The study explains AMUL operations in their facility at Anand with the unique AMUL – ANAND Pattern in detail.

1. PROJECT REPORT
ON
STUDY OF WORKFLOW AT KDCMPUL, ANAND
FOR
AMUL
DURATION
(13 July to 22 July 2011)
Submitted By –
SANKET S. PRABHU
Submitted To –
Mr. JIGNESH BHOI
ACADEMIC YEAR 2011-12.
0

2. PREFACE
I got opportunity for training in AMUL, I feel lucky to get a chance to work with such a
reputed company which can upgrade my knowledge related to practical aspects of business
world and which is very helpful for my bright future.
Whatever I have learnt during my training period, I have tried to present in systematic
manner. I have tried to explain the process flow of each of the departments viz Societies,
Purchase, Production, Stores, FPS, Commercial & I have explained the interactions between
them. I have tried to portray role on GCMMF in these departments. I have limited my study to
work flow and process that are followed at AMUL plant at Anand.
The information provided is derived with professional guidance from people from various
departments in the plant.
1

3. ACKNOWLEDGEMENT
First of all my special thanks to Mr. JIGNESH BHOI for giving me an opportunity to get
practical knowledge of an Industry.
I am very thankful to ANAND MILK UNION LTD for giving permission of training
project in their organization.
Grateful to all the people of the company who helped me directly or indirectly during my
training period, who shared their practical knowledge and their valuable time, without their
support and guidance my training would not have been a success.
Regards,
SANKET S. PRABHU
09773577938
prabhu.sanket.s@gmail.com
2

4. KAIRA DISTRICT CO-OPERATIVE MILK PRODUCERS’ UNION LTD.ANAND
1. HISTORY OF AMUL 5
2. STAGES OF DEVELOPMENT 7
3. AMUL LOGO 9
4. PLANTS OF AMUL , ANAND 10
5. COMPANY PROFILE 11
6. MISSION OF AMUL 13
7. ORGANIZATION STRUCTURE 14
8. AMUL - ANAND GENERAL PRODUCTION PROCESS 16
9. AMUL PRODUCTION PLANNING PROCESS – AN OVERVIEW 19
10. PURCHASE DEPARTMENT 20
11. ACCOUNTS DEPARTMENT 23
12. PURCHASE BILL DEPARTMENT 23
13. SOCIETIES 24
14. RECEIPT DEPARTMENT 27
15. PRODUCTION DEPARTMENT 29
AMUL – 3 PROCESS AND RECEPTION LAB 30
AMUL – 2 PROCESS AND MILK POUCH 32
BUTTER SECTION 35
STERILIZED FLAVOURED MILK 37
GHEE SECTION 39
16. STORES (FPS – FINISHED PRODUCT STORES) 40
INVENTORY MANAGEMANT AT KDCMPUL – AN INTRODUCTION 43
NATURE OF INVENTORY 43
OBJECTIVES OF INVENTORY MANAGEMENT 44
BENEFITS OF INVENTORY MANAGEMENT 45
INVENTORY CYCLE 45
AMUL STORE DEPARTMENT 46
INVENTORY MANAGEMENT 47
3

5. 17. COMMERCIAL DEPARTMENT 49
18. SOME OTHER DEPARTMENTS IN AMUL 52
19. CONCLUSION 54
20. BIBLIOGRAPHY 54
4

6. HISTORY OF AMUL
In the year 1946 the first milk union was established. This union was stated with 250 liters of
milk per day. In the year 1955 AMUL was established. In the year 1946 the union was known as
KAIRA DISTRICT CO-OPERATIVE MILK PRODUCERS’ UNION. This union selected the brand
name AMUL in 1955
The brand name Amul means ‘’AMULYA’’. This word derived from the Sanskrit word
“AMULYA’’ which means “PRICELESS”. A quality control expert in Anand had suggested the
brand name “AMUL”. Amul products have been in use in millions of homes since 1946. Amul
Butter, Amul Milk Powder, Amul Ghee, Amul spray, Amul Cheese, Amul Chocolates, Amul
Shrikhand, Amul Ice cream, Nutramul, Amul Milk and Amulya have made Amul a leading food
brand in India. (The total sale is Rs.6 billion in 2005). Today Amul is a symbol of many things like
of the high quality products sold at reasonable prices, of the genesis of a vast co-operative
network, of the triumph of indigenous technology, of the marketing savvy of a farmers’
organization. And have a proven model for dairy development (Generally known as “ANAND
PATTERN “).
In the early 40’s, the main sources of earning for the farmers of Kaira district were farming and
selling of milk. That time there was high demand for milk in Bombay. The main supplier of the
milk was Polson dairy limited, which was a privately owned company and held monopoly over
the supply of milk at Bombay from the Kaira district. This system leads to exploitation of poor
and illiterates’ farmers by the private traders. The traders used to decide the prices of milk and
the farmers were forced to accept it without uttering a single word.
However, when the exploitation became intolerable, the farmers were frustrated. They
collectively appealed to Sardar Vallabhbhai Patel, who was a leading activist in the freedom
movement. Sardar Patel advised the farmers to sell the milk on their own by establishing a co-
operative union. Instead of supplying milk to private traders, Sardar Patel sent the farmers to
Shri Morarji Desai in order to gain his co-operation and help. Shri Desai held a meeting at
Samarkha village near Anand, on 4th January 1946. He advised the farmers to form a society for
collection of the milk.
These village societies would collect the milk themselves and would decide the prices at which
they can sell the milk. The district union was also formed to collect the milk from such village
co-operative societies and to sell them. It was also resolved that the Government should be
asked to buy milk from the union.
However, the govt. did not seem to help farmers by any means. It gave the negative response
by turning down the demand for the milk. To respond to this action of Govt. the farmers of
Kaira District went on a milk strike. For 15 whole days not a single drop of milk was sold to the
traders. As a result the Bombay milk scheme was severely affected. The milk commissioner of
Bombay then visited Anand to assess the situation. Having seemed the condition, he decided to
fulfill the farmers demand.
5

7. Thus their co-operative unions were forced at the village and district level to collect and sell
milk on a cooperative basis, without the intervention of Government. Mr. Verghese Kurien
showed main interest in establishing union who was supported by Shri Tribhovandas Patel who
lead the farmers in forming the Co-operative unions at the village level. The Kaira district milk
producers union was thus established in ANAND and was registered formally on 14th December
1946. Since farmers sold all the milk in Anand through a co-operative union, it was commonly
resolved to sell the milk under the brand name AMUL.
At the initial stage only 250 liters of milk was collected every day. But with the growing
awareness of the benefits of the cooperativeness, the collection of milk increased. Today Amul
collect 11 lakes liters of milk every day. Since milk was a perishable commodity it becomes
difficult to preserve milk flora longer period. Besides when the milk was to be collected from
the far places, there was a fear of spoiling of milk. To overcome this problem the union thought
out to develop the chilling unit at various junctions, which would collect the milk and could chill
it, so as to preserve it for a longer period. Thus, today Amul has more than 150 chilling centers
in various villages. Milk is collected from almost 1073 societies.
With the financial help from UNICEF, assistance from the govt. of Newzealand under the
Colombo plan, of Rs. 50 millions for factory to manufacture milk powder and butter was
planned. Dr. Rajendra Prasad, the president of India laid the foundation on November 15,
1954. Shri Pandit Jawaharlal Nehru, the prime minister of India declared it open at Amul dairy
on November 20, 1955.
6

8. STAGES OF DEVELOPMENT:-
AMUL is the co-operative union with a slow and steady growth. AMUL had started with
one society, now it has almost a union of 1073 societies. The development of AMUL was step by
step. The main stages of Development are as follows:
IN 1954:-
In this year UNICEF provide the financial help worth Rs.50 million to AMUL. This financial
help led to establishment fully automatic plant for providing milk and milk powder.
IN 1958:-
In this year AMUL expanded the plant & started producing Sweetened condensed milk.
IN 1960:-
The excess supply of milk in the winter season and huge amount of profit made
expansion possible for AMUL. AMUL established new units for producing cheese and baby food.
This created history in the Dairy Products, because it was the initialization where cheese and
baby foods were being produced from the Buffalo Milk.
IN 1981:-
The new Cattle feed Plant was established at KANJARI.
IN 1992:-
For getting the benefits of excess supply of milk, Amul established another plant named
AMUL – 3. This plant has capacity of producing 14 lakhs liters of milk daily.
In 1994:-
The new Cheese Plant was established at KHATRAJ and Chocolate plant was established
at MOGAR. These two plants started with the help and the aid given by NDDB.
7

9. IN 2001:-
For providing the quality milk at any time, AMUL launch the flavored milk. These
Flavored milk products were available in many different flavors.
IN 2003:-
For the market expansion the Amul launched “SNOWBALL” pizza and Flavored Lassi.
This gave a new market share in the fast food area for the Amul and led to the development of
the Amul
IN 2004:-
The Amul keeps on achieving new highs in this competitive world. It has launched
CHOCOZOO (Chocolate), MUNCHTIME (Gathiya). Amul also started the new satellite Dairy at
PUNE and KOLKATA. This helped AMUL in expanding milk marketing in other states.
8

10. AMUL LOGO
Anand Milk Union Limited - AMUL
VISION & LOGO
The main Motto of Amul is to help the farmer. Amul system works under the objective of
highest possible price to the milk producers and lowest possible price to consumer. Farmers are
paid money in cash payment for the milk. Milk gives them money for daily necessities. Amul is
the one who started using their profit for the milk producers’ common good.
Symbol of AMUL is a ring of four hands, which are coordinated each other. The actual meaning
of this symbol is Coordination of hand of different people by whom this Union is now at top.
First hand is for the Farmer (Producers), without whom the organization would not have
existed.
Second hand is for the Representative of processor by whom the raw milk processed into
different finished products.
Third hand is for Marketer without whom the product would not have been able to reach to
the customer.
Fourth hand is for Customers without whom the organization could not carry on, because they
are the people who consume the product By co-ordination of this four people the Union run
successfully.
9

11. PLANTS OF AMUL, ANAND
MOGAR PLANT
It is situated on Anand – Vadodara Highway No. 8. Its Production is Chocolates, Nutramul, Amul
Lite and Amul Ganthia. This plant was established in 1973.
ANAND PLANT
The products produced are Milk, Buttermilk, Milk Powder, Butter, Ghee, Flavored Milk etc. It
was established in 1973.
KANJARI PLANT
The product produced is cattle feed Old plant was established in 1964 & new Plant in 1980.
KHATRAJ PLANT
It is situated between Nadiad – Mahemdabad. The product manufactured is Cheese.
Chilling Center
Kapadvanj, Undel and Balasinor
Satellite Dairy
Balasinor, Undel
Today, twelve dairies are producing different products under the brand name Amul. Today
Amul dairy is no.1 dairy in Asia and no.2 in the world, which is matter of pride for Gujarat and
whole India.
10

12. COMPANY PROFILE
Name of the Unit : The Kaira District Co-operative Milk producer’s
Union Ltd. Anand, Gujarat
Registration date : 14th December 1946 under co-operatives act.
Size of Unit : Having the capacity of process 14 lakh liters of milk
producing 10 different products
Registration : Kaira District Co-operative Milk Producers’ Ltd.
Office Anand- 388001
Bankers : Kaira District Central Co-operative Bank
UTI Bank
State Bank of India
Bank of Baroda
Bank of Maharashtra
State Bank of Saurashtra
Corporation Bank.
Auditors : Internal auditors and Government auditors
Initial promoters : Shri Tribhuvandas Patel
Shri Morarajibhai Desai
11

13. BOARD OF DIRECTORS:
1. Shri Ramsingh P. Parmar Chairman
2. Shri Rajendrasinh D. Parmar Vice Chairman
3. Shri Shivabhai M. Parmar Member
4. Shri Maganbhai G. Zala Member
5. Shri Chandubhai M. Parmar Member
6. Shri Pravinbhai F. Solanki Member
7. Shri Dhirubhai A.Chavda Member
8. Shri Bhaijibhia A. Zala Member
9. Shri Mansinh K.Chauhan Member
10. Shri Bipinbhai M.Joshi Member
11. Smt. Madhuben D. Parmar Member
12. Smt. Sarayuben B. Patel Member
13. Shri Ranjitbhai K. Patel Member
 Shri B. M. Vyas
(M.D. of GCMMF, Anand)
 Shri Rahulkumar Shrivastav
(M.D. of KDCMPUL, Anand)
12

14. MISSION OF AMUL
The main mission of Amul is to help farmers. Farmers were the foundation stone of
Amul. The system works only for farmers and for consumers, not for profit. The main aim of
Amul is to provide quality products to the consumers at minimum cost. The goal of Amul is to
provide maximum profit in terms of money to the farmers.
QUALITY POLICY
We the motivated and dedicated work force at Amul are committed to produce
wholesome and safe foods of excellent quality to remain market leader through deployment
and quality management system, state-of art, technology, innovation an eco-friendly operation
to achieve delight of customers and betterment of milk producers
THE ORGANIZATION
Co-operative is generally operated not for the profit but for the betterment of
consumer and products. Their main objective is to serve people of the society with good quality
of product with as much as low price.
“AMUL “is the successful Co-operative sector. The brand names itself indicates how AMUL is
separated over the country and world. Amul gets so many awards for its productivity and
performance. Amul is Asia’s no.1 and 2nd in world, which is a matter of proud for India. In our
country every one knows what Amul is. This makes the popularity and contribution of the dairy
industry. AMUL is co-operative organization and they also doing social works. They provide
employment to the village people. They also provide health centers and education facilities to
the villagers.
Amul has a three level structure. The first level is called primary level. Here village societies are
placed. The second level is district level where NDDB placed and the third level is state level
where Federation placed Co-operation among this three level is necessary for achievement of
goal.
13

15. ORGANIZATION STRUCTURE
Board of Directors
Shri Ramsinh Parmar
Managing Director
Shri Rahul Kumar
Assistant General Manager
Manager
Deputy Manager
Assistant Manager
Senior Executive
Executive
Senior Officer
Senior Assistant
Assistant
14

16. Workers
AMUL ANAND PLANT
WORKERS in AMUL DAIRY 969
Total No. Of Shifts:
There are three shifts.
1st Shift Time: 8:30 a.m. to 4:30 p.m.
2nd Shift Time: 4:30 p.m. to 12:30 a.m.
3rd Shift Time: 12:30 a.m. to 8:30 a.m.
15

17. AMUL - ANAND GENERAL PRODUCTION PROCESS
GCMMF AMUL
ACCOUNTS
HQ
DEPARTMENT
AUDIT PURCHASE SOCIETIES
AUDIT MILK
PURCHASE BILL
AUDIT RAW MATERIAL STORES AUDIT AMUL2(D)
QA QA AMUL-3(A)
AUDIT PRODUCTION AUDIT AMUL-2(E)
QA BUTTER GHEE FLAV MILK QA AMUL-3(B)
AUDIT STORES /FPS AUDIT AMUL-2(F)
QA DISPATCH QA AMUL-3(C)
AUDIT COMMERCIAL DEPARTMENT
GCMMF AMUL
DEPOTS DAIRIES
16

18. 1. Section 1: GCMMF HQ /AMUL
PCM – Program committee meeting is held at the start of every month,
accordingly planning is done. Details are explained (AMUL PRODUCTION
PLANNING PROCESS – AN OVERVIEW page-19)
GCMMF(Gujarat Co Operative Milk Marketing Federation)/AMUL interacts with
each and every department during production process.
2. Section 5: PRODUCTION (BUTTER , GHEE ,FLAVORED MILK) /AMUL-2 /AMUL-3
Planned details for each product are sent to respective Production department.
Accordingly Production Planning is done for 3 months. Production process details
of each product is explained below. (PROUDCTION DEPARTMENT page-29 to 39)
Milk is Processed in AMUL-2, AMUL-3 (Details explained in PRODUCTION
DEPARTMENT -AMUL-2(E) page-32, AMUL-3(B) page-30)
3. Section2: PURCHASE DEPARTMENT
Production requires Milk and other raw materials. Milk is procured from
Societies (Section3) and raw materials are procured by Purchase Department
only. The detailed processes are explained below
(PURCHASE DEPARTMENT page-20 to 23)
4. Section3: SOCIETIES
Milk Procurement is function of societies detailed below.
(SOCIETIES page-24 to 26)
5. Section4:RAW MATERIAL STORE / AMUL-2 /AMUL-3
Procured raw materials are stored in RAW MATERIAL STORE.
(RECEIPT DEPARTMENT/ RAW MATERIALS STORE page-27 -28)
Procured Milk is stored in AMUL-2 / AMUL-3. (Details explained in PRODUCTION
DEPARTMENT - AMUL-2(D) page-32, AMUL-3(A) page-30)
17

19. 6. Section6: STORES /FPS/DISPATCH DEPARTMENT /AMUL-2/AMUL-3
Finished Products (Butter, Ghee , Powder, Flavored Milk) are stored in FPS
(Finished Product Stores) and dispatched from this department only. Details
explained in (FINISHED PRODUCT STORES DEPARTMENT page 40 to 42)
Processed Milk is stored and dispatched by AMUL-2, AMUL-3.(Details given in
PRODUCTION DEPARTMENT - AMUL-2(F) page-34, AMUL-3(C)page-31)
7. Section7: AMUL ANAND COMMERCIAL DEPARTMENT
All Goods need to be cleared from this department. Pricing is done in this
department. (COMMERCIAL DEPARTMENT page 49 to 51)
8. GCMMF DEPOTS /AMUL DAIRIES
Goods are transported to depots across the country for sale or other AMUL
Dairies for internal consumption.
9. ACCOUNTS DEPARTMENT.
Accounts department interacts with each department since all transaction
details are processed by Accounts department. (page 23)
10. AUDIT / QUALITY ASSURANCE
Audit and QA takes place at every stage.(page 52)
18

20. AMUL PRODUCTION PLANNING PROCESS – AN OVERVIEW
GCMMF (Gujarat Co Operative Milk Marketing Federation) is the marketing body of all Unions
who manufacture and sell products under Brand name AMUL.
1. GCMMF according to the market survey and past sales, predicts the sales for the next
few months.
2. Accordingly the requirements at several depots (42 approx) spread across the country
is decided.
3. PCM – Program committee meeting is held at the start of every month (generally in the
first week).
4. GCMMF projects its expected sales in the meeting.
5. The inventory available at each of the plants is taken into account.
6. Taking into consideration Past and Future/Predicted sales, the amount of milk expected
to be procured, the total quantity of each product to be produced is roughly
determined.
7. Depending on demographics of AMUL Dairies, GCMMF Depots and several other factors
quantity of each product to be produced at each respective AMUL dairy is determined.
I.e. PD Planned Dispatch is determined for each AMUL Union.
8. Accordingly Production Planning is done for each AMUL dairy.
19

21. PURCHASE DEPARTMENT
-Mr. S P DESAI
PURCHASE DEPARTMENT PROCESS FLOWCHART
PRODUCTION DEPARTMENT
↓
PR (PURCHASE REQUISITION) GIVEN
↓
PR contains Product Code, Quantity, and Delivery Date
↓
PRODUCT SUB DIVIDED IN 3 TYPES
NORMAL PRODUCT RAL RATE APPROVAL LIST EMERGENCY PRODUCT
↓ ↓ ↓
RFQ -REQUEST FOR QUOTATION GCMMF HAS LIST OF APPROVED PRODCTION DEPT
VENDORS HAS EMERGENCY
↓ ↓ ↓
3-10 PARTIES
↓
QUOTATION FROM PARTIES PO IS REALEASED TO THAT VENDOR ICPO IS REALEASED
↓ ↓
COMPARATIVE STATEMENT PREPARED INDENT COME
PURCHASE ORDER
↓ DIRECTLY UNDER GM
AUDIT TAKES PLACE
↓ ↓ ↓
CHEAPEST QUOTATION
THAT MEETS REQUIREMENTS
IS SELECTED
↓ ↓ ↓
AM APPROVAL FOR PRICE < 5000
MD APPROVAL FOR PRICE > 5000
↓ ↓ ↓
↓
PO IS CREATED FOR RESP VENDOR
↓
AS PER DELIVERY DATE VENDOR DELIVERS GOODS TO STORES
↓
20

22. SAMPLES ARE SENT TO QA DEPT  DISAPPROVAL  SENT BACK
↓
APPROVAL
↓
SENT TO PRODUCTION DEPARTMENT DISAPPROVAL SENT BACK
↓
APPROVAL
↓
GOODS RECEIPT NOTES PREPARED  ALL GOOD RECEIVED
↓ PO CLOSED
SENT TO ACCOUNTS
↓
CLUBBED WITH INVOICE & TEST APPROVAL REPORT
↓
PAYMENT TO VENDOR
PURCHASE:
There is a centralized purchase system. Purchasing of all the raw materials except the
cattle feed is done through this department. Main type of materials are Engineering
materials, packaging stationary, veterinary medicine, chemicals, raw material for production
etc. After getting indent from the stores department the purchase order is placed to
different purchasing systems for obtaining different materials. For packaging material and
veterinary medicine, an RAL (Rate Approval Letter) is provided by GCMMF in which rates,
quantity, quality etc. are predefined by GCMMF
PROCESS
1. Production department/any user can create a PR (Purchase Request) if any raw
materials are required for production.
2. PR will be created in SAP ERP system.
3. PR will contain product name ,product code , quantity , and the excepted delivery date.
4. For our convenience we divide the products in three types
NORMAL PRODUCT
RAL RATE APPROVED LIST
EMERGENCY PRODUCT
21

23. 5. NORMAL PRODUCT
A. RFQ (Request for quotation) is sent to the vendors
B. Quotation is received from the respective vendors.
C. Comparative statement of all quotations is prepared by the purchase department.
D. Depending on the comparative statement, AM approves the cheapest quotation
that meets all specifications, up to rupees 5000.If amount exceeds 5000 MDs
approval is required.
E. On approval PO purchase order is released.
6. RAL -RATE APPROVED LIST
A. RAL basically consists of packaging materials and veterinary medicines.
B. Vendors for such items is fixed by GCMMF.
C. Purchase department directly generates PO for such items.
7. EMERGENCY PRODUCT
A. Production may require raw materials urgently at times.
B. Normal procedure cannot be followed under such circumstances.
C. ICPO-Indent cum purchase order is released under GM approval under these
conditions.
8. PO is released.
9. Transporter for the respective vendor has to supply the raw materials on the respective
date.
10. Goods are received at the stores.
11. Samples of the raw materials are sent for Quality Assurance to confirm whether goods
meet required specifications.
12. On disapproval by QA goods are sent back.
13. On approval goods are sent to production department.
14. On disapproval by production ( even cleared by QA) goods can be sent back.
15. On approval by production GR (Goods Receipt) note is prepared.
16. If all goods mentioned in PO are received, PO is closed.
22

24. 17. GR Note, Invoice & Test Report for QA are clubbed together and sent to Accounts
department.
18. Payment is made to the vendor.
SOME IMPORTANT FUNCTIONS OF PURCHASE DEPARTMENT
A. Service Contracts : Service Contracts are also a function of the Purchase department.
Dairy Maintenance Contract
PEST Contract
Boiler Cleaning Contracts
Consultancy Contracts
B. ARC – Annual Rate Contract are also issued by Purchase Dept to Vendors to get goods
from them annually at the same mentioned rate
C. AMC – Annual Maintenance Contract are also issued by Purchase Dept for maintenance
ACCOUNTS DEPARTMENT
The activities performed by this department are cash and bank related activities,
societies’ accounts, taxes related accounting, investment receipts and payments, milk cycle
related activities and data entry. All the accounting transactions performed by different
departments like Purchase Department, Commercial Department, and Societies. All financial
transactions with GCMMF are handled by accounts department only. Different types of
vouchers are processed here. All final accounting is done in this department.
PURCHASE BILL DEPARTMENT
Purchase Bill department is a sub-division of the accounts department. All
accounting related to Purchase and Billing is done here. Vouchers for purchase are
prepared in this department and then sent to the Accounts department for further
clarification and final dispatch.
23

25. SOCIETIES
- Mr. J R PATEL
SOCIETIES
Societies’ division is a link between milk producers and AMUL. Milk producers first
contact the societies’ division for any queries. All day to day transactions with the milk
producers are done through this department.
Milk is procured from several co operative societies in Gujarat.
Following cooperatives that function under GCMMF.
Kaira Dist Coop Milk Producers’ Union Ltd, Amul Dairy, Anand
Mehsana Dist Coop Milk Producers’ Union Ltd, Dudhsagar Dairy, Mehsana.
Banaskantha Dist Coop Milk Producers’ Union Ltd, Palanpur.
Baroda Dist Coop Milk Producers’ Union Ltd, Baroda.
Bharuch Dist Coop Milk Producers’ Union Ltd, Bharuch.
Valsad Dist Coop Milk Producers’ Union Ltd, Vasudhara Dairy, Valsad.
Panchmahal Dist Coop Milk Producers’ Union Ltd, Godhra.
Bhavnagar Dist Coop Milk Producers’ Union Ltd.
Gandhinagar Dist Coop Milk Producers’ Union Ltd, Gandhinagar.
Junagadh Dist Coop Milk Producers’ Union Ltd, Junagadh.
Ahmedabad Dist Coop Milk Producers’ Union Ltd, Ahmedabad
Kutch Dist Coop Milk Producers’ Union Ltd, Kutch Dairy, Madhapar.
Rajkot Dist Coop Milk Producers’ Union Ltd, Rajkot.
Sabarkantha Dist Coop Milk Producers’ Union Ltd, Sabar Dairy, Himatnagar.
Surat Dist Coop Milk Producers’ Union Ltd, Sumul Dairy, Surat.
Surendranagar Dist Coop Milk Producers’ Union Ltd, Surendranagar.
24

26. MILK PROCUREMENT PROCESS AT AMUL ANAND FLOWCHART
FARMERS
↓
TANKER  SOCIETIES
↓
SOCIETY1
↓
MILK MEASUREMENT
↓
SLIP GENERATED  ACCOUNTS
↓
BMC BULK MILK CHILLING / CAN
↓
SOCIETY2
↓
BMC BULK MILK CHILLING / CAN
↓
SOCIETY3/ SOCIETY4/ SOCIETY5………….
↓
ROUTE FIXED
↓
SOCIETIES AMUL3 /CAN  AMUL2
↓
MILK MEASUREMENT  ACCOUNTS
↓
INVOICE GENERATED
↓
PAYMENT TO BMC WITHIN 10 DAYS
↓
BMC /SOCIETY PAYMENT TO FARMERS
AT RECEIPT OF MILK / WITHIN 2 DAYS/5 DAYS/10 DAYS
ON BASIS OF SLIP GENERATED AT RECEIPT
25

27. PROCESS
1. Milk is procured from Anand district & Khaira district.
2. KDCMPUL has three chilling centers at Kapadvanj , Balasinor & Undel and satellite
dairies at Khatraj , Balasinor.
3. 774 societies supply milk to AMUL Dairy , Anand.
4. Farmers supply milk to the 774 societies in Anand & Khaira districts.
5. Societies having BMC bulk milk cooling centre store milk at 4 deg.C and the others store
milk in cans.
6. Milk measurement – Quantity of milk is calculated. The Fat and SNF details are
collected. The details are updated in SAP ERP system. Accounts department gets the
details.
7. Slip : Slip is generated on this measurement basis and given to the farmers to claim their
payments.
8. Tankers from AMUL Anand dairy, as per their pre determined schedule collect milk
from the societies via a predetermined route.
9. Finally milk collected from BMCs is given to AMUL-3 & collected from societies through
cans is passed to AMUL -2
10. Milk measurement – Quantity of milk is calculated. The Fat and SNF details are
collected. The details are updated in SAP ERP system. Accounts department gets the
details.
11. Payments is accordingly made to BMCs/ Societies within 10 days of receipt of milk
12. BMCs/societies have some advance cash to make instantaneous payments to farmers.
13. Payments are made to farmers immediately on receipt or within 2 / 5 / 10 days of
receipt of milk on basis of slip generated.
26

28. RECEIPT DEPARTMENT (RAW MATERIALS STORE)
-Mr. A K THAKUR
Receipt department receives the raw materials/goods as planned by the Purchase
department.
All the raw materials are stored in the Stores department. When requirement for
any material arises, the store department gives the necessary indent to the
Purchase department. This is done on a proactive basis so that no stock out
situation arises. All the incoming materials are received by this department and
the quality check is done in the laboratories. Goods receipt notes are prepared
through this department. The Stores department is divided into three main parts,
which are (a). General (b). Miscellaneous (c). Engineering.
27

29. RAW MATERIALS STORE PROCESS FLOWCHART
PO IS CREATED FOR RESP VENDOR BY PURCHASE DEPT
↓
AS PER DELIVERY DATE VENDOR DELIVERS GOODS TO RAW MATERIAL STORES
↓
SAMPLES ARE SENT TO QA DEPT  DISAPPROVAL  SENT BACK
↓
APPROVAL
↓
SENT TO PRODUCTION  DISAPPROVAL  SENT BACK
DEPARTMENT
↓
USER APPROVAL
↓
GOODS RECEIPT NOTES
PREPARED  ALL GOOD RECEIVED
↓
PO CLOSED
1. Transporter for the respective vendor has to supply the raw materials on the respective
date as per the PO details.
2. Goods are received at the stores.
3. Samples of the raw materials are sent for Quality Assurance to confirm whether goods
meet the required specifications.
4. On disapproval by QA goods are sent back.
5. On approval goods are stored in Stores godown.
6. As required, the goods on a daily basis are transferred to the production department.
7. Inventory of the Raw materials godown – Stock Statement is regularly checked on a
daily basis.
8. Stock statement is an odd list of approximately 200 items.
9. On disapproval by production (even cleared by QA) goods can be sent back.
10. On final approval GR (Goods Receipt) note is prepared.
11. If all goods mentioned in PO are received PO is closed.
28

30. PRODUCTION DEPARTMENT
- Mr. D R SHARMA
INTRODUCTION
The basic philosophy of production management is to launch a frontal attack on direct costs and
effective use the availability manpower weaving new techniques in to the whole to keep the production
unit efficient and developing production management is the process of planning, organizing, directing
and controlling.
AMUL was started with only 250 liters of milk per day. But now AMUL collects average 11 lakhs
of liters milk per day. At the initial stage, AMUL has not any problem regarding milk, but in the winter
season there was excess supply of milk. So, AMUL had to sell out that excess milk at the low price or
AMUL had to face loss. To removing these problems AMUL took a decision to set up a plant to process
the surplus milk, butter and milk powder.
With the financial help of UNICEF, union established a Rs. 50 million factory to manufacture milk
powder and butter in November 15, 1954. In 1958 the plant was expanded to manufacture sweet
condensed milk. In 1960 the other branch is started, which can produce 600 tons of cheese and 2500
tones of baby food every year. In 1964 the other plant was established to manufacture cattle feed on
October 31, 1964. Third dairy and cheese plant at Khalraj began in February 1994.
Today the AMUL has three plants Known as AMUL 1, 2 & 3 all three plant work 24 hours a day
continuously. The all manufacturing process is done automatically. The production is done in the special
machines. These machines and the technology are import-id from the TRFTA PEAK Company. There is
also facility of chilling of milk, so that the milk remains usable.
29

31. AMUL PRODUCTION SECTIONS
MILK RECEPTION
AMUL – 3 PROCESS AND RECEPTION LAB
This is very first department of any dairy where tankers loaded with milk are
unloaded and simultaneously the milk is tested and processed further.
Raw milk at AMUL– 3, is received through road tankers and in cans from AMUL – 2.
There are three reception lines for unloading milk tankers.
A. AMUL – 3 MILK RECEIPT PROCESS
1. Tankers from AMUL, Anand dairy as per their pre determined schedule collect milk
from the societies via a predetermined route.
2. Finally milk collected from BMCs is given to AMUL-3.
3. There are 3 bays of unloading milk tankers
4. Each reception lines are equipped with the following:
Centrifugal pumps each of capacity of 30000 liters/ hours.
Tank to remove air from the milk.
Filters - filter the milk.
Pre heat exchanger (chiller) – one PHE after each filter.
Raw milk silo used for storage of raw milk.
B. AMUL-3 MILK PASTEURIZATION PROCESS
AMUL-3 process takes place as follows
Raw Milk Tankers (With chilled milk)
↓
Chiller (Cooled down)
↓
Raw Milk Buffer Tank (Stored in the tank)
↓
Raw Milk Silo
↓
Balance Pasteurizer Tank
↓
Regeneration Section
↓
30

32. Cream Separation
Skimmed Milk Cream Buffer Tank
↓ ↓
Pasteurizer( 80 +/- 3deg.c) Cream Pasteurizer( 80 +/- 3deg.c)
↓ ↓
Milk Silo Cream Balance Tank
↓ ↓
Issued to Powder Section Issued to Butter Section
↓
Standardization unit
↓ ↓
Skimmed milk Whole milk
↓ ↓
Pasteurization Pasteurization
↓ ↓
Proportionate mixing in milk storage Tank
↓
Pasteurized standardized milk
↓ ↓ ↓ ↓ ↓
F60 powder L& T Amul-2 Road tanker Rail tanker
C. AMUL-3 MILK DISPATCH
1. Milk Processed at AMUL – 3 is sent to 5 different sections as indicated below.
AMUL- 2 for Pouch Packaging
Eg. AMUL Gold etc.
Mumbai Dairy , Pune Dairy & Kolkata Dairy
Inter Dairy Transfer :Valsad Dairy, Baroda Dairy, Rajkot Dairy
Finally F60 powder plant, L& T plant, Butter Section, Ghee Section,
Flavored Milk Section
2. Transfer to Mumbai Dairy , Pune Dairy & Kolkata Dairy & Inter Dairy Transfer to
Valsad Dairy, Baroda Dairy, Rajkot Dairy is controlled by Control Office.
3. Transfer to Mumbai Dairy , Pune Dairy & Kolkata Dairy should be under
inspection of Commercial Department
31

33. AMUL – 2 PROCESS AND MILK POUCH
Pouch packing section deals with packing of milk into pouches. There are three
packing machines. Each machine consists of two identical heads for packing and each
head draws heat sealable polyethylene sheet from a separate roll, which is fed with
milk to be packed from the overhead tank by gravity.
The material moved continuously downwards in a strip, the film is folded
longitudinally. First vertical sealing occurs, as continuous cylinder moves downwards
transverse heat seals are made by jaws, which have the effect of closing the bottom of
pouch, so that measure volume of milk is filled into the space above a seal.
D. AMUL – 2 MILK RECEIPT PROCESS
1. At RMRD AMUL 2 milk is received in cans.
2. Both Cow milk and buffalo milk is received in cans marked with separate colors.
3. Milk is received in two shifts viz
Morning & Evening.
4. There are two reception lines.
5. Cans are checked for sour or curdled milk.
6. Milk is added to weighting tank .
7. Empty cans are moved to the washer.
8. Samples are collected for Fat & SNF calculations.
E. AMUL – 2 PROCESS
Tankers Bring Cans from various
Societies via predetermined routes to AMUL-2
↓
Cans containing Cow & Buffalo Milk
Separately Unloaded
Added On conveyor belt
↓
Physical Inspection
(For sour or curdled milk)
↓
Milk added to dump tank
↓
Filtration
32

34. ↓
Chilling
↓
Pasteurization
(80 C approx)
↓
Standardization
↓
Pouch Packing Department
1. Milk is then sent to AMUL -3 for packing and stored in SILO tanks
2. Milk then can be used for variety of purposes.
3. Milk at AMUL-2 is also used for producing butter milk which is also packed in Pouch
Packing Department
AMUL -2 MILK POUCH SALES PROCESS FLOWCHART
LOCAL PARTIES BOOK MILK ORDERS AT AMUL-2
↓
DAILY REGISTER IS MAINTAINED FOR THE SAME
↓
PARTIES MENTION THE QUANTITY REQUIRED AND TIME OF RECEIPT
↓
COUPLE OF SHIFTS PER DAY (MORNING & EVENING)
↓
PARTIES HOLD THEIR ACCOUNTS AT KDCMPUL
↓
PAYMENT IS MADE IN RESP ACCOUNTS
↓
TANKERS ARRIVES AT SCHEDULED TIME
↓
AMUL-2 EMPLOYEE VERIFIES FOR PAYMENT IN SYSTEM
↓
IF PAYMENT RECEIVED
↓
VEHICLE IS CHECKED FOR HYGEINE
↓
IF SATISFACTORY
↓
MILK POUCHES ARE LOADED
33

35. F. AMUL-2 MILK DISPATCH -- MILK POUCH
Milk is received from AMUL – 3 for packing. Milk Pouch packing department has 3
machines.
1. Milk 500 ml & 1000 ml
2. Butter milk 500 ml
3. As per the process explained above milk is dispatched daily in local market as well as
other dairies .
4. All transactions are under inspection of Commercial department and Accounts
department.
34

36. BUTTER SECTION
In the plant, there is a machine called separator vessel, which counts the fat of
the milk and separates the excess fat from the milk. This excess fat is used to
manufacture butter. Butter is manufactured from the fresh cream of the milk. The raw
milk is weighed and poured into cream of the milk separated. Pure fat of cream gets
separated from the milk then colored salt is added in them to make butter. The
processing of butter takes 7 minutes.
A. BUTTER MANUFACTURING PROCESS
AMUL -3 Pasteurized Milk – Milk Cream & AMUL-2 Milk Cream Pumped
↓
Butter cream/Raw cream
↓
Pasteurizer (Heated to 90 +/- 3 deg.c)
↓
Cooling (To 10 deg.c)
↓
Ageing (Moved in pipes for 20 hours)
↓
Cream Balance tank
↓
Plate Heat exchanger for temperature adjustment
↓
Churning
Butter Grains Butter Milk (40 000 Capacity)
↓ ↓
Washed with Butter Milk Cooled in Chiller
↓ ↓
Butter milk Silo (Stored)
Unsalted Butter (white butter) Salting
↓ ↓
Used for ghee manufacturing Grinding
↓
Brine& Color addition
↓
Butter blender
↓
35

37. Butter silo
↓
Packing lines
↓
↓ ↓ ↓
10 gm chip let 8 gm blister pack 100 gm(refill pack) 500 gm(refill pack)
B. BUTTER DISPATCH PROCESS
1. Samples are sent to QA department.
2. Goods are transported to FPS godowns.
3. Goods are counted on basis of a Batch Number printed on them.
4. Goods on clearance from QA department can be released by FPS.
5. Goods are released in FIFO manner.
36

38. STERILIZED FLAVOURED MILK
Milk is the product which is used in the daily life. Now-a-days the new
generation wants the milk in various flavors. Due to that the plant starts the flavored
milk process
Flavored milk section generates milk in several flavors in 200 ml glass bottles and cans.
Shelf life of milk is increased from two days to (120 – 180) days.
A. FLAVORED MILK MANUFACTURING PROCESS
Pasteurized Milk (Reqd Specification) + SMP+ Sugar + TSP(Tri sodium phosphate)
↓
Dissolve sugar completely
↓
Heat the Milk mix
↓
Homogenise the Milk mix
↓
Chill to less than 5deg.c
↓
Take care to prevent the development of acidity
↓
Storage tank
↓
Color and flavor Added
↓
Filtration
Automatic washing filling & corking Glass bottle
↓
Placing filled bottles in metal crates
↓
Sterilise
↓
Cooling by fans in cooling rooms
↓
Holding for 5 days at ambient temperature to watch for quality defects such as curdling leakage
and discoloration
↓
Labeling & wrapping with hot glue machine
37

39. NOTE : The Process is slightly different for chocolate flavored milk and coffee.
B. FLAVORED MILK DISPATCH PROCESS
1. Samples are sent to QA department.
2. Goods are transported to FPS godowns.
3. Goods are counted on basis of a Batch Number printed on them.
4. Goods on clearance from QA department can be released by FPS.
5. Goods are released in FIFO manner.
38

40. GHEE SECTION
Sour milk is used for the production of ghee. This milk is sent to the cream machine for
collecting cream. Cream is converted into butter and butter is heated to make ghee. Ghee is
then packed in tins or plastic bags.
A. FLOW CHART FOR GHEE MANUFACTURING
Pasteurized white butter Curdled Milk
↓ ↓
Churning
↓ ↓
Washing
↓ ↓
Butter
↓ ↓
↓
Melting vat (temp-110 deg c)
↓
Serum portion ghee residue  Settling tank
↓ ↓
Serum tank Ghee Vessel
↓ ↓
Ghee Heated at 115 deg.C for 45 mins
↓
Filteration
↓
Clarification (60-65 deg.c)
↓
Settling storage tank
↓
Balance tank  Sent to QC lab for testing
↓
Packing Section ( 40-45 deg.C)
↓
Pouch Packing Tin packing
(200ml , 500 ml, 1000 ml) (I lit ,5 lit, 15 kg)
B. GHEE DISPATCH PROCESS
Process is same as flavored milk or butter.
39

41. STORES (FPS – FINISHED PRODUCT STORES)
-Mr. A K THAKUR
The main function of this department is to store the finished product and dispatch the same
duely on the basis of the DIL.
FINISHED PRODUCT STORES PROCESS FLOWCHART
GCMMF
↓
DIL
DESPATCH INFORMATION
LETTER
↓
FPS /TRANSPORTERS/COMMERCIAL DEPARTMENT
↓
TRANSPORTER HAS TO PICK UP THE FINISHED PRODUCTS
↓
FPS EMPLOYEE RECEIVES DIL FROM TRANSPORTER
↓
AVAILABLITY OF GOODS IS CHECKED
IN STORES
↓
QUALITY CLEARANCE IS VERIFIED
↓
INVOICE IS CREATED
↓
VEHICLE IS QUALITY TESTED DISAPPROVED  SENT BACK
(TEMPERATURE HYGIENE ETC)
↓
APPROVED
↓
LOADED WITH RESP GOODS
↓
GATE PASS & INVOICE HANDED OVER
↓
APPROVED BY COMMERCIAL DEPT
↓
TRANSPORTED TO GCMMF GODOWNS /OTHER AMUL DAIRIES
40

42. PROCESS DESCRIPTION
1. As per production planning GCMMF decides the locations/depots where goods are to be
transported to.
2. According DIL Dispatch Information Letter is prepared and handed over to Transporter,
Commercial department & Dispatch department.
3. On the mentioned date the transporter arrives at the stores with their copy of DIL
4. On verifying the DIL, FPS Employee verifies weather the stock has been produced and
available in the respective stores and weather the available stock has been cleared by QA
5. Simultaneously the transporters vehicle is verified for hygiene, temperature and other
specifications.
6. If the vehicle is approved, and if quality tested stock is available Invoice & Gate Pass are
created and the goods are released.
7. These goods are priced as per COMMERCIAL DEPARTEMENT.
OTHER IMPORTANT FUNCTIONS
The brief function of stores can be summarized as under:-
1. Materials Receipts. [JIT METHOD]
2. Materials Issue. [FIFO METHOD]
3. Physical verification of Stocks. [Quarterly/Annually]
4. Data entry of Receipts and Issues. [ERP Systems]
5. Preparation of various reports like Stock Statement, Ledger, and consumption Report etc.
6. Maintaining various registers like Inward Register, Rejection Register etc.
7. Coordination between Purchase and Commercial Department for smooth flow of material
8. Goods are also released for Inter Dairy Transfer, Defense Sales & Local Sales.
9. Inter Dairy transfer includes releases to
Kolkata ( SMP , WMP , Butter ASP)
Pune (Butter)
Mogar (SMP , White Butter)
41

43. Kanjri (FSP)
Process remains same. DIL is released by Commercial Department
NOTE
A. Tankers and lorries for Butter and Milk are insulated.
B. Temperature may increase maximum by about 2-3DEG C during transportation
C. Goods are marked by Batch Number which includes day of year & shift of that day.
D. To speed up the loading operations goods are loaded with the help of CONVER directly
from the stores into the vehicle.
E. Goods are accurately counted before being loaded into the truck.
F. Material return:- Once material issued to user department and due to some valid reason,
cannot be used for a long time then the material is returned to stores department on an
authorized Material Return Note (MRN). Stores department takes back the material and
makes a data entry in the system and the stock get increased by the MRN quantity.
G. Inter store / Unit transfer:- Other than the material user department, if one Store / unit
is in need of any material, it send a requisite to another store / unit. And if the Store
department has the material, it issues the physical material and transfers it through the
system also.
H. Material issue other then the dairy:-. If material is issued on sale bases to another dairy
/ party, it is issued by DC and subsequent debit note is raised by account section. In case
material is issued on loan basIs, it is issued by returnable gate pass and DC. And data
entry is made in loan register.
I. Material rejection:- Material rejection should be of two types: On Line Material
Rejection and Material Rejection by QA. In both the cases store department inform the
purchase section about the rejection of the goods to inform the party. Once the material
gets rejected, rejection label get hanged on that lot and that should not consider in the
stock.
42

44. STORES INVENTORY
-Mr. A K THAKUR
INVENTORY
NATURE OF INVENTORY
OBJECTIVES OF INVENTORY MANAGEMENT
BENEFITS OF INVENTORY MANAGEMENT
INVENTORY CYCLE
AMUL STORE DEPARTMENT
INVENTORY MANAGEMENT
INTRODUCTION:-
Inventory generally refers to the stockpile of the products a firm is offering
for sale and the components that make up the product. In this sense inventory
management would refer to the management of current assets and other materials
inside the organization. Inventory management is very necessary for the firm because if
the firm has lesser investment in inventory, this would lead to unavailability of materials
when required which would ultimately lead to interruption in production process.
Similarly if the firm has higher investment in inventory this would lead to unnecessary
locking up of funds in inventory, thus reducing the working capital. Hence, the inventory
should be properly managed in every organization.
NATURE OF INVENTORY:-
 Raw Materials: These are goods, which have not yet been committed to production in a
manufacturing firm. They may consist of basic raw materials.
 WIP: This includes those materials, which have been committed to production process
but have not yet been completed.
 Finished Goods: These are completed products awaiting sale. They are the final output
of the production process in a manufacturing firm.
 Supplies: These materials are of low value and they do not enter the production process
directly.
43

45. OBJECTIVES OF INVENTORY MANAGEMENT:-
The main aim of inventory management should be to avoid excessive and inadequate
levels of inventories and to maintain sufficient inventory for the smooth production and sales
operations. Efforts should be made to place an order at the right time with the right source to
acquire the right quantity at the right price and quantity.
An effective inventory management should ensure all of the following
 A continuous supply of raw materials to facilitate uninterrupted production
 Maintain sufficient stock of raw materials in period short supply and anticipate price
changes
 Maintain sufficient finished goods inventory for smooth sales operation and efficient
customer service
 Minimize the carrying cost and time
 Control investment in inventories and keep it at an optimum level
 Enable the company to obtain quantity discounts through large scale buying of materials
 Help in maintaining a continuous production for seasonal goods
 Minimizes inventory on hand and ensures that excess stock is not kept
 Help in minimizing wastage as well as losses
 Reduce the risk of deterioration of goods kept in the inventory
 Simplify the purchasing activity and make it more efficient
 Minimize losses faced by the firm due to price decline
 Make most of the storage capacity available
44

46. BENEFITS OF INVENTORY MANAGEMENT:-
The following are some of the benefits, which we can be obtained through proper
management of inventories:
 Efficient & Economical Production
 Protection against too little or excessive stock
 Protection of stock
 Lesser wastage
 Avoiding loss of sales & customer satisfaction
 Optimum use of finance
 Efficient stock taking
INVENTORY CYCLE:-
45

47. INFORMATION ABOUT AMUL STORE DEPARTMENT:-
At KDCMPUL, Anand, store department has been functioning in order to cater day to day
material transaction need for the union and its effective management.
The store department can further be classified as:-
General : It includes Packaging and ingredients materials.
Engineering : It includes Mechanical spares, Electrical goods, Lubricants and fuel.
Miscellaneous : It includes Consumables, Capital Items, Dead stack items.
Scrap : It includes receipt and sale of scrap of different plants
46

48. INVENTORY MANAGEMENT:-
Inventory generally refers to the stock of raw material, which have some economical value. In
this sense inventory management would refer to the management of current assets and other
materials inside the organization. Inventory management is very important for the firm because
if the firm has lesser investment in inventory, this would lead to unavailability of materials
when required. This would ultimately lead to interruption in production process. However, if
the firm has higher investment in inventory this would lead to unnecessary locking up of funds
in inventory, thus reducing the working capital. Hence the inventory should be managed
properly in every organization.
Inventory together with receivable and cash and bank balance constitute around 30% of
the total current assets.Effective control of all these factors can increase the profitability of the
organization.
At all the plants of AMUL and KAIRA DISTRICT CO-OPERATIVE SOCIETY inventory is
classified mainly in five heads.
 Raw Milk Stock
 Raw Materials: it is major input in the organization which is used in the production
activity. Its quantity will be determined by rate of consumption and the time
required getting the supplies.
 Work in Progress: in this stage the stock are in between materials and finished goods
form. The quantum of work-in-progress depends upon the time taken in
manufacturing process.
 Finished Goods: It means that goods are ready to consume . Its stock provide buffer
between production and market.
 Scraps
 Stock in Progress
47

49. Since the working is on a continuous basis, it is bound to have enough amount of
inventory in stock to ensure smoothness in production without any interruption. To ensure
timely availability of milk, AMUL brings milk every day from the 1073 villages surrounding the
Kaira district. To store the raw milk, AMUL has already provided chilling centers at the village
co-operative unions. And to store the processed milk, AMUL has developed eight milk storing
towers, each having the capacity of storing 1.5 lakhs liters of milk. The processed milk is sold
out in the Kaira and Anand district and the remaining stock of milk is used to produce other
milk products. Thus inventory management is very sound at AMUL.
The prime objective of inventory management is
1) To minimize the possibility of disruption in the production schedule of a firm.
2) To keep down capital investment in inventory
Although it is essential to have necessary idea resources of the firm. Inventory
management therefore should strike a balance between too much inventories and to little
inventory. The efficient management and effective control of inventories help in achieving
better operation results and to eliminate duplication in ordering cost, and reduce investment in
working capital.
48

50. AMUL ANAND COMMERCIAL DEPARTMENT
-Mr. Anand Singh
All activities related to sales and marketing are carried out by the commercial
department. Most of the AMUL products are sold through GCMMF. GCMMF works as a
media for selling AMUL products. Commercial department is a link between AMUL and
GCMMF. GCMMF is also the largest buyer of AMUL products. The second largest buyer
of AMUL products is the Indian Army. There is no intervention of federation while
dealing with the Army. Main products that are sold to the Indian Army are Ghee, White
Milk Powder, Butter, Cheese, and Nutramul. The byproducts are sold to Vadilal Ice-Cream.
AMUL also markets some products at small level by itself. AMUL sells milk and buttermilk
on its own. All transactions with the Indian Army are carried by Commercial Department.
COMMERCIAL DEPARTMENT PROCESS FLOWCHART
GCMMF / AMUL
↓
PLANNED DISPATCH
↓
PRODUCTION PLANNING
DONE ACCORDINGLY
↓
COMMERCIAL DEPT DECIDES
PRODUCT PRICING/DISPATCH TIME / BEST ROUTE /MAX QUANTITY IN TRUCKS
↓
TRANSPORTERS ON CONTRACT WITH GCMMF
↓
DIL
DESPATCH INFORMATION
LETTER
↓
FPS /TRANSPORTERS/COMMERCIAL DEPARTMENT
↓
TRANSPORTER HAS TO PICK UP THE FINISHED PRODUCTS
↓
FPS EMPLOYEE RECEIVES DIL FROM TRANSPORTER
↓
AVAILABLITY OF GOODS IS CHECKED IN STORES
49

51. ↓
QUALITY CLEARANCE IS VERIFIED
↓
INVOICE IS CREATED
↓
VEHICLE IS QUALITY TESTED DISAPPROVED SENT BACK
(TEMPERATURE HYGIENE ETC)
↓
APPROVED
↓
LOADED WITH RESP GOODS
↓
GATE PASS & INVOICE HANDED OVER
↓
APPROVED BY COMMERCIAL DEPT
↓
TRANSPORTED TO GCMMF GODOWNS
↓
INVOICE SENT TO ACCOUNTS
↓
PAYMENT RECEIVED FROM GCMMF BY ACCOUNTS DEPT
PROCESS
1. PD is decided in PCM and Production Planning is done accordingly.
2. As per production planning GCMMF decides the locations/depots where goods are to be
transported to.
3. Accordingly Commercial department decides the logistics , the best route available , and
the goods to be sent in a particular truck and product price to be paid by vendor or federation
itself.
4. According DIL- Dispatch Information Letter is released to Transporter, Commercial
department & Dispatch department by federation.
5. On the mentioned data the transporter arrives at the stores with their copy of DIL
6. On verifying the DIL, FPS Employee verifies whether the stock has been produced and
available in the respective stores and whether the available stock has been cleared by QA
50

52. 7. Simultaneously the transporters vehicle is verified for hygiene, temperature and other
specifications.
8. If the vehicle is approved, and if quality tested stock is available Invoice & Gate Pass are
created and the goods are released.
9. These goods are approved by as Commercial department and transported to GCMMF
depots
10 . Invoice is handed over to the depots as well as handed to the Accounts.
11. Accordingly payment is received from Federation.
OTHER IMPORTANT FUNCTIONS
1. Goods are also released for Inter Dairy Transfer, Defense Sales & Local Sales.
2. Inter Dairy transfer includes releases to
Kolkata ( SMP , WMP , Butter ASP)
Pune (Butter)
Mogar (SMP , White Butter)
Kanjri (FSP)
3 . Mumbai Dairy , Pune Dairy , Kolkata Dairy are under KDCMPUL
4. Goods are internally transferred to these dairies and further sold to GCMMF.
5. All the transactions related to defense are handled by Commercial Department.
6. Some products are specially manufactured for defense use. PP for these goods is
done separately.
7. Transactions related to export of goods is handled separately.
8. Transactions with agencies like ISO are also handled by commercial department
9. Process remains same. DIL is released by Commercial Department
51

53. SOME OTHER DEPARTMENTS IN AMUL ,ANAND:
Administration:-
The main work of administration department in any company is to appoint
right people at right time and then supervise them. In AMUL, there is a combined
administration and Human Resources Development department. The Administration
department also performs all activities related to human resources development.
Salary Account:-
This is a sub section of Accounts department. All accounting related to salaries
and wages, provident funds, pension insurance, gratuity etc. is done in this department.
Audit:-
There are two audit departments at AMUL . One is the internal audit department
and the other is the government audit department. As the name suggests government,
auditing is done by a certified government auditor. Internal audit work is given to an
outside accountancy firm. Pre-auditing and Post auditing of different vouchers are done
in this department.
MIS:-
It is a sub-section of the Accounts department. It is called MIS (Management
Information System). All the information systems that are required in different
departments are first developed in this department.
52

54. NOTE
Gate pass:-
No material can be taken out of Factory premises without a properly authorized
Gate Pass. Stores /concerned department shall issue a Gate Pass either of following types:
a) Non Returnable Gate Pass: - This Gate Pass is to be issued when material is
permanently dispatched and not expected to be received back.
b) Returnable Gate Pass: -This Gate Pass is to be issued when the material is expected
to be received back after repairing, modifications etc.
Scrap handling:-
1) Each and every department is sending solid waste to the scrap yard, along with the note
describing the type and the quantity of the scrap, which is handled by the stores department.
2) These scrap is kept to the prefix area only. Here different cages are allocated to the different
type of scraps. Stores department is keeping records of all the receipts and sale of the scrap.
3) When the scrap is being received at the scrap yard, the scrap personnel check the quantity
and make receipt of the scrap. The stores department is responsible for the sale of scrap.
4) For the sale of scrap, annual contract is given by purchase section to different parties at a
fixed rate.
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55. CONCLUSION
My heartfelt thanks to all employees of KDCMPUL for devoting their valuable time , for helping
me in understanding Production Process from Planning to Finished Product dispatch
BIBLIOGRAPHY:-
Stores Handbook
www.amul.com
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