PROJECT ON APPLICATION OF IS INRURAL MANAGEMENT Submitted to: Dr Bhaskar Basu Submitted by: Meera T Muricken (UR14059) Nirmalya Kanungo(UR14061) Pratheesh P(UR14066) Sweta Kejriwal(UR14081) Debashree Debashrita(UR14094) The Chairman of the BOD is elected amongst the members of the Board. Introduction The Orissa State Cooperative Milk Producers Federation also known as OMFED Milk Federation affiliated to the National Dairy Development Board (NDDB). Project Objective To study the supply chain of OMFED in order to understand the current operations. the state capital of Odisha. OMFED is controlled by a Board Of Directors which consists of Chairman of all affiliated Dist. situated at Bhubaneswar. procurement. Cooperative Milk Producers" Unions. identify operations going on. It is an apex level Milk Producers' Federation in Orissa registered under Cooperative Society Act – 1962. Here our objective is to study current supply chain scenario of OMFED.A PROJECT ON IS APPLICATION IN OMFED 1. three nominees of Government of Orissa. for promoting. Packaging and Marketing of milk and milk products . a nominee from the National Dairy Development Board and Managing Director of the OMFED. challenges faced and make the necessary recommendations. OMFED was established based on AMUL pattern under operation flood programme of National Dairy Development Board (NDDB). 2. production. challenges they face with current supply chain and give feasible suggestions for same. The Prime activities of OMFED include: 1) Procurement of milk from the milk producers 2) Providing technical input in new and scientific methods to increase productivity of milk in the state 3) Storing of the milk in their chilling centres 4) Processing. processing and marketing of milk & milk products with a mission to integrate rural milk producer with urban consumer. Its job is also to provide technical inputs.1 and by purchasing a share of Rs. Artificial Insemination. Some of the important Technical input programs are Embryo Transfer Technology (ETT). Business Model of OMFED OMFED follows a 3-tier structure in its business. The BOD chooses a Chairman amongst its members. It is managed and controlled by a committee and headed by a chairman. Feed & Fodder Programs. The MU gives various technical inputs to the producers to enhance their milk productivity. This is done in the hope that excess productivity will result in excess of surplus milk with the producers which he can then sell to the village society. There are some more people. The committee is selected by its member and they also select the chairman. The Federation has representation from various MUs and also from the State Government of Odisha. The 3 tiers are: 1) The Village Cooperative Society 2) The District Milk Union 3) Milk Federation 1) The Village Cooperative Society: It is a voluntary association of milk producers in a village who are willing to sell their milk on a collective basis.3. . 2) The District Milk Union (DMU): The collector of the district is the chairman of the District milk union. Any milk producer can be a member of this society by paying just a nominal fee of Rs.10. Training. etc. who acts as aids to the committee. etc. etc to the village societies. training and sometimes even to provide cattle feed and fodder. 3) Milk Federation: The Federation is managed by a Board of Directors (BOD). secretary. like milk tester. In this way. . early morning and evening. The milk is then sold to the Milk Unions. it reaches to its end users. the achieved money realization is routed back through this supply chain to the producers once in 10 days. The MU then carries the milk by using hired transport vehicles to their processing centers. it is difficult to maintain consistently the product quality throughout the procurement chain. 3. A sample from each producer is taken and tested using the lactometer by the milk tester.2 Challenges Faced by OMFED Supply Chain 1) Milk is a perishable item. 2) As milk is collected from various cooperative societies and Milk Unions. The chilled milk is then sent to the nearest Federation Unit for Processing. so it has to be made readily available to the customer at the right time. Milk is then chilled to 5 degree centigrade in the chilling centers.3. It is supplied to the authorized retail centers in small hired OMFED trucks.e. The milk & milk products are being marketed by authorized retailers of OMFED throughout the state. One of the important feature of this supply chain is.1 OMFED Supply Chain DISTRIBUTION Current Supply Chain of OMFED: The milk is brought to the cooperative society by the milk producers twice a day. 3) There is an absence of well-furnished and improved ware houses with proper cold storage facilities and cold chain enabled vehicles for maintain proper supply chain. after the marketing of the products. Packaging and Marketing. They sell their milk to the nearest milk unions only. i. 4. This stands for an approx 7-10% loss for the company. demands of external and internal customers. it has to be brought back to the nearest dairy plants of the co-operative. 5) It is necessary to have a clear understanding about the expected demand and actual demand at each retailer’s outlet. Step 3 Examining the scope of improvement in the operating efficiency after implementing ISWe have to also look into the feasibility of implementing the Information System as well as its long term sustainability. roads etc).untapped rural market etc. 2. Methodology We followed a different methodology to study the supply chain of OMFED which involves the following three steps: 1. developing infrastructure(warehouse. Any milk or milk product that fails to get sold at retail outlets within the consumable period of the product. 3.4) One of the most important problems is of reverse supply chain. Step 2 Identifying the areas of improvement in the supply chainAfter analyzing the present supply chain model we have found out some areas of improvement of OMFED like more focus on quality and co-ordination of distribution activities. Step 1 Analysis of the existing operating structure of OMFEDWe analysed the whole existing structure of OMFED through various sources. . So. it becomes highly essential to effectively forecast the customers’ demands to prevent undesirable losses. A detailed discussion regarding its distribution channels has been carried out starting from procurement. marketing to finally delivering milk and its products to the customers. They are 1. The distributors. Odisha). Secondary data collection. Dairy promoted milk suppliers constitute Tier 1 and Tier 2 of the three tier structure and tier 3 is the dairy production unit. Fish bone diagram Schematic Diagram The figure below shows the various stakeholders in the OMFED supply chain extending from dairy promoted milk suppliers to consumers. It was very useful in studying the supply chain of OMFED.1 Tools and techniques We have used the following tools while data collection. We asked him various things about the supply chain. The tool was useful to analyse the supply chain of OMFED in detail. Fish Bone Diagram: . Besides that we have also taken information from various research articles and journals to enrich our analysis.We have taken personal interview of Mr. Ashish Mohanty (Supt of Finance. Primary data collection. Berhampur. D1 to Dn reaches out to retailers R1 to Rn across the state finally reaching the consumers.We have also referred to the official website of OMFED for getting more information. Tools Used-We have two types of diagram to analysis the present supply chain of OMFED. The suppliers are depicted as S1 to Sn. Schematic diagram 2.4. Technology 4. outdated technology. adulterated milk. absence of smart IS. Management 3. poor demand forecast. poor process design. Process 5. The major factors contributing to this problem are: 1. Environment The various causes that contributes to the problem are late deliveries. . inadequate quantity.Fish Bone Diagram Fish bone diagram was used as a tool to analyse the cause–effect relationship. incompetent workforce. Temperature and humidity. poor quality management system. Suppliers 2. The problem identified by us was the 7-10% loss of profit. It helped us to identify the areas of improvement and examine the scope of improvement if IS is adopted in the operations. There is a need to improve marketing with agents. 3. Enterprise resource planning (ERP) is business process management software that allows an organization to use a system of integrated applications to manage the business and automate many back office functions related to technology. Key Findings The Key findings of our study are 1.. The demand forecast system is inaccurate.e. OMFED is not able to maintain a consistent quality of milk throughout the procurement chain. inaccurate demand forecasting could be addresses by implementation of ERP system. services and human resources. . Suggestions The key issues identified. 4. poor quality of milk. The schematic diagram: . 6. There is an absence of Information system for its operations.i.5. 2. Earlier.Also direct money transfer to the farmers bank account also could be implemented for better transparency . quick payments and Risk minimization are some of the benefits of using this technology. Both these details are recorded in the PC.Electronic Miliko-Testers (EMT). planning and in easy generation of various reports to check the performance of the cooperative. This will help the higher management in evaluating the performance at different regions and hence taking effective decisions based on accurate data. Each farmer can be given a plastic card for identification. The value of the milk is then printed out on a slip and handed over to farmer who collects the payment . At the milk collection counter.The local server collects all the information and this would be helpful in auditing. around thousand farmers come to sell milk at their local co-operative milk collection centre. members had passbooks containing details like identification number. The milk brought by the farmers is weighed using weighing scale and milk samples are analyzed using the Milk Analyzer. The data from various collection centres can be periodically transmitted to central server at the cooperate office. The computer then calculates the amount due to farmer on the basis of the fat content. On an average. milk fat contents. The volume of the milk was recorded in the passbook and a small sample was stored in plastic bottles for measurement of the fat content. The PC is connected to the Automatic Milk Collection Systems (AMCS) and has a Dairy Information Services Kiosk (DISK) which offers an extensive knowledge and service delivery mechanism through a Dairy Portal. The DISK when used with a Dairy Portal by the . The milk is then weighed and the fat content of the milk is measured by an electronic fat testing machine. fat percentage of milk and volume of milk. the farmer drops the card into a box and the identification number is transmitted to a personal computer attached to the machine. volume collected and amount payable to each member electronically. Quality Milk Collection. The testing of the milk was done at a later date and the entire process used to take more than a week. AMCUS facilitates to capture member information. PC connected electronic miliko-tester machines (known as Automatic Milk Collection Systems – AMCS) will help in satisfactory milk collection methods and facilitated immediate payments to farmers based on the quality and quantity of milk delivered. Automatic Milk Collection System units (AMCUS) at village societies installed to automate milk producers logistics. which are superimposed by product-wise sales data. Geographical Information System (GIS) can be used at Head Office and key Marketing Offices. Use of information system will also help in addressing the issue of reverse supply chain. They are in position to plot zone/depot boundary as well as pointer for zone. depot & distributor locations. Using the All India Map in GIS. for a region that has a lower milk production rate. Geographic Information Systems (GIS) can be used for business planning and optimization of collection processes. The same is being used for sales & distribution planning and review. GIS is being used for business planning activity at milk centres & it covers animal census data. there exists enormous opportunity to interact with them on the issues related to cooperative and union activities. As per the data from the distributers. this medium is also perceived as an opportunity to understand customers better. . This ultimately helps in forecasting milk production according to the region and suggests remedies. In addition. if any. Dairy farmers who are members of the cooperative will visit the milk collection centre twice a day to deliver the milk. enhance the service quality and to introduce the new products and services. Thus. the management would be able to forecast the demand more accurately and reduce the wastage to some extent. and with customers (Business-to-Customer: B2C) through the internet medium to minimize the lead times and transaction costs. Moreover. This can help in determining the average milk production and productivity of cows.Union enhances the scope of services that would benefit the farmers as well as the dairy industry. Enterprises are establishing links with suppliers (Business-to-Business: B2B). What is the scope for improvement in OMFED w.ca/proc/2013/Manuscripts/p%20141%20-%20162%20Bewley.A. http://www. Indian Institute of Management. What are the cold storage facilities in delivery van? 5.omfed.Mr Ashish Mohanty (Supt. Centre for Electronic Governance. What are the types of technology to process milk? . Of Finance) 1. What are the major reasons for the 7-10% loss? 4. supply chain management? 3. Ahmedabad 2.asp?lnk=org B.r. Supply Chain Management in OMFED. Development of Milk Analysis Reliable Embedded System for Dairy Farmers Yadav S.wcds. Questionnaire used for Personal Interview.pdf 5. Adyasha Suvadarshini.Annexure A. T. Rama Rao.( Issue 7. http://www.N1. What are the main challenges faced by OMFED in its supply chain? 2. References: 1.Gopal Prasad Roy 4. What steps are taken for introduction of IS in its operations? 6. Kulkarni V. July 2012) 3.Prof.com/organisation. Dairy Information Services Kiosk and Dairy Portal .Creating Values through White Channels: A Case Study.t.2.P.