A DOCUMENTORY REPORT AND PRESENTATION ON SUMMER PROJECT OF “GUJARAT COOPERATIVE MILK MARKETING FEDERATION Ltd.” On “ANALYSIS OF BALANCE-SHEET” Submitted to INDUKAKA IPCOWALA INSTITUTE OF MANAGEMENT (I 2 IM) M.B.A PROGRAMME Constituent of Charotar University of Science and Technology Presented by ASHWIN B. NIMJE M.B.A Semester-2I ROLL. NO. 09/ MBA/21
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Constituent of Charotar University of Science and Technology
Presented by
ASHWIN B. NIMJE
M.B.A Semester-2I
ROLL. NO. 09/ MBA/21
2010
DECLARATION
I, ASHWIN B. NIMJE, hereby declare that the DOCUMENTORY REPORT on titled SUMMER PROJECT of “GUJARAT COOPERATIVE MILK MARKETING FEDERATION Ltd.” On subject of “ANALYSIS OF BALANCE-SHEET” is a result of my own work and my indebtedness to other work publications, if any, have been duly acknowledged.
Place: Changa
Date:6-6-2010 ASHWIN B. NIMJE
PREFACE
There is a summer training programme in mid-completion of MBA; the trainee is required to undertake a project that would help him to expand his knowledge.
Practical training in the course allows the trainee to use their skill with sufficient knowledge to develop an equal balance between the theory and practical mindset and thereby gives an opportunity to verify the application of theory and practical mindset. It teaches the trainee to interact with the management concepts.
It is with great sincerity that we would take that challenge. I hope to meet success under the guidance of our professors.
This report is a perfect platform for suggestions and discussions from experienced and well knowledge manager.
ACKNOWLEDGEMENT
Apart from the efforts of me, the success of any project depends largely on the encouragement and guidelines of many others. I take this opportunity to express my gratitude to the people who have been instrumental in the successful completion of this project.
I would like to show my greatest appreciation to Mr. J. M. TRIPATHI (TAX DEPARTMENT HEAD) for providing me the opportunity to work on this project.
I feel motivated and encouraged every time I attend his meeting.
Without his encouragement and guidance this project would not have materialized.
I also convey my thanks to all those who have knowingly or unknowingly helped me to give this report a realistic dimension.
I would also thank my Mr. S.T DESAI SIR (G.M&C.S) for giving me a great opportunity for this industrial experience
I would like to thank our SUJATA MAM for being our summer guide from college.
NAME OF THE COMPANY : Gujarat Co-operative Milk Marketing Federation Ltd.
HEAD OFFICE : Amul Dairy Road, Anand-388 001, Gujarat
DEPOTS : 45
BRAND NAME : Amul
ZONAL OFFICES : New Delhi, Chennai, Kolkata, Mumbai,
Ahmedabad, Guwahati.
FORM OF ORGANIZATION : Co-operative sector
GCMMF’s Mission Statement reiterates our endeavour to satisfy the taste and nutritional requirements of the customers of the world, through excellence in marketing by our committed team of professionals. Besides through co-operative networking, we strive endlessly to offer quality products that provide best value for money.
GCMMF: AN OVERVIEW
Gujarat Cooperative Milk Marketing Federation (GCMMF) is India's largest food products marketing organisation. It is a state level apex body of milk cooperatives in Gujarat which aims to provide remunerative returns to the farmers and also serve the interest of consumers by providing quality products which are good value for money.
CRISIL, India's leading Ratings, Research, Risk and Policy Advisory company, has assigned its highest ratings of "AAA/Stable/P1+" to the various bank facilities of GCMMF.
Members: 13 district cooperative milk producers' Union
No. of Producer Members: 2.79 million
No. of Village Societies: 13,328
Total Milk handling capacity: 11.22 million litres per day
The main stakeholder of GCMMF is the farmer member for whose welfare GCMMF exists. GCMMF states that its main objective is the 'carrying out of activities for the economic development of agriculturists by efficiently organizing marketing of milk and dairy produce, veterinary medicines, vaccines and other animal health products, agricultural produce in raw and/or processed form and other allied produce'.
GCMMF aims to market the dairy and agricultural products of co-operatives through:
common branding centralized marketing
centralized quality control
centralized purchases and
Efficient pooling of milk.
GCMMF has declared that its business philosophy is as follows:
To serve the interests of milk producers and To provide quality products that offer the best value to consumers for money
spent.
The biggest strength of GCMMF is the trust that it has created in the minds of its consumers regarding the quality of its products. Amul stands for guaranteed purity of whatever products it produces. None of its products are adulterated.
HISTORICAL BACKGROUND OF GCMMF
In the 1940s, in the district of Kaira in the State of Gujarat, India, a unique experiment was conducted that became one of the most celebrated success stories of India. At that time, In Gujarat, milk was procured from farmers by private milk contractors and by a private company, Polson’s Dairy in Anand, the headquarters of the district. The company had a virtual stranglehold on the farmers, deciding the prices both of the procured as well as the sold milk. The company arranged to collect milk, chill it and supply it to the Bombay Milk Scheme, which supplied milk to the metropolis of Bombay, and to cities in Gujarat.
Polson’s exploited its monopoly fully and the farmers were forced to accept very low prices for their products, and the decisions of the company regarding the quality and even the quantity of the milk supplied by the farmers were final.
In 1946, under inspiration from a leading freedom fighter, Mr. Vallabhbhai Patel (who belonged to Gujarat and who later became the Home Minister of the Central Government), Mr. Tribhuvandas Patel, a local farmer, freedom fighter and social worker, organized the farmers into co-operatives, that would procure milk from the farmers, process the milk and sell it in Bombay including to the Bombay Milk Scheme.
In 1949, purely by chance, a dairy engineer, named Dr. Varghese Kurien, who had just completed his studies in dairy engineering in the U.S.A., came to India and was posted by the Government of India to a job at the Dairy Research Institute at Anand. Settling down in Anand was hardly a part of his career plans. But a meeting with Tribhuvandas Patel changed his life and changed India’s dairy industry.
What Mr. Patel requested to Dr. Kurien was hardly to bring about such a revolution. All he wanted was some help in fixing some problems with commissioning some of the equipment just purchased by his co-operative, especially the chilling and pasteurizing equipment. These items of equipment malfunctioned, leading to the rejection of large quantities of milk by the Bombay Milk Scheme.
Dr. Kurien’s involvement with the Kaira District Co-operative Milk Producers’ Union Limited or KDCMPUL (that was the name of the co-operative registered) grew very rapidly from merely providing technical assistance in repairing, maintaining and ordering new equipment to the larger sociological issues involved in organizing the farmers into co-operatives and running these co-operatives effectively.
He observed the exploitation of farmers by the private milk contractors and Polson’s and how the co-operatives could transform the lives of the members. The most important feature of these co-operatives was that they were run purely as farmers’ cooperatives, with all the major decisions being taken by the farmers themselves. The co-operatives were not “run” by a separate bureaucracy with its own vested interests: the farmers were truly in charge of their own decisions. Any farmer could become a member by committing to supply a certain quantity of milk for a certain number of days in a year and would continue to be a member only if he kept up this commitment.
Each day, the farmers (or, actually, in most cases, their wives and daughters) would bring their milk to the village collection centers where the milk would be checked for the quantity in full view of all, and the quality (the fat content) would be checked through a simple hydrometer, again in full view of all.
The farmers would be paid in the evening for the milk supplied by them in the morning, and in the morning for the evening milk. This prompt settlement in cash was a great attraction to the farmers who were usually cash starved.
Thanks to the above mechanism, there were no disputes regarding quantity or quality of the milk supplied by each farmer.
It was soon realized that it was not enough to merely act as the collection and selling agents for the farmers. A variety of support services were required to enable the farmers to continue selling their milk of adequate quality and to avoid disasters such as death of their cattle (for a family owning just one or two cattle and depending on its milk for their income, death of cattle could indeed be a disaster). The farmers were progressively given new services such as veterinary care for their cattle, supply of cattle feed of good quality, education on better feeding of cattle and facilities for artificial insemination of their cattle. All these were strictly on payment basis: none of the services were free.
This experiment of organizing farmers into co-operatives was one of the most successful interventions in India. A very loyal clientele was built up who experienced prosperity on a scale they could not have dreamt of ten years earlier, since with good prices paid for their milk, raising milch cattle could become a good supplementary source of revenue to many households.
The co-operatives were expanded to cover more and more areas of Gujarat and in each area, a network of local village level co-operatives and district level co-operatives were
formed on a pattern similar to that at Anand (the so called Anand pattern). KDCMPUL became better known by the brand name of the products marketed by it (Amul) than by the name of the co-operative itself.
Amul meant priceless in Sanskrit. It was also a word easy to pronounce, easy to remember and carry a wholly positive connotation. This became the flagship brand for all the dairy products made by this Union.
In 1954, KDCMPUL built a plant to convert surplus milk produced in the cold seasons into milk powder and butter. In 1958, a plant to manufacture cheese and one to produce baby food were added. Subsequent years saw the addition of more plants to produce different products.
In 1973, the milk societies/district level unions decided to set up a marketing agency to market their products.
This agency was the Gujarat Cooperative Milk Marketing Federation (GCMMF). It was registered as a co-operative society on 9 July 1973.
It had, as its members (ordinary share holders), the district level milk unions.
Starting from a daily procurement of 250 liters’ per day in 1946 had become a milk giant with the milk procurement at about 10 million liters’ per day by 2007 with 12 dairy plants all over the State of Gujarat.
ORGANIZATION STRUCTURE
DIFFERENT LEVEL OF ORGANISATION’S PART
DIAGRAM DEPICITING THREE TIER STRUCTURE OF ANAND PATTERN
THE THREE-TIER "AMUL MODEL"
The Amul Model is a three-tier cooperative structure. This structure consists of a Dairy Cooperative Society at the village level affiliated to a Milk Union at the District level which in turn is further federated into a Milk Federation at the State level.
The above three-tier structure was set-up in order to delegate the various functions; milk collection is done at the Village Dairy Society, Milk Procurement & Processing at the District Milk Union and Milk & Milk Products Marketing at the State Milk Federation. This helps in eliminating not only internal competition but also ensuring that an economy of scale is achieved. As the above structure was first evolved at Amul in Gujarat and thereafter replicated all over the country under the Operation Flood Programme, it is known as the ‘Amul Model’ or ‘Anand Pattern’ of Dairy Cooperatives.
GCMMF is Responsible for Marketing of Milk & Milk Products Responsible for Procurement & Processing of Milk Responsible for Collection of Milk Responsible for Milk Production.
VILLAGE DAIRY COOPERATIVE SOCIETY (VDCS)
The milk producers of a village, having surplus milk after own consumption, come together and form a Village Dairy Cooperative Society (VDCS). The Village Dairy Cooperative is the primary society under the three-tier structure. It has membership of milk producers of the village and is governed by an elected Management Committee consisting of 9 to 12 elected representatives of the milk producers based on the principle of one member, one vote. The village society further appoints a Secretary (a paid employee and member secretary of the Management Committee) for management of the day-to-day functions. It also employs various people for assisting the Secretary in accomplishing his / her daily duties.
The main functions of the VDCS are as follows:
Collection of surplus milk from the milk producers of the village & payment based on quality & quantity
Providing support services to the members like Veterinary First Aid, Artificial Insemination services, cattle-feed sales, mineral mixture sales, fodder & fodder seed sales, conducting training on Animal Husbandry & Dairying, etc.
Selling liquid milk for local consumers of the village
Supplying milk to the District Milk Union
Thus, the VDCS in an independent entity managed locally by the milk producers and assisted by the District Milk Union.
DISTRICT COOPERATIVE MILK PRODUCERS’ UNION (MILK UNION)
The Village Societies of a District (ranging from 75 to 1653 per Milk Union in Gujarat) having surplus milk after local sales come together and form a District Milk Union. The Milk Union is the second tier under the three-tier structure. It has membership of Village Dairy Societies of the District and is governed by a Board of Directors consisting of 9 to 18 elected representatives of the Village Societies. The Milk Union further appoints a professional Managing Director (paid employee and member secretary of the Board) for management of the day-to-day functions. It also employs various people for assisting the Managing Director in accomplishing his / her daily duties.
The main functions of the Milk Union are as follows:
Procurement of milk from the Village Dairy Societies of the District Arranging transportation of raw milk from the VDCS to the Milk Union.
Providing input services to the producers like Veterinary Care, Artificial Insemination services, cattle-feed sales, mineral mixture sales, fodder & fodder seed sales, etc.
Conducting training on Cooperative Development, Animal Husbandry & Dairying for milk producers and conducting specialized skill development & Leadership Development training for VDCS staff & Management Committee members.
Providing management support to the VDCS along with regular supervision of its activities.
Establish Chilling Centres & Dairy Plants for processing the milk received from the villages.
Selling liquid milk & milk products within the District
Process milk into various milk & milk products as per the requirement of State Marketing Federation.
Decide on the prices of milk to be paid to milk producers as well on the prices of support services provided to members.
STATE COOPERATIVE MILK FEDERATION (FEDERATION)
The Milk Unions of a State are federated into a State Cooperative Milk Federation. The Federation is the apex tier under the three-tier structure. It has membership of all the cooperative Milk Unions of the State and is governed by a Board of Directors consisting of one elected representative of each Milk Union. The State Federation further appoints a Managing Director (paid employee and member secretary of the Board) for management of the day-to-day functions. It also employs various people for assisting the Managing Director in accomplishing his daily duties.
The main functions of the Federation are as follows:
Marketing of milk & milk products processed / manufactured by Milk Unions. Establish distribution network for marketing of milk & milk products.
Arranging transportation of milk & milk products from the Milk Unions to the market.
Creating & maintaining a brand for marketing of milk & milk products (brand building).
Providing support services to the Milk Unions & members like Technical Inputs, management support & advisory services.
Pooling surplus milk from the Milk Unions and supplying it to deficit Milk Unions.
Establish feeder-balancing Dairy Plants for processing the surplus milk of the Milk Unions.
Arranging for common purchase of raw materials used in manufacture / packaging of milk products.
Decide on the prices of milk & milk products to be paid to Milk Unions.
Decide on the products to be manufactured at various Milk Unions (product-mix) and capacity required for the same.
Conduct long-term Milk Production, Procurement & Processing as well as Marketing Planning.
Arranging Finance for the Milk Unions and providing them technical know-how.
Designing & providing training on Cooperative Development, Technical & Marketing functions.
Conflict Resolution & keeping the entire structure intact.
We move to the year 2008. The dairy industry in India and particularly in the State of Gujarat looks very different. India for one has emerged as the largest milk producing country in the World. Gujarat has emerged as the most successful State in terms of milk and milk product production through its cooperative dairy movement. The Kaira District Cooperative Milk Producers’ Union Limited, Anand has become the focal point of dairy development in the entire region and AMUL has emerged as one of the most recognized brands in India, ahead of many international brands.
Today, we have around 176 cooperative dairy Unions formed by 1,25,000 dairy cooperative societies having a total membership of around 13 million farmers on the same pattern, who are processing and marketing milk and milk products profitably, be it Amul in Gujarat or Verka in Punjab, Vijaya in Andhra Pradesh or a Nandini in Karnataka. This entire process has created more than 190 dairy processing plants
spread all over India with large investments by these farmers’ institutions. These cooperatives today collect approximately 23 million kgs. of milk per day and pay an aggregate amount of more than Rs.125 billion to the milk producers in a year.
ACHIEVEMENTS OF GCMMF
2.8 million milk producer member families 13,759 village societies
13 District Unions
8.5 million liters of milk procured per day
Rs. 150 million disbursed in cash daily
GCMMF is the largest cooperative business of small producers with an annual turnover of Rs. 53 billion
The Govt. of India has honored Amul with the “Best of all categories Rajiv Gandhi National Quality Award”.
Amul Pro-Biotic Ice-cream Gets No. 1 Award At World Dairy Summit
Ramakrishna Bajaj National Quality Award-2003
Amul - The Taste Of India (GCMMF)Receives International CIO 100 Award For Resourcefulness
Rajiv Gandhi National Quality Award - 1999
AMUL BRAND BUILDING
GCMMF (AMUL) has the largest distribution network for any FMCG company. It has nearly 50 sales offices spread all over the country, more than 3,000 wholesale dealers and more than 5,00,000 retailers.
AMUL is also the largest exporter of dairy products in the country. AMUL is available today in over 40 countries of the world. AMUL is exporting a wide variety of products which include Whole and Skimmed Milk Powder, Cottage Cheese (Paneer), UHT Milk, Clarified Butter (Ghee) and Indigenous Sweets. The major markets are USA, West Indies, and countries in Africa, the Gulf Region, and [SAARC] Singapore, The Philippines, Thailand, Japan and China.
In September 2007, Amul emerged as the leading Indian brand according to a survey by Synovate to find out Asia's top 1000 Brands.
In essence our CORE COMPETENCIES are the following:
We see ourselves as being in the business of development; not just marketing. Development, be it of products, people or processes. The spirit of development
can be seen and felt in everything that we do. Marketing is simply our tool to achieve our ultimate objective – Human Development.
A willingness to put in good solid hard work and be innovative in our work.
An office culture which is steeped in camaraderie and encourages everyone to take responsibility.
Having people who have contributed their best in whatever they have done, no matter how lowly or how surmounting the task might have been.
An ability to just hang in there and bear adversity.
QUALITY POLICY
GCMMF are committed to consistently meeting the dynamic needs of our customers across the world and delighting them by our excellence in service and by providing products with innovative taste and nutrition features. We will strive to bring in a qualitative change in the lives of our milk producers by ensuring the most profitable returns to their produce through professional marketing efforts.
GCMMF strive to achieve our goals through application of state-of-the-art technology/process, delivery system, empowerment of our employees through continuous up-gradation of their skill, a vibrant work environment for an effective and efficient operation of marketing and service network, on-going research on the latest development to ensure continuous improvement and through application of quality and food safety management systems and eco-friendly operations.
GCMMF will strive to be the world leader in the market of food products.
TQM ACTIVITIES
Small Group Activities (SGA) Kaizen recording
Other related TQM activities co-ordinate through HRD Department
ANNUAL MANAGEMENT ACTIVITIES
NPD Launch Plan Annual Trade Scheme/BTL/POP Calendar
GCMMF is India's largest exporter of Dairy Products. It has been accorded a "Trading House" status. GCMMF has received the APEDA Award from Government of India for Excellence in Dairy Product Exports for the last 11 years.