With 400 million liters of milk production (daily) and an estimated consumer demand for dairy products growing at a CAGR of 15-16%, the Indian dairy market is definitely one to vie for. Competing successfully in this sector is however easier said than done, considering:
Nearly 30% of all surplus milk up for sale has already been cornered by a few large players (the 800-pound gorilla being Amul)
The supply side of the dairy ecosystem is extremely tricky considering that well over 70% of all milk produced is generated by dairy owners with only 1-4 heads of cattle. The transportation and delivery to retail is trickier considering the sheer number of retail outlets, the shifty nature of a lot of the 3rd party logistics providers and a distinct lack of cold chain infrastructure
This is the part where technology comes to the rescue. Mobile phones have become ubiquitous even in the Indian hinterland, data will soon be getting there. And thanks to them, the dairy supply chain can literally be overhauled for the price of peanuts.
Supply Side Streamlining- requires timely data about the amount and time of supply so that collection runs can be planned with the right sized vehicles. Precise data can now be collected real-time from the producers over simple mobile apps. And for the not-so-technically savvy ones with the feature phones, there’s always the easy missed call and the multi-lingual IVR!
Transport Routes Can Now be Planned- In a jiffy, communicated to route drivers and their movements tracked continuously by simply using the driver’s smart phones. IoT devices on-board the transport vehicles can transmit temperature data real-time to reduce wastage (At an annual wastage value of 4400 crores, wastage should definitely be a thing for consideration).
Delivery and Integration with Retail Outlets - The integration with retail outlets over the mobile again provides for better production planning. Cows produce more in winter, but men don’t drink significantly more. It would just make sense to divert milk supplies into value-added longer shelf life products then.
Everybody and their aunt seems to be getting into value-added products in the dairy sector these days to tap the great margins therein, but to successfully compete a deep understanding of demand patterns is essential. Integration with the last mile directly or indirectly (via sales staff) and visibility into secondary & tertiary sales is extremely essential, and now very much feasible with field applications
Structuring-a-Futuristic-Dairy-Supply-Chain
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