Anilkmf

Karnataka Milk Federation- Dharwad

ADHICHUNCHANAGIRI INSTITUTE OF TECHNOLOGY-CHIKMAGALUR Page 1


EXECUTIVE SUMMARY

INTRODUCTION

Karnataka milk federation was setup in 1974 on the AMUL pattern it is the third
largest co-operative federation in India and first in south India. There are 17 unions in
Karnataka.

The project is conducted to know the “distribution effectiveness in Hubli-Dharwad
for K.M.F” in Dharwad. As present market is highly competitive, if one not reaches to
ultimate customer other reaches and grabs the opportunity. So an effort made by the company
like manufacturing, promotion etc. are gets wasted. So it becomes important to reach ultimate
customer at right time and right place, by knowing the requirement of the market.

In 1960‟s & 70‟s the product dominated the market, but presently the scenario has
changed because of the competition (man players in market).Secondly the customer has many
choices to choose a single product, immediately he/she shifts to the other product.

After the liberalization many organizations entered the new markets or expanding
business into new areas and they have set up the plants in different regions in the country.
Hence it has become vital important to local player to compete with them in quality, pricing,
distribution etc. under such condition plays very important to grab even small of the small
opportunities.

It becomes important to update to the market requirement to compete in competitive
world. So to know the market requirement we should have proper information from the
market. So I selected this project, which can serve the specified information, which could
help to the organization to improve the distribution channel effectively in the market. So to
serve better from the existing one



CHAPTER-1

INDUSTRIAL PROFILE

History of Milk

Animal milk was first used as beverage at the beginning of animal domestication. Goats
and sheep were domesticated in the Middle East in 9000BC. Goats and sheep were one of the
first animals to be domesticated. Around the year 7000 BC, cattle were being herded in parts
of Africa and Turkey. Milk was also consumed in the British Isles during the Neolithic
period. Dairy products were first made in the Roman Empire around 100 BC. The use of
cheese and butter spread in Europe, parts of Asia and parts of Africa. Cattle were then
introduced to European colonies after the Age of exploration.

Background Milk

Is a nutritive beverage obtained from various animals and consumed by humans. Most milk
is obtained from dairy cows, although milk from goats, water buffalo, and reindeer is also
used in various parts of the world. In the United States, and in many industrialized countries,
raw cow‟s milk is processed before it is consumed. During processing the fat content of the
milks adjusted, various vitamins are added, and potentially harmful bacteria are killed. In
addition to being consumed as a beverage, milk is also used to make butter, cream, yogurt,
cheese, and a variety of other products.

History

Cattle were first brought to the United States in the 1600s by some of the earliest colonists.
Prior to the American Revolution most of the dairy products were consumed on the farm
where they were produced. By about 1790, population centres such as Boston, New York,
and Philadelphia had grown sufficiently to become an attractive market for larger-scale dairy
operations. To meet the increased demand, farmers began importing breeds of cattle that were
better suited for milk production. The first Holstein-Friedens were imported in 1795, the first
Airsides in 1822, and the first Guernsey‟s in 1830.With the development of the dairy industry
in the United States, a variety of machines for processing milk were also developed. In 1856,
Gail Borden



Patented a method for making condensed milk by heating it in a partial vacuum, Not only did
his method remove much of the water so the milk could be stored in a smaller volume, but it
also protected the milk from germs in the air. Borden opened a condensed milk plant and
cannery in Wassail, NewYork, in 1861. During the Civil War, his condensed milk was used
by Union troops and its popularity spread.

In 1863, Louis Pasteur of France developed a method of heating wine to kill the
microorganisms that cause wine to turn into vinegar. Later, this method of killing harmful
bacteria was adapted to a number of food products and became known as pasteurization. The
first milk processing plant in the United States to install pasteurizing equipment was the
Sheffield Farms Dairy in Bloomfield, New Jersey, which imported a German-made
pasteurizer in 1891. Many dairy operators opposed pasteurization as an unnecessary expense,
and it wasn‟t until 1908 that Chicago became the first major city to require pasteurized milk.
New York and Philadelphia followed in 1914, and by 1917 most major cities had enacted
laws requiring that all milk be pasteurized.

One of the first glass milk bottles was patented in 1884 by Dr. Henry Thatcher, after seeing a
milkman making deliveries from an open bucket into which a Childs filthy rag doll had
accidentally fallen. By 1889, his Thatcher‟s Common Sense Milk Jar had become an industry
standard. It was sealed with a waxed paper disc that was pressed into a groove inside the
bottles neck. The milk bottle, and the regular morning arrival of the milkman, remained a part
of American life until the 1950s, when waxed paper cartons of milk began appearing in
markets.

In 1990, the annual production of milk in the United States was about 148 billion lb
(67.5 billion kg). This is equivalent to about 17.2 billion U.S. gallons (65.1 billion litters).
About 37% of this was consumed as fluid milk and cream, about 32% was converted into
various cheeses, about 17% was made into butter, and about 8% was used to make ice cream
and other frozen desserts. The remainder was sold as dry milk, canned milk, and other milk
products.



DAIRY INDUSTRY IN INDIA

Dairy enterprise is an important occupation of farmer. In India nearly 70% of the people
Depend on agriculture. It is the backbone of India. Dairy is linked with agriculture industry to
a large extent. Animal husbandry in India is an essential part of agriculture. It is mainly a
rural occupation closely associated with agriculture.

DEVELOMENT OF DAIRY INDUSTRY IN INDIA

During the Pre-independence year there was no serious stress given to dairy industry. In
1886 the Department of Defence of the British Government established the dairy farms for
the supply of milk to the British troops in Allahabad. Later, in 1920 serious steps were taken
by Mr. William Smith, an expert in dairy forming to improve the milk production There was
discrimination done to the Indians hence this led to the rise of the first milk union in India. In
Luck now in 1937 called the Luck now milk producer‟s Co-operative union Ltd.
In 1946 AMUL (Anand Milk Udyog Ltd) was started in Gujarat to bring up the economic
stability of villagers.

When the farmer Prime Minister Lal Bahaddur Shastri visited the functioning as it was
rendering a social service to the society, which helped the villagers to come in the national
economic stream.

The dairy and Animal Husbandry received serious attention after the independence. There
Were lots many of progressive steps taken by the government through five year plans.

This led to the formation of National Dairy Development Board in 1965 & thus in 1970
he decided to bring a “White Revolution” throughout the country, Initially 10 states were
selected for this purpose excluding Karnataka.

In Karnataka in 1974 an integrated project was launched to restructure and reorganize the
dairy industry on Co-operative principle of AMUL and to lay foundation for new direction in
dairy industry.



INDIAN DAIRY INDUSTRY

India: World’s Largest Milk Producer

India has become the world‟s No. 1 milk producing country, with output in 1999-2000
(marketing year ending March 2000) forecasted at 78 million tonnes. United States, where
the milk production is anticipated to grow only marginally at 71 million tonnes, occupied the
top slot till 1997. In the year1997, India‟s milk production was on par with the U.S. at 71
million tonnes. The world milk production in 1998 at 557 million tonnes would continue the
steady progress in recent years (see Table 1). Furthermore, the annual rate of growth in milk
production in India is between 5-6 per cent, against the world sat 1 per cent. The steep rise in
the growth pattern has been attributed to a sustained expansion in domestic demand, although
per capita consumption is modest - at 70 kg of milk equivalent.

World’s Top milk Producers.

Following is the list of Top 10 Countries By Milk Production as per US Department of
Agriculture, 2011:

S.No. Country Production (1000 MT)

1 EU-27 140,620.00

2 India 121,500.00

3 United States 88,768.00

4 China 31,780.00

5 Russian Federation 31,200.00

6 Brazil 30,846.00

7 New Zealand 18,049.00

8 Mexico 11,228.00

9 Argentina 11,070.00

10 Ukraine 10,812.00



THE FATHER

OF

“WHITE REVOLUTION”

IN

INDIA



Dr. Verghese Kurien

Born on 26th November 1921

Dr. Kurien graduated with Physics from Loyola College, Madras in 1940 and then did B.E.
(Mech) from the Madras University. He was very good at cricket, tennis, and boxing, and
represented his college at state level. After passing out of the University, he joined the Tata
Steel Technical Institute, Jamshedpur from where he graduated in 1946

Instead of taking the charted course of managerial career at Jamshedpur, Dr.Kurien
competed and qualified at the all India level selection for specialized studies in USA under
government scholarship and passed the Master of Science in Mechanical Engineering from
the Michigan State University with distinction.

When he came back to India, he was posted as a Dairy Engineer at the government
creamery, Anand, in May 1949. Around the same time, the infant cooperative dairy, Kaira
District Cooperative Milk Producers Union Limited (KDCMPUL), -- now famous as AMUL
-- was fighting a battle with the Polson Dairy which was privately owned. Young Kurien, fed
up with being at the government creamery which held no challenge, volunteered to help Shri
Tribhuvandas Patel, the then Chairman of KDCMPUL, to set up a processing plant, which
marked the birth of AMUL. The rest is history.

Dr. Kurien is a manager and institutional builder par excellence. He has built dozens of
institutions including the Institute of Rural Management, Anand of which he is the founder
Chairman. He is also the founder Chairman of the National Dairy Development Board
(NDDB) which designed and implemented the world‟s largest dairy development programme
– the Operation Flood. Dr.Kurien may rightly be called the architect of India‟s modern dairy
industry and the father of White Revolution ushered in by the Anand-pattern dairy
cooperatives established under the Operation Flood.

Dr.Kurien in his impressive career spanning over almost five decades has been
honoured by several national and international organisations. He has been conferred honorary
doctorate degrees by several universities in India and Abroad. He has been decorated with the
Padmashri (1965) Padmabhushan(1966), Krishi Ratna Award (1986) and Padma Vibhushan
(1999) by the President of India. He has won many awards including the prestigious Ramon



Magsaysay Award for Community Leadership (1963), the Wateler Peace Prize Award of
Carnegie Foundation (1986), the World Food Prize Award (1989) and the International
Person of the Year Award (1993) by the World Dairy Expo, Madison, Wisconsin, USA and
"Ordre du Merite Agricole" by the Government of France (in March 1997).

Some of the other major awards he has won are:-

• Regional Award 2000 from the Asian Productivity Organization, Japan

• The first Rochdale Pioneers Prize by the international Co-operative Alliance (ICA), Seoul,
Korea 2001

• Dr. Paulos Mar Gregorious Award 1999, New Delhi

• The Economic Times Lifetime Achievement Award for the Corporate Excellence, Mumbai
2001

• Lifetime Achievement Award for Translating Excellence in Corporate Governance into
Reality, from the Institute of Company Secretaries of India, New Delhi (November 2001)

• Lifetime Achievement Award for Social Service for the Tenth Red & White awards, New
Delhi (January 2002)

• Yashwantrao Chavan Natioanl Award for National Integration, Democratic Values, Social
and Economic Development for the year 2001. (Mumbai)

• "Lokmanya Tilak Award" by the Lokmanya Tilak Smarak Trust, Pune (August 2002)

• "Lifetime Achievement Award" by the Bombay Management Association, Mumbai (Jan.
2003)

• "Rotary Lifetime Achievement Award" by the Rotary Club of Palghat East (Feb. 2003) I
Too Had a Dream



I Too Had a Dream

I had to a dream

Category: Non-Fiction

Author: Dr Verghese Kurien as told to Gouri Salvi

Publisher: Roli Books

From the lack cover

Architect of Operation Flood, the largest dairy development programme in the world,
Dr Verghese Kurien has enabled India to become the largest milk producer in the world. A
man with a rare vision, Dr Kurien has devoted a lifetime to realising his dream – empowering
the farmers of India. He has engineered the milk cooperative movement in India.

It was a sheer quirk of fate that landed him in Anand where a small group of farmers
were forming a cooperative, Kaira District Cooperative Milk Producers‟ Union Limited
(better known as Amul), to sell their milk. Intrigued by the integrity and commitment of their
leader Tribhuvandas Patel, Dr Kurien joined them. Since then there has been no looking
back. The Anand pattern of co-operatives were so successful that, at the request of the
Government of India, he set up the National Dairy Development Board to replicate it across
India. He also established the Gujarat Cooperative Milk Marketing Federation to market its
products.



In these memoirs, Dr Verghese Kurien, popularly known as the father of the white
revolution, recounts, with customary candour, the story of his life and how he shaped the
dairy industry. Profoundly inspiring, these memoirs help us comprehend the magnitude of his
contributions and his multifaceted personality.

"I have often claimed that I have had but one good idea in my life: true development is the
development of women and men. This idea took such a hold of me that I remained in this
small, sleepy town of Anand for over fifty years as an employee of farmers. I was never able
to give this up for what many call "a better life". These years have, without an iota of doubt,
been the most rewarding years of my life. Over the years I have spoken ceaselessly of this
idea, hoping to Enthuse young women and men to adopt my passion as theirs. I have been
fortunate that there have been many who took up the challenge."



NATIONAL DAIRY

DEVELOPMENT BOARD

About NDDB

The National Dairy Development Board was created to promote, finance and support
producer-owned and controlled organizations. NDDBs programmes and activities seek to
strengthen farmer cooperatives and support national policies that are favourable to the growth
of such institutions. Fundamental to NDDBs efforts are cooperative principles and the Anand
Pattern of Co-operation.

NATIONAL DAIRY DEVELOMENT BOARD:

History

The NDDB was founded to replace exploitation with empowerment, tradition with
Modernity, Stagnation with growth, transforming dairy into and instrument for the
development of Indian‟s rural people.

The NDDB was established in 1965; the board is registered under the Societies Registration
Act and the public Trust Act, fulfilling the desire of the Prime Minister of India – the late Lal
Bahaddur Shastri to extend the success of the Kaira Co-operative Milk producers union,
AMUL to other parts of India. Dr Vergese Kurien was the founder chairman.



The Growth
NDDB began its operations with the mission of making dairy a vehicle to a better
future for millions of gross roots milk producers. The mission archived helped to launch
“Operation Flood‟‟ a programme extending over 26 years and with the help of World Bank
Loan India become the world‟s largest milk producing country. As per March 2001 India‟s
96000 Dairy Co-operative are integrated through a three Tier Co-operative structure. The
Anand pattern, which is owned by more than 10 million formers, procures an average of 1605
million liters of milk every day. The milk is processed and marketed by 170 milk producers‟
co-operative unions which, in turn own 15 state co-operative milk marketing federation.
Since its establishment the dairy development board has planned and spearheaded India‟s
Dairy programmer by placing dairy development in the hands of milk

Services rendered by NDDB:
NDDB provide the following services.
a. Planning dairy and rural development projects.
b. Organization of farmer co-operative societies.
c. Setting up of dairy and cattle feed plants.
d. Manpower planning and training.
e. Applied research and development. Implementation of milk production enchantment
programme.

Objectives of NDDB:

1. To sponsor, promote, manage, acquire, construct or control any plant or work,
2. Which promote projects of general public utility relation to dairying,
3. To make information available on request to technical services to increase
Production of Milk,
4. To prepare initial feasibility studies of dairying and other dairy related projects
And undertake subsequent designing planning and start up those projects.
5. To undertake research and development programme related to production and
Marketing of milk and milk products,
6. To provide assistance for exchange of information to other international agencies.



PHILOSPHY

We believe that

Co-operation is the preferred form of enterprise, giving people control over the resources they
create through democratic self-governance.

Self-reliance is attained when people work together, have a financial stake, and both enjoy
the autonomy and accept the accountability for building and managing their own institutions

Progressive evolution of the society is possible only when development is directed by those
whom it seeks to benefit.

All beneficiaries, particularly women and the less privileged must be involved in
cooperative management and decision making

Technological innovation and the constant search for better ways to achieve our objectives is
the best way to retain our leading position in a dynamic market

While our methods change to reflect changing conditions, our purpose and values must
remain constant.

CONSTITUTION

The National Dairy Development Board has been constituted as a body corporate and
declared an institution of national importance by an Act of India‟s Parliament.

The National Dairy Development Board -- initially registered as a society under the Societies
Act 1860 -- was merged with the erstwhile Indian Dairy Corporation, a company formed and
registered under the Companies Act 1956, by an Act of India‟s Parliament - the NDDB Act
1987 (37 of 1987),with effect from October 12, 1987. The new body corporate was declared
an institution of national importance by the Act.

The general superintendence, direction, control management of NDDBs affairs and business
vests with the Board of Directors.



PERSPECTIVE 2010 PLAN

The Perspective 2010 plan of the Dairy Board maps the future of dairying in India, setting
realistic goals for Strengthening Cooperative Business, Production Enhancement, Assuring
Quality, and creating an Information and Development Research. The plan was realized with
the successful completion of the Operation Flood Programme and has been developed by the
State Milk Marketing Federations and the Milk Producers Cooperative Unions in
consultations with the Dairy Board. The Perspective 2010 goals and strategies to meet them
have been drawn by its actual implementers - Federation and Unions and supported by
NDDB.

DAIRY CO-OPERATIVES

Dairy Cooperatives account for the major share of processed liquid milk marketed in the
country. Milk is processed and marketed by 170 Milk Producers Cooperative Unions, which
federate into 15 State Cooperative Milk Marketing Federations.

The Dairy Boards programmes and activities seek to strengthen the functioning of Dairy
Co-operatives, as producer-owned and controlled organizations. NDDB supports the
development of dairy cooperatives by providing them financial assistance and technical
expertise, ensuring a better future for India‟s farmers.

Over the years, brands created by cooperatives have become synonymous with quality and
value. Brands like Amul (GCMMF), Vijaya (AP), Verka (Punjab), Saras (Rajasthan).
Nandini (Karnataka), Milma (Kerala) and Gokul (Kolhapur) are among those that have
earned customer confidence.

HEAD OFFICE

National Dairy Development Board
P.B. No. 40
Anand - 388 001
Gujarat
INDIA
Telephone: 91-2692-260148/260149/260159/260160
Fax: 91-2692-260159/260165



CHAPTER-2
COMPANY PROFILE

KARNATAKA MILK FEDERATION

The first dairy in Karnataka was started in Kudige in Kodagu district in 1955, further in June
1974, an integrated project was launched in Karnataka to restructure and reorganize the dairy
industry on the co-operative principle and to lay foundation for a new direction in dairy
development.

In 1975, the World Bank aided dairy development was initiated. The present
Karnataka Milk Federation (KMF) came into existence in 1984 as a result of merging of
Karnataka Dairy Development Co-operation, small co-operatives and Karnataka Milk
Production Development and loose vendors.

At the end of the March 1998, the network of 8023 Diary Co-operative Societies
(DCS) have been established which are spread over 166 taluks of the total 175 taluks in all 30
Districts of Karnataka, There are 13 Milk Unions and Dharwad Milk Union (DMU) is one
among them. There are 35 Chilling centers, 3 Farm coolers, 15 Liquid milk plants and
Product dairies for chilling, processing, conservation and marketing of milk. To supply cattle
feed there are 4 cattle feed plants.

To ensure supply of quality germ plasma, Bull breeding farm and frozen semen
bank are also available.



KARNATAKA CO-OPERATIVE MILK PRODUCERS’ FEDERATION
LIMITED (KMF):

KMF is the apex Body in Karnataka representing Dairy Cooperatives. It is the third largest
dairy co-operative amongst the dairy co-operatives in the country. To impart training,
institutes at Bangalore and regional training institutes at Dharwad and Gulbarga are
functioning. Three nitrogen plants (2 plants of 25 CPM and 1 plant of 5CPM) are been set-up
to supply nitrogen, which is used for Refrigeration purpose. Three diagnostic centers have
been set-up for monitoring diseases: three fodder farms at Rajkunte, Kuttanahalli and Kodagu
have been set-up to supply good quality of fodder and seed production farm at Shahpur has
been set-up.

The federation giving details of the latest technology in dairy industry etc is published
“Ksheer Sagar‟‟ magazine monthly.

KMF is a co-operative apex body in the state of Karnataka for representing dairy
Organizations and also implementing dairy development activities to achieve the Following
objectives.

1) Providing assured and remunerative market for all the milk produced by the farmer
members.
2) Providing hygienic milk to urban consumers.
3) To build village level institutions in co-operative sector to manage the dairy activities.
4) To ensure provision of milk production inputs, processing facilities and dissemination
of know-how.
5) To facilitate rural development by providing opportunities for self-employment at
village level, preventing migration to urban areas, etc.



The growth process……

The growth over the years and activities undertaken by KMF is summarized briefly
here under:

1976-
KEY ITEMS 2011-2012(Up to Mar'12) 2012-13(Upto OCT'12)
77
13340 REGED /11870
Dairy Co-operatives No’s 416 13006 REGED / 11568 Funct
Funct

Membership No’s 37000 21.51 Lacs 21.96 Lacs

Avg.42.85
Avg.50.05
Avg. Milk Procurement Kg’s/day 50000 Peak Proc.46.49(Nov'11)
Peak Proc.54.56(Nov'12LKPD)
LKPD
28.90 LLPD / Curd:2.74 LKPD / 29.83 LLPD / Curd:3.05 LKPD / Good
Milk Sales Lt’s/day 95050
Good life 2.19 LLPD life 2.33 LLPD

Cattle Feed Consumed Kg’s/DCS 220 2958 2766

Daily Payment to
Rs.Lakhs 0.90 785 990
Farmers

Turnover Rs.Crores 5823.69 ----------

FUNCTIONS OF KMF
 Co-ordination of activities between the unions.
 Developing the markets for the increasing in milk production.
 To make the brand „‟Nandini‟‟ as a house hold name.
 To increase the market share of „‟Nandini‟‟.



1.6 THE DISTRICT CO-OPERATIVE SOCIETY (DCS):

It is basic organization unit, functioning at the village level, by training local people to
organize and manage the activities village level institution building and development of local
leadership is promoted.

FUNCTIONS

 It functions daily and acts as a marketing outset for the milk produced in the village.
 Input facilities are also canalized to the dairy farmers through these societies and
include Veterinary First Aid, Sale of Cattle Feed, Supply of Fodder Seeds, Seedling
and Provisions of Mobile Veterinary Health Care etc.
 Payment for the milk is done through society.

THE MILK UNION

Milk union is a channel of District Co-Operative Societies in organized form for milk
Procurement, The procurement route is linked to chilling center or a dairy. Dharwad Milk
Union is one of such Milk Unions. It is the middle tier of the complex co-operative
organization network. Unions are formed by federating the societies in locating geographical
area. The milk unions are organized to make them economically viable and the jurisdiction
extends from one district to 3 Districts. There are 5 Milk Unions who‟s Jurisdiction covers a
single district, 4 Unions COVER 2 District, each 3 Unions cover 3 districts and one Union‟s
territory extends to 4 District. All Unions own their own Milk Processing Facilities.

FUNCTIONS

These Unions help to organize new Primary Dairy Co-operative Societies. The Union also
helps in managing these DCS by assisting in accounts, purchase, process and marketing
liquid milk. The Union helps in providing all the input facilities to DCS and channelizes the
dairy farmers through DCS. The Union provides the following facilities.

 Providing Balanced Cattle Feed.
 Providing Animal Health Care.
 Providing Artificial Insemination facility for breed improvement.
 Providing Training for breeding, feeding management.



MILK FEDERATION:

The main objective of the federation is to help in formation of Milk Unions through the state
and thus forming the state level ape‟s organization. The Federation implements the entire
project Activates, after the project activities are accomplished the federation aims at
formulating Marketing strategies in marketing the Milk and Milk Product. The Karnataka
Milk Federation which was setup in 1984 has the following functions:

 The foremost function of KMF was to co-ordinate the activities between the Union

and also in making market available so that production increases

 The Federation also manages surpluses and deficiencies of liquid of milk among the

milk union and help in disposing milk and milk product at reasonable price

 The Federation also manages to market the milk and milk products outside the state.

 Provides Balanced cattle feed, mineral mixture, frozen semen semen straws and liquid

nitrogen are produced and distributed to Unions Excellence in quality is maintained to

lay a solid foundation for widespread acceptance of the milk and milk products.

 Training and developing senior managerial personnel, acquiring and applying all

recent technologies, prescribing quality guidelines and norms.

UNITS OF KMF

KMF has the following Units functioning directly under its control:

 Mother Dairy, Yelahanka,Bangalore.
 Nandini Milk Products, KMF Complex, Bangalore.
 Cattle Feed Plants at Rajanukunte/Gubbi/Dharwad/Hassan
 Nandini Sperm Station (formerly known as Bull Breeding Farm & Frozen Semen
Bank) at Hessaraghatta
 Pouch Film Plant at Munnekolalu, Marathhalli
 Central Training Institute at KMF Complex, Bangalore.

 Quality Control Lab at KMF Complex, Bangalore.



Karnataka Milk Federation consists of:

UNITS NO

Milk units 13

Dairies 17

Liquid Nitrogen Silos 6

Product Plant 3

Training center 3

Sperm Station 1

Cattle Feed Plant 4

Pouch Film Plant 1



ORGANIZATION OVERVIEW

Of

DHARWAD MILK UNION



DHARWAD MILK UNION (DMU)

Dharwad Milk Union (DMU) came into existence on 3-3-1986.DMU was established
under co-operative act on 3-3-1986 at Dharwad and Gadag, Haveri, Uttar kannada and
Dharwad come under its operation.

Establishment:
The Dharwad Milk Union is Co-operative society among the 13 establishment, under KMF.
The Dharwad Milk Union (DMU) is one of the most modern plants in the country. It is
located in the spacious 25 acres of land, located in Lakamanahalli Industrial Area, adjacent to
the Nation Highway-4. It is patterned the AMUL Milk Dairy, Anand, Gujarat.

History:
A group of experienced officers, appointed by the Karnataka Milk Federation surveyed the
whole of Dharwad districts (includes two newly formed district Gadag and Haveri) and Uttar
Karnataka. Further they found out there as a need for a Milk Dairy. They travelled the
Surrounding villages educated the villagers about Milk and Milk products and the benefits
they would get from the Milk Dairy.

Seeing the overwhelming response and untapped resources and the huge market the
Federation decided to setup the Milk Union in 1984, known as the



DMU MISSION STATEMENT:

At DMU we Endeavour to satisfy the taste and nutritional requirements of the customers.
Through excellence in marketing by DMU committed team, DMU are committed to offering
quality products that provide best value for money.

DHARWAD DISTRICT CO-OPERATIVE MILK PRODUCERS SOCIETIES
UNION LIMITED:

Further in 1988, the Raipur Dairy and Chilling Center, setup in 1968, also came under the
Union. In 1989, the training center, which was controlled by KMF, came under Dharwad
Milk Union.
DMU was Rs.7 Crore Projects of which Government has Rs.2Crore of share capital and
Authorized capital of DMU is Rs.5crore.
DMU formed 551 milk producer‟s co-operative societies in Dharwad, Gudag, and Haveri
also Uttar Kannada districts.
The production capacity of DMU is 2 lack litters of milk per day and also has the capacity to
produce 12 tons of milk powder, 10 tons of butter, 6 tonnes of ghee per day.
DMU is collecting 70thousand litters of milk per day from its societies and sells 60 thousand
litters of milk per day and the remaining milk is used for producing milk products.

Functions of DMU
 The main function of DMU is to procure milk from villagers and pay them the right
price.
 To educate the villagers about milk and its quality
 To make ‟Nandini‟ as a part of daily life.
 To provide good quality of cattle feed, fodder, veterinary properly and in an efficient
manner.
 To see that the DCS‟s are carrying out their activities properly and in an efficient
manner.



Objectives of DMU:

 Providing hygienic and good quality of milk to the consumers.
 To build the economic strength of the milk products in villages.
 To eliminate middlemen‟s in the business so that the milk products receive there
appropriate share of bread.
 To educate the villages about the adulteration of milk and its harmful effect on the
body.
 To see that every citizen becomes healthy by consuming good quality of milk.
 To make villagers self-viable and build self image.

Process at DMU

The milk collected at DCS‟s is brought to the center thought carries trucks etc. The Quality
and quantity of milk bought is checked at the Reception center by a supervisor.

A sample of milk is taken and is tested in a laboratory for fat content, Solid Not fat (SNF)
acidity etc.

As the milk is at room temperature is to be brought down to 40 c to 50 c. so that it may
check the growth of bacteria. To ensure this milk is passed through a chilling chamber where
the milk is chilled.
Its temperature is bought down and then the milk is stored in a tank called as ‟Ram Milk
Tank‟ From this tank milk is pumped to a pasteurizing cell where the milk is heated up to 720
c and 15 seconds, so that all the bacteria and microorganisms may be killed and then the milk
is simultaneously cooled to 40 C to 5o C and is store in a „Pasteurized Milk Tank‟ From here
the milk is separated according to the requirement of production of different types of milk
and the remaining milk is used for manufacturing milk products.



Nature of business carried
Procuring and marketing of milk production and sale of milk products.

VISION OF THE DMU:
Cleanliness
Total quality maintenance
Discipline
Co-operation.
Transparency.

QUALITY POLICY OF DMU:
To ensure pure, hygienic milk and milk products through continuous improvement of quality
standards.



PRODUCT PROFILE

KMF, Dharwad product the following milk and Milk Products.

HOMOGENIZED TONED MILK
Karnataka‟s most favorite milk, Nadine Toned Fresh
And pure milk containing 3.1% FAT and 8.5% SNF, Available in
500ml and 1tr packs.

Price-26 Rs per liter

SHUBHAM

Buffalo‟s milk, 100% pure pasteurized processed and packed
Hygienically, this milk has 4.6%fat and 8.5%snf. Available in 5ooml and
1ltr, and also Available in 5ltrs packs for marriages, and other Functions.
Price-30 Rs per liter

FULL CREAM MILK

Full cream milk, containing 6% fat and 9% SNF, Rich, creamier
Tastier milk, ideal for preparing home-made sweet & savories.
Available in 500ml and 11trs packs.

HOMOGENIZED COW MILK

Nandini homogenized milk is pure milk. This is homogenized
And pasteurized, consistent right through, it gives you more cups
Of tea or coffee and is easily digestible. Available in 500ml and 1 lter packs.
Price- 28 Rs per liter Fat3.6% and SNF 8.5%.



NANDINI SET CURDS

A Nandini curd made from pure milk, its thick delicious Giving you
all the goodness of homemade curds. Available in 200gms and
500 gms sachet.

MILK POWDER

Enjoy the taste of pure milk! Skimmed milk powder made form
pure milk, processed and packed hygienically. Available in100gms,
200mgs,500gms, 1kg& 25kg Pack.

BUTTER

Rich, smooth and delicious, Nandini butter is made out of fresh
Pasteurized cream, rich taste, smooth texture and the rich purity
of cow‟s milk makes any preparation a delicious treat. Available in
100gms (salted), 200gms and 500gms cartons both salted and
Unsalted

PEDHA

No matter what you ate celebrating! Made from pure milk,
Nandini peda is a delicious treat for the family. It will be store at
Room temperature approximately 7days, Available in 250gms pack
containing 10 pieces each.

GHEE

A state of purity, Nandini ghee made from pure butter. It is fresh
and pure with a delicious flavor, hygienically manufactured and
packed in a special pack to retain the goodness of pure ghee. Shelf
life of 6 months at ambient temperature. Available in 200ml,
500ml, 1000ml sachets, 5ltrs tins and 15kegs tins..



GOOD LIFE MILK

Cow's pure milk, UHT processed, bacteria free in a tamper-proof tetra-
fino pack which keeps this milk fresh for 90 days without refrigeration
until opened.

Available in 500ml Fino and in 200ml Bricks at premium stores
across the state.

SMART

Cow's pure milk, homogenized, double toned UHT processed milk bacteria
free in a tamper proof tetra fino pack which keep the milk fresh for 60days
without refrigeration until opened. At present the milk is being directly home
delivered on request.
Available in 500ml pack.
SLIM

Cow's pure milk, homogenized, Skimmed. UHT processed milk bacteria free in
a tamper proof tetra-fino pack which keep the milk fresh for 60 days without
refrigeration until opened. Nandini Good life slim skimmed milk is 99.5% fat
free.

Available in 500ml Fino and in 200ml Bricks at premium stores across the
state.

BUTTER MILK

Nandini spiced Butter Milk is a refreshing health drink. It is made from
quality curds and is blended with fresh green chillies, green coriander leaves,
asafoetida and fresh ginger. Nandini spiced butter promotes health and easy
digestion.

It is available in 200 ml packs and is priced at most competitive rates, so that it is
affordable to all sections of people.



MYSORE PAK
Fresh and tasty, Nandini Mysore Pak is made from quality Bengal Gram,
Nandini Ghee and Sugar. It's a delicious way to relish a sweet moment.

Available in 250gms, 500gms. PP container shrink packed to preserve
freshness. Can be kept for 7 days.
Advised to consume fresh to enjoy its excellent taste.

GULAB JAMOON MIX

Great way to those soft and juicy jamoon treats at home! Nandini Gulab
Jamoon Mix is made from Nandini skimmed milk powder, maida, soji and
Nandini Special Grade Ghee.

Available in 100gms and 200gms standy pouch with a five layer foil
lamination. Shelf life of 6 months.

PANEER

Pure and tasty dishes with Nandini Paneer! A fresh, nutritive product made
by coagulating pure milk, it is an excellent source of milk protein. Nandini
paneer is ideal for vegetarian dishes such as mutter paneer, sag paneer and
various other dishes.

Refrigerated storage is preferable. Available in 200gms pack, specially packed in a five
layer film and vacuum packed to preserve its quality. Bulk packings are also available.

FLAVOURED MILK

Sterilised flavoured milk, a nutritious and healthy drink and an all-season
wholesome drink available in five different flavours - pineapple, rose, badam,
pista and natural orange. A part from refreshing energy.

Available in 200ml



ICE CREAM

Nutritious, delicious creamy ice cream is manufactured at ISO
9002/HACCP certified Mother Dairy modern plant. The range includes
Vanilla, Strawberry, Pineapple, Mango, Chocolate, Butter scotch, Kesar
Pista, Orange & Mango Candies, Mango & Raspberry Dollies, Chocobar
and Ball varieties Vanilla, Strawberry, Sundae.

Available in 500ml and 1ltr packs.

BADAM POWDER

A delicious beverage with hot or cold milk, It can be used for kheer,
kesaribath, desserts or ice cream. It's the goodness of Badam mixed with
almond, edible starch, saffron, skimmed milk powder and cane sugar to
give you the ideal Badam delight.

Available in 200 gms. PP boxes, cover shrink wrapped to offer better
quality and also to prevent pilferage Shelf life of 6 months under room
temperature.

KHOVA

Khova is prepared out of fresh milk. It is an ideal base to prepare delicious
sweets at home like peda, Gulab Jamoon, Kalakand, Burfi, Gajar Halwa and
the like. Nandini Khova gives you a high nutritive value with large
quantities of muscle building proteins, bone forming minerals and energy
giving fat and lactose.

To be kept under refrigeration
Available in 200 gms vaccum packed in a special five layer pouch film
Khova is also available in bulk pack for marriages and other functions

CURD

Nandini Curd made from pure milk. It's thick and delicious.
Giving you all the goodness of homemade curds.

Available in 200gms and 500gms sachet.



Area of operation - Regional

Ownership pattern

DMU builds and runs under the co-operative institutions such as
District Co-operative Society.(DCS)
National Dairy Development Board.(NDDB)

Competitor’s of information.
DMU has various competitors in the milk products market such as
Krishna
Arokya
Spurthi
Adhitya
Bharath Dairy

Infrastructural facilities,

Infrastructural facilities of DMU are as follows.

Security facilities.
Canteen facilities.
Shifts facilities-3shifts per day.
Heat allowance
Cold allowance

Achievements or awards
DMU has got ENERGY SAVING award for the production activities.



Future growth and prospects

 Procuring and selling 1 lack litters per day.
 Preparing for ISO-9001 certification.
 Marketing quality improvement.
 Developing HACCP-hazards Analysis and Critical Control Points.
 Getting export Grade milk powder.

Input required per day:

 Milk procurement up to 155000 liters
 5 to 6 lakh liters of water
 10,000 units of electricity
 4 to 5 tones of coal
 Generator in case of electricity failure and manpower

Department of DMU

1. Purchasing Department

2. Quality Control Department

3. Production Department

4. Procurement and Input Department (P & I)

5. Finished goods and materials storage Department (FGS)

6. Stores Department

7. Sales and Marketing Department

8. Finance and Accounts Department

9. Administration Department



A) Organization structure

President

Director Director Director Director Director
(Govt) (Govt) (DCS) (NDDB) (Society)

MANAGING DIRECTOR

Procurement Product process Marketing Admn Finance
Dept Dept Dept Dept Dept

Transport Quality FGS & Account &
MIS
Control Stores Purchase



Dharwad Milk Union:

STATUS A Co-operative society registered under the Co-operative
Act 1959.
NATUREOF BUSINESS Procuring & Marketing of Milk Production & Sale of Milk
Products.
SHARE CAPITAL 3 crore Approx.
PLANT CAPACITY

MILK CHILLING CENTER Gadag
AND CAPACITY Haveri
Hirekerur
Rona
Srisi
KARWAR PACKING The milk in bulk is sent for packing and distribution at
UNIT Karwar which supplies and need of karwar, Gokarna,
Honnavar, bhatkal, Murudeshwar.
SALES OF MILK 90,000 LPD
AREA OF OPERATION Dharwad,Haveri,Gadag, Uttar Karnataka,
BOARD OF DIRECTORS Elected Member 8
Ex-Officers 5
By Govt 3
TOTAL WORKERS 289 Workers
LOCATION Lakkamanahalli Industrial Area,Dharwad
DEPARTMENT 9
BRAND NAME Nandini
PRODUCTS Milk
Toned Milk, Standard Milk, Shubam Milk
Milk Product
Butter,Ghee,Pedha,Curd,Lassi,Panner,Milk Powder
CO-OPRATIVE SOCIETIES 760 Societies
AT VILLAGE LAVEL



PROCUREMENT AND INPUT DEPARTMENT

The union carries on procurement by setting up co-operative societies at village level.
Later milk is collected in the chilling centre. Milk collected from the milk centre, is first
tested. There is milk –testing equipments for this purpose. Then a survey on availability of
transportation facilities and productive capacity of villages are conducted. If the marketable
surplus is more than 150 liters pre day, a society is formed. Further 10 promoters are selected
from the village and are given the responsibilities of collecting the capital for the society by
selling shares. Procurement is done twice a day and payment is made on the basis of
percentage of content and SNF in the milk.

After this, milk is sent to Union else chilling center, whichever is near. At the
chilling center, milk is chilled up to 4 degree Celsius. Later this chilled milk is sent to Union
in Insulated Tankers for further processing. The main function of this department is to
procure milk different areas throughout the year.

The department also provides facilities that help in enhancing more productivity.
The main function of p & I department is to organize, supervise and operate village dairy co-
operative societies and to procure more milk from village societies. Other services provided
are:

Veterinary services to keep up the good health of cattle through
- Regular health camps
- emergency services round the clock
- first aid, vaccination, infertility camps, fodder
Artificial insemination facilities for improvements of cattle breed.
Facilitating Training programs regarding management of cattle
Supply of fodder to the cattle



THE STRUCTURE OF P & I DEPARTMENT

Manager

Procurement wing Technical wing

Deputy Manager Deputy Manager

Assistant Manager Assistant Manager

Extension officer

Clerks Helpers



PRODUCTION AND PROCESS DEPARTMENT

The main objective of this department is to follow up production schedule as per plan
and to maintain close and co-ordinate relationship with other department and ensures to
upgrade the technical efficiency of production. Milk, as it is highly perishable product has to
processed immediately to avoid spoilage milk respect to its flavor, texture and taste

Production department is well equipped and has various types of highly
sophisticated machines imported from Sweden and Denmark. Once the milk is received from
p & I department, it is first weighed with the help of weighing bowl. Later, it is poured in
dump tank. Sample testing is made through lactometer reading and other tests. The fat and
SNF content of each sample of milk is accessed the cow and buffalo‟s milk are separately
received and sent to the production section separately through two different stainless steel
pipes.

Later, the raw milk is passed through plate chiller of variable capacity where it is cooled
up to 4-5 degrees Celsius. This cooled raw material is further stored in a silo of 30,000 liters
capacity.

PURPOSE OF CHILING

This is done to avoid the growth of micro organisms, which are responsible for
spoilage of milk and bitter taste. The milk, which is stored in silos, is pumped through
pipeline to the balance tank, which helps to maintain the steady speed flow of milk in the
pasteurization machine. In, DMU, there are 2 milk pasteurization machine and 1 Cream
pasteurization machine.

PURPOSE OF PASTEURIZATION

Pasteurization is a process where milk is heated to high temperature and cooled
instantly, to destroy any microorganism. The pasteurized milk will stored in pasteurized milk
silos and then sent to pre-packing section. Package is done in 500ml and stored in cold
storage at 7 degree.



Work flow model. (End to End):

Production process has the following work flow model.

DCS

Fresh Liquid Milk Sample Testing FAT and SNF

Chilling

Storing

Pasteurization

Separation

Homogenization

Storing

Packing

Dispatching



PASTEURIZATION OF CREAM:

The milk in bulk is taken to the cream separator. Here, the cream is separated. The
cream is passed through cream pasteurization Unit. This cream is sent to Butter section. The
milk with no fat is skimmed milk. This skim milk is pumped back to pasteurization Unit and
heated to72 using steam and chilled to 4 using chilled water and stored silos.

This skimmed milk is sent to powder section. The pasteurize cream is mixed in portion to
Pasteurized milk.

CURDS:

Raw milk is heated to 90 and allowed to cool to 30. Later culture is added to it and
packed; the curd is formed in the packet itself. It is stored and packed in 200gms and 500gms.

BUTTER:

The cream, which is stored in cream refining tank, is taken to the churning section
where it is churned. Here butter fat and butter milk are separated.The vacuum pump removes
excess of moisture and butter comes out of continuous butter making machine (capacity-
1500kgs/hour).Butter is packed in 100, 200and 500gms and also in 10, 25 gms, these are
stored in deep freezer room with temperature -22 and if the order of salt butter they mix salt
water with cream and other process is same.

GHEE:

There are 2 Ghee Boiler of capacity 1500kgs/batch. A butter of 2.5 tons is melted and
is brought Ghee Boiler. Here it is heated to 116-117 degree Celsius for 15 minutes so that the
residue is allowed to settle down and Ghee is passed setting tank through clarifies. Later
Ghee is allowed for cooling (at 30 to 40) and packed in Tin of liter, 500ml and 200ml pack
and kept in the cold storage.

PANEER:

If there is excess of milk, then, paneer is made. The milk is heated to 90 for 15 to 20
minutes. Glacial acetic acid is added to milk, and then milk is strained through fine muslin
cloth. The solid portion is retained and put in water and then it is put in chilled water and left
over night. Later it is packed and stored in cold storage.



MILK POWDER:

When there is excess of milk. Milk powder is made the capacity of the powder plant is
12tons. There are two sections-Evaporator and spray driver through which milk is converted
to Milk powder. In Evaporator, milk is boiled for 55 at high vacuum, Milk is concentrated to
drier 40-45 of milk is solid, moisture is removed and the milk powder obtained consists of
4% moisture.

PEDHA:

Dharwad is famous for its delicious pedhas DMU has separate pedha section. About 80
liters (depends upon the demand ) is heated continuously for 3 hours till the milk is semi-
solid, later sugar and other ingredients are added and stirred continuously on low flame. Later
it cooled and it is shaped in small balls and packed.

The milk produced here is differentiated by the content of FAT and SNF

TYPE FAT SNF

Toned milk 3.1% 8.5%

Standard Milk 4.5% 9%

Subham Milk 6% 9%

Full cream milk 5.1% 9%

The below table gives a brief idea of the milk products, their fat SNF moisture content :

PRODUCT FAT SNF MOISTURE

Butter 83% 1% 16%

Ghee 99.8% - 0.2%

Paneer 20% 30% 50%



PRODUCTION DEPARTMENT

The production department has the following structure.

MANAGER DAIRY

DEPUTY MANAGER OFFICE STAFF

ASSISTANT

MANAGER

TECHNICAL ASSISTANT ASSISTANT

OFFICER (ACCOUNTS) (STORES)

SENIOR
CLERK TYPIST
SUPERVISOR

JUNEIOR

SUPERVISOR

DAIRY DAIRY DAIRY

OPRETORS TECHNICIAN WORKERS



QUALITY CONTROL DEPARTEMENT

In DMU, at every stage, care is taken to ensure that the customer gets the products,
which have a very high quality. Hence there is a separate department called Quality
Department. Where the quality testing is done, there is a separate laboratory for this. Quality
control is very essential as to maintain the freshness of the milk. All the containers, pipes and
other equipments are washed with hot water before starting off with new production. There
are many tests conducted here. The packed milk we get will have undergone 3 quality tests.
First test is done on raw milk, which we get from chilling center. Next before standardization
and the last test before packing, The other tests conducted are.

TESTS REASON

Temperature Should be below 5 degrees

Clot on Boiling If mill curdles soon after boiling milk

Acidity Test To test the extent of acidity

Alcohol Test To check the heat stability of milk

Lactometer To check the density of milk

Fast test Percentage of fat determined

SNF Test Percentage of SNF determined for pricing



QUALITY CONTROL DEPARTEMENT STRUCTURE

DEPUTY MANAGER

ASSISTANT
ASSISTANT
MANAGER
MANAGER

QUALITY ASSISTANT QUALITY ASSISTANT
OFFICER OFFICER
(CHEMICAL) (BACTIRIOLOGY)

LAB QUALITY QUALITY

ASSISTANT ASSIATANT ANALYST



MARKETING DEPARTMENT

Marketing Manager

Deputy Manager

Assistant Manager

Marketing Marketing
Superintendent Technical officer

Development officer Development officer

Marketing Marketing

Assistant Assistant



STARAGETIES OF THE MARKETING DEPARTMEN

 Visit to all routes of individual points by going in a routes distribution vehicle for
contact with all agents.
 Aims to conduct 5 Consumer Awareness Program and various Seminars.
 Aims at conducting agents‟ meetings.
 Aims at setting 10 Exclusive NANDINI Milk Parlors.
 Aiming to set up new sales promotional and advertisement activities.
 Women association programs.
 Joining with other programs.

Strategy Implementation system:
Marketing strategy like sales promotional and advertisement activities of DMU are as
follows.
 Press advertisements

 Hoardings

 Wall paintings

 Rental for KSRTC Buses

 Leaflets

 Banners

 Vehicles paintings and own hoarding paintings

 Pole ads and Flute boards

 Rate display boards

 Milk carry bags

 Calendar and greetings

Exhibition, drawing and consumer mela.

Further the Marketing Department has two sub-department
 STORES
 FINISHED GOODS STORE



STORES DEPARTEMENT

The Stores Department in DMU follows the Cordex System (Coded Control System). A card
is maintained for each item and a number is allotted. The card attached to each article
consists of amount balance, date of issue, purchase etc. this is later recorded in separated
ledger book. The inventories are of different kind ranging from mechanical, spares, packing
items to animal drugs, stationary and veterinary drugs. There are at least 4000 different
inventories.

The department has the following services:

It tries to maintain maximum and minimum level of inventory so as to avoid blockage
of capital and storage.
Ordinary and local available commodities are maintained at minimum possible level.
Items of urgent and not easily available are stored sufficiently for further demand.

The structure of this department is as shown.

STORES SUPPERIDENT

STORES ASSISTANT

(FDS)

STORES ASSISTANT

(GR-II)

HELPERS



FINISHED GOODS STORES:

This Department acts as an interface between production and Marketing Department. It
is concerned with manatees of finishes goods connected records. It receives all the finished
goods and issues the stock to marketing department as per indents. It ensures that the goods
are maintained properly with respect to quality.

Accounts are maintained and daily and daily and monthly report is submitted to the
production. Marketing and Finance Departments, as the products as perishable First-In-First
Out method of inventory is followed.

The FGS Department has the following Structure;

ASSISTANT MANAGER

MARKETING ACCOUNT

ASSISTANT ASSISTANT

DAIRY OPERATOR

DAIRY WORKERS



FINANCE DEPARTMENT

This Department is responsible for keeping all the inward and outward flow of money
of union. It prepares budget every year and financial rules for receipts all payments are
framed. The functions of these departments are;

To prepare monthly accounts (Receipts and payments account P&I account and
Balance Sheet).
To prepare quarterly financial statement.
To prepare integrated business plan.
To prepare year ending financial statements.
To get accounts audited from statutory books of accounts.

DMU, Follows two types of auditing;

1. Pre-Audit System-done by Finance and Accounts Department every year.
2. Statutory System-Done by private charted accounts every year.

THE STRUCTURE OF FINANCE DEPARTMENT IS AS SHOWN

DEPUTY MANAGER

ASSITNANT MANAGER

ASSISTANT ACCOUNT
OFFICER

ASSISTANT ACCOUNT



PURCHASE DEPARTMENT

It is a sub-department, which comes under Finance Department. The main work of
this department is to purchase various materials required by different department. After
ascertaining the stock position by stores department and indent is sent by different
department duly approved by the Managing Director. This department act to purchase
materials.

It also maintains records of all the suppliers calls for Tenders, quotation etc. Quotations with
lowest rate are sanctioned. Purchase up to 50,000 can be made by Purchase Department.If the
purchase amount is more than 50,000, then the approval of Managing Director.

THE STRUCTURE OF PURCHASE DEPARTMENT IS AS FOLLOWS

PUCRCHASE
OFFICER

PURCHASE
SUPERDIENT

ASSISTANT
PURCHASE OFFICER

HELPERS



ADMINISTRATION DEPARTMENT:

The Administration Department controls the overall functioning of the organization. The
Organization consists of the following three levels.

a. Managerial cadre includes Managing Director, Deputy Manager, and Assistance Manager.
b. Supervisory level included technical officers and supervisors.
c. Worker level includes labors helpers.

The department has the following structure:

Deputy Manager

Asst. Manager (Board) Asst. Manager

(Personnel)

OZPPpppp

Admn Superintendent Admn Superintendent

Admn Assistant Time Canteen Security



The Administration Department also handles Canteen, Security and Time Keeping
Machine.

CANTEEN

There is a canteen in the premises itself. The employees are provided lunch, tea etc., at
reasonable rates. The canteen is handled by the canteen-In charge.

TIME KEEPER

This department records the working hours of the employees. Time machine shows the entry
time and exit time of each employee. The workers divided into different shifts control the
working of the department. Each employee is given a punch card, whenever an employee
enters the premise he has to punch the card in the time machine and before living the premise
he has to do the same. Based on this attendance, canteen bills are charged, wages are fixed
and deduction are made.

SECURITY DEPARMENT

Dharwad milk union occupies 25 acres of land the whole premise is been guarded by
the security personnel. The security people work in three shifts. All the vehicles are checked
before entering the premise. The department is also maintains separate registers like store-in
register, attendance register etc.

SKILLS
The skills here refers to the various skills the workers have here the workers are
further Divided into three categories, This first category contains the people who are in the
top management level the second category consists of the supervisor‟s office assistants etc.
The Third category consists of the supervisor‟s office assistants etc. The third category
consists of the workers at the operational.
The first category consist of the people who are in the decision making process in KMF
these people are highly qualified few Deputy Managers are to industries like IRMA, Anand
dairy for Training.
The second category is related to office work and fieldwork. These people are also
trained in Computer Applications, secretarial skills, Accounting skills etc.
The third level people consist of the workers who are actually into the operation these
People are also trained into fields like checking the quality of milk processing packing etc.



TRAINING SYSTEM
The Union emphasizes on training the employees. Most of the training given to
the employees here are On-the-Job training and few Off-the-Job Training.

 Procurement and Technical Input Training (NDDB)
 PG Diploma in Rural Management
 Basic Computer Applications.
 Data Base Administrator
 Finance Training for non-Finance Officer
 Co-Operative management Training Programs
 Clean Milk Production Training

STYLES
A) DMU has follows Top to Bottom or Top down style system.
B) The Styles of the organization is said to follow the participative type that is the
management cadre follow the participative type of administration. The fact is that for a
manufacturing firm like the KMF, Dharwad this type of administration is necessary

The Indicators of the Style are:
Follows Orders, rules and procedure
Is always Reliable, Dependable
Watches DetailsPrefers to write out Communications
Is Rational, Logical, Self-Controlled, Fair and Firm, Decision making parameter for
day to day operations,
The marketing department provides information to production department
regarding Daily requirements of the sale of the milk and milk products based on the
marketing demand, Later the production department will take the decision about production
activities.

STRATEGIES
The Dharwad Milk Union has the following set of strategy, which will be formulated
Event year. The present year has the following strategies. The strategies are formulated with
the help of KMF and NDDB and the union members. Below are the strategies set for this
year.



COMPETITOR PROFILE



Major competitor in Karnataka for K.M.F

HATSUN (Arokya)
Welcome to the Hatsun world, India‟s largest private dairy. From a modest ice cream
manufacturer to one of the leading names in India‟s dairy sector in just a span of three
decades,

The company was in-corporated on 4th march 1986 under the name and style of
hatsun foods private ltd. The name of the company was changed hatsun milk foods private ltd
and subsequently converted in to a public ltd company in the year 1995. the present name of
the company was adopted in the year 1998 .

The company was found and promoted by Mr. R.G Chandramogan and his associates.R.G
Chandramogan, Initially started ice cream business in early in 1970 and later in the year 1986
formed the business into a private ltd co, which was later converted into a public ltd co.

The company is the leading private dairy industry in India. the co enjoys market share
of 60%&35%for its ice creams in tamilnadu & south India respectively .the market share for
its milk & milk based product is 45% in the entire south India the co plant are situated in red
hills (Chennai),Salem and kancheepuram in tamilnadu and belgum in Karnataka .

The co is the first in south India to introduce homogenized milk, which is consumed all
over the world .the co was proved to introduced 100% pathogenic bacteria removed milk, the
first of its kind in India bacteria removed milk is produced by bacteria clarification process
using german technology which physically removes 100% pathogenic bacteria from milk this
technology helps in preserving the natural flavor and taste of from fresh milk.

It started as a creamy dream in 1970: Arun icecream, the rich, delicious brand that has
captured the heart of millions of icecream lovers. With over 70 delightful varieties it is the
No.1 selling ice cream in south india . Arun ice creams is manufacture at the most modern
plant its kind in Chennai. From the ingredients, to the packing and the distribution stringent
quality control is maintained at every stage which has made Arun ice creams the first ice
cream brand in India to win the 9001 certification for quality and world class manufacturing
facilities. Arun ice cream reaches the customer through the largest network of a exclusive
parlours in India.



Sales
The combined sales of arokya and komatha is 7,5000 liters a day. And hastsun is fast nearing
its objective 1 million liters a day.

Hastun quest for quality starts at procurement, two times a day, 365 days of the year at over a
thousand collection centers, from more than a hundred thousand farmers hastsun sources its
milk with on ever watchful eye, always keen on quality. Its an enthusiastic and busting
activity when milk its takes first step in its journey to the consumers homes.

Products

 AROKYA
 KOMATH
 SANTHOSH
 ARUN (Ice cream)

OTHER COMPETITORS

 SPURTHI
 BHARTHI
 ADITHYA
 SRI KRISHNA



SWOT ANALYSIS



SWOT ANALYSIS

STRENGTH

 Nandini enjoys good image.
 Wide distribution network.
 Milk processed in local milk.
 It enjoys highest share in the packed milk segment.

WEAKNESS

 Recurrent quality problem.
 Lowest paying brand (commission less).
 Low milk predominant.
 Poor retail serving & consumer grievance handling.
 Inadequate sales promotional activity & bad smell.

OPPORTUNITY

 Scope to develop new area.
 Availability of buffalo milk-improve market quality.
 Predominant of loose milk segment- divide appropriate strategies.
 Market penetration.

THREATS

 No entry barriers for private players.
 Low level of consumer awareness.
 Persuade benefits of competing brand.



Project
Overview



INTRODUCTION OF PROJECT
Introduction

This project is carried out in, Karnataka co-operative Milk Federation Hubli. They
work for the purpose of giving a quality and fresh milk for customer without adding any
chemicals. Direct formers (cow) to customer. With a fresh good quality milk.

The study has been under taken to find out the effectiveness of distribution channel about
K.M.F Dharwad Milk and other products.

The area of study is limited to

 Hubli
 Dharwad

The study has been done to ensure that this would help and organization to increase their
sales and ultimately profits.

SCOPE OF THE PROJECT
The project was exclusively conducted for dealers and agents for consumer durables.
The time frame of this project lasted about 2 months.

Project title

“A Study on Distribution Effectiveness in Hubli & Dharwad For K.M.F”



AIMS & OBJECTIVES:

1. To study the organization overview.

2. The study has been understood to find out the distribution channel about K.M.F
organization.

3. To know the expectations of the agents, dealers from the organization.

4. To find out the role of the organization in promotion of the product.

5. To determine the satisfaction level of agents and dealers organization

6. To determine the effectiveness of the distribution channel.

7. To know the reason for non satisfaction of the agents.

8. To know the problem faced by agents or dealers.



METHODOLOGY

In this project the questionnaire was designed for dealers and agents of K.M.F –
Dharwad in Hubli and Dharwad.

In this project the questionnaire was administrated personally.

Questionnaire adapted was

1. Open-ended question.
2. Multiple questions
3. Dichotomous questions

Data collection Instrument

In this project personnel interview and questionnaire was adapted for collecting the
data.

1. Primary data
2. Secondary data.

Primary data is collected through survey method i.e. by preparing questionnaire and
interviewing persons directly and by interacting with the marketing manager, dealers, agents
and other staff members who all are involved in distribution network.

Secondary data, which is secondary in nature i.e. already, collected information. This
secondary data is collected through-

Company broachers
Books
Magazines
News papers
Internet



Analysis and interpretation

From the required data collected from the dealers and agents by way of questionnaires
and personal interview, on the basis of collected data can be analyzed and based on this
analysis, conclusion and recommendations was formulated.

Research Approach: Survey Method

Sampling Process: The process of drawing a sample from a large number of
Agents and dealers is called sampling
The sampling process is broadly divided into three categories, they are

1. Sampling unit
2. Sampling size
3. Sampling technique

Sampling Unit: Sampling unit for study is conducted on distribution effectiveness on
Nandini Milk and other products for agents and dealers from the various part of the Hubli
And Dharwad.

Sampling size:The sampling size consist the 100 agents, dealers for K.M.F products in
various parts of Hubli and Dharwad.

Sampling technique:
Probability judgment techniques
Systematic sampling: The most common form of systematic sampling is an equal-
probability method. In this approach, progression through the list is treated circularly, with a
return to the top once the end of the list is passed. The sampling starts by selecting an element
from the list at random and then every kth element in the frame is selected, where k, the
sampling interval this is calculated as,



Population size:

Hubli-Dharwad City Total Male Female

Population 943,857 475,980 467,877

Literates 736,506 389,290 347,216

Children (06) 99,989 51,293 48,696

Sex ratio 1:0.98 983 1000



DISTRIBUTION
CHANNEL



Distribution

'Distribution' is one of the four aspects of marketing. A distribution business is the
middleman between the manufacturer and retailer or (usually)in commercial or industrial the
business customer. After a product is manufactured by a supplier/factory, it is typically stored
in a distribution company's warehouse. The product is then sold to retailers or customers. The
other three parts of the marketing mix are product management, pricing, and promotion.
Traditionally, distribution has been seen as dealing with logistics.

The Distribution Channel

Frequently there may be a chain of intermediaries; each passing the product down the chain
to the next organization, before it finally reaches the consumer or end-user. This process is
known as the 'distribution chain' or, rather more exotically, as the 'channel'. Each of the
elements in these chains will have their own specific needs; which the producer must take
into account, along with those of the all-important end-user.



Channels

A number of alternative `channels' of distribution may be available:

1. Selling direct (via a salesforce)
2. Mail order (including Internet and telephone sales)
3. Retailer
4. Wholesaler
5. Agent (who acts on behalf of the producer)
Vertical Marketing

This relatively recent development integrates the channel with the original supplier -
producer, wholesalers and retailers working in one unified system. This may arise because
one member of the chain owns the other elements (often called `corporate systems
integration'); a supplier owning its own retail outlets, this being 'forward' integration. It is
perhaps more likely that a retailer will own its own suppliers, this being 'backward'
integration. (For example, MFI, the furniture retailer, owns Hygena which makes its kitchen
and bedroom units.) The integration can also be by franchise (such as that offered by
McDonald's hamburgers and Benetton clothes) or simple co-operation (in the way that Marks
& Spencer co-operates with its suppliers).

Alternative approaches are `contractual systems', often led by a wholesale or retail co-
operative, and `administered marketing systems' where one (dominant) member of the
distribution chain uses its position to co-ordinate the other members' activities. This has
traditionally been the form led by manufacturers.

The intention of vertical marketing is to give all those involved (and particularly the supplier
at one end, and the retailer at the other) 'control' over the distribution chain. This removes one
set of variables from the marketing equations.

Other research indicates that vertical integration is a strategy which is best pursued at the
mature stage of the market (or product). At earlier stages it can actually reduce profits. It is
arguable that it also diverts attention from the real business of the organization. Suppliers
rarely excel in retail operations and, in theory, retailers should focus on their sales outlets
rather than on manufacturing facilities ( Marks & Spencer, very deliberately provides
considerable amounts of technical assistance to its suppliers, but does not own them).



Horizontal Marketing

A rather less frequent example of new approaches to channels is where two or more non-
competing organizations agree on a joint venture - a joint marketing operation - because it is
beyond the capacity of each individual organization alone. In general, this is less likely to
revolve around marketing synergy.

Retailers

Like for wholesalers, it may be that you only use retailers if you manufacture your own
products: again, evidencing the larger smaller business. Retailers can promote your product
by making consumers aware of its availability and by passing on technical information that
could encourage the sale.
Because there are thousands of retailers located all around the country, they are an
excellent intermediary for distributing your product to a wide geographical range of
consumers. Today, many retailers prefer to buy their products directly from producers (you)
instead of going through wholesalers: this is typical of supermarkets. By selling directly to
retailers, the added expense of transportation is the only issue.

Small businesses account for a high proportion of retailers and so they can often find
themselves at the end or in the middle of a distribution channel, where their own channel of
selling to a consumer would be direct.

Using Multiple Channels of Distribution

When analyzing which distribution channel is best for your business, you should not restrict
yourself to one channel, but instead adopt a number of channels that are suitable for selling
your product/service efficiently and effectively (if necessary).

For example, a business may use a retailer to sell their product and at the same time, use
direct mail and telemarketing to further encourage sales: there are a number of feasible
combinations.

Choosing the Right Distribution Channel

There are several factors affecting how you may decide on the most appropriate distribution
channel(s). A few of these are highlighted below:



Profit and Sales

Which channels will maximise sales and profit? Using intermediaries such as agents,
retailers and wholesalers can distribute your product on a wider scale but can often
lead to reduced profit levels. Finding the right balance is the key

Product/Service

Perishable products such as certain foods (e.g. milk) usually require direct sales
because of their short shelf lives. The same principle applies to fragile products to
reduce the amount of transportation and handling
Arguably, services need to be sold direct or through intermediaries that provide a
strong link between the consumer and the business such as direct mail, e-commerce or
telemarketing. This way the consumer can specifically give their situation or
requirements directly to the business so a tailored service can be provided
Products of low value that are manufactured in high quantities may be influenced to
take a distribution channel involving a wholesaler. This way, it reduces the issue of
storage, as wholesalers will buy in bulk

The Consumer

How convenient is it for them to purchase your product or service
Who is your target audience

Telemarketing

Selling your product/service through telemarketing is becoming increasingly popular. Similar
to direct mail, telemarketing allows sales to be made on a local, national and global scale,
although the costs will increase with the time and distance of phone calls. Extra skills may
also be required creating the need for more staff. Alternatively, a professional service can be
consulted to carry out the task: with an increased cost and/or commission.

Agents/Brokers

An agent or broker will help sell your product/service, but will not take ownership of what
they are selling at any time. They usually work on commission taking a percentage of the
total sales made by themselves. An agency or brokerage will sell your product or service, for



example insurance, tickets for entertainment, accommodation, etc. This can be directly to the
consumer or to retailers and wholesalers.

Agents/brokers can sell your product on a scale than extends from your business premises
and are very useful for expanding your business into foreign markets.

Perhaps the most common example of an agent would be a travel agency. They never own
the holidays or credit the full amount of the sale to their business. Instead, they act as a link
between the holiday resort and the consumer, taking a commission on the sales.

Wholesalers

It may be that you only sell to a wholesaler if you manufacture your own products: possibly
evidencing a larger small business. If this is the case, a wholesaler can be used to distribute
your products reaching a potentially large number of consumers. The main function of a
wholesaler is to provide a link between the producer (you) and the retailer. The advantage of
selling to a wholesaler is that they often buy in bulk, splitting the purchase into smaller
manageable quantities for further selling to retailers.

Once selling to a wholesaler, there are three ways that your product will reach the consumer.
Firstly, the consumer will purchase directly from the wholesaler: this is the less common
route out of the three. Alternatively, your products will be sold on by the wholesaler to
retailers.

The other advantages of selling to a wholesaler are that they may have strong links with
quality retailers: research will help discover this fact. In addition, because they buy in bulk, it
reduces the burden of on-site storage at your premises reducing overhead costs. Further,
wholesalers will also take away the burden of transportation, as they often have their own
network of transport delivering goods directly to retailers, which would normally be your
responsibility.

The disadvantage of using a wholesaler to distribute your products is that they cannot market
your products extensively. Further, because they buy in bulk, it is often you will sell at a price
much lower than the final retail price. Therefore, the wholesaler will take some of the profit
because they will sell on your products in smaller quantities at a higher price.



DHARWAD MILK UNION DISTRIBUTION CHANNEL



PROMOTIONAL ACTIVITIES CARRIED OVER BY KMF

Promotional activities are the activities conducted by the company which helps the company
to keep its customers informed about the product, any developments, and advancement in the
products. The promotional activities help the company to place its brand or product on the top
of the mind of the customers. These activities depend on the nature of the product, the target
customers, the message that the company wants to convey to its customers etc…

KMF found the need for adopting the promotional activities in order to create awareness
about the product which intern lead to increase in sales and help the company to increase its
market share. The company has undertaken various promotional activities in order to increase
the market share of its Milk and Milk products.

The following are the major promotional activities carried over by KMF:

Advertisements
Magazines
Hoardings
Ad boards
Banners
Dealer displays
Television
Radio etc…
Awareness campaigns
Door to door
Mass campaigns

RTISEMENTS:
Now a day‟s advertisement is the well known, most effective, and common means of
promotional activity. Advertisement is a complex form of communication that operates with
objectives and strategies leading to various types of impact on consumer thoughts, feelings
and actions. It is the best way to keep the customer updated and give an introduction to the
new customers. Also it helps the company in keeping its brands or products on the top of the
minds of the customers.



KMF is making extensive use of advertisement in making the customers aware about its milk
and milk products. It is using almost all the media vehicles in a proportionate manner. The
company is making use of different media vehicles like Print media, electronic media, and
others also.
The following are the media vehicles used by the company for advertising its products.

MAGAZINES:
All the leading Kannada magazines are used by the company for advertising. Especially the
weekly and monthly magazines are used to a greater extent. The special edition magazines
like Deepawali edition, New year edition are also used. The main advantage of this print
media is we can give bit detailed information about the products.

HOARDINGS:
These are also very effective ads, where in the large hoardings with the ad message are put in
the much clustered areas or on the sides of the roads. These are designed in such a way that
just to remind about the brands. Usually this doesn‟t give the detailed information about the
brand but to remind about the brand and to show the availability.

NEWS PAPER INSERTIONS:
These types of advertisements are made by inserting the printed pamphlets in the leading
local news papers. The target customers from a particular geographical area are selected and
the printed insertions will be given to the news paper agents. The agents insert those
pamphlets in the said news papers. From this the company can reach to the majority of
customers who purchase that particular news paper in the whole area. This is a very
economical means of advertisement.

BANNERS:
Banners also play important role in creating awareness. They are the one which carry the
message of the product or brand and catches the eye of consumers very easily. They are so
compatible in nature that you can use them at any place. For ex, the banners can be used at
dealers or outlets, can be tied in a crowded area, can be used in a promotional campaigns
etc…



DEALER DISPLAYS:
The dealer displays are the display boards given by the company for displaying the product
information. They are exclusively given to dealers only which contain lighting facility which
make them clearly visible at the night also. These boards displays the products that are
available and also to make separate identity for the dealers.

TELEVISION AND RADIO:
The company also making the publicity through the most popular media i.e.: electronics
media. We can see and hear the advertisement of Nandini in radio channels and in various
television channels also. At the same time KMF is doing some kitchen programs like
NANDINI ADUGE MANE in private Kannada channels which are exclusively sponsored by
KMF, which are also creating awareness about NANDINI products and increasing the brand
image of NANDINI.

AD BOARDS:
These are the tin boards and hard plastic boards which carry the information about individual
products and of all products. There are two types of ad boards, namely Rectangle boards,
cone boards. Usually these are used to advertise on public transport systems (back of city
bus) and to display at the dealer outlets. These are more informatory compared to the
hoardings.

AWARENESS CAMPAIGNS:
Awareness campaigns are the campaigns organized by the KMF for promoting the Nandini
Milk and Milk products. The awareness campaigns are organized by the marketing
department of the company in which the company officials try to make the consumers aware
about all the products available at Nandini counter. Also the officials try to convey the
parameters which have to be looked while purchasing the milk and milk products. The
consumers are given knowledge of the steps taken by KMF in order to provide them the
healthier products which are processed with hygiene.

The company officials also give knowledge to the consumers that how they are cheated by
the private suppliers by doing adulteration and how that will affect their and their children‟s
health.



In total the awareness campaigns never force the consumer to purchase the Nandini products
but help them in decision making by comparing Nandini products with that of other private
branded products.

Usually this kind of awareness campaigns are organized in developing market and in the
areas where the sales is less, and in the area where comparatively less educated people are
there. Because the less educated consumers are week in decision making so these campaigns
gives them a platform to think and decide.

There are two types of awareness campaigns practiced by the company. They are:

DOOR TO DOOR CAMPAIGNS:
The door to door awareness campaigns are done in the area where there are less existing
customers are there and more potential customers are observed. Here the company officials
personally visit every house and provide the information to the individual households.
Generally it is carried over in such place where the customers need detailed knowledge about
the products. These door to door campaigns are too much time consuming and also need to
incur more expenses. But the results are more favorable.

MASS CAMPAIGNS:
Mass campaigns are carried over where there is a crowd. In such areas the officials take
opportunity to make the crowd understand about the quality of the product, the factors to be
looked after while purchasing the milk products. And also educate the crowd about the
product mix of Nandini.

These types of campaigns are organized in Mela‟s, Fairs, and in sponsored programs like
Mahila Mandal programs, functions in school and colleges etc...

Compared to door to door campaigns the mass campaigns are less expensive and less time
consuming. But the results of mass campaigns are not so favorable as of door to door
campaigns.

With the above background, in order to study the consumer awareness questionnaire was
prepared to get feed back from from the general public (Annexure).


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