides complete Computer-enabled solutions that

automate the milk collection process at local milk cooperatives. Its high-end

system, selling for about US$3,300 (Rs 151,800), incorporates an electronic

weighing system, a milk analyzer to test milk quality, a personal computer, and

accounting and management software. Compared to earlier manual procedures,

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the AMCUS system is faster, more accurate, and more transparent. That means

milk can be sent on to the cooperative union for processing more quickly,

reducing spoilage; farmers can see for themselves the weight and quality of their

milk via a display and printed receipt, increasing their trust in the cooperative

process. In addition, farmers are paid immediately, rather than sometimes days

later as under manual procedures; and local cooperatives need fewer employees

and have better records and reports for planning purposes. In just a few short

years of operation, the AMCUS has become quite popular in the Indian dairy

industry, especially in the state of Gujarat.

4.4.3 Automatic Milk Collection Systems

The traditional process of milk collection in India begins with dairy farmers

bringing their milk to the local village-level dairy cooperative society where the

milk is poured into metal buckets (aluminum or stainless steel) and weighed on a

steel scale. After weighing, the fat content of the milk is measured using

electronic testers. Once these measurements are completed, the transaction

details (the quantity and quality of milk) are manually recorded in the dairy

cooperative’s paper register and on the farmer’s membership card. Farmers are

paid for the collected milk usually a day or two after it is initially sold; because the

calculations for payment must be done manually from the data in the register, it

typically occurs at a later time to avoid further delays while milk collection is

going on and people are in line.

Payments are made based on the information previously recorded on the

farmers’ membership cards. This process is susceptible to fraud, both in the

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initial recording of the milk quality and quantity and at the time of payment,

because most of the farmers are illiterate and hence cannot read what was

entered on their membership card. Automation of the measurements eliminates

the potential for milk purchasers to misrepresent the quality of the milk and cheat

farmers out of a fair price.

In the product development process, AMCUS spent a considerable

amount of time researching the milk collection process. They focused not only on

the functional aspect of the process but also on external factors such as the

physical environment (hot, humid climates), and the human capacity of the

society’s staff. Based on their research, they developed appropriate systems to

automate the collection process at the village cooperative society level that used

simple technology and had a rugged design. For example, farmers can insert

their identification card in any direction and it will be read—the card does not

need to be swiped in only one particular direction. The system also designed to

be user-friendly, requiring minimum keyboard inputs in the milk collection

activities.

Product designers recognized that in order to maintain the freshness of

the milk, the processing time needed to be reduced, so they designed the

Automatic Milk Collection Systems (AMCS) to increase the efficiency and speed

of the collection process. Observations of fraud and mismanagement on the part

of the collection agents tempted the designers to create digital displays and

printed receipts reflecting accurate weight and milk quality measurements.

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 Using the AMCS, the process of milk collection has changed significantly.

Upon arriving at the village dairy cooperative society, farmers proceed to the

receiving counter and insert their plastic identification card into the card-reader,

which automatically reads his identification number. Farmers then pour the milk

into a bucket on the weighing scale. The weight of the milk is displayed on a

digital readout and that data is automatically transferred to the micro-processor

or PC-based system (depending on which system the cooperative uses). Next, a

five Millie liter sample of milk is collected and passed through the fat testing

machine. The fat content is also displayed and automatically transferred to the

system. Finally, the AMCS calculates the amount to be paid to the farmer based

on the weight of milk and the fat content at the price specified by the milk union.

This data is printed out on a receipt and handed to the farmer who takes it to the

cashier and collects his money immediately. The Automatic Milk Collection

System provides several advantages over the traditional manual method. First, it

speeds up the entire milk collection process, thereby reducing the spoilage of

milk. Wait time for the farmers decreases from 45 to 10 minutes, on average—

with farmers selling milk twice a day, this decreases the total amount of time

spent from an hour and a half to just 20 minutes, saving over an hour’s time each

day. Second, the automated system is more transparent and minimizes the role

of the collection agent, reducing the likelihood of mistakes or fraud. Far from just

having economic consequences, automation frees the farmers from the burden

of having to fear cheating or corruption in their daily business dealings.

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 Initially, the AMCUS was microprocessor-based, but later a PC-based

system was introduced. Conceptually, the two systems are very similar, except

that the PC-based system can hold more data, can integrate accounting

software, and provides additional flexibility that can easily accept new software

products with enhanced reporting capabilities. The specimens of the Milk

Collection Software and Milk Processors are given in the following pages. (See

Exhibits 4.1 to 4.3)

4.4.4 Automating the Weighing Scales

The electronic weighing scale has a stainless steel base, a milk receiving

pail which holds 10 kilograms, a large digital display, and load cells to

compensate for temperature variation. It features an auto-zero capability (the

scale is set to zero after each measurement) and an interface to transfer weight

data from the weighing scale to the PC. Scales are available in capacities of five

to 5,000 kilograms. The Electronic Weighing Scales are been mainly used by the

Milk Producers Cooperative Society. The Integration with the computers is done

to find the weight of the milk and transfer the data to the computers directly. (See

Exhibit 4.4)

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Exhibits 4.1 Milk Collection Software

Exhibit 4.2 Microprocessor based AMCS

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 Exhibit 4.3 PC based AMCS

Exhibit 4.4 Electronic Weighing Scales.

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4.4.5 Milk Analyzers

District unions buy milk from village cooperative societies and pay on the

basis of weight and average non-fat solid (SNF) content of the milk. In contrast,

village dairy cooperative societies pay farmers on the basis of the weight and fat

content of the milk. This discrepancy in payment systems means farmers are

paid less for their milk based on the fat-to-weight ratio than the district union pays

village cooperatives for the same milk. The primary reason for the difference in

the type of analysis used for payment appears to be the fact that equipment to

measure non-fat solid (SNF) content has thus far been prohibitively expensive

and unaffordable for village dairy societies. The milk analyzers measure the fat,

non-fat solids, and protein composition of the milk. (See Exhibit 4.5)

Exhibit 4.5 Milk Analyzer

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4.4.6 Accounting and Management Software

Accounting and Management Software user interfaces have been

developed in local languages and have localization features.

Functionality Accounting and Management Software includes

bookkeeping, user-defined report generation, profit and loss calculation, and

forecasting. Raw Milk Receiving Docks (RMRD) software is marketed to district

unions. This software provides district unions with information and analysis of

district-level milk collection and other operations. Reports detail milk collections

data on a per-session basis, trends of milk collection from different societies,

employee time sheets, efficiency of operations, and more. Accounting and

Management Software also integrates different milk collection centers by

providing a data-exchange and sharing capability.

AMCUS is an example of how computer application is being used as a

catalyst for synergies between social development and business objectives. It is

clear that how the development benefits of improved efficiency and transparent

and fair prices for dairy farmers can be combined with the business objectives of

growth and profitability in a sustainable and mutually beneficial relationship.

AMCUS has demonstrated that with simple and appropriate systems designs and

proper training, illiterate people from poor rural areas can learn to be users and

managers of technology-based systems. Collection agents and dairy society staff

are using Windows-based software and electronic systems.

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 In fact there is a demand for further enhancements (such as additional

reports) to the existing systems as well as new products and services (such as

milk analyzers).

The increased operational efficiencies and productivity that technology enables is

welcomed in these rural areas. By automating the milk collection process,

AMCUS is enabling faster transportation of perishable milk to unions, preventing

milk spoilage and creating higher milk yields. The system’s procurement

information and transaction history tools are helping local cooperatives to be able

to better plan their operations.

AMCUS also illustrates how innovative use of technology can have a

profound impact on the daily lives of the common villager. Farmers are excited

about receiving fair and transparent compensation for their products as well as

more efficient service at milk collection centers. Immediate and system-

calculated payments have increased farmer’s belief in the cooperative system. In

a cooperative social structure, the intangible “moral capital” of trust and

confidence in the transaction process is an important consequence of AMCUS.

Human resource development has also been an important developmental

benefit of AMCUS. By hiring and training locally, AMCUS has contributed to the

development of human capital in rural areas. Unemployed youth have been able

to earn livelihoods locally within their rural community instead of migrating to the

big cities. Providing jobs at the local level, the company has provided stimulus to

the local rural economy.

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4.4.7 Enterprise-wide Integrated Application System (EIAS)

Accordingly, Amul assigned the ERP software development project named

as Enterprise-wide Integrated Application System (EIAS), on a turnkey basis to

Tata Consultancy Services. At present, the EIAS system covers a plethora of

operations like market planning, advertising and promotion, distribution network

planning, stock control, sales and accounting, budgetary control, quality control

management and co-operative service management. Amul has also connected

all its zonal offices, regional offices and members dairies through VSATs for

seamless exchange of information.

Each of Amul’s offices is connected by e-mail and all of them send a daily

report on sales and inventory to the main system at Anand. Also, sales offices,

C&F points and wholesale distributors of GCMMF have been connected through

the Internet for timely exchange of information. The customized ERP EIAS is

designed in such a way that it can be plugged into various points of the supply

chain and external system. Moreover, the software is platform independent and

can work on any operating system. Amul is also in the process of Web-enabling

the entire supply chain so that it can capture key information at the source, and

use the same for decision-making. This would include the likes of transporters,

member-manufacturing units, oil packing stations, suppliers, depots and the

entire field force.

Says Hegde, “In the co-operative space, this is the first instance of an

integrated system. The same system is going to be linked to each member

dairy’s ERP system in order to get information about a variety of details. For
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 example, details like milk procurement, production and stocks ready for

despatch, wholesale distributor orders, secondary sales, direct consumers and

demographic census data are available on the click of a button. This has proved

to be extremely effective in streamlining the supply versus demand data activity

on a continuous basis.”

 Uses automated milk collection system units for collection of milk

 Implemented a customized ERP system which is used in conjunction with GIS

 Uses data analysis software for forecasting milk production and increasing

productivity

 Has connected all zonal, regional and member dairies through VSAT

 One of the first five Indian organisations to have a Web presence

 Has made IT education compulsory for all its employees

 Opted for the .coop domain to position its brand in a distinct way.

4.5 GEOGRAPHIC INFORMATION SYSTEMS (GIS)

In addition to the EIAS, Amul has also been using Geographic Information

Systems (GIS) in an innovative way. The company uses GIS in its head office

and key marketing offices. Using the Indian map in GIS, the company is in a

position to plot zone/depot boundary as well as a pointer for zone, depot and

distributor locations, which are superimposed by product-wise sales data. This

data is then used for sales and distribution planning according to the various

zones. The unique thing about Amul’s GIS is that it is used for business planning

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activity at the collection level as it captures the farmer-member census

information, which includes animal census data. This has enabled Amul to

decipher information regarding milk production and productivity of animals,

region wise in Gujarat. This ultimately helps in forecasting milk production

according to the region and suggests remedies, if any, for a region that has a

lower milk production rate. The same GIS system can also be used for

monitoring veterinary health and controlling the outbreak of diseases.

4.6 DAIRY INFORMATION SYSTEM KIOSK (DISK)

Also significant are the efforts of IIM-Ahmedabad’s (IIMA) e-governance

centre that has developed additional modules, by building applications upon the

existing system. The centre has tried to extend the benefits of the existing

applications by developing a Dairy Information System Kiosk (DISK). Besides

automating the collection of milk, the system would be used for data analysis and

decision support to help in improving milk collection.

The KIOSK would also contain an extensive database on the history of

cattle owned by the farmers. This would contain details like medical history of the

cattle, reproductive cycle and history of diseases. Besides this, farmers can have

access to information related to milk production, including best practices in

breeding and rearing cattle. Using the same system, the farmers can even have

access to a multimedia database on innovations captured by Srishti, an NGO

working with IIMA. As a large amount of detailed history on milk production is

available in the database, the system can be used to forecast milk collection and

monitor the produce from individual sellers.

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 Going forward, there are plans to introduce features like Internet banking

services and ATMs which will enable milk societies to credit payments directly to

the seller’s bank account. In line with this vision, officials at Amul are looking at

upgrading the plastic cards which are being currently used only for identification

purposes, to smart cards which can be used to withdraw cash from ATMs.

4.7 Online initiatives

The history of Amul shows that it radically changed the way business was

done—by eliminating the middleman and bringing the producer closer to the

consumer—resulting in benefits for both. Incidentally, it was also one of the first

Indian companies to have a Web presence. Today, Amul’s cyber store gifting

service is capable of servicing consumers in more than 125 cities. Says Hegde,

“We have also linked our distributors, to our network and also incorporated Web

pages of top retailers in our site (amul.com), as part of our B2B initiatives.”

Distributors can place their orders on the website, amulb2b.com, especially

meant for accepting orders from stockiest and promoting Amul’s products via e-

commerce. Currently, the company receives queries from overseas agents for

distributing its products in countries like the US, Britain, New Zealand, Singapore

and Thailand. As a result of the online initiatives, today, Amul exports products

worth around Rs 100 crore, to countries in West Asia, Africa and the US. Amul

has also launched sites like “amulgreetings.com” and “amulkids.com” to extend

the brand identity to kids and teenagers who are its target market for its ice-

cream and chocolates products. Also, as a strategy, Amul has a customer

feedback channel which uses e-mail like “cheese@amul.com” for cheese

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products and “butter@amul.com” for butter products.

In addition, the organization’s corporate intranet site contains all the

company’s updates including policies, procedures, functional role and

responsibilities of each person in the organisation. Another example that puts

Amul in a league of its own is its recruitment policy. For instance, for any new

requirement in different functional areas, candidates have to compulsorily

undergo a computer literacy test, where the minimum passing mark is 80

percent. Explains Vyas, “Our main emphasis, is to increase competency at the

end user level with the help of IT. All our employees have undergone computer

training according to the departmental needs so that they can take charge of their

responsibilities in an effective way at the respective supply points.”

To put into nutshell, Amul has done the extensive application of IT, which

includes a B2C ordering portal, an ERP based supply chain planning system for

the flow of material in the network, a net based dairy kiosk at some village

societies (for dissemination of dairy related information), automated milk

collection stations at village societies and a GIS based data network connecting

villages and societies to markets. Milk collection information at more than 10,000

villages is available to all dairies (or Unions) to enable them make faster

decisions in terms of production and distribution planning, and disease control in

more than 6,700,000 animals. Similarly, this is linked with information at all 45

distribution offices and 3900 distributors. This network is being extended to cover

all related field offices in the network.

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