Project on

Implementation of Supply Chain Management at Hindustan

Unilever

Operations And Supply Chain Management

M.B.A. Dual Specialization 2nd Semester

GALGOTIAS UNIVERSITY

(Batch 2023-2025)

SECTION - 17

Submitted by: - Group 1 Submitted to: -

Md Farhan Nayazi (23GSOB2011282) Prof. Dr. Viveksheel Yadav

Siptain Khan (23GSOB2010936)
Mohd Hammad (23GSOB2011294)
Nabiya Alam (23GSOB2011298)
Anjali Verma (23GSOB2010289)
 TABLE OF CONTENTS

S.NO. CONTENTS
1. Executive Summary
2. Overview
3. Objectives
4. SCM Background
5. Introduction To HUL

6. Research Methodology

7. Data Collection Method

8. Research Problem

9. Sampling Technique

10. Data Analysis

11. Conclusion

12. Limitation Of Study

13. Recommendations

14. Questionnaire
 EXECUTIVE SUMMARY

The main objective of the project is to get the full knowledge of the products of the HUL
and what are they doing to get the customer loyalty, to maintain there market.

This is also to find the preferences of customer and there market knowledge and product
information, information about the presence of the rivals of HUL and all the other options
they have in the market.

What are the techniques they adopt to know about the preferences and changing needs of
the customer?

HUL are also looking to tap the market in rural sector, so they also taking into consideration the
needs and wants of the people there.
They are also studying the consumption habits of the rural people. Like most of them are daily wage
earners or small peasants, so they are studying the buying patterns of them also.
 OVERVIEW

Hindustan Unilever is well known organization in India. The mission that inspires HUL's over
15,000 employees is to "add vitality to life". With 35 Power Brands, HUL meets everyday needs for
nutrition, hygiene, and personal care with brands that help people feel good, look good and get more
out of life.

OBJECTIVE OF THE RESEARCH

Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods
company, touching the lives of two out of three Indians with over 20 distinct categories in
Home & Personal Care Products and Foods & Beverages

The main objective of this project is to find, what are the steps Hindustan Unilever Ltd. is adapting
to be market leader and to differentiate itself from its competitors. What is the steps company is
utilizing to find current trend in the market?

Most of the product of HUL comes in the category of convenience products. They are frequently
used and bought by the customers. There is large no. of players in the market, who are supplying
similar product to the customers.
Now, customers have become smart, they have great knowledge of market, product and suppliers.
So, they are looking for the product which is providing something extra.

HUL has a wide range of product in FMCG sector, covering almost every needs and wants of the
customers. It has products for child, young & adult, male & female, etc. so, it has to differentiate its
products taking into account the needs and demands of all the sectors of the society.

Not, only product but it has to look upon the services and feedback from customers also. It should
do something to give after sales service and collect feedback from the customers.

The basic objective of this project is as mentioned above to find ways so that HUL remain market
leader by considering all the needs & wants and fulfilling their demand.
 An Introduction to Supply Chain Management
A supply chain is a network of facilities and distribution options that performs the functions of
procurement of materials, transformation of these materials into intermediate and finished products,
and the distribution of these finished products to customers.

Supply chains exist in both service and manufacturing organizations, although the complexity of the
chain may vary greatly from industry to industry and firm to firm.

Below is an example of a very simple supply chain for a single product, where raw material
is procured from vendors, transformed into finished goods in a single step, and then
transported to distribution centres, and ultimately, customers.

Realistic supply chains have multiple end products with shared components, facilities and
capacities. The flow of materials is not always along an arborescent network, various modes
of transportation may be considered, and the bill of materials for the end items may be both
deep and large.

Traditionally, marketing, distribution, planning, manufacturing, and the purchasing

organizations along the supply chain operated independently. These organizations have their
own objectives and these are often conflicting. Marketing's objective of high customer
service and maximum sales dollars conflict with manufacturing and distribution goals.

Many manufacturing operations are designed to maximize throughput and lower costs with
little consideration for the impact on inventory levels and distribution capabilities.
Purchasing contracts are often negotiated with very little information beyond historical
buying patterns.

The result of these factors is that there is not a single, integrated plan for the organization---
there were as many plans as businesses. Clearly, there is a need for a mechanism through
which these different functions can be integrated together. Supply chain management is a
strategy through which such integration can be achieved.

Supply chain management is typically viewed to lie between fully vertically integrated
firms, where a single firm, and those own the entire material flow where each channel
member operates independently. Therefore, coordination between the various players in the
chain is key in its effective management. Cooper and Ellram [1993] compare supply chain
management to a well-balanced and well-practiced relay team.

Such a team is more competitive when each player knows how to be positioned for the
hand-off. The relationships are the strongest between players who directly pass the baton,
but the entire team needs to make a coordinated effort to win the rac

The components of SCM are:

• Demand planning (forecasting)

• Demand collaboration (collaborative resolution process to determine consensus
forecasts)
• Order promising (When one can promise a product to a customer taking into account
lead times and constraints)
• Strategic network optimization (what plants and DC's should serve what markets for
what products) (monthly - yearly)
• Production and distribution planning (Coordinate the actual production and
distribution plans for a whole enterprise) (daily)
• Production scheduling (For a single location create a feasible production schedule)
(minute by minute)
• Transportation planning (For multiple supply, manufacturer, distributor and
warehousing points in a network)
• Transportation execution (Enactment of long term plans on a per shipment basis,
typically performed by focused organizations called forwarders)
• Tracking and Measuring (An ever increasing aspect of supply chain management
designed to highlight potential against the plan and possible process improvements)
• Plan of reduction of costs and management of the performance (diagnosis of the
potential and the indicators, the organization and planifiaction strategic, masters
dysfunctions in real time, evaluation and accounting reporting, evaluation and
reporting quality).
 OBJECTIVES

This shows that on what basis the research report will be, as the objectives of the research

report will be:

❖ To find the importance of supply chain management in HUL

❖ To measure the time decreased due to supply chain.

❖ How they (Channel Partners) maintain the customer preferences and demands with the help
of supply chain.

Supply Chain Decisions

We classify the decisions for supply chain management into two broad categories -- strategic and
operational. As the term implies, strategic decisions are made typically over a longer time horizon.
These are closely linked to the corporate strategy (they sometimes {\it are} the corporate strategy),
and guide supply chain policies from a design perspective. On the other hand, operational decisions
are short term, and focus on activities over a day-to-day basis.

The effort in these type of decisions is to effectively and efficiently manage the product flow in the
"strategically" planned supply chain.

There are four major decision areas in supply chain management: 1) location, 2) production,
3) inventory, and 4) transportation (distribution), and there are both strategic and
operational elements in each of these decision areas.

Location Decisions
The geographic placement of production facilities, stocking points, and sourcing points is the natural
first step in creating a supply chain. The location of facilities involves a commitment of resources to
a long-term plan.

Once the size, number, and location of these are determined, so are the possible paths by which the
product flows through to the final customer. These decisions are of great significance to a firm since
they represent the basic strategy for accessing customer markets, and will have a considerable
impact on revenue, cost, and level of service.

These decisions should be determined by an optimization routine that considers production costs,
taxes, duties and duty drawback, tariffs, local content, distribution costs, production limitations, etc.
(See Arntzen, Brown, Harrison and Trafton [1995] for a thorough discussion of these aspects.)
Although location decisions are primarily strategic, they also have implications on an operational
level.

Production Decisions
The strategic decisions include what products to produce, and which plants to produce them in,
allocation of suppliers to plants, plants to DC's, and DC's to customer markets.
As before, these decisions have a big impact on the revenues, costs and customer service levels of
the firm. These decisions assume the existence of the facilities, but determine the exact path(s)
through which a product flows to and from these facilities.
Another critical issue is the capacity of the manufacturing facilities--and this largely depends the
degree of vertical integration within the firm. Operational decisions focus on detailed production
scheduling. These decisions include the construction of the master production schedules, scheduling
production on machines, and equipment maintenance.

Other considerations include workload balancing, and quality control measures at a production
facility.

Inventory Decisions
These refer to means by which inventories are managed. Inventories exist at every stage of the
supply chain as either raw material, semi-finished or finished goods. They can also be in process
between locations.
Their primary purpose to buffer against any uncertainty, which might exist in the supply chain.
Since holding of inventories can cost anywhere between 20 to 40 percent of their value, their
efficient management is critical in supply chain operations.
It is strategic in the sense that top management sets goals. However, most researchers have
approached the management of inventory from an operational perspective.
These include deployment strategies (push versus pull), control policies --- the determination of the
optimal levels of order quantities and reorder points, and setting safety stock levels, at each stocking
location. These levels are critical, since they are primary determinants of customer service levels.

Transportation Decisions
The mode choice aspects of these decisions are the more strategic ones. These are closely linked to
the inventory decisions, since the best choice of mode is often found by trading-off the cost of using
the particular mode of transport with the indirect cost of inventory associated with that mode. While
air shipments may be fast, reliable, and warrant lesser safety stocks, they are expensive. Meanwhile
shipping by sea or rail may be much cheaper, but they necessitate holding relatively large amounts
of inventory to buffer against the inherent uncertainty associated with them.
Therefore, customer service levels, and geographic location play vital roles in such decisions. Since
transportation is more than 30 percent of the logistics costs, operating efficiently makes good
economic sense.
Shipment sizes (consolidated bulk shipments versus Lot-for-Lot), routing and scheduling of
equipment are key in effective management of the firm's transport strategy.
Supply Chain Modeling Approaches
Clearly, each of the above two levels of decisions require a different perspective. The strategic
decisions are, for the most part, global or "all encompassing" in that they try to integrate various
aspects of the supply chain. Consequently, the models that describe these decisions are huge, and
require a considerable amount of data. Often due to the enormity of data requirements, and the broad
scope of decisions, these models provide approximate solutions to the decisions they describe.
The operational decisions, meanwhile, address the day to day operation of the supply chain.
Therefore the models that describe them are often very specific in nature. Due to their narrow
perspective, these models often consider great detail and provide very good, if not optimal, solutions
to the operational decisions.

To facilitate a concise review of the literature, and at the same time attempting to
accommodate the above polarity in modeling, we divide the modeling approaches into three
areas --- Network Design, ``Rough Cut" methods, and simulation based methods. The
network design methods, for the most part, provide normative models for the more strategic
decisions.

These models typically cover the four major decision areas described earlier, and focus
more on the design aspect of the supply chain; the establishment of the network and the
associated flows on them. "Rough cut" methods, on the other hand, give guiding policies for
the operational decisions.

These models typically assume a "single site" (i.e., ignore the network) and add supply
chain characteristics to it, such as explicitly considering the site's relation to the others in the
network. A simulation method is a method by which a comprehensive supply chain model
can be analyzed, considering both strategic and operational elements.

However, as with all simulation models, one can only evaluate the effectiveness of a pre-
specified policy rather than develop new ones. It is the traditional question of "What If?"
versus "What's Best?".
 Supply Chain Management: Background

A typical supply chain includes a number of companies and activities that contain other
necessary activities in necessary businesses needed to design, produce, deliver and utilize a
product (which can be alternatively a service).

All these business activities and processes can be involved in one or multiple supply chains.
Napoleon a master war strategist, made this quote several hundred years ago: “An army
marches on its stomach”, which means the army won’t move when soldiers are hungry. This
quote can be regarded as one of the first remarks which insist on the importance of
efficiency in the supply chain.

Till around 1990s the subject of supply chain management has been a popular managerial
topic ;although it may has used in different names, and nowadays it is being given even
more attention.

A typical supply chain starts with raw material purchase, and continues with various
production, transport and storage activities absorbing other necessary managerial and
overhead resources ending with product or service delivery to final consumer. As a result
we can find out that typical elements of a supply chain will be suppliers, manufacturers,
warehouses, distribution centers and retailers. Simchi-Levi et al. define Supply Chain
Management as follows:
Supply chain management is a set of approaches utilized to efficiently integrate
suppliers, manufacturers, warehouses and stores, so that merchandise is produced
and distributed at the right quantities, to the right locations, and at the right time, in
order to minimize system-wide costs while satisfying service level requirements.”

Goods and information flows in supply chain

Supply Chain Management and Logistics

As far as traditional logistics goes, it normally includes activities which are limited to single
company or organization in order to coordinate all the activities necessary to deliver the
product to the market. These activities can be procurement, distribution, maintenance, and
inventory control and management.

In the concept of supply chain management we need a modern concept for logistics which
enjoys the concept of traditional logistics just as a part of it. In the supply chain view all the
organizations are seen as a single entity and so we need to see all the networks among these
organizations.

For doing this we need a systems approach in order to coordinate all these business
activities inside networks in addition to organizations to reach the final goal which is
nothing but ultimate consumer satisfaction. With such a systems approach we will be able to
coordinate business activities which seems to be in conflict with each other in a low level
point of view.

Main Areas in Supply Chain

There are lots of activities which are common among almost all supply chains. These
common activities make possible to produce a basic model with which makes it possible for
various kinds of supply chain satisfy their unique set of market demands and win
operating challenges. This basic model includes following decision-making areas in which
all elements in the supply chain must make decisions individually or together:

1-Production: the goal is to produce what the market desires, at the right time and with
enough production volume. For reaching such goals we need to take into account the
corresponding limitations such as capacities and desired level of quality and also take into
account other necessary functions such as workload capacity, equipment maintenance, etc.

2-Inventory: what level of inventory from different SKUs must be stocked in various stages
throughout the supply chain? Inventory level act as buffer and keep the business safe from
demand fluctuations. As holding inventory costs money, it is very important to make
decisions about optimal levels of inventory.
3-Location: along the supply chain will be various kinds of facilities. Concerning this issue
another important decision will be the optimal location for various facilities, warehouses
and storage points. Another related decision will be about the setting up of new facilities.

4-Transportation: the need to move inventory from one point to another point throughout
the supply chain is another crucial function in supply chain management which needs
another important issue in decision making. The question is how the goods must be moved
and what kind of transportation mode must be chosen? The answer can be quietly different
for different kinds of products, and also kinds of markets (e.g. geographical location,
demographical issues, infrastructures, etc.)

5-Information: this part of decision making concerns about the necessary level of data
collection and data sharing. There are good points in making deep information sharing but it
also produces lots of corresponding risks. This is also true about data collection, a rich
database leads to more precise decision makings but it also can be expensive.

The Five major Supply Chain drivers

 INTRODUCTION OF HUL

(Hindustan Unilever Limited)

Hindustan Unilever Limited (HUL) is India's largest fast moving consumer goods company, with

leadership in Home & Personal Care Products and Foods & Beverages. HUL's brands, spread across

20 distinct consumer categories, touch the lives of two out of three Indians. They endow the

company with a scale of combined volumes of about 4 million tonnes and sales of Rs.13,718 crores

The mission that inspires HUL's over 15,000 employees is to "add vitality to life". With 35 Power

Brands, HUL meets every day needs for nutrition, hygiene, and personal care with brands that help

people feel good, look good and get more out of life. It is a mission HUL shares with its parent

company, Unilever, which holds

52.10% of the equity. A Fortune 500 transnational, Unilever sells Foods and Home and Personal

Care brands in about 100 countries worldwide.

COMPANY PROFILE

Company’s Background

Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods
Company, touching the lives of two out of three Indians with over 20 distinct categories in
Home & Personal Care Products and Foods & Beverages. They endow the company with a
scale of combined volumes of about 4 million tonnes and sales of Rs.10,000 crores.

HUL is also one of the country's largest exporters; it has been recognized as a Golden Super
Star Trading House by the Government of India .

The mission that inspires HUL's over 15,000 employees, including over 1,300 managers, is
to "add vitality to life." HUL meets everyday needs for nutrition, hygiene, and personal care
with brands that help people feel good, look good and get more out of life. It is a mission
HUL shares with its parent company, Unilever, which holds 51.55% of the equity. The rest
of the shareholding is distributed among 380,000 individual shareholders and financial
institutions.

HUL's brands - like Lifebuoy, Lux, Surf Excel, Rin, Wheel, Fair & Lovely, Pond's, Sunsilk,
Clinic, Pepsodent, Close-up, Lakme, Brooke Bond, Kissan, Knorr-Annapurna, Kwality
Wall's – are household names across the country and span many categories - soaps,
detergents, personal products, tea, coffee, branded staples, ice cream and culinary products.

They are manufactured over 40 factories across India. The operations involve over 2,000
suppliers and associates. HUL's distribution network comprising about 4,000
redistribution stockists, covering 6.3 million retail outlets reaching the entire urban
population, and about 250 million rural consumers.

HUL has traditionally been a company, which incorporates latest technology in all its
operations. The Hindustan Unilever Research Centre (HLRC) was set up in 1958, and
now has facilities in Mumbai and Bangalore. HLRC and the Global Technology Centers
in India have over 200 highly qualified scientists and technologists, many with post-
doctoral experience acquired in the US and Europe.
HUL believes that an organization’s worth is also in the service it renders to the
community. HUL is focusing on health & hygiene education, women empowerment, and
water management. It is also involved in education and rehabilitation of special or
underprivileged children, care for the destitute and HIV-positive, and rural development.
HUL has also responded in case of national calamities / adversities and contributes
through various welfare measures, most recent being the village built by HUL in
earthquake affected Gujarat, and relief & rehabilitation after the Tsunami caused
devastation in South India.
 RESEARCH METHODOLOGY

Methodology includes the overall research procedures, which are followed in the research

study. This includes Research design, the sampling procedures, and the data collection

method and analysis procedures.

RESEARCH DESIGN

A research design is defined, as the specification of methods and procedures for acquiring

the Information needed. It is a plant or organizing framework for doing the study and

collecting the data. Designing a research plan requires decisions all the data sources,

research approaches, Research instruments, sampling plan and contact methods.

Research design is mainly of following types: -

1. Exploratory research.

2. Descriptive studies

3. Casual studies

SAMPLE DESIGN

– SAMPLE UNIT: NCR

– SAMPLE SIZE: 80
– SAMPLE SELECTION: Random, convenient
 DATA COLLECTION METHOD

PRIMARY DATA

❖ Interview

❖ Questionnaire

SECONDARY DATA

❖ Interview

❖ Magazines

❖ News paper

DATA COLLECTION METHOD

PRIMARY SECONDARY

Direct personal Interview

Indirect personal Interview Published Sources Unpublished Sources

Information from correspondents Govt. publication

Mailed questionnaire Report Committees &

Commissions

Question filled by enumerators. Private Publication

Research Institute
 RESEARCH PROBLEM AND ITS RELEVANCE

RESEARCH PROBLEM

HUL is facing the problem rather challenges from

• Large no. of players in the market

• Continuous changes in the taste and preferences of the customers

Such problems were identified as Research Problems and the objective statement was
formed on its basis.

RELEVANCE OF THE RESEARCH

The relevance of the research is to find out

• Acceptability among the customers

• Promotional analysis

SCOPE OF THE RESEARCH

The scope of the research has been limited to the NCR- DELHI
Keeping in mind the objective stated, questionnaire was designed for the people.
Subsequently a research was conducted.

Data Collection Method:

For this research study, primary data as well as secondary data was collected.

Primary Data has been collected through personal contact. For this purpose both
questionnaire and one-on-one interview was considered with the consumers, shop owners
and distributors & suppliers of the company.
Secondary data has collected from magazines, newspaper, company literature and websites.
MAJOR FINDINGS

Major competitors

1. Dabur
2. Jhandu
3. Johnson &Johnson
4. Cavin Care
5. Procter & Gamble
6. Britannia
7. ITC
8. Gillette

METHODOLOGY FOR RESEARCH PROBLEM

Following steps where taken in to consideration, to identify the research problem-

1. Informal investigation
• Visit to the shop owners, talked to the distributors and to the consumers in
the locality and surrounding areas.

2. External and Internal Analysis

• Understanding customer problem
• Understanding the market structure
3. Situational Analysis
• Tastes & preferences
• Needs & income
• Major Competitors
ITC
Dabur
Procter & Gamble
Cavin Care
Amul
Johnson & Johnson, etc
 SAMPLING TECHNIQUE

For my survey I used Cluster Sampling technique. I selected a sample of 100 people around
the area and interviewed them according to the questionnaire.
In the survey I tried to find out their preferences & tastes, their purchasing habit, are they
brand loyal or they consider their friends advice or some reference group during purchasing.
I also tried to find out that are they satisfied with the quality or present stature of product,
did they want any change in the existing product.

I also interviewed some of the shop owner and distributors and try to find out what the
company is doing to sustain their customer and what new changes they are bringing in their
product to gain competitive advantage from other competitors

RESEARCH INSTRUMENT

Research instruments, for the purpose of primary data collection were Questionnaires. The
Questionnaires were designed in two sets, one is for customers and another is for shop-
owners and distributors.

• The first set is to find out about the needs and preferences of the customers and what
they want from in the product and also the level of knowledge about different
products in the market.

• Second set is all about what are the steps company are taking to get about the
information about he changing preferences in the taste and needs of the customers
and what company is doing to sustain their market position as well as to tap new
market.
 DATA ANALYSIS

For the analysis of data collected through survey work, a series of steps were followed
which are given in a chronological order

• Each question of the questionnaire was assigned codes (coding)

• Each questionnaire was punched into ms-excel sheet thus forming a data base
(punching)
• Further the data was analyzed by using diagrams, graphs, charts etc.
• The graphic rating scale and ranking method was used to measure the response and
attitude of the customer.

Finally, an effort was made to extract meaningful information from analyzed data, which
acted as a base for the recommendations.

1. From whom do you prefer for the supply of goods?

direct from organization

19% distributor
25%

whole seller
56%
2. When you place the order?

after end of stock

21%
during schemes
32%

being less stock

47%

3. Are you satisfied with the service of supply chain management of HUL?

no
11%

yes
89%
4. Which types of decision strongly affect the supply chain?

front end decisions

29%

back end decisions

71%

5. During the Procurement, Distribution and the Logistics decisions are

decentralized
17%

centralized
83%
6. Which type of Framework do you consider in SCM?

strategic
23%
functional
31%

structural
46%

7. Which companies products supply chain do you find suitable and easy?

itc
13%

hul
36%

dabur
22%

p&g
29%
 CONCLUSION

The various recommendations reached at, are a result of direct questionnaires as well as
informal responses given by the various distributors and dealers

• Mostly dealers buy goods from the distributors and customers buy goods from the
dealers.

• Dealer’s plays order when the stock is being less than one production inventory.

• In the supply chain decision of the HUL company is the back-end decision.

• In the supply chain of HUL Procurement, Distribution and the Logistics decisions
are centralized.

• HUL companies supply chain products suitable and easy.

 LIMITATIONS OF STUDY

1. The sample size may not adequately represent the national market.

2. This study has not been conducted over an extended period of time, it do
not consider any changes due to changes in the sudden needs of the
customer because of some seasonal change or any kind of festivals.
 RECOMMENDATIONS

There are the following suggestions regarding this according to my research report:

• First of all i would like to suggest dealer should buy the products from the directly to
the organization so that the SCM would be better and they can get the product on the
cheaper price and the management of the supply chain could be better.

• Dealers should generally buy the product when the schemes are going on so that
they can get the maximum benefit.

• Since back-end decisions affect the organization most in the inventory management
so they should take care for this.

• Dealers should take care for the inventory management so that they would be in the
race as P&G, Dabur and ITC are the competitors of the HUL.
 QUESTIONNAIRE
Name of the shop:
City:
Authorized Dealer:

Sir/mam please answers these questions:-

1. From whom do you prefer for the supply of goods?

a. Distributor
b. Whole seller
c. Direct from organization

2. When you place the order?

a. After end of stock

b. Being less stock
c. During schemes

3. Are you satisfied with the service of supply chain management of HUL?

a. Yes
b. No

4. Which types of decision strongly affect the supply chain?

a. Back-end Decisions
b. Front-end Decisions

5. Does the Procurement, Distribution and the Logistics decisions are

a. Centralized
b. Decentralized

6. Which type of Framework do you consider in SCM?

a. Strategic
b. Structural
c. Functional

7. Which companies products supply chain do you find suitable and easy?

a. P&G
b. HUL
c. ITC
d. Dabur

8. What suggestion do you recommend for supply chain management in HUL?

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Thank you for your effort!