Sudha dairy report

DISTRIBUTION
CHANNEL OF
SUDHA DAIRY
6/12/2016

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Shubham Kumar Singh - 33
Praveen Kumar Singh - 34
Rohit Banerjea - 38
Subrata Kumar Dey - 45
Anubhav Prateek - 48
Shashi Bhushan Prasad - 58
TEAM MEMBERS
MARKETING -1

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CERTIFICATE
This is to certify that the project entitled “Distribution Channel of
Sudha Dairy” submitted by Rohit Banerjea, Shashi Bhushan
Prasad, Subrata Kumar dey, Shubham Kumar Singh, Praveen
Kumar Singh & Anubhav Prateek of Marketing – 1, XISS is a
record of bonafide project work carried out by them under my
guidance and direction.
Prof A. R. Bodra
(Head of Dept. Marketing)
XISS, Ranchi
Date: 06th
December, 2016
Place: XISS, Ranchi

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ABSTRACT
This report describes the distribution network and supply chain management
used in Sudha Dairy, Ranchi. A distribution channel is a chain of businesses or
intermediaries through which a good or service passes until it reaches the end
consumer. It can include wholesalers, retailers, distributors and even the internet
itself. There are three main types of channels, all of which include a combination
of a producer, wholesaler, retailer and to the end customers. Each intermediary
receives the item at one pricing point and movies it to the next higher pricing
point until it reaches the final consumer.
Sudha is having across 1400 retailers and 27 distributors who are being
registered from Sudha to distribute Sudha milk products and its items to the
customers. The distributors collect the orders individually from each retailer on
daily basis and take the order payment and submit it to Sudha’s bank A/c just a
day before the delivery. After receiving the order payment the supply of milk
products is done through van directly from Sudha Dairy.
Keywords: - Distribution network, Supply chain management, Chain of
businesses, producer, wholesaler, retailer, end customers.

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ACKNOWLEDGEMENT
We are extremely grateful to Mr. Anmol Roshan Bodra, Head of the
Department of Marketing (XISS) for giving me the consent to carry out the
project.
We would also like to thank to Md. Majiduddin, Chief Executive of Sudha
Dairy Ranchi for his guidance and permission to complete this project
successfully.
Finally, we would like to thank our entire team & friends for their support &
love that kept us going during hard times.

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CONTENTS
Index Page No.
TEAM MEMBERS………………………………….................................. 1
CERTIFICATE…………………………………………………………… 2
ABSTRACT……………………………………………………………….. 3
ACKNOWLEDGEMENT………………………………………………... 4
CONTENTS……………………………………………………………….. 5
CHAPTER – 1
ORGANIZATION- A PROFILE………………………………………... 7
1.1 History…………………………………………………………….. 7
1.2 Background……………………………………………………….. 8
CHAPTER – 2
OPERATIONS…………………………………………………………... 10
2.1 Area of Operations………………………………………………... 10
2.2 Products of Sudha Dairy………………………………………….. 11
CHAPTER – 3
DISTRIBUTION CHANNEL…………………………………………… 12
3.1 Supply Chain Management………………………………………... 12
3.2 Role of Channel Intermediaries…………………………………… 13
3.3 Line Diagram of System of Distribution…………………………... 14

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Index Page No.
CHAPTER - 4
CHANNEL SELECTION……………………………………………….. 15
4.1 Channel Selection in Sudha……………………………………….. 15
4.2 Selection of Distribution Channel by Sudha……………………… 15
4.3 Conflict Solving Strategy in Distribution Channel…………........... 16
4.4 Distributors in Ranchi………………………………………........... 16
CHAPTER – 5
PRODUCT MANAGEMENT…………………………………………... 17
5.1 Product Management by Sudha Dairy…………………………….. 17
5.2 Compensation and Benefits……………………………………….. 17
CHAPTER - 6
Physical Distribution……………………………………………………. 18
6.1 Physical Distribution Channels…………………………………… 18
6.2 Distribution System of Sudha Dairy………………………………. 18
6.3 Sudha Supply Chain……………………………………………….. 19
CHAPTER - 7
OBSERVATION………………………………………………………... 21

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CHAPTER - 1
ORGANIZATION - A PROFILE
1.1 History
The mighty Ganges at its origin is but a tiny stream in the Gadgetry ranges of the
Himalayas. Similar is the story of Sudha which inspired 'Operation Flood' and
heralded the 'White Revolution' in India. Father of white revolution is Dr.
Vargiskurian (1973) it began with two village co-operatives and 250 litres of
milk per day, nothing but a trickle compared to the flood it has become today.
Today Sudha collects processes and distributes over a million litres of milk and
milk products per day, during the peak, on behalf of more than a thousand
village co-operatives owned by half a million farmer members. Further, as
Ganga-ma carries the aspirations of generations for Moksha, Sudha became the
symbol of the aspirations of millions of farmers. Creating a pattern of liberation
and self-reliance for every farmer to follow.
The start of a revolution:-
The revolution started as awareness among the farmers that grew and matured
into a protest movement and the determination to liberate themselves. Over four
decades ago, the life of a farmer in Kaira District was very much like that of his
counterpart anywhere else in India. Its income was derived almost entirely from
seasonal crops. The income from milk buffaloes was undependable. The
marketing and distribution system for the milk was controlled by private traders
and middlemen. As milk is perishable, farmers were compelled to sell it for
whatever they were offered. Often, they had to sell cream and ghee at
throwaway prices. In this situation, the one who gained was the private trader.
Gradually, the realization dawned on the farmers that the exploitation by the

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trader could be checked only if marketed their milk themselves. In order to do
that they needed to form some sort of an organization. This realization is what
led to the establishment of the Bihar state Cooperative Milk Producers'
federation Limited (popularly known as Sudha) which was formally registered
on December 14, 1946.
The Kaira Union began pasteurizing milk for the Bombay Milk Scheme in June
1948. An assured market proved a great incentive to the milk producers of the
district. By the end of 1948, more than 400 farmers joined in more village
societies, and the quantity of milk handled by one Union increased from 250 to
5,000 litres a day.
1.2 Background
“Patna dairy project” was started at 1st
October, 1981 through the National
Dairy Development Board (NDDB).NDDB handed over the arrangements of
Patna Dairy Project (PDP) to Vaishal Patliputra Dugdh Utpadak Sahkari
Sangh Ltd. (VPDUSS) with effect from 1st
July, 1988. The Company is ISO-
9001:2000 and HACCP (IS-15000) certified by Bureau of Indian Standards in
March, 2002.
A Corporation know as Bihar State Dairy Corporation was formed in the year
1972 for speedy and effective implementation of the Operation Flood program in
the state. The Dairy Corporation was to develop the Dairy Cooperatives both at
the village level and milk shed level cooperative would take over the entire
infrastructure created in due course.
The Corporation positioned a multi-disciplinary Procurement & Inputs wing in
1975 after their recruitment and training. A Spread Head Team (SHT) was
deputed from National Dairy Development Board (NDDB) from the same year
for helping the Corporation in organizing and developing the Cooperatives.

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Though the progress in the initial years was encouraging, the programme, for
obvious reasons could not achieve the goals for which it was established.
Subsequently, the State Government felt it worthwhile to request the DAIRY
BOARD (NDDB) for taking over the infrastructure created on management
basis. The National Dairy Development Board (NDDB) took over the
management of the infrastructure with effect from 1st October, 1981 under the
banner of Patna Dairy Project (PDP).

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CHAPTER – 2
Operations
2.1 Area of Operation
There are six district level Milk Producer’s Cooperative Unions affiliated to the
Milk Federation. These milk unions are covering twenty-six districts and in
addition five districts are being covered by the Federation.
Different milk unions, which are organising the DCS network in these districts,
are as follows:
 Vaishal Patliputra Milk Union, Patna covering Patna, Vaishali, Nalanda,
Saran and Sheikhpura districts.
 DR Milk Union, , Barauni covering Begusarai, Khagaria, Lakhisarai and
part of Patna Districts.
 Tirhut Milk Union, Muzaffarpur covering Muzaffarpur, Sitamarhi,
Sheohar, East Champaran, West Champaran, Siwan & Gopalganj.
 Mithila Milk Union, Samastipur covering Samastipur, Darbhanga &
Madhubani, Basopatti district.
 Shahabad Milk Union, Area covering Bhojpur, Buxar, Kaimur & Rohtas
districts.
 Vikramshila Milk Union, Bhagalpur, Munger, Banka and Jamui Districts.

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The Milk Federation has already taken up organisation of Dairy Co-operative
Societies (DCS) in the districts of Gaya, Jehanabad, Arwal and Nawada under
Magadh Dairy Project and work has been initiated by Kosi Dairy Project in
Saharsa, Supaul and Madhepura, Katihar, Purnia, Araria and Kishanganj
districts.
The districts of Ranchi, East and West Singhbhum, Bokaro and Dhanbad now in
Jharkhand are being covered by the dairies directly under the control of Milk
Federation for the supply of milk and milk products to the urban consumers in
these cities. Procurement of milk has been taken up in Ranchi districts only.
2.2 Products of Sudha Dairy
Products manufactured and sold by Sudha dairy are categorized into three parts:-
 Milk
 Milk Products
 Ice Creams

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Raw Material Procurement
Chilling Unit/ Processing Plant
Distribution
Zone 1
Route 2Route 1
Zone 2
Route 2Route 1
Zone 3
Route 2Route 1
Retailer
Customer
CHAPTER – 3
Distribution Channel
3.1 Supply Chain Management
 Here Distribution directly controls retailers.
 There is no direct sales forces that are controlling retailers. If is a sole a
responsibility of a distributors to control retailers.

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3.2 Role of Channel Intermediaries
Distribution of Milk and Milk Products takes place by means of channels, and
the intermediaries are the independent groups that make the product available for
consumption.
The entire distribution is based on the customer demand. The customer demand
flows through some important intermediaries such as retailer, distributors, whole
seller etc. according to customer demand the retailer and distributor prepare the
list of liquid milk consumption of one day.
The computer department of PDP collects the demand from the distributors of
different zones / pay in slip/ Bank guarantee cheque.
 Distribution usually takes order from the retailers and then transfers the
order to Sudha Dairy.
 Distributors submit the money of orders into the Bank account of Sudha
Dairy.
 Orders are usually paced before the day of delivering.
 Then Sudha deliver their products to their respective distributors.
 And then it goes from distributors to the retailers.

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3.3 Line Diagram of System of Distribution
CUSTOMER DEMAND
LIQUID MILK
RETAILER RETAILER
MILK BY VAN DETAILS OF
DEMAND
SUDHA DAIRY DISTRIBUTOR
DEMAND SHEET DEMAND & MONEY
COMPUTER DIVISON OF
PDP
It’s a cycle process and also day to day affairs of PDP, which starts with
consumer demand of milk and ends over consumption of milk by the consumer.

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CHAPTER – 4
CHANNEL SELECTION
4.1 Channel Selection of Sudha
 They usually have a direct contact with distributors where they supply
their products and then it goes to retailer and finally it reaches to the
customer.
 Sometimes they also have a direct contact with the retailers like
“Reliance Fresh” where they directly supply their products.
 These are all perishable product so here products are distributed fastly
before getting expired.
4.2 Selection of Distribution Channel by Sudha
 Sudha usually published tender for distributors and they select those
distributors who offer at a very low and reasonable cost.
 They select those distributors who are already in a business of dairy
products and experience.
 They select these distributors who have TIN Number and PAN No.
 Those have their own transportation and must have a enough space to
stock their products.
 They do not randomly select the distributors in their distribution channel.
 On their basis of population of that particular location and the demand of
customers they decide how many distributors are required in their
distribution channel.

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 They have supervisors who do the proper survey of every location on the
basis of their survey; Sudha selects how many distributors they require.
4.3 Conflict Solving Strategy in Distribution Channel
 Sudha has a very organized system of doing business with their
distributors and retailers.
 Sudha takes order from distributor after the deposition of money into the
bank account of Sudha Dairy.
 Then only they supply the products to distributors.
 Something they do with the big retailers like Reliance Fresh, they have a
bank agreement with them. When Reliance Fresh places their orders they
also need to pay of orders to Sudha Dairy.
4.4 Distributors in Ranchi
The total no. of distributors are:
Ranchi - 6
Hazaribagh - 3
Bokaro - 4
Gumla - 1

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CHAPTER – 5
PRODUCT MANAGEMENT
5.1 Product Management by Sudha Dairy
 Sudha is very much cautious that they have enough stock to avoid the
problem of stock out.
 They usually produce pasteurized milk which can stock for 3 days.
 So in these ways they stock their products through this process they can
also meet the urgent orders of consumers during festive seasons.
 They usually have a stock of 1lakh liters to 1.20 lakh liters of milk in their
plant. Which is sufficient to fulfill the demand of consumers and they can
maximum store it for 3 days due to pasteurization.
5.2 Compensation and Benefits
 Incentive scheme: Suppose distributor or retailers have a target to sell
1000 liters of milk. If they sell more than 1000 liters then Sudha pays
extra to distributors or retailers as a incentives.
 They also provide fridge to retailers so that they could stock their
products.
 Rewarding and Awarding: Sudha gives praise and certificates to retailers
or distributors for their best performance.
 They usually perform all these activities within 2 or 3 month.
 They are rigid with their compensation structure if any new channel
members are added into their distribution channel system.

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CHAPTER – 6
PHYSICAL DITRIBUTION
6.1 Physical Distribution Channels
Physical distribution is the group of activities associated with the supply of
finished product from the production line to the consumers. The physical
distribution considers many sales distribution channels, such as wholesale and
retail, and includes critical decision areas like customer service, inventory,
materials, packaging, order processing, and transportation and logistics. You
often will hear these processes be referred to as distribution, which is used to
describe the marketing and movement of products.
6.2 Distribution System of Sudha Dairy
The structure of distribution channel describes the arrangement and linkage of its
member. This are-
 Direct distribution system
 Indirect distribution System
 Double distribution system
We have found that Sudha uses double distribution system because they follow
both direct and indirect system. Under direct distribution they have their own
retail outlets in these areas-
 Kokar
 Kanke Road
 Ratu Road
 Harmu & etc..
Under Indirect system they distribute its product to grosery shops.

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6.3 Sudha Supply Chain
Village
Cooperative
societies
Company
owned units
Other
Villagers
Other Local
Bodies
UnionsChilling
Plants
Milk
Processing
Warehouses
Distributers
Consumer
Retail
Outlet
Farmers
Groceries

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Consumer
Despatching
Cold storage at 5°C
Packaging
Pasteruzation of Milk
Storage Milk
Chilled at 4°C to 5°C
Dumb Tank
RMRD
Societies
Let’s see a process how milk reaches to the final consumer-

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CHAPTER – 7
OBSERVATION
 It has been observed that distributors are the 1st
partner of Sudha Dairy
who gives the order to the company.
 They have an organized system in doing business with their distributors &
retailers, so there is no chance of conflicts.
 They also have a direct relationship with big retailers like Reliance Fresh
where they directly deliver their products.
 Roots supervisors usually do the survey of location on the basis of their
survey. Sudha selects the distributors on the basis of their survey.
 They have incentive system and award for the distributors and retailers
who gives the best performance.
 Sudha does not have their own transport, distributor or retailers need to
have their own transportation for the distribution and supply of products.

Sudha dairy report

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Sudha dairy report