DISASTER MANAGEMENT

INTRODUCTION
Disaster is any occurrence that causes ecological disruption, loss of human life, and
deterioration of health services on a scale sufficient to warrant an extraordinary response
from outside that affected to community or area. Disaster occurs suddenly and
unexpectedly, disrupting normal life and infrastructure of social services including health
care system. For this reason a countrys health system and public health infrastructure
must be organized and kept ready to act in any emergency situations as well as under
normal conditions.
To meet the challenges of emergency and disaster situation, the government of India has
identified the model Ministries to earmark responsibilities to the various concerned
departments and sectors and to coordinate the entire activities relating to specific types of
disaster and also support Ministry to develop sectoral contingency planning for
implementation, monitoring and evaluation.

DEFINATION OF HAZARDA hazard is a rare or extreme event in the natural or human-made environment that
adversely affects human life, property or activity to the extent of causing a disaster.

DEFINATION OF DISASTERA disaster is a serious disruption of the functioning of a society, causing widespread
human, material, or environmental losses which exceed the ability of affected society to

copy using only its own resources. Disaster are often classified according to their speed
of onset (sudden or slow), or according to their cause (natural or man made)

CAUSAL FACTORS OF DISASTERThe magnitude of each disaster, measured in deaths, damage, or costs for a given
developing country increases with the increased marginalization of the population. This is
caused by a high birthrate, problems of land tenure and economic opportunity, and the
lack or misallocation of recourse to meet the basic human needs of an expanding
population.
Poverty
The most important single influence on the impact of a disaster. All other factors could be
lessened if the affected population were not also limited by poverty. Virtually all disaster
studies show that the wealthiest of the population either survive the disaster unaffected or
are able to recover quickly. Across the broad spectrum of disaster, poverty generally
makes people vulnerable to the impact of hazards. Poverty explains why people in urban
areas are forced to live on hills that are prone to landslides, or why people settle near
volcanoes or rivers that invariably flood their banks. Poverty explains why droughts
claim poor peasant farmers as victims an rarely the wealthy, and why famines more other
than not are the result of a lack of purchasing power to buy food rather than an absence of
food.
Population Growth
There is an obvious connection between the increase in losses from a disaster and the
increase in population. If there are more people and structures where a disaster strikes,

then it is likely there will be more of an impact. The growth of population has been so
spectacular that it is inevitable that more people will be affected by disaster because more
will be forced to live and work in unsafe areas. Increasing numbers of people will be
competing for a limited amount of resources (such as, employment opportunities, and
land) which can lead to conflict.
Rapid Urbanization
Rapid population growth and migration are related to the major phenomenon of rapid
urbanization. This process is also accelerated in developing countries. It is chatagarised
by the rural poor or civilians in an area of conflict moving to metropolitan areas in search
of economic opportunities and security. These massive numbers of urban poor
increasingly find fewer options for availability of safe and desirable places to build their
houses. Here again, competition for scare resources, an inevitable consequence, can lead
to human made disaster.
Transitions in cultural practices
Many of the inevitable changes that occur in all societies lead to an increase in the
societies, vulnerability to disaster. Obviously, all societies are constantly changing and in
a continual state of transition. These transitions are often extremely disruptive and
uneven, leaving gaps in social coping mechanisms and technology. These transitions
include nomadic populations that become sedentary rural people who move to urban
areas, and both rural and urban people who move from one economic level to another.
More broadly, these examples are typical of a shift from non-industrialized to
industrializing societies.
Environmental degradation

Many disasters are either caused or exacerbated by environmental degradation.

Deforestation leads to rapid rain run off, which contributes to flooding. The destruction of
mangrove swamps decreases a coast lines ability to resist tropical winds and storm
surges.
Lack of awareness and information
Disaster can also happen because people vulnerable to them simply didnt know how to
get out of harms way or to take protective measures. This ignorance may not necessarily
be a function of poverty, but a lack of awareness of what measures can be taken to build
safe structures on safe locations. Perhaps some people did not know about safe
evacuation routes and procedures. Other population may not know where to turn for
assistance in times for acute distress. Nevertheless; this point should not be taken as a
justification for ignoring the coping mechanisms of the majority of people affected by
disaster. In most disaster prone societies, there is wealth of understanding about disaster
threats and responses. This understanding should be incorporated into any efforts to
provide external assistance.
War and civil strife
In this text war and civil strife are regarded as hazards that are extreme events that
produce disaster. War and civil strife often results in displaced people, a target population
of this training programme.The causal factors of war and civil strife include competition
for scarce resources, religious or ethnic intolerance, and ideological differences. Many of
these are also byproducts of the preceding six causal factors of disaster.

TYPES OF DISASTER
Natural hazards
The discussion about disasters and emergencies resulting from natural and human made
hazards has been developed in general terms.However,each hazard has its own
charactristics. To understand the significance and implications of a particular type of
disaster we must have a basic understanding about the nature,casuses and efforts of each
hazard type. The list of hazard types is very long. Many occur infrequently or impact a
very small population. Other hazards, such as severe snowstorms, often occur in areas
that are prepared to deal with them and seldom become disaster.However, from the
perspective of a disaster victim it is not particularly useful to distinguish between minor
and major disasters. Some disasters are now of limited interest to the international
community. These include avalanches, fog, frost, hail, lightning, snowstorms and
tornadoes. There are several hazard types for which there is widespread concern. They
can be categorized as follows:
Sudden onset hazards- (geological and climatic hazards) Earthquakes, Tsunamis,
Floods,Tropical storms, Volcanic eruptions, Landslides.
Slow onset hazards-(environmental hazards) Drought, Famine, Environmental
degradation, desertification, Deforestation, Pest infestation.
Industrial/Technological- System failures/accidents, Spillages, Explosions, Fires.
War and civil strife-Armed aggression, Insurgency, Terrorism and other actions leading
to displaced persons and refugees.
Epidemic-Water and/or food-borne diseases, persons-to-persons diseases (conduct and
respiratory spread), vector-borne diseases and complications from wounds

Earthquakes
Causal phenomena: Slippage of crusted rock along a fault or area of strain and rebound to
new alignment.
General characteristics and effect:
Shaking of earth caused by waves on and below the earths surface causing: Surface
faulting ,Aftershocks ,Tsunamis ,Tremors, vibrations ,Liquefaction ,Landslides
Typical adverse effects:
Physical damage-Damage or loss of structures or landslides, flooding may occur.
infrastructure. Fires, dam failures,
Public health- Fracture injuries most widespread problem. Secondary threats due to
flooding, contaminated water supply, or breakdown in sanitary conditions.
Water supply-Severe problems likely due to damage of water systems, pollution of open
wells and changes in water table.
TSUNAMIS
Causal phenomenon: Fault movement on sea floor, accompained by an earthquake. A
landslide occurring underwater or above the sea, and then plunging into the water.
Volcanic activity either underwater or near the shore.
General characteristics:

Tsunami waves are barely perceptible in deep water and may measure 160km

between wave crests.

May consist of ten or more wave crests.
Move up to 800km per hour in deep water of ocean, diminishing in speed as the

wave approaches shore.

May strike shore in crashing waves or may inundate the land.
Flooding effect depends on shape of shorelines and tides.

Typical adverse effects:

Physical damage-The force of water can raze everything in its path but the majority of
damage to structure and infrastructure results from flooding.
Withdrawal of the wave from shore scours out sediment and can collapse ports and
buildings and batter boats.
Causalities and public health: Deaths occur principally by drowning and injuries from
battering by debris.
Crops and food supplies: Harvests, food stocks, livestock farm implements and fishing
boats may be lost. Land may be rendered infertile due to salt water incursion.

VOLCANOES
Causal phenomenon: Magma pushed upward through volcanic vent pressure and
effervescence of dissolved gases.
General Charactaristics: Types of volcanoes are cinder cones, shield volcanoes,
composite volcanoes and lava domes. Magma flowing out onto surface is lava and all
solid particles ejected are tephra.Damage results from type of material ejected such as
ash,pyroclastic flows(blasts of gas containing ash and fragments),mud,debris,and lava
flows.
Typical adverse effects:
Causalities and public health: Death from pyroclastic flows, mud flows and possibly lava
flows and toxic gases. Injuries from falling rock, burns, respiratorydifficulties from gas
and ash. Settlements, infrastructure and agriculture: Complete destruction of everything

in the path of pyroclastic, mud or lava flows, collapse of structure under weight of wet
ash, flooding, blockage of roads or communication systems.
Crops and food supplies: Destruction of crops in path of flows, ash may break tree
branches, livestock may inhale toxic gas or ash, grazing lands may be contaminated.

LANDSLIDES
Causal phenomenon: Down slope transport of soil and rock resulting from naturally
occurring vibrations, changes in direct water content, removal of lateral support, loading
with weight and weathering or human manipulation of water courses and slope
composition.
General Charactristics: Landslides vary in types of movement (falls, slide, topples, lateral
spread, flows) and may be secondary effects of heavy storms, earthquake and volcanic
eruptions. Landslides are more widespread than any other geological event.
Typical adverse effects:
Physical damage-Anything on top of or in path of landslide will suffer damage.
Rubble may block roads, lines of communication or waterwayes. Indirect effects may
include loss of productivity of agricultural or forest lands, flodding,reduced property
values.

TROPICAL CYCLONES
Causal phenomenon: Mixture of heat and moisture forms a low pressure centre over
oceans in tropical latitudes where water temperatures are over 26degrees c. Wind currents
spin and organize around deepening low pressure over accelerating toward the center and

moving along track pushed by trade winds. Depression becomes a tropical cyclone when
winds reach gale force or 117km per hour.
General Charactristics: When the cyclone strikes land, high winds, exceptional rainfall
and storm surges cause damage with secondary flooding and landslides.
Typical adverse effects:
Physical damage-Structure lost and damaged by wing force, flooding, storm surge and
landslide.
Causalities and public health: May be caused by flying debris or flooding, contamination
of water supplies may lead to viral outbreaks and malaria.
Water supplies-Ground water may be contaminated by floods water.
Crops and food supplies: High winds and rains can rain standing crops, tree plantations
and food stocks.

FLOODS
Causal phenomenon: Naturally occurring flash, river and coastal flooding from intense
rainfall or inundation associated with seasonal weather patterns, Human manipulation of
watersheds, drainage basins and floodplains.
General characteristics:
Flash floods: Accelerated runoff, dam failure, breaks up of ice jam.
River floods: Slow buildup, usually seasonal in river system.

Coastal floods: Associated with tropical cyclones, tsunami waves, storm surges factors
affecting degree of danger: Depth of water, duration, velocity, rate of rise, frequency of
occurance, seasonality.
Typical adverse effects:
Physical damage-Structure damaged by washing a way, becoming
inundated,collapsing,impact of floating debris, landslide from saturated soils, damage
greater in valleys than open areas.
Causalities and public health: Deaths from drowning but few serious injuries, possible
outbreaks of malaria, diarrhea and viral infection.
Water supplies: Contamination of wells and groundwater possible. Clean water may be
unavailable.
DROUGHTS
Causal phenomenon: Immediate cause-Rainfall deficit, Possible underlying causesEI Nioo(incursion of warm surface waters into the the normally colder waters of south
American Pacific),human induced changes in ground surface and soil, higher sea surface
temperatures, increase of atmospheric carbon dioxide and greenhouse gases.
General Charactristics: The reduction of water or moisture availability is temporary and
significant in relation to the norm, meteorological drought is the reduction in rainfall and
hydrological drought is the reduction in water resources. Agricultural drought is the
impact of drought on human activity influenced by various factor: the presence of
irrigation systems, moisture retention capacity of the soil, the timing of the rainfall and
adaptive behavior of the farmers.

Typical adverse effects: Reduced income for farmers, reduction of spending from
agricultural sector, increase in price of staple foods, increased inflation rates,
deterioration of nutritional status, famine, illness, death, reduction of drinking water
sources, migration, breakup of communities, and loss of livestock.
Possible risk reduction measures: Drought and famine early warning systems.
Specific preparedness measures: Development of inter-institutional response plan.

ENVIRONMENTAL POLLUTION
Causal phenomenon: Air pollution-pollutants such as sulphur dioxide, nitrogen dioxide,
particulates, carbon monoxide and lead from industry and transport. Marine pollutionSewage, industrial effluents, marine litter, petroleum spills and dumped radioactive
sustances.Fresh water pollution-Discharge of human waste and domestic wastewaters
into lakes and rivers, industrial effluents, use of irrigation and pesticides, run off of
nitrogen from fertilizers. Increased run off from deforestation causing sedimentation.
Possible global warming-Accumulation of carbon dioxide from combustion of fossil
fuels, deforestation and methane from livestock. Ozone depletion-Chloroflorocarbons
(CFCs) released into the atmosphere deplete ozone shield against ultraviolet light.
Typical adverse effects:
Air pollution: Damages agricultural crops, forests.aquatic systems, structural materials
and human health.
Water pollution: Spread of pathogens, injury to marine animals, spread of chemicals to
the environment effecting the health of humans, animala and sea life.
Global warming: Sea level rise, climate change, temperature rise.

Ozone depletion: Increase in skin cancer, cataracts, reduction in immune system

functions and damage to marine life.
Possible risk reduction measures: Set ambient air quality standards, set emission limits
for every pollutant, establish protection policies for water supplies, reduce the use of
pesticides by integrated management, reduce the rate of deforestation and increase
planting of trees, promote energy efficiency, regulate use of aerosols and disposal of
refrigeration units, prohibit manufacture and use of CFCs.
Specific preparedness measures: Establish a national environment safety and protection
plan; create education programs for environmental awareness, training of government
personnel as part of development programs.
DEFORESTATION
Causal phenomenon: The spread of farming and grazing, firewood collection timber
harvesting.
General Charactristics: Contributes to other hazards by by removing root systems which
stabilize soil, acting as a filter and buffer, allowing percolation of water into soil and
retaining moisture in soil, removal of leaf biomass and forest products, burning and decay
of dead wood.
Typical adverse effects: Deforestration results in loss of free products from the forest
such as fruits and medicine and decline in traditional cultures. It stresses economies
which import forest products and are dependent on wood products. It contributes to other
hazards such as flooding-Deforestation of watersheds can increase severity of flooding,
reduce stream flows, dry up springs in dry seasons and increase sediment entering

waterways. Drought-Removal of roots and leaf canopy can alter moisture levels drying
soil and decreasing percipitation.
PHASES OF A DISASTER
Disasters can be viewed as a series of phases on a time continum.Identifying and
understanding these phases helps to describe disaster related needs and to conceptualize
appropriate disaster management activities.
Rapid onset disaster:
The definitions below correspond to the time sequence following the occurrence of a
rapid onset disaster.
The relief phase is the period immediately following the occurrence of a sudden
disaster(or the late discovery of a negated/deteriorated slow onset situation)when
exceptional measures have to be taken to search and find the survivors as well as meet
their basic needs for shelter,water,food and medical care.
Rehabilitation is the operations and decisions taken after a disaster with a view to
restoring a stricken community to its formar living conditions, while encouraging and
facilitating the necessary adjustment to the changes caused by the disaster.
Reconstruction is the action taken to reestablish a community after a period of
rehabilitation subsequent to a disaster. Actions would include construction of permanent
housing, full restoration of all services and complete resumption of the pre-disaster state.
Mitigation is the cooective term used to encompass all action taken prior to the
occurrence of a disaster(pre-disaster measures)including preparedness and long term risk
reduction measures.(Mitigation has been used by some institution or authors in a narrow
sense, excluding preparedness.)

Preparedness consists of activities designed to minimize loss of life and damage, organize
the tempory removal of people and property from a threatened location and facilitate
timely and effective rescue, relief and rehabilitation.
Slow onset disasters:
The sequence of a disaster continuum for slow onset disaster is similar in framework but
has important distinctions. The following terms and definitions reflect those additions or
modifications.
Early warning is the process of monitoring situations in communities or areas known to
be vulnerable to slow onset hazards. For example, famine early warning may be reflected
in such indicators as drought, livestock sales or changes in economic conditions. The
purposes of early warning are to enable remedial measures to be initiated and to provide
more timely and effective relief including through disaster preparedness actions. The
emergency phase is the period during which extraordinary measures have to be taken.
Special emergency procedures and authorities may be applied to support human needs,
sustain livelihoods, and protect property to avoid the onset of disaster.
This phase can encompass pre-disaster, disaster alert, disaster relief and recovery periods.
An emergency phase may be quite extensive, as in a slow onset disaster such as a famine.
It can also be relatively short-lived, as after an earthquake.
Rehabilitation is the action taken after a slow onset disaster where attention must be
given to the issues of resettlement or returnee programmes, particularly for people who
have been displaced for reasons arising out if conflict or economic collapse.
The disaster management team-

One of the primary purposes of this overall training program is to introduce the concept
of managing disaster as a team. The objectives of disaster management through teamwork
include

A forum for communication, information exchange and developing consensus.

A format for co-ordination, eliminating duplication and reducing gaps in services.
The possibility of being more effective through pooled resources.

The UN Disaster Management Team

The United Nations General Assembly believes that the objectives of team management
are applicable to the UN agencies oriented to emergencies. They have mandated that a
standing, UN Disaster Management Team (UN-DMT) be formed in each disaster prone
country, convened and chaired by the UN resisdent coordinator.
The composition of the UN-DMT is determined by taking into account the types of
disaster to which the country is prone and the organizations present, but should normally
include a core group consisting of the country level representatives of FAO,
UNDP/UNDRO, UNICEF, WFP, WHO and where present, UNHCR. It may be enlarged
to include additional representatives or project personnel from other relevant agencies
when an emergency arises. The original and primary purpose of the
UN-DMT is to ensure a prompt, effective and concerted response by the UN system at
country level in the event of a disaster. The team should also ensure similar coordination
of UN assistance to the government in respect to post-disaster rehabilitation and
reconstruction and relevant disaster mitigation measures through long term development
programs. It should be emphasized that for all aspect of disaster management the UNDMT is in a support role of the government.
Country Disaster Management Team

Most disaster prone countries already have a formal or informal disaster management
team. It is typically headed by a national disaster focal point body. This body function in
liaison with the office of the president pr prime minister, with civil defense organizations,
key government ministeries, the red cross/red crescent and other NGOs and major
donors. The UN-DMT needs to interface with this team and where practical to be a team
member. Where national officials do not participate in
UN-DMT meetings or activities, the resident coordinator should ensure that they are
consulted and briefed on all relevant matters. In practice it is vital that the policies of the
DMT releate to those approved by the government even under the pressure of event.
Roles and resources of UNDP, UNDRO and other agencies
UNDP focuses primarily on the development related aspects of disaster risks and
occurrences and on providing technical assistance to institution building in realtion to all
aspect of disaster management.
a) Incorporating long term risk reduction and preparedness measures in normal
development planning and programes.including support for specific mitigation measures
where required.
b) Assisting in planning and implementation of post disaster rehabilitation and
reconstruction, including the definition of new development strategies that incorporate
risk reduction measures relevant to the affected area.
c) Reviewing the impact of large settlements of refugees or displaced persons on
development and seeking ways to incorporate the refugees and displaced persons in
development strategies.

d) Providing technical assistance to the authorities managing major emergency assistance

operations of extended duration (especially in relation to displaced persons and
possibilities for achieving durable solutions in such cases.)
e) In addition UNDP provides administrative and operational support to the resident
coordinator function, particularly at country level, but also at headquarters.
f) In the event of disaster,UNDP may grant a maximum of $50,000 from SPR funds to
provide immediate relief.UNDP is not otherwise involved in the provision of relief
using only of its own resources or other funds administrative by the program.
Where a major emergency substantially affects the whole development process within a
country, IPF resources may be used to provide technical assistance to plan and manage
the operation, with the agreement of the Government.

COMPANY INFORMATION

INTODUCTION
Since the turn of 19 th century, Cooperatives have existed as dominant forms of
organization in the dairy industry around the world. Sometimes they have played the role
of developing infant industry while at other times they have been used to strengthen weak
production bases in an environment where market failures tend to be higher for marginal
producers. In some other cases, a network of small producers have organized themselves
to better market their products. Management of these cooperatives have also led to some
interesting managerial insights for managers in emerging as well as developed
economies.
Large emerging economies, e.g., India and China, have complexities that range from
development of markets (where the largest segment of population is the one which has
low purchasing power) to integration of low cost suppliers who are predominantly very
small. For firms that aspire to conduct substantial business in such markets, such
complexities have to be recognized and then overcome. The challenge is to understand
the linkages between markets and the society.

This would also require development of a new business model that helps a firm grow in
such environments. This paper is about one such successful model. The Kaira District
Milk Cooperative Union or AMUL in India is an example of how to develop a network of
firms in order to overcome the complexities of a large yet fragmented market like those in
emerging economies by creating value for suppliers as well as the customers. AMUL has
led the milk dairy revolution in India that has now emerged as one of the largest milk
producers in the world.
In this article we will describe the breakthrough vision that led to the simultaneous
development of the market and supply side through a process of social development and
education at AMUL. Clearly, implementation of this vision in a competitive environment
and maintaining sustained growth and profitability requires development of
competitiveness on several dimensions and operational effectiveness. This article
provides insights into management of very large supply chains by adapting and
integrating a variety of strategies and techniques. This includes building networks,
developing trust & values in the network, developing fair mechanisms for sharing
benefits across the supply chain, coordination for operational effectiveness, innovation
and new technology for gaining competitiveness. It is noteworthy that these successes
were achieved within the framework of a network of cooperatives organized in a
hierarchical manner. There are many lessons in AMULs success not only for the
cooperative sector but also for firms who intend to do business in emerging markets.

Organization
AMUL is organized as a cooperative of cooperatives (i.e., each village society, a
cooperative in itself, is a member of the AMUL cooperative) thereby deriving the

advantage of scale and uniformity in decision making. The founders of Kaira Union
realized that to fulfill their objectives, a large number of marginal farmers had to benefit
from the cooperative a network of stakeholders had to be built. And once built, it had to
grow so as to draw more rural poor to undertake dairy farming as a means of livelihood.
The network had to have several layers the organizational network where the voice of
the owners governed all decisions, a physical network of support services and product
delivery process and a network of small farmers that could deliver the benefit of a large
corporation in the market place. More importantly, a process had to be put in place to
build these networks.
Building an organizational network that would represent the farmers and the customers
was the most complicated task. A loose confederation was developed with GCMMF
representing the voice of the customers, the Unions representing the milk processors and
the village societies representing the farmers. Competition in the markets ensured that the
entire network was responding to the requirements of the customers at prices that were
very competitive. The task of ensuring that returns to the farmers was commensurate with
the objectives with which the cooperatives were setup was achieved through
representation of farmers at different levels of decision making throughout the network
the board of directors of societies, Unions and the
Federation comprised farmers themselves. In order to ensure that most returns from sales
went to the producers, the intermediaries had to operate very effectively and on razor thin
margins. This turned out to be a blessing in disguise the operations remained very
lean and started to provide cost based advantage to the entire network.

AMUL established a group to standardize the process of organizing farmers into village
societies. In addition to establishing the criteria for selecting members, the group had to
train the VS to run the cooperative democratically, profitably and with concern for its
members. This included establishing procedures for milk collection, testing, payment for
milk purchased from member farmers and its subsequent sale to the union, accounting,
ensuring timely collection and dispatch of milk on milk routes established by the union,
etc. The Village Societies Division at AMUL acts as the internal representative of village
societies in their dealings with the Union. Cooperative development programmes at the
village level for educating & training its members have become an important part of the
strategy to build this extensive network .
Milk procurement activity at AMUL comprises development and servicing of village
societies, increasing milk collection, procurement of milk from societies & its transport to
the chilling locations, and resolving problems of farmers and village societies. Their
stated objective is to ensure that producers get maximum benefits. The Village Societies
Division coordinates these activities. Milk collection takes place over a large number of
pre-defined routes according to a precise timetable. The field staff of this division also
help village societies interface with the Union on various issues ranging from
improvement of collection, resolving disputes, repair of equipments to obtaining
financing for purchase of equipment etc. In addition, they are also responsible for the
formation of new societies, which is an important activity at AMUL.
In essence, the organization structure of AMUL allows effective utilization of resources
without losing the democratic aspiration of individual members. It is obvious that such a

system needs charismatic leadership to achieve consensus across issues a process that
has long-term benefits for any organization.

BUSINESS STRATEGY
AMULs business strategy is driven by its twin objectives of (i) long-term, sustainable
growth to its member farmers, and (ii) value proposition to a large customer base by
providing milk and other dairy products a low price. Its strategy, which evolved over
time, comprises of elements described below.
Simultaneous Development of Suppliers and Customers: From the very early stages of
the formation of AMUL, the cooperative realized that sustained growth for the long-term
was contingent on matching supply and demand. Further, given the primitive state of the
market and the suppliers of milk, their development in a synchronous manner was critical
for the continued growth of the industry. The organization also recognized that in view of
the poor infrastructure in India, such development could not be left to market forces and
proactive interventions were required.
Accordingly, AMUL and GCMMF adopted a number of strategies to assure such growth.
For example, at the time AMUL was formed, the vast majority of consumers had limited
purchasing power and was value conscious with very low levels of consumption of milk
and other dairy products.

Thus, AMUL adopted a low price strategy to make their products affordable and
guarantee value to the consumer. The success of this strategy is well recognized and
remains the main plank of AMUL's strategy even today. The choice of product mix and
the sequence in which AMUL introduced its products is consistent with this philosophy.
Beginning with liquid milk, the product mix was enhanced slowly by progressive
addition of higher value products while maintaining desired growth in existing products.
Even today, while competing in the market for high value dairy products, GCMMF
ensures that adequate supplies of low value products are maintained.
On the supply side, as mentioned earlier, the member-suppliers were typically small and
marginal- farmers had severe liquidity problems, were illiterate and had no prior training
in dairy farming. AMUL and other cooperative Unions adopted a number of strategies to
develop the supply of milk and assure steady growth. First, for the short term, the
procurement prices were set so as to provide fair and reasonable return. Second, aware of
the liquidity problems, cash payments for milk supply was made with minimum of delay.
For the long-term, the Unions followed a multi- pronged strategy of education and
support. For example, only part of the surplus generated by the Unions is paid to the
members in the form of dividends. A substantial part of this surplus is used for activities
that promote growth of milk supply and improve yields. These include provision of
12veterinary services, support for cold storage facilities at the village societies etc. In
parallel, the
Unions have put in place a number of initiatives to help educate the members.

To summarize, the dual strategy of simultaneous development of the market and member
farmers has resulted in parallel growth of demand and supply at a steady pace and in turn
assured the growth of the industry over an extended period of time.
Cost Leadership: AMULs objective of providing a value proposition to a large customer
base led naturally to a choice of cost leadership position. Given the low purchasing power
of the Indian consumer and the marginal discretionary spending power, the only viable
option for AMUL was to price its products as low as possible. This in turn led to a focus
on costs and had significant implications for managing its operations and supply chain
practices (described later).
Focus on Core Activities: In view of its small beginnings and limited resources, it became
clear fairly early that AMUL would not be in a position to be an integrated player from
milk production to delivery to the consumer 23 . Accordingly, it chose a strategy to focus
on core dairy activities and rely on third parties for other complementary needs. This
philosophy is reflected in almost all phases of AMUL network spanning R&D,
production, collection, processing, marketing, distribution, retailing etc.
For example, AMUL focused on processing of liquid milk and conversion to variety of
dairy products and associated research and development. On the other hand, logistics of
milk collection and distribution of products to customers was managed through third
parties.
However, it played a proactive role in making support services available to its members
wherever it found that markets for such services were not developed. For example, in the
initial stages, its small and marginal member farmers did not have access to finance,
veterinary service, knowledge of basic animal husbandry etc. Thus to assure continued

growth in milk production and supply, AMUL actively sought and worked with partners
to provide these required services. In cases where such partnerships could not be
established, AMUL developed the necessary capabilities and provided the services. These
aspects are elaborated later in this section.
Managing Third Party Service Providers: Well before the ideas of core competence and
the role of third parties in managing the supply chain were recognized and became
fashionable, these concepts were practiced by GCMMF and AMUL. From the beginning,
it was recognized that the core activity for the Unions lay in processing of milk and
production of dairy products. Accordingly, the
Unions focused efforts on these activities and related technology development. Marketing
efforts (including brand development) were assumed by GCMMF. All other activities
were entrusted to 13third party service providers. These include logistics of milk
collection, distribution of dairy products, sale of products through dealers and retail
stores, some veterinary services etc. It is worth noting that a number of these third parties
are not in the organized sector, and many are not professionally managed. Hence, while
third parties perform the activities, the Unions and GCMMF have developed a number of
mechanisms to retain control and assure quality and timely deliveries (see the sub-section
on Coordination for Competitiveness later in the paper for more details). This is
particularly critical for a perishable product such as liquid milk.
Financial Strategy: AMULs finance strategy is driven primarily by its desire to be selfreliant and thus depend on internally generated resources for funding its growth and
development. This choice was motivated by the relatively underdeveloped financial

markets with limited access to funds, and the reluctance to depend on Government
support and thus be obliged to cede control to bureaucracy.
AMULs financial strategy may thus be characterized by two elements: (a) retention of
surplus to fund growth and development, and (b) limited/ no credit, i.e., all transactions
are essentially cash only. For example, payment for milk procured by village societies is
in cash and within 12 hours of procurement (most, however, pay at the same time as the
receipt of milk). Similarly, no dispatches of finished products are made without advance
payment from distributors etc. This was particularly important, given the limited liquidity
position of farmer/suppliers and the absence of banking facilities in rural India. This
strategy strongly helped AMUL implement its own vision of growth and development. It
is important to mention that many of the above approaches were at variance with industry
practices of both domestic and MNC competitors of AMUL.

Growth and Challenges

From its inception with the formation of its first milk cooperative, AMUL network has
sustained an impressive growth rate for more than 50 years culminating in the emergence
of Indian dairy industry as the worlds leading milk producer. However, it is unclear
whether AMULs strategy and practices that have worked well for long can maintain this
growth trajectory in a changing environment with globalization and increased
competition. In this section we describe some of
AMULs initiatives and discuss briefly opportunities for growth and challenges that need
to be overcome.
AMULs growth during the past five decades has been fuelled primarily by growth in
milk supply with corresponding pricing strategy to generate demand. This growth has

been sustained by a two-pronged strategy (a) growth in the number of member farmers
by widening its coverage with more village societies and increasing the membership in
each society, and (b) growth in per capita milk supply from its members. This growth is
achieved by increasing milk yields and by helping members raise their investments in
cattle. It is worth noting that AMUL has funded these support activities from its earnings
(instead of repatriating them to the members either as dividends or with a higher
procurement price). It is expected that AMULs growth in the immediate future will
continue to rely on this strategy.
However, in the new emerging environment, several challenges have become apparent
and AMUL network needs to evolve proactive mechanisms to counter these threats. First,
competitors are cutting into milk supply by offering marginally higher procurement
prices thereby challenging the practice of provision of services for long-term growth in
lieu of higher prices in the short-term. Second, for a section of its membership, dairy
activity is a stepping-stone for upward mobility in the society. Typically, such members
move on to other occupations after raising their economic position through milk
production. As a result, AMUL is unable to realize the full benefits of its long-term
strategy, and finds new members (mostly marginal farmers) to replace those who have
higher potential and capacity.
While this is a welcome development for the society as a whole, it is unclear whether
AMUL would be able to sustain it in the light of increased competition.
By progressively increasing the share of higher value products AMUL has been able to
grow at a faster rate than the growth in milk supply. AMUL has been rather cautious in
implementing this strategy and has always ensured retention of its customer base for

liquid milk and low value products. With slowdown in the growth of milk supply this
strategy is likely to come under pressure and AMUL will be forced to make some hard
choices. More important, it is fairly clear
that its low price, cost efficient strategy may not be appropriate for the high value
segment. Thus,
AMUL may have to adopt a dual strategy specific to its target markets, which in turn may
lead to dilution in focus.
A part of AMULs growth has come from diversification into other agri-products such as
vegetable oils, instant foods etc.
In some of these initiatives AMUL adapted its successful cooperative organization
structure, but the experience to date has been somewhat mixed. More recently, the
network is exploring conventional joint venture arrangements with suitable partners for
diversification into areas such as fast food and speciality chocolates. While it is too early
to assess the success of these ventures, challenges involved are becoming quite visible.
For example, diversification has resulted in expansion of the network with disparate
elements, each motivated by their own objectives. This in turn has led to a lack of focus
within the network and dilution in the commonality of purpose.
These developments are likely to have serious implications for coordination and control
in the network. More important, shared vision and common goal was one of the main
planks of AMULs growth during the past 50 years, and its dilution is likely to adversely
impact the network performance.

Corporate Social
responsibility
Corporate Social Responsibility (CSR) is a concept that encourages organizations to
consider the interests of society by taking responsibility for the impact of the
organization's activities on customers, employees, shareholders, communities and the
environment in all aspects of its operations. This obligation is seen to extend beyond the
statutory obligation to comply with legislation and sees organizations voluntarily taking
further steps to improve the quality of life for employees and their families as well as for
the local community and society at large.
Corporate social responsibility is the commitment of businesses to contribute to
sustainable economic development by working with employees, their families, the local
community and society at large to improve their lives in ways that are good for business
and for development.
An essential component of our corporate social responsibility is to care for the
community. We endeavor to make a positive contribution to the underprivileged

communities by supporting a wide range of socio-economic, educational and health

initiatives. Many of the community projects and programs are driven by active
participation from our employees. Our commitment to address important societal needs
extends throughout our philanthropic outreach programs driven by the HRI.

The business benefits of Corporate Social Responsibility

Corporate social responsibility (CSR) isn't just about doing the right thing. It offers direct
business benefits. Building a reputation as a responsible business sets you apart. Many
consumers prefer to buy from ethical businesses. Companies often prefer suppliers who
demonstrate responsible policies, to minimize the risk of any damage to their own
reputations. Some customers don't just prefer to deal with responsible companies, but
insist on it. For example, sales of "environmentally friendly" products continue to grow and these products often sell at a premium price. Amul India became as famous for its
approach to responsible business as for its products. The company has grown
dramatically while continuing to focus on CSR, Started in 1946 in small village of Khera
District, Gujrat against British Polson Dairy Company. There are several such names.
There are other benefits too:
" A good reputation makes it easier to recruit employees.
" Employees stay longer, reducing the costs and disruption of recruitment and retraining.
" Employees are better motivated and more productive.
" CSR helps ensure you comply with regulatory requirements.
" Activities such as involvement with the local community are ideal opportunities to
generate positive press coverage.

" Good relationships with local authorities make doing business easier. See the page in
this guide on how to work with the local community.
" Understanding the wider impact of your business can help you think up profitable new
products and services.
" CSR can make you more competitive, and reduces the risk of sudden damage to your
reputation (and sales). Investors recognize this, and are more willing to finance you.
" Active Participation in the activity and community development work. Promotion of
organization & organizational identity in the activity areas of Help Rural India, a kind of
trust & brand building.
The Socio - economic and Health Empowerment activities of HRI has been supported by
renowned companies like... British Scaffoldings Ltd., HUNT Technologies, ITPL, LHI,
Escorts Heart Institute, Max Heart & Vascular Institute, RG Stone & Urology Institute,
Apollo Hospitals, Sohana Multi-Specialist Hospital, MoRD HP etc.

Corporate Social Responsibility, The Amul Way

corporate social responsibility (CSR) has been defined as the commitment of business
to contribute to sustainable economic development working with employees, their
families, the local community, and society at large to improve their quality of life, in
ways that are both good for business and good for development.
To meet with the CSR it is expected that a business in its entire procurement-productionprocessing-marketing chain should focus on human development involving the producer,
the worker, the supplier, the consumer, the civil society, and the environment.
Indeed, a very tough task. Most businesses would certainly flounder in not being able to
achieve at least one or many of those expectations. But AMUL has shown the way.

CSR-sensitive Organisational Structure

AMUL is a three tier co-operative organisation. The first tier is the co-operative society at
the village,of which; milk producers are voluntary members, managing the co-operative
through a democratically elected 9-member managing committee, and doing business by
purchasing milk from members and selling it to the district level co-operative. There are
more than 11,000 co-operatives in villages of Gujarat.
The second tier is the district co-operative that processes milk into milk products, markets
locally and sells surplus to the state co-operative for national and international marketing.
There are 12 district co-operatives each being managed by a 15-member board elected by
the college comprising the nominated representatives or chairmen of the village cooperatives.
Third tier is the state level co-operative - the Gujarat Co-operative Milk Marketing
Federation (GCMMF) responsible for national and international marketing of milk and
milk products produced and sold to it. The GCMMF is managed by the board
democratically elected by and from amongst the chairmen of the district co-operatives.
The entire three-tier structure with the GCMMF at its apex, is a unique institution
because it encompasses the entire chain from production of raw material to reaching the
consumer with the end product. Every function involves human intervention: 23.60 lakh
primary milk producers; 35,000 rural workmen in more than 11,400 village societies;
12,000 workers in 15 dairy pla-nts; 750 marketing professionals; 10,500 salesmen in
distribution network and 600,000 sal-esmen in retail network. Accu-mulation of human
capital is sine qua non for the development and growth of any enterprise or economy. The
GCMMF is sensitive towards CSR. It believes that technology and capital are replicable

inputs but not the human capital. Since men are the basis for achieving the CSR, the
GCMMF lays emp-hasis on their development into competent, courteous, credible,
reliable, responsive communicators and performers.
CSR-sensitive Business Philosophy
The first step towards discharging the CSR is the business philosophy of the GCMMF. It
is two-fold: one, to serve the interests of milk producers and second, to provide quality
products to consumers as value for money. Evolution of an organisational system has
ensured that the corporate social responsibility towards the primary milk producers,
village and the ecological balance is fulfilled. The milk producers are paid for their milk
in accordance with market forces and realisation of value for their produce. Invariably the
price paid to the member-producers in Gujarat is higher by 15 per cent than the national
average.
CSR-oriented To Staff
The GCMMF hires and trains people to take advantage over its competitors. It has
developed in-house modules for training and competence buil-ding to improve and up
grade of their knowledge; communication skills to understand the customer, be
responsive to customer requirements, and communicate clearly for trouble shooting of
problems. They are expected to be courteous, frie-ndly, respectful, and considerate to the
customer. To improve the credibility and trustworthiness of the managers it is important
they perform consistently and accurately every time and at all times. The structure of
salary and perquisites is altogether different. The first and foremost the staff must get
satisfaction from the job they. They are recognised for their contribution (Climate
Survey) CSR-AMUL WAY.

GREEN POLICY
Amul adopts green tech for its chocolate plant
Amul chocolates will be manufactured with green technology. The Kaira District Cooperative Milk Producers Union Limited (KDCMPUL) popularly known as Amul Dairy
has adopted low carbon technology at the Amul chocolate plant at Mogar in Anand
district.
The technology commissioned by the dairy co-operative is first of its kind in Gujarat. The
district dairy union's initiative comes after its green initiatives involving lakhs of farmers
to plant over 312 lakh saplings to make Green Gujarat and its green project at Virar in
Maharashtra - the first of its kind in country's dairy sector.
The Electric Heat Pump (EHP) system installed at Amul's Mogar Food Complex was
commissioned on Monday.

This project is being executed by Amul, The Energy and Resources Institute (TERI), New
Delhi, the Institute of Global Environment Strategies (IGES), Japan and the Japan
International Cooperation Agency (JICA).
EHP system was installed by engineers from Mayekawa Manufacturing Company
Limited, Japan under a four year research project - 'Application of Low Carbon
Technology' being undertaken by TERI, New Delhi jointly with IGES, Japan.
The goal of this project is to promote energy efficiency and environment friendly
technologies in Indian small and medium enterprises.
The pilot project, introduced for the first time in India, will result into energy saving of
around 47 percent and reduction in CO2 emission by 39 percent which corresponds to the
monetary savings to the tune of Rs 20 lakh per annum besides reducing reliance on fossil
fuels.
"This initiative by TERI and IGES for implementation of low carbon technologies,
especially in developing countries like India is appreciable. We hope that application of
such technologies will be replicated by the processing industry in general and dairy
industry in particular to reduce energy consumption and CO2 emissions," Amul Dairy's
managing director Rahul Kumar said, lauding the role of the team engaged in the
successful commissioning of the system.
"This pilot plant at our Food Complex will also act as a demonstration site for other dairy
units and milk plants in India, who are interested in knowing more about this green
technology," said Kumar.

Amul bags Green Globe Foundation award

Gujarat Cooperative Milk Marketing Federation (GCMMF) - the apex body of dairy
cooperatives of Gujarat which markets brand Amul - has received the Green Globe
Foundation award in the manufacturing category.
GCMMF's managing director R S Sodhi received the award during the 4th Green globe
awards ceremony held at the 12th Delhi Sustainable Development Summit 2012. The
ceremony was organised in association with The Energy Research Institute ( TERI) and
the United Nations Environment Programme ( UNEP) at New Delhi .
GCMMF received this award for its mass tree plantation drive and contribution to
environment by the milk producers of Gujarat. "The 30 lakh milk producers of Gujarat
have planted more than 312 lakh trees in 15,000 villages of the state in the last five
years," a release from GCMMF mentioned, adding, "Amul has set an example for all the
cooperatives and other institutions to turn India green in the era of global warming and
environmental crisis."

Amul is top Indian Green Brand for 2011

AMUL has been rated as the top Indian Green brand by the Global Green Brands study
which researches consumers' attitudes and perceptions towards 'green' issues.
The team conducting the public opinion research- Cohn and Wolfe, Esty Environmental
Partners and Penn Schoen Berland- polled over 9,000 people in eight countries from
April 2 to May 3, 2011, ranking more than 370 brands and determined which companies
have the greenest reputation across the world. A total of 1101 respondents from metros in
India were surveyed.

The countries, where the poll was conducted, includes Australia, Brazil, China, France,
Germany, the USA, the UK and India. The major brands and companies like Starbucks,
Microsoft, IKEA, Dove, Volkswagen, Apple, Unilever, Kimberly-Clark and Nivea
featured on the list. But the first place on the chart was occupied by Amul.
The research pointed out that India is the only country to choose deforestation and air
pollution as most important green issues.
Gujarat Cooperative Milk Marketing Federation (GCMMF) Managing Director R S
Sodhi said 30 lakh members of Amul had planted eight to nine million saplings in a
single day on August 15, across 15,000 villages in the last four years. He said that the
International Dairy Federation has also awarded Amul Green Movement as the best
environment initiative in the "sustainability category'' in 2010.

GREEN GUJARAT TREE PLANTATION CAMPAIGN BY MILK

PRODUCERS OF DAIRY COOPERATIVES
Amul Coops plant more than 311.98 lakhs trees.
Milk Producer members of Gujarat Dairy Cooperatives- better known as AMUL have
been celebrating the nation's Independence Day in a novel manner by planting lakhs of
saplings across Gujarat and have taken up an ambitious plan to save the environment by
planting trees, making India green and thereby reducing the effects of global warming.
The milk producers of Gujarat Dairy Cooperatives are conducting mass tree plantation
drive every year on Independence Day for last five years. In last five years (2007 to 2011)
the milk producers have planted around 311.98 lakhs trees). The most striking feature of
these entire programmes was that it has been initiated by milk producer members of the

dairy cooperatives. The unique fact about the programme was that the milk producer
members took up the oath to protect tree saplings till it survives and grows into tree.
Over the years, due to intensive agriculture and dairying various natural resources are
getting consumed at faster pace in Gujarat state of India. The state level apex body of
dairy farmers in Gujarat gave a serious thought in this direction and discovered a novel
idea for giving back to nature. The idea was "one member one tree" plantation on our
60th Independence day - 15th August 2007.To put this idea in to the practice a design
team constituting of representatives of member unions were formed. The team accepted
the idea by heart and immediately decided to spread it among farmer members of village
dairy cooperative societies. Then the idea was communicated to farmer members and
they all welcomed it and enthusiastically agreed to implement the idea.
For smooth implementation of the idea, the design team chalked out the road map for
various activities. Execution teams were formed at district union level to give final shape
and put the plan in action. Village level coordinators were identified and they were
trained to streamline activity of tree plantation. Various awareness materials were
prepared. Through various communication media farmer members were made aware of
benefits of tree plantation and tree plantation activity schedule
The entire plantation activity was coordinated at all the three tiers of Anand pattern - at
village, district and state level dairy cooperatives. On 15th August, 2007, after the flag
hoisting ceremony, each member took an oath to plant saplings and ensure that they grew
in to trees. Then individually they planted sapling on their own at their identified
locations like their farm, near their home, on Farm bunds, etc. They have taken necessary
care to ensure that this sapling survives and they also reported regarding the survival to

village level coordinator and district milk unions after five months. In this way, 18.9 lakh
trees were planted on 15th August 2007. This was just the beginning. Henceforth, the
Village Dairy Cooperative Societies of Gujarat as a mark of respect for our nation
decided to conduct such event on every Independence Day and accepted 15th August
(Independence Day) as a "Green Revolution Day by Afforestation to Protect Mother
Earth from Pollution, Climate change and Global Warming".

CONCLUSION:
Reasons for Amul success are its Robust Supply Chain, Low CostStrategy, Diverse
Product Mix, Strong Distribution Network,Technology advancements & e-initiatives and
service availability.
Because of all these competences Amul is the largest producer of milkand milk products
in the world. It has set world best practices for dairyproducers.
Amul is one of the fastest growing industries of India. This industry has revolutionalized
the Indian dairy sector and also brought it back from the brink of extinction. Also it was
one of the first successful Cooperative association in India ans also now the market leader
in the dairy sector. Amul remained as the trend setter in the whole operations.
Amul projects delivered a lot of benefits to the rural community. Unlike the others in the
industry Amul facilitated the rural mass for in becoming an empowered community.

Agricultural Universities and Goverment Agencies are also getting into the project of
GCMMFL. Amul itself has seen in creaned revenues.

METHODOLOGY
DATA COLLECTION METHOD
Project is fully based on secondary data.
Secondary data: The data is collected from the Magazines, Annual reports, Internet, Text
books.
The various sources that were used for the collection of secondary data are
1. Internal files & materials
2. Websites Various sites like www.wikepedia.com and other site

BIBLIOGRAPHY
WEB SITES
1. en.wikipedia.org
2. www.google.com
3. www.amul.com
NEWSPAPER ARTICLE

Times of India
Hindu