SCM Assignment:unorganized productGroup 1

KARTHIK SURESH (1502087)PRADEEP KUMAR (1502129)RAVI KUMAR (1502151)ROHIT (1502159)

Indian Dairy Industry

Dairy Industry

Handling of Milk Handling of Milk Products Marketing of Milk and Milk Products Dairy Technology

Operation Flood

Launched in 1970 Flood of Milk Augment Rural Income Ensuring Fair Prices Three Phases

First Phase (1970 – 1980)

Support from Europe through World Food Programme

NDDB’s Role Connecting Milk sheds with consumers

Second Phase (1981 to 1985)

Milksheds increased to 136 290 Urban Markets 43000 Village Co-operatives 4.25 Million Milk Producers

Third Phase

Co-operatives Expanded Infrastructure Cattle Health Care Education 30,000 New Dairies Women Participation

Indian Dairy Industry

One of the fastest growing sectors in India, with a total size of about INR1160 billion (INR 1,16,000 crore) OR US$ 26.5 billion.

In Dairying, 75 million women are engaged as against 15 million men.

Indian Dairy Scenario

Position Of Milk Production

By Farm Level

-45%

Unorganised -42%

Organised -13% 0

51015202530354045

Farm Level Unorganised OrganisedSector

Position Of Milk Utilization

Consumed as Milk

- 46% Traditional

- 47% Western

- 7%05

101520253035404550

Consumed TraditionalProducts

WesternProducts

Milk Supply Chain, in the traditional and unorganized dairy system

(i) Milk producers directly supply milk to the consumer or through a marketing channel. (ii) Milk producers supply milk to the consumers through the intermediaries like middlemen

Producer--Consumer Producer—Market---

Consumer Producer—Middleware—

Market—Consumer

Unorganized Dairy System

Retailing of Milk in India is thoroughly unorganized.

There is no supply chain management perspective.

An overwhelming proportion of the Rs. 400,000 crore retail market is UNORGANISED. In fact, only a Rs. 20,000 crore segment of the market is organised.

Unorganized Dairy System

As much as 96 per cent of the 5 million-plus outlets are smaller than 500 square feet in area.

India per capita retailing space is about 2 square feet thus the lowest in the world .

Just over 8 per cent of India's population is engaged in retailing.

Milk Supply Chain, in the traditional and Organized dairy system

(i) Producers’ milk reaches private processors directly and After Processing it reaches Consumer.

(ii) Milk producers supply their milk to primary cooperative society, which inter alia supplies to secondary cooperative. The milk, after processing , reaches consumers via marketing channel, either directly or through apex cooperative.

Milk Supply Chain, in the traditional and Organized dairy system

Producer—Private Processor—Consumer

Producer—Middlemen—Market—Consumer

Producer—Primary/Secondary Cooperative

Society—Apex Society—Market—Consumer

Major Player in organized sector

Challenge for Organized Sector

Competition from the unorganised sector. Organised sector have big expenses to meet. Organised retailing also has to cope with the

middle class psychology that the bigger and brighter a sales outlet is, the more expensive it will be.

Challenge for Organized Sector

While India as a country became the world’s largest milk producer in 2001, not a single Indian dairy company featured in the list of global top 20 dairy companies

Opportunity for Organized Sector

Economic and demographic changes including rising disposable incomes.

A growing proportion of working women becoming a part of the urban population.

Greater awareness due to exposure to global trends

Turning Point for Organised Sector

The dairy industry was de-licensed in 1991. No license is required for setting up of large-

scale production facilities for manufacture of ice cream.

The exemption limit is increased for compulsory registration of dairy plants, from the present 10,000 litres a day to 20,000 litres.

Position Of Organized Sector

There are 678 manufacturing units registered with the Central and State Governments.

The combined capacity of these units is 73 million litres per day while they process about 29 million litres per day.

Significant excess capacity.

New Activities

Launching of Venture Capital Fund for Dairy ----scheme is being implemented through NABARD to provide loans to entrepreneurs in dairy and poultry sectors at a lower rate of interest.

-----The objectives are to encourage clean milk production, promote use of modern technology in dairy farms and to bring the milk produced in the unorganised sector to organised sector.

55% of Milk produced converted to various Milk Products

Biggest player:

Origin from the Sanskrit word ‘Amoolya’. Amul is a brand under which GCMMF markets

its products. Birth of GCMMF is closely linked to India’s

freedom struggle.

We observed how Amul has evolved itself by employing the different techniques of supply chain. Similar techniques should be made prevalent to convert unorganized sector into organized sector.

Hence, Unorganized share of milk market can be converted to organized by encouraging the players like Amul. By encouraging such players and increasing awareness among people in villages , milk industry in India can achieve heights.

By increasing cold storages in villages and chilling centers , wastage of milk can be reduced. Corporates in association with villagers can be provided conducive environment to establish such plants.

Collaboration with other cold supply logistics can increase efficiency.

Cold supply 3PL should be encouraged to cater to untapped potential of milk industry along with other agri products in India.

Suggestions

Thank You