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    Business case study from India


    Acquiring e-competency: a success story
    © International Trade Centre, International Trade Forum - Issue 1/2001 

    The Gujarat Cooperative Milk Marketing Federation Ltd (AMUL) links 10,000 village societies in India, a total of 2.1 million milk-producing families. Its business involves daily collection of milk at 25 supply centres in Gujarat; the production of butter, cheese, ice cream, baby food and milk powder; the marketing of these products through 50 sales offices throughout India; and distribution through a network of 4,000 stockists who, in turn, supply 500,000 retail outlets.

    Notwithstanding the traditional nature of its business, the cooperative's management decided in 1995 to adopt "information technology integration" as a strategic thrust. The objective was to create new efficiencies in all aspects of the business, heighten competitiveness, and extend market reach (both within India and in export markets).

    Since that time, all 650 staff have received computer and e-commerce training. All are e-literate. Only e-competent applicants are now recruited. Five hundred computers have been installed at headquarters and a company intranet has been established.

    A web site (http://www.amul.com) has been constructed featuring sports information, recipes and quizzes (to stimulate buyer interest and to establish national brand recognition) and business-to-consumer order placement.

    E-competency has been established at the supply and distribution ends of AMUL's business. At the supply end, a computerized database has been established of all suppliers and their cattle. Computerized equipment measures and records qualities and quantities collected. Around 4,000 computers have been set up at member unions and village cooperatives. At the distribution end, 3,000 stockists have been provided with basic training and computers. AMUL experts assist stockists and retailers to build promotional web pages.

    AMUL cyberstores have now been set up in 125 locations in India, the United States of America, Singapore and Dubai. Each visit to the Indian cyberstore sites results in purchases averaging over 300 rupees (US$ 6.50). An e-mail database of 10,000 customers has been developed.

    All this has been achieved in less than five years despite a national environment characterized by weak information technology infrastructure, and a high "touch-and-feel" consumer culture.

    AMUL's future plans include introduction of a web-based business-to-business ordering system for dealers/stockists and e-transaction capability at the level of the village cooperative.

    "If you want to become e-competent, it is not enough to focus just on your own company. You need to bring in your whole business network. This means creating a shared vision," says B.M. Vyas, managing director of AMUL.

    From the book, Export Development in the Digital Economy. 

    Milking computers in India 

    "My company transformed itself in five years from being a milk marketing company to an 'IT company in the food business'. We started in 1946 in two villages producing 247 litres of milk... and today support ten product groups through an Internet-enabled distribution channel which includes 25 supply centres, 4,000 stockists, 500,000 retail outlets and a turnover of US$ 500 million. Much of the success of the company has been due to supporting the existing culture of the village cooperative societies."

    B.M. Vyas, Managing Director, Gujarat Cooperative Milk Marketing Federation Ltd, India bmvyas@amul.com