Samarth KMF dharwad project report

KARNATAKA MILK FEDERATION, DHARWAD

CHAPTER – 1:

EXECUTIVESUMMARY

INDUDTRY PROFILE

COMPANY PROFILE

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1. EXECUTIVE SUMMARY

1.1TITLE OF THE PROJECT

“ORGANIZATIONAL STUDY IN KMF DHARWAD”

1.2OBJECTIVES

1) To study the functions of various departments in detail

2) To gain knowledge by practical exposure to the working environment in the organization

3) To know the various policies and procedures followed in the organization

4) To analyze the overall performance of the organization

5) To make a SWOT ANALYSIS of the organization

1.3 SCOPE OF THE STUDY

This study is an attempt to understand the organization as a whole and to study the different departments in detail so
that as a student get a detailed knowledge about the organization. The study is directed towards the understanding of

functions of different departments. The study focuses on the functioning of different departments .

1.4 PLACE WHERE STUDY IS DONE

The internship study has been undertaken at KARNATAKA MILK FEDERATION, DHARWAD. Located at
Lakkammanahalli Industry P.B Road Dharwad 580004

1.5 DURATION OF THE STUDY

The internship study has been extensively carried out for a period of 1 Month that is 01-08-2012 to 31-08-2012.

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1.6 LIMITATIONS

1. Since supplying goods to defense, availability of information was also a constraint
2. Since the organization is too big with too many departments, covering all the departments in short period is not
possible

3. It is assumed that the information provided by the organization is correct

4. Time Limitation

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2. INDUSTRY PROFILE

2.1 INTRODUCTION DAIRY INDUSTRY IN INDIA

Dairy enterprise is an important occupation of farmer. In India nearly 70% of the people depend on
agriculture. It is the backbone of India. Dairy is linked with agriculture industry to a large extent.
Animal husbandry in India is an essential part of agriculture. It is mainly a rural occupation closely associated with
agriculture.

2.1.1 DEVELOPMENT OF DAIRY INDUSTRY IN INDIA
During the Pre-independence year there was no serious stress given to dairy industry. In 1886 the
Department of Defense of the British Government established the dairy farms for the supply of milk to the British
troops in Allahabad.
Later, in 1920 serious steps were taken by Mr. William Smith, an expert in dairy forming to improve the
milk production There was discrimination done to the Indians hence this led to the rise of the first milk union in India.
In Lucknow in 1937 called the Lucknow milk producer’s Co-operative union Ltd.
In 1946 AMUL (Anand Milk Udyog Ltd) was started in Gujarat to bring up the economic stability of villagers.
When the farmer Prime Minister Lal Bahaddur Shastri visited the functioning as it was rendering a social service to
the society, which helped the villagers to come in the national economic stream.
The dairy and Animal Husbandry received serious attention after the independence. There were lots many of
progressive steps taken by the government through five year plans. This led to the formation of National Dairy
Development Board in 1965 & thus in 1970 he decided to Bring a “ White Revolution” throughout the country, Initially
10 states were selected were for this purpose excluding Karnataka.
In Karnataka in 1974 an integrated project was launched to restructure and reorganize the dairy industry on
Co-operative principle of AMUL and to lay foundation for new direction in dairy industry.

INDIAN DAIRY INDUSTRY PROFILE

India's high-value, high-volume market for traditional dairy products and delicacies is all set to boom further under the
technology of mass production. This market is the largest in value after liquid milk and is estimated at US $3 billion in
India.

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More and more dairy plants in the public, cooperative and private sectors in India are going in for the
manufacture of traditional milk products. This trend will undoubtedly give a further stimulus to the milk consumption in
the country and ensure a better price to primary milk producers. Simultaneously, it will also help to productively utilize
India's growing milk surplus.

Milk production in India increased from 17 million tons in 1950-51 to 89.6 million tons in 2007-08. India has
rapidly positioned itself as the world's largest producer of milk. Producing milk in rural areas through smallholder
producer cooperatives and moving industrially-processed milk from these smallholder sources to urban demand centers
became the cornerstone of government dairy development policy. This policy initiative gave a boost to dairy
development and initiated the process of establishing the much-needed linkages between rural producers and urban
consumers. The performance of the Indian dairy sector during the past three decades has been truly impressive. Milk
production grew at an average annual rate of 4.6 percent during the 1970s, 5.7 percent during the 1980s, and 4.2
percent during the 1990s.

Despite its being the largest milk producer in the world, India's per capita availability of milk is one of the lowest
in the world, although it is high by developing country standards. The per capital availability of milk expanded
substantially during the 1980s and 1990s and reached about 226 grams per day in 2003-04 the per capita consumption
of milk and milk products in India is among the highest in Asia, but it is still growing. It is still below the world average of
285 grams per day, and also the minimum nutritional requirement of 280 grams per day as recommended by the Indian
Council of Medical Research (ICMR).

Several factors have contributed to increased milk production. First, milk and dairy products have cultural
significance in the Indian diet. A large portion of the population is lacto-vegetarian, so milk and dairy products are an
important source of protein in the diet. The demand for milk and dairy products is income-responsive, and growth in per
capita income is expected to increase demand for milk and milk products.

Despite the fact that dairy production in India is widespread throughout the country and overwhelmingly carried
out by small-scale producers, there are still large interregional and interstate variations in milk production. Roughly two-
thirds of national milk production comes from the states of Uttar Pradesh, Punjab, Rajasthan, Madhya Pradesh,
Maharashtra, Gujarat, Andhra Pradesh, and Haryana. However, there have been some shifts in milk production shares
of different states. In 2001-02, Uttar Pradesh was the largest milk producer in the country, with about 16.5 million tons of
milk, followed by Punjab (8.4 million tons), Rajasthan (6.3 million tons), Madhya Pradesh (6.1 million tons), Maharashtra
(6 million tons), and Gujarat (5.6 million tons). The eastern region is lagging behind in terms of dairy development, and
imports milk from surplus areas in the West and North.

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2.1.2 INDIAN DAIRY INDUSTRY PROFILE

The annual milk production is presently 92 million tones, contributing around Rs. 1000 billion to the GDP.
Provides assured and remunerative employment round-the-year to 60 million families.

The dairy animals make a substantial contribution to household food security by providing income, quality food,
energy, fertilizer and assets in over majority of the rural households in India.

The Animal Husbandry is the single largest contributor under the agriculture sector which provides a
remunerative employment round the year at a very small investment. The dairy animals make a substantial contribution
to household food security by providing income, quality food, energy, fertilizer and assets in over majority of the rural
households in India.

These livestock keepers are constrained by poor animal health and veterinary services, lack of feed and fodder,
water, milk handling, chilling, etc. Besides, there has been lack of infrastructure facilities such as good roads and access
to markets, etc. The livestock keepers also lack access to advanced technologies as well as proper institutional support
system. The result is that both the production and productivity remain well below its potentials. Thus the losses and
wastages continue to remain high. Adapted breeds and local feed resources although available, but need proven
technology supports in its preservation and processing. Such support would substantially improve production and
productivity, which would result in higher income for the livestock keepers.

One of the problems faced by India is unemployment, despite the rapid growth rate. The problem is more acute
in rural educated and marginally educated youths, who have no alternative but to migrate to urban areas. Due to
automation in various core sectors, the employment opportunities have dwindled considerably whereas the service
sector has its own limitations, especially the high investment cost per job created. In this context, the dairy industry
offers a plausible opportunity of creation of self-employment with minimum investment. There is a scope for doubling the
present milk production, which can be achieved with marginal investment, such a step would not only enhance milk
production and productivity, but also would create millions of additional jobs.

Dairying is, in fact, a supplementary activity of the marginal farmers and the landless laborers. It is therefore
suggested that dairy and such other animal farming be included within the legal framework of ‘agriculture and agriculture
products’. This would enable the marginal farmers and the landless agriculture laborers to benefit from the various
government incentives.

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Milk is no more a luxury, but essential nutritional requirements of human being. The children largely depend on
milk for nutrition. Higher milk production therefore will also increase the health status of the farmers and people at large.
Due to several inherent reasons, the cost of milk production is high. One of the important reasons is low animal
productivity. Because of high cost, the milk and milk products are not affordable to poor strata of the society. Milk is a
perishable commodity. Hence, its conversion to products, such as, milk powder, butter and cheese, etc. is necessary.
Considering these factors, it is reasonable that at par with agriculture produce, the milk products be also exempted from
any excise duty, sales tax and such other taxes. This gesture of the government would go a long way in accelerating the
growth of the Indian dairy industry from present annual rate of around 4.5 % to more than 9%.

The conversion of excess milk to milk-products is a necessity. The basic principle here is evaporation of water
which changes its physical form only, whereas there is no change whatsoever in its chemical composition. One of the
reasons of higher cost of milk and milk products is the cost of packaging. To safeguard the quality and safety for human
consumption, packaging of milk and milk product is necessary. The milk product manufacturing therefore should be
construed as ‘processing milk for preservation’ and it should be exempted from all the taxes and duties like excise,
central sales tax and octroi etc. To enhance milk production during the next five years as well as to address the issues
referred in the foregoing sentences, there is an imperative need of policy support from the government on the following
core areas

 Clean and quality milk production, processing and packaging
 Boost the exports of milk and milk products
 Enhance milk production and mulch animal productivity

2.1.3 Indian Dairy: The organized sector is expanding rapidly.

India’s modern dairy sector has expanded rapidly. From an insignificant 200,000 liters per day (lpd) of milk
being processed in 1951, the organized sector is presently handling some 20 million lpd in over 400 dairy plants.
Already, one of the world’s largest liquid milk plants is located in Delhi and handling over 800,000 liters of milk per day
(Mother Dairy, Delhi). India's first automated dairy ‘Mother Dairy ‘ has been established at Gandhi agar near
Ahmadabad, Gujarat, in Western India and its capacity is capacity is 1 million lpd. It is owned by India’s biggest dairy
cooperative group, in Anand, with an annual turnover in excess of Rs 23 billion (US $500 million). Amul-III with its
satellite dairies, with total installed capacity of 1.5 million lpd has also been commissioned. India's first vertical dairy
(capacity: 400,000 lpd), owned by the Pradeshik Cooperative Dairy Federation (PCDF) has been commissioned at
Noida, outside Delhi

Dairy is a place where handling of milk and milk products is done and technology refers to the application of
scientific knowledge for practical purposes.

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In India, dairying has been practiced as a rural cottage industry since the remote past. Semi-commercial dairying
started with the establishment of military dairy farms and co-operative milk unions throughout the country towards the
end of the nineteenth century.

The Indian Dairy Industry has made rapid progress since Independence. A large number of modern milk plants
and product factories have since been established. These organized dairies have been successfully engaged in the
routine commercial production of pasteurized bottled milk and various Western and Indian dairy products. With modern
knowledge of the protection of milk during transportation, it became possible to locate dairies where land was less
expensive and crops could be grown more economically.

2.2 DAIRY INDUSTRY PROFILE

• Human population: 953 million (70 million dairy farmers)
• Milk production: 74.3 million tonnes (203.5 million lpd)
• Average annual growth rate (1995-2000): 5.6%
• Per capita milk availability: 214 g/day or 78 kg/year
• Milk animals: 57 million cows; 39 million buffaloes:
• Milk yield per breed able bovine in-milk: 1,250 kg
• Cattle feed production (organized sector): 1.5 million tonnes
• Turnover of veterinary pharmaceuticals: Rs. 550 crores
• Dairy plants throughput: 20 mlpd

Specific features of dairy in relation to marketing in developing countries
The dairy industry in the developing countries has a number of specific features which distinguish it from the
other sectors of agriculture and have particular implications for marketing.
First, milk consists of over 85% water, and produced daily. Consequently, high costs of transportation are
incurred per unit of output marketed. Also, milk being highly perishable, it needs to be used within a short period or
processed and transformed into a more stable, longer-storable form. The quality of milk depends on farm management
practices, and milk is potentially subject to adulteration, so strict and comprehensive quality regulations may be
necessary when marketing involves more than direct delivery by producers to consumers.

Second, the vast majority of the dairy farmers are small-scale producers, who produce milk as a source of
regular cash income. Dairy production is a labor-intensive enterprise, and dairy marketing activities often provide
substantial employment. However, because of asset fixity (high percentage of fixed costs), dairy enterprises often
respond to market changes and incentives in a limited and gradual way.

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Third, milk can be used to make a wide range of high quality palatable and nutritious products, which often imply
substantial value added over the cost of the raw material. When production and consumption points are far apart and
demand increase rapidly, processing of dairy products becomes very important.

Fourth, as a consequence of the above features of milk and the market vulnerability of its producers,
cooperatives may assume a strong position in milk processing.

A survey by the International Dairy Federation in 1984 revealed that in 21 developed countries together
accounting for 55% of the world's milk supply, producer cooperatives marketed 86% of total sales of milk from farm to
the first handler. In some of these countries, cooperatives also handled 80-90% of the total processing activity. It may be
noted that the history of development of dairy cooperatives in these countries are not always similar. However, in most
developing countries, dairy producer cooperatives and cooperative processing are either non-existent or very weak. The
need for cooperatives in these countries is driven by the need to capture some economies of scale in transportation and
processing where numerous small producers are scattered far away from the consumption centers. In many countries,
this gap has been filled by establishment of parasitical dairy enterprises for collection and processing of milk to promote
domestic dairy.

In most cases, these enterprises ended up processing subsidized imported dairy products, neglecting the rural
dairy sector. The monopolistic character of these enterprises often led to inefficiency thus they failed to serve the
interests of domestic producers and consumers.

Weaknesses in physical and marketing links between rural producers and urban processors and consumers are
among the major constraints to dairy development in the developing countries. It is important to be aware of and
understand how such constraints can be addressed in order to devise mechanisms that can transfer growing urban
demand into increased livestock production. Inadequate infrastructure and inefficient marketing may lead to increased
transactions costs and/or market failure. By better understanding these costs and identifying the ways of reducing their
impact, policy prescriptions can be made to promote economic development by fostering production and trade.

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2.3 NATIONAL DARIY DEVELOPMENT BOARD:

2.3.1 History:

The NDDB was founded to replace exploitation with empowerment, tradition with Modernity, Stagnation with
growth, transforming dairy into and instrument for the development of Indian’s rural people.
The NDDB was established in 1965; the board is registered under the Societies Registration Act and the
public Trust Act, fulfilling the desire of the Prime Minister of India – the late Lal Bahaddur Shastri to extend the
success of the Kaira Co-operative Milk producers union (AMUL) TO OTHER PARTS OF India. Dr Vergese Kurien
was the founder chairman. The success combined the wisdom & energy of farmers with professional management to
successful capture liquid milk and milk product markets while supporting farmer’s investment with inputs and
services.
In 1969, when the Government of India approved the Operation Flood programme and it’s financing through the
monetization of World Food Programme-gifted commodities, it was found that the statutes under which NDDB was
registered did not provide for handling of government funds. Therefore, in 1970 the government established a public-
sector company, the Indian Dairy Corporation. The IDC was given responsibility for receiving the project’s donated
commodities; testing their quality; their storage and transfer to user dairies and receiving the dairy payments. Thus it
served as finance-cum-promotion entity while the entire Operation Flood technical support was provided by NDDB. To
avoid any duplication in their activities or overlap of functions, the IDC and NDDB were eventually merged into a newly
constituted NDDB by an Act of Parliament passed in October 1987.

2.3.2 The Growth:

NDDB began its operations with the mission of making dairying a vehicle to a better future for millions of gross roots
milk producers. The mission archived helped to launce ‘’Operation Flood’’, a programmed extending over 26 years
and with the help of World Bank Loan India become the world’s largest milk producing country. As per March 2001
India’s 96000 Dairy Co-operative are integrated thorough a three Tier Co-operative structure. The Anand pattern,
which is owned by more than 10 million formers, procures an average of 1605 million liters of milk every day. The
milk is processed and marketed by 170 milk producers’ co-operative unions which, in turn own 15 state co-operative
milk marketing federation. Since its establishment the dairy development board has planned and spearheaded
India’s Dairy programmer by placing dairy development in the hands of milk producers and the professionals they
employ to manage their co-operatives. In addition, NDDB also promotes other commodity based co-operative, allied
industries and veterinary biologically on an intensive and nationwide basis.

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2.3.3 Objectives of NDDB:
 To sponsor, promote, manage, acquire, construct or control any plant or work, which promote projects of
general public utility relation to dairying.
 To make information available on request to technical services to increase production of Milk.
 To prepare initial feasibility studies of dairying and other dairy related projects and undertake subsequent
designing planning and start up those projects.
 To undertake research and development programmed related to production and marketing of milk and milk
products.
 To provide assistance for exchange of information to other international agencies.

2.3.4 Services rendered by NDDB:

• Planning dairy and rural development projects.
• Organization of farmer co-operative societies.
• Setting up of dairy and cattle feed plants.
• Manpower planning and training.
• Applied research and development.
• Implementation of milk production enchantment programmed.

2.3.5 Objectives of the study:

The objectives of the study were;

1. To study the overall functioning of the organization with help of organization structure.
2. To know about the milk procurement and processing.
3. To study about the area of operation and channels of distribution system.
4. To study their marketing Plans and sales promotional activities.

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3 COMPANY PROFILE
COMPANY NAME : Dharwad Co-operative Milk Producers Union Ltd.
Lakkammanahalli, Industrial Area.
P.B Road Dharwad-580004

NATURE OF
BUSINESS : Mfg / Service / Semi-agro based Co-operative Unit.

TYPE OF
OWNERSHIP : Co-Operative Unit.

TEL-NO : 0836-2467643, 2461876, 2468380.

RAW MATERIAL : Milk
85,000 LPD
Water 5 to 6 lack liters/day
Coal 4 to 5 tones.

CAPACITY OF
PLANT : 2, 00,000 Liter’s / Day
12 Tones milk powder, 10 T Butter, 6 T Ghee.

FINISHED
PRODUCTS : Milk, Butter, Ghee, Peda, Milk powder, Ice creams, Curd, Lassi, Khova.

TOTAL INVEST : 7 Crores

TOTAL SOCIETIES
AT VILLAGE LEVEL : 460 Societies

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3.1 BOARD OF DIRECTORS

1. Shri B N Arabgond. Chairman
2. Dr M N Venkatramu. Managing Director
3. Shri N S Asuti. Director
4. Shri G M Morbad. Director
5. Shri A M Desai. Director
6. Shri S M Hadagali. Director
7. Shri R N Davagi. Director
8. Shri U M Hegade. Director
9. Shri G G Hegade. Director
10. Govt Dept Officers. 5 Members
11. Govt Nominated. 3 Members

KARNATAKA MILK FEDERATION (KMF)

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3.2 KARNATAKA MILK FEDERATION:

The first dairy in Karnataka was started in Kudige in Kodagu district in 1955, further in June 1974; an integrated
project was launched in Karnataka to restructure and reorganize the dairy industry on the co-operative principle and
to lay foundation for a new direction in dairy development.
In 1975, the World Bank aided dairy development was initiated. The present Karnataka Milk Federation
(KMF) came into existence in 1984-as a result of merging of Karnataka Dairy Development Co-operation, small co-
operatives and Karnataka Milk Production Development and loose vendors.

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At the end of the March 1998, the network of 8023 Diary Co-operative Societies (DCS) have been
established which are spread over 166 taluks of the total 175 taluks in all 28 districts of Karnataka. There are 13 Milk
Unions and Dharwad Milk Union (DMU) is one among them. There are 35 Chilling centers, 3 Farm coolers, 15 Liquid
milk plants and 2 Product dairies for chilling, processing, conservation and marketing of milk. To supply cattle feed
there are 4 cattle feed plants.
To ensure supply of quality germ plasma Bull breeding farm and frozen semen bank are also available.

3.2.1 Karnataka co-operative Milk Producers’ Federation Limited ( KMF)

KMF is the apex Body in Karnataka representing Dairy Cooperatives. It is the third largest dairy co-operative
amongst the dairy co-operatives in the country.
To impart training, institutes at Bangalore and regional training institutes at Dharwad and Gulbarga are
functioning. Three nitrogen plants (2 plants of 25 CPM and 1 plant of 5 CPM) are been set-up to supply nitrogen,
which is used for Refrigeration purpose. Three diagnostic centers have been set-up for monitoring diseases: three
fodder farms at Rajkunte, Kuttanahalli and Kodagu have been set-up to supply good quality of fodder and seed
production farm at Shahapur has been set-up. The federation giving details of the latest technology in dairy industry
etc is published ‘’Ksheer Sagar’’ magazine monthly.

3.2.3 UNITS OF KMF:

KMF has the following Units functioning directly under its control:
 Mother Dairy, Yelahanka, Bangalore.
 Nandini Milk Products, KMF Complex, Bangalore.
 Cattle Feed Plants at Rajanukunte/Gubbi/Dharwad/Hassan.
 Nandini Sperm Station (formerly known as Bull Breeding Farm & Frozen Semen Bank) at Hessaraghatta.

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 Pouch Film Plant at Munnekolalu, Marathhalli.
 Central Training Institute at KMF Complex, Bangalore.
 Quality Control Lab at KMF Complex, Bangalore.

List of Co-operative Milk Producers’ Societies Union:

KMF is a co-operative apex body in the state of Karnataka for representing dairy organizations and also
implementing dairy development activities to achieve the following objectives.

• Providing assured and remunerative market for all the milk produced by the farmer members.
• Providing hygienic milk to urban consumers.
• To build village level institutions in co-operative sector to manage the dairy activities.
• To ensure provision of milk production inputs, processing facilities and dissemination of know-how.
• To facilitate rural development by providing opportunities for self-employment at village level,
preventing migration to urban areas, etc.
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3.2.4 FUNCTIONS OF KMF:

• Co-ordination of activities between the unions.
• Developing the markets for the increasing in milk production.
• To make the brand ‘’Nandini’’ as a house hold name.
• Excellence in quality is to be maintained to lay a solid foundation for wide Spread acceptance of
‘’Nandini’’ products.
• To increase the market share of ‘’Nandini’’.

THE GROWTH PROCESS:
The growth over the years and activities undertaken by KMF is summarized briefly hereunder:
Growth of KMF

Descriptions Units 1976-1977 2009-2010
Dairy Co-operatives Nos 416 11063
Membership Nos 37000 1956163
Milk Procurement Kgs/day 50000 3025940
Milk Sales Lts/day 95050 2129790/curd:1.77LKPD
Cattle Feed Consumed Kgs/DCS 220 3010
Daily Payment to Farmers Rs.Lakhs 0.90 342
Turnover Rs.Crores 2707.00

Source:
DHARWAD MILK UNION

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Dharwad District Co-operative Milk Producer’s Societies Union Ltd.
The Union was established in the year 1986 under the Operation Flood 2 and 3. The Union also later took over
in 1988 the Milk Products Factory with a drying capacity of 2.10 Lakh Litres per day, earler established by the Karnataka
milk Products Limited (GOK Undertaking).
The Union covers the districts of Dharwad, Karwar, Haveri, and Gadag, and has chilling centres at Gadag,
Haveri, Sirsi,, Ron, Nargund, Hirekerur, and Kumta with chilling capacity of 1.20 Lakh Litres Per Day.
The Union procures and sells on an average 0.92 Lakh per Day and 0.59 Lakh Liters Per Day respectively.
There are 7 Bulk Milk Coolers in the Union.
Apart from selling milk, I sells pure buffalo milk and produces very thick 250gm Curds in mud pots specially
designed for this namely “KUDIKE MOSARU”, the famous Dharwad Peda, Butter in bulk as well as in retail packs and in
10 gm chip sets, Ghee, Skimmed Milk Powder and Paneer.

Establishment:
The Dharwad Milk Union is Co-operative society among the 13 establishments, under KMF: The Dharwad Milk
Union (DMU) is one of the most modern plants in the country. It is located in the spacious 25 acres of land, located in
Lakamanahalli Industrial Area; adjacent to the National Highway-4. It is patterned the AMUL Milk Dairy, Gujarat.

NATURE AND BUSINESS CARRIED:
The Nature of Dharwad Milk Union is that procuring the Milk from societies. And that milk will be bringing

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through tankers for various chilling centers those, which are near and convenient to various societies.

The Union processes the milk and market in urban area through by various agents. The Union providing service
to milk producer's technical inputs like veterinary services, seeds, fodder etc. and also by giving training to farmer and
also induction program. The Union is strengthening of milk cooperative movement of organization extension activities
and the rural development services.

The Union also owns and operates the dairy plant cattle feed plant; fodder and bull mother forms, semen
collection station, and herd quarter center for animal husbandry activities.
The Union also takes research, development and also other promotional activities for the overall benefit of the
farmer.

The Union providing various product to market like toned milk, standard milk, full creamed milk, double toned
milk, homogeneous standard milk, along with cheese curd, ghee, peda also providing. This is the nature and business
carried of the Shivamoga milk Union.

3.3 VISIONS MISSION AND QUALITY POLICY:

VISION STATEMENT OF DMU
Dharwad Milk Union in committed to conserve to conserve energy and Maintain in the areas of plants by
educating all the connected staff and thereby gaining competitive edge by reducing operation cost control, increasing
market share of milk and milk products for prosperity of producers, consumers and employee for mutual help for nation
and organizations.

MISSION STATEMENT OF DMU:
Dharwad Milk Union is committed to provide maximum possible price for the milk supplied by its members and
provide necessary inputs to enhance milk production while ensuring economic viability of the Union and is also
committed to provide quality milk products to consumers and emerge as one of the top most milk union of the co-
operative dairy industry in the country.
At DMU we Endeavor to satisfy the taste and nutritional requirements of the customers. Through excellence in
marketing by DMU committed team, DMU are committed to offering quality products that provide best value for money.

PUNCH LINE: “FRESH AND PURE “

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DMU QUALITY OBJECTS AND QUALITY POLICY:

QUALITY OBJECTS:

1) To develop the quality consciousness among all the producers or employees of the union.
2) To implement the cost reduction in each stage of collection processing and distribution.
3) To make every one aware of the every conservation in dairy.
4) To maximize the customers complaints and achieve customer satisfaction.
5) To set goals or targets at all levels to achieve continuous improvement.
6) To train our workman from time to time for exposure to advanced technology for efficient operations.
7) To provide adequate infrastructure facility for improving the work environment.

INFRASTRUCTURE FACILITIES:
Infrastructure facilities in DMU, they have one chilling center and they can distribute milk with the capacity of
covering the 11 routes and the capacity is 2, 00,00LPD.
Other facilities like:
♦ Security facilities
♦ Canteen facilities
♦ Shift: Three shift per day.
♦ Manual punching card and computer entries will be there

DHARWAD DISTRICT CO-OPERATIVE MILK PRODUCERS SOCIETIES UNION LIMITED.
Further in 1988, the Raipur Dairy and Chilling Center, setup in 1968, also came under the union. In 1989, the
training center, which was controlled by KMF, came under Dharwad Milk Union.

DMU was Rs.7 crore Projects of which Government has Rs.2Crosre of share capital and authorized capital of
DMU is Rs.5crore.DMU formed 551 milk producer's co-operative societies in Dharwad, Gadag,and Haveri and Uttar
Kannada districts. The production capacity of DMU is 2lack liters of milk per day and also has the capacity to produce
12tones of milk powder, 10tones of butter, and 6tones of ghee per day.

DMU is collecting 85 thousand liters of milk per day from its societies and sells 60 thousand liters of milk per day
and the remaining milk is used for producing milk products.

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History:

A group of experienced officers, appointed by the Karnataka Milk Federation surveyed the whole of Dharwad
districts (includes two newly formed district Gadag and Haveri) and Uttar Karnataka. Further they found out there as a
need for a Milk Dairy. They traveled the surrounding villages, educated the villagers about Milk and Milk Products and
the benefits they would get from the Milk Dairy.

Seeing the overwhelming response and untapped resources and the huge market the Federation decided to
setup the Milk Union in 1984, known as the DHARWAD DISTRICT CO-OPERATIVE MILK PRODUCERS SOCIETIES
UNION LIMITED Further in 1988, the Raipur Dairy and Chilling Center, setup in 1968, also came under the union. In
1989, the training center, which was controlled by KMF, came under Dharwad Milk Union.

Functions of DMU:
The main function of DMU is to procure milk from villagers and pay them the right price.
• To educate the villagers about milk and its quality.
• To make 'Nandini' as a part of daily life.
• To provide good quality of cattle feed, fodder, veterinary aid seeds, etc., to the villagers.
• To see that the DCS's are carrying out their activities properly and in an efficient manner.
• To see that the milk is brought from DCS's to the chilling centers in the prescribed time.
• To look the accounts of the DCS's supervise the purchase process and market the milk and milk products.

Objectives of DMU:
• Providing hygienic and good quality of milk to the consumers.
• To build the economic strength of the milk producers in villagers.
• To eliminate middlemen's in the business so that the milk producers receive their appropriate share of bread.
• To educate the villagers about the adulteration of milk and its harmful effect on the body.
• To see that every citizen becomes healthy by consuming good quality of milk.
• To make villagers self-viable and build self image.

GOALS OF THE DMU

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• Generating employment opportunity for rural mass
• Procurements of good milk
• Supplying quality milk to the customer in the city for appropriate price

Process at DMU:
The milk collected at DCS's is brought to the center through carriers, trucks etc. The quality and quantity of milk
bought is checked at the Reception center by a supervisor.
A sample of milk is taken and is tested in a laboratory for fat content, Solid Not Fat (SNF) acidity etc.
As the milk is at room temperature it is to be brought down to 4°C to 5 degree C. So that it may check the
growth of bacteria. To ensure this milk is passed through a chilling chamber where the milk is chilled. Its temperature is
bought down and then the milk is stored in a tank called as "Ram Milk Tank".

From this tank the milk is pumped to a pasteurizing cell where the milk is heated up to 72°C and 15 seconds, so
that all the bacteria and microorganisms may be killed and then the milk is simultaneously cooled to 4°C to 5 degree C
and is stored in a "Pasteurized Milk Tank"
.

PRODUCT PROFILE

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Milk Products
1. Nandini Toned milk:
Nandini Toned Fresh and Pure milk containing 3.0% fat and 8.5% SNF.
Available in 500ml and 1litre packs.

2. Nandini Homogenized toned milk:
Nandini Homogenized Milk is pure milk which is homogenized and pasteurized.
Consistent right through, it gives you more cups of tea or coffee and is easily digestible.

3. Full cream milk:
Full cream milk is Containing 6% Fat and 9 % SNF. A rich creamier and tastier milk, Ideal for
preparing home-made sweets & savories
.

4. Good life:
Cow's pure milk, UHT processed bacteria free in a tamper-proof tetra-fino pack which
keeps this milk fresh for 60 days without refrigeration until opened. Available in 500ml fino and in
200ml Bricks pack.

5. Nandini Ghee:
A taste of purity is Nandini Ghee made from pure butter. It is fresh and pure with a
delicious flavor. Hygienically manufactured and packed in a special pack to retain the goodness
of pure ghee. Shelf life of 6 months at ambient temperatures. Available in 200ml, 500ml, 1000ml
sachets, 5lts tins and 15.0 kg tins

6. Nandini Curd:
Nandini Curd made from pure milk. It's thick and delicious. Giving you all the goodness of
homemade curds. Available in 200gms and 500gms sachet.

7. Nandini Peda:

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No matter what you are celebrating! Made from pure milk, Nandini Peda is a delicious treat for the family.
Store at room temperature approximately 7 days. Available in 250gms pack containing 10 pieces each.

8. Butter:
Rich, smooth and delicious. Nandini Butter is made out of fresh pasteurized cream.
Rich taste, smooth texture and the rich purity of cow's milk makes any preparation a delicious
treat. Available in 100gms (salted), 200gms and 500gms cartons both salted and unsalted.

Product Processing

Milk may be
defined as the
whole, fresh, clean,
lacteal secretion obtained by the complete milking of one or more healthy milk animals, excluding that obtained within 15
days before or 5 days after calving or such periods as may be necessary to render the milk practically colostrums-free
and containing the minimum prescribed percentages of milk fat and milk-solids-not-fat. In India, the term 'milk', when
unqualified, refers to cow or buffalo milk, or a combination of the two.

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PRODUCT PROCESSING

SOURCE:
DHARWAD MILK UNION

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Status A co-operative society registered under the Co-operative act
1959
Nature of Business Procuring and Marketing of Milk Production and Sale of Milk
Products
Share Capital 5 corers Approx.
Plant Capacity 2 Lakhs Liters / day
Milk Powder 12 MT /Day
Butter 10 MT / Day
Ghee 6 MT / Day
Milk Chilling Centers and Gagad 20000 LPD
Capacity Haveri 20000 LPD
Hirekerur 20000 LPD
Naragund 8000 LPD
Ron 10000 LPD
Sirsi 20000 LPD
Karwar packing unit The milk in bulk is sent for packing and distribution at Karwar
Which supplies and need of Karwar, Gokama, Honnavar,
Bhatkal, Murdeshwar and Goa

Present Value of Activity Collection of Milk 85000 LPD
Sale of Milk 70000 LPD
Area of Operation Dharwad, Haveri, Gadag, Uttar Karnataka, Goa Parts of
Maharashtra
Board of Directors Elected Member8
Ex-Officers 5
By Govt. 3
Total Workers 383 Workers
Location Lakamanahalli Industrial Area, Dharwad
Department 8
Brand Name Nandini
Products Milk
Toned Milk, Standard Milk, Shubham Milk
Milk Products
Butter, Ghee, Peda, Curd, Lassi, Paneer, Milk Powder
Co-operative Societies at 460 Societies
Village Level

3.4 LAYOUT OF COMPANY:

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This is the plant existence in industrial area lakkamanahalli in PB Road.

STRATEGIES OF DMU
The Dharwad Milk Union has the following set of strategies, which will be formulated every year. The present
year has the following strategies. The strategies are formulated with the help of KMF and NDDB and the union
members. Below are the strategies set for this year.

STRATEGIES OF PROCUREMENT AND INPUT DEPARTMENT:
• To establish 10 new unions in this year.
• Aims at procuring an average of 70,000 liters of milk.
• Aims at establishing 15 Artificial Insemination Centers in village units.
• Aims at marketing 6080 metric tons of "Nandini" fodder for cattle.

• Aims of setting up of 1296 Veterinary Treatment Camps.
• Aims at providing Vaccination to 50,000 cattle against Food and Mouth Diseases.
• Making more milk to powder this year.

STRATEGIES OF ADMINISTRATION DEPARTMENT

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• To Check Labor absenteeism.
• To take actions against in-disciplined workers.
• To reduce the intake daily workers for petty jobs.
• Aims at helping the employees to become more responsible towards their work.
STRATEGIES OF PRODUCTION DEPARTMENT
Aims at processing an average of 1.10 lakh liters of milk daily Aims at producing

Tons Products
1338 Milk powder

245.74 Butter

857.24 Bulk Butter

135.52 Ghee

48.22 Peda

19.56 Paneer

537.24 Curds
There have been plans set to reduce the SNF and FAT content in the milk so as to protect the quality of the
milk.

STRATEGIES OF THE MARKETING DEPARTMENT
• Aims at marketing the above products through proper Distribution Channels.
• Aims to conduct 52 Consumer Awareness Programs and various Seminars.
• Aims at conducting 10 wholesalers' retailers meeting.
• Aims at setting 10 Exclusive NANDINII Milk Parlors.
• Aiming to set up new advertisements strategies like putting up of hoardings.
• Distributing Pamphlets, contests etc.

Price list of milk and milk products.
SL. Product’s name Net Amt Commission MRP
1 Toned Milk/Liter 24.12 0.88 25.00
2 HTM/ltr 25.09 0.91 26.00
3 HCM/ltr 27 1.00 28.00
4 Curd 500gm 14 1.00 15.00

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5 Butter Milk 200ml 4 1.00 5.00
6 Peda/250 gm 39.00 6.00 45.00
7 200 ml Ghee 54.55 5.45 60.00
8 500 ml 180.90 18.10 199.00
9 1000 ml Ghee 250 30.00 280.00
10 S.F.M/ bottle 14.47 2.53 17.00
11 Jamoon mix/ 200gm 44.64 5.36 50.00
12 Mysore pak/ 250 gm 66.97 8.03 75.00
13 Paneer/kg 217.39 32.61 250.00
14 Butter 500gm 126.79 15.21 142.00

NANDINI PRODUCT DETAILS AND RATE (NMP PRODUCTS)
Sl No. Product Name Maximum Price of
Sale
1. Badam Powder 200 gm Tin/Kg 250.00
Badam Powder 200 gm Tin/Kg 50.00
Badam Powder 10 gm Tin/Kg 300.00
2. Mysore Pak 250 gm/Kg 280.00
Mysore Pak 250 gm pack 70.00
3. Jamoon Mix 200 gm / Kg 250.00
Jamoon Mix 200 gm / pack 50.00
4. SFM Bottles 14.00
5. Milk 200 Ml Pack (Tetra Pack) 14.00

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CHAPTER – 2

ORGANIZATIONAL STRUCTURE AND FUNCTIONAL DEPARTMENTS

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ORGANIZATIONAL STRUCTURE

Board of President

Govt. nominees
Directors Ex Officers
(3 Members)
(5 (5
Members) Members)

Procurement Product Marketing Administrative Accounts and Security
Department President Department Department Purchase Department
Director Department

Quality FGS and MIS
Transport Control Stores

Organization structure is the skeleton of the organization. It prescribes the formal relationship among various
position and the activities. Arrangements about reporting, relationship, how an organization member is to communicate
with other members, what roles and procedures exist to guide the various activities performed by the members of all
parts of the organization structure.

Organization structure plays a vital role in achieving the organizational goals. Organization structure should be
properly designed to facilitate the smooth functioning of the organization.

Organization structure of Dharwad milk union consists of BOD’s at the top. Then president, under whom is the
Managing Director. He is the person who is responsible for smooth functioning of the organization. After Managing
Director there are managers and Deputy Mangers of various departments who are responsible and accountable for the
activities of their respective departments. There are subordinates, supervisors and employees who are directly linked
with department managers.

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DEPARTMENTS OF DMU:
1. Purchase Department
2. Production process and Department
3. Procurement and input Department
4. Stores Department
5. Finance Department
6. Marketing Department
7. Administrative Department
8. Human Resource Department

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1. PURCHASE DEPARTMENT:

It is a sub-department, which comes under Finance Department. The main work of this department is to
purchase various materials required by different department. After ascertaining the stock position by stores department
and indent is sent by different department duly approved by the Managing Director. This department act to purchase
materials.

It also maintains records of all the suppliers calls for Tenders, quotations etc. Quotations with lowest rate are
sanctioned. Purchase up to 50,000 can be made by Purchase Department. If the purchase amount is more than 50,000,
then the approval of Managing Director.

STRUCTURE:-

The structure of Purchase Department is as shown:

PURCHASE OFFICER

PURCHASE
SUPERINDEDENT

ASST PURCHASE OFFICER

HELPERS

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QUALITY CONTROL DEPARTMENT:

DEPUTY MANAGER

ASST. MANAGER ASST. MANAGER

QUALITY ASSISTANT QUALITY ASSISTANT
OFFICER (CHEMICALS) OFFICER
(BACTERIOLOGY)

QUALITY ANALYST

LAB ASSISTANT QUALITY ASST.

In DMU, at every stage, care is taken to ensure that the customer gets the products, which have a very high
quality. Hence there is a separate department called Quality Department. Where the quality testing is done.

There is a separate laboratory for this. Quality control is very essential as to maintain the freshness of the milk.
All the containers, pipes and other equipments are washed with hot water before starting off with new production. There
are many tests conducted here. The packed milk we get will have undergone 3 quality tests. First test is done on raw
milk, which we get from chilling center. Next before standardization and the last test before packing. The other tests
conducted are:

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TEST REASON

Temperature Should be below 5 degrees

If mill curdles soon after boiling milk is
Clot on Boiling
Rejected

Acidity Test To test the extent of acidity

Alcohol Test To check the heat stability of milk

Lactometer To check the density of milk

Fat test Percentage of fat determined

Percentage of SNF determined for pricing
SNF Test
SNF=CLR+FAT/4

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2. PRODUCTION PROCESS AND DEPARTMENT:

The main objective of this department is to follow up production schedule as per plan and to maintain close and
co-ordinate relationship with other department and ensures to upgrade the technical efficiency of production. Milk, as it
is highly perishable product has to process immediately to avoid spoilage milk with respect to its flavor, texture and
taste.

DCS

Fresh Liquid Milk Sample Testing Fat and SNF

Chilling

Storing

Pasteurization

Separation

Homogenization

Storing

Packing

Dispatching

Production department is well equipped and has various types of highly sophisticated machines imported from
MSRCASC Page 36

Sweden and Denmark. Once the milk is received from P & I department, it is first weighed with the help of weighing
bowl. Later, it is poured in dump tank. Sample testing is made through lactometer reading and other tests. The fat and
SNF content of each sample of milk is accessed the cow and buffalo's milk are separately received and sent to the
production section separately through two different stainless steel pipes.

Later, the raw milk is passed through plate chiller of variable capacity where it is cooled up to 4-5 degrees
Celsius. This cooled raw material is further stored in a silo of 30,000 liters capacity.

PURPOSE OF CHILLING:
This is done to avoid the growth of microorganisms, which are responsible for spoilage of milk and bitter taste.
The milk, which is stored in silos, is pumped through pipeline to the balance tank, which helps to maintain the steady
speed flow of milk in the Pasteurization machine. In, DMU there are 2 milk Pasteurization machine and 1 Cream
Pasteurization machine.

PURPOSE OF PASTEURIZATION:

Pasteurization is a process where milk is heated to high temperature and cooled instantly, to destroy any
microorganism. The pasteurized milk will stored in Pasteurized milk silos and then sent to pre-packing section. Packing
is done in 500ml and 1000ml and stored in cold storage at 7°.

PASTEURIZATION OF CREAM:
The milk in bulk is taken to the cream separator. Here, the, cream is separated. The cream is passed through
cream Pasteurization Unit. This cream is sent to Butter Section. The milk with no fat is skimmed milk. This skim milk 'is
pumped back to Pasteurization Unit and heated to 72° using steam and chilled to 4° using chilled water and stored
silos. This skimmed milk is sent to powder section. The pasteurize cream is mixed in portion to pasteurized milk.

CURDS:
Raw milk is heated to 90° and allowed to cool to 30°. Later culture is added to it and packed; the curd is formed
in the packet itself. It is stored and packed in 200gms and 500gms.

BUTTER:

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The cream, which is stored in cream refining tank, is taken to the churning section where it is churned. Here
butler fat and buttermilk are separated. The vacuum pump removes excess of moisture and butter comes out of
continuous butter making machine (capacity - 1500 kgs/hour). Butler is packed in 100, 200 and 500 gms and also in 10,
25 gms, these are stored in deep freezer room with temperature - 22° and if the order of salt butter they mix the salt
water with cream and other process is same.

GHEE:
There are 2 Ghee Boiler of capacity 1500 kgs/batch. A Butter of 2.5 tons is melted and is brought to Ghee
Boiler. Here it is heated to 116-117 degree Celsius for 15 minutes so that the residue is allowed to settle down and
Ghee is passed to setting tank through clarifiers. Later Ghee is allowed for cooling (at 30°-40°) and packed in Tin of
Liter, 500 ml and 200 ml of pack and kept in the cold storage.

PANEER:
If there is excess of milk, then, Paneer is been made. The milk is heated to 90 0 for 15-20 minutes. Glacial acetic
acid is added to milk and then milk is strained through fine muslin cloth. The solid potion is retained and is put in water
and then it is put in chilled water and left overnight. Later it is packed and stored in cold storage.

MILK POWDER:
When there is excess of milk. Milk powder is made. The capacity of the powder plant is 12 tons. There are two
sections – Evaporator and Spray Drier through which milk is converted to Milk Powder. In Evaporator, milk is boiled for
55° at high vacuum. Milk is concentrated to drier 40-45% of milk is solid, moisture is removed and the milk power
obtained consists of 4% moisture.

PEDHA:
Dharwad is famous for its delicious Peda. DMU has separate Peda section. About 80 Liters (depends upon the
demand) is heated continuously for 3 hours till the milk is semi-solid, later sugar and other ingredients are added and
stirred continuously on low flame. Later it cooled and it is shaped in small balls and packed.

The milk produced here is differentiated by the content of fat and SNF

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TYPE FAT SNF
Toned 'Milk 3.1% 8.5%

Standard Milk 4.5% 9%

Shubham Milk 6% 9%

Full Cream Milk 5.1% 9%

The below table gives a brief idea of the milk products, their fat SNF, moisture Content:

PRODUCT FAT SNF MOISTURE

Butter 83% 1% 16%

Ghee 99.8% - 0.2%

Pannier 20% 30% 50%

The production department has the following structure:
Manager (Dairy)

Deputy Manager Office Staff

Asst. Manager
Asst. (Accounts) Asst. (Stores)

Technical Officer
Clerk Typist

Senior Supervisor

Junior Supervisor

Dairy Operators Dairy technician Dairy Worker

Package of milk:

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The company has three machines with double head; six persons for packing the milk. The milk is heated from
70-80 degree temperature and compressed air for filling of milk.
Total workers in this department are 24.

Liquid milk weight in grams
a) 200 ml=208 +/-3 gms
b) 500 ml=517 +/-3 gms
c) 10,00 ml=1034 +/-5 gms

Curds weight:
• 200 gms = 202 +or-
• 500 gms = 503+or-2

Film length:
a) 200 ml= 100 mm
b) 500 ml= 150 mm
c) 1000 ml= 230 mm

While packaging of milk. The crate is washed from 3 to 5 degree temperature and then the milk is set in crate
and the milk is stored in cold room. The temperature of cold room is 2 to 5 degree Celsius.

3. PROCUREMENT AND INPUT DEPARTMENT:

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Input required per day:
Milk procurement up to 85000 liters
5 to 6 lakh liters of water
10,000 units of electricity
4 to 5 tones of coal
Generator in case of electricity failure and manpower

Quality Control:
At different stages of production the officer from the Quality Control department keeps verifying the quality of the
products frequently. Any defects or unconformity to standards is immediately reports and necessary measures are taken
to correct them. It is only that after the approval of this department the goods can be dispatched to the market.

Waste materials are sent to Effluent Treatment Plant (ETP). The buttermilk liquid containing a small percentage
of fat content is sold to the soap manufacturers, otherwise it is sent to a special tank with agitator rotating in it. Different
chemicals are used and sterilized fresh water is released for agricultural purpose. Caution is taken with regard to the
height of the chimney to avoid air pollution.

Steam plant:
In various steps of production for instance melting of butter to ghee etc., steam is required. This steam is
produced in steam production plant where coal is used for this purpose.
Everyday nearly 4-5 tones of coal are required. The ash is sold to the brick manufacturer.

THE STRUCTURE OF P&I DEPARTMENT:

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Manager (P & I)

Procurement wing Technical Input Wing

Deputy Manager Deputy Manager

Assistant Manager Assistant Manager

Extension Officer Clerks

Clerks Helpers

Procurement and input department is play a vital role in the DMU. In any any milk union this department handles
the procurement of the milk required amt to the production process.

FUNCTIONS OF P&I:

• Procurement of milk from milk producer’s co-operative societies.
• Establishment of milk producer’s co-operative societies.
• Encouraging farmers to produce more milk.
• Provide fair price to the good quality milk.

PROCUREMENT OF MILK:

Daily procurement of DMU is 80,000 liters/day on average. Procurement of milk seasonally variated from September –
December the milk productivity is high and in summer it is low.
M
Milk collection process

MSRCASC Farmers (producer) Page 42
((((producers)


Societies

Chilling centers.

Milk union

Milk procurement process has done all the 365 days and two times a day and procuring milk routes through
transportation. DMU making Rs11 for cow milk and Rs13.50for buffalo milk as minimum and other rate will depend on
the SNF and FAT.
After the chilling the milk is loaded and brought to the near by union. Once milk brought to the union it is
rechecked for quality, quantity, freshness and then it sent for the further production process.
If the milk is spoilt in transit it brought to the notice of concerned society, in case of away society if the milk is
spoilt due to carelessness/delay of the driver it is brought to the notice to the contractor who is responsible for the loss.

ESTABLISHMENT OF DAIRY CO-OPERATIVE SOCIETIES:-

This is the important task carried by the P&I dept, societies are established in villages. There should be a min 50
members from societies and there should surplus of 75 liters of milk collection per day.

There should be localities should produce milk from buffalo or cow or both, there is cheap elected from members who
has ability to run a society successfully he is responsible for selling the shares to the formers who contributed from the
societies.
Share of Rs100 each should be allocated a society should gather an Rs20, 000 from the society.
After registration, a commencing a general body meeting will held with 9 members who are influential and
knowledgeable elected becomes director of the societies two as take as secretary and tester.
It is the duty of secretary to maintain all records and ledgers of dairy transactions. The tester verifies quality of
the milk a sheet a send with the carrier.

PROMOTIONAL ACTIVITIES:-
This dept takes some promotional activities to increase the rate of production of the milk.
• Veterinary services to keep up the good health of cattle through

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a) Regular health Camps
b) Emergency service round the clock
c) First aid, Vaccination, Infertility Camps, Fodder
• Artificial Insemination facilities for improvement of Cattle breed.
• Facilitating Training Programs regarding management of Cattle.
• Supply of Fodder to the cattle.

PRICE TO THE PROCURED MILK:-
The price given below is based on the SNF and Fat

Fat content SNF Price/Liter
Buffalo. 6% 9% 12.60RS
Cow’s Milk. 3.5% 8.5% 9.75Rs

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4. STORES DEPARTMENT:

STRUCTURE:-

Stores Superintendent

Stores Assistant

Stores Assistant

Helpers

The stores department in DMU follows the Cordex System (Coded Control System). A card is maintained for
each item and a number is allotted. The card attached to each article consists of amount balance, date of issue,
purchase etc. this is later recorded in separated ledger book. The inventors are of different kind ranging from
mechanical, spares, packing items to animal drugs, and stationary and veterinary drugs. There are at least 4000
different inventories.

This department has the following services:

It tries to maintain maximum and minimum level of inventory so as to avoid blockage of capital and storage.
Ordinary and local available commodities are maintained at minimum possible level.
Items of urgent and not easily available are stored sufficiently for further demand.

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Finished Goods Stores Department:

The FGS department has the following structure

Assistant Manager

Marketing Assistant Account Assistant

Dairy Operator

Dairy Workers

Finished Goods Stores:

This department acts as an interface between production and Marketing Department. It is concerned with maintenance
of finishes goods connected records. It receives all the finished goods and issues the stock to marketing department as
per indents. It ensures that the goods are maintained properly with respect to quality.

Accounts are maintained and daily and monthly report is submitted to the production. Marketing and Finance
Department, as the products as perishable first-in-first-out method of inventory is followed

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5. FINANCE DEPARTMENT:

The structure of finance Department is as shown:

Deputy Manager

Assistant Manager

Asst Account Officer

Assistant Account

This Department is responsible for keeping all the inward and outward flow of money of union. It prepares
budget every year and financial rules for receipts all payments are framed.

The functions of these departments are:
• To prepare monthly accounts (Receipts and payment account P & I account and Balance Sheet).
• To prepare quarterly financial statement.
• To prepare integrated business plan.
• To prepare year ending financial statements.
• To get accounts audited from statutory books of accounts.

DMU Follows to types of auditing:

1) Pre-Audit System - done by Finance and Account Department every year.
2) Statutory System - Done by private charted accountants every year.

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REPORTING TO THE MANAGEMENT:-
Every month an audit is submitted to the management by pore audit system. This report contains how many
agents’ defaulted, monthly, receipt and payment a/c etc.

SALES ACCOUNT:
This section of sales department is concerned with the accounting work of sales. They keep daily records of
collection default by the agents other record related to the sales. When demanded quantity is delivered to the agent in
morning Chelan will send with that. The agent should remit the amt by evening to any nearest bank to the ledger in case
of his default the amt is entered into the ledger against him. The daily turnover of milk is nearly 5lack. Out of two bank
challans receipts one sent to the bank other is to finance dept. DMU has certain price policy weekly according to
marketing strategy.

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6. MARKETING DEPARTMENT:-

Marketing Department is very important part of Organization marketing of milk and its products is the greatest
responsibility to all the products before losing its quality.
The marketing department of DMU is considerably extensive which covers the area of north GOA, UTTAR
KANNADA, HUBLI, DARWAD, GADAG & HAVERI today’s market share of DMU is 23%.

FUNCTION OF MARKETING DEPARTMENT.
1. To prepare the marketing plan at the beginning of every year, taking into consideration the demand, sales,
production capacity and customer performance.
2. To promote milk and milk products through medices.
3. To study competitors products and their strategies.

Nandini. 23%
Loose vendors’. 57%
Private Brand. 14%
Others 06%
Even today large no. of the market share lies with the loose vendors who supplies inferior quality of the milk.
Therefore it is necessary for the company to undertake an aggressive marketing campaign and educate people about
the quality of the milk.

MARKETING STRATEGY:

• Visit to all roots of distribution vehicle for connect with all agents.
• Aims to conduct consumer awareness program.
• Aims to conduct agents meeting.
• Aims to setup more Nandini milk parlors.
• Joining to other program.
• Women’s association.
• Aiming to set up new sales promotional and advertising activities.

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COMPETITORS:-
• Arogya.
• Spurthi.
• Bharath.
• Aditya.
• Maha laxmi.
• Navalur diary.
• Siddi vinayak.
• Gauli.
• Kolhapur.
• Shree Krishna.
• Ram Raheem.
• Warna.

DISTRIBUTION CHANNEL:-

DMU ---Transportation - Dealers - Door Delivery Boys - Consumer.

DMU ---Transportation - Institution.
(Institution: Hospitals, Hotels, Hostels etc.)

DMU ---Transportation - Parlours - Consumers.
DMU --- Transportation - Day counters - Consumers.

MEDIA OF ADVERTISEMENT:
1. News Papers.
2. Magazines.
3. Radio.
4. Wall paint.
5. Hoardings and pamphlets.

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SALES PROMOTION:
Providing discounts, incentives, to agents for increase sales.

THE STRUCTURE OF MKTING DEPT AS SHOWN:

Manager

Deputy Manger Deputy Manger
(Account / Audit (Account / Audit

Asst. Manager Asst. Manager
(Tech. Officer)

Supervisor Supervisor
(FGS/Stores)

Market assistant Market assistant

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7. ADMINISTRATIVE DEPARTMENT:-

The administration department controls the overall functioning of the organization.
The organization consists of the following three levels.
1. Managerial cadre includes Managing Director, Deputy Manager and Assistance manager.
2. Supervisory level includes technical officers and supervisors.
3. Worker level includes labors helpers.
The overall responsibility of administrative executive/managers comes under three board categories as given below.

GENERAL CO-ORDINATION:
1. Maintenance of official documents like files, records etc up to date. Collecting and presenting data when require to
operation as useful information.
2. Implementing the organization system, procedures and policies in a co-ordinate manner.
3. Ensuring smooth running of office by interfacing with the external agencies as required for eg:-Payment of
Telephone/Water supply bills etc.
4. Maintenance of the office premises.
PROVIDING FACILITIES:
1. Designing and implementing forms for variety of purpose where some exist across the organization.
2. Allocating space for people, furniture equipment etc as the organization norms.
3. Maintenance and upkeep of office equipments.
4. Attending to small necessary needs of various people working in the organization.

EFFECTIVE CONTROL:
1. Maintenances of files, records etc up to date. Collecting and presenting data in the form use full information
from the record.
2. Recording and maintaining attendance, leave details, looking after the security needs etc.
3. Reducing the cost of office operation, production costs, without affecting the functioning of the organization.

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FLOW CHART OF ADMINISTRATION DEPT:

Deputy Manager

Asst. Manager (Board) Asst. Manager
(Personnel)

Admn. Superintendent Admn. Superintendent

Admn. Assistant Time Canteen Security

The Department also handles Canteen, Security and Time Keeping Machine.

CANTEEN:

There is a Canteen in the premise itself. The employees are provided lunch, Tea etc., at reasonable rates. The
Canteen is handled by the Canteen In charge.

TIME KEEPER:

This Department records the working hours of the employees. The time machine shows the entry time and exit
time of each employee. The workers divided into different shifts control the working of the Department. Each employee
is given a Punch Card, whenever an employee enters the premise he has to punch the card in the time machine and
before living the premise he has to do the same. Based on this attendance, Canteen bills are charged, wages are fixed
and deduction are made.

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SECURITY DEPARTMENT:

Dharwad Milk Union occupies 25 acres of land the whole premise is been guarded by the security personnel.
The security people work in three shifts. All the vehicles are checked before entering the premise. The departments is
also maintains separate registers like Store-in Register, Attendance register etc.

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8. HUMAN RESOURCE DEPARTMENT:

Human resource department is employing the people developing the resources utilizing maintaining and the
compensating there services in tune with the organizational requirement with a view to contribute to the goals of
organization.

HRD department is one of the very important dept in the DMU. There are total 321 no of employees are
performing their best service to organization.

• In management card - 30 employees.
Includes MD, Managers of various depts.
• Middle level Mgmt - 61 employees.
Includes Technicians, Executives, Supervisors, Chemistries and assistants.
• Lower Level Mgmt - 230 employees.
Includes helpers, Workers, Operators etc.

FEATURES OF HRD:
• Human Resource Department is concerned with employees both individual and as group in attaining goals. It
also concerned with behavior, emotional and social aspects of personnel.
• It is concerned with the development of HR as per requirement of organization.
• It is continuous and never ending process.
• It covers all three levels of organization. {Top, middle, lower level mgmt.}
• Its aims to attaining the organization common goals.

STYLES:

The Styles of the organization is said to follow the bureaucratic type that is the management cadre follow the
bureaucratic type of administration. The fact is that for a manufacturing firm like the KMF, Dharwad this type of
administration is necessary.
The Indicators of the Style are:

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• Follows Orders, rules and procedure
• Is always Reliable, Dependable
• Watches DetailsPrefers to write out Communications
• Is Rational, Logical, Self Controlled, Fair and Firm.

FUNCTIONS OF HRD:
• Recruitment and selection:-
HRD looks well being recruitment and selection of employee. Here some procedures following for the search
candidates mainly.
>Through adds.
>Through employment exchange.
>Through in service.
Afterwards recruitment procedure based on the company rules and recruitment process based on the candidates
education, experience, and age. Selection done through the company card according to rules and regulation of
company.

STAFF:
The staff deals with the various personnel Policies followed by the Organization. Below are given the personnel
policies followed by the Organization.

PERSONNEL POLICIES:
There are around 383 employees working in Dharwad Milk Union. There are various policies followed by the
Union. The Human Resource Department is the in Dharwad Milk Union Works as a sub Department of Administration
Department.

INDUCTION:
After an employee is employed in DMU, heshe has to be made familiar to the union and also known the objective,
value, functions and the operations. This helps the employee to interact with senior staff members from various
departments.

TRAINING AND DEVELOPMENT:
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The Union emphasizes on training the employees. Most of the training given to the employees here are On-the-Job
training and few Off-the-Job Training.
♦ Procurement and Technical Input Training (NDDB)
♦ PG Diploma in Rural Management
♦ Basic Computer Applications.
♦ Data Base Administrator
♦ Finance Training for non-Finance Officer
♦ Co-Operative management Training Programs
♦ Clean Milk Production Training
♦ Maintenance of Record and Auditing and Most of the Off-the-Job
Training includes training programs in Anand, Erode etc.

Wage and Salary Administration:
Salary as per government scale the salary consists HRA, TA, DA, HRA, PF, SPF, CCA.
PF: Every month an employee contributes 10% of salary to PF and also mgmt contributes 10% of salary. Total
20% of the salary will contribute.

BONUS: Bonus as per the 8.33% Rs 1600 who draws less than Rs 3500.
A subsidy paid to the employee on House Building, heat allowance, cold allowance facilities provided by the union.

INSURANCE: This will provided by union to employee as per requirement of employees.

SPECIAL FACILITIES:
TRANSPORTATION: For came to work place employee get Rs300/month for motor cycle maintenance, Rs200
for moped 50cc Bike, Rs150 will get for using other vehicle.

MEDICINE: An employee will reimburse Rs2500 if he takes treatment as an outdoor patient otherwise he will be given
Rs3500 if he takes indoor treatment.

CANTEEN: Employee gets facilities at very cheap rate Meal for Rs2.50, Tiffin for Rs1.50, Tea for Rs0.75.

UNIFORMS:-Two pairs of uniform one pair of shoe and one pair of footwear are provided by union.
Quarter liter of milk provides to all employees at free of cost daily.

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LEAVE FACILITY:-DMU providing 30 earned leave, 10 half payment leave – out of 10 day leave 5 full day leave, 15
casual leave.
Leaves received by the management and salary will be paid according to leave taken.

STRUCTURE OF HRM DEPT:

Deputy Manager

Asst. Manager (Board) Asst. Manager
(Personnel

Admn. Superintendent Admn. Superintendent

Admn. Assistant Time Canteen Security

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CHAPTER – 3

SWOT ANALYSIS

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Strengths:
 Nandini enjoys good brand image. Dharwad milk union is one the leading producer of milk products & it has
wide area of Market, “Nandini” is a trusted house hold brand name, more than two lakhs farmer members were
supplying milk.

 It has large procurement system.

 Huge infrastructure for processing.

 Competitive prices for all products.

 Wide distribution network leads to regular and timely supply.

 It enjoys highest market shares in the packed milk segment.

 Provides excellent veterinary, vaccination, Extension facilities, Feeds and Fodder seeds supply etc., in the
field, which cannot be thought off by any private operator. Hence earned lot of goodwill from member
producers, who patronize the union throughout the year.

 Has earned the distinction of not failing to deliver the milk to market on time throughout the year. There are
days with no power supply, no water supply; but there is no day without NANDINI milk supply.

 DMU is giving highly remunerative and timely payment to its producers & this has a good on suppliers and
made Union to be in good financial position.

 ISO 9001-2000 certificate.

 Good institutional support from KMF, NDDB, by giving financial support and guidance to the DMU. DMU is
equipped with fully automatic systems which ensure total quality maintenance.

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Weaknesses:

 Lack of flexibility in deciding about its operation. No authority over issues like pricing, offering volume discounts
etc. The president of KMF and the Board of directors DMU decides it.
 Perishable commodity. Milk is Perishable commodity it cannot be store in long.
 Lack of professional manpower. In DHARWAD MILK UNION department heads are not based on qualification.
 Bureaucratic method of functions.
 Lacking quality consistency because of seasonal changes in the supply of milk.
Less buffalo milk. Because of which customers preferring buffalo milk may get attracted to other brands.
 Inadequate sales promotional activity.
 Due to bad smell that persists causes low sales.
 Some private dairies are selling homogenized milk, which appears rich. The union cannot homogenize all its
huge quantity of milk due to lack of homogenizing capacity and increase in processing cost.
 DMU Organizational structure does not permit incentive/ reward for good performance of an employee.
 DMU Company should distribute their product directly to sellers without keeping any middlemen and agents
because part of profit is divided between middlemen and agents. About 65-70% of the marketing is done directly
the rest of 35-40% is done using middle men.

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Opportunities:

 There is a phenomenal scope for innovation in product development, packing and presentation.
 Steps to taken to introduce value added products like shrikhands, ice-creams, paneer, khoa, flavored milk, dairy
sweets etc. this will lead to a greater presence and flexibility in the market place along with the opportunities in
the field of brand building.
 Yet another aspect can be the addition of infant foods and nutritionals.
 Increasing market demand for milk and milk products.
 There is scope for developing in unexplored areas for milk processing as Nandini can extend its equity of brand.
 Addition of buffalo milk will improve market share.
 Since the DHARWAD district is under Cauvery basin, perennial greens are available to the cattle. This makes
the farmers to rare the cattle easily from this DMU is getting huge amount of milk.

 Institutional markets, bakeries, hotels etc., are not fully tapped and these can be captured preferably by direct
marketing.

 Diversification of milk products like Peda, Mysore Pak, cashew burfi, lassie, milk powders, masala majjige.

 Exploit the “Human Face”, by positioning in the market as an organization with social responsibilities of serving
the milk produced by paying remunerative price and serving customer by offering hygienic quality product at a
reasonable price throughout the year. Union is not in the business to maximise the profit as in the case of
private dairies and is acting as price stabilizing force in the market. Projecting these to the customers will
reinforce the positive image of the organization in customer’s minds as a caring organization which service to
them as its motto.

 DMU is SELLING its products to different states like Tamilnadu, Kerala and Andrapradesh.

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Threats:
 Increase of competitor's milk vendors in organized sector.
 Flexibility in commission structure by competitors may attract the distributors.
 No entry barriers for private players.
 Low level of consumer awareness in Dharwad and surrounding areas.
 After liberalization, entry barriers in the dairy industry eased for new entrants.

 The competition from Co-operatives like Dodla, Heritage, Kamadenu, they producing different milk products
which are giving a good competition to the MYMUL, etc.

 Private dairies procure milk at low cost from producers and sell milk resorting to unethical trade practices. It is a
marketing war in which union has to fight by rules and other private dairies do not fight by rules. Hence, there is
no level playing field for organization with social responsibilities to compete with organizations with purely profit
motive.

 Plans of major companies like Reliance, ITC to enter into milk market in future.

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CHAPTER – 4

FINDINGS
SUGGESTIONS
CONCLUSIONS

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Summary of Findings:

 Dharwad milk union is serving rural region by way of procuring milk through poor farmers through its formed
societies and paying them fair returns. It is contributing for economic upliftment of farmers.

 Dharwad milk union is equipped with fully automatic systems which ensures total quality maintenance.

 It has got its own quality control department with fully equipped laboratory and equipments that helps detecting
any adulteration or any such other defects.

 Through the use of advanced technology, Dharwad milk union provides its customers bacteria free and
balanced nutritious milk which is very hygienic.

 The advertisement in local newspaper and local television is very low.

 Nandini products have a good brand image.

 Pricing strategies of Nandini is appreciated by its customers

 Proper training programs for farmers are an additional service provided by the company which is improving
Nandini popularity among the farmers and ensures quality and consistency of supply of milk from them.

 Nandini is started with customers contact programs in order to get first hand feedback from its customers about
the service by the distributors and its products.

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SUGGESTIONS

 Organization should try to improve the packaging of the product to prevent leakage.

 Organization should try to adopt more and more new technology and methods of production to survive in this
competitive market.

 The company should provide some attractive schemes for the regular consumers as well as retail sellers.

 Dharwad milk union must adopt professionalism in the overall function of working departments.

 More ads can be given to products especially for new introduced products in print media, which can attract
more consumers.

 HR department should work on more plans to motivate employees to reduce absenteeism so that company can
think of reduction of manpower as it is excess at present.

 Offers performance awards annually to encourage employees, agents and dealers.

 There is a scope for improvement of quality and brand image as there is a huge competition in the market.

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CONCLUSION:

It was an exciting experience to us working with DMU Dharwad. From this project we learnt about the marketing tactics
used by Dharwad Milk union.

Dharwad Milk Union is reputed organization which has developed its good will in the market to compete with other
famous brands such as Arokya, siddhadhara, varana etc. It has to adapt modern technology in the production process
and can do better marketing compared with others.
It has to increase the rate of commission payable to its agents or retailers.

Dharwad is functioning well for the social as well as economical up-liftment of the rural population. To survive in the
market the company needs to adapt an aggressive marketing policy as of competitors.

Last but not least we would like to conclude DMU as good organization to work as well as to interact with people. All
the workers and members of the unions nicely motivated us.

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CHAPTER – 5

BIBLIOGRAPGHY

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Samarth KMF dharwad project report

Samarth KMF dharwad project report

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