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Supply Chain Co-Ordination in

Dairy (Milk Products) Industry:

2016093- Neha Suhas Thatte 2016170- Rashi Mittal 2016230- Sachin Rathi Group- A4
2016233- Saraswathi Piratla 2016239- Siddharth Mertia 2016247- Vedang Pradip Kulkarni
Milk and Dairy Industry in India:
India is the worlds largest producer and consumer of dairy products. 10 million dairy
farmers belong to 96000 local dairy cooperatives and 170 district milk producers unions
155.5 MT of milk produced during 2015-16 (6.27% growth on previous year)
15% of total production used for production of liquid milk, butter, cheese, milk powder and
other dairy products
Supply Chain: Dairy industry has a vertically integrated structure with manufacturers
depending on the farmer
Mostly 4-tier structure consisting of farmers, village societies, District co-operative unions
and state co-operative unions
However, Milk being a perishable commodity, it requires a responsive and efficient supply
Since there exists a lot of demand fluctuations in this sector, milk supply chains are more
focused on providing good quality milk and controlling supply at the same time
Supply chain coordination in Indian Dairy industry is affected by abnormal wastage that
occurs because of poor handling (logistics) and disorganization in time and supply
of orders
Supply Chain of Dairy Industry:
Milk Production

Chilling units Chilling centers at village & district level

Unorganized sector
(Local milkman) Transportation of chilled milk
Milk processing
Dairy plants

Restaurants/sweet Packaging of milk and

shops other dairy products
Transportation of packaged milk and other dairy products

Value-added products Distribution

such as sweets

Mother Dairy SUMUL Dairy

Delhi-NCR, Mumbai, Saurashtra, A co-operative milk processing

Hyderabad are the major regions organization that is spread across four
regions: South Gujarat, Mid-Gujarat,
66% market share in Delhi-NCR North West Maharashtra and Goa

3.2 million litres milk produced daily; 2.5 70% share in Surat city only
million litres produced daily in Delhi
12 district unions which has
Turnover increased by 9% to Rs. 7,850 manufacturing units
crore in 2016-17 from Rs 7,186 crore in
2015-16. 4.5 lakh litres milk produced daily in
Surat city
Sales of around 30 lakh liters per day
through 800 milk booths It has a three tier supply chain system
Procure milk from farmers at village
1400 retail and 1000 company-owned level co-operatives
outlets Block-level co-operatives
District level processing centers

Material Flow Retail Grocers

Information Flow

Milk Product Packaged Milk Products


Raw Milk
Cardboard Labels
Manufacturer Plastic Container
Tier 1 FAT Free MILK Manufacturer

Dairy Farm
Cardboard Label Company

External Suppliers Tier 2 Chemical Plant

Paper Mill
Raw Materials

Chemical Extraction
Lumber Company Plant
Tier 3
Supply Chain Coordination Issues with MOTHER DAIRY
Procuring milk adds to transportation cost and quantity of the milk depends on the order which
adds to the further issues.
Mother dairy being a subsidiary of a government body NDDS has some restrictions in taking
some critical decisions like setting tariffs and procurement price
In supply chain, availability of the product is most vital, in case of mother dairy it has been an
issue and stocking is a perceptual problem
It has a very good distribution channel but faces some problems like poor forecasting, poor
logistics and poor supply
Mother Dairy focuses on small stores to accelerate slow growth of modern retail stores but retail
expansion is not keeping pace with the growth in demand
How does Mother Dairy resolve supply chain
Mother Dairy has set up end to end cloud based ERP program agreement with Ramco Systems for
seamless real time information. It has extended this to its partners, dealers, subcontractors and
retailers. This is done to increase
Transparency across supply chain
Streamline operations
Track product traceability and batch quality
Track consumption pattern
Manage inventory
Ensure centralized approvals
Mother Dairy has also equipped its distributors teams with Distributor Management System (DMS)
Main purpose of implementing DMS was that whenever stock levels are low, there is an Auto
Replenishment Trigger which would be automatically triggered to replenish the stock levels across
multiple stages of supply chain. This also provides
Increased visibility of secondary sales
Selling pattern and right intervals of taking orders
Distributors get the suggested list of products that they should sell to a particular retailer
Pass on schemes to retailers

Village Cooperative Village Cooperative

Local Restaurants/ Other Milk sold to Village and
Societies (with chilling Societies (without chilling
Milk related business Local Residents
units) units)

Milk Processing Plants
Units &
Network Services:

Veterinary Services GCMMF

Animal Husbandry Warehouses
Animal Feed
Factory Retailers
Milk Can Producers
Wholesalers/ Customers
University C&S
Home Delivery
Rural Management Contractors
Trucking Facilities
Supply Chain Coordination Issues with SUMUL

On time delivery
Increased fuel costs tracking

Vehicle stoppages

Theft of goods

Proof of delivery Work force Route

monitoring optimization
Fleet utilization

Workforce safety
How does SUMUL resolve supply chain
SUMUL has integrated big data analytics into its supply chain in collaboration with Maruti
3PL Logistics Private Ltd., a service provider
It has installed Fleeton an online fleet management and vehicle tracking software
It is a patented integrative logistic solution that not only predicts the risk and disruptions in
the supply chain but also assists in mitigating through large volumes of data guided by
seasoned professionals.
The servers record and provide real time information on the behavior of vehicles and
people involved in logistics that enable the supply chain managers to monitor the supply
chain activities given below
Unnecessary delays
Threats like reckless driving, speeding, route deviation etc.
Time taken by vehicles for each round trip
Fleet utilization to reflect over and under utilization
Article on Mitigating Supply Chain Risk via Sustainability Using Big Data Analytics:
Evidence from the Manufacturing Supply Chain
Article on Dairy Product Supply Chain under Risk of Demand Uncertainty On Implements
VMI and Expands Order Sharing in Dairy Stations