How Amul beat its competition & made 39,200 Cr during Lockdown? : Business case study
Executive Summary
A Think School business case study of how Amul handled the 2020 COVID lockdown. The presenter says Amul prepared for a surge in household demand while others cut back, used an IBM-built digital supply chain system, incentivised frontline workers, used e-commerce partners and raised advertising, then closes with three lessons. The caption text covers the whole 13 minute video. All figures (revenue gain, extra milk procured, demand increases, ad volumes, the IBM investment) are the presenter's statements, not independently checked, and he describes the managing director's decisions from his own reading. Captions are automatic with errors. Topics are untimed; metadata follows YouTube. Source: https://youtubetotranscript.com/transcript?v=nnwqtZiYMxQ
Key Takeaways
The lockdown hit
The presenter says the lockdown cost the Indian economy over 10 lakh crore and dairy producers over 112 crore a day, with restaurant and hotel demand, about 20 percent of organised dairy revenue, vanishing.
Amul's result as he states it
He says Amul made 33 new products, procured about 35 lakh extra litres of milk a day, paid 800 crore extra to rural producers and grew revenue by 698 crore.
Reading consumer behaviour
He says staying home raised household consumption and a shift from loose to packaged milk, and credits managing director R S Sodhi for keeping the supply chain at full capacity.
Demand figures
He cites May 2020 demand rising 80 percent for cheese, 40 percent for cottage cheese and 100 percent for condensed milk, with Amul planning for 115 percent capacity and using rail and others' idle plants.
The IBM system
He says an 80 crore partnership with IBM from 2009 let managers see plants and trucks across 18,700 societies, 5,000 tankers and 3.6 million farmers, so idle ice cream capacity moved to milk overnight.
Workers and partners
He says casual workers got 100 to 125 rupees in incentives plus food and stay, and Amul sold through BigBasket, Dunzo, Flipkart, Swiggy and Zomato, including 60,000 Zomato orders in May.
Marketing and lessons
He says ad volume rose 316 percent over 2019 without outlandish COVID claims, and his lessons are to embrace risk, build resourcefulness, and see a crisis as an opportunity.
The Conversation Breakdown
The lockdown hit
⏱ Untimed topicThe presenter says the lockdown cost the Indian economy over 10 lakh crore and dairy producers over 112 crore a day, with restaurant and hotel demand, about 20 percent of organised dairy revenue, vanishing.
Amul's result as he states it
⏱ Untimed topicHe says Amul made 33 new products, procured about 35 lakh extra litres of milk a day, paid 800 crore extra to rural producers and grew revenue by 698 crore.
Reading consumer behaviour
⏱ Untimed topicHe says staying home raised household consumption and a shift from loose to packaged milk, and credits managing director R S Sodhi for keeping the supply chain at full capacity.
Demand figures
⏱ Untimed topicHe cites May 2020 demand rising 80 percent for cheese, 40 percent for cottage cheese and 100 percent for condensed milk, with Amul planning for 115 percent capacity and using rail and others' idle plants.
The IBM system
⏱ Untimed topicHe says an 80 crore partnership with IBM from 2009 let managers see plants and trucks across 18,700 societies, 5,000 tankers and 3.6 million farmers, so idle ice cream capacity moved to milk overnight.
Workers and partners
⏱ Untimed topicHe says casual workers got 100 to 125 rupees in incentives plus food and stay, and Amul sold through BigBasket, Dunzo, Flipkart, Swiggy and Zomato, including 60,000 Zomato orders in May.
Marketing and lessons
⏱ Untimed topicHe says ad volume rose 316 percent over 2019 without outlandish COVID claims, and his lessons are to embrace risk, build resourcefulness, and see a crisis as an opportunity.
Core Frameworks & Ideas
Crisis behaviour shift - presenter's lens
Every crisis changes consumer behaviour, so forecast the new behaviour.
Resourceful systems - presenter's lesson
Invest early in systems that show your whole operation in real time.
Obstacle or opportunity - presenter's choice
Decide whether a crisis is a threat or a chance to gain share.
Actionable Next Steps
- ✓List how your customers' behaviour would shift in a crisis in your industry.
- ✓Find the idle capacity in one of your lines and ask how it could move to a busier one.
- ✓Check the revenue and milk volume figures against Amul or GCMMF reports before quoting them.
- ✓Write down one frontline incentive you could offer in a hard month.
Notable Quotes
“every time there is a crisis of any kind, there is a paradigm shift in consumer behaviour”
“great leaders prepare to embrace risk with open arms”
“resourcefulness is one attribute that will always save you during crisis”
The One Thing to Remember
In a crisis, read how customer behaviour is shifting and prepare for demand, not for loss.