Dudhsagar Dairy
1.1 Global Scenario of Industry
Europe remains the largest market in the dairy Industry. US Follows Europe as the second largest market. Preference for rich, fortified, fat-specific, and organic variants of various dairy products in the market. India is going to be a major market for international players – Growing population – lot of growth opportunities It is projected to account for over 1/3 of the global milk consumption by 2020
CAGR(2011-2014) drinking milk sector: Global : 1.9 % , APAC: 3.5%, Western Europe: 0.2%, Africa: 2.2%, Eastern Europe:2.4, Latin America: 2.8%
Market Value in Asia Pacific
Category % Share
Japan 37.3% China 31.2% India 9.5%
South Korea 8.3% Rest of Asia-Pacific 13.7% Total 100% Source: Data monitor
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% Share
Japan 0 37.30% China India South Korea 100% 31.20% Rest of Asia-Pacific 9.50% Total 8.30% 13.70% Source: Data monitor
In developed dairying countries such as the U.S.A., the year 1850 is seen as the dividing line between farm and factory-scale production. Various factors contributed to this change in these countries, viz. concentration of population in cities where jobs were plentiful, rapid industrialization, improvement of transportation facilities, development of machines, etc. whereas the rural areas were identified for milk production, the urban centers were selected for the location of milk processing plants and product manufacturing factories. These plants and factories were rapidly expanded and modernized with improved machinery and equipment to secure the various advantages of large-scale production. Nearly all the milk in the U.S.A. before 1900 was delivered as raw (natural) milk. Once pasteurization was introduced, it developed rapidly. Mechanical refrigeration helped in the rapid development of the factory system of market milk distribution.
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Global players
Switzerland , started in 1866 with sales turnover Rs 1,471.30 crore
New Zealand, started in 2001 with sales turnover US $17 billion.
Denmark , started in 1881with annual turnover of Danish krone (DKK) 64 billion
Barcelona, Spain started in 1994,
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1.2 History of the Industry
India is the highest milk producer in the entire globe. India is well known as the 'Oyster' of the global dairy industry, with opportunities galore for the entrepreneurs globally. It might be dream for any nation in the world to capitalize on the largest and fastest growing milk and milk products' market. The dairy industry in India has been witnessing rapid growth with liberalization. As the economy provides good opportunities for MNCs and foreign investors to release the full potential of this industry. The main objective of the Indian Dairy Industry is to manage the national resources in a manner to enhance milk production and upgrade milk processing using innovative technologies.
The crossbred technology in the Indian Dairy Industry has further augmented with the viability of the dairy units by increasing the milk production per animal. Then subsequently milk production has also increased at an exponential rate while the benefits of an increase in milk production also reached the consumers from a relatively lower increase in the price of milk. The favorable price environment for milk producers for the Dairy Industry in India however appeared to have weakened during the 90's, a decline in the real price of milk being noticed after the year 1992. And then slowly regained it is glory after 1992 to till now.
In India dairying from very much earlier is regarded as an instrument for social and economic development. The country's milk supply comes from millions of small producers, who are dispersed throughout the rural areas. All these farmers maintain an average herd of one or two milk animals, comprising cows and/or buffaloes. Mostly ample labor and a small land base encourage farmers to practice dairying as an occupation subsidiary to agriculture. As income from crop production is seasonal instead dairying provides a stable which is a year- round income and also an important economic incentive for the small farmer.
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The co-operative society was stated about 26years ago in indices while in the foreign country (Britain). It was established in 1844. I.e. 146 years ago. In Gujarat the first milk producer union was stated in kheda district were inspire and guided by the Sardar Patel and the kheda district milk producer union ltd. The co-operative based industry was started in 1946 at Anand name ―AMUL DAIRY‖. Following the footstep of ―Amul Dairy‖ the milk producer union was started at Surat in 1951. It is called as Surat in ―Sumal Dairy‖. Then in 1957-58, the other co-operative milk producer union was established in Baroda called ―Baroda dairy‖ in 1960. ―Dhanasura Dairy‖ was started in Mahesana. In Banaskanthadistrict, the ―Banas Dairy‖ was established in 1966. Dr. V.Kurien the General Manager of Amul Dairy talked to Mr. Bhalabhai Patel a prominent of dairy industry is Sabarkantha District and with great task efforts on the Mr.Bhalubhai Patel the foundation Chairman Mr. C.C. Desai,Mr. Gopalbhai Patel and Mr. Ambabhai Patel. The Sabarkantha district Co-operative Milk producers’ union was established on 27th November 1964. It called as ―Sabar Dairy‖. It has got its name as it is situated in the Sabarkantha district first 19 societies registered their names on 20th October 1965. 5100 liters milk was collected and supplied for Ahmedabad. Ahmedabad municipal dairy could not accept more quantity of milk during the seasons. For the first seven years the milk union kept in on supplying raw milk to Ahmedabad municipal dairy and could not expand its activities due lack of financial sources. Therefore, in 1970 the milk union submitted proposal to Indian Dairy Corporation for establishment of multiproduct dairy plant in Sabarkantha district.
History of Indian Market Milk Industry
Beginning in organized milk handling was made in India with the establishment of Military Dairy Farms.
Handling of milk in Co-operative Milk Unions established all over the country on a small scale in the early stages. Long distance refrigerated rail-transport of milk from Anand to Bombay since 1945 Pasteurization and bottling of milk on a large scale for organized distribution was started at Aarey (1950), Calcutta (Haringhata, 1959), Delhi (1959), Worli (1961), Madras (1963) etc.
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Establishment of Milk Plants under the Five-Year Plans for Dairy Development all over India. These were taken up with the dual object of increasing the national level of milk consumption and ensuing better returns to the primary milk producer. Their main aim was to produce more, better and cheaper milk.
1.3 Indian Scenario of Industry
Co-operative: A man takes a muster seeds and sows it in his field. It is the smallest of all seeds, but when it grows up, it has the biggest of all plants. It becomes a tree, so that birds comes and make their nest in its shredded branches.‖ This approach of the growing and nesting birds the spirit of co-operation between the natures, the person who shows the seed is the true essence of a co-operative. ―Co-operation amongst competitive‖ is the fundamental principal. One is reminded of the story where the father tells his five sons to break small wood stick individually and then trying to breaks them when they are joining. The sticks do not break.
Co-operative movement in dairy industry: Milk is perhaps the only agriculture product that a farmer is required to sell twice a day every day of the year. In view to its extremely limited keeping quality, the farmer has also got to sell it within few hours of production; otherwise it becomes a total loss. In India as farming is carried on very small it is not possible for a farmer himself to market what little milk he produce. The production being small it does not become worthwhile for him to sell the milk to the consumer himself. Inevitably, therefore draying so developed that middle man entrench themselves in the milk producing areas to buy the milk from the farmer transport it to the consuming centers and to sell in to the consumer. We are all aware of the tremendous exploitation that the middle man indulges in when marketing agricultural commodities.
Even product like wheat, rice, tobacco, the exploitation of the farmer by middle men is very important but these are products that are needed to be marketed only once a year.
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These are also products, which the farmer can stock for some time in order to obtain a good market.
• India is one of the largest milk producers in the world • Market size of Indian Dairy Industry stands at around US$4.4 billion • CAGR (2005-2009): 11.9 % • Domestic Market – 50% in fluid form, 35% in traditional products (cheese, yogurt and milk based sweets), and 15% is consumed for production of butter, ghee, milk powder and other processed dairy products • Forecast 2014: increase by 49.4 % to take market value to US $ 6.5bn
Indian Dairy Industry
Size of the Industry More than 10 million dairy farmers belong to 96,000 local dairy cooperatives, who sell their product to one of 170 milk producers' cooperative unions who in turn are supported by 15 state cooperative Geographical Delhi, Punjab, Mumbai, Gujarat, Surat, Lucknow, Bihar, distribution Hyderabad Output per annum Growing 5 % per annum Market Capitalization The industry contributes about Rs 1,15,970 crores (US $ 25,771 million) to the national economy.
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India ranks first in the world in milk production, which went up from 17 million tons in 1950-51 to 121.84 million tons in 2010-11. The per capita availability of milk has also increased from 112 grams per day in 1968-69 to 281 grams in 2010-11. The world average per capita availability was 284 grams per day in 2009-10 compared to 273 grams per day for India.
The Indian dairy sector acquired substantial growth momentum from the Ninth Plan onwards, achieving an annual output of 121.84 million tons of milk during 2010-11. This represents sustained growth in the availability of milk and milk products for the growing population of the country.
Dairying has become an important secondary source of income for millions of rural families and has assumed an important role in providing employment and income- generating opportunities next to agriculture.
India ranks first in the world in milk production, which has gone up from 53.9 million tons in 1990- 1991 to 127.9 million tons in 2012-13. The per capita availability of milk has also increased from 176 grams per day in 1990’s to 290 grams per day in 2012-13. This is comparable with the world per capita availability of milk at 289.31 grams per day for 2012. This represents sustained growth in the availability of milk and milk products for the growing population of the country, apart from being an important secondary source of income for rural families. 8 | P a g e S.V. Institute of Management, Kadi.
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1.4 Gujarat Scenario
Gujarat has registered an impressive industrial development since its formation as a separate state in 1960. The industrial sector at present comprises of over 1200 large industries and over 3,45,000 micro, small and medium industries. A As per the results of the Annual Survey of Industry (ASI), 2005-06 carried out by the Central Statistical Organization (CSO), under Ministry of Statistics and Program Implementation, Government of India, Gujarat accounts for 19.69% of fixed capital investment, 16.13% of gross output and 15.35% of net value added in industrial sector in India.  This survey further reinforced the position of Gujarat as the most industrially developed state in India in respect of first ranking in industrial investment and second in terms of value of production and value addition in industrial sector.
Over the years, Gujarat has diversified its industrial base substantially. In the year 1960-61, textiles  and auxiliaries were the major contributor to industrial economy of the state. In the span of over 49 years, the industrial spectrum has completely transformed and today 12 major industry groups together account for 86% of factories, 96% of fixed capital investment, 94% of value of output and 95% of value addition in the state€™s industrial economy. In the recent years, refined petroleum products has emerged as one of the largest industrial groups having 33% share, followed by chemicals having 21% share. Other important groups include agro and food products (8.5%), textiles and apparel (6.9%), basic metals (6.2%), machinery and equipment (2.7%), non-metallic mineral based products (2.5%), plastic and rubber products (1.8%), furniture industry (1.4%), fabricated metal products (1.4%), electrical machinery (1.2%) and paper and paper products (1.1%). The industries in Gujarat produce a wide variety of products. A The products which have substantial contribution in terms of production in India include:  Soda Ash having 94% share, Salt (80%), Processed Diamond (80%), Polyester Filament Yarn (63%), Caustic Soda (42%), Phosphate Fertilizers (37%), Sponge iron (35%), Textile Fabrics (34%), Refined Petroleum Products (33%), Nitrogenous Fertilizers (19.5%), Cement (10%) and so on.
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Over a period of time, Gujarat has also succeeded in widening its industrial base. At the time of inception in 1960, the industrial development was confined only to four major cities namely Ahmedabad, Baroda, Surat and Rajkot and some isolated locations such as Mithapur and Valsad. Today, almost all the districts of the state have witnessed industrial development in varying degree. Such a massive scale of  industrial development has been possible on account of judicious exploitation of natural resources, such as minerals, oil and gas, marine, agriculture and animal wealth. The discovery of oil and gas in Gujarat in the decade of 60s has played an important role in setting up of petroleum refineries, fertilizer plants and petrochemical complexes. During the same period, the state government has also established a strong institutional network.
Gujarat Industrial Development Corporation (GIDC), established industrial estates providing developed plots and ready built-up sheds to industries all across the state. Institutions were also set up to provide term finance, assistance for purchase of raw materials, plant and equipment and marketing of products. Later, District Industries Centers (DICs) were set up in all the districts to provide assistance in setting up industrial units in the form of  support services. The state also developed infrastructure facilities required for industries, such as power, roads, ports, water supply and technical education institutions. The Government also introduced incentive schemes, from time to time, to promote industries mainly in the under- developed areas of the state to correct regional imbalances. All these initiatives have made Gujarat to emerge as the highly industrialized state in the country today.
1.5 Growth of the Industry Over the past five years, the ministry of science and technology’s ―Dairy Industry Development‖ project has improved technological innovation in the industry, made great progress in key technology Research and Development, e.g., breeding of milk cows, feedstuffs, prevention and treatment of epidemic diseases, processing of dairy products, quality and safety, and initially set up china’s technology pillar system for dairy industry. The project has established 20 demonstration zones with 1.18 million milk cows, increased output per cow from 5000 to 6500 kilograms, and fostered a great many competitive brands driven by the ―Dairy Industry Development‖ project, china’s dairy
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industry output has maintained a very high average growth rate of 25% a year, and accounts for 3.7% of the world total.
The National Dairy Development Board (NDDB). At the foundation of dairy industry are the cows and buffaloes that, during the last three decades, our nation’s milk producers have transformed Indian dairying from stagnation to world leadership. During this period and before, science and technology have played a critical role in supporting our farmers’ efforts. During the next decade, that role will be further enhanced as they face a number of new challenges. The dairy cooperative movement has been central to the development of dairying in India. The inspiration for this movement was the success of the Kharia District Cooperative Milk Producers’ Union—better known as AMUL. Founded in 1946 in response to the exploitation of district’s dairy farmers, AMUL grow rapidly from it is one of the most successful and the largest cooperative dairy enterprises in the whole of Asia.
NDDB has also supported animal nutrition through the financing of 46 cattle feed plants and supporting these plants with quality control laboratory services. A useful innovation has been the development of protected feed technology which minimizes the degradation of protein and fat in the rumen. Mineral deficiencies are also a constraint to improved animal productivity. NDDB is supporting area surveys resulting area surveys resulting in profiles that lead targeted mineral mixtures to be used as supplements in cattle feeds sold to farmers in this regions. Last, but not least, animal diseases cost our nation’s milk producers thousands of million rupees are lost annually in production. NDDB’s efforts in this field are matter of great pride.
Latest developments
Indian Dairy Industry is the largest milk producer all over the world, around 100 million MT Indian Dairy Industries value of output amounted to Rs. 1179 billion in 2004-05 which approximately equals combined output of paddy and wheat. With 1/5th of the world’s bovine population In India the Milk animals constitutes45% indigenous cattle, 55 % buffaloes, and 10% cross bred cows
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Intensive Dairy Development Programmed (IDDP): The Schemes, modified under these programmers are on the basis of the recommendation of the evaluation studies which were launched during Eighth Plan period and are being continued throughout the Eleventh Plan with an outlay of Rs. 32.49 core for 2009-10.
Strengthening Infrastructure for Quality and Clean Milk Production (CMP): this is a centrally sponsored scheme which was launched in October 2003, which had the main objective of improving the quality of raw milk produced at the every village level in the India.
Dairy Venture Capital Fund- this is introduced in the Tenth Fiver Year Plan to bring about structural changes in unorganized sector, which would measure like milk processing at village level, marketing of pasteurized milk in a cost effective manner, quality or the up gradation of traditional technology to handle commercial scale using modern equipment’s and management skills.
1.6 Top Companies in the Industry
The Leading Dairy Product Companies in India, which are under the control of different state governments, are generally cooperatives. These cooperatives buy milk from the dairy farmers at minimum support price. Later these cooperatives process it to different high nutritious milk products. The leading private milk product companies of India are more into producing and further processing of this milks. Most of the leading dairy product companies in India are well equipped to handle processing of bulk quantities of cow and buffalo milk. Further, the technology used by these leading companies of India to process the milk is at par with the international standards.
National Dairy Development Board towards educating dairy farmers on producing quality milk, cattle disease control, cattle feeding, genetic improvement of cattle, vaccination and other allied education on dairy farming.
Some of the leading dairy product companies in India are:
Amul and Gujarat Cooperative Milk Marketing Federation Ltd The Orissa State Cooperative Milk Producer’s Federation Ltd (OMFED) Andhra Pradesh Dairy Development Cooperative Federation Ltd
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Haryana Dairy Development Cooperative Federation Ltd Kream Kountry Mother Dairy Vasudhara Dairy Lactose (India) Ltd. Modern Dairies Ltd Pastonji Ice Cream Kings Ice Cream Ltd Param Dairy Ltd Dhruv Makhan (India) Ltd
1.7 Industry Structure
Indian Dairy Industry
Organized Unorganized (20%) (80%)
Private Cooperatives Government dairies Societies
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1.8 Nature of Demand
In dairy industry the demand for dairy products are basic consumption goods its necessities product for the consumer. The consumption of any single dairy products depends not only the demand for that product but also on the consumption of the several other dairy products because for any short period of time combined consumption of all dairy products must come from the same fixed supply of milk. Prices must be at level such that the quantities of milk demanded in all outlets equals the total supply of milk.
1.9 Profit potential
2007-08 2006-07 Sales, Profit, Depreciation (Rupees in crores) Sales 1482 1266 % Increase over Previous year 17% 20% Profit before depreciation 16 15 Depreciation 12 11 Net Profit 3.55 3.73 Segment sales compared to previous year Dairy business 1323 1135 % Increase over previous year 17% 20% Cattle feed business 159 131 % Increase over previous year 21% 18%
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1.10 Entry and Exit barrier and Rivalry among Competitors
Potential Entrants
Industry Competitors Supplier Buyers s Rivalry Among Existing Firms
Substitut e Products
According to this model there are five forces which determine the competitiveness of an industry in the long-run. The five competitive forces are:
1. Potential Entrants 2. Bargaining Power of Buyers 3. Threats of Substitute 4. Bargaining Power of Suppliers 5. Rivarly
1. Potential Entrants:
The row material availability is adequate and thus too many small firms comes into existence which affect the market share of small and big firms. Government rules and regulation to be followed are less because of there is free entry and exit
2. Bargaining Power of Buyers:
Bargaining powers of buyers is very high. Product of industry is standard.
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There are low switching cost faced by buyers
3. Threats of Substitute:
Substitute product affect price elasticity as more substitute become available, the demand become more elastic since customer have more alternatives.
4. Bargaining Power of Suppliers:
Suppliers’ power is not high, as they are numerous in number. The companies are purchasing the spices from the farmers. As there enough availability of raw material, company can purchase it from the place find its cheaper as compare to other places.
5. Rivarly:
Rivarly is intensive in this industry. Every price cut is matched by subsequent price cut by other manufacturers. Increase rivarly because more firms must compete for the same customers and resources.
2.1 Introduction of Organization
The ―MEHSANA DISTRICT CO-OPERATIVE MILK PRODUCERS UNION LTD‖. Mehsana dairy is a Co-operative organization registered under Co-operative Societies Act.1925 on 08-11-1960 by Registration No. c/-1960.It has about 1241 member villages’ milk co-operative societies in Mehsana District from whom it procures milk. The Societies have over 4, 52,000 producer members. Working with Manpower (force) in the capacity of Managerial 34, officers 283, Skilled 798, Semi-skilled 346, & Unskilled 27. Total strength of Manpower comes to 1488.
The ―MEHSANA DISTRICT CO-OPERATIVE MILK PRODUCERS’ UNION LTD‖ has its head Quarters & Dairy plant in Mehsana –town. The union has five milk chilling center at Vihar, Kheralu, Kadi, Hansapur, & Harij, these chilling centers helps to store milk for longer period. All these centers are located in the rural area. Ithas two cattle feed plants, at Boriavi &
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Ubkhal (capacity 300 M.T) & an animal breeding station at Jagudan,this breeding station helps to improve milk product’s animal.
The union provides various technical inputs to its members through village milk co-operative societies. The milk collected is processed in to various products such as market Milk, Butter, Ghee, Milk powder &Sweetened condensed milk. The market milk is sold in Mehsana District directly by the Union, whereas other milk products exported by the Gujarat Co- operative milk marketing federation into which the union is totally committed to provide quality & error-free products & services to its customers with the ultimate aim of satisfying them.
PROGRESSIVE JOURNEY OF DUDHSAGAR DAIRY
Mehsana –a largest milk producing district of Gujarat is famous since long for cattle breeding & animal husbandry practices. Large, small & marginal farmers & landless laborers are engaged in the practices of animal keeping & milk production. The high yielding well known ―Mehsana‖ buffalo breed is native of the district & is known for its potential of economical milk production. The union makes use of most advanced technologies for manufacture of various milk products, for providing better animal health care services & for building socio- economic strength.
Historical Background
1960 - Establishment of the MDCMPU Ltd. 1961 - Started milk supply to Ahmadabad Municipal dairy. 1963 - The MDCMPU ltd has Innograted 1964 - Innogration of the Vihar chilling center.
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2.2 Organization Vision and Mission
Provide maximum customer satisfaction by quality of milk product diversification Dudhsagar Dairy has a mission to save the surplus and give employment to village people. Dudhsagar Dairy sells their items at MRP price and their mission to provide healthy and happy life
2.3 History and development of the Unit
The dairy was established on 8thNovember 1960. The dairy has been registered under the leadership of shri. Mansihbhai Pruthviraj Patel in April 1961. He was the founder of the ―DUDH SAGR DAIRY‖
Late Shri. Mansinbhai Pruthviraj Patel – (1919-1970) A visionary step initiated 50 years ago, against all odds, with only 1125 producer members to start with, by our founder Chairman Shri. Mansinbhai Pruthviraj Patel has grown to become Asia’s largest cooperative society, an Institution that epitomizes the economic & social empowerment of about 5 LACS milk producing members.
Late Shri. Motibhai R Chaudhary – (1923-2005) As an able Leader & Administrator, Shri.. Motibhai R Chaudhary was Chairman of our Union continuously for a period of about 34 years. He has taken the Mission forward to very high peaks of achievement. His contributions to the progress of the Union, his ideas and beliefs in simple
living and high values, all continue to inspire us in our activities.
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2.4 Size of the Unit
The Mehsana District Cooperative Milk Producers’ Dudhsagar Dairy Union Ltd., popularly known as Dudhsagar Dairy, is Dudhsagar Dairy - Amul a member of the state-level Gujarat Cooperative Milk Marketing Federation Ltd., Anand. Dudhsagar Dairy is the largest dairy in Asia, processing on an average 1.41 million kilograms of milk each day. It has established a network for procuring milk from 4,500,000 milk producers through 1150 village milk cooperatives. Dudhsagar Dairy
Today, Dudhsagar Dairy has a membership of over 5.2 lakhs(520,000) dairy farmers. Its consolidated turnover in 2012-13 was more than Rs.3400crores (34 billion). The union procured 6,147 lakh kg of milk during 2012-13 at an average milk procurement of 32 lakh kg of milk per day during peak season.
The union is ISO 9001:2000, ISO 14000:2004, and ISO 22000:2005 certified and is an environment-friendly organization.
2.5 Form of Organization
NAME OF THE COMPANY
Mehsana District Co-Operative Milk Producers Union Limited (Dudhsagar Dairy)
ADDRESS OF THE COMPANY
Dudhsagar dairy Mehsana District Co-operative Milk Producers Union limited. Mehsana – 384002 Gujarat State, India.
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REGISTERED OFFICE Dudhsagar dairy Mehsana District Co-operative Milk Producers Union limited. Mehsana – 384002 Gujarat State, India.
DATE OF ESTABLISHMENT Dudhsagar dairy was established as on 8thNovember 1960.The starting date of union is 2nd April 1961.
BANKERS The Mehsana District Central Co-operative bank ltd, Mehsana. Bank of Baroda, Mehsana. State Bank of India. U.T.I. Bank, Mehsana. H.D.F.C. Bank, Mehsana.
2.6 Profiling of all Departments in the Company
Production Department
Meaning of PRODUCTION is simply that ―To use material which is not in form to use but through systematically process- it converts into finish products which can be used.
Production Department plays a vital role in the industry. In this department different kinds of milk products are prepared from their raw material. It is called as input output process of the product.Mr B.K. Rana, A.G.M. (Egg.) is the in-charge of Process-Production Department. The department handles various processes as RMRD, Processing, and Pouch Filling & Sterilized Flavored Milk. The milk is received through various CC on Mehsana Dock for
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Dudhsagar Dairy further processing. For processing the milk, they have old and new process facility with different capacities. The milk is passed through pasteurization, cream pasteurization transferred to milk storage tank and cream storage tank, same procedure for new process capacity. For pouch filling, various packing limits are available as per the market requirement after standardizing the milk at the required Fat & SNF %. Current pouch filling capacity is sufficient enough to provide for market demand. As per the requirement from the market, SFM bottles are being filled and dispatch from the plant. As per the standards required for SFM batch, the pasteurized milk is being standardized and taken in the lot of 1200 liters batch, sugar and approved. Colors are being added to complete the bottle filling. Daily inward of milk, pasteurization and standardization of milk, pouch filling and dispatch and SFM bottle filling and dispatch records are being maintained at this level.
Production Planning
Production planning process is responsible for the overall production planning for all the products. The planning is based on the dispatch requirement, as specified by GCMMF, other party orders such as Army and ITBP, capacity of the plant, availability of resources, and quantity of milk expected to be procured, closing stock of finished goods, local demand.
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Organization Structure of Production Department
Production Manager
Senior Officer
Junior Officer
Supervisor
Workers
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Milk Flow Process
Milk Farmers
Village Milk Co-op Soc. (collection center)
Chilling center
Raw millk Reception Dock
Milk Processing Plant
Butter Ghee Milk packing Power section section section
Storage
Dispatch
Distribution Fedretion channel
Customer
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HR Department
The personnel function is important of any other management function because a good personnel policy of an organization ensures it of availability of the required type of employees and the removal of any disputes arising among the management and the employees.
There are 500 employees working in the plant. As the plant is fully automatic the employee’s requirement is less compared to other dairies. The machines are imported so the employees should be skilled enough to handle them. These are 170 technicians, 110 staff and 230 trainees with average age of 23 years.
Dudhsagar dairy hires these employees on seasonal bases and out of the total 500 employees these are 190 permanent employees and the rest are seasonal.
Organization Structure of HR Department
HR Department
General manager
HR manager
Senior JR. manager Others manager
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Finance Department
Finance Management is the part of the Managerial activity, which is concerned with planning, and controlling of the firm’s financial resources. It is an applied branch of general management it has to plan to organize and control the finance of the enterprise. Chief duties of financial management are planning and control of corporate finance.
Financial Management is called upon to take three major decisions viz.Investment decision, financial decision, and dividend decision. Financial Management involves the implementation of these three major decisions it is an integral part of overall management rather than merely a staff activity concerned with fund raising operations without sound management of financial resources, business cannot achieve its objective and may occur heavy losses.
The finance is of great importance in business. It is described as lifeblood of business, the science of money. From establishment of business its termination finance is necessary. The efficiency of production and marketing operations are directly influenced by the manner in which the finance functions of the enterprise are performed. Finance is that administrative area or set of administrative function in an organization, which relates with arrangement of cash and credit so that the organization may have means to carry out its objectives as satisfactorily as possible. It has been said that a businessman takes money and you manage it properly, you will make more money. This management of finance is necessary for all.
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Organization Structure of Finance Department
Chairman
Managing Director
General manager
Deputy General manager
Assistant general Manager
Sr. Executive
Executive
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Process of Finance & Account
The accounting function covering the Mehsana office and plant, the five Chilling centers at Vihar, Kadi, Harij, Hansapur, and Kheralu and two cattle feed plants at Boriavi and Ubkhal are performed by the Accounts Department at Mehsana head office of Dudhsagar dairy. All the purchase and sales forDudhsagar dairy are executed from the Mehsana head office centrally. The purpose and scope of Account process are Management of Financial resource of the union accurate and timely payment to societies and supplies, maintain proper books of the union and advise Dudhsagar dairy’s management of the performance of the union based on accounting records, finance process includes the accounting functions of payables, Receivable, Cash Management, Asset Management, and General Accounting & Reporting functions including Budgeting. It also covers Costing activities performed at Dudhsagar dairy. The Audit Budgeting and Costing process are performed by the internal Audit department in closeness with Accounts Department.
Financial Planning
A firm needs to manage its resource effectively and efficiently to achieve its objective. The managing of resources in an a effective manner is possible only when the management work out the future course of action in advance and take decision in professional manner and rational manner that’s why financial planning is very important Financial planning is a statement estimating the amount of capital and determining its composition. It includes the determination from and proportionate amount of securities.
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Steps for financial planning
Establishing Objective
Determine Investment Need
Forecasting Cash flow
Financing
Costing Activities:-
In Dudhsagar Dairy is done on a yearly basis for the financial year. This is too limited to the product group costing. As the value of asset is not finally known production wise process, depreciation is avoided for allocation to the product groups. The yearly cost sheets forms an important basis in the estimation of costs, pack wise prepared, yearly for all products packs. Of late concept of conversation costing where by the milk purchase price is excluded from the estimated contribution analyses. The client opinions that as milk purchase price of the last year does not reflect the current and by comparing the gross contribution and gross profit visa-a-versa the milk Purchase price existing as on the date, one could as certain the profitability of the products and packs. The incremental cost of milk for fat, SNF and moisture are based on standard costing. The unit price is the actual transportation and chilling post based on the previous year’s financial data. The wastage is calculated based on actual content of the milk fat and SNF content in the milk purchased of the previous year less the standard content of fat and SNF for actual production for which milk had been consumed. This wastage is applied to the fat and SNF inputs in proportion. Based on the standard inputs
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Dudhsagar Dairy the actual quantity product wise is derived applying the wastage rate on the standard the consumption.
Capital Structure
Capital is one of the most important factors of production without capital organization cannot production or other type of the activity. Capital includes share capital reserve and surplus and long term liabilities. The authorized share capital of the dairy is 2500,000 shares of Rs. 100 each and the capital is2500, 00,000
The major finance is procurement of money needed by the business, keeping and increasing the invested money through sound financial policies and programs and generating income or profit for the business.
2.7 Contribution of the unit to the Industry
Total contribution to the economy/ sales
The Indian Dairy Industry engages in the production and processing of milk & cream. This industry is involved in the manufacture of various dairy products like cheese, curd, yoghurt etc. The Indian Dairy Industry specializes in the procurement, production, processing, storage and distribution of dairy products. India as nation stands first in its share of dairy production in the international scenario. The industry contributes about Rs 1, 15,970 to the national economy.
Employment opportunities
The Indian Diary industry which is in the developing stage provides gainful employment to a vast majority of the rural households. It employs about 8.47 million people on yearly basis out of which 71% are women.
Jobs in Indian dairy industry are mainly in the fields of production and processing of dairy products. An individual with minimum of 60% marks who has bachelor's degree course in the
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Dudhsagar Dairy dairy technology can easily be availing an opportunity to work in this industry. For the graduation course in Dairy technology one has to qualify the All India Entrance Test that is affiliated to the Indian Council of Agricultural Research. After that the person can continue with his masters in dairy technology. Jobs would be for the following positions.
Dairy Scientists: The main job of the dairy scientists is to deal with collection of milk and taking care of the high yielding variety of animals. Dairy Technologists: the work of Dairy technology requires procurement officers who take the responsibility of collecting milk from farmers, milk booths and cattle- reapers. This particular procurement officer should well understand the latest technology that is applicable in maintaining the quality of milk of the process of transporting it to the desired location. Dairy Engineers: dairy engineers are usually appointed is to set up and maintain dairy plants. Marketing Personnel: These individuals deal with the sale and marketing of milk together with milk products.
2.1 Organization of marketing department
The marketing is very broad concepts for the business. We can distinguish between social and managerial definition of Marketing. Asocial definition saw the role Marketing plays in society. One market said that Marketing’s role is to ―Deliver a higher standard of living.‖ Here is a social definition that serves our purpose Marketing is a societal process by which individuals and group obtain of what they need and want through creating, offering and freely exchanging products and services value with others. For Managerial definition, Marketing has often being described as ―the art of selling products‖.Dudhsagar Dairy, Mehsana covers a domestic market and now days its marketing is widely spread in foreign countries also. It has covered major markets in the states like Karnataka, Rajasthan, Maharashtra and many other states in India including Gujarat.
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Dudhsagar dairy is having its goods reputation in the market because of its best quality. Quality is the bench mark of Dudhsagar dairy resulting in to raising the graph of consumer demand and market. At current year Dudhsagar dairy procured more than 20, 00,000 kg/day and its turnover have more than1750 crores for the year 2008-09.Mr.P.A. Mukharji, Manager is the in-charge of Sales dept. Any kind of sales in the society is being booked through this dept. Majority of sales are booked through GCMMFL, ANAND, as direct & Through federation sales, consignment sales, Army sales, member farmer sales, etc. Federation transaction is ruling at federation decided prices, while rest of pricing is independent to our union. Our union has also entered in export market, where the price ruling is under the union control. Federation makes payment to the union on advance bases or approximately within 10-15 days as per the requirement of union or the fund facility available at GCMMFL.
Activities
Milk, chhash, flavored milk sales:
The liquid milk is sold in pouches, in cans & tankers. The pouch milk will be supplied as per the requirement of milk distributing agents. The loose milk in tankers will be supplied to Mother Dairy, Gandhinagar, other member union other parties & to individual customer as per their requirement. Mother dairy 7 other member unions are lifting milk as per the monthly milk dispatch program decided in GCMMF, Anand. Chhash is also sold in pouches & in cans. Flavored milk is sold in bottles as per the requirements of GCMMF, milk distributors &approved parties.
The appointment of milk distributing agent:
The sales process of Dudhsagar dairy invites applications from the parties of potential areas, who are interested in selling milk, chhash, flavored milk. The area may be fixed while appointing the milk-distributing agent, whenever required. In case of an individual customer, milk, chhash, chilled water is given in union’ scans vessel against cash payment basis.
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DEFINITION
―Marketing is a social and managerial process by which individuals and groups obtain what they need and want by way of exchanging things for mutual benefits‖.
Purpose & scope:-
To supply milk & milk products To review customer requirement, resolving any requirements differing from established norms. To meet customer requirement.
Responsibility & authority:-
Sales coordination of liquid milk, Butter milk & flavored milk within Mehsana milk shed area. Sales coordination of milk products to various GCMMF depots & their bulk parties Sales coordination of milk products to Defense Liasioning with Government & legal agencies as & when required Liasioning with National Co-operative Dairy Federation of India Ltd (NCDFI), GCMMF Ltd. Complaints redressed.
2.2 Product Planning and Management and Development
Product Planning
Product is a key element in the market offering. Marketing-mix planning begins with formulating an offering to meet target customers need and wants. The customer will judge the offering by three basic elements. Product feature Service mix and quality Price a product is anything that can be offered to satisfy a want or need. Products that are marketed include physical goods, services, experience, events, persons, places, properties,
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organization, information and ideas. In planning its market offering, the marketer needs to think through five level of the product. Each level adds more customer value and the five constitute a customer value hierarchy. The most fundamental level is the core benefit; the fundamental services or benefits that the customer is really buying. A patient is buying cure for his disease not medicines.
The Art of Selling Products Essentials of Marketing Focus on brand name Effective Differentiation Effective public relations Price differentiation Product mix Product mix is the set of marketing tools that firm uses to pursue its marketing objectives in the target market. It consists of everything the firm can to influence the demand for its product. The many possibilities can be collected into 4 groups of variable known as the four Ps: Product mix which is also called as product assortment is the set of all product and items that a particular seller offers for sale. A company’s product mix has certain width, length, depth and consistency.
Product
4 Ps of Promotion Price Marketing
Place
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PRODUCT
Marketing is a comprehensive term and it includes all resources and a set of activities necessary to direct and facilities the flow of goods and services from producers to customers in process of the distribution. Business regards marketing as a management function to plant promote and delivered product to the clients or customers.
PRODUCT CLASSIFICATION
Marketers have traditionally classified products on the basis of Characteristic. Durability Tangibility Use (Customer or Industrial)
Dudhsagar dairy is a production unit located at Mehsana. But the marketing of the Dudhsagar dairy is being managed by the Gujarat cooperative milk federation. The three A’s of marketing is…. Availability, Acceptability, and Affordability.
Already, the glass bottle for retailing milk has given way to single use sachets which are more economical. Another viable alternative to sell small quantities of milk powder in mini sachets adequate for two cups of tea or coffee. Dudhsagar dairy has also started to produce favored in tetra pack which was previously used to distribute in bottle. The flavored are available in variety in ―Gulab‖, ―Ilachi‖, ―Kesher‖.
Name of the Products:-
Amul gold, (Pasteurized full cream milk 6.0% Fat & 9.0% SNF.) Sagar standard, Amul Shakti Pasteurized standard milk, Amul ghee, Sagar ghee, Sagar sfurti flavored milk,
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Amul cool flavored milk, Sagar skimmed milk powder, Amul whole milk powder Amul Pasteurized butter, Amul mithai, Sagardan (Cattle Feed)
Development
Milk, Butter milk, flavored milk sales: the liquid milk is sold in pouches, in cans & tankers. The pouch milk will be supplied as per the requirement of milk distributing agents. The loose milk in tankers will be supplied to Mother Dairy, Gandhinagar, other member union other parties &to individual customer as per their requirement. Mother dairy 7 other member unions are lifting milk as per the monthly milk dispatch program decided in GCMMF, Anand. Butter milk is also sold in pouches& in cans. Flavored milk is sold in bottles as per the requirements of GCMMF, milk distributors&approved parties.
The appointment of milk distributing agent: - The sales process of Dudhsagar dairy invites applications from the parties of potential areas, who are interested in selling milk, butter milk, flavored milk. The area may be fixed while appointing the milk-distributing agent, whenever required.
In case of an individual customer, milk, butter milk, chilled water is given in union's cans vessel against cash payment basis. Product sales within district including village co-operative societies: -the demand for ghee, butter milk, chilled water etc., within the district is being met by selling the products to the individual customer or institutional customers. The sale may be done against cash payment or cheque or DD or credit sales depending upon the party.
Export orders: - the export dept. of GCMMDF Ltd. Anand sends the copy of export order for the various products to the managing director, production process, QA process, purchase process &sales process. On the receipt of the same, the order details are examined. Production planning is done as it done as it is mentioned in production process. The dispatch
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Dudhsagar Dairy of different products is made by dairy against GCMMF Ltd.’s Dispatch instruction letter, to its various depots. Whenever there is demand for products, which is specific & special requirement from customers, it is received by sales process. Sales process in turn reviews the requirements with top management &concerned personal. Detail of the reviving and meeting customers requirement are explained in customer satisfaction sub process. General housekeeping: Housekeeping is maintained at sales process as per the work instruction of general housekeeping.
2.3 Market Segment
Market segmentation is a process by which the company dividing the market on the base of need, features or behavior that require separate product. Market segment means classification of market on the base of Geographic, Demographic, Psychographic and Behaviorist.
Process
Survey stage
Analysis stage
Profiling stage
Market segment is a very important function for market department of the Dudhsagar dairy because the market consists of buyers different in any ways. They are different in their wants resources, locating buying practices. Because buyers have unique needs and wants each buyer is potentially separate market Dudhsagar dairy has segmented its market in following variables.
In the Dudhsagar dairy market segment on the base of ―Geographic‖. In the geographic base market divided in to different geographic units like nations, regions, states, cities.
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Geographic
In the Dudhsagar dairy market segment on the base of Geographic in the geographic base market divided in to different geographic units like nations, regions, states, cities and neighborhood.
2.4 Pricing Policy
PRICE
― Price is the only element in the marketing mix that creates sales revenue; the other elements are costs.‖- -Philip Kotler
It is the value, usually in monetary terms that sellers ask in-exchange for the products they are offering.
The prices of products of DUDHSAGAR are also decided by the GCMMF; it conducts the market survey to check the validity and feasibility of prices in the market and accordingly decides the prices of DUDHSAGAR products. However, the price is inclusive of several elements like:
Cost of Milk Raw Material Cost Labor Cost Processing Cost Packaging Cost Advertising Cost Transportation Cost Sales Promotion Cost Taxes etc.
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The GCMMF considers all these cost aspects and set them up in pricing structure to decide the jelling price of milk and milk products.
DUDHSAGAR decides prices for the product Milk, Butter Milk and Curd. For that they mainly focus on commission of retailers.
Pricing Methods and Strategy
The aim of each and every company is the maximum of profit and customer satisfaction. The level of profit is generally depending on the pricing policy of the company. Prices of the product are decided evaluating the return of factors of production i.e. interest, rent, wage, and profit. Also other such as direct and indirect taxes etc. is also considered while deciding the price. The factors affecting the pricing are as follow.
Cost of production. Competition Quality of product Payment period there are five types of price setting methods. Value pricing Target return pricing Mark-up pricing Group Pricing Going rate pricing In DUDHSAGAR DAIRY, prices are not fixed for the products; there are some regular changes in price of some products, just like milk and ghee. Prices are more and less depends upon the cost of the raw materials and other expanses. They can also adjust the price according to the market price and demand of product
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Dudhsagar Dairy
Place DUDHSAGAR dairy is classified into large scale industry. Dairy is producing its various products like milk, ghee, butter and milk powder etc. it is very necessary to have strong distribution channel. The DUDHSAGAR dairy has its own sales office which is organized by DUDHSAGAR dairy himself and Gujarat state milk marketing Federation Company distributes 70% products through GCMMF and 20%through local marketing and remaining 10% to the Army.
Product price
Particular Price Amul gold Rs. 22 Sagar standard Rs. 21 Amul Shakti Rs. 21 Amul tazza Rs. 21 Amul ghee Sagar ghee Sagar sfurti flavored milk Rs. 14 Amul cool flavored milk Rs. 15 Amul Butter Rs. 33
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2.5 Channel of Distribution
―Dudhsagar Dairy‖ Mehsana is producing various products like Milk, Butter, Ghee, Milk powder and Sweetened condensed milk etc. Distribution channel is important for business. It has two types of Distribution channel like:
Local Distribution channel
The Dudhsagar dairy has its own sales office, which is organized by Dudhsagar dairy itself. It has different sales office in different cities like Kalol, Kadi, Mehsanaand other places.
Wholeseller
Dealer
Retailers
Customer
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Nationally Distribution Channel
This Distribution channel decided by Gujarat Co-op Milk Marketing Federation Ltd.
Federation dairy union
Federation Depot
Wholesale
dealer
Retailer
Customer
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2.6 Sales Promotion
Sales Promotion consists of short term incentives to encourage Purchase and Sales of a product or services whereas advertising offer reasons to by a product or services, sales promotion offers reason to buy it. Advertising is joined by two other mass production tools, sales promotion and public relation. Two tools of the sales promotion (a) Consumer sales promotion tools and (b) Trade promotion tools.
The main consumer sales promotion tools include:
Samples Coupons Cash refund Price pack Premium Advertising specialties Contents and games Patronage reward
For the sales promotion, in the Dudhsagar some stapes are taken like in dipavli festival some discount is given to the customers. For increase the morale of agent some benefits are given like bonus, increase commission etc.
PROMOTION MIX
Promotion refers to marketing activities used to communicate positive information about an organization, its product and activities to directly or indirectly expedite exchange in a target market. DUDHSAGAR promotes its products through newspaper, hoardings etc. The GCMMF however uses hoarding for advertising in local areas. Hoarding designed on the creative basis attract the customer more.
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2.7 Advertisement
―Dudhsagar Dairy‖ is do advertisement of its product many different ways, which are under Advertisement through
Newspaper- Advertisement through Board and Hoardings- Advertisement through Posters- Advertisement through Internet the sales of organization mostly make by Gujarat Co-operative Milk Marketing Federation (GCMMF).
Local Sales It is the sales made in the boundaries of Mehsana district. The products mainly sold are Sagar Milk, Sagar Ghee, Sagar Butter Milk, Amul Butter and Amul Milk Powder. This local sale is done through distributors. On special occasions like marriage, party big orders are taken directly from party. Average milk sold locally is 7500 liters, per day.
Army Sales It is very special selling to Army. There is no intermediate between two. Only Butter, Sweetened Condensed Milk and Skimmed Milk Powder sold to army. From this, Powder is negotiated by federation and Sweetened condensed Milk by dairy.
Powder is supply by main three centers Mehsana District Co-operative Producers Union Ltd. (Amul dairy) Sabar dairy (Sabarkantha) Whole milk powder is given to Army’s supply depot. There total 47 Army supply depot in India. Skimmed milk powder is gives to Army’s Military farm.
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2.8 Marketing Research
―Marketing Research is a systematic problem analysis model building and fact binding for the purpose of improves decision making and control in the marketing of goods and service‖
―Marketing Research is a systematic gathering, recording and analysis of date about marketing problems to facilitate decision-making.‖
Marketing Research is also raised thought cell four phases of the administration process selecting strategies developing marketing plans putting the plan in to action, and integrated their marketing research activities in to miss designed to provide manager the information they need for recurring problem decisional.
The marketing manager had to take various decision regarding activities of marketing. The selection of decision depends upon the information available to him. If has to decide about many matters such as who are dealer, why they sales company’s product and ratio of the product sales etc. are the questions that might spore within managers for answers of such questions. A new concept establishes in marketing which is called marketing research. Marketing Research is a continuous activity. It includes product analysis, Market analysis, distribution analysis and competition analysis.
In Dudhsagar Dairy Clean Milk Production (CMP) programmed in procurement of clean milk is the first step towards providing quality product to the consumer. Their union has started focused efforts in this direction. Besides, planning and execution have been initiated to include all our societies for ISO certification. To begin with, in the first phase, it has been decided to cover 61 numbers of societies with bulk coolers plus 24 numbers of societies, each having currently a turnover of over 3 crores rupees.
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