Amul Dairy, Anand.
The institute organises Industrial Visit on 23rd, September, 2014 for MBA students
to the “Amul Dairy, Anand” which engaged in the manufacturing of milk, butter,
ghee, milk powder, flavoured milk and butter milk.
During
experts
for the
various
the visit, our students got an opportunity to interact with the company
and they were taken to the world of Amul. It was a wonderful opportunity
budding managers to get hands on experience real time knowledge on
management aspects.
It was a memorable occasion to all our students, as they were taken around the
factory, and put into real time experience in milk products manufacturing process.
Students engaged themselves in a survey to find out the Effectiveness of
Advertising, Sales promotion and Consumer behaviour techniques adopted by the
company.
This Visit provides useful insights and knowledge on plant operation and
understanding the management practices of different units.
Value for Many :R. S. Sodhi
Varsha Chidambaram
R. S. Sodhi
MD, Amul
There are very few brands that evoke a sense of fondness and pride in its customers the way
that Amul does. Whether it's Amul's witty socio-political ads or its business culture that has
lead to the upliftment of 3.5 million Indian farmers. It’s no wonder then that R.S. Sodhi, MD,
Amul has been with the co-op for 30 years. Born in a village, raised in the country’s lustrous
farms, Sodhi has grown with the organization the way we have grown on Amul’s ghee,
butter, and milk. And today, at the company's helm, he’s taking Amul to new heights, never
once forgetting the humble values Amul was built on.
Interview Questions
Q.Since you took over, there's a new vigor in Amul’s growth plans. What’s changed?
Q.By foraying into new products are you trying to re-invent the Amul brand?
Q.How are you dealing with competition from profit-focused MNCSs?
Q.Apart from local competition, what is your biggest challenge?
Q.So what’s the secret of your success?
Q.How have you leveraged IT to help Amul grow?
Q.What does the future for Amul look like?
Full Interview with R. S. Sodhi
CIO: Since you took over, there's a new vigor in Amul’s growth plans. What’s
changed?
R. S. Sodhi:
Amul has been thriving for 60 years. In the last three years, we have grown at over 20 percent
which is much more than the previous years. Last year, our turnover was Rs 9,800 crore, this
year it will be above Rs 11, 000 crore. This is the result of a few steps that we have taken.
We are the only FMCG company in India to have four distribution channels—unlike others
who have only two or three. But we were not able to cater to smaller towns as our distributors
were located only in the major towns of the country. So we introduced the concept of the
super distributor. We identified 200 districts and added a super distributor to each of the
districts. This super distributor would then cover 15-20 small towns. Last year, we added
3,000 more towns and cities to our distribution network. Today, all our products reach the
whole length and breadth of the country.
The second change relates to sourcing of milk. Until recently we sourced our milk only from
farmers in Gujarat. Therefore, we were able to sell fresh milk only within Gujarat and
weren’t able to meet the increasing demand for milk in other states. Hence since the last year,
we have started buying milk from the co-ops in West Bengal, Maharashtra, Rajasthan, and
UP. Today, we produce 145 lakh liters of milk, out of which 17 lakh liters come from other
states. We have increased our milk production by 22 percent.
We also changed our product mix. We’ve expanded our product portfolio to include nonconventional products such as sweet lassi, and frozen yoghurt.
Go to Questions
CIO: By foraying into new products are you trying to re-invent the Amul brand?
R. S. Sodhi:
Our plan is to double our capacity by 2020. At the rate we’re growing, we’ll probably reach
our target by 2018. I’ve been with Amul for three decades now. It’s my first job! When I
joined Amul it was an organization of Rs 120 crore, this year we expect it to be Rs 11,000
crore. I want to take it to Rs 30,000 crore.
A lot of people are ready to work for the rich and powerful, but a very few are ready to work
for the have-nots. Besides the salary, the satisfaction you get from working with the 3.5
million marginal farmers of India is something else.
Go to Questions
CIO: How are you dealing with competition from profit-focused MNCSs?
R. S. Sodhi:
Amul was born out of competition. Right from the start we have been fighting competition
from large MNCs such as Unilever and Nestle which is good because when you fight you
become more efficient and you learn a lot.
We face competition from two sides; one from the milk procurement side and the other from
marketing and distribution. Because of our business strategy which is to give the highest
price to the farmer and also value for money to the customer we are able to counter
competition to a great extent. We give 15-20 percent more to the farmer than others so we get
better quality milk. We are able to sell our products at a very competitive price in the market.
We don’t compromise when it comes to content, ingredients, or even technology. We have
the largest market share wherever we operate.
I believe fighting a national player or an MNC is not difficult. Fighting local competition is a
greater challenge for a national player like us. Their overheads are small and they are more
flexible.
Go to Questions
CIO: Apart from local competition, what is your biggest challenge?
R. S. Sodhi:
My biggest challenge is to keep the interest of milk producers and dairy farmers alive.
Today’s educated rural youth is no longer interested in waking up at 4 AM to bathe, clean,
and feed cattle. At the end of a whole day’s toil he’s just left with Rs 100-150. If we don't
encourage milk production, we’ll become import-dependent for milk too.
Therefore, our biggest challenge is to ensure that the next generation finds the business of
milk farming and production lucrative. They should be able to make money such that at the
end of the day they get at least 2 paise more than urban factory workers.
So, in the last three years we have increased the price at which we buy milk from farmers by
50 percent. Today, if a farmer gets a few a little more money he’s ready to invest more, but
his return on investment must increase.
Besides, people no longer have 2-3 cows, but many more. They need milking machines to
make their jobs easier. In fact the joke is, girls in Gujarat don’t want to marry into households
with more than two cows because that’ll increase their workload!
Go to Questions
CIO: So what’s the secret of your success?
R. S. Sodhi:
It’s IT! It is core to our business. Without IT, one cannot work in rural areas considering the
numbers involved. We collect milk from 3.5 million farmers twice a day, that’s more than six
million transactions a day scattered over 16,000 village societies. We’ve been able to achieve
such geographical dispersion and diversity only because of IT. Sitting here, I know in which
village which farmer has given me how much milk. Product integration with IT also helps me
predict demand and adjust my produce to meet that demand.
Go to Questions
CIO: How have you leveraged IT to help Amul grow?
R. S. Sodhi:
IT provides an integrated and holistic view of all stakeholders data for a quick and accurate
analysis. It helps in understanding the market share of Amul and identify where we should
focus our efforts. IT also helps us bring process level efficiencies and improve our entire
supply chain. IT is also helping us automate critical processes across the entire network.
We have integrated technology at all stages of distribution by implementing software
solutions across the entire value chain on a robust and reliable communication backbone.
These include software focused on automating rural operations to enterprise-wide SAP
implementations. We are also improving our distribution reach through robust GIS-based
analytics.
IT is a strategic differentiator. It has helped us cut costs and improve customer service. This
has helped Amul turn complex, duplicate, fragmented and error-prone systems into
simplified, standardized, and customer-enabled systems.
Go to Questions
CIO: What does the future for Amul look like?
R. S. Sodhi:
Our plan is to double our capacity by 2020. At the rate we’re growing, we’ll probably reach
our target by 2018. I’ve been with Amul for three decades now. It’s my first job! When I
joined Amul it was an organization of Rs 120 crore, this year we expect it to be Rs 11,000
crore. I want to take it to Rs 30,000 crore.
A lot of people are ready to work for the rich and powerful, but a very few are ready to work
for the have-nots. Besides the salary, the satisfaction you get from working with the 3.5
million marginal farmers of India is something else.
Go to Questions
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imp link for amul
http://www.indiamart.com/amul-dairy/csr-initiatives.html
general
http://www.dasm.co.in/index.php?option=com_content&view=article&id=78