INTRODUCTION OF DAIRY

FINANCIAL PERFORMANCE: A STUDY OF KMF MOTHER DAIRY.BANGLORE

INTRODUCTION OF DAIRY

Dairy farming is concerned with the production of milk butter and cheeses constitute a dairy.

Dairy technology is the scientific basis of maintaining the heard of cows and buffaloes,

collection and preservation of large quantity of milk and producing the by-products to meet

the demands of consumers.

The milk production in India has multiplied since the advent of 5 years plan. The

National Dairy Research Institute (NDRI) was established in Haryana during the 1st 5-years

plan (1951-1956). Later National Dairy Corporation (NDC) and the Indian Veterinary

Research Institute (IVRI) were established for the development of dairy technology to boost

milk production through scientific methods. In 1970, the government of India launched a

massive dairy development project called “operation flood” which brought “white revolution

in India”.

ABOUT MILK

Milk is highly nutrition and majority of Indian population rely on milk for their protein

supplement. Milk is obtained by bread cows and buffaloes, either manually or through

satirized milk cream, cheese, ghee, condensed milk protein are the dairy products which are

separated from milk through various process.

OBJECTIVES

Karnataka Milk Federation (KMF) is a cooperative apex body in the state of

Karnataka representing dairy farmers association and also implementing dairy development

activities to achieve the following objects:

To provide assured and remunerative market for the milk produced by the farmer

members.

To provide quality milk to urban rural consumers.

To build village level institutions in cooperative sector to manage the dairy

activities.

To ensure provision of milk production inputs processing facilities and

dissemination of know-how.

DEPARTMENT OF MBA SVCE BANGLOREPage 1


To facilitate rural development by providing opportunities for self employment at

village level prevention migration to urban areas introducing cash economy and

opportunity for steady income.

The philosophy of dairy development is to eliminate middlemen and organize

institutions to be owned and managed by the milk producers themselves, employing

professionals & Achieve economies of scale to ensure maximum returns to the milk

producers, at the same time providing wholesome milk at reasonable price to urban

consumers. Ultimately, the complex network of cooperative organization should build a

bridge between masses of rural producers and millions of urban consumers and achieve a

socio-economic revolution in the hinterland of the state.

ORGANISATION STATUS

At the end of march 2009, the network of Rs.8363 Dairy cooperative Societies

(DCS) has been organized and are spread over 166 Taluks of the total 175 taluks in all the 27

district of Karnataka. These societies have been organized into 13 milk unions. The unions

are further federation. There are 38 chilling centers (capacity 12.49 LLPD), 4 number of farm

coolers (capacity o.16). 17 number of liquid milk plants and two products dairies for chilling

and processing (21.20 LLPD), conversation (25 TPD) and marketing of milk.

To supply quality germ plasma, bull breeding farm and frozen semen bank had been

established and is well stocked with exotic quality high pedigree bull. To impart training, one

Central Training Institute and 3 regional training centers are functioning. Three diagnostic

laboratories have been set up for disease monitoring. Three folder demonstration farms at

Sahapur, Kottanahalli, Kudige and one seed production farm at sahapur are also operating.

Out of the above units, 16 numbers of dairies, 2 numbers of product, 3 numbers of training

centers and 3 numbers of diagnostic labs are operating under respective unions.

Under technology mission for dairy development project, it had been envisaged to

distribute liquid nitrogen, which is required to stores straws. Six silos 10,000 Lts. Each silo

has been erected at Bangalore, Mysore, Gulbarga, Dharwad, Hassan and Shimoga union

juriskiction at a total cost of 3.0 Crores. KMF has been taken the responsivility to supply

LN2 in road tankers to the storage silos.



(1) INDUSTRY PROFILE

DAIRY INDUSTRY- AN OVERVIEW

In 1965, National Dairy Development Board (NNDB) was set up with the object of

meeting the demand of milk, especially in urban areas, as well as developing the rural

economy through the enhancement of the milk production of the country. In 1970 National

Dairy Development Board took up operation flood program in order to organize milk

producers co-operative in several places in India taking the karia district (ANAND) co-

operative milk producers union limited (AMUL) of Anand, Gujarat as a model with the

above object in view.

HISTORY OF DAIRY CO-OPERATIVE IN INDIA

The co-operative movement started in India in the last decade of the 19 th century with

two objects in view, i.e., to protect the farmers from the hands of the private money leaders

and to improve their economic condition.

The history of dairy development movement in India is a new one. The most notable

of this venture was a khoria district co-operative milk producer union limited of Anand,

Gujarat. But after independence, the national government took great initiative in setting up

new dairy co-operative in many parts of India. The National Dairy Development Board was

set up to make the ambitious project a success.

Dairy industry is playing a vital role in providing quality and hygienic milk and other

milk products at a competitive price to the consumer as well as it is offering/providing

employment opportunities to rural folk.

In June 1974, an integrated project was launched in Karnataka to restructure and

reorganize the dairy industry to the co-operative principle and to lay foundation for a new

direction in dairy development project was initiated in 1975. Initially the project covered 8

southern districts of Karnataka. Dairy Development Co-operative was set up to implement

the project. The multived organization with total vertical integration of all dairy development

activities was set up with co-operative societies at grass roots level, milk unions at the middle



level and a dairy development co-operative societies at stage level as an apex body vested

with the responsibilities of implementing Rs.51 crores project.

At the end of September 1984 the World Bank aided project ended and the dairy

development activities continued under operation flood-2. The activities were extended to

cover entire state expect coastal Talukas of Uttar Karnataka districts and the process of dairy

development was continued in second phase from april-1984. KMF came into existence in

may-1984 as a successor to KDCC. The spills over works are finance by NDDB from 1-4-

1996 under different terms and conditions.

After the closure of operation flood-2 the dairy development activities which

continued under the operation flood-3 on 31st march. During the pre independence period this

moment was extended to few parts of India namely the Bangalore, Madras and Calcutta.

The operation flood was undertaken after the national dairy development board

formed in 1965. It was decided that milk co-operative formed in ANAND would be followed

across the country. The Anand pattern has been accepted as a model.

Dr.v.v.Kurian , is Regarded as the father of white revolution. The main objective of

the white revolution was to provide quality milk to the nation and upgrade the living standard

of the rural people.



(2) COMPANY PROFILE

Mother dairy. Bangalore was commissioned under operation flood-2 with a

processing capacity of 2 lakh per day on 7-12-1984, with an investment of Rs 6.97 crores, at

Yalahanka New Yown in a total area of 28.09 acres. It is expanded to 4.00 lakh liters under

operation flood -3 during 1993-944 with an additional cost of Rs 3.64 crores. Total

investment for this project is Rs 10.61 crores.

As at the end of March 2009, the network of 8363-Dairy co-operative Societies (DCS)

have been organized and spread over 166 talukas of the total 175 talukas in all the 27 districts

of Karnataka. These societies have been organized in to 13 mild unions. These are 38 chilling

(capacity 12.49 LLPD), 4 no’s of farms cooler (capacity 0.16), 17 no’s of liquid milk plants

& 2 products dairies of chilling and processing (21.20 TDP) and marketing of milk.

(A)Operation Status:

The average procurement of milk touched a pack of 20.28 LKPD in November 1999.

In March 2000 liquid milk sales was at the level of 15.2 LLPD. The sales of cattle feed were

1, 10,605 during 1999-2000. The turnover of the organization during 1999-2000 was Rs

998.39 crores.

(a)Dairy Co-operative Societies:

DCS Role:

Dairy cooperative societies are a basic organization unit functioning at the village

level. Democracy is practiced at the grass root level in these societies which are organized on

the cooperative principles. By training local people to organize and manage the activities,

village level institution building and development of local leadership is promoted. All milk

cattle owners are eligible to become members of the dairy co-operative societies.



(b)DCS Functions:

The DCS function daily and acts as a marketing outlet for the milk produced in the

village. Input facilities are also channelized to the dairy farmers through these societies and

including veterinary first aid, sales of cattle feed, supply of fodder seeds, seedlings, provision

of know how etc., payment for the milk purchased is also arranged through the society, a

string of DCS is organized to form a milk procurement route linked to chilling centre or a

dairy.

(c)Milk union:

Union is the middle tier of the complex co-operative organized network.

Federating the societies in ear marked geographical area forms union. The milk unions are

organized to make them economically viable and the jurisdiction extends from one district to

3 districts.

(d)FUNCTIONS OF THE UNION:

DCS are grouped at district level into co-operative milk producer’s unions. The

unions organized new DCS, with their management including audit of Accounts, Supervise,

Purchase, Process and Market the liquid milk.

(B)Milk Federation

(a) Role:

The Karnataka cooperative milk producer’s federation ltd., came into existence on 1-

5-1984 by federating the milk unions in the state and thus forming the state level apex

organization. The project activities are being implemented by the federation. When all the

project activities are completed, the main role of the federation will be to market surplus milk

products and to produce and supply centralized inputs.



(b) Federation Functions:

Presently mother dairy and “Nandini milk product” at Bangalore are under the

control of KMF. Four cattle feed plants a central training institute and a centralized testing

and quality control laboratory are functioning under the direct control of KMF. Co-operation

of activities between unions and developing market for the increasing milk production is the

responsibility of KMF. Local milk market for the increasing milk production of the KMF.

The respective unions are organizing local milk market in the area of union. Surpluses and

deficiencies of liquid milk amongst the member milk union and disposing milk added the

federation manager’s products at a remunerative price. The federation organizes marketing of

liquid milk and products outside the state.

Milk and milk products are sold under Nandini Brand name, which has become

household name in Karnataka. To make products available to consumers, distribution

network has been established and sales depots are commissioned at Bangalore, Hubli,

Chennai, Tirupati, and Mangalore. The distribution network include 150 major professional

wholesale dealers spreading across all the southern states of India. The major quantity of milk

is sold as liquid milk. This parts other products like Butter, Ghee, and SMP, Peda, and

Flavored milk. Burfi, Panner, Kova, Jamoons, Mysore pak, Badam powder and Ice cream are

sold.

(c)PERSPECTIVE PLAN 2005

Karnataka milk Federation, milk unions and National Dairy Development Board are

formulating appropriate strategies in order to meet the challenges particularly after

liberalization and de-licensing the dairy sector to develop and strengthen dairy co-operative

movement on the following trust areas namely:

Productivity enhancement

Co-operative business {procurement processing and marketing }

Quality assurance programme

National information networking



With a view of enhancing and extending Karnataka Dairy Development infrastructure, under

KMF’S perspective plan 2005 NDDB is providing finance and requisite support to Karnataka

Dairy Development up to Rs.250 crores. Under this plan, it is envisaged to establish another

cooperative societies covering a total of 17.5 lakh members. The procurement by cooperative

is likely to rise to 25 LKPD and milk marketing 21 LLPD. With additional infrastructure

facilities to be created the total processing capacity available will be 29.80 LLPD, chilling

capacity 5.17 LLTD, chilling capacity 5.17 LLPD and cattle feed capacity of 700 MT per

day.

(D)NEW PEOJECTS

Expansion of Ice-cream plant from 3000 liters, to 10.000 liters. Capacity at an outlay

of Rs.3.69 crores.

Strengthening of Frozen Semen Bank, Hessaragatta with an investment of Rs.2.68

crores.

Revamping and expansion of Gubbi cattle feed plant from 100 MT to 150 MT per day

at an outlay of Rs.2.14 crores.

Expansion of Hassan cattle feed plant from 100 MT per to 200 MT per day at an

outlay of Rs.4.63 crores.

KMF corporate office complex at koramangala at an estimated cost of Rs.2.90 crores.

Launching of new milk products at Nandini milk products unit.

(E)PERFORMANCE HIGHLIGHTS

State entirely covered by dairy development.

Elected boards in position in all unions and federation.

Processing units controlled by respective milk producers’ unions.

97% of functioning milk producers’ cooperative societies earning profit.

In the last 10 years, for milk produced Rs.7683 crores has been paid to dairy farmers.



At present an average payment of Rs.342 lakh per day is paid to milk producers.

High capacity utilization of cattle feed plants.

Bulk suppliers of SMP,WMP to Army.

Low price spread between procurement and sale prices.

Widespread dispersal of cross breed cattle.

Coverage of 4,00,243 numbers of women members (24%)and about 2.88.760

numbers of landless labourers(17%)under the project.

Milk supply to Calcutta mother dairy through railway tankers from Mother dairy.

Bangalore.

Successful implementation of state government aided dairy development programme

through SC/ST development & backward class development corporations.

Organization of dairy cooperative exclusively to women membership under step

programme.

Coverage of 2.10 lakh farmer members under social security insurance scheme

benefiting 727 numbers of families so far.

Implementation of ‘MINI Dairy scheme’ for rural unemployed youth sanctioning

2000 units so far which comprises 5 cows per unit.

Export of 6401 MTs. Of SMP to Nepal, Middle East, Singapore, Thailand and

Philipines.

Supply of 2172 MTs of ghee to Thirumala, Thirupathi Devastanam.

Opening “Nandini Dairy farmers welfare trust”hostel for farmers childrens at the cost

Rs 12.96 crores for higher education of 600 boyes and 400 girles.



(A)BACKGROUND AND INCEPTION OF THE COMPANY:

In June 1974, an integrated project was launched is Karnataka to restructure and

recognize the dairy industry on the cooperative principle and to lay foundation for a new

direction in dairy development. Work on the first ever, World Bank aided dairy

development project was initiated in 1975. Initially the project covered 8 southern

districts of Karnataka and Karnataka dairy development corporation was set up to

implement the project. The multilevel, multiunit organization with total vertical

integration of all dairy development activities was set up with dairy cooperative societies

at grass root level, milk unions at the middle level and a dairy development corporation at

the state level as an apex body, vested with the responsibility of implementing Rs.51

crores project. At the end of September 1984 the World Bank aided project ended and the

dairy development activities were extended to cover the entire state except coastal taluks

of Uttar Kannada district and the process of dairy development was continued in the

second phase from April 1984. KMF came into existence in May 1984 as a successor to

KDDC. After the closure of operation flood –II, the dairy operation flood-III ended on

31-3-1996. The post operation flood works are financed by NDDB from 1-4-1996 under

different terms and conditions.

(B) NATURE OF BUSINESS CARRIED:

(a) PROCUREMENT:

Mother Dairy is procuring 2.4 lakh litres of milk per day from Kolar Milk Union’s

Chilling Centres such as Chintamani, Sadali and Gowribidanur Chilling Centres of Kolar

Milk Union & Dairy Cooperative Societies which are possessing Bulk Milk Coolers, through

road milk tankers. The Dairy is processing and distributing on an average 2.25 lakh litres of

milk per day to the consumers in Bangalore City With the increase in demand for liquid milk,

it is planned to increase the processing capacity of the Dairy.



(b) PRODUCTION:

Mother Dairy has a unique nature of homogenizing the milk and selling it to

the consumers through Bulk Vending Booths and FRP tanks. In addition to

production of Toned Milk in Sachet, it also produces Full Cream Milk in Sachet

(6.0% FAT and 9.0% SNF) and products like White Butter, Ghee, Curds, Ice-cream,

and Homogenized pure cows milk with a fat % of 3.5 and 8.5% S.N.F. priced at

Rs.8/- as MRP per half liter.

Mother dairy distributes loose milk to the consumers through bulk vending

booths and FRP tanks at a rate which is 50 Paise less than the sachet milk for the

same quality of 3.1% fat and 8.5% SNF (Rs.14.00 per liters) from 1900 onwards it is

also distributing toned milk in recent years it also started marketing

Butted,Ghee,Curd, Butted milk etc.

(C) VISION, MISSION, QUALITY POLICY:

Vision:

Quality assurance from cow to consumer.

To vanish the scarcity of milk.

To fulfill the objectives of the white revolution.

To strengthen the living standards or rural people.

Product diversity.

Avoiding post harvest losses.

Mission:

Procuring the raw milk from the local farmers at a fair price.

Pasteurization and homogenizing of the procured raw milk.

Producing the other milk products.

Transporting the pasteurized milk in various quantities from processing plant to

the urban areas.

Supply milk to the consumer at a reasonable rate.

Developing good infrastructure facilities.



Quality policy:

Every employee of mother dairy will strive for customer satisfaction by providing

quality milk and milk products at competitive rates and timely delivery through

continual improvement.

Mother dairy is committed to supply safe milk and milk products and to the

satisfaction of customers.

(D) PRODUCT PROFILE:

Presently mother diary and Nandini milk product at Bangalore are under the control

of KMF. Total 8,363 dairy cooperative societies have been organized and spread over 166

Taluks of the total 175 Taluks in all the 28 Districts of Karnataka.

(a) Milk Products:

Ghee

Butter

Curds

Skim milk powder

Cheese

Badam powder

Paneer

PedaMysore pak

Burfi

Jamoons

Ice Cream

Sterilized Flavoured milk in 5 Flavours (Pista, Badam, pineapple,

mango, chocolate)

Rasagulla

Dahi

Lassi



PREMIUM PRODUCTS:-

Nandini is adding yet another three new premium products to its family –“Fruit based

Nandini drinking yogurt” in two flavors i.e., mango and lemon (200ML & 500 ML),

“Nandini ghee in pearl pet jars (500ML) and Nandini besan ladoo”

NANDINI MILK

1. NANDINI TONED MILK

Karnataka’s most favorite milk, Nandini toned milk contain 3.1% fat and 8.5% SNF

and available in 250 ml 500ML and 1 liter packs.

2. NANDINI FULL CREAM MILK

It contains 6% fat and 9% SNF and it is rich, creamier milk available in 500ML and 1

liter packs.

3. NANDINI HOMOGENIZED MILK

It is pure that is homogenized and pasteurized. It is available in 500ML packs

4. NANDINI GOOD LIFE MILK

It is longer shelf life milk variant. It is treated with ultra high temperature and it has a

shelf life of 60 days without refrigeration. Available in 500 ML packs.

5. NANDINI CURD

Nandini curd, made from pure milk, is thick and delicious. It is available in 200 Gms

and 500 Gms sachet

6. NANDINI BUTTER

Rich, smooth and Delicious, Nandini butter is made out of pasteurized cream and it is

available in 100gms,200gms and 500gms.



7. NANDINI GHEE

Nandini ghee is made from pure butter and it is known for its purity and rich taste. It

is packed in a special pack to retain the goodness. It is available in 200ml, 500ml,1000ml

sachet,5liter tin and 15 kg tin.

8. NANDINI MILK POWDER

Skimmed milk powder made from pure milk, processed and packed hygienically

available in 50gms, 100gms, 500gms, 1kg pack, and 25kg bags.

(E) AREA OF OPERATION:

The mother dairy KMF operates regionally.

It operates throughout the Karnataka.

Now the emphasis is given to extend the marketing territory apart from the Karnataka.

(F) OWNERSHIP PATTREN:

Karnataka state government in association with national dairy development board

funds the mother dairy, KMF. So mainly Government of Karnataka is major owners for

KMF, mother dairy, Yelahanka, Banglore.

(G) COMPETITORS INFORMATION:

Though Nandini is one of the market leader in milk products at Karnataka, through it

has good name, it has so many competitors. As dairy industry is providing so many milk and

milk products, naturally there is scope and demand for the products. So competitors exist in

the market.

The main competitors to the mother dairy are:

Amul

Heritage

Arogya

Good morning

Swastika

Milk way

Dodla

Dhood Pandari

Gomata

Nestle



(H) INFRASTRUCTURAL FACILITY:

Mother dairy provides good infrastructure facilities for the workers

Production Block

Administration Block

Security and time office

Tanker parking

Fueling point

Garage Block

Canteen

Working amenities

Godown

Hospital

Dressing room

Future expansion

Coal yard

Sub station

Tank reception unit

(I) ACHIEVMENTS AND MILESTIONS

1955-Dairy in Karnataka was set up at Kodagu District on 08-01-1955.

1965-Biggest Dairy in Karnataka with 1.5 Lakh liters per day liquid Milk processing

factory was set up in Bangalore.

1974-world Bank Aided Karnataka Dairy Development project was implemented 19-

06-1974 to 30-09-1984.

1974-karnataka Dairy Development Corporation was born.

1975-First Speared team was positioned on 07-07-1975.

1976-First Registration of the union was on 23-11-1976.

1980-Karnataka Milk Product Ltd was established on 01-03-1980.

1982-First Milk Product Dairy started at Gejjalgere on Monday 12-06-1982.

1983-Corporate brand name NANDINI was given on 13-02-1983

1. First cattle Feed Plant commissioned at Rajankuntae on 21-03-1983.

2. Capacity Expanded from 100mt on 01-06-1997.

1984- KDDC Transferred to KMF on 01-02-1984.

1984-Mother Dairy starts Functioning on 01-12-1984.

1985-Remaining govt. Dairies are transferred to KMF on 14-02-1985.

1987-OF-III implemented on 01-04-1987.



1988-Dairy at Bangalore, Gejjalagere, Dharwad, Belgam and Mangalore transferred

to District Milk Unions on 10-09-1988.

1990-Milk supply at kolkata Mother Dairy, through railway tankers from Mother

Dairy, B’lore.

1991-Chilling and processing plant at Bijapur, Gulbarga, Gellary, shimoga and Kolar

transferred to District Milk Union on 01-08-1991.

1993-Commercial production and marketing of Nandini Flavored Milk launched in

September.

1994-1993 Milk procurement on single day crossed million kg levels in December

1986 and average Milk procurement per day cross million kg levels 1992-1993.

1995-Liquid Milk scale crosses million liters per day on Feb. 1994.

1996-Varites of new Nandini Milk products launched.

1997-Installation of LN2 Distribution system for Karnataka State.

2000-chilling Center 0f 150 TLPD capacities at Hoskote started in Bangalore Union.

2002-Powder plant was established in October 2002.

2003-04 In November, it will change its ISO 9002 to 9001-2000 standard

2005- construction of new ice cream plant in mother dairy Bangalore

2006- Release of new tetra fino package for flavored milk & butter milk.

2007- Release of new homogeneous milk.

2008- Dairy weights, Nandini highest milk powder, ice cream lanched, sundae, Corn

kulphi Nandini milk

ISO 9002 AND HACCP IS 15000(HACCP) CERTIFICATE

Mother dairy has obtained ISO 9002 and HACCP certificate from Bureau of Indian

standards (BIS) of government of India from December 2000. Mother dairy is the first and

only dairy to secure the comprehensive certificate in the entire south India. The importance of

obtaining this certificate is to:-

Procure, manufacture & distribute the products under controlled set of procedures as

per ISO 9003.

To identify a probable occurrence of hazards during the process of procurement,

manufacturing and distribution.

To identify the severity of hazards during critical control point.

To control the indentified hazards and to produce the products of international food

safety standard.


Stored & standardized in PM silos at 4 deg to 6 deg Celsius

Pre pack: packed & stored in cold storage below 10 deg C

Milk issue Bulk issue for FRP & BVB’s

Dispatch to customers


(J) WORK FLOW MODEL:


Raw chilled milk reception from kolar & other units throughInstalled tankers

Weighted at mother dairy weigh bridge

Reception back [plat form test, chemical quality analysis]

Filtered

Rechilled through PHE 6 Deg Celsius to 8 Deg Celsius

Stored in raw milk silos at 6 deg Celsius to 8 deg Celsius

Pasteurization: 1. Balance tank2. Regenaration I3. Filter Separation4. Regenaration II5. Heating & holding 72 degree to

80 degree.6. Regenaration II7. Regenaration I8. Chiller.


(K)FUTURE GROWTH & PROSPECTS:

Establishment of new mega dairy of 6 lakh liters per day capacity expandable to 10

lakh liters per day at an outlay of Rs. 38.70 crores at Bangalore dairy.

Establishment of 30 MT milk powder plant at mother dairy Yalahanka at an estimated

cost of Rs. 22 crores.

Expanding of ice cream plant from 3000 liters per day to 10000 liters per day and

construction of packing material stores at mother dairy, Bangalore are taken up by

National Dairy Development Board. The work in under process.

Expansion of frozen semen bank Hesarghatta with an investment of Rs. 2.68 crores.

Expansion of Gubbi cattle feed plant from 100 MT to 200 MT per day at an outlay of

Rs. 8.80 crores.

Expansion of Hassan cattle feed plant from 100 MT to 200 MT per day.

Modernization of cattle feed plant, Rajankunte at an outlay of Rs. 4.4 crores.

KMF corporate office complex at kormangala at an estimated cost of Rs. 2.9 crores.

A 30 MT powder plant at mother dairy has been commissioned at a accost of Rs.

22.51 crores, out of which KMF and national dairy development board on loan basis

finances the remaining 50% meet 50%.



3.1 McKENSY’S 7S FRAME WORK

Mc KENSY’S 7S MODELS:

This model still works when the focus is on product marketing. However most

developed economies have moved on with an ever-increasing focus on service business &

therefore service marketing is to better represent the challenges. McKensy’s developed a new

frame work for analyzing and improving organization effectiveness.

To better represent the challenges of service marketing McKinney’s developed new

frame work for analyzing and improving organizational effectiveness, through the 7s model.

The 7s model is better known as McKensy’s 7s. This is because of two persons, who

developed this model, Tom peters and Robert waterman, having been consultant at

McKensy’s and co at the time. They published their 7s model in the article as “structure is not

organization” in the year 1980 and their books “The art of Japanese management” in the year

1981 and “In search of excellence” in the year 1982.

McKensy’s 7s frame work, these all 7s models are inter linked with each other.


MANAGER PRODUCTION [1]

productionDY. MANAGER PRODUCTION [1]

ASSI.MANAGERS PRODUCTION [4]

TRAINING OFFICERS PRODUCTION [10]

SUPERVISORS [2]

TECHNICIANS [18]

SR. TYPIST [1]

HELPERS [3]


1. STRUCTURE:

Production department:

Production can be defined as “an organized activity of transforming raw material into

finished products”. Production can also be defined as “production of goods, which satisfies

some human needs and wants”.

Structure of production department:

Functions of production department:

Improving volume of production

Reducing rejection rate

Minimizing rework rate

Controlling idle machine and manpower hrs

Decreasing machine setup time


FINANCE MANAGER [1]

DY. FINANCE MANAGER [1]

ASST.FINANCE MANAGER [4]

SR STENOS [1] & SUPERVISORS [2]

ASST.ACCOUNTANT [2]

HELPERS [3]


Check absenteeism thefts pilferages and misconduct

Effectiveness of relevance handling

Enhancing customer satisfaction

Maintaining delivery schedules

Updating process and products

Finance department:

Finance is involved in drivers and challenging assignments. There are three board

areas of financial decision-making, capital budgeting, capital structure, and working capital

management.

Structure of finance department:

Functions of finance department:



To formulate principles of accounting of all the departments according to act and in

consultation with NDDB/board.

To review the accounts of each department and advice wherever necessary.

To ensure that books of accounts are maintained as required by law and submit for

pre-audit and statutory audit.

To ensure that guidelines are given for maintained and safe custody of documents on

accounts.

To mobile working capital and term loans required by the organization.

To recommend for investments depending upon availability of funds and also to put

up proposals received from the NDDB and others appropriately.

To propose for payment of bills and claims on KMF upon certification by competent

authorities.

To propose or recommend payment to reimburse the losses of the mother dairy or

need of funds for capital expenditure or working capital to mother dairy.

Inventory management.

Preparation of final accounts.

Audit:

There is pre and statutory audit that is basically at the end of financial year as the

mother dairy is a cooperative department under the Govt. of Karnataka. The audit is done

according to the rules and regulation of the state Govt. Double entry system of book

keeping is followed by the finance department to calculate the depreciation, diminishing

balance method of depreciation is followed.

Mode of payment (dealer):

1. Cheque

2. Letter of credit

3. Demand draft

Marketing department:


MARKETING MANAGER [1]

DY.MARKETING MANAGER [1]

ASST.MARKETING MANAGER [2]

MARKETING SUPERVISORS [3]

SUPERVISOR MILK DISPACH [7]

SR.TYPIST [1]supervisors

MARKETING ASSISTANT [5]

HELPERS [3]


Mother dairy distributes loose milk to the consumers through bulk vending and FRP

tanks at a rate which is 50 paisa less than the sachet milk for the same quality of 3.1% FAT

and 8.5% SNF (Rs 12.50 per liter). From 1990 onwards it is also distributing toned milk in

sachets part from full cream milk. In recent years it also started marketing butter, ghee, curds,

buttermilk etc.

Structure of marketing department:

Human resource department:



It plays a very important role in the organization. It is primary concern is with human

relationship in the organization. Thus, its main objects lay in the maintenance of relationship

on a basis which considers the well being of the individual. Company believes that its greater

asset is human resource. In mother dairy 350 permanent employees are working. The success

of any organization depends upon the quality of human resources.

BENEFITS TO THE EMPLOYEES:

Medical facilities are provided as per the law in force. & For unhealthy employees

provide 50000 to 1.5 lakh Rs/- for heart patient.

Conveyance allowances: who get 7000 salary they are eligible for conveyance

allowance +5 liters cost of petrol. & above 15000 salary employees get 20 liters cost

of petrol. & who are having cars they get 30 liters cost of petrol.

Washing allowance

2 pair’s uniform and shoes.

3 shift allowance

House building advance, motor cycle advance, & solar advance.

Who works in night shift one bun, coffee, tea will be provide.

Canteen facilities: coffee 1 rupee, Tiffin 3 rupee, lunch 5 rupee for working

employees.

Home travel concession (HTC) for every two years.

Free milk 250ml for employee every day.

Free ghee 500ml for festivals like yugadhi and bonus of 9000 per year.

LEAVE:


MANAGER ADMIN & HR [1]

ASST. MANAGERS ADMIN & HR [7]

TRAINING OFFICERS ADMIN & HR [7]

SUPERVISORS [4]

ASSISTANTS [5]

TYPIST [1]

HELPERS [3]


Earned leave (EL)-30 days per year.

10 days compensatory leave or 10 days half pay leave.

15 days casual leave

Government holidays

1 and half month miscarriage leave

Structure of human resource department:

Quality control department:

The quality control division in the plant is basically a part of production management that

performs the functions of using the best raw material skilled and other inputs measured and

checked up to the standard with the assurance and control over to get the best quality output.

The various tests conducted by the quality control personnel in analyzing the milk, cream and

butter are as follows:

1. Analyzing of milk:



Alcohol test: to determine equality of milk

COB test (clot on boiling) to test the milk for its quality

Determination of adulterant: to detect the presence of cone sugar in milk

Detection of preservation:

Detection of acidity: to check the quality of milk

2. Analyzing of milk (chemical test)

3. Analyzing of milk: pasteurization

4. Analyzing of creams;

Determination of titratable acidity in cream

Determination of fat by Geber method

Phosphate test

5. Analyzing of butter:

Determination of mixture content

Determination of curd

Determination of fat

Titratable acidity

Coli form test

East and molds test

Structure of quality control department:


ASST.MANAGER QUALITY CONTROL [1]


Management information department:

Presently mother dairy is having a system of all major transaction being carried out

through its online computer system. The major areas covered are:

The milk production and quality control system: the weightment of milk tankers

taken on Weight Bridge, which is inter forced with the online system. Quality tests fat

% and SNF % area entered in QC menu. The shift wise receipt issue milk processing

register products report are taken by entering the details in production menu to arrive

to material balance.

Milk marketing and distribution system: indenting for milk supply as per the

retailers requisition quantity, production indent, route sheet printing, distribution

menus. After the supply return entry, cheque entries carried to take the cheque

statement, short/excess payment reports, sales reports and retailers’ reports are taken.

Financial accounting system: the general receipts are entered for cash/cheque

receipts with GR printouts. Payment vouchers debit note, credit note, advances, bill

payment, cheque bounces are entered. All financial reports petty cash, cash book,

purchase day, R&P, trial balance, journal register, subsidiary ledgers, retailers ledger,

income tax form-16, TDS certificates etc, monthly annual reports are taken.

Integrated material management system.

Payroll/attendance management.


TRAINING OFFICERS QUALITY CONTROL [4]

SR.CHEMISTS [3]

CHEMISTS [5]

ASSTS.QC [11]

HELPERS [1]

MANAGER SYSTEMS [1]

ASST.MANAGER SYSTEMS [1]

EXECUTIVES COMPUTER [2]

ASST.EXECUTIVES SYSTEMS [2]

ASST.SYSTEMS [3]

HELPERS [3]


Engineering and production planning control.

Functions of MIS department:

Collection of data on daily basis from all the chilling centers and farm callers

on milk procurement and form all the dairies on milk receipt sales and stock

position.

Preparation of weekly report to marketing section

Preparation of monthly progress report with comparative market sales

Compilation of statistics and preparation of data base on various key physical

activities

Structure of MIS department:

Purchase department:

Functions:

To organize and make centralized purchase for mother dairy


MANAGER PURCHASES [1]

ASST.MANAGER PURCHASE [2]

PURCHASE OFFICER [2]

SUPERVISORS & [2] SR.TYPIST [2]

ASSISTANT PURCHASE [6]

TELEPHONE OPERATORS [3]

HELPERS [3]


To obtain annual requirements of the materials coming under the purview of CPC

from all the chilling centers. Once the actually quantity to be purchased is arrived at

necessary tenders to be called by giving wide publicity in newspapers.

Once the tenders are received, and tabulated these are to be placed before the

purchase advisory committee for consideration.

Convening purchase advisory committee meeting from time to time.

Monitoring the suppliers of all CPC items to mother dairy if they face any problem in

procuring the material.

Structure of purchase department:

2. SKILL

As the milk and milk products are perishable in nature so they should be handled

carefully. So it required skilled manpower for handling, packing, and skill in the sense testing

of FAT content, micro organism, humidity, and moisture. For all these it needs training.



Training will be conducted at central training institute, Bangalore dairy. For newly recruited

employees will be given basic training program for a month. And 1 month training will be

given for employees for junior technical officer, about machines. After that they will be sent

to Amul, Gujarat to know about various activities related to dairy. Training will be given to

employees to know about the cattle feed plant, insemination.

3. STYLE

There is no differentiation, but the superiors and the subordinates with various

degrees of responsibilities.

To achieve the common goals so called has to make collaborations within and across

organization boundaries.

Taking new ideas and views on procurement of milk from different source and

decision-making.

In the KMF mother dairy organization majorly we can observe, well adopted

machineries, various technologies to manufacture milk products etc..,

4. STRATEGY

Development of intermediates and bulk milk products order using a variety of

procurement technologies of milk.

Development of cattle field plants of 100 TPD capacities, each and one plant of 200

TPD capacities with mineral mixture production facility on one unit.

Providing assured and remunerative market for the milk produced by the farmers.

Improving the quality status of milk and their derivatives to urban consumers.

5. SYSTEM

Online computer transaction system at mother dairy. Presently mother dairy is having a

system of all major transaction being carried on though its online computer system. The

major areas covered are:


SWOT ANALYSIS

Internal External

Strengths Weakness Opportunity Threats


All milk distribution to retailers/factories/institutions

All incoming milk weightiest. Billing and its accounting.

All financial accounts, book maintenance, employees’ pay roll, sales transaction.

6. STAFF

In this organization, the staff members are well co-aporative each other, and well

experienced employees with knowledge regarding their work.

Duties and responsibilities of staff

To report him/ her to duty at the place to which he/she posted.

To undergo the prescribed probation under the KMF for a period of two years and

undergo such training and for a period has may be arranged for him/her and acquit

him/her self creditably in the training imported to him/her.

To obey and abide the rules, regulations, service conditions and standing orders which

the KMF may adopt, prescribe, frame are issue from time to time to govern its

employees.

Total staff strength, permanent, contract laborers and security.

SL.NO TYPES NUMBERS SALARY PER MONTH

1 Permanent 324 2525876.00

2 Contact labours 350 1575000.00

3 Security 41 106371.00

7. SHARED VALUES

It has been serving the state from last 30 decades.

State entirely covered by dairy development.

Bulk supplier of SMP, WMP to army.

Low price spread between procurement and sales price.

In the last ten years for milk produced Rs 3055 crores has been paid to dairy from

house.

Wide spread dispersal of cross breed cattle3.2 SWOT Analysis of the company



STRENGHTS:

1) It is located in a place where good infrastructure is available.

2) The company is concentrating towards the quality of the products.

3) The technological standards of the company.

4) The co-operative principle, which has laid the foundation of the company.

5) Certificate like ISO 9002 and IS 15000 (HACCP).

6) Each department in the organization is very coordinative.

7) Since it is a government organization there is no any strikes, lockouts, or any labour

union problems

WEAKNESS:

1) The company needs improvement and should concentrate on timely customer service.

2) The promotion procedure in the organization is too rigid.

3) The company has to focus more on sales, marketing.

4) As it is government organization, employee productivity is less.

OPPORTU

NITIES:

1) As Nandini is well known brand, it has an opportunity to diversify into some other

business.

2) Mother diary is concerning only on local market can enter into other markets.



3) It has got infrastructure to expand production capacity.

4) Mother dairy is recruiting its labor from both permanent and contract basis. it has

opportunity to meet production as per fluctuating demand.

THREATS:

1) Stiff competition by brands like arogya, heritage, good life, nestle and other brands.

2) Now a days animal husbandry is losing its importance.

3) As mother dairy is owned by Karnataka government, change in policies of the

government affects the mother dairy.

4) Threat due to entrance of the private firms into the milk processing.


Date post:	03-Apr-2015
Category:	Documents
Upload:	mahesh-kumar
View:	2,305 times
Download:	11 times

INTRODUCTION OF DAIRY

Documents