Cooperative Society: Social Obligation vs Performance

Dr.Vijay Kumar Pandey* Prof.Satish Bansal** Prof. Sonu Sidhwani*** Mr.B.K.Suthar**** Prof. Manjari Agarwal***** Miss Ayushi Gaur****** Miss Kanika Gupta*******

Gwalior Sahakari Dugdha Sangh Maryadit is a byproduct Dr. Verghese Kurien`s dream , the father of white revolution and winner of Ramon Magsaysay award including Padma Shri(1965) Padma Bhushan(1966) and Padma Vibhushan(1999) The GSDSM, Gwalior (MP State, India) which turned into reality in the year of 1980 as National Dairy Development Board(NDDB) promoted the GSDSM SANCHI with a view to economic milk production at farm level, vibrant management of primary dairy cooperative society and utilization of ideal manpower and resources for rural development. The GSDSM has planned to fulfill its objectives by giving education, training and demonstration sessions to the rural milk producers, farmers and staff members in its jurisdiction of Madhya Pradesh State. The GSDSM aimed to procure excellent quality of milk to the people of M P State, processing by using and advanced technology and to pay best prices and excellent input services to its milk producers. Sanchi Gwalior milk centre is working as a co-operatives pattern since 1980 in India. From 1978 to 1980 NDDB promoted SANCHI in various cities of Madhya Pradesh. SANCHI was started in Gwalior with four other regions were Bhind, Morena, Datia, and Shivpuri. * Assistant Professor, Symbiosis Centre for Management Studies, NOIDA, India

Dairy cooperative societies include the services which are provided to the animals which provide milk like cow, goat and buffalo. It was started in Bhopal, Indore, Jabalpur, Ujjain, Sagar, Raipur (which has now become a part of Chhattisgarh) and Gwalior with the help of Operation Flood. They have their milk routes and main plants where the raw material is being transported and

then in those plants actual process for the production of milk is done. They are various processes for the milk to be procured and pasteurized. The word pasteurization was coined by the scientist Louis Pasteur. In this process the milk is heated at the temperature of 72 degree and then it is hold for 4 minutes and then it is suddenly brought to 4 degree to make it cool. It has various chilling centers where the milk is made to cool in the mid way while it is being sent to the main plant .various chilling centres are Mahgawan, Daboh, Shivpuri, Shopur, Datia, Bhander and Tikamgarh. Basically DCS (dairy cooperative society) is a primary unit which depends upon two factors That is: Quality testing Quantity Coming on to the quality of the milk, basically milk contains fats and minerals SNF (i.e. solid not fat). Quality of milk depends upon the amount of S.N.F it contains. Milk can be categorized as follows:
1. Full cream milk: It contains 6% of fat and 9% of SNF

2. Standard milk: It contains 4.5% of fat and8.5% of SNF 3. Toned Milk: It contains 3.5% of fat and8.5% SNF 4. Double Toned Milk: It contains 1.5% fat and 8.7% of SNF
5. Skimmed milk: it contains 0.5% fat and 9% of SNF

There are various other milk packages like Homogenized milk. In this type of milk the fat particles are crushed and it is kept at a temperature of 42 degree. Basically we use this type of milk package for sending at a longer distance because it can be used for 6 months without using refrigerators.

Figure 1: Showing organisations operational structure

On April 20, 2011 nearly at 03:00 pm, Mr. S K Shivhare, a senior executive of GSDSM- Gwalior with his anxious face discussed to our team on some bare facts of his organization about losing the market share, trustworthiness of customers and misuse of liberalization policy of our Government in the name of transparency, service/product quality by the competitors in the dairy industry of MP State. The most shocking issue was about the abuse cows and buffaloes exploited milk by the instant more money seekers. He explained how the field operational activities are being done in GSDSM-SANCHI by adopting Amul pattern, organizing milk producers farmers` training programs for formation of co-operatives, awareness to co-operative principles and milk production enhancement techniques, procurement and transportation arrangement of milk , providing technical input services to the milk producer farmers for milk production enhancement such as animal health care, artificial insemination, balanced cattle field and improved fodder seeds. Mr. S K Shivhare added on the preference to economically weaker sections, small and marginal farmers, scheduled caste/Tribes categories in various activities. He gave some information on the products of SANCHI like; milk varieties, varieties of yogurts, main products, sweets, balanced cattle feed and others. Mr. S k Shivhare was very enthusiastic on saying about performance on key parameters of the GSDSM like: nos. of functional milk routes, nos. of organized Dairy Co-operative Societies (DCS ), nos. of functional DCS, membership of functional DCS, average milk procurement, local milk marketing, and sales of balanced cattle feed by DCS, chilling centers and turn over. But the statistics on performance did not allow him to say something more. He was in worry on performance of his organization since 2007, where the war of milk/products quality and services to the customers has taken place. The core issues on quality of milk and competition in dairy

industry. Mr. S K Shivhare was seriously in search of problem solving tools with a view to survive in such kind of competitive environment. The Indian dairy industry has restructured. The Indian Government liberalized the industry by taking expeditious steps like: utilization of industrial strengths i.e. optimistic demand profile, quite reasonable margins on milk/milk products, availability of raw material and technical manpower by governing body with limited regulations. The Indian dairy industry has weaknesses which are necessarily to be eliminated by considering it as a demand of time. The weaknesses are like: perishability, lack of control over yield, logistics of procurement, problematic distribution and competition. The problems can be summarized as follows: I. The major problem is the shortage of milk and milk products during summers and basically in the month of May and June. During summers there is shortage of water and food items, which are provided to the animals hence there is a decrease in the amount of milk in those days.
II.

Another major reason behind the shortage of milk is that the supply of animals and the basic services provided to them. Farms , dairies, village places is considered to be the best the place for those animals but the services provided to them are decreasing at an alarming rate. Younger generation is not interested to do such services they are more concerned in securing their future and getting good jobs. There has been a shift from agricultural sector to service sector.

III.

Thirdly, another major drawback of SANCHI is that they do not produce other milk products, which can yield much profit, like ice cream, paneer and other milk products which are being produced by other milk companies to maximize the profit.

IV.

Fourthly, government is not able to curb malpractices by private players which are not safe for consuming.

Questions: 1. Suggest methods to cope with the challenges faced by cooperative society.
2. In your opinion why this company is not able to replicate Amuls success.

Teaching Notes:

Teaching Objectives and Target Audience: The Case discusses the role of cooperative society in rural development of India. The case is based on the initiative of National Diary Development Board in promoting dairy cooperative society and utilization of ideal manpower and resource for rural development in the state of Madhya Pradesh in India. It also discusses initiative of cooperative society in promoting rural development so that economy level of milk producers increase. The case can be used to executive post graduate and graduate management for individual analysis and group discussion.

Teaching Approach and Strategy: The case and the references should be provided to the executives and the students one day prior to the discussion for individual analysis and write up. Next day the case should be discussed among a small group. The outcome of the small group discussion should be presented in front of the whole batch by representative of each group in order to evaluate each option in detail. Analysis: The case is suitable for written assessment or examination, role playing and oral presentations.

Reference http://www.amul.com/products.html http://www.amul.com/organisation.html http://www.nddb.org/aboutnddb/genesis.html