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Overview Of The Company

Mother Dairy – Delhi was set up in 1974 under the Operation Flood Programme, a wholly
owned subsidy of the National Dairy Development Board (NDDB), whose current chairman is
Dr. Amrita Patel. Currently, it is one of the largest milk (liquid/unprocessed) plants in Asia
selling more than 25 lakh liters of milk per day, thereby enjoying a market share of 66% of the
branded milk sales in Delhi. Other important markets include Mumbai, Saurashtra and
Hyderabad. Mother dairy ice-cream was launched in the year 1995 and has shown continuous
growth over the years, and today it boasts approximately 62% market share in Delhi and NCR.
Mother Dairy's range of products include the brands Mother Dairy (milk, milk products, curd, ice
cream, butter, etc), Dhara (range of edible oils) and Safal (range of fresh fruits and vegetables,
frozen vegetables, fruit juices).

Mother Dairy Fruit and Vegetable Pvt. Ltd. offers the following products: Mother Dairy markets
dairy products like Liquid Milk, Ice Creams, Flavoured Milk, Dahi, Lassi, Mishti Doi, Ghee,
White Butter, Table Butter, Cheese, UHT Milk, Dhara range of edible oils and the Safal range of
fresh Fruits & Vegetables, Frozen Vegetables and Fruit Juices at a national level, through its
sales and distribution networks, for marketing food items. Mother Dairy milk (Bulk Vended
Milk) is fortified with vitamin A @2000 IU per litre of milk as a part of social accountability.
This program was started with the Mother Dairy, Delhi, since February 1980and there after
Mother Dairy is continuing this program on their own as a social responsibility without having
any financial assistance from the Government as well as since it is felt that BVM is generally
consumed by the middle / lower middle / poor strata of the society. It is also found that the
dietary practices adopted by these classes are deficient in Vitamin A. Mother Dairy sources
significant part of its requirement of liquid milk from dairy cooperatives. Mother Dairy sources
fruits and vegetables from farmers / growers associations. Mother Dairy also contributes to the

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cause of oilseeds grower cooperatives that manufacture/ pack the Dhara range of edible oils by
undertaking to nationally market all Dhara products.

At Mother Dairy, processing of milk is controlled by process automation whereby state-of-the-

art microprocessor technology is adopted to integrate and completely automate all functions of
the milk processing areas to ensure high product quality/ reliability and safety. Mother Dairy is
an IS/ ISO-9002, IS-15000 HACCP and IS-14001 EMS certified organization. Moreover, its
Quality Assurance Laboratory is certified by National Accreditation Board for Testing and
Calibration Laboratory (NABL)-Department of Science and Technology, Government of India.

Mother Dairy markets approximately 2.8 million liters of milk daily in the markets of Delhi,
Mumbai, Saurashtra and Hyderabad. Mother Dairy Milk has a market share of 66% in the
branded sector in Delhi where it sells 2.3 million liters of milk daily and undertakes its marketing
operations through around 14,000 retail outlets and 845 exclusive outlets of Mother Dairy.

The company’s derives significant competitive advantage from its unique distribution network of
bulk vending booths, retail outlets and mobile units. Mother Dairy ice creams launched in the
year 1995 have shown continuous growth over the years and today boasts of approximately 62%
market share in Delhi and NCR. Mother Dairy also manufactures and markets a wide range of
dairy products that include Butter, Dahi, Ghee, Cheese, UHT Milk, Lassi & Flavored Milk and
most of these products are available across the country.

The company markets an array of fresh and frozen fruit and vegetable products under the brand
name SAFAL through a chain of 400+ own Fruit and Vegetable shops and more than 20,000
retail outlets in various parts of the country. Fresh produce from the producers is handled at the
Company’s modern distribution facility in Delhi with an annual capacity of 200,000 MT. An IQF
facility with capacity of around 75 MT per day is also operational in Delhi. A state-of-the-art
fruit processing plant of fruit handling capacity of 120 MT per day, a 100 percent EOU, setup in
1996 at Mumbai supplies quality products in the international market. With increasing demand
another state-of-the-art fruit processing plant has been set up at Bangalore with fruit handling
capacity of around 250 MT per day.

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Quality Standards

Mother Dairy is an IS/ ISO9002 15000 HACCP and IS 14001 EMS certified organization.
Mother Dairy, Delhi has been awarded ISO 9001:2000 (Quality Management Systems), HACCP,
2002 RvA (Food Safety Management Systems) and ISO 14001:2004 (Environmental
Management Systems) Certifications. Moreover, National Accreditation Board accredits its
Quality Assurance Laboratory as per ISO/IEC 17025:1999 for Testing and Calibration
Laboratories, Department of Science and Technology, Government of India.

Product Range

S.No. Product Name Brand Name Items

1. Milk and its Products Mother Dairy Packaged Milk (Full Cream,
Standardised, Toned, Double Toned
Skimmed and Pro-biotic), Butter, Dahi,
Ghee, Cheese, Ice-Creams, UHT Milk,
Lassi & Flavoured Milk.
2. Edible Oils Dhara Refined Vegetable Oil, Refined
Soybean Oil, Refined Sunflower Oil,
Refined Rice Bran Oil, Kachi Ghani
Mustard Oil and Filtered Groundnut
Oil.

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3. Fresh and frozen fruit and Safal Fruits, Vegetables, Rice, Processed
vegetable products items (jams, juices, ketchup, pulp, etc.)

Mother Dairy’s has a varied range of products. The different products categories are explained
below:

MILK:

Packaged Milk is available in 5 different variants:

1. Full Cream milk - milk fat 6%, SNF 9%

2. Standardised milk - milk fat 4.5%, SNF 8.5%
3. Toned milk - milk fat 3%, SNF 8.5%
4. Double toned milk - milk fat 1.5%, SNF 9%
5. Skimmed milk - milk fat 0.5%, SNF 8.7%

Other than packaged milk, Bulk Vended Token Milk is also available which is distributed
through vending machines installed in different regions of the city.

The high quality variant of milk is also available under the brand name ok ‘MILK’. It is thick &
completely natural, containing no preservations. It is referred with name of UHT (Ultra Heat
Treatment) Milk.

Mother Dairy also manufactures flavoured milk under the brand name of ‘CHILLZ’. It is
available in three flavours namely Kesar Elaichi, Vanilla and Chocolate flavour.

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Milk Products:

Various milk products of Mother Dairy are:

1. Mother Dairy Ghee

2. Mother Dairy Butter
3. Mother Dairy Cheese
4. Mother Dairy Dahi (Curd)
5. Mother Dairy Lassi

Except all these milk products Mother

dairy also manufactures Ice Cream under two categories namely CHILLZ and Mother
Dairy Ice Cream.

PROBIOTIC:

It is the latest product range launched by Mother Dairy. It mainly contains BB-12 friendly
Bacteria which results in better digestion and absorption of nutrients. It also contains
probiotic fibre which also results in better digestion. The various products in this category
are:

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1. b-Activ Probiotic Dahi

2. b-Activ Probiotic Lassi
3. b-Activ Curd
4. Nutrifit (Strawberry & Mango)

SAFAL: Range of fresh foods & vegetables, frozen vegetables, fruit pulps and fruit juices etc.

DHARA: It has a popular range of edible oils in different types as refined soya bean oil, refined
sunflower oil and filtered ground nut oil etc.

Transformational Process

Firstly, the milk is collected in the plant from all dairy owners who supply the milk.

Secondly, Clarification, in which milk is spun at very high speed, removing all dust particles that
are invisible to the naked eye.

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Thirdly, Standardisation which helps to milk maintains uniformity by raising or lowering its fat
and SNF (solid not fat) percentage to desired levels, so as to deliver milk to consumers as per
prescribed PFA norms.

Fourth, it is Homogenization which improves palatability of milk and

Finally, Pasteurization, which kills all pathogenic bacteria present in the milk and thus making it
safe for consumption.

In case of packaged milk, the processing goes through only three processes (excludes
homogenization).

Input Collection of Milk

Clarification of Milk

Standardization of Milk

Processing

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Homogenization of Milk

Pasteurization of Milk

Packing of Milk
Output

Facility Layout

Plant layout is arrangement of facility inside the factory location. Plant layout basically deals
with arrangement of equipments and machineries inside the factory building in such a manner,
which ensures smooth movement of man and materials inside the factory as well as the minimum
movement of man and material. It is the designing of factory place in optimum manner so as to
fit the manufacturing process. There are basically three types of layouts namely.

 Product layout.

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 Process layout.

 Mix layout.

Mother Dairy is organization which is engaged the continuous manufacturing process of various
milk products. As a result, it has developed the product layout which follows the continuous
manufacturing system. Under the product layout, product is given more emphasis than process
and machineries are engaged in the order in which the product is prepared.

Formerly it has the old factory structure in which old machines were performing the production
operation. This was taking too much time. Therefore company adopted modernization and set up
a totally automatic plant. As result it has developed a new plant layout at its premises to adjust
the automatic equipments and machineries.

Plant Layout and Process Diagram

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Product Layout

 Milk:-
Raw chilled milk in tankers

Filter

Chiller

Milk Clarifier

Raw Milk Silo

Cream separator

Skim Milk Cream Balance Tank

Pasteurizer Cream Pasteurizer

Milk Separator Cream Storage Tank

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Issued to Powder Section Issued to Butter Section

For the Manufacturing of processed milk products, everyday milk is bought from 1028 village
societies through truck. Since several no of chilling centers have been allotted to the village
societies according the quality of milk being collected. Milk sourcing is eliminated further the
trucks have the containers, which are thermoses shaped and hence protected the milk from
getting spoiled. The milk comes twice a day. Generally about 85% of milk is the buffalo’s milk
and rest is cows. The company have capacity of handling 15 lakh liter milk per day.

Milk is received first at the raw milk receiving dock. The cans of milk are smelt washed and
sample of milk is taken. Chemicals and hot air then wash the cans. While milk is brought to
Mother Dairy, its temperature is generally 8 to 9 degree C. So milk is pasteurized that means it is
first heated at 70 to 80 degree C. this process kills the germs and bacteria from milk. Then milk
is chilled at 3 to 4 degree to protect from getting spoiled. Then milk is stored in bullet like
containers. Company has 8 such containers having the capacity of maintaining 15 lacks liter of
milk each.

The processed milk is thus used for producing milk products and the surplus milk sent villages
and big cities in packing for sale. There is pouch machine for fulfilling this purpose, which packs
500 gm. of milk in pouches.

 Butter:-

Raw Milk

Clarification

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Separation &Skimming

Skimmed Milk Cream

Blending Pasteurization

Pasteurization Ripening of cream

Standardized Milk Churning

Storage in consumer packs Butter

Consideration of White Butter

Milk
Dispatch
Homogenization Packing

Spray Drying Storage

Packing Dispatch

Storage

Dispatch

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 Butter:-
In the plant, there is a machine called separator vessel, which counts the fats of the milk and
separate the excess fats from the milk. This excess fat is used to manufacturing butter. Butter is
manufactured from the fresh cream of the milk. The raw milk is weighted and poured into cream
separator. Pure fat on cream gets separated from milk. Then colored salt is added in it to make
butter. The processing of butter takes 7 min. butter making is however a continous process.
Almost 30 tones of butter are packed each day. Butter is then moved on the conveyor belt to
pack it in 100 gms. packing. The butter packets are then automatically moved into a box, which
contain specific number of butter packets as specified by the computer program formally.

 Ghee:- Flavored Milk:-

Receiving Milk
White Butter

Standardization
Melting Vat

Pre – Heating at
Melted Butter 60 c
Pump

Addition of Sugar
Tank

Chilling at 5 c
Melted Butter
Tank in Pot

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Addition of
Open Butter flavors & colors
Valve for Heating

Bottling
Sampling

Capping
Ghee Buffer Tank

Sterilization

Storage

Dispatch

 Ghee:-

Sour milk is used for the production of ghee. This milk is sent to the cream machine for
collecting cream. Cream is converted into butter and butter is heated to make ghee. Ghee is then
packed in tins or plastic bags in the packing of 1, 2, 3, 4, 5, and 15 kg.

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 Flavored Milk:-

Market milk form Mother Dairy is processed in this section marketed under the name of chillz.
It has four flavors i.e. Elaichi, Kesar, Cool Vanilla, Chocolate Swirl. The color is to different
flavors.

Milk Storing Vessels

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Facility Location

Plant location deals with the selection of optimum location for establishing industry. The
selection of location is affected by a variety of factors like:

 Availability of raw material.

 Proximity of market.

 Availability of water, power etc.

 Government policy.

 Availability of finance.

 Availability of labour.

 Infrastructure facility.

 Link with the transportation network.

Hence location decision should be taken with proper care and understanding after evaluating the
each of above factors.

As far as Mother Dairy is concerned, it has selected the best location. This is because it is based
on the availability of milk and it involves number of village surrounding an and which are main
sources of for getting milk since the villagers mainly depend on selling milk to earn income.
Further location is very near to milk to market since milk is prime requirement of every house.
Labor is cheaply available with various kinds of skills required. The location is linked with
national highways and railway, thus having good transportation facilities. Also it has a good
market near where it could sell it products. Besides it has developed better infrastructure
facilities at its plants. Thus Mother Dairy has chosen best location for it.

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Villages (from where the milk is collected)

Small Towns (Milk is also collected from there)

Labor is also cheaply available

(People come from nearby town & vill.)

Location
Good market is also near

The location where it could

Mother Dairy
Sell its products.

Road transport is a convenience convenience of a railway is also

(National Highway is nearby Location) (Station is not so far from location)

Capacity Planning:

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With the day by day increasing market and competition the organization has set its capacity
planning. Armed with a slew of launches and a fresh media campaign, one of the major players
in the branded milk segment is targeting to close the current year with a 50 per cent increase in
turnover.

"Looking at the market trend, it is expected that market will grow day by day. Currently the
market size for milk (sold in loose or packaged) is estimated to be 36 million MT valued at
Rs.470bn. Elaborating on the consolidation and restructuring exercise undertaken by the
company during the last few years the company is targeting to increase its market share by
increasing its capacity planning.

The market is giving great response to these milk products so company is planning to fully
utilize the capacity of its plants. Mother Dairy sells 14.5 lakh litres per day of branded packaged
milk, said a senior official. It is all set to achieve a growth of 20 per cent this fiscal year to touch
Rs 8000 crore sales turnover. Mother Dairy still enjoys largest share in overall liquid milk
market in Delhi with sales of 27 lakh litres per day. The liquid milk market in the capital is more
than 55 to 60 lakh litres per day. It is now charged up to strengthen its existing market share of about
55 per cent in the branded milk segment along with sprucing up its distribution and vending points. The
company currently has over 500 distributors and about 4,500 sub dealers. It has set up more than 300
vending machines across Delhi and NCR. "We want to increase our penetration in the semi-urban and
rural market. At present, we are available in over 700 towns. We propose to double this count," he said.

Commenting on the one new variant of flavored milk and ice cream that the company is set to launch, he
said, "A lot of research was done before launching these types of products. In fact, we have factored in
what the consumer wants in summers."

The company has a variety of products in its portfolio ranging from kids to adults.

The company is also thinking to increasing its milk capacity from 2.8 lakh million litres to round about
3.5 lakh million litres if the demand increases in the summer.

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Inventory Management
The organization that are engaged in the activity of production need to keep the stock of raw
materials as well as other part to support the uninterrupted production. At the same time, the
organization also has to store finished goods because it is not sure that the goods produced will
be sold immediately. Hence they have to be prevented against spoilage and breakage when they
are in stored in storage house.

Since milk is a perishable commodity, it has to be treated in a special manner in order to prevent
it from spoilage. Hence the milk is first of chilled at 3 to 4 C. Organization has developed the
bullet type storage towers which are implementing the concept of a thermos. It has 8 such
towers; each having the capacity of storing 1.5 lacks liters of milk. Thus the milk is stored in
such storage towers.

Quality Systems
In the year 2000, Mother Dairy Calcutta received ISO 9002 certification and in the year 2001
Mother Dairy received HACCP Certification. The certification agency is internationally
renowned D.N.V [DET NORSKE VERITAS, NETHERLANDS]. Mother Dairy has also
received Environment Excellence award [2000 - 2001]. In the year October'2003, Mother Dairy
received ISO 9001:2000 and the certification agency is SGS India Pvt. Ltd., a renowned London
based Organization.ISO also revised to ISO 9001:2008. Mother Dairy was the first industry in
country to implement ISO-14031(Environment Performance Evaluation) project.

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Stringent quality control methodologies are employed in Mother Dairy.

a) The milk is tested for adulterations and quality at the time of collection from the farmers.
b) The Milk that comes from the collection points to the Mother Dairy plant is ensured to have a
temperature of not more than 7°C and is subjected to 15 product and quality checks.
c) The Milk quality is checked repeatedly after each processing phase and the temperature is
judiciously maintained less than 5°C always.
d) Before the milk leaves the plant for the delivery/distribution outlets the milk is tested again.
e) The temperature of milk in the delivery trucks is always maintained less than 7°C.
f) All the trucks that deliver milk have specified guidelines to bring back 100 litres of milk after
distribution. This is done in order to test the delivered milk and to ensure that the tankers are
not adulterated during distribution.
g) Since all the employed processing procedures are automated, no contamination by human
hands takes place.
h) To ensure milk freshness the collection and distribution points are always chosen such that
the travel time between them is always less than 36 hours.

Model Of Supply Chain Management

The organizations success also depends on how strong is supply chain management.

Below is a schematic display of Mother Dairy’s Supply Chain Management.

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With products being highly perishable, the supply chain ought to have to maintain correct temperature,
humidity etc and the chain should move fast.

To reach out its consumers more directly and let them the total brand experience, Mother Dairy has come
up with Milk Vending machines and its exclusive shop pies. They have come up in major cities like
Ahmadabad, Kolkata, Delhi, Delhi NCR, Mumbai, Hyderabad and Saurashtra already, and many more
starting up real soon. Till date there are about 400 parlours across the country. These parlours are set at
prominent locations such as campuses of officies, temples, Metros etc.It has franchisee plans in regards to
open Mother Dairy parlours. This might start pretty soon, since the talk are almost at the end.

Now, going back to the supply chain of Mother Dairy, it has gone the e- commerce way. The 1st
initiatives taken for an ERP system was in ’98. Consultancy Services was hired to guide in its
implementation. The implementation project was named as Enterprise- wise Integrated Application
System (EIAS). Automatic Milk Collection System units (AMCUS) at village societies were installed

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in the first phase to automate milk producers logistics.It also connected its zonal offices, regional
offices and member’s dairies through VSATs for seamless exchange of information. Mother Dairy is
also using Geographic Information Systems (GIS) for business planning and optimization of
collection processes.

References:

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