OPERATIONS MANAGEMENT

CIA – I

Title: Factors influencing operations strategy in a competitive

environment.

Report Submitted
By
KIRAN R- 2127210
KARTHIKA M- 2127232
P BINDIYA- 2127246
POOJA- 2127250

To

PROF. JUSTIN JOY

DECEMBER 2021
DAIRY INDUSTRY

With a continual growth in the availability of milk and milk products, India has been the world's
largest producer and consumer of dairy products since 1998. Dairy farming is an important part
of the rural Indian economy, as it generates both jobs and revenue. India is also home to the
world's largest herd of cattle. The dairy market in India will be worth INR 11,357 billion in
2020. According to IMARC Group, the market would grow at a CAGR of 15.4 percent between
2021 and 2026. We're getting ready for COVID-19 while keeping the unknowns in mind.

AMUL INDUSTRY

 Company's headquarters is located in Anand, Gujarat.

 With 3,000,000 milk farmers, the Gujarat Co-operative Milk Marketing Federation Ltd
(GCMMF) was formed.
 Mr. Tribhuvandas Patel, the founding chairman
 Dr. Verghese Kurien, Deputy Chairman

India has become the world's largest milk producer thanks to the Amul model. More than
15,000,000 milk farmers supply their milk to 144,500 dairy cooperative groups around the
country. Pasteurized milk is distributed by 184 district co-operative unions.
GROWTH DYNAMICS

According to research, the increase is from Rs.2218.52 to Rs.8005.36. Exports have risen by
50%, and foreign exchange earnings have topped Rs. 100 crores. Amul is the country's most
popular brand, and organisational design has played a crucial role in this. Approximately 80%
of employees believe Amul's dynamic organisational structure contributes to operational
success, according to the research.

MARKET DYNAMICS

1. Placement and Branding:

"The Taste of India" was a divisive slogan. It debunked the notion that sliced and buttered
bread was solely a British invention. It was taken over by India. Years later, jingles like "Doodh
hai Wonderful, Pee Sakte Hai Roz Glassful" and "Utterly Butterly Delicious" are still
remembered.

2. Product Portfolio

Amul has a wide range of products. From milk to butter and cheese to ice creams and
chocolates, it has diversified its product portfolio to satisfy evolving consumer preferences. As
a result, Amul is now accessible to a large portion of India's population.

3. Product Pricing

Amul's main goal is to give both suppliers and consumers the same benefits. By delivering
competitive pricing for its items, it ensures demand and, as a result, sales. As a result, Amul's
marketing strategy emphasizes affordability on a regular basis. Its main goal is to ensure that
both suppliers and customers gain equally. By delivering competitive pricing for its items, it
ensures demand and, as a result, sales. As a result, Amul's marketing strategy emphasizes
affordability on a regular basis.

4. Advertising and Digital Marketing

Amul does not use "hard core" marketing or advertising techniques. Surprisingly, it
concentrates primarily on Amul Butter and Amul Cheese. Because Amul's marketing and
advertising strategy receives only 1% of income, this is the case. Profits are reinvested in the
cooperative. This is how it maintains its cost-effectiveness.

CUSTOMER REQUIREMENTS

Sugar reduction, value-added ingredients, mobility, and clear labelling are just a few of the
features that dairy buyers look for. There are motifs in each of the four primary dairy product
categories: cultured goods, cheese, milk, and ice cream.According to the National Dairy
Council, nutrition experts feel that meals, rather than tablets, are the best source of minerals,
including calcium (NDC).On the other hand, the dairy industry is changing since market and
weather factors have a big impact on pricing. Fluid milk, the foundation of all dairy products,
is a commodity that is always subject to supply and demand fluctuations.

COMPETITIORS

Many competitors have entered the market in the recent decade and are progressively
increasing their market share.
a) Kwality walls
b) Vadilal
c) Havmore
d) Dinshaws
e) Baskin Robbins
f) London Dairy
g) Arun Ice cream
TRANSFORMING CORPORATE INTO OPERATIONAL STRATEGIES

 Availability of the Products

Amul has been working hard to increase the accessibility of its products to its customers. In
this context, they've opened Amul Parlors so that customers can get all of their Amul products
in one place. Despite Amul's best efforts, availability has increased in western India and metros,
according to the poll, but non-availability in the rest of India is keeping these parlours from
satisfying consumer demand. To meet the increased demand, Amul needs to expand its milk
production and processing capacity.

 Avoiding Delay in Decision Making

The ability to make judgments is crucial to the success of any company. Making the right
decision at the appropriate time is crucial. Delays in making decisions detract from the
importance and urgency of the procedures at hand. The GCMMF is recommended for
identifying highly warranted judgments. Amul can only stay ahead of the competition if it
makes quick decisions.

 Awareness in Unexplored Areas

Amul, on the other hand, has been working on a number of projects to enhance public
awareness about cattle care and improve breeding facilities. Regrettably, many programmes
have been targeted towards areas with a higher literacy rate. Amul must seize the opportunity
to expand into rural areas with milk production potential. Extensive programmes should be
launched to persuade farmers to join the community. To share their knowledge, certain demos
or experiences from producers who are comparable to them should be brought there. In this
way, they will be easily persuaded.

 Coping with the Competition

The majority of Amul's revenue comes from fresh milk, followed by butter, one of the
company's oldest products. If Amul wants to increase revenue, it must focus on increasing fresh
milk sales, which can only happen if milk procurement improves.

 Product Development

Despite Amul's commitment to innovation, many aspects of the company still need to be
improved. Amul chocolates and Nutramul have less than ten percent of the market, far behind
their competition. Furthermore, army supplies account for 10% of Nutramul's market share.
The most popular malted beverage is Bournvita. The majority of people are unfamiliar with the
Nutramul brand. To raise client knowledge of the product, they should start with an ad
campaign in this area. They can also obtain consumer feedback on what the product should
include. In this approach, they will be able to grab the market and compete with other
businesses.

 Availability of Power

Despite Amul's great success in the field of information technology, it has been established that
technology acceptance is challenging in slightly backward regions. There are also electrical
problems. They can do so by having sufficient power backups or even deploying generators.
During busy collection hours, they can additionally request that the power department provide
electricity to run the BMC and freezing units.

 Supply Chain Management

Despite having a strong supply chain with a big number of retailers and wholesalers, Amul's
number of depots in each state is insufficient to meet demand. Even in larger states, only one
depot is available, which is insufficient to meet the demands of retailers. In order to meet the
expectations of its customers, Amul needs to increase the number of depots it has.

PROCESS CONTROL FLOW DESIGN

Because diverse process equipment and labour skills are placed in sequence according to the
way the product is manufactured, the line flow is also known as a product form of layout.
PROCESS CONTROL METHODOLOGIES
 Open-loop control

In essence, open-loop control means imposing trajectories for the process impacted variables,
which will lead to proper profiles and end values for the required state variables. Such
trajectories are defined offline and a beforehand. They can be defined in a variety of ways,
including using experience-based considerations or model-based methodologies. While the
process is ongoing, employing mechanisms for trajectory re-evaluation and updating could be
advantageous.

 Optimal control

Off-line in open-loop optimum control, optimal trajectories for manipulated and state variables
are evaluated using a given economic profit function. These optimum temporal profiles for the
manipulated variables are brought on-line by actuating directly on the final control elements or
utilising local closed loop algorithms, both of which make use of programmable controllers.
No automated corrective action is taken if the optimal process path diverges from the nominal
one. As a result, designing appropriate design procedures to determine optimal trajectories for
the most relevant process variables (relevant in terms of process performance) is a basic
difficulty in open-loop optimal control.

 On-line optimizing control

A quick note on a topic that will likely have a big impact on how procedures work in the near
future. In its most basic form, on-line optimization control entails optimising a cost function
on-line and in real-time by using successively gathered on-line and/or off-line measurements
of the current process run to select and execute new corrective control laws. Indeed, for the
reasons stated above, the conclusion of an open-loop control implementation is that the process
is operated at sub-optimal settings that are not compatible with the anticipated process
performance determined by the off-line design technique. To improve the open-loop operating
procedure's durability and high yield, on-line optimising control should be used.
 Conventional closed-loop control

In general, closed loop control aims to force the process state to follow a predetermined path
(reference). This path can be designed heuristically or mathematically, and it can be kept
constant (regulator action) or altered on a regular basis during the operation (servo action).

 Single loop feedback controls

The feedback system operates by sending information about the process output to the
controller. Following that, decisions are made based on the information that has been returned
to the process. Off-line calculated ideal command profiles are used as set-points for on-line
local closed loop controllers. Closed-loop control is limited by the availability and reliability
of online measuring equipment for the regulated variables.

FACILITY LAYOUT

a) The plant layout refers to the overall arrangement of the machine tools, handling
equipment, warehouse, and other auxiliary accessories needed to help production in a
factory.
b) The building was designed to match a precise process pattern as a result of these pre-
planned arrangements.
c) The AMUL facility was built from the ground up to accommodate numerous manufacturing
processes and the manufacture of multiple items in one location. The total length of the
land is around 2.27 kilometres.
d) Separate facilities with needed arrangements of machine tool management and computer
connectivity through the control room are designed to support varied product-
manufacturing departments.
e) This facility produces milk, ice creams, milk powder, and ghee. For each product, the entire
department has its own set of processing facilities. There are four production divisions and
four packaging sections for each product.
f) As a result, the plant layout takes into account all production and service facilities, allowing
for the most effective operation possible.
Concept for layout of Amul dairy plant

PARAMETERS REQUIRED IN PLANNING LAYOUTS

 PLANNING CONSIDERATIONS FOR DAIRY PLANT

The following elements should be considered when planning a dairy plant:

a) Milk business forecasting, including milk procurement and marketing.

b) Product demand market study.

c) Land availability and requirements, topography for waste disposal, and communication.

d) Water supply and demand analysis; and

e) No objections from municipal, pollution, or aviation authorities.

 SITE SELECTION

Factors affecting the location of a diary plant

a) The factory should be positioned near a railway siding or near a roadway where
transportation services are accessible.

b) The facility should be located in such a way that all necessary facilities, such as power,
water, and trash disposal, are readily available at a reasonable cost.

c) The site must be large enough and in a suitable shape to allow for building design
flexibility and future extension.

d) There should be no air pollution in the vicinity.

e) A sufficient amount of labour must be available on site, and workers may need to be
housed.

f) Waste disposal g) Hazards to the local community

h) Pollution - liquid, gaseous, and solid

i)Day and night noise levels

j) Impact of the plant on the utilisation of local raw materials

 SITE PLANNING
1. Set the building back 45 metres from the highway. Even after a highway-widening
project, this will allow some space around the building.
2. Traffic should be arranged in such a way that all vehicles and pedestrians can move
safely.
3. If possible, provide driving access to all sides of the buildings. This enables for one-
way traffic and permits fire trucks to access areas where they are needed.
4. Rail sidings, truck and automobile parking spaces, trash collecting locations, and
"surplus" equipment dumps can all become a source of contamination and vermin
breeding grounds.
5. Place loading bays at the back of the structure. Without cutting or filling, a gradual
slope from the front to the back will raise the building's floor to around 1 m above
grade.
 6. Prepare the ground to allow for natural drainage to ditches.
7. Make the truck building and weigh scale accessible.
8. Make the weigh scale and truck building accessible.
9. Choose a location.
10. Make the truck building and weigh scale accessible.
11. Provide parking for employees and visitors near the building's main entrance.
12. Truck parking should be separated from the rest of the parking lot and possibly gated
in.
13. Raising outdoor equipment 20 cm above the pavement will prevent rodents from using
it as a nesting ground.
14. Landscaping and gardens help to improve the company's image.
15. 1 m grass-free strip coated with gravel or stones to keep weeds at bay and give a good
area for traps and bait placement around the plant
16. Enclosure fencing around the periphery 12.1m grass-free strip with gravel or stones to
suppress weeds and a decent space for traps and bait placement around the plant.

SUPPLY CHAIN MANAGEMENT

 Delivery Net work

▪ 47 company owned depots with dry cold warehouses for all products
▪ 4000 distributors
▪ 5 Lakh retailer outlets
 Business Model
▪ Responsive business model with pull system
▪ Advance order with DD from 4000 distributors to GCMMF
▪ Advance order with DD from retailer to distributor

 Supply Chain Model

1. Supply Side
 Farmers deliver milk to each VCoS
 VCoS with chilling plant chill the milk and transport it to Union Processing Unit
 VCoS without chilling plant will transport milk to chilling plant and then to
processing unit
  Excess milk is sold by VCoS locally to local customers
2. Processing
 Union processing unit process milk to various products and store in dry cold ware
houses of GCMMF at factory site
3. Delivery Side
 3 PL Company transport products to 47 GCMMF depots
 3 PL transport products to 4000 distributors on behalf of GCMMF
 Distributor transport products to retailers on ‘milk- run model’
 Customers come and by from retailer, or home delivered to customers

Benefits of SCM implementation in Amul

 Reduced lead time
 Faster inventory turnover
 Lower warehouse space requirements and safety stock owing to precise forecasting
 Fewer stock out situations
 Long-term advantage and benefits to farmers on the supply side with a predictable
market and income

SCM Network Design

CONCLUSION

Amul's success may be due to its solid supply chain, low-cost strategy, diverse product mix,
strong distribution network, technology advancements, and initiative and service availability,
among other things. Amul is the largest producer of milk and milk products in the world. It has
established international dairy farmer best practices. AMUL has continually introduced new
items under its trademark at very low prices over the course of many years. It provides direct
access to high-quality products for local buyers. The brand isn't arrogant. Its goal is to improve
the lives of farmers and their socioeconomic situation. It also ensures that the profits of the
company are distributed equitably among the company's shareholders. As a result, unlike the
others, AMUL has been able to follow through on its claims in the real world.