73347633 milma-os

ORGANISATION STUDY AT MILMA, KOLLAM DAIRY

EXECUTIVE SUMMARY

An efficient organisation is essential for the success of a business enterprise. The defining of

duties and fixing responsibilities of all employees in the organisation is essential. An

effective organisation system ensures proper supervision and control. Organisation is the

mechanism which determines the relationship of various persons. With the help of a well

defined management is able to perform the functions of direction, co-ordination and control.

An ill-defined organisation plan will not enable the management to make an effective

exhibition of its managerial talents to realise business goals. An organisational study was

conducted in Milma, Kollam Dairy to know the real functioning of an organisation.

In this study primary and secondary data were the main sources of information. Here the

primary data are collected through an interview method with the managers of the concerned

department. Then interactions with the plant workers were done in order to collect data

regarding the processing of the plant. Secondary data are collected from websites, newspaper,

and magazines.

The main objectives of the study are,

The study is conducted to familiarise with the functioning of the organisation.

To know the functions of all departments.

To know the interrelation of all departments with each other and the Dairy Manager.

The main findings are,

There is good coordination between the Dairy Manager and the departmental heads.

Fine interrelationship between all departments leads to proper working.

The Kollam Milma unit planning to implement thumb punching system for attendance

taking.

There are certain areas to improve such as to implement R& D department for

producing new products.

1


The main suggestions are,

Modern equipments are needed especially an alert computerised system.

The HRD dept should try all efforts to implement the thumb pressing system instead

of punching system without any chances for unrest in the firm.

Implementation of R & D department is required to make new products or acquiring

know how to produce new products from other Milma units.

The study faces certain limitations they are,

Majority of the office staff were busy during study conducted, hence less information

was gathered from them.

All the plant workers and the officers were not met due to different time shifts.

It was found that some plant workers did not reveal certain information due to fear

from the actions of the management.

The organisation study at Milma was done with an objective to understanding how an

organiastion functions, what are its major departments and functioning of these departments.

The study at Milma provided the opportunity to learn the organiastional goals and objectives,

various department that conduct critical functions and the interrelation between them.

Milma is observed to be an organiastion that not only has an objective of working profitably

but also a socially responsible organiastion that cares of different sections of the society viz ;

the milk producers, and the milk consumers

The organization Milma has established different departments based on functions like

procurement, production, human resource, marketing etc. It ensures quality of product

through established systems which are monitored by quality control department. Finally the

project enabled understanding of an organiastion and its objectives and how they function to

achieve organiastional objectives.

2


INTRODUCTION

1.1 INTRODUCTION TO STUDY

Present business system is very complex. The firm must run efficient to stay in the

competitive world of business. Various jobs are to be performed by persons most to suitable.

Manager who knows how to make effective use of their resources can make any

organisational design or pattern work efficiently. A manager has to create the right conditions

to enable the employees to efficiently utilize the resources of the organisation to achieve

organisational goals. He has to make the employees understand the necessity of cooperation

for accomplishing tasks. Employees should understand their roles and responsibilities and

should work together to achieve the organisational objectives. This applies to any

organisation – business, government, or a football team. For a subordinate to understand his

role, a manager must provide verifiable objectives and a clear picture of the major duties to

be performed. The manager must also specify subordinates ‘authority and responsibility. This

gives the subordinate idea of what he must do to achieve the goals and objectives of the

organisation. In addition, a manager should provide the subordinates with necessary

information and tools for efficiently performing their roles.

Organising refers to the process of bringing together physical, financial and human

resources and establishing productive relations among them for the achievement of specific

goals. It is concerned with building up a stable framework or structure of various interrelated

parts of an enterprise, each part having its own function and being centrally regulated. The

aim of organising is to enable people to relate to each other and to work together for a

common purpose. The organised group of people in a collective sense are known as

‘organisation’.

An organisational structure shows different classification of the departments and its

employees’ hierarchy. This also fixes their authority and the type communication with the

superiors, subordinates and their peers. An organisational structure also shows the type of

span of control. It can be narrow or a wide one.

An organisation has to follow certain management process such as planning, organising,

staffing, directing and controlling.

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Planning is the process of deciding in future the activities to be done .it includes

plans, targets, and so on. Organising is confined with the activity of organising the

requirements of a firm to implement the plans which are formulated. Staffing is another

important process of appointing required employees to particular positions to work as per the

plans of the organisation. To do work as per the plans it needs directions, so directing is

another process. And last to see whether the actual performances of the activities are per the

plans controlling process is done. So if any deviations are there it can be located and reasons

are found out for that and been rectified as per the plans formulated. Such a situationis

prevalent in Milma, Kollam Dairy. Thus an Organisational Study was conducted which

enables to know the real functioning of an organisation.

1.2 OBJECTIVES

There are two objectives. There are primary and secondary objectives,

Primary objective

The study is conducted to get familiarise with the functioning of the organisation.

Secondary objective

To know the functions of all departments.

To know the interrelation of all departments with each other and the Dairy Manager.

To know the organisational culture.

To know the various academic applications from the practical perspective.

1.3 SCOPE OF THE STUDY

The study enables to know,

Functioning of Kollam Dairy

Milk production

Marketing of Milk products in Kerala

The diary industry in India, special emphasis given to Kerala market.

1.4 RESEARCH METHODOLOGY

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Methods of Data Collection

The most integral part of the study was the data collection process. The data consist of

two types. It can be classified as primary data and secondary data.

Primary Data

Primary data are collected for the first time and are original in character. Here the

primary data are collected through an interview method with the managers of the

concerned department. Then interactions with the plant workers were done in order to

collect data regarding the processing of the plant.

Secondary Data

Secondary data are those which have already been collected by some other persons

and which are passed through the statistical machines at least once. Data are collected

from websites, newspaper, and magazines.

1.5 LIMITATION OF THE STUDY

1. Majority of the office staff were busy in the time of study conducted, less information

gathered from them.

2. All the plant workers and the officers were not met due to different shifts.

3. It was found that some plant workers did not reveal certain information due to fear

from the actions of the management.

INDUSTRY PROFILE

5


2.1 INTERNATIONAL SCENARIO

The international dairy federation, with its head quarters Brussels, was established in

1903 and consists of 32 member countries throughout the world.

UNICEF has been the motivating force for establishing a dairy industry in many under

developed countries. One of these is in India, where large modern processing plants have

been set up to process locally produced milk or to reconstitute milk from donated or

purchased milk fat and powder. Domestic milk production has increased in India and a part of

the pasteurized milk is provided free to children in the larger cities through UNICEF.

The first co-operative artificial breeding association was organized in Denmark in 1936.

There are now many such associations which helped the diary industries. After 1950s dairy

industries faced a wide range of development throughout the world.

2.2 NATIONAL SCENARIO

Indian dairy sector has come a long way from price independence era of acute milk

shortage and dependent on foreign aid in the form of milk powder to meet the growing milk

demand. As a result of this a dairy co-operative society was registered in 1913 for meeting

this problem. Later Kaira District milk supply union was formed at Anand. It was an

important land mark in the history of the co-operative dairy sector. Inspired by the

achievements of this institution, the Government of India constituted a National Dairy

Development Board in 1965.

ANAND PATTERN

ANAND is a small village of farmers in Kaira District of Gujarat. ANAND Milk

Union Limited is a Co-operative Society formed by the farmers of Anand Village for the

purpose of distribution of milk. Now the world famous Anand Milk Union Limited is

popularly known as Amul.

The Anand Milk Union Limited has a three tier structure.

1. Village level Primary Co-operative Society called APCOS.

2. District Milk Producers Union.

3. State Level Milk Marketing Federation.

NATIONAL DAIRY DEVELOPMENT BOARD

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National Dairy Development Board was developed by the Government for the purpose of

organising, planning and executing the dairy development programmes in the country. This

board, with the help of government, got assistance valuing Rs. 120 crores under flood

programmes. Under this scheme financial assistance was provided to various state

governments and other agencies for implementing development scheme.

OPERATION FLOOD

Operation Flood is an important move in the history of dairy development in India. Operating

Flood was conceived and formulated by National Dairy Development Board during the fourth

plan. It aimed at establishing a broad base for acceleration and development of the dairy

industry sponsored by the European economic community through world food programme.

Operation Flood was conducted to meet India’s rapidly increasing need for milk and milks

product, and making dairy industry capable of viable and self-sustaining growth. The

ideology followed by Operation Flood was the remunerative linking of the rural milk

production centre with the urban demand centre so as to build up a viable dairy industry.

2.3 STATE SCENARIO

Dairy co-operatives were also developed in Kerala as a part of operation flood. Dairy

co-operatives have a three tier structure in Kerala with primary milk supply society at the

base and milk supply union at the district level and a state level federation. This co-operative

society follows the Anand pattern of dairy development scheme. Apart from the state

federation two regional unions were also formed in our state.

2.4 COMPETITORS

Milma holds more than 45% market share, who is the front leader in the market. There are

more than 30 competitors in Kerala against Milma.

Some of other competitors are:

K.C.A

A1 Milk

Ambady

P.D.DP

7

Malanadu

Nirmalgram

Surya

Penta

Pooja

Figure 2.1

Royal


MILMA45%

K.C.A9%

A1 MILK7%

OTHERS39%

KERALA MARKET SHARE OF MILK

SALES OF KOLLAM MILMA PRODUCTS

PRODUCT CONSUMPTION

Milk 1, 20,000 litres/ day

Ghee 30,000 litres/ monthly

Sambaram 1000 litres/monthly

Curd 2000 litres/day

2.5 REGULATORY FRAMEWORKS

8

Source: Kerala Co-operative Milk Marketing Federation (KCMMF) Report, 2009-10

Table 2.1


(1) ACTS OF THE GOVERNMENT:

(a) Milk and Milk Products Order

(i) Milk and Milk Products Order, 1992: The production, distribution and supply

of milk products are controlled by the Milk and Milk Products Order, 1992. The

order sets sanitary requirements for dairies, machinery, and premises, and includes

quality control, certification, packing, marking and labeling standards for milk and

milk products.

Standards specified in the order also apply to imported products. The Department

of Animal Husbandry, Dairying and Fisheries at the Ministry of Agriculture is the

regulatory authority.

(ii) Essential Commodities Act, 1955: The main objective of the Act is to regulate

the manufacture, commerce, and distribution of essential commodities, including

food. A number of Control Orders have been promulgated under the provisions of

this Act.

(iii) Standards of Weights and Measures Act, 1976 and the Standards of Weights

and Measures (Packaged Commodities) Rules, 1977: The Act governs sale of

packaged commodities and provides for mandatory registration of all packaged

products in the country.

(iv) Consumer Protection Act, 1986: The Act provides for constitution of District

Forum/State/National Commission for settlement of disputes between the

seller/service provider and the consumer.

(v) The Insecticide Act, 1968: The Act envisages safe use of insecticides so as to

ensure that the leftover chemical residues do not pose any health hazard.

(vi) Export (Quality Control and Inspection) Act, 1963: The Act aims at facilitating

export trade through quality control and inspection before the products are sold to

international buyers.

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(vii) Environment Protection Act, 1986: This Act incorporates rules for the

manufacture, use, import and storage of hazardous microorganisms / substances /

cells used as foodstuff.

(viii) Pollution Control (Ministry of Environment and Forests): A no-objection

certificate from the respective State Pollution Control Board is essential for all

dairy plants.

(ix) Industrial Licences: No licence is required for setting up a dairy plant in India.

Only a memorandum has to be submitted to the Secretariat for Industrial

Approvals (SIA) and an acknowledgement obtained. However, a certificate of

registration is required under the Milk and Milk Products Order (MMPO), 1992.

(b) Directorate of Marketing and Inspection (DMI):

The DMI enforces the Agricultural Products (Grading and Marketing) Act, 1937.

Under this Act, Grade Standards are prescribed for agricultural and allied

commodities. These are known as "Agmark" Standards. Grading under the provisions

of this Act is voluntary. Manufacturers who comply with standard laid down by DMI

are allowed to use "Agmark" labels on their products.

(c) Management Systems for Quality and Food Safety:

ISO 9000 Quality Management Systems: The ISO 9000 system is looked at as a

system with minimum quality requirements. It builds a baseline system for managing

quality. The focus, therefore, is on designing a total quality management system, one

that complies with external standards, but includes the specific requirement of industry

and integrates elements of competitiveness. The millennium standard (ISO 9000:2000)

has changed the focus from procedure to process.

(d) ISO 14000 (EMS):

The ISO 14000 family addresses various aspects of environmental management.

The very first two standards, ISO 14001:2004 and ISO 14004:2004 deal with

environmental management systems (EMS). ISO 14001:2004 provides the

requirements for an EMS and ISO 14004:2004 gives general EMS guidelines.

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(2) AUTHORITIES OF THE GOVERNMENT

NATIONAL DAIRY DEVELOPMENT BOARD

The National Dairy Development Board is an institution of national importance setup by

an Act of Parliament of India. The main office is located in Anand, Gujarat with regional

offices throughout the country. NDDB's subsidiaries include Mother Dairy, Delhi. It was

founded by Dr. Varghese Kurien and Dr. Amrita Patel is the current Chairman of the

National Dairy Development Board, Anand.

The National Dairy Development Board (NDDB) was created in 1965, fulfilling the

desire of the then Prime Minister of India - the late Lal Bahadur Shastri - to extend the

success of the Kaira Cooperative Milk Producers' Union (Amul) to other parts of India.

That success combined the wisdom and energy of farmers with professional management

to successfully capture liquid milk and milk product markets while supporting farmer

investment with inputs and services. The major success of this mission was achieved

through the World Bank financed Operation Flood, which lasted for 26 years from 1970

to 1996 and was responsible for making India the world's largest producers of milk. This

operation was started with the objective of increasing milk production, augmenting

farmer income and providing fair prices for consumers.

NDDB has now integrated 96,000 dairy co-operatives in what it calls the Anand Pattern,

linking the village society to the state federations in a three-tier structure.NDDB

launched its Perspective Plan 2010 with four thrust areas: Quality Assurance,

Productivity Enhancement, Institution Building and National Information Network.

(3) CENTRAL AND STATE DEPARTMENTS

Government of India& Government ofKerala

The Phenomenal success of the Dairy Co-operatives in Kerala could not have been

achieved, without the foundation of animal husbandry activities, led by the Animal

Husbandry Department, Dairy Development Department and Kerala Livestock

Development Board, of the Government of Kerala & India.

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COMPANY PROFILE

3.1 HISTORY

Kerala Co-operative Milk Marketing Federation (KCMMF), popularly called Milma

was established in April, 1980 with its Head Office at Thiruvananthapuram for the successful

implementation of the Operation Flood (a dairy programme launched in 1970 under the

agenceis of National Dairy Development Board(NDDB).

The name Milma represents:-

2,702 primary milk co-operative societies

7.78 lakhs farmer members

Three Regional Co-operative Milk Producers' Union

Eleven Dairies capable of handling 9.90 lakhs litres of milk per day.

Thirteen Milk Chilling Centres

Two Cattle Feed Plants with cumulative capacity of 600MT per day

One Milk Powder Plant of 10MT per day capacity

A well established Training Centre

5,200 retail outlets

Over 32,000 people working either directly or indirectly for the functioning of milma

3.2 (a) Mission

The mission of Milma is: “Farmer’s prosperity through consumer satisfaction.”

3.2 (b)Objectives

To channelize marketable surplus milk from the rural areas to urban deficit areas to

maximize the returns to the producer and provide quality milk and milk products to

the consumers.

To carryout activities for promoting Production, Procurement, Processing and

Marketing of milk and milk products for economic development of the farming

community.

To build up a viable dairy industry in the State.

To provide constant market and stable price to the dairy farmers for their produce.

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3.3 Strategy

The Motto of Co-operation,"of the people, by the people and for the people" is the foundation

of the "three tier system" followed by the organisation. At the village level Milma have the

Village Milk Co-operative Societies which have the local milk producers as its members.

These Village Co-operatives unite at the Regional level and form Regional Co-operative Milk

Producers' Unions. These Unions are federated at the State level to form State Federation

namely Kerala Co-operative Milk Marketing Federation (KCMMF).

3.4 Associates

Milma is in constant touch with other Organisations in this sector. It is only through this

active exchange that Milma grew from a small dairy co-operative to the position it holds in

Kerala today.

Cheif associates are:-

National Dairy Development Board

NDDB, under Dr. V Kurien's guidance set up KCMMF in 1980. Ever since then,

there has been a very close co-operation between NDDB and the Federation. NDDB

are the originators of the Operation Flood Programme and have been our funding

agent for the Operation Flood Projects in Kerala.

Amul

The Dairy Co-operatives of Gujarat have been the inspiration for the development of

such a vast network of dairy co-operatives in Kerala. Among the co-operatives in

Gujarat, the Kaira District Co-operative Milk Producers' Unions (Amul) is the the first

in this sector. Our Co-operatives are called "Anand Pattern Co-operative Societies"

following the illustrious lineage of "Amul".

Government of Kerala

The Phenomenal success of the Dairy Co-operatives in Kerala could not have been

achieved, without the foundation of animal husbandry activities, led by the Animal

Husbandry Department, Dairy Development Department and Kerala Livestock

Development Board, of the Government of Kerala.

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FUNCTIONAL AREAS OF MILMA, KOLLAM DAIRY

Kollam Milma Dairy has well established HRD, Financeand Account, Procurement

and Inputs, Production, Quality Control, Marketing, and. Maintenance and Engineering

departments.

Human Resource Development

Milma has 2098 skilled, efficient and qualified personnel and has an excellent labour

relationship

Takes active role in framing personnel policies and service rules

Finalise long term wage settlement, bonus etc.

Placement and career development activities.

Finance and Accounts

Financial management of KCMMF and its units

Liaison with financial institutions for availing loan for creation of infrastructure.

Liaison with Government for availing Government financial assistance

Long term repayment and scheduling of loans

Capital Management Schemes for primary co-operative societies

Recommend remuneration of APCOS employees

Procurement and Inputs

Centralised purchase of Dairy consumables

Purchase of Raw Materials for Cattle Feed Plants

Purchase functions of KCMMF Head Office

Marketing

Brand Management

Bulk trading of surplus products

Co-ordinated promotional activities

Packaging & Product Development

Procurement & Consumer Pricing

Quality Control

Render technical & legal assistance to primary dairy co-operatives and Regional Milk Unions

Liaison and maintain quality of milk and milk products as per the standards Liaison with statutory authorities for bringing in suitable amendments in statutes

Attend to consumer complaints on quality problems

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Projects

Planning and execution of projects for creating infrastructure for Regional Milk

Unions and KCMMF

Providing consultancy for execution of projects

Liaison with statutory authorities like Factories and Boilers, Electrical Inspectorate,

Dept.of Explosives etc for obtaining approval and implementation of projects

Liaison with Government for land allocation, water, power and other amenities

Estate management and assistance in maintenance of Plant & Machinery of KCMMF

Units

Computer

Maintenance of Systems at KCMMF, Units and Regional Milk Unions

Conducts Training programs for development of computer skills

3.5 TOP MANAGEMENT

Top Management of Kerala Co-operative Milk Marketing Federation (KCMMF)

The Board of Director of Thiruvananthapuram Regional Co-operative Milk Producers' Union

Ltd (TRCMPU) is headed by the Board of Directors The Present Chairman of the Union is

Shri.Kallada Ramesh The Managing Director of the Union is Shri. Baby Joseph

The Board of Director of TRCMPU Ltd. comprise of 14 directors elected from among the

Presidents of affiliated Primary Milk Producer Societies, three Govt. nominees and the

Managing Director as ex-officio member. Board is the Policy making forum of the

Union.The term of Board is five years.

BOARD OF DIRECTORS

Shri. Kallada Ramesh ChairmanShri. K Ayappan Nair DirectorShri. MurthikkavuDivakaran DirectorShri. Girish Kumar DirectorSmt. Sreeja S DirectorShri. Venugopalakurrupu DirectorShri. K Rajashekaran DirectorShri. S SadashivanPillai DirectorShri. Gopakumar DirectorShri. Mathew Chammathil DirectorShri. Sebastain Joseph Director-NDDBShri. George Joseph Director-KCMMFShri. Baby Joseph Director

15

Table 3.1

Source: Thiruvananthapuram Regional Co-operative Milk Producers' Union Ltd Report, 2009-10


3.6 KERALA CO-OPERATIVE MILK MARKETING FEDERATION (KCMMF)

Milma is the trade mark of the Kerala Co-operative Milk Marketing Federation Ltd, which

is the apex Co-op of three regional milk Unions viz. Thiruvananthapuram (TRCMPU),

Ernakulam (ERCMPU) and Malabar (MRCMPU).

Performance of KCMMF

Milestones

Federation and all the three Regional Milk Unions joined hands with NDDB to be a

part of the national stream to promote co-operative brand. In the wake of competition

from private sector, KCMMF and the Regional Milk Unions readily accepted the well

planned Marketing Strategy of NDDB and the mnemonic symbol of NDDB was

introduced in the milk pouches in the State. Kerala is the first federation to adopt the

mnemonic symbol throughout the State.

The year 2007 was a landmark year for milk production in the country, which reached

a new high. At over 100 million tonnes, milk output has breached the magical three-

digit level, making India the world’s second largest producer, after the European

Union (154 million tonnes) and accounting for nearly 15 per cent of the world

production of 675 million tonnes. The milk prices in India have been rising primarily

because economic growth and demographic pressure have pushed demand higher.

Prices also edged up because of the country’s entry into the international market for

skimmed milk powder. High milk powder prices led the government to even place an

embargo on its export. Being milk deficit State, the year 2007-08 was a turbulent year

to Kerala and our dependency on other States have increased. With the active co-

ordination and involvement of Regional Milk Unions Milma could get through the

16

KCMMF LTD

MRCMPUTRCMPU ERCMPU


Figure 3.1


problems faced by our organization in this front and we could meet the demand for

milk from our esteemed consumers.

27 years ago, we responded to the challenges that threatened dairying in our State by

implementing the Operation Flood program with the active support and assistance of

the National Dairy Development Board. NDDB guided in taking up us the challenges

with a program that contributed significantly to creating the self-reliant, vibrant dairy

industry that now greatly benefits millions of rural households across the country.

Though, milk price was increased twice during the financial year and we passed on

nearly 70% of the increased consumer rupee to the farmer s, still our members are

struggling to continue in the profession due to spiralling cost of production. We would

believe that what the milk producer seeks to achieve by engaging his time and energy

in milk production is a remunerative price and a stable round the year market. If these

two needs are fulfilled, then the milk producer would continue in dairying and

perhaps, even expand even expand his business,of course within the boundaries of

other constrains.

Increasing the selling price of milk and passing on maximum benefit to the farmers is

not the only solution and in long run we have to look for other ways. The choice of

cost plus approach for milk pricing would breed inefficiencies since it would ignore

the demand factor. Similarly this would be an open invitation for large-scale import of

milk from the less priced neighboring states through other channels and ultimately

work to the determent of the milk producers of our State. So also, we have to

appreciate that soaring prices in a shorter period could adversely affect domestic

consumption as many of the households are in the low-income category.

Healthy growth in milk production can be achieved only through active intervention

in reducing the cost of production at farmer level and sustained investments in animal

feeding, breeding and health care.

A heavy surge in raw material prices for manufacturing of cattle feed has placed us in

a crisis situation as cattle feed plants are running heavy losses. Though we tried to

keep the cattle feed prices at reasonable levels, the increasing cost of raw material

forced us to increase the selling price of cattle feed which in turn resulted in increased

cost of production to our farmer members. The situation with regard to the availability

of raw material needed for cattle feed manufacturing was not at all rosy. The oil cakes

17


are costly and in short supply. Maize is being diverted for the production of ethanol as

bio-fuel due to its better conversion efficiency in the fuel.

Molasses became a scarce material and availability and its price become serious

concern to us. The prices of rice bran have gone up mainly due to ban on export of

rice. Since the ingredient cost is going up regularly, the cost of the compounded feed

is also going up, beyond the reach of a small producer. As the cost of milk production

increases, the margin of profit for the producer decreases. This is quite discouraging

trend, especially for the milk producers who are sometime even forced to quit

dairying as a profession. We feel that it is high time we looked forward for alternative

nutritional technologies, which would help our members to get the nutritional

requirement for their animals. So also efforts to be made by through Government

intervention to cushion the dairy producers against inflation by extending subsidy to

the farmers for purchase of cattle feed at reasonable prices.

Milma acclaimed as the No:1 brand in the State for the 2nd consecutive year in the

survey conducted by Dhanam Magazine which shows the popularity and consumer

belongingness of this household brand.

Aims for the year to come

The dairy industry in the country is exposed to various challenges.The management of

lean-flush periods has always been a matter of major concern to Milma and it still

continues to be a key problem to be addressed on top priority. Milma has to re-

dedicate ourselves to uphold our oft-repeated slogan "Farmers' Prosperity through

Consumer Satisfaction". To keep farmer and consumer contended and happy in

chorus is a difficult task. Milma has to formulate strategies and plans to accomplish

the aforesaid task. Though a quarter century has elapsed since the drawn of Operation

Flood programme we are yet to achieve self-sufficiency in milk production. At the

same time we can be proud of our achievements in the area of infrastructure

development, milk consumption enhancement and economic and social development

of rural dairy farmers. A joint concerted effort of Milma and other Government

agencies in Dairy Development and Animal Husbandry will go a long way in

fulfilling our dreams. We have to strive to wipe off the accumulated losses and to

improve the performance both on the physical and financial fronts. Your trust, your

18


confidence and your encouragement will further energize and motivate us in this

pursuit.

Food crisis is a major threat now faced by the world and being the 2nd largest

populated country we are forced to bear the brunt more than others. Our Government

is giving priority to ensure food security to the citizens. To ensure food security we

have to enhance domestic production of agricultural commodities including dairy

products. This can only be achieved through ensuring remunerative prices to their

produce and encouraging them to produce more milk and other agriculture products.

We have to strengthen the hands of our farmers by enhancing their capability to

produce more and thereby ensure the prosperity of our nation .

The Federation achieved a turnover of Rs. 14128 lakhs in the year 2007-08 as against

Rs.13280 lakhs during previous year.

Turnover of KCMMF (Units wise - Rs.in Lakhs*)

Year Cattle Feed Plant

Pattanakkadu

Cattle Feed PlantMalampuzha

Central ProductsDairy, Alappuzha

Total

1996-97 2226.91 1212.65 1333.63 4773.19

1997-98 2069.16 1220.71 1463.66 4753.53

1998-99 3041.71 1903.05 1704.95 6649.71

1999-2000 4419.66 3667.48 2307.53 10394.67

2000-2001 4284.89 3798.49 2778.82 10862.20

2001-2002 4580.42 2922.4 3053.23 10556.05

2002-2003 4691.39 2691.13 2901.08 10283.60

2003-2004 4968.62 3124.79 3020.13 11113.54

2004-2005 4325.24 3885.46 3629.94 11840.64

2005-2006 5135.58 3602.57 4000.85 12739.00

2006-2007 5082.00 3954.00 4244.00 13280.00

2007-2008 4933.08 4738.22 4456.55 14128.00

2008-2009 5644.05 5074.30 5507.38 16186.62

2009-2010 6465.80 6747.92 6150.56 19364.28

Turnover & Profits of Milma (2009-10)

19


Table 3.2

Table 3.3


TRCMPU ERCMPU MRCMPU KCMMF TOTAL

Turnover / Rs in crores 362.62 231.07 357.45 193.64 1144.78

Net profit/Loss 0.18 2.78 1.21 (-)0.75 3.42

Milk Procurement and Sales of KCMMF

Year Procurement (Liters) Sales (Lakhs)

2000 2249.33 2308.69

2001 2487.11 2412.83

2002 2418.25 2558.59

2003 2179.73 2698.80

2004 2319.70 2841.21

2005 2630.14 3069.51

2006 2921.14 3340.05

2007 2722.90 3497.43

2008 2693.57 3475.22

2009 276.45 3575.91

2010 2729.00 3911.96

Organization Profile -TRCMPU Ltd (MILMA)

20



Table 3.4


Organization

Thiruvananthapuram Regional Co-operative Milk Producers' Union Ltd (TRCMPU) was

registered in 1985, as a Regional Milk Union with 4 Southern Districts of Kerala viz,

Thiruvananthapuram, Kollam, Alappuzha and Pathanamthitta as its area of operation.

TRCMPU was formed by dividing the area of operation of Kerala Milk Marketing

Federation, formed for implementing of II project in 1980, in to two viz ERCMPU with 4

northern districts under of II area, and TRCMPU.

Thiruvananthapuram Regional Co-operative Milk Producers’ Union has completed 25 years

of its operation successfully. It has successfully faced odds like excessive procurement in the

initial stages and consequent losses, stagnation of sales in early 1990’s and of late shortage of

milk and related problems and consequent loss. With such diverse experience in the past and

the talent pool it has, it can face any adverse environmental problems successfully. In 1985,

Union started operation from the old Thiruvananthapuram Dairy handed over by KLD & MM

Board which was selling milk in Thiruvananthapuram and Kollam districts and having a

capacity of 40,000 LPD. The first Dairy plant under OF II project in TRCMPU area was

commissioned at Kollam with a capacity of 60,000 LPD in 1986. Subsequently Chilling

Plants with capacity of 10,000 LPD each were set up at Mannar and Pathanamthitta. New

Dairy Plant at Alappuzha with a capacity of 60,000 LPD was commissioned in 1989, and

new Dairy Plant with one lakh LPD capacity was commissioned at Thiruvananthapuram in

1992. The Dairy plant at Alappuzha was transferred to KCMMF in 1992 in order to facilitate

operation of Powder Plant set up at Alappuzha for handling surplus milk in the State.

Subsequently capacity of Kollam Dairy was expanded to 1 Lakh LPD and that of

Thiruvananthapuram Dairy to 2 Lakh LPD. The capacities of the Chilling Plants were also

expanded to 30,000 LPD each. A glance at the union’s procurement and sales over the years

as given below and reveal that Unions procurement and sale has been showing a two digit

growth over the years.

Past Performance of TRCMPU Ltd

21

Table 3.5


YEAR MILK PROCUREMENT(LPD) MILK SALES(LPD)

2000-01 231649 288334

2001-02 273551 298788

2002-03 252521 316425

2003-04 205067 321806

2004-05 206200 354361

2005-06 234280 377579

2006-07 254827 406890

2007-08 230476 402109

2008-09 213085 403073

However the growth in procurement has always been lagging as compared to milk sales.

Union used to have surplus milk in the flush season up to 1996. However the fast growth in

demand thereafter and rapid decline in milk production in the State after 2001, owing to

demographic problems like rapid urbanization, diminishing land holding size, transformation

to nuclear families and reduction in family size, due to reduction in population growth,

attractive price for cash crops, shortage of unskilled labour an offshoot of high literacy rate,

etc. The demand for milk has been growing rapidly since the beginning and even the opening

up of markets in 1991 did not affect this growth much. Unlike the northern districts of the

State, not many competitors ever came to the market. Union in fact had maximum sales

growth during the period 1995-2000. Union has been purchasing milk right from the

beginning from the other two sister Unions and also from outside states mostly Tamil Nadu

till the year 2006.

From 2006 onwards, Unions milk deficit shot up due to rise in demand and drop in

milk procurement and the milk availability in Tamil Nadu also came down and hence Union

was forced to move to Karnataka for meeting its deficit. This reduced availability of milk in

the Southern States resulted in the steep increase in milk price in Karnataka and Union started

incurring loss on milk purchased from outside. Side by side the price of skim milk powder

also sky rocketed. The combined effect of these was the heavy loss to union in 2007-08.

22



Appendix III shows the financial performance of Union since beginning. Unions sales

turnover from products has always been below 10% since beginning, since Union never had

surplus milk after meeting demand for liquid milk.

Vision

To achieve the status of the best union in the country in turnover and profitabilityby

achieving 10-15% growth per annum by accelerating the growth in milk production and sale

of milk and milk products and by diversification into related areas in food sector.

Mission

To become the leading organisation in the food and nutrition sector in the region,

through the attainment of its marketing objectives and to become nucleus of an endeavour for

an accelerated development of the rural economy of the region. Further it would aspire to

function as professional,profitable and socially responsible organisationensuring better returns

to farmers,primary societies as well as its customers by providing good value for their money.

Units of TRCMPU

The Units of TRCMPU are as follows,

1. Thiruvananthapuram Dairy:

Thiruvananthapuram Dairy is Located on the way to Kovalam 4 Km from the City.

The Dairy with a capacity to handle 1 lakh LPD was commissioned in 1992. The Dairy is

selling milk in Thiruvananthapuram District except ChirayinkeezhThaluk.

No. of Employees 287

No. of societies pouring 340

No of agents selling milk 2100

Average procurement 100,000 LPD

Average milk sale 2,10,000 LPD

The Entire Milk is collected through Bulk Milk coolers

Thiruvananthapuram Dairy started to collect the entire milk through Bulk Milk Coolers since

November 2009.The capacity of the Dairy has been expanded to 2 Lakh litres per day by

23


2001 Now it is proposed to expand the capacity to 3 Lakh litres per day. In addition a

separate block for manufacture of Products is proposed to be constructed.

Thiruvananthapuram is the first "ISO 2001" certified Dairy in the State and all steps have

been initiated to get HACCP for Thiruvananthapuram Dairy.

2. Kollam Dairy:

The Dairy was commissioned in 1986 with a capacity to handle 60,000 litres per day and

subsequently expanded to handle 1 lakh litres per day.

No of employees 226

No of Societies 336

No. of agencies 1080

Average milk collection 50,000 LPD

Average milk sale 120,000 LPD

Quantity processed and supplied to Pathanamthitta unit-45000 lpd At present 18,000 litres

milk is collected through Bulk Milk Coolers and the remaining quantity in Cans. Presently

the milk marketed in Pathanamthitta district is supplied from Kollam Dairy, in pasteurized,

standardized condition.

3. Pathanamthitta Dairy:

A new dairy plant with 60,000 litre capacity is constructed at Thatta near Adoor in

Pathanamthitta district and is expected to be commissioned by the end of 2009. Presently

there is a 30,000 litres Chilling Plant in the district. Milk is also packed there at present.

These facilities will be decommissioned when the new Dairy Plant is commissioned. Now the

entire milk in the district is being collected through Bulk Milk Coolers.

4. Alappuzha District:

In Alappuzha district, 60,000 Litres per day dairy constructed under O.F II has been

expanded to 1 Lakh litres per day which is managed by KCMMF. Milk Procurement and

marketing activities are carried out by Union. There is also a Chilling Plant with 30,000

Litres capacity in the district.

Details of Staff, Senior Officers Head Office, TRCMPU

24

Table3.5


DESIGNATION NAME

Managing Director: Sri.Baby Joseph

Senior Manager (Production): Sri.R.Sudhir

Senior Manager (Inspection): Dr.K.Marthandan

Manager (Maintenance): Sri.K.S.Vijayakumar

Manager (Marketing): Sri.G.Rajesh

Manager (HRD): Sri.K.R.Polachan

Manager (F&A): Sri.G.Krishnalal

Officer I/C(MIS/Systems): Sri.Sarathchandrababu

Assistant MD: Sri.K.K.GopinathanNair

KOLLAM MANAGEMENT

Dairy Manager Mr. Prasanna Kumar

Human Resource Manager Mr. FiroshMurali

Marketing Manager Mr. Sri.K.Sathyanarayanan

Finance & Accounts Manager Mr. Sri.A.K.Madhusoodanan Nair

Procurement & Input Manager Mr. Joan Lewis

Production Manager Mr. Sri.I.G.Venugopal

Quality Manager Mr. UnniKrishnan V.S

Engineering Manager Mr. C K James

Maintenance Manager Mr. Suresh Chandran K.R

3.7 PRODUCTS PROFILE

Pasteurized Milk

25

Table3.6




Milma pasteurized vitamin A enriched milk comes in three varieties.

Fat free milk

Toned milk which contains 3.0% fat and 8.5% SNF

Standardised milk which contains 4.5% fat and 9.0% SNF

Conveniently packed in 500 ml and 1 litre sachets, the fat content range of Milma's Milk

has made it the popular health drink of young and old alike.

Sterilized Flavoured Skimmed Milk

Prepared from pasteurized skimmed milk, sweetened with cane sugar and flavoured with

cardamom. It is very tasty in chilled condition and has a keeping quality of 60 days.

Ice-Cream

Milma ice-cream, is available in a range of lip smacking flavours: vanila, chocolate,

mango, strawberry and fruit & nut. In addition, our Ernakulam Union also produces and

distributes delicious "kulfi" and cream rolls.

The only ice-cream in Kerala market which is manufactured in a dairy,and hence most

fresh ice cream.

Sambharam

Sambharam (butter milk) a favourite beverage of Kerala.MilmaSambharam, the only

product of its kind in the market, is very popular throughout the State. It comes in

convenient 200ml throw away sachets.

Curd

It is a fermented product prepared from pasteurized skim milk using Curd Culture from

National Dairy Research Institute (NDRI). It is delicious, tasty, free from cholesterol and

available in 500ml and bulk.

Lassi

It is a sweetened and flavoured product prepared from curd. It is available in 200ml pack

and is a very good health drink for all age group.

26


Ghee

Ghee is a key ingredient in most Indian delicacies. Milma produces good quality, pure

ghee from butter or cream at all dairies. The ghee is available in convenient packs of

100gm to 15Kg.

Butter

Milma Butter prepared from the cream of milk contains 81% fat and less than 15.6%

water.

This is available in convenient 100gm,200gm and 500gm family packs. Available in

salted and unsalted varieties.

Tetrapack Flavoured Milk

Milma offers a range of flavored health drinks in hygienic tetra packs. Cardamom milk

has already captured the market and are available at all Milma outlets.

Refresh

In addition to milk drinks, Milma also has a mango drink in the market. Refresh, Milma 's

manago drink is a favorite in the fruit drink sector.

Peda

An indigenous milk product manufactured by evaporating water content from wholesome

cow's milk and sweetened with cane sugar. It is a nutritious and delicious sweet bite for

children. It is available in 25gm and 250gm cartons.

Cream Roll

Mixture of tasty ice-cream and tooty fruity encircled with oven fresh sponge cake. It is a

delicious snack rich in Milma cream.

Milma Ize Premium Soda

MilmaIze Premium Soda recently introduced in the market as part of product

diversification.

27


Milma Chocolates:

(a) Milky Thundr: Wafers coated with black and milk chocolate. The product is sold

at Rs.5

(b) Milky Beats: Milk chocolate bar, available in the market at Rs 10.

(c) Choco Beats: Black chocolate bar, available in the market at Rs 10.

(d) Milma Krispy: Black chocolate wafer at the price of Rs.5

(e) MilmaChocochat: Small black chocolate bar at the price of Rs.2.

(f) MilmaEclairs: Éclair toffee for Re.1

MilmaPayasam Mix

Full ingridents for making payasam is available as a kit during Onam season.

Cattle Feed

Balanced cattle feed is the major input provided to the dairy farmers of the State from the

Federation.

There is a high level of acceptability for this product in the market. Milma is now

producing 600MT cattle feed a day. It produces both mash and pellet form of cattle feed.

In addition to augment the balanced feed and to support vitamin level in animal, milma

has come out with milma mineral mixture - "MilmaMin". The cattle feed is distributed to

farmers at reasonable rate through Apcos, Dealers and Government agencies.

Adjudged Top Feed Manufacturer of India for manufacture of Aflotoxin-free best quality

cattle feed by Indian Association of Veterinary Pathologists during 1998.

ORGANISATION CHART

An organization chart is a diagrammatical form which shows important aspects of an

organization including the major functions and their respective relationships. In other words ,

it is a graphic portrayal of positions in the enterprise and of the formal lines of

communication among them. It provides a bird’s eye-view of the relationships between

28


different departments or divisions of an enterprise as well as the relationships between the

executives and subordinates at various levels. It enables each executive and employee to

understand his position in the organization and to know to whom he is accountable. Thus, it is

obvious that an organisation chart has the following characteristics:

1. It is a diagrammatical presentation.

2. It shows principal lines of authority in the organisation.

3. It shows the interplay of various functions and relationships

4. It indicates the channels of communication.<

An organization chart is merely a type of record showing the formal orgainsational

relationalship which management intends should prevail. It is, therefore, primarily a

technique of presentation. It presents diagrammatically the lines of authority and

responsibility among different individuals and positions. It may be either personnel or

functional.

Personnel organization chart depicts the relationship between positions held by different

persons. Functional organization chart depicts the functions or activities of each unit and sub-

unit in the organiastion. Organisation chart helps in the following ways,

1. It shows the employees how their positions fit into the total organisation and how they

relate to others. It shows the lines of authority and responsibility among employees.

2. It serves as a valuable guide to the new personnel in understanding the organisation and

for their training.

29


DEPARTMENTS & FUNCTIONS

DEPARTMENTS AND FUNCTIONAL AREA ANALYSIS

30


Chester I. Barnard defined formal organization as “a system of consciously

coordinated activities or forces of two or more persons”. A formal organization is deliberately

designed to achieve some particular objectives. It refers to the structure of well-defined jobs,

each bearing a definite measure of authority, responsibility and accountability. The structure

is consciously designed to enable the organizational members to work together for

accomplishing common objectives. It tells the employee to do certain things in a specified

manner, to obey orders from designated individuals and to cooperate with others. Co-

ordination also proceeds according to a prescribed pattern in the formal organization

structure.

The formal organization is built around four key pillars, namely:

(i) Division of labour

(ii) Scalar and functional processes

Division of labour and specialization is the basic principle of formal organization. The scalar

and functional processes imply the growth of the organization both vertically and

horizontally. The structure of the organization refers to the overall arrangement in the

organization which ensures proper balance between different parts of the organization and

secures the execution of all operations and the achievement of organization objectives.

The span of control refers to the number of subordinates directly reporting and accountable to

one superior.The Organisational Structure of any firm will include the Top Level

Management, who takes the main administrative decisions for the business concern; the

Middle Level Management which is concerned with the day to day management of the

concern; and the Lower Level Management which is concerned with the normal day to day

activities of the concern. Milma follows such a structure for the department and function

areas.

5.1 HUMAN RESOURCE DEVELOPMENT DEPARTMENT

ORGANISATIONALSTRUCTURE HUMAN RESORCE DEVELOPMENT

31

(iii) Structure

(iv) Span of control

Figure 5.1


Assistant HR Mgr

Assistant Personnel Officer

Junior Superintendent

Senior Assistant

Junior Assistant

Stenographer

Typist

Office General

FUNCTIONS

Deals with all the matter of employees.

Recruitment

Selection

Tests & interview

Training

Performance appraisal

Grievance redressal

ROLES & RESPONISIBILITIES

(1)Assistant Manager:

Total administration of discipline in the firm.

Communicating between the management and the employees.

Solving the problems regarding employees.

Takes precautionary measures to avoid unrest in the firm.

(2) Assistant Personnel Officer:

Assists the assistant HR manager.

(3) Junior Superintendent:

Deals with salary matters such as ESI, PF etc

Deals with welfare of the employees

(4) Senior Assistant:

32


Deals with matters regarding transfers, payments etc

Service matters

(5) Junior Assistant:

Deals with the primary stages of grievance redressal

(6) Stenographer:

Does secretary jobs towards the assistant manager.

(7) Typist:

Does job related to typing the official matters of the firm.

(8) Office General:

Does filling works and collecting couriers.

STAFF POLICY

There are 226 employees in Kollam Dairy Milma. It includes 32 employees and rest

areworkers.The members in the organisation formed a welfare society named “Milma

Employees Welfare Organisation”.

A cooperative society is working in the organisation to provide loans to the workers at a

nominal rate of interest. This society gives scholarship and cash award to the children of

employees in the organisation who gets high marks in their studies.

(a)WAGE PAYMENT AND INCENTIVE PLAN

Milma is under time basis wage payment system. Under this method employee is paid on

the basis of time worked.

Milma is giving the following non-financial incentives to the workers.

1. Offers job security.

2. The superior officers take interest on the subordinates.

3. Provide more promotion.

4. Provide more training for unskilled and new workers.

5. Facilitate labour welfare and social security measures.

33


(b) FRINGE BENEFITS

The following are the fringe benefits provided to its workers

i. Leaves

Every employee can take 13 casual leaves in a year

ii. Provident fund and gratuity

The provident fund scheme is followed by the organisation. They also provides

gratuity scheme with the help of General Insurance Company.

(c) OTHER BENEFITS

Each employee of the organisation gets 500ml of milk every day. As per the Bonus

Act of 1948, they are paying bonus to the employees. There is free uniform and

footwear washing facility.

(d) PROMOTION AND TRANSFER POLICY

The policy applies to promotion within workers categories and workmen confirmed in

the permanent service of the federation/unions working of its various units within

Kerala state and at the registered office. Promotions are on the basis of seniority rather

than merit.

<

TRAINING AND DEVELOPMENT

Milma sends their workers to many training institutions in various parts of India. Important

among these institutions is “MANSING INSTITUTE OF TRAINING, GUJARAT”. They

adopt the following techniques like formal lecture, seminar and so on.Milma also gives

apprenticeship training to workers and provides a stipend to them. The training covers areas

in management training as well as operational areas.

SELECTION PROCESS

Temporary staff are recruited by the concerned units and permanent staff are recruited by the

head office, in the following process:

34


1. Inviting application

Federation releases the advertisement in leading news papers showing the vacancy and

quality required by the applicant.

2. Screening the application

The next step is the screening of the application to reduce the number of applicants and

also to find out more suitable candidates.

3. Interview

Next step is the interview conducted by top officials of Milma. Interview is also

conducted by a group of various managers.

4. Final selection

If a candidate overcomes all the procedures given above, he would be selected. An

appointment letter is given to him mentioning the terms of appointment, pay scale etc.

The selected candidate undergoes a probationary period of one year.

DISCIPLINARY PROCEEDINGS

The HRD department is responsible for maintaining discipline in the organisation. At the

Kollam diary, the rules and regulations for office staff and workers are different. Staff

regulations are concerned with the office and standing orders are concerned with workers. If

there is way in disciplinary action arises from a worker standing order will be issued. The

procedure in as follows:

Written explanation is asked from the concerned workers.

Domestic enquiry will be conducted either by an efficient advocate or by a top

manager in the dairy.

WORKING HOURS

The office time is from 10.00 am to 5.00 am. The workers work for 8 hours in the dairy.

There are 3 shifts:

7.00 a.m to 3.00 pm,

3.00 p.m to 1.00 pm and

11.00 p.m to 7.00 am

35


TRADE UNION

Trade unions are voluntary associations of workers or employers formed to promote and

protect their interests through collective action. The Trade Unions Act,1926 defines a trade

union as a combination, whether temporary or permanent, formed

(i) Primarily for the purpose of regulating the relation between

(a) between workers and employers

(b) between workers and workers

(c) between employers and employers, or

(ii) For imposing restrictive conditions on the conduct of any trade or business, and

includes any federation of two or more trade unions.

The main trade unions in Kollam Milma are,

All India Trade Union Congress (AITUC),

Central Industrial Trade Union (CITUC),

and Indian Trade Union congress(INTUC)

PUNCHING SYSTEM

The attendance of the employees is done by punching system. There are discussions going on

for the implementation of finger laser punching system within two months. This system can

automatically can daily attendance and compute the salary of employees. This process

enables achieve accurate salary as well as incentive calculation.

5.2. FINANCE AND ACCOUNTS DEPARTMENT

ORGANISATIONAL STRURCTURE OF FINANCE & ACCOUNTS

36

Assistant Mgr

Figure 5.2


Assistant Account Officer Computer technician

Superintendent

Senior Assistant

Junior Assistant

Mgt Apprentice

Occasional Apprentice

FUNCTIONS

Providing financial assistance as per the departmental requirements.

Keeping the monetary transactions in the book of accounts expect the marketing

department.

Proceeding requisitions of Milma Kollam unit’s requirements towards the head

office.

Finance department also deals with the Systems department.

Systems department operates with software which is made by KCMMF, Milma

Integrated Information System.

ROLES & RESPONSIBILITIES

(1) Assistant Manager:

Deals with the entire functions of the Finance and Systems departments.

Final verification of all financial matters.

Confirms sending the concerned statements to the Dairy Manager.

(2) Assistant Account Officer:

Verification of entire accounts

(3) Superintendent:

Verifies the milk value

Computing the TDS

Preparing the inter units transfers

37



Transactions relating to the outside purchases

Transactions relating to the transportations & distributions

Transactions relating to the TA

(5) Junior Assistant ( Cashier)

Issuing cash payments, especially salaries and wages.

Making advance payments.

(6) Mgt Apprentice:

Issuing cheques

Dealing with the bank matters.

(7) Occasional Apprentice:

Filling

Collecting couriers.

(8) Computer technician :

Development of softwares to support various functions.

Support Management Information System

Networking

SOURCES OF FINANCE:

LONG TERM: the source of long term finance is only term loans. CPD gets its financial

assistance from National Dairy Development Board (NDDB) through KCMMF. There is an

agreement between the federation and NDDB.

As per the agreement between them 70% of the loan amount should be repayable and the

remaining 30% subsidy.

SHORT TERM: the source of short term fund is procured from the Canara Bank at the

prevailing interest rates. It is mainly in terms of overdraft.

MODES OF PAYMENT

HRD dept prepares the payment for employees and sends to the Finance dept. Payments are

made in two ways, through direct cash which is paid in the finance dept and other through in

38


bank i.e., in the Canara Bank. Overtime payment is not paid in cash but paid in bank. The

following are different modes of payments at certain situations.

CASH PURCHASE: Makes payment within 10 days made to society’s milk purchase.

CREDIT PURCHASE: 15 days get as credit period for film (plastic cover pack) purchase.

ADVANCE PAYMENT: Advance payment is needed for purchase of skimmed milk.

DEPRECIATION

The depreciation pattern maintained as per the Income Tax Schedule. Every year the firm

prepares provision of depreciation.

The following are the depreciation rates for the concerned assets.

Building 5%

Factory building 5%

Plant & Machinery 30%

Vehicles 20%

Furniture 15%

AUDITING PROCESS

The dairy has statutory auditing, which is done by the registrar of the cooperative society. For

the purpose a representative is appointed in the dairy as their concurrent auditor.

PROFIT SHARING: The profit earned is given to the farmers as per the quantity and quality

of milk they supplied to the concerned society. Further the dividend is paid to the shareholders.

STATEMENTS & LEDGERS

(a) Journal

(b) Ledgers

(c) Sub ledgers

(d) P& L a/c

5.3. PROCUREMENT AND INPUTS DEPARTMENT

ORGANISATIONAL STRUCTURE OF PROCUREMENT AND INPUTS

39

(e) Balance sheet( yearly

maintained)

(f) Trail balance

(g) Bank reconciliation

(h) Budget

Figure 5.3


Assistant Mgr

Milk Procurement Officer Veterinary Officer

Assistant Milk Procurement Officer

Senior Supervisors

Junior Supervisors

This department deals in procuring milk from the societies.

Calling tenders of vehicles

Scheduling of routes

Providing veterinary services.

Providing cattle feed supply



Ensuring all the activities is performing according the plans.

(2) Veterinary Officer:

All medical issues of the cattle are treated.

(3) Milk Procurement Officer:Entrusted with the activities of calling tenders and quotations of vehicles. Scheduling of the routes.

(4) Assistant Milk Procurement Officer:

Assisting in the works of the Milk Procurement Officer

(5) Senior Supervisors:

Deals with the extension activities in the field such as ,Finding the needs of the farmers.Conducting camps and seminars

(6) Junior Supervisors:

Assisting with the activities carried out by the Senior Supervisors.

PROCURING: Procures milk from the societies through tendered trucks and reaches to the

plant. Kollam Milma has 11 regular routes and 11 emergency routes. Milk collection route

contract is awarded annually by collecting competitive offers.

40

FUNCTIONS


Union is going for quality improvement of raw milk by installing milk coolers in Societies.

At present 41 Nos of coolers are in operation.

Government of India is financing 75% cost for installing coolers. Rs.10 crores has already

been sanctioned for this. Union will meet all expenditure for operating the coolers in

Societies.

VETERINARY SERVICES: This service is extended to the farmers irrespective to the cost

involved for its operation.

INPUT WING: Input wing is responsible for health care, insurance, genetic up gradation,

nutrition, and production enhancement.

PROCUREMENT PROCESS OF MILK FROM FARMERS

41

FARMERS

SOCIETY

TANKERS

MILMA

Figure 5.4


5.4. PRODUCTION DEPARTMENT

ORGANISATIONAL STRUCTURE OF PRODUCTION

Involved with the processing of milk. Production of curd, buttermilk and ghee.

Procures raw materials.

Procures milk from outside state in the times of scarcity.

Makes payments for the milk powder.


(1) Production Manager:

Controls the entire production function of the plant.

Hears the grievances of plant employees if any.

Informs the Dairy Manager about the production status.

(2) Assistant Production Manager:

Assists the Production Manager in his work.

(3) Technical Officer

Scheduling of the plant activity.

(4) Technical Supervisor:

Implementation of plans. Ensures that the milk tankers arrive as per the schedule.

(5) Operators :

Operates the plant machines

(6) Workmen:

Involves in the production process.

42

Figure 5.5

FUNCTIONS


THE PRODUCTION PROCESS

Test for acidity

Coliform

Curd ,Samabharam

Skim Milk

Ghee

43

Raw Milk at diary

Chilling to <10 ℃

Processing

Standardisation &Testing

Packing &Cold storage

Distribution

Dispatching to agents

To control growth of bacteria rawmilk is chilled. Plant either diary tested for fat, SNF, Acidity, MBRT, Temperature.

Societies Milk producers (APCOS)Raw milk is accepted based on

Organologistic evaluation Testing for fat on SNF Acidity MRTP test for bacterial load SPC

Heating milk to a minimum temperature of 72℃ holding for 15℃ and cooling to less than 5℃ .This will destroyall pathogenic living beings.

Fat 3.05% SNF 8.5%

Filled only after ensuring quality standards.

At dispatch dock sachet tested for MBRT, SFN and coliform.

Market sample tested for MBRT, SNF and coliform.

Figure 5. 6



5.5. QUALITY CONTROL ORGANISATIONAL STRUCTURE OF QUALITY CONTROL

FUNCTIONS

Taking samples at every stages of milk processing and of other milk products.

Timely testing the quality of milk and other milk products.

Maintains to keep the standard.


(1) Manager:

Management representative of ISO 9001 standard.

Ensures the quality is maintained.

Ensures that subordinates do the quality testing in time.

(2) Quality control officer:

Management representative of AGMARK standards.

Does mainly quality testing of AGMARK products such as ghee.

Sees whether the milk has required quality.

Similarly this is done in the other milk products also.

Does quality analysis and records the results

Taking periodic statements

(3) Chemist / Bacteriologist:

Does the entire required tests for knowing the quality.

44

Figure 5.7


(4) Lab Technician Grade 1:

Assists in the chemist in conducting tests.

(5) Lab Technician Grade 2:

Collects the required samples at every stages of processing.

TYPES OF TESTS

The important tests in quality control are given below.

1. At chilling centre

a. Organoleptic test

b. Temperature

c. Clot On Boiling (COB)

d. Acidity (as lactic acid)

e. Fat %

f. SNF % (Solid Non Fat%)

Periods of quality testing:

1. When milk is received at the plant its appearance and smell is first is checked.

2. Then sample is taken at RMRD (Raw Milk Reception Dock) and tested to know the

fat content in order fix price for the concerned society which supplied the milk.

3. Sample is taken at the processing stage of milk to know temperature of the milk.

4. Later sample milk is taken from the processed milk tank to know the fat and acidity.

5. Sample is taken from filled packets.

6. Similarly this is done in cold storage.

7. Sample is taken at despatching of milk packets.

8. Five packets are taken as samples in a month to know whether the quality is

maintained.

45

2. At village co-operative society

a. Organoleptic tests

b. Fat%

c. SNF% (Solid Non Fat %)


PESERVATION OF MILK: Processed of milk does not need preservatives. After the milk is

chilled and pasteurized. Hence milk does not get spoiled. The milk stays good for two days

under refrigeration conditions.

SPECIFICATIONS (MINIMUM) AS PER PFA AND MILMA REQUIMENTS

PRODUCTS FAT % SNF % TOTAL

ACIDITY% PHOSPHATE MBRT

TONNED MILK 3.0 8.5 - 0.13-0.15 -VE 5hrs

MILMA RICH PLUS 3.8 10.0 - 0.15-.18 -VE 5hrs

CURD 0.5 (max)

10.5 - 0.8-1.3 NA N A

SAMBHARAM 0.5(max) - 4.0-6.0 0.4-0.7 NA NA

SPECIFICATION FOR GHEE-AGMARK REQUIREMENTS

PRODUCT MOISTURE % FREE FATTY ACID %

GHEE (special grade) 0.3 5.2(max)

COMPOSITION OF MILK

Main constituent Range (%)

Water 85.5 – 89.5

Total solids 10.5 – 14.5

Fat 2.5 – 6.0

Proteins 2.9 – 5.0

Lactose 3.6 – 5.5

Minerals 0.6 – 0.9

5.6. MARKETING DEPARTMENT

46

Table 5.1

Table 5. 3


Source: Kerala Co-operative Milk Marketing Federation (KCMMF) Report , 2009-10


Table 5. 2


ORGANISATIONAL STRUCTURE OF MARKETING

FUNCTIONS

Sales of milk and other milk products.

Distribution of the products.

Collecting the payments from the agents

Finding the potential markets.

Doing promotional activities.

ROLES & RESPONISIBILITIES

(1) Marketing Manager:

Coordination of all marketing activities

(2) Marketing Officer:

Marketing activities of milk

(3) Assistant Marketing Officer:

Marketing activities of all Milma products including products which arenot

produced in Kollam unit.

(4) Marketing Organisers:

Dealing with the customer complaints

Agency promotion

Finding potential markets

Canvassing

(5) Marketing Assistants:

47

Figure 5.8


Cash collection of agents (CASH BOX system)

Milk despatch activities

(6) Junior Assistant:

Keeping marketing accounts Issuing invoices MIS

(7) Salesmen:

Selling process is done in the stall, where located outside Milma unit.

Maintaining inventories in the stores.

PRICING

The prices products of Milma are fixed in the head office. Cost plus profit pricing strategy is

used.

PROMOTION

There is less promotional activities from the firm. Usage of posters, calendars bill boards etc

are certain tools used in the promotions activities. Advertisements are used only when the

offers are provided.

DISTRIBUTION

Milk is distributed directly only through retailers i.e. no wholesalers is included. While other

products are provided to wholesalers as well as retailers. Advance payment is to be made for

milk sales by the agents. Nearly 1800 agents are functioning in Kollam. 4% commission is

fixed on the milkat minimum retail price.

MARKETSHARE

Milma milk has a market share of approximately 45% and is leading in the market. But in the

case of other products they are just meeting the targets set by the head office. So there is

relatively small market share for the milk products of Milma.

SALES OF PRODUCTS IN MILMA, KOLLAM DAIRY

SL.NO PRODUCTS SALES1 Milk 1, 20,000 litres/ day2 Ghee 30,000 litres/ monthly3 Sambaram 1000 litres/monthly4 Curd 2000 litres/day

5.7. MAINTENANCE AND ENGINEERING DEPARTMENT

48

Table 5. 4

Source:Thiruvananthapuram Regional Co-operative Milk Producers' Union Ltd Report, 2009-10


ORGANISATIONAL STRUCTURE OF MAINTENANCE AND ENGINEERING

Assistant Mgr

Deputy Engineers

Technical Superintendent

Senior Assistant

Operators andTechnicians

FUNCTIONS

Maintaining the proper functioning of the plant and its machines.

Purchasing the materials for packing of the products,

Purchasing the materials which are required for the machines.

ROLES & RESPONSIBLITIES


Coordinating all the activities of the department(2) Deputy Engineers:

Maintains the plant and machinery

(3) Technical Superintendent:

Assists the deputy engineers


Making computer entries

Placing purchase orders

Takes statements

(5) Operators &Technicians:

Here various activities are carried out by the following workers as per their designation. Technicians (operators cum repairers)

Electricians

SWOT ANALYSIS

49

Figure 5.9

Refrigerator operator

General mechanic

Driver Boiler operators


6.1 SWOT ANALYSIS

SWOT analysis is a strategic planning method used to evaluate the Strengths,

Weaknesses, Opportunities, and Threats involved in a project or in a business venture. It

involves specifying the objective of the business venture or project and identifying the

internal and external factors that are favourable and unfavourable to achieve that objective.

The technique is credited to Albert Humphrey, who led a convention at Stanford University

in the 1960s and 1970s using data from Fortune 500 companies.

A SWOT analysis must first start with defining a desired end state or objective. A SWOT

analysis may be incorporated into the strategic planning model. Strategic Planning has been

the subject of much research.

Strengths: characteristics of the business or team that give it an advantage over others in

the industry.

Weaknesses: are characteristics that place the firm at a disadvantage relative to others.

Opportunities: external chances to make greater sales or profits in the environment.

Threats: external elements in the environment that could cause trouble for the business.

Identification of SWOTs is essential because subsequent steps in the process of planning for

achievement of the selected objective may be derived from the SWOTs.

First, the decision makers have to determine whether the objective is attainable, given the

SWOTs. If the objective is not attainable a different objective must be selected and the

process repeated.

The SWOT analysis is often used in academia to highlight and identify strengths,

weaknesses, opportunities and threats. It is particularly helpful in identifying areas for

development.

50


STRENGTH

Good brand name in the Kerala dairy

market.

Kollam Milma holds the major market

share in Kollam dairy market, especially

milk.

Meets the market demand appropriately.

There is good coordination between the

Manager and the departmental heads.

There is good interrelationship between all

departments.

There is active customer complaint cell.

There are great number of employees

benefits schemes.

Eco-friendly plant.

Strike free campus.

Strict disciplinary actions and quick

grievance redressal are taken.

Ensures timely quality testing of milk and

other related products.

Maintains quality standards such as ISO.

WEAKNESS

Faces milk shortage.

Outdated machines plant.

Plant is not fully automated.

No computerised warning system in

plant for detecting problems.

The Kollam Milma unit cannot take

independent decisions on major

situations since head office is the prime

authority.

Just meeting the demands of the market

rather creating more demand.

There is no R&D department.

No recreational activities for the

workers.

OPPORTUNITIES

More scope to procure milk from other

states, which is not much expensive plus

ensures good quality.

Good scope for capturing huge market

share in the milk products category.

More opportunities to create demand in

rural areas.

THREATS

Faces milk shortage within the state.

Government’s decisions regarding

procuring milk from Tamil Nadu may

result in loss making due to high price.

New competitor, Thripthi may reduce

market share.

Customers preferring other brands’

milk products.

STRENGTHS

51


Milma is one of the first organizations to enter into the Kerala milk market through the

introduction of packed milk. The large acceptance of packed milk of Milma among customers

made the Milma successful. This gradually created Milma as trust worthy one. All these lead

to capture 45% of the market share. Kollam Milma Dairy is successful in delivering quality

milk products in time to its dealers and customers, so customer always rely on Milma

products. Strength of Milma is its employees. They are provided with various incentives and

benefit schemes.

WEAKNESS

Milma’s plant is not modernized one, so there is less computerized works. There is lack of

R&D works in the organiastion, which is very essential for surviving in the business. Even

though the employees have various incentives and schemes, it does not have recreational

activities. Independent Milma units are able take their own decisions on major issues, since

top management involves in it.

OPPORTUNITIES

Since Milma has good name among the customers it can introduce new milk products. The

market share of Milma can be increased through creating more demand in rural areas. The

sale of chocolates can be increased by effective promotion activities in the urban areas.

THREATS

Facing milk shortage within the state is a serious issue. Customers prefer other brand’s milk

product is another issue. Very soon government supported milk organiastion, Thripthi would

be a big competitor to capture the major market share.

SWOT analysis of this organiastion shows its strengths as well as its weakness. This

may enable the company to improve its prevailing methods of production. The firm can make

significant results by implementing good business strategies, which may retain and increase

the market share of Milma.

FINDINGS, SUGGESTIONS & CONCLUSIONS

52


7.1 FINDINGS

The following are the findings:

1. The Kollam Milma unit cannot take independent decisions on major situations since

head office is the prime authority.

2. The plant lacks modern machines which are required to produce efficiently.

3. There is no computerised alert system to detect problems in the plant.

4. The firm planning to implement finger pressing system at the entry gate.

5. The incoming of the trays into the plant found to be slow, which may result in

delaying of packing the packed milk.

6. There is no scope for developing of new products.

7. It was found that the firm just meet the required demands rather than creating

demand. This was seen in the milk products especially sambharam.

8. There are no recreational activities for the workers.

9. The study revealed that Kollam Milma unit faces milk shortage within the state.

10. In a day around 100 packets of milk are being torn due to improper packing, storing in

old and bad conditioned trays.

7.2 SUGGESTIONS

The following suggestions may help the firm to gain good results,

1. Implementation of modern equipments is needed to produce efficiently.

2. Implementation of a computerised alert system may help to detect problems quickly.

3. An aggressive promotion of products is needed from the marketing department.

4. The HRD dept should try all efforts to implement the finger punching impressing

system instead of punching system without any chances for unrest in the firm.

5. The Engineering dept should try to maintain proper working of the plant in certain

areas which are not given much importance, especially the breakdown of the conveyor

for bringing the trays from outside.

6. There are certain areas to improve such as to implement R& D department for

producing new products.

7. More production and promotion of Sambharam may increase the market in the

Sabarimala season.

53


8. The firm may make policy to establish recreational activities for the workers.

9. The Kollam unit may try to procure milk from other states which incur less cost and

provide good quality.

10. Proper packing of milk packets is essentially needed as well as good trays are needed

for storing it.

7.3 CONCLUSION

The organisation study at Milma was done with an objective to understanding how an

organiastion functions, what are its major departments and functioning of these departments.

The study at Milma provided the opportunity to learn the organiastional goals and objectives,

various department that conduct critical functions and the interrelation between them.

Milma is observed to be an organiastion that not only has an objective of working

profitably but also a socially responsible organiastion that cares of different sections of the

society viz ; the milk producers, and the milk consumers.

The organiastion, Milma has established different departments based on functions like

procurement, production, human resource, marketing etc. It ensures quality of product

through established systems which are monitored by quality control department. Finally the

project enabled understanding of an organiastion and its objectives and how they function to

achieve organiastional objectives.

BIBLIOGRAPHY

54


1. Koontz, Harold, Weihrich, Heinz, (2008); “Essentials of Principles of Management”.

New Delhi: Tata Mc-Graw – Hill.

2. Chabara, T.N,2008,“Principles & Practices of Management”: Dhanpat Rai & Co

3. Aswathappa, K., 2009, “Human Resource Management” New Delhi: Tata McGraw

Hill Education Private Limited

4. Kotler, Philip, Armstrong, Gary, 2006, “Principles of Marketing”. New Delhi :

Pearson Education

WEBSITES

1. Retrieved November 16, 2010, from http://www.milmatrcmpu.com/organisation.jsp

2. Retrieved November 18, 2010, from http://www.amul.com/organisation.html

3. Retrieved November 19, 2010, from http://www.indiaagronet.com/indiaagronet/agronet_home/agrinethome.html

4. Retrieved November 21, 2010, from http://en.wikipedia.org/wiki/Kerala_Co-operative_Milk_Marketing_Federation

55

http://en.wikipedia.org/wiki/Kerala_Co-operative_Milk_Marketing_Federation%20%20%20Accessed%20on%2021-11-10

http://en.wikipedia.org/wiki/Kerala_Co-operative_Milk_Marketing_Federation%20%20%20Accessed%20on%2021-11-10

http://www.indiaagronet.com/indiaagronet/

http://www.amul.com/organisation.html

http://www.milmatrcmpu.com/organisation.jsp

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