Milk is a basic need, though a luxury at present but meticulous supply chain can curb price

Background

- By Lt. Col. Chandana Weerakoon

MILK price is exorbitantly higher in Sri Lanka when comparing to the countries of the world. Sri Lanka shows the highest price gap for milk with the farm gate price and the retail price, as of now the farm gate price of a litre of milk is Rs. 200 while the retail price is up to Rs. 550 in a Tetra pack and a plastic one litre bottle is Rs. 480 further, 900 millilitre in polythene pack is Rs. 380. This is what the problem that the analyses should be. This is a problem of the logistics/ supply chain. The basic theory of the supply chain is the supplier, the manufacturer and the market must have been in the range of reasonable distance. If I elaborate the theory more with an example; "Supplier is in Jaffna, factory is at Digana (Kandy) and again the market is in Jaffna". This is one of the real situation theory that can observe in the country in order to elaborate the wrong and long logistic model.

In order to elaborate more of this concept, I will elaborate a milk processing and distribution model which prevailed in the country during the decades of 60's and the 70's done by Government owned "Milk Board". There were small scale milk processing factories were in almost all the big townships, board targeted the milk farmers around the range of 10 km, and 2000 Liter bowser went to the field to collect the milk from milk farmers, but some farmers brought to the processing factory After pasteurising the milk (pasteurising or UHT is the best method to preserve the milk without adding chemicals), Milk Board distributed to the "Milk Bars" and shops around their given territory generally around 10 km and total supply chain completed within 24 hrs. supplying the milk to the customer, restricting the word to the "Fresh". This product came in returnable glass bottles filled by fresh milk with a basic aluminum lid by 6 a.m. to the market and customer used it for the morning tea. Population had the necessary purchasing power to purchase the fresh milk daily.