Birla Institute of management technology, Noida.

Industrial Visit Report

ON

Mother Dairy

Instructor: Kapil Garg

Group: 8
George K Abhraham (16DM079)
Manav Juneja (16DM0116)
Himanshu Malhotra (16DM086)
Hemanth Kumar Chuttu (16DM083)
Mohit Kumar Singh (16DM126)
Kshitij Mishra (16DM105)

Mother Diary Fruit and Vegetable Pvt Ltd

TABLE OF CONTENTS

1. Overview of the Company .. 3

2. Product profile . 4
3. Plant Layout .. 7
4. Financial Status . 14
5. Supply Chain Management .. 15
6. Product Promotion Strategies ... 16
7. HR Practices ... 17
8. Most Important Observation .... 19
9. Outcome of the Visit ...... 19

Overview of the Company

Mother Dairy was commissioned in 1974 as a wholly owned subsidiary of the National
Dairy Development Board (NDDB). It was an initiative under Operation Flood, the world's
biggest dairy development program launched to make India a milk sufficient nation. Over the
years, Mother Dairy has contributed significantly in achieving this objective through a series
of innovations and programs. Today, Mother Dairy manufactures markets & sells milk and
milk products including cultured products, ice creams, paneer and ghee under the Mother
Dairy brand. The Company also has a diversified portfolio with products in edible oils, fruits &
vegetables, frozen vegetables, pulses, processed food like fruit juices, jams, etc. to meet the
daily requirements of every household.

The Company over the last many years has created a market leadership position for
itself in branded milk segment in Delhi & NCR through a robust network of its booth and retail
channels. It has also expanded its reach to other regions in North, South, East and West with
its offering of Milk and Milk products pegging it among the few companies to own such a vast
channel of distribution in India.

Brand Mother Dairy sources a significant part of its requirement of liquid milk from
dairy cooperatives and village level farmer centric organizations. The Company is committed
to uphold institutional structures that empower milk producers and farmers through
processes that are equitable. A significant portion of its income is ploughed back into the
value chain to support and maintain the system.

Mother Dairy is an ISO 9001:2008 (QMS), ISO 22000:2005 (FSMS) and ISO 14001:2004
(EMS) certified organization. Quality of milk is of paramount importance for the company and
hence it has invested extensively in installing hi tech automated machines to ensure high
product quality/reliability and safety.

Safal, F&V arm of Mother Dairy was the first Company to organize the fruits and
vegetables business in India. Today Safal is the market leader in organized fruit & vegetable
retail business in Delhi NCR and operates the largest number of F&V Stores in Delhi NCR and
has significant presence in Bangalore. Safal was also the first brand in India to launch frozen
vegetable in mid 90s. Over the years, the brand has gained significant customer support and
has become a household brand with market leadership and presence across the country.

Safal also has a state of the art plant in Bangalore which produces and sells around
23000 MT of aseptic fruit pulp & concentrate annually and supplies to noteworthy companies
in food processing space like Coca Cola, Pepsi, Unilever, Nestle etc. Safal also has a prominent

presence across 40 countries viz., USA, Europe, Russia, Middle East, Asia and Africa and
exports Fresh Fruits & Vegetables (Grapes, Banana, Gherkin, Onion, etc.), Fruit Pulp &
Concentrate, Frozen Fruits & Vegetables, etc.

Mother Dairy is also present into edible oils segment under the brand name Dhara
which was launched under the Operation Golden Flow program of NDDB as a market
intervention program to address a larger cause of the Indian farmers & consumers. Trust,
Purity and Taste are the hallmarks of Dhara cooking oil.

It has been a constant endeavour at Mother Dairy to stay connected with its
stakeholders. The corporate tag line of the latest brand campaign Happy Food Happy People
captures the essence of what the Company stands for. Mother Dairy is committed to bring
happiness to every individual with its range offering pure, hygienic and adulteration-free highquality products which has been the strength, differentiator and heritage of the brand over
years.

In Mother Dairys effort to instil and create happiness in all the lives we touch, we live
our notion of creating happiness for our employees through creating a workplace reality that
is fulfilling and enriching for them. We constantly listen to our employees and evolve our
people practices. As a result of this, Mother Dairy has been recognized as the 2nd best in the
FMCG Industry and has also been ranked at 39th amongst Indias Top 100 Best Companies to
Work, in a study by Great Place To Work Institute in association with the Economic Times
for their annual 2015 survey. The corresponding ranking in 2014 was 62nd amongst the list of
Top 100. In the survey, the brand also witnessed a significant move its Trust Index from 70%
to 83% in 2015.

Product profile

Indian Sweets Gift Pack

Khoya

Chhana Kheer

Plain Dahi

Probiotic Dahi

Mishti Doi

Sweet Lassi

Mango Lassi

Strawberry Lassi

Salted Lassi

Plain Chach

Tadka Chach

Mango Flavoured Milk

Strawberry Flavoured Milk

Chocolate Flavoured Milk

Kesar Eliachi Flavoured Milk

Cold Coffee

Vanilla Flavoured Milk

Fresh Paneer

Butter

Cheese Slice

Cheese Cubes

Cheese Spreads

Buffalo Ghee

Cow Ghee

Kathiawadi Ghee

Toned Milk

Plant Layout

Flow Chart

Activities of Production Department:

There are mainly six (8) activities done by the Production Department. They are as follows:
1. Raw Material Receiving Dock
2. Storage area- for milk storage tanks
3. Clarification
4. Homogenization
5. Pasteurization
6. Dispatch in Insulated Tankers Mother Dairy has set up a modern plant for the production
process. It has established its plant in a modern high tech style which functions nearly 80%
automatically.

1. Raw Material Receiving Dock (The Process Flow of the Mother Dairy Raw):
Raw Milk Reception: Raw milk received through insulated road/rail tankers at a very
low temperature thus retaining the freshness of milk. The milk goes for more than 15
stringent quality tests before it is accepted for the processing of milk. Milk achieved from
individual producers is checked for all basic quality parameters meeting the company
specification and required norms at respective collection and chilling centres. Milk is then
supplied to the dairy units through insulated milk tankers at <4 degree C.

2. Storage area- for milk storage tanks

The main objective of storage tank is to provide an improved form and operation of
an interim milk-cooling storage; to provide an improved form and arrangement of milkcooling storage tank within an insulated housing; to provide an improved arrangement and
operation of means for spraying ice water over the exterior walls of the milk storage tank.

Processing of Milk: Processing of milk is done in basically 4 steps:

3. Clarification:
The chilled milk from the silos goes to the clarifier after pre-heating. The clarifier spins
the milk at very high speed, removing all the dust particles that are invisible to naked eyes.

4. Standardization:
Milk from different breeds of cow and buffalo may vary in its composition. Hence, to
make Milk uniform in composition, before supply to the market, it is standardized by raising
or lowering its fat and SNF percentage present in the milk to a desired level, so as to deliver
the milk to consumers as per prescribed norms of FSSAI.

5. Homogenization:
In this process, the milk is processed at very high pressure during which the large fat
globules presently in milk are broken down into tiny droplets. The milk fat gets evenly
distributed in the milk and milk become whiter and thicker. Milk is homogenized for
consumers who do not like cream layer on top. Homogenization improves Palatability of milk
and is easily digestible.

6. Pasteurization:
The milk is then pasteurized, named after Louis Pasteur, a French Scientist who
invented the process to use in wine. Pasteurization was first applied by Dr.Soxhiet of
Germany. This involves heating of milk to 72 degree Celsius for 15 second and then cooling it
down to 4 degree Celsius. The process kills all pathogenic bacteria present in the milk making.
It makes milk safe for consumption. Pasteurization, unlike boiling does not affect the
nutritional value of the milk.

6. Dispatch in Insulated Tankers:

Milk Transfer tanks are specially insulated stainless steel tanks ensuring safe milk
transportation. They guarantee stable temperature for long time periods, are easily installed
on vehicles of varying types and allow multiple shipments from different producers.
The quality and treatment of the metal construction and its washing system prevent the
entrapment of even the minutest milk quantity, therefore avoiding the development of
bacteria and the deterioration of the transported milk.

Following are the process from starting to end:

Raw Milk Reception, Clarification, Standardization, Processed Milk, Pasteurization,
Homogenization and then Dispatch.

Financial Status
1. Leading milk supplier Mother Dairy is eyeing to cross Rs 10,000 crore turnover mark
in next three years on rising demand for dairy products as well as fresh and processed
fruits and vegetables.
2. Mother Dairy, which supplies about 30 lakh litres of milk in the national capital region
has posted a turnover of Rs 7,186 crore during last fiscal, out of which about 75 per
cent is from it dairy business.
3. "We are aiming for more than Rs 10,000 crore turnover by the end of FY19 with
expected rise in sales across all the segments," Mother Dairy MD S Nagarajan told PTI.
4. In a bid to expand its market, Mother Dairy is in process of establishing a 25,000
tonnes per year integrated food and vegetable processing plant in Ranchi at an
estimated cost of Rs 75 crore.
5. The freezing line will have the capacity to produce 5,000 tonnes per year of finished
product and which will mainly include peas produced in the state.
6. The pulp and concentrate line will have a capacity of 20,000 tonnes per annum of
finished products and this will largely include tomato processing, mango and other
fruits.
7. Besides this, the company is also exploring new markets for its dairy and other milk
products and at the same time also expanding its product portfolio with new launches.
8. Mother Dairy, a wholly-owned subsidiary of the National Dairy Development Board
(NDDB), has diversified portfolio with presence in dairy products, edible oil, fruits and
vegetables (fresh as well as frozen) and pulses.
9. The firm sells processed food products like juices and ready to cook products under
the brand name Safal and also has presence in edible oil segment under the brand
name Dhara.
10. The company also sells fruits and vegetables and other processed food products on its
more than 400 Safal stores in the national capital region and Bangalore. Safal outlets
are being operated on the franchise model, where the company provides basic
infrastructure. During the time of spike in prices of pulses and onions, the Safal outlets
had sold these two food items below market prices following the government's
instruction. Recently, Paytm and Mother Dairy partnered to allow customers make
cashless payments through the former's wallet service across more than 100 milk
booths.

Supply Chain Management

1. Milk Procurement:

Mother dairy sources its requirement of liquid milk from dairy co-operatives
and producer institutions. Milk is received through former co-operatives in insulated
tankers at 4c temperature in order to retain its freshness.

2. Milk Distribution:
Tankers in the morning and in the evening bring in the milk from the regional
collection centre. After collection same tankers are utilized for delivery of the
processed milk to the distributors. Each of these LAD (Local Area Distributor) places
their demand by raising an invoice one day in advance. The demand is also calculated
using the calendar scheme. In this depending upon the pre-calculated seasonal
demand the outlet place their demand accordingly. In order to satisfy immediate
demand, 20-25 tankers are provided with a buffer stock of 500 litres each day, so that
they can be mobilized to cater demand in an area. To cater demand each of the tanker
is equipped with HAM radio.

3. Distribution Channels:

A) Token Distribution: Token distribution also termed as lohe ki bhains (Metal

buffalo), is an automatic vending machine where customer have to bring their utensils
and by using a can take milk.
b) Distributors: The packaged milk is distributed via the distributor network
throughout the city.

Product Promotion Strategies

1. Focused approach
In a nutshell, Mother Dairy wants to get into bigger markets and have bigger shares in
those markets. The co-operative is also expanding its product portfolio further to match rival
offerings - particularly those of Amul. For the first 22 years of its existence, liquid milk was the
only dairy product that Mother Dairy offered.
It was in 1996 that it came up with ice-creams. When it introduced curd, flavoured
milk, lassi and mishti doi. Later it also introduced butter, ghee and UTH milk and cheese. And
under its frozen foods and vegetables brand Safal, besides the introduction of corn and mixed
vegetables, it has plans to come out with frozen potato-based snacks.
So while the product portfolio has been growing, Mother Dairy has plans for reach out
to newer markets - but the strategy here is more product-specific. In liquid milk, it will initially
concentrate only on four markets - Delhi, its home ground; the Junagarh region and Ahmedabad in

Gujarat; Mumbai. Mother daily also announced the launch of Cow Milk variant for consumers. The
newly launched variant will be available in 500 ml pack size priced at 20.

2. Wider Spread:
As far as the dairy products are concerned mother dairy plans to expand across the
board. Other than milk, for most state federation dairy products are still a small part in of
their operations. So they are taking their product to regions across India where they see
enough market potential. In ice-cream it was recently when mother entered its first market
outside Delhi-UP and Punjab, and extended its operations to Haryana, Jaipur and Kolkata. For
ghee although current focus is in the northern region, it has plans to have national presence.

3. Product Difference:
While Mother Dairy still may not have a product portfolio as large as Amul, which is
also expanding across the country in a big way and is a much bigger player, it's doing its bit.
Mother Dairy says the idea is not just to enter new markets, but to do well in that market which means bigger market shares in the different product categories in whichever market it
is present.
The drivers will be value created through quality of the offerings as well as innovations in
products. This will, of course, be backed by relevant marketing and promotion campaigns.

HR Practices
Flood of talent
They have become part of the 200-member senior management team, supported by
800 in the middle management and 1,500 in junior management. The remaining 1,500
comprise workers. Of the total of 4,000 people, close to 600 are spread out in the villages, the
source of produce and residence of key stakeholders of the company farmers.
Theres HR mandate has been two-fold: the all-important procurement HR, and the futuredriven transformational HR.
He explains, What we look for in people all across the organisation is an appreciation of
business for social good. They need to understand the language of this business.
For procurement, the skill sets and the competencies required are only learnt in the villages.
So here, hiring is not through head hunters but school headmasters, local NGOs, army officials
(for those looking for resettlement) and the like. The villages also serve as a training ground
for fresh talent coming in from B-schools, agriculture and engineering colleges.

His resolution for 2012 is to move from transaction HR' to transformation HR'. That involves
the leadership pipeline. And that explains why the company has been visiting B-school
campuses as a practice for four years now.

Investing in the future

The headcount is increasing by about 10 per cent each year, and among those have
been 50 recruited on campus last year from B-schools, and half that number from engineering
and agriculture institutes.
Dairy technology graduates from the National Dairy Research Institute (Karnal) and graduates
from the Gujarat Agricultural University have been sought out.
The B-school campuses visited include IRMA, XIM (Bhubaneswar), IIM (Rohtak), MDI
(Gurgaon), FMS (Delhi) and Symbiosis (Pune). Currently, the starting pay on offer is Rs. 7 lakh
per annum on average. But people are still coming on board and more importantly, staying
on. The rigor of the selection processes plays a key role here. So does the career map for
those coming in.
Once in, they are put through an elaborate induction process. This involves an eight to 15-day
stay in the remote villages where the produce comes from. And days here start at any time
after 3 am.
The procurement experience and interaction with farmers holds them in good stead for the
journey ahead. The induction also helps slot inductees into roles.

Blending energy and experience

There are several employees who have served the company for 35 years. On average,
the tenure of current staff is around 16 years. The system entails that the new recruit for the
leadership role undergoes training under experienced staffers for a period of time, after
which the staff who train him or her will be managed by the person trained.
It may seem impractical, but it's been accomplished with the sales function. Manufacturing is
up next.
It took us some time and there were initial hiccups, but it's been accepted now. The staff
also realized that we were not affecting their career growth or compensation. The new
recruits also performed well, says Dr Mitra.
What has also helped is that the company made the transition from a distribution-led
organization to one driven by sales. So the old hands who may not have had exposure to the
sales function with its current demands, have no qualms in welcoming a younger set of bosses
to run the function, he adds.

The reporting structure does not reflect in the compensation, though. Those with higher
experience typically draw a higher package than their much younger bosses.
Attrition is at 3.5 per cent, claims Dr Mitra. With the work force getting younger and the
company expanding in terms of people, product portfolio and geographic spread, he admits
that the average tenure of employees' statistic is likely to come down.
But that is what it will be a statistic. By itself, it will not truly reflect the people story at
Mother Dairy.

Most Important Observation

The most important observation during the visit was the hygiene factor present there.
The premises and the plant area was clean, the employees have the orders not to touch milk
with bare hands and they get their machines and silos cleaned every weekend to ensure that
the milk produced is safe for the customers. Moreover, they have a specific TPM Total
Productive Maintenance policy for everything like for distribution, energy conservation,
environment etc. and KAIZEN policy for all the employees which they have to follow. They
even have a large hall, with a large glass window, for the visitors. Visitors can have a look at
all the area and the machineries involved in milk production through that glass window. By
such arrangement Mother Dairy ensures that any visitor does not have direct access to the
machineries and the milk being processed but they can have a good look at the whole process.
They have these policies as strict code of conduct as they are manufacturing milk
which requires purity and hygiene and to give the best to the customers the company needs
to do this. That is why their policies can be seen at most of the places in the premises.

Outcome of the Visit

We all know milk is a complete food and everyone consumes milk in one form or other
every day. None of us knew why it was called so and what were the ingredients made it
complete. We were provided with all those information at the beginning like the contents of
milk, types of milk, advantages etc.
Farmers, the suppliers are the base of this industry. Mother Diary has a wide network
of loyal suppliers in North India and in Maharashtra and in Andhra Pradesh. Hygiene and
quality of the milk are of given at most importance. 4 degree celsius is the ideal temperature
for milk. Milk reached the plant is followed by 23 tests and then pasteurized and stored in
huge vessels which is followed by supply to customers and outlets. All throughout the process,
they showed us how hygienically company maintains all these. Minute details like silence is
also given too much importance.
Company gave a brief idea about who all are competitors, their market share, how
they differ from others, their unique products, challenges etc. Mother diary holds more than
50% of market share in NCR. More than 35 lakhs litre of 65 lakhs NCR consumption is provided

by them. Plant we visited had 10 lakh litre capacity. The main challenge they face is from
logistics part. Mother Diary was a 2000 Cr turn over company 5 years back; now they have a
turnover of around 4000 Cr. However, their target is 10,000 Cr in 5 years and to expand to
South India as well. Revenue is also generated from exporting ice creams too. 50% of the milk
provided are from cows, 46% from buffaloes and rest from other animals. Company have a
dedicated wing for R&D also. Their upcoming product probiotic milk product is expected to
bring a new category.
Over all we got idea about what is milk, how companies procure milk, how they carry
on their processes, their plant layout, process structure followed, their market shares,
distribution, challenges, their targets and researches.