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How integrated IT infrastructure helped Amul steer through coronavirus impact

GCMMF has improved Amul products' data accuracy and enabled a smoother integration with the distributor management system

twitter-logoNidhi Singal | June 1, 2020 | Updated 17:56 IST
How integrated IT infrastructure helped Amul steer through coronavirus impact
Unlike other manufacturing units, Amul's supply chain does not start from a factory or an ancillary supplier. It starts from the source of the milk production - the cattle and the milk suppliers

With the government of India announcing nationwide lockdown on March 24 due to the outbreak of COVID-19, Amul, one of the biggest FMCG company in India, was in a major fix. With its complex supply chain, the company witnessed an unforeseen surge in the demand for dairy products and a steep decline for frozen products. With the frozen supply chain lying idle, and the dairy supply chain under pressure, Amul maximized the use of recourses and infrastructure by deploying the frozen one for delivering dairy products overnight.

"The pandemic situation was extremely critical for us since this is an essential service. But thanks to our integrated IT infrastructure, during the lockdown, our supply chain of 3.6 million farmers, 18,700 societies, 5,000 milk tankers going to 200 chilling stations, making 750 SKU, then going to 62 branches and 10,000 distributors and one million retailers,  I knew exactly what was happening at every point- where tankers are being stopped, in which village milk has not been collected, and which market tankers could not go. Technology is being used every day by everyone, but during the lockdown, it was very critical for us," says RS Sodhi, Managing Director, GCMMF Ltd (AMUL).

With the objective to integrate all its members and federation on a single enterprise platform and enable end-to-end visibility of its supply chain - all while supporting business growth, Gujarat Cooperative Milk Marketing Federation (GCMMF), owner of the popular brand Amul, signed a 10-year partnership with IBM back in 2009, which has been renewed for another 10-years. It covered Business Transformation in the form of ERP implementation for GCMMF and 14 Member Unions, provision of Infrastructure and Application Management Services. IBM conducted an IT architecture and strategy study and developed an IT strategy roadmap for GCMMF.

Kamal Singhani, Managing Partner, Global Business Services, IBM India/South Asia, explains, "To meet GCMMF objectives, one of the biggest parts has been supply chain solutions that have been woven around our ERP solutions. It is going beyond financial balancing and is responsible for the inventory supply for the entire business. The entire technology infrastructure has been created around the planning landscape, to ensure it helps them sustain and continue to maintain the pace. Besides, GCMMF has deployed various  high end IT point solutions like milk procurement, milk testing, warehouse management and even POS solutions."

Amul has a very complex supply chain, which is multi-layered and multi-dimensional. Unlike other manufacturing units, Amul's supply chain does not start from a factory or an ancillary supplier. It starts from the source of the milk production - the cattle and the milk suppliers. It required a super agile, extremely responsive and scalable platform that would be able to provide complete control and real-time visibility to their complex 24-hour logistics process. A complete disaster recovery solution, given the highly perishable nature of the products in question, was a must. In case of an incident, the solution would need to get the processes back on their feet with minimum downtime, and the distribution channels to be always up and running for maximum customer benefit.

Lingraju Sawkar, General Manager, Global Technology Services, IBM India/South Asia, says "For GCMMF, we created a private cloud implementation with a data centre infrastructure and a disaster recovery infrastructure which backs up automatically. Whenever there is any intervention needed or an issue on the production side, it fills the Disaster Recovery (DR) on an automatic basis and the systems run seamlessly between production and DR. It is monitored and managed 24/7 by remote technology at our command centres so the  operations are constantly being carried out."

The strategy was planned around five business transformation initiatives that would provide the foundation for the growth plans. The IT initiatives that were identified were designed to enhance visibility and transparency across the value chain while improving operational efficiency. SAP technology solutions were chosen for IT infrastructure and applications, ERP solution and distributor management in a Village Co-operative Society context, business analytics solutions for advanced planning capabilities, and an IT infrastructure to provide an integrated platform for better visibility for the entire distribution chain. This infrastructure would assure better disaster recovery and business continuity solutions. Scalability and flexibility were identified as the most critical objectives and a custom plan was designed to help upgrade to reliable, scalable and flexible transaction processing systems that support growth. While GCMMF started its ERP Infrastructure journey on IBM Power Systems a decade ago, it has been transitioned to POWER9 servers to support growth vision and help expand operations across many co-operative societies.

Over the last ten years, this adoption has delivered a tenfold growth at GCMMF's business. GCMMF has improved Amul products' data accuracy and enabled a smoother integration with the distributor management system. IBM cognitive capability has also enabled continuous mobile-based applications and automation compliance for managing applications. In addition to running a seamless milk and milk products supply operation, it has provided clarity and visibility into the daily logistics and inventory process.

Commenting on the renewal of the contract, Singhani, explains "we need to be focused on converting this supply chain to a smart supply chain, a more resilient and more self-healing supply chain." The other focus would be introducing lots of AI and ML in their supply chain and as a result, bringing lots of cost savings as well as the ability and resilience to grow multifold in the next ten years. With IBM's help, Amul is integrating new technologies with farmers and retailers. the company is integrating each distribution retails- each shop, down to each item that is being sold.

Also read: Coronavirus crisis: Opportunities aplenty for consumer goods companies, says Nestle MD Suresh Narayanan

Also read: Coronavirus lockdown has driven dairy consumption in homes up to 20%, says Amul MD

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