The country witnessed a turning point like no other on March 25, 2020, when a pandemic imposed nationwide lockdown. In its early phase, what sounded like trouble turned out to be a lot more than when havoc amongst the local population spilled the streets. A state of ambiguity filled the hearts of many. Amidst this unrest, another concern gripped the country.
The lockdown caused financial losses of 10 lakh crores for the country. Several industries were affected and suffered a loss in revenue. This included the dairy industry. The country is heavily dependent on milk as it is widely available at homes as a part of the daily diet. People consume about 40% of milk produced in the country for their neat consumption. The government's announcement of a complete shutdown affected milk supply to households and industries that used milk as one of their raw materials. When the milk-producing department cut down its production, unable to sell even one unit of milk, AMUL came up with a perfect solution that revealed itself as an asset during this time when the whole nation was in lockdown.
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You must be wondering, how it was possible when all hotels and restaurants were shut down, contributing up to 20-30% of its revenue? There is a very simple answer to this – they made analyzed and understood the consumer needs. Several marketers say that consumer behavior is bound to change after every major crisis. It became obvious that people couldn't order food from restaurants because of the shutdown, so they ended up making food by themselves.
Since lockdown was nowhere a normal thing, so what people started doing is; they started with the lockdown food trend, which included delicacies like mug cakes, pizzas, and dalgona coffee, and it's nothing to guess that milk and milk byproducts are most common in these. This made a sudden increase in demand for dairy products, and Amul was the only company able to meet this demand as it was operating at 100% capacity.
To prevent the measures against COVID 19, 80% of consumers started buying packaged milk instead of loose milk. This increased cottage cheese sales by 40%, cheese by 80%, and condensed milk by 100%.
The Economic Transcript has mentioned: With this increase in sales and their existing products, they dominated the market and launched 33 new products. Amul started collecting 35 lakh of milk every day to fulfill consumer demand.
The Economic Times has mentioned: To gauge the complexity of Amul’s supply chain, consider this - the co-operative has a total of:
- 3.6 million farmers
- 18,700 societies
- 5,000 milk tankers
- 200 chilling stations
- 750 SKUs
- 62 branches
- 10,000 distributors
- 1 million retailers
Amul used technology to improve its supply chain. In an industry where supply chain management is a challenge in itself, Amul has managed to maintain delivery of dairy products across the country. The company took advantage of idle frozen products resources and redeployed them towards the dairy supply chain. It chose this strategy because of an imbalance in its original supply chain.
Digital Transformation through integrated IT infrastructure
Now, after seeing the success of Amul, the question that arises here is; how they were able to manage their resources well.
The Economic Transcript has also mentioned: The managing director of the largest dairy cooperative in India, Dr. Rupinder Singh Sodhi, took a firm decision to invest 80 crores in creating a digital system to track the entire operation. Since then, Amul was able to identify that their ice-cream and frozen food division was idle, so they shifted their resources to other divisions, which helped Amul operate at 115% capacity.
A great deal of change was happening within the organization. Amul had to up its game to remain relevant in the Indian dairy market. An IT roadmap was drawn up with three objectives:
A) Enable the supply chain management end-to-end, from procurement to delivery.
B) Ensure real-time visibility and decision-making at each link in the value chain.
C) Bring all stakeholders together onto a single platform to provide a 360-degree view of the business.
The most important aspect of this transformation has been real-time insights. The system allows Amul to know when the stock will reach a particular retail outlet to send the delivery without any delay. It also gives a breakdown of what products are doing well in each region to plan accordingly and keep the supply chain moving swiftly.
Amul has built a private cloud with a data center and a disaster recovery system with automatic backups. The cloud enables the performance of high-availability applications with reduced latency, improves service efficiency, and exceptional management ease for Amul's geographically dispersed teams. Amul was able to divert idle resources overnight and ensure a steady supply of dairy products.
Way forward
Improvements in every process are a huge benefit from the Amul digital transformation. Processes are seamless now and allow for more efficient operations by improving data accuracy and integration with the distributor management system. Automated applications have also reduced repetitive work and increased safety.