The article discusses the organizational purpose of dairy giant Amul, which has been embedded in its DNA since its inception. Jayen Mehta, MD of Amul, states that the company’s purpose is to provide value for its farmers, employees, and consumers, while maintaining profitability. Amul’s business model is distinct from the traditional model, where it prioritizes buying milk from farmers at the highest possible price and selling finished products at affordable prices.
Amul’s approach to organizational development is based on two core values: value for many, which ensures a better livelihood for 3.6 million farmers, and value for money, which provides high-quality dairy products at affordable prices to over a billion consumers. The company has a cooperative business model, where village dairy cooperative societies are formed at the grassroots level, and the products are marketed by the state federation, eliminating middlemen.
Amul’s journey to success began in 1946 with the visionary leadership of Sardar Vallabhbhai Patel, who believed that farmers should form cooperatives to protect themselves from exploitation by middlemen. The cooperative model, which was later expanded under Operation Flood, has made India the largest producer of milk in the world.
To stay competitive in a liberalized market, Amul embarked on a change management process, exploring international models such as the Japanese Total Quality Management (TQM) model. The TQM model focuses on continuous improvement, customer satisfaction, and employee involvement in every level of the organization. This approach has been instrumental in the company’s success and has become a blueprint for the dairy industry.
Amul has also adopted the latest technological tools, such as enterprise resource planning (ERP) systems, custom applications, and specialized online portals, to streamline its operations and manage its vast supply chain. The company’s digital infrastructure is designed to ensure accuracy, transparency, and efficiency in every aspect of the business, from procurement to sales.
The company is now exploring the potential of artificial intelligence (AI) to drive efficiency, optimize supply chains, and enhance consumer engagement. Mehta believes that AI will be instrumental in automating processes, analyzing big data, and generating valuable insights.
Overall, Amul’s unique approach to organizational development, combined with its use of technology and data analytics, has enabled the company to achieve sustainable growth and success in the dairy industry.