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Featured · Dairy operations

The ₹5 lakh inventory mistake that a growing dairy business failed to notice

A realistic case study of a growing Indian dairy plant that lost ₹5 lakh in unrecorded stock drift. Learn why milk Fat and SNF mass balance matters and how ERP controls fix it.

Key Takeaway:Dairy factories experience severe inventory discrepancies when accounting records purchase volumes in liters while factory processing consumes milk solids (Fat and SNF). Because raw milk separates into skimmed milk, cream, butter, and ghee, treating raw milk as a single uniform inventory item hides operational losses, cream skimming shrinkage, and moisture evaporation. Implementing two-axis stock valuation based on Fat and SNF mass balance synchronizes physical tank inventories with general ledger balance sheets.

Updated 13 Nov 2026 · 8 min read · Naffo Dairy Systems Team

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