DISASTER MANAGEMENT

INTRODUCTIONDisaster is any occurrence that causes ecological disruption, loss of human life, and

deterioration of health services on a scale sufficient to warrant an extraordinary response

from outside that affected to community or area. Disaster occurs suddenly and

unexpectedly, disrupting normal life and infrastructure of social services including health

care system. For this reason a country’s health system and public health infrastructure

must be organized and kept ready to act in any emergency situations as well as under

normal conditions.

To meet the challenges of emergency and disaster situation, the government of India has

identified the model Ministries to earmark responsibilities to the various concerned

departments and sectors and to coordinate the entire activities relating to specific types of

disaster and also support Ministry to develop sectoral contingency planning for

implementation, monitoring and evaluation.

DEFINATION OF HAZARD-

A hazard is a rare or extreme event in the natural or human-made environment that

adversely affects human life, property or activity to the extent of causing a disaster.

DEFINATION OF DISASTER-

A disaster is a serious disruption of the functioning of a society, causing widespread

human, material, or environmental losses which exceed the ability of affected society to

copy using only its own resources. Disaster are often classified according to their speed

of onset (sudden or slow), or according to their cause (natural or man made)

CAUSAL FACTORS OF DISASTER-

The magnitude of each disaster, measured in deaths, damage, or costs for a given

developing country increases with the increased marginalization of the population. This is

caused by a high birthrate, problems of land tenure and economic opportunity, and the

lack or misallocation of recourse to meet the basic human needs of an expanding

population.

Poverty

The most important single influence on the impact of a disaster. All other factors could be

lessened if the affected population were not also limited by poverty. Virtually all disaster

studies show that the wealthiest of the population either survive the disaster unaffected or

are able to recover quickly. Across the broad spectrum of disaster, poverty generally

makes people vulnerable to the impact of hazards. Poverty explains why people in urban

areas are forced to live on hills that are prone to landslides, or why people settle near

volcanoes or rivers that invariably flood their banks. Poverty explains why droughts

claim poor peasant farmers as victims an rarely the wealthy, and why famines more other

than not are the result of a lack of purchasing power to buy food rather than an absence of

food.

Population Growth

There is an obvious connection between the increase in losses from a disaster and the

increase in population. If there are more people and structures where a disaster strikes,

then it is likely there will be more of an impact. The growth of population has been so

spectacular that it is inevitable that more people will be affected by disaster because more

will be forced to live and work in unsafe areas. Increasing numbers of people will be

competing for a limited amount of resources (such as, employment opportunities, and

land) which can lead to conflict.

Rapid Urbanization

Rapid population growth and migration are related to the major phenomenon of rapid

urbanization. This process is also accelerated in developing countries. It is chatagarised

by the rural poor or civilians in an area of conflict moving to metropolitan areas in search

of economic opportunities and security. These massive numbers of urban poor

increasingly find fewer options for availability of safe and desirable places to build their

houses. Here again, competition for scare resources, an inevitable consequence, can lead

to human made disaster.

Transitions in cultural practices

Many of the inevitable changes that occur in all societies lead to an increase in the

societies, vulnerability to disaster. Obviously, all societies are constantly changing and in

a continual state of transition. These transitions are often extremely disruptive and

uneven, leaving gaps in social coping mechanisms and technology. These transitions

include nomadic populations that become sedentary rural people who move to urban

areas, and both rural and urban people who move from one economic level to another.

More broadly, these examples are typical of a shift from non-industrialized to

industrializing societies.

Environmental degradation

Many disasters are either caused or exacerbated by environmental degradation.

Deforestation leads to rapid rain run off, which contributes to flooding. The destruction

of mangrove swamps decreases a coast line’s ability to resist tropical winds and storm

surges.

Lack of awareness and information

Disaster can also happen because people vulnerable to them simply didn’t know how to

get out of harm’s way or to take protective measures. This ignorance may not necessarily

be a function of poverty, but a lack of awareness of what measures can be taken to build

safe structures on safe locations. Perhaps some people did not know about safe

evacuation routes and procedures. Other population may not know where to turn for

assistance in times for acute distress. Nevertheless; this point should not be taken as a

justification for ignoring the coping mechanisms of the majority of people affected by

disaster. In most disaster prone societies, there is wealth of understanding about disaster

threats and responses. This understanding should be incorporated into any efforts to

provide external assistance.

War and civil strife

In this text war and civil strife are regarded as hazards that are extreme events that

produce disaster. War and civil strife often results in displaced people, a target population

of this training programme.The causal factors of war and civil strife include competition

for scarce resources, religious or ethnic intolerance, and ideological differences. Many of

these are also byproducts of the preceding six causal factors of disaster.

TYPES OF DISASTER

Natural hazards

The discussion about disasters and emergencies resulting from natural and human made

hazards has been developed in general terms.However,each hazard has its own

charactristics. To understand the significance and implications of a particular type of

disaster we must have a basic understanding about the nature,casuses and efforts of each

hazard type. The list of hazard types is very long. Many occur infrequently or impact a

very small population. Other hazards, such as severe snowstorms, often occur in areas

that are prepared to deal with them and seldom become disaster.However, from the

perspective of a disaster victim it is not particularly useful to distinguish between minor

and major disasters. Some disasters are now of limited interest to the international

community. These include avalanches, fog, frost, hail, lightning, snowstorms and

tornadoes. There are several hazard types for which there is widespread concern. They

can be categorized as follows:

Sudden onset hazards- (geological and climatic hazards) Earthquakes, Tsunamis,

Floods,Tropical storms, Volcanic eruptions, Landslides.

Slow onset hazards - (environmental hazards) Drought, Famine, Environmental

degradation, desertification, Deforestation, Pest infestation.

Industrial/Technological - System failures/accidents, Spillages, Explosions, Fires.

War and civil strife - Armed aggression, Insurgency, Terrorism and other actions leading

to displaced persons and refugees.

Epidemic-Water and/or food-borne diseases, persons-to-persons diseases (conduct and

respiratory spread), vector-borne diseases and complications from wounds

Earthquakes

Causal phenomena: Slippage of crusted rock along a fault or area of strain and rebound to

new alignment.

General characteristics and effect:

Shaking of earth caused by waves on and below the earth’s surface causing: Surface

faulting ,Aftershocks ,Tsunamis ,Tremors, vibrations ,Liquefaction ,Landslides

Typical adverse effects:

Physical damage-Damage or loss of structures or landslides, flooding may occur.

infrastructure. Fires, dam failures,

Public health- Fracture injuries most widespread problem. Secondary threats due to

flooding, contaminated water supply, or breakdown in sanitary conditions.

Water supply-Severe problems likely due to damage of water systems, pollution of open

wells and changes in water table.

TSUNAMIS

Causal phenomenon: Fault movement on sea floor, accompained by an earthquake. A

landslide occurring underwater or above the sea, and then plunging into the water.

Volcanic activity either underwater or near the shore.

General characteristics:

Tsunami waves are barely perceptible in deep water and may measure 160km

between wave crests.

May consist of ten or more wave crests.

Move up to 800km per hour in deep water of ocean, diminishing in speed as the

wave approaches shore.

May strike shore in crashing waves or may inundate the land.

Flooding effect depends on shape of shorelines and tides.

Typical adverse effects:

Physical damage-The force of water can raze everything in its path but the majority of

damage to structure and infrastructure results from flooding.

Withdrawal of the wave from shore scours out sediment and can collapse ports and

buildings and batter boats.

Causalities and public health: Deaths occur principally by drowning and injuries from

battering by debris.

Crops and food supplies: Harvests, food stocks, livestock farm implements and fishing

boats may be lost. Land may be rendered infertile due to salt water incursion.

VOLCANOES

Causal phenomenon: Magma pushed upward through volcanic vent pressure and

effervescence of dissolved gases.

General Charactaristics: Types of volcanoes are cinder cones, shield volcanoes,

composite volcanoes and lava domes. Magma flowing out onto surface is lava and all

solid particles ejected are tephra.Damage results from type of material ejected such as

ash,pyroclastic flows(blasts of gas containing ash and fragments),mud,debris,and lava

flows.

Typical adverse effects:

Causalities and public health: Death from pyroclastic flows, mud flows and possibly lava

flows and toxic gases. Injuries from falling rock, burns, respiratorydifficulties from gas

and ash. Settlements, infrastructure and agriculture: Complete destruction of everything

in the path of pyroclastic, mud or lava flows, collapse of structure under weight of wet

ash, flooding, blockage of roads or communication systems.

Crops and food supplies: Destruction of crops in path of flows, ash may break tree

branches, livestock may inhale toxic gas or ash, grazing lands may be contaminated.

LANDSLIDES

Causal phenomenon: Down slope transport of soil and rock resulting from naturally

occurring vibrations, changes in direct water content, removal of lateral support, loading

with weight and weathering or human manipulation of water courses and slope

composition.

General Charactristics: Landslides vary in types of movement (falls, slide, topples, lateral

spread, flows) and may be secondary effects of heavy storms, earthquake and volcanic

eruptions. Landslides are more widespread than any other geological event.

Typical adverse effects:

Physical damage-Anything on top of or in path of landslide will suffer damage.

Rubble may block roads, lines of communication or waterwayes. Indirect effects may

include loss of productivity of agricultural or forest lands, flodding,reduced property

values.

TROPICAL CYCLONES

Causal phenomenon: Mixture of heat and moisture forms a low pressure centre over

oceans in tropical latitudes where water temperatures are over 26degrees c. Wind currents

spin and organize around deepening low pressure over accelerating toward the center and

moving along track pushed by trade winds. Depression becomes a tropical cyclone when

winds reach gale force or 117km per hour.

General Charactristics: When the cyclone strikes land, high winds, exceptional rainfall

and storm surges cause damage with secondary flooding and landslides.

Typical adverse effects:

Physical damage-Structure lost and damaged by wing force, flooding, storm surge and

landslide.

Causalities and public health: May be caused by flying debris or flooding, contamination

of water supplies may lead to viral outbreaks and malaria.

Water supplies-Ground water may be contaminated by floods water.

Crops and food supplies: High winds and rains can rain standing crops, tree plantations

and food stocks.

FLOODS

Causal phenomenon: Naturally occurring flash, river and coastal flooding from intense

rainfall or inundation associated with seasonal weather patterns, Human manipulation of

watersheds, drainage basins and floodplains.

General characteristics:

Flash floods: Accelerated runoff, dam failure, breaks up of ice jam.

River floods: Slow buildup, usually seasonal in river system.

Coastal floods: Associated with tropical cyclones, tsunami waves, storm surges factors

affecting degree of danger: Depth of water, duration, velocity, rate of rise, frequency of

occurance, seasonality.

Typical adverse effects:

Physical damage-Structure damaged by washing a way, becoming

inundated,collapsing,impact of floating debris, landslide from saturated soils, damage

greater in valleys than open areas.

Causalities and public health: Deaths from drowning but few serious injuries, possible

outbreaks of malaria, diarrhea and viral infection.

Water supplies: Contamination of wells and groundwater possible. Clean water may be

unavailable.

DROUGHTS

Causal phenomenon: Immediate cause-Rainfall deficit, Possible underlying causes-

EI Nioo(incursion of warm surface waters into the the normally colder waters of south

American Pacific),human induced changes in ground surface and soil, higher sea surface

temperatures, increase of atmospheric carbon dioxide and greenhouse gases.

General Charactristics: The reduction of water or moisture availability is temporary and

significant in relation to the norm, meteorological drought is the reduction in rainfall and

hydrological drought is the reduction in water resources. Agricultural drought is the

impact of drought on human activity influenced by various factor: the presence of

irrigation systems, moisture retention capacity of the soil, the timing of the rainfall and

adaptive behavior of the farmers.

Typical adverse effects: Reduced income for farmers, reduction of spending from

agricultural sector, increase in price of staple foods, increased inflation rates,

deterioration of nutritional status, famine, illness, death, reduction of drinking water

sources, migration, breakup of communities, and loss of livestock.

Possible risk reduction measures: Drought and famine early warning systems.

Specific preparedness measures: Development of inter-institutional response plan.

ENVIRONMENTAL POLLUTION

Causal phenomenon: Air pollution-pollutants such as sulphur dioxide, nitrogen dioxide,

particulates, carbon monoxide and lead from industry and transport. Marine pollution-

Sewage, industrial effluents, marine litter, petroleum spills and dumped radioactive

sustances.Fresh water pollution-Discharge of human waste and domestic wastewaters

into lakes and rivers, industrial effluents, use of irrigation and pesticides, run off of

nitrogen from fertilizers. Increased run off from deforestation causing sedimentation.

Possible global warming-Accumulation of carbon dioxide from combustion of fossil

fuels, deforestation and methane from livestock. Ozone depletion-Chloroflorocarbons

(CFCs) released into the atmosphere deplete ozone shield against ultraviolet light.

Typical adverse effects:

Air pollution: Damages agricultural crops, forests.aquatic systems, structural materials

and human health.

Water pollution: Spread of pathogens, injury to marine animals, spread of chemicals to

the environment effecting the health of humans, animala and sea life.

Global warming: Sea level rise, climate change, temperature rise.

Ozone depletion: Increase in skin cancer, cataracts, reduction in immune system

functions and damage to marine life.

Possible risk reduction measures: Set ambient air quality standards, set emission limits

for every pollutant, establish protection policies for water supplies, reduce the use of

pesticides by integrated management, reduce the rate of deforestation and increase

planting of trees, promote energy efficiency, regulate use of aerosols and disposal of

refrigeration units, prohibit manufacture and use of CFCs.

Specific preparedness measures: Establish a national environment safety and protection

plan; create education programs for environmental awareness, training of government

personnel as part of development programs.

DEFORESTATION

Causal phenomenon: The spread of farming and grazing, firewood collection timber

harvesting.

General Charactristics: Contributes to other hazards by by removing root systems which

stabilize soil, acting as a filter and buffer, allowing percolation of water into soil and

retaining moisture in soil, removal of leaf biomass and forest products, burning and decay

of dead wood.

Typical adverse effects: Deforestration results in loss of free products from the forest

such as fruits and medicine and decline in traditional cultures. It stresses economies

which import forest products and are dependent on wood products. It contributes to other

hazards such as flooding-Deforestation of watersheds can increase severity of flooding,

reduce stream flows, dry up springs in dry seasons and increase sediment entering

waterways. Drought-Removal of roots and leaf canopy can alter moisture levels drying

soil and decreasing percipitation.

PHASES OF A DISASTER

Disasters can be viewed as a series of phases on a time continum.Identifying and

understanding these phases helps to describe disaster related needs and to conceptualize

appropriate disaster management activities.

Rapid onset disaster:

The definitions below correspond to the time sequence following the occurrence of a

rapid onset disaster.

The relief phase is the period immediately following the occurrence of a sudden

disaster(or the late discovery of a negated/deteriorated slow onset situation)when

exceptional measures have to be taken to search and find the survivors as well as meet

their basic needs for shelter,water,food and medical care.

Rehabilitation is the operations and decisions taken after a disaster with a view to

restoring a stricken community to its formar living conditions, while encouraging and

facilitating the necessary adjustment to the changes caused by the disaster.

Reconstruction is the action taken to reestablish a community after a period of

rehabilitation subsequent to a disaster. Actions would include construction of permanent

housing, full restoration of all services and complete resumption of the pre-disaster state.

Mitigation is the cooective term used to encompass all action taken prior to the

occurrence of a disaster(pre-disaster measures)including preparedness and long term risk

reduction measures.(Mitigation has been used by some institution or authors in a narrow

sense, excluding preparedness.)

Preparedness consists of activities designed to minimize loss of life and damage, organize

the tempory removal of people and property from a threatened location and facilitate

timely and effective rescue, relief and rehabilitation.

Slow onset disasters:

The sequence of a disaster continuum for slow onset disaster is similar in framework but

has important distinctions. The following terms and definitions reflect those additions or

modifications.

Early warning is the process of monitoring situations in communities or areas known to

be vulnerable to slow onset hazards. For example, famine early warning may be reflected

in such indicators as drought, livestock sales or changes in economic conditions. The

purposes of early warning are to enable remedial measures to be initiated and to provide

more timely and effective relief including through disaster preparedness actions. The

emergency phase is the period during which extraordinary measures have to be taken.

Special emergency procedures and authorities may be applied to support human needs,

sustain livelihoods, and protect property to avoid the onset of disaster.

This phase can encompass pre-disaster, disaster alert, disaster relief and recovery periods.

An emergency phase may be quite extensive, as in a slow onset disaster such as a famine.

It can also be relatively short-lived, as after an earthquake.

Rehabilitation is the action taken after a slow onset disaster where attention must be

given to the issues of resettlement or returnee programmes, particularly for people who

have been displaced for reasons arising out if conflict or economic collapse.

The disaster management team-

One of the primary purposes of this overall training program is to introduce the concept

of managing disaster as a team. The objectives of disaster management through

teamwork include

A forum for communication, information exchange and developing consensus.

A format for co-ordination, eliminating duplication and reducing gaps in

services.

The possibility of being more effective through pooled resources.

The UN Disaster Management Team

The United Nations General Assembly believes that the objectives of team management

are applicable to the UN agencies oriented to emergencies. They have mandated that a

standing, UN Disaster Management Team (UN-DMT) be formed in each disaster prone

country, convened and chaired by the UN resisdent coordinator.

The composition of the UN-DMT is determined by taking into account the types of

disaster to which the country is prone and the organizations present, but should normally

include a core group consisting of the country level representatives of FAO,

UNDP/UNDRO, UNICEF, WFP, WHO and where present, UNHCR. It may be enlarged

to include additional representatives or project personnel from other relevant agencies

when an emergency arises. The original and primary purpose of the

UN-DMT is to ensure a prompt, effective and concerted response by the UN system at

country level in the event of a disaster. The team should also ensure similar coordination

of UN assistance to the government in respect to post-disaster rehabilitation and

reconstruction and relevant disaster mitigation measures through long term development

programs. It should be emphasized that for all aspect of disaster management the UN-

DMT is in a support role of the government.

Country Disaster Management Team

Most disaster prone countries already have a formal or informal disaster management

team. It is typically headed by a national disaster focal point body. This body function in

liaison with the office of the president pr prime minister, with civil defense organizations,

key government ministeries, the red cross/red crescent and other NGOs and major

donors. The UN-DMT needs to interface with this team and where practical to be a team

member. Where national officials do not participate in

UN-DMT meetings or activities, the resident coordinator should ensure that they are

consulted and briefed on all relevant matters. In practice it is vital that the policies of the

DMT releate to those approved by the government even under the pressure of event.

Roles and resources of UNDP, UNDRO and other agencies

UNDP focuses primarily on the development related aspects of disaster risks and

occurrences and on providing technical assistance to institution building in realtion to all

aspect of disaster management.

a) Incorporating long term risk reduction and preparedness measures in normal

development planning and programes.including support for specific mitigation measures

where required.

b) Assisting in planning and implementation of post disaster rehabilitation and

reconstruction, including the definition of new development strategies that incorporate

risk reduction measures relevant to the affected area.

c) Reviewing the impact of large settlements of refugees or displaced persons on

development and seeking ways to incorporate the refugees and displaced persons in

development strategies.

d) Providing technical assistance to the authorities managing major emergency assistance

operations of extended duration (especially in relation to displaced persons and

possibilities for achieving durable solutions in such cases.)

e) In addition UNDP provides administrative and operational support to the resident

coordinator function, particularly at country level, but also at headquarters.

f) In the event of disaster,UNDP may grant a maximum of $50,000 from SPR funds to

provide immediate relief.UNDP is not otherwise involved in the provision of “relief

“using only of its own resources or other funds administrative by the program.

Where a major emergency substantially affects the whole development process within a

country, IPF resources may be used to provide technical assistance to plan and manage

the operation, with the agreement of the Government.

COMPANY INFORMATION

INTODUCTIONSince the turn of 19 th century,

Cooperatives have existed as dominant

forms of organization in the dairy industry

around the world. Sometimes they have

played the role of developing infant industry while at other times they have been used to

strengthen weak production bases in an environment where market failures tend to be

higher for marginal producers. In some other cases, a network of small producers have

organized themselves to better market their products. Management of these cooperatives

have also led to some interesting managerial insights for managers in emerging as well as

developed economies.

Large emerging economies, e.g., India and China, have complexities that range from

development of markets (where the largest segment of population is the one which has

low purchasing power) to integration of low cost suppliers who are predominantly very

small. For firms that aspire to conduct substantial business in such markets, such

complexities have to be recognized and then overcome. The challenge is to understand

the linkages between markets and the society.

This would also require development of a new business model that helps a firm grow in

such environments. This paper is about one such successful model. The Kaira District

Milk Cooperative Union or AMUL in India is an example of how to develop a network of

firms in order to overcome the complexities of a large yet fragmented market like those

in emerging economies by creating value for suppliers as well as the customers. AMUL

has led the milk dairy revolution in India that has now emerged as one of the largest milk

producers in the world.

In this article we will describe the breakthrough vision that led to the simultaneous

development of the market and supply side through a process of social development and

education at AMUL. Clearly, implementation of this vision in a competitive environment

and maintaining sustained growth and profitability requires development of

competitiveness on several dimensions and operational effectiveness. This article

provides insights into management of very large supply chains by adapting and

integrating a variety of strategies and techniques. This includes building networks,

developing trust & values in the network, developing fair mechanisms for sharing

benefits across the supply chain, coordination for operational effectiveness, innovation

and new technology for gaining competitiveness. It is noteworthy that these successes

were achieved within the framework of a network of cooperatives organized in a

hierarchical manner. There are many lessons in AMUL’s success not only for the

cooperative sector but also for firms who intend to do business in emerging markets.

Organization AMUL is organized as a cooperative of cooperatives (i.e., each village society, a

cooperative in itself, is a member of the AMUL cooperative) thereby deriving the

advantage of scale and uniformity in decision making. The founders of Kaira Union

realized that to fulfill their objectives, a large number of marginal farmers had to benefit

from the cooperative – a network of stakeholders had to be built. And once built, it had to

grow so as to draw more rural poor to undertake dairy farming as a means of livelihood.

The network had to have several layers – the organizational network where the voice of

the owners governed all decisions, a physical network of support services and product

delivery process and a network of small farmers that could deliver the benefit of a large

corporation in the market place. More importantly, a process had to be put in place to

build these networks.

Building an organizational network that would represent the farmers and the customers

was the most complicated task. A loose confederation was developed with GCMMF

representing the voice of the customers, the Unions representing the milk processors and

the village societies representing the farmers. Competition in the markets ensured that the

entire network was responding to the requirements of the customers at prices that were

very competitive. The task of ensuring that returns to the farmers was commensurate with

the objectives with which the cooperatives were setup was achieved through

representation of farmers at different levels of decision making throughout the network –

the board of directors of societies, Unions and the

Federation comprised farmers themselves. In order to ensure that most returns from sales

went to the producers, the intermediaries had to operate very effectively and on razor thin

margins. This turned out to be a blessing in disguise – the operations remained very

“lean” and started to provide cost based advantage to the entire network.

AMUL established a group to standardize the process of organizing farmers into village

societies. In addition to establishing the criteria for selecting members, the group had to

train the VS to run the cooperative democratically, profitably and with concern for its

members. This included establishing procedures for milk collection, testing, payment for

milk purchased from member farmers and its subsequent sale to the union, accounting,

ensuring timely collection and dispatch of milk on milk routes established by the union,

etc. The Village Societies Division at AMUL acts as the internal representative of village

societies in their dealings with the Union. Cooperative development programmes at the

village level for educating & training its members have become an important part of the

strategy to build this extensive network .

Milk procurement activity at AMUL comprises development and servicing of village

societies, increasing milk collection, procurement of milk from societies & its transport to

the chilling locations, and resolving problems of farmers and village societies. Their

stated objective is to ensure that producers get maximum benefits. The Village Societies

Division coordinates these activities. Milk collection takes place over a large number of

pre-defined routes according to a precise timetable. The field staff of this division also

help village societies interface with the Union on various issues ranging from

improvement of collection, resolving disputes, repair of equipments to obtaining

financing for purchase of equipment etc. In addition, they are also responsible for the

formation of new societies, which is an important activity at AMUL.

In essence, the organization structure of AMUL allows effective utilization of resources

without losing the democratic aspiration of individual members. It is obvious that such a

system needs charismatic leadership to achieve consensus across issues – a process that

has long-term benefits for any organization.

BUSINESS STRATEGYAMUL’s business strategy is driven by its twin objectives of (i) long-term, sustainable

growth to its member farmers, and (ii) value proposition to a large customer base by

providing milk and other dairy products a low price. Its strategy, which evolved over

time, comprises of elements described below.

Simultaneous Development of Suppliers and Customers: From the very early stages of

the formation of AMUL, the cooperative realized that sustained growth for the long-term

was contingent on matching supply and demand. Further, given the primitive state of the

market and the suppliers of milk, their development in a synchronous manner was critical

for the continued growth of the industry. The organization also recognized that in view of

the poor infrastructure in India, such development could not be left to market forces and

proactive interventions were required.

Accordingly, AMUL and GCMMF adopted a number of strategies to assure such growth.

For example, at the time AMUL was formed, the vast majority of consumers had limited

purchasing power and was value conscious with very low levels of consumption of milk

and other dairy products.

Thus, AMUL adopted a low price strategy to make their products affordable and

guarantee value to the consumer. The success of this strategy is well recognized and

remains the main plank of AMUL's strategy even today. The choice of product mix and

the sequence in which AMUL introduced its products is consistent with this philosophy.

Beginning with liquid milk, the product mix was enhanced slowly by progressive

addition of higher value products while maintaining desired growth in existing products.

Even today, while competing in the market for high value dairy products, GCMMF

ensures that adequate supplies of low value products are maintained.

On the supply side, as mentioned earlier, the member-suppliers were typically small and

marginal- farmers had severe liquidity problems, were illiterate and had no prior training

in dairy farming. AMUL and other cooperative Unions adopted a number of strategies to

develop the supply of milk and assure steady growth. First, for the short term, the

procurement prices were set so as to provide fair and reasonable return. Second, aware of

the liquidity problems, cash payments for milk supply was made with minimum of delay.

For the long-term, the Unions followed a multi- pronged strategy of education and

support. For example, only part of the surplus generated by the Unions is paid to the

members in the form of dividends. A substantial part of this surplus is used for activities

that promote growth of milk supply and improve yields. These include provision of

12veterinary services, support for cold storage facilities at the village societies etc. In

parallel, the

Unions have put in place a number of initiatives to help educate the members.

To summarize, the dual strategy of simultaneous development of the market and member

farmers has resulted in parallel growth of demand and supply at a steady pace and in turn

assured the growth of the industry over an extended period of time.

Cost Leadership: AMUL’s objective of providing a value proposition to a large customer

base led naturally to a choice of cost leadership position. Given the low purchasing power

of the Indian consumer and the marginal discretionary spending power, the only viable

option for AMUL was to price its products as low as possible. This in turn led to a focus

on costs and had significant implications for managing its operations and supply chain

practices (described later).

Focus on Core Activities: In view of its small beginnings and limited resources, it

became clear fairly early that AMUL would not be in a position to be an integrated player

from milk production to delivery to the consumer 23 . Accordingly, it chose a strategy to

focus on core dairy activities and rely on third parties for other complementary needs.

This philosophy is reflected in almost all phases of AMUL network spanning R&D,

production, collection, processing, marketing, distribution, retailing etc.

For example, AMUL focused on processing of liquid milk and conversion to variety of

dairy products and associated research and development. On the other hand, logistics of

milk collection and distribution of products to customers was managed through third

parties.

However, it played a proactive role in making support services available to its members

wherever it found that markets for such services were not developed. For example, in the

initial stages, its small and marginal member farmers did not have access to finance,

veterinary service, knowledge of basic animal husbandry etc. Thus to assure continued

growth in milk production and supply, AMUL actively sought and worked with partners

to provide these required services. In cases where such partnerships could not be

established, AMUL developed the necessary capabilities and provided the services. These

aspects are elaborated later in this section.

Managing Third Party Service Providers: Well before the ideas of core competence and

the role of third parties in managing the supply chain were recognized and became

fashionable, these concepts were practiced by GCMMF and AMUL. From the beginning,

it was recognized that the core activity for the Unions lay in processing of milk and

production of dairy products. Accordingly, the

Unions focused efforts on these activities and related technology development. Marketing

efforts (including brand development) were assumed by GCMMF. All other activities

were entrusted to 13third party service providers. These include logistics of milk

collection, distribution of dairy products, sale of products through dealers and retail

stores, some veterinary services etc. It is worth noting that a number of these third parties

are not in the organized sector, and many are not professionally managed. Hence, while

third parties perform the activities, the Unions and GCMMF have developed a number of

mechanisms to retain control and assure quality and timely deliveries (see the sub-section

on Coordination for Competitiveness later in the paper for more details). This is

particularly critical for a perishable product such as liquid milk.

Financial Strategy: AMUL’s finance strategy is driven primarily by its desire to be self-

reliant and thus depend on internally generated resources for funding its growth and

development. This choice was motivated by the relatively underdeveloped financial

markets with limited access to funds, and the reluctance to depend on Government

support and thus be obliged to cede control to bureaucracy.

AMUL’s financial strategy may thus be characterized by two elements: (a) retention of

surplus to fund growth and development, and (b) limited/ no credit, i.e., all transactions

are essentially cash only. For example, payment for milk procured by village societies is

in cash and within 12 hours of procurement (most, however, pay at the same time as the

receipt of milk). Similarly, no dispatches of finished products are made without advance

payment from distributors etc. This was particularly important, given the limited liquidity

position of farmer/suppliers and the absence of banking facilities in rural India. This

strategy strongly helped AMUL implement its own vision of growth and development. It

is important to mention that many of the above approaches were at variance with industry

practices of both domestic and MNC competitors of AMUL.

Growth and Challenges From its inception with the formation of its first milk cooperative, AMUL network has

sustained an impressive growth rate for more than 50 years culminating in the emergence

of Indian dairy industry as the world’s leading milk producer. However, it is unclear

whether AMUL’s strategy and practices that have worked well for long can maintain this

growth trajectory in a changing environment with globalization and increased

competition. In this section we describe some of

AMUL’s initiatives and discuss briefly opportunities for growth and challenges that need

to be overcome.

AMUL’s growth during the past five decades has been fuelled primarily by growth in

milk supply with corresponding pricing strategy to generate demand. This growth has

been sustained by a two-pronged strategy – (a) growth in the number of member farmers

by widening its coverage with more village societies and increasing the membership in

each society, and (b) growth in per capita milk supply from its members. This growth is

achieved by increasing milk yields and by helping members raise their investments in

cattle. It is worth noting that AMUL has funded these support activities from its earnings

(instead of repatriating them to the members either as dividends or with a higher

procurement price). It is expected that AMUL’s growth in the immediate future will

continue to rely on this strategy.

However, in the new emerging environment, several challenges have become apparent

and AMUL network needs to evolve proactive mechanisms to counter these threats. First,

competitors are cutting into milk supply by offering marginally higher procurement

prices thereby challenging the practice of provision of services for long-term growth in

lieu of higher prices in the short-term. Second, for a section of its membership, dairy

activity is a stepping-stone for upward mobility in the society. Typically, such members

move on to other occupations after raising their economic position through milk

production. As a result, AMUL is unable to realize the full benefits of its long-term

strategy, and finds new members (mostly marginal farmers) to replace those who have

higher potential and capacity.

While this is a welcome development for the society as a whole, it is unclear whether

AMUL would be able to sustain it in the light of increased competition.

By progressively increasing the share of higher value products AMUL has been able to

grow at a faster rate than the growth in milk supply. AMUL has been rather cautious in

implementing this strategy and has always ensured retention of its customer base for

liquid milk and low value products. With slowdown in the growth of milk supply this

strategy is likely to come under pressure and AMUL will be forced to make some hard

choices. More important, it is fairly clear

that its low price, cost efficient strategy may not be appropriate for the high value

segment. Thus,

AMUL may have to adopt a dual strategy specific to its target markets, which in turn may

lead to dilution in focus.

A part of AMUL’s growth has come from diversification into other agri-products such as

vegetable oils, instant foods etc.

In some of these initiatives AMUL adapted its successful cooperative organization

structure, but the experience to date has been somewhat mixed. More recently, the

network is exploring conventional joint venture arrangements with suitable partners for

diversification into areas such as fast food and speciality chocolates. While it is too early

to assess the success of these ventures, challenges involved are becoming quite visible.

For example, diversification has resulted in expansion of the network with disparate

elements, each motivated by their own objectives. This in turn has led to a lack of focus

within the network and dilution in the commonality of purpose.

These developments are likely to have serious implications for coordination and control

in the network. More important, shared vision and common goal was one of the main

planks of AMUL’s growth during the past 50 years, and its dilution is likely to adversely

impact the network performance.

Corporate Social responsibility Corporate Social Responsibility (CSR) is a concept that encourages organizations to

consider the interests of society by taking responsibility for the impact of the

organization's activities on customers, employees, shareholders, communities and the

environment in all aspects of its operations. This obligation is seen to extend beyond the

statutory obligation to comply with legislation and sees organizations voluntarily taking

further steps to improve the quality of life for employees and their families as well as for

the local community and society at large.

Corporate social responsibility is the commitment of businesses to contribute to

sustainable economic development by working with employees, their families, the local

community and society at large to improve their lives in ways that are good for business

and for development.

An essential component of our corporate social responsibility is to care for the

community. We endeavor to make a positive contribution to the underprivileged

communities by supporting a wide range of socio-economic, educational and health

initiatives. Many of the community projects and programs are driven by active

participation from our employees. Our commitment to address important societal needs

extends throughout our philanthropic outreach programs driven by the HRI.

The business benefits of Corporate Social Responsibility

Corporate social responsibility (CSR) isn't just about doing the right thing. It offers direct

business benefits. Building a reputation as a responsible business sets you apart. Many

consumers prefer to buy from ethical businesses. Companies often prefer suppliers who

demonstrate responsible policies, to minimize the risk of any damage to their own

reputations. Some customers don't just prefer to deal with responsible companies, but

insist on it. For example, sales of "environmentally friendly" products continue to grow -

and these products often sell at a premium price. Amul India became as famous for its

approach to responsible business as for its products. The company has grown

dramatically while continuing to focus on CSR, Started in 1946 in small village of Khera

District, Gujrat against British Polson Dairy Company. There are several such names.

There are other benefits too:

" A good reputation makes it easier to recruit employees.

" Employees stay longer, reducing the costs and disruption of recruitment and retraining.

" Employees are better motivated and more productive.

" CSR helps ensure you comply with regulatory requirements.

" Activities such as involvement with the local community are ideal opportunities to

generate positive press coverage.

" Good relationships with local authorities make doing business easier. See the page in

this guide on how to work with the local community.

" Understanding the wider impact of your business can help you think up profitable new

products and services.

" CSR can make you more competitive, and reduces the risk of sudden damage to your

reputation (and sales). Investors recognize this, and are more willing to finance you.

" Active Participation in the activity and community development work. Promotion of

organization & organizational identity in the activity areas of Help Rural India, a kind of

trust & brand building.

The Socio - economic and Health Empowerment activities of HRI has been supported by

renowned companies like... British Scaffoldings Ltd., HUNT Technologies, ITPL, LHI,

Escorts Heart Institute, Max Heart & Vascular Institute, RG Stone & Urology Institute,

Apollo Hospitals, Sohana Multi-Specialist Hospital, MoRD HP etc.

Corporate Social Responsibility, The Amul Way corporate social responsibility (CSR) has been defined as the commitment of business to �

contribute to sustainable economic development working with employees, their families,

the local community, and society at large to improve their quality of life, in ways that are

both good for business and good for development. �

To meet with the CSR it is expected that a business in its entire procurement-production-

processing-marketing chain should focus on human development involving the producer,

the worker, the supplier, the consumer, the civil society, and the environment.

Indeed, a very tough task. Most businesses would certainly flounder in not being able to

achieve at least one or many of those expectations. But AMUL has shown the way.

CSR-sensitive Organisational Structure

AMUL is a three tier co-operative organisation. The first tier is the co-operative society

at the village,of which; milk producers are voluntary members, managing the co-

operative through a democratically elected 9-member managing committee, and doing

business by purchasing milk from members and selling it to the district level co-

operative. There are more than 11,000 co-operatives in villages of Gujarat.

The second tier is the district co-operative that processes milk into milk products, markets

locally and sells surplus to the state co-operative for national and international marketing.

There are 12 district co-operatives each being managed by a 15-member board elected by

the college comprising the nominated representatives or chairmen of the village co-

operatives.

Third tier is the state level co-operative - the Gujarat Co-operative Milk Marketing

Federation (GCMMF) responsible for national and international marketing of milk and

milk products produced and sold to it. The GCMMF is managed by the board

democratically elected by and from amongst the chairmen of the district co-operatives.

The entire three-tier structure with the GCMMF at its apex, is a unique institution

because it encompasses the entire chain from production of raw material to reaching the

consumer with the end product. Every function involves human intervention: 23.60 lakh

primary milk producers; 35,000 rural workmen in more than 11,400 village societies;

12,000 workers in 15 dairy pla-nts; 750 marketing professionals; 10,500 salesmen in

distribution network and 600,000 sal-esmen in retail network. Accu-mulation of human

capital is sine qua non for the development and growth of any enterprise or economy. The

GCMMF is sensitive towards CSR. It believes that technology and capital are replicable

inputs but not the human capital. Since men are the basis for achieving the CSR, the

GCMMF lays emp-hasis on their development into competent, courteous, credible,

reliable, responsive communicators and performers.

CSR-sensitive Business Philosophy

The first step towards discharging the CSR is the business philosophy of the GCMMF. It

is two-fold: one, to serve the interests of milk producers and second, to provide quality

products to consumers as value for money. Evolution of an organisational system has

ensured that the corporate social responsibility towards the primary milk producers,

village and the ecological balance is fulfilled. The milk producers are paid for their milk

in accordance with market forces and realisation of value for their produce. Invariably the

price paid to the member-producers in Gujarat is higher by 15 per cent than the national

average.

CSR-oriented To Staff

The GCMMF hires and trains people to take advantage over its competitors. It has

developed in-house modules for training and competence buil-ding to improve and up

grade of their knowledge; communication skills to understand the customer, be

responsive to customer requirements, and communicate clearly for trouble shooting of

problems. They are expected to be courteous, frie-ndly, respectful, and considerate to the

customer. To improve the credibility and trustworthiness of the managers it is important

they perform consistently and accurately every time and at all times. The structure of

salary and perquisites is altogether different. The first and foremost the staff must get

satisfaction from the job they. They are recognised for their contribution (Climate

Survey) CSR-AMUL WAY.

GREEN POLICY

Amul adopts green tech for its chocolate plant Amul chocolates will be manufactured with green technology. The Kaira District Co-

operative Milk Producers Union Limited (KDCMPUL) popularly known as Amul Dairy

has adopted low carbon technology at the Amul chocolate plant at Mogar in Anand

district.

The technology commissioned by the dairy co-operative is first of its kind in Gujarat. The

district dairy union's initiative comes after its green initiatives involving lakhs of farmers

to plant over 312 lakh saplings to make Green Gujarat and its green project at Virar in

Maharashtra - the first of its kind in country's dairy sector.

The Electric Heat Pump (EHP) system installed at Amul's Mogar Food Complex was

commissioned on Monday.

This project is being executed by Amul, The Energy and Resources Institute (TERI),

New Delhi, the Institute of Global Environment Strategies (IGES), Japan and the Japan

International Cooperation Agency (JICA).

EHP system was installed by engineers from Mayekawa Manufacturing Company

Limited, Japan under a four year research project - 'Application of Low Carbon

Technology' being undertaken by TERI, New Delhi jointly with IGES, Japan.

The goal of this project is to promote energy efficiency and environment friendly

technologies in Indian small and medium enterprises.

The pilot project, introduced for the first time in India, will result into energy saving of

around 47 percent and reduction in CO2 emission by 39 percent which corresponds to the

monetary savings to the tune of Rs 20 lakh per annum besides reducing reliance on fossil

fuels.

"This initiative by TERI and IGES for implementation of low carbon technologies,

especially in developing countries like India is appreciable. We hope that application of

such technologies will be replicated by the processing industry in general and dairy

industry in particular to reduce energy consumption and CO2 emissions," Amul Dairy's

managing director Rahul Kumar said, lauding the role of the team engaged in the

successful commissioning of the system.

"This pilot plant at our Food Complex will also act as a demonstration site for other dairy

units and milk plants in India, who are interested in knowing more about this green

technology," said Kumar.

Amul bags Green Globe Foundation award Gujarat Cooperative Milk Marketing Federation (GCMMF) - the apex body of dairy

cooperatives of Gujarat which markets brand Amul - has received the Green Globe

Foundation award in the manufacturing category.

GCMMF's managing director R S Sodhi received the award during the 4th Green globe

awards ceremony held at the 12th Delhi Sustainable Development Summit 2012. The

ceremony was organised in association with The Energy Research Institute ( TERI) and

the United Nations Environment Programme ( UNEP) at New Delhi .

GCMMF received this award for its mass tree plantation drive and contribution to

environment by the milk producers of Gujarat. "The 30 lakh milk producers of Gujarat

have planted more than 312 lakh trees in 15,000 villages of the state in the last five

years," a release from GCMMF mentioned, adding, "Amul has set an example for all the

cooperatives and other institutions to turn India green in the era of global warming and

environmental crisis."

Amul is top Indian Green Brand for 2011

AMUL has been rated as the top Indian Green brand by the Global Green Brands study

which researches consumers' attitudes and perceptions towards 'green' issues.

The team conducting the public opinion research- Cohn and Wolfe, Esty Environmental

Partners and Penn Schoen Berland- polled over 9,000 people in eight countries from

April 2 to May 3, 2011, ranking more than 370 brands and determined which companies

have the greenest reputation across the world. A total of 1101 respondents from metros in

India were surveyed.

The countries, where the poll was conducted, includes Australia, Brazil, China, France,

Germany, the USA, the UK and India. The major brands and companies like Starbucks,

Microsoft, IKEA, Dove, Volkswagen, Apple, Unilever, Kimberly-Clark and Nivea

featured on the list. But the first place on the chart was occupied by Amul.

The research pointed out that India is the only country to choose deforestation and air

pollution as most important green issues.

Gujarat Cooperative Milk Marketing Federation (GCMMF) Managing Director R S

Sodhi said 30 lakh members of Amul had planted eight to nine million saplings in a

single day on August 15, across 15,000 villages in the last four years. He said that the

International Dairy Federation has also awarded Amul Green Movement as the best

environment initiative in the "sustainability category'' in 2010.

GREEN GUJARAT TREE PLANTATION CAMPAIGN BY MILK PRODUCERS OF DAIRY COOPERATIVES

Amul Coops plant more than 311.98 lakhs trees.

Milk Producer members of Gujarat Dairy Cooperatives- better known as AMUL have

been celebrating the nation's Independence Day in a novel manner by planting lakhs of

saplings across Gujarat and have taken up an ambitious plan to save the environment by

planting trees, making India green and thereby reducing the effects of global warming.

The milk producers of Gujarat Dairy Cooperatives are conducting mass tree plantation

drive every year on Independence Day for last five years. In last five years (2007 to

2011) the milk producers have planted around 311.98 lakhs trees). The most striking

feature of these entire programmes was that it has been initiated by milk producer

members of the dairy cooperatives. The unique fact about the programme was that the

milk producer members took up the oath to protect tree saplings till it survives and grows

into tree.

Over the years, due to intensive agriculture and dairying various natural resources are

getting consumed at faster pace in Gujarat state of India. The state level apex body of

dairy farmers in Gujarat gave a serious thought in this direction and discovered a novel

idea for giving back to nature. The idea was "one member one tree" plantation on our

60th Independence day - 15th August 2007.To put this idea in to the practice a design

team constituting of representatives of member unions were formed. The team accepted

the idea by heart and immediately decided to spread it among farmer members of village

dairy cooperative societies. Then the idea was communicated to farmer members and

they all welcomed it and enthusiastically agreed to implement the idea.

For smooth implementation of the idea, the design team chalked out the road map for

various activities. Execution teams were formed at district union level to give final shape

and put the plan in action. Village level coordinators were identified and they were

trained to streamline activity of tree plantation. Various awareness materials were

prepared. Through various communication media farmer members were made aware of

benefits of tree plantation and tree plantation activity schedule

The entire plantation activity was coordinated at all the three tiers of Anand pattern - at

village, district and state level dairy cooperatives. On 15th August, 2007, after the flag

hoisting ceremony, each member took an oath to plant saplings and ensure that they grew

in to trees. Then individually they planted sapling on their own at their identified

locations like their farm, near their home, on Farm bunds, etc. They have taken necessary

care to ensure that this sapling survives and they also reported regarding the survival to

village level coordinator and district milk unions after five months. In this way, 18.9 lakh

trees were planted on 15th August 2007. This was just the beginning. Henceforth, the

Village Dairy Cooperative Societies of Gujarat as a mark of respect for our nation

decided to conduct such event on every Independence Day and accepted 15th August

(Independence Day) as a "Green Revolution Day by Afforestation to Protect Mother

Earth from Pollution, Climate change and Global Warming".

CONCLUSION: Reasons for Amul success are its Robust Supply Chain, Low CostStrategy, Diverse

Product Mix, Strong Distribution Network,Technology advancements & e-initiatives and

service availability.

Because of all these competences Amul is the largest producer of milkand milk products

in the world. It has set world best practices for dairyproducers.

Amul is one of the fastest growing industries of India. This industry has revolutionalized

the Indian dairy sector and also brought it back from the brink of extinction. Also it was

one of the first successful Cooperative association in India ans also now the market leader

in the dairy sector. Amul remained as the trend setter in the whole operations.

Amul projects delivered a lot of benefits to the rural community. Unlike the others in the

industry Amul facilitated the rural mass for in becoming an empowered community.

Agricultural Universities and Goverment Agencies are also getting into the project of

GCMMFL. Amul itself has seen in creaned revenues.

METHODOLOGYDATA COLLECTION METHOD

Project is fully based on secondary data.

Secondary data: The data is collected from the Magazines, Annual reports, Internet,

Text books.

The various sources that were used for the collection of secondary data are

1. Internal files & materials

2. Websites – Various sites like www.wikepedia.com and other site

BIBLIOGRAPHYWEB SITES

1. en.wikipedia.org

2. www.google.com

3. www.amul.com

NEWSPAPER ARTICLE

Times of India

Hindu