Partnerships

How Technology helped Amul create supply chain resilience during COVID-19

The Covid-19-induced lockdown disrupted many industries, including the FMCG sector.
Gujarat Cooperative Milk Marketing Federation Limited (GCMMF), the company that owns the Amul brand, also experienced a massive imbalance in its supply chain. Amul saw a surge in demand for its fresh dairy products while there was a steep drop of frozen products arising from wariness about spread of the virus.

This imbalance put its dairy supply chain under immense pressure. So Amul fell back on technology and redeployed idle resources in the frozen supply chain towards dairy products. Thus, ensuring steady delivery of dairy products across India.

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 that go to
  • 200 chilling stations
  • 750 SKUs
  • 62 branches
  • 10,000 distributors
  • 1 million retailers

For Amul, the use of technology was critical to its survival as one of India’s biggest FMCG companies. Every single aspect of this complex supply chain was integrated through technology enabling GCMMF to have visibility into each step. These insights became crucial during the lockdown allowing the dairy company to know, for instance, which village was not contributing to the supply of milk, which tanker wasn’t operational, which of the 200 chilling stations were working at optimal capacity, etc.

Transforming business through integrated IT infrastructure
This was possible because of Amul’s decision to embark on a digital transformation journey way back on 2009 when it partnered with IBM to reinvent its technological infrastructure. The infrastructure pivoted around planning to have control over the supply chain and introducing IT-based solutions across all stages of production to better manage inventory. The key objective was to ensure flexibility and scalability across the complex chain.

This system has become integral to Amul’s functioning due to its complicated supply chain which went beyond factories, to the real source of milk production. IBM developed a comprehensive IT roadmap that took all this into account to create a highly responsive platform that provides real-time insights and control over every stage.

IBM developed a private cloud with a data centre and a disaster recovery system that has automatic back-ups in place. So, whenever there are issues the disaster recovery kicks in, ensuring zero down time. This was proven during the recent lockdown when Amul was able to divert idle resources overnight and ensure steady supply of dairy products.

In the past decade Amul’s digital transformation has helped it gain a 10x growth in business. By improving data accuracy and integration with the distributor management system, processes are seamless now. Coupled with mobile applications and automations that efficiently manage applications, Amul not only has better operations, but also gained much-needed insight into the logistics-side of things.

Way forward
As the 10-year contract between Amul and IBM was due for a renewal, so were the existing objectives and solutions. The current focus revolves around enhancing technology in supply chain to build greater resilience. Another key objective is to add a layer of artificial intelligence and machine learning to make the supply chain more cost effective and position Amul for faster growth over the coming years.