A

RESEARCH REPORT
ON

“A RESEARCH OF SUPPLY CHAIN MANAGEMENT OF

In the partial fulfilment for the award of the degree of

SUBMITTED BY: -
Manoj Kumar

PGDM-VIth Trimester
Roll No. 2020036

1|Page
 MENTOR CERTIFICATE

This is to certify that the project report entitled “A Research of Supply Chain

Management of Hindustan Unilever Limited “submitted by Manoj Kumar in partial

fulfillment of the requirement for the award of Master of PGDM, is a record of

candidates own work carried out by him under my guidance, this has not been submitted

to any other University or Institution for the award of any degree/diploma/certificate.

Date: Signature of Supervisor

2|Page
 CERTIFICATE
This is to certify that Mr. Manoj Kumar, Roll No: 2020036 is a student of Jaipuria

School of Business, Ghaziabad, and has done his/her Research Project “A Research of

Supply Chain Management of Hindustan Unilever Limited.” in the specialization

area Operation Management.

The work embodied in this report is original and is of the standard expected of an PGDM

student and has not been submitted in part or full to this or any other University for the

award of any Degree or Diploma. he has completed all requirements for Research Project

Report and the work is fit for evaluation.

SIGNATURE OF THE GUIDE

3|Page
 DECLARATION

I hereby declare that the dissertation entitled the ‘Research Report in HUL Ltd. on the
topic of “A Research of Supply Chain Management of Hindustan Unilever Limited”
submitted in partial fulfillment of the requirement for the degree of Post Graduate
Diploma in Management is my original work & not submitted for the award of any other
degree, diploma or other similar title of prizes.

Date:

Place:
Manoj Kumar
Roll No.: 2020036
PGDM 6th Trimester

4|Page
 ACKNOWLEDGEMENT

On the successful completion of this project, I would like to express gratitude to all the

people who have helped us in completion of this project. I wish to extend my deep and

sincere gratitude to Prof. Rini (Faculty) who take out time from their busy schedules to

provide us with their valuable guidance at the time of need and who also helped us whole

heartedly to achieve the ultimate goal of the study. I would also like thank her for

providing us guidance for understanding the investment management. Finally, would like

to express my gratitude to, all faculty members who gave us constant guidance

throughout our grand project.

Manoj Kumar
Roll No.: 2020036
PGDM 6th Trimester

5|Page
 TABLE OF CONTENTS
S.No. TITLE Page no.

1. Executive Summary 7

2. Overview 8-9

3. Objective Of Research 10

4. Introduction 11-19

5. Objective 20

6. Supply Chain Management 21-48

7. Hindustan Unilever Ltd. 49-53

8. Company Profile 54-59

9. Research Methodology 60-62

10. Research Problem 63-67

11. Sampling Technique 68-69

12. Data Analysis and Interpretation 70-77

13. Conclusion 78

14. Limitation 79

15. Recommendations/ Suggestions 80

16. Bibliography 81

17. Questionnaire 82-84

6|Page
 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 their market.

This is also to find the preferences of customer and their 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.

. 

7|Page
 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

every day needs for nutrition, hygiene, and personal care with brands that help people

feel good, look good and get more out of life.

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.

HUL works to create a better future every day and helps people feel good, look good and

get more out of life with brands and services that are good for them and good for others.

With over 35 brands spanning 20 distinct categories such as soaps, detergents, shampoos,

skin care, toothpastes, deodorants, cosmetics, tea, coffee, packaged foods, ice cream, and

water purifiers, the Company is a part of the everyday life of millions of consumers

across India. Its portfolio includes leading household brands such as Lux, Lifebuoy, Surf

Excel, Rin, Wheel, Fair & Lovely, Pond’s, Vaseline, Lakmé, Dove, Clinic Plus, Sunsilk,

Pepsodent, Close-up, Axe, Brooke Bond, Bru, Knorr, Kissan, Kwality Wall’s and Pureit.

The Company has over 16,000 employees and has an annual turnover of27408crores

(financial year 2013 - 2014). HUL is a subsidiary of Unilever, one of the world’s leading

suppliers of fast moving consumer goods with strong local roots in more than 100

countries across the globe with annual sales of €49.8 billion in 2013. Unilever has

67.25% shareholding in HUL.

8|Page
We meet every day needs for nutrition; hygiene and personal care with brands that help

people feel good, look good and get more out of life. Sustainability is at the heart of our

business, and through our brands, we seek to inspire people to take small everyday

actions that can add up to a big difference for the world.

Our deep roots in local cultures and markets around the world give us our strong

relationship with consumers and are the foundation for our future growth. We will bring

our wealth of knowledge and international expertise to the service of local consumers – a

truly multi-local multinational.

Our long-term success requires a total commitment to exceptional standards of

performance and productivity, to working together effectively, and to a willingness to

embrace new ideas and learn continuously.

To succeed also requires, we believe, the highest standards of corporate behaviour

towards everyone we work with, the communities we touch, and the environment on

which we have an impact.

This is our road to sustainable, profitable growth, creating long-term value for our

shareholders, our people, and our business partners.

9|Page
 OBJECTIVE OF THE RESEARCH

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

10 | P a g e
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 centers, 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.

11 | P a g e
Although the supply chain’s overall performance depends on the sites’ joint performance,

usually each site is managed by fairly autonomous management teams, each with its own

objectives and mission. These objectives may have little to do with the supply chain’s

overall performance. Worse, these objectives may conflict. The consequence is that the

different sites may have operational goals that, if met, result in inefficiencies for the

overall chain.

For example, a northern California computer manufacturer’s circuit assembly operation

used cost per placement as its overriding performance measure. The site focused on

reducing placement cost. This was not inherently wrong, but it didn’t take into account

how the site’s performance affected the overall supply chain of computer manufacturing

and distribution. Consequently, the site held excessive inventory in order to operate in

large lot sizes.

In another case, an Indiana component manufacturing plant of an automobile

manufacturer started aggressively cutting inventory, as its performance was explicitly

determined by its inventory. As a result, the plant’s response times to the final assembly

plants and the spare parts distribution centers became longer and highly erratic. The final

assembly plants and the parts distribution centers had to keep inventory high to give their

customers reasonable service.

We observed that there were no performance measures for the complete supply chain.

Many companies have this problem. Those that do have such metrics often do not

monitor them regularly. Or their metrics are not directly related to customer satisfaction.

For example, some companies use inventory turns for all supply chain inventories as the

main performance measure. Yet they do not measure their response time or service fill
12 | P a g e
rates to customers. We contend that supply chain metrics must be oriented to customer

satisfaction. This leads us to the second pitfall

Understanding and tracking sources of uncertainties is the first step. The next step is to

use such information to drive inventory stocking policies. This is a dynamic process; the

uncertainties are constantly changing. Some suppliers become more reliable in both

delivery and quality; others become less reliable. Demand for some items becomes more

predictable as products mature; demand for others becomes more unpredictable.

Inventory needs for some components stabilize as multiple products use common parts.

Inventory stocking policies should be periodically adjusted to reflect such changes.

Companies commonly use generic stocking policies: all A stock-keeping units (SKUs)

have three weeks of safety stock, B SKUs have four weeks, and so on. The classification

of items by transaction volume does not necessarily reflect the magnitude of uncertainties

in supply and demand. More rigorous techniques should be used. One California

automobile parts supply warehouse classifies an item based on the transaction volumes

between the warehouse and the supplier. Hence, it has SKUs that are classified as A

items whose annual demand is only one-tenth of others that are classified as C items. The

irony is that this warehouse uses generic stocking policies for the SKUs. Simple analysis

reveals that the company could reduce 40 percent of its inventory investment while

maintaining the same level of customer service just by linking stocking policies to the

sources of the uncertainties that require inventory in the first place

Many new approaches to product-process design have been introduced.5 Product designs

that enable fast and precise manufacturing and assembly are critical for cost and quality

effectiveness, but the implications for supply chain inventory are usually ignored or
13 | P a g e
poorly understood. The result is that all of the anticipated savings may be lost owing to

increased distribution and inventory costs. Similarly, product introduction without proper

supply chain planning can create problems like product unavailability, excessively long

delivery lead times, and unnecessary expediting costs, which may ultimately affect the

product’s success.

A U.S. computer peripherals manufacturer makes printers for worldwide distribution.

The printers have a few country-specific components, such as the power supply and

owner’s manual. The U.S. factory produces to meet demand forecasts, but by the time the

printers reach regional distribution centers, demand has changed. Because the printers

have been prepared for specific countries, the distribution centers have no flexibility to

respond to changing demand patterns. The result is simultaneously high inventory

stockpiles and backlogs.

This manufacturer is now redesigning the assembly process so that the distribution

centers can add the country-specific components. The U.S. factory will ship a generic

product. Tremendous savings in inventory investment and flexibility are expected. It is

worth noting that design changes are not sufficient to successfully “design for supply

chain management.” In this example, the distribution centers have to become involved in

the final manufacturing stage, but they belong to a different organization within the

company than the manufacturing sites. Organizational barriers between these two groups

will require significant effort to gain their collaboration (see Pitfall 9).s

Design for supply chain management can be a powerful concept for new product

introduction. One computer peripheral manufacturer used such a concept to introduce a

second model of its product. Rather than develop a product with a different bill of
14 | P a g e
materials and manufacturing process, the company decided to design a generic product

that could be made into either model at the distribution centers. This design was more

expensive, but it provided much greater flexibility for meeting demand. Flexibility is

especially important for a new product, whose demand could be highly variable as well

as unpredictable.

Going beyond the internal supply chain by including external suppliers and customers

often exposes new opportunities for improving internal operations. Manufacturers

commonly view their immediate customers — such as retailers or other manufacturers —

as the end of the supply chain. Manufacturers with a hierarchy of distribution centers

concentrate on inventory costs and service only up to the major distribution centers.

Manufacturers often have service targets in the form of fill rate, the fraction of customer

demands met without delay. “Customer demand” usually refers to orders from dealers.

But good service to dealers does not necessarily translate into good service to customers;

manufacturers who do not consider the entire supply chain will have operational

inefficiencies.

Using fill rates as service targets is problematic for another reason. Dealers have their

own inventory control systems. For them, an 85 percent fill rate, say, with highly variant

delays for the remaining 15 percent, would probably be worse than a 0 percent off-the-

shelf fill rate with a reliable resupply time of one week. Understanding the dealers’

inventory control systems is the only way for the manufacturer to accurately set internal

service targets.

Another benefit for incorporating dealers into the supply chain comes from sharing

information. By knowing the dealers’ inventory levels, the manufacturer can respond
15 | P a g e
accordingly. It can appropriately reprioritize dealer orders, expedite shipments, and use

overtime. Similarly, dealers who have access to the manufacturer’s inventory status can

respond to market changes more promptly.

Dealers’ inventory control systems determine, to a large extent, their reorder patterns,

that is, frequency, size, and composition. Hence, understanding their inventory control

systems would also improve the distribution network’s ability to forecast demand.

As described earlier, manufacturers should understand the needs of stakeholders that

affect or are affected by the supply chain. Such an understanding can result in better

targets and operating efficiencies. It can also expose opportunities outside the supply

chain.

A recent study found that the U.S. companies that stand apart from their peers in terms of

their logistics operations typically use more data-processing technology and have a

higher level of information system support so that they have more electronic data

interchange with their suppliers and customers.7 This reduces or eliminates many of the

administrative delays in the supply chain.

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

16 | P a g e
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 race.

The components of SCM are:

Plan

Every company needs a strategy on how to manage the resources in order to achieve

their customers demand for their products and services. The supply chain management is

developing a set of metrics to monitor the supply chain so that it can deliver high

qualities and values to customers.

17 | P a g e
Source

To create their products, companies need to be very careful when choosing suppliers to

deliver their goods and services needed. The managers need to develop a set pricing and

delivery system in the supply chain. They can also put processes for managing their

goods and goods inventory, for example; receiving shipments.

Make

In manufacturing the supply chain manager should always schedule the activities that are

needed for the production, packaging, testing and preparation for delivery. The most

metric-intensive portion of the supply chain, production output and measure levels.

Deliver

This part is mainly referred to as logistics by the supply chain management. In this case

companies coordinate receipts of orders, pick carriers to get products to customers and

develop a network of warehouses.

Return
In many companies this is usually where the problem is – in the supply chain. The
planners should create a flexible and responsible network for receiving a flaw and excess
products sent back to them (from customers).

In many companies this is usually where the problem is – in the supply chain. The

planners should create a flexible and responsible network for receiving a flaw and excess

products sent back to them (from customers).

18 | P a g e
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).

19 | P a g e
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.

20 | P a g e
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 types 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.

21 | P a g e
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.

22 | P a g e
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.

23 | P a g e
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.

24 | P a g e
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.

25 | P a g e
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?".

26 | P a g e
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

27 | P a g e
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

28 | P a g e
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 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.

29 | P a g e
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.

30 | P a g e
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.)

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.

31 | P a g e
 The Five major Supply Chain drivers

(Source: Michael Hugos essentials of SCM)

32 | P a g e
SCM Goal

Supply chain management is responsible for providing a flow of material with a high

level of velocity and relevant information which makes the supply chain transparent and

efficient enough to produce the product or service without any interruption and on a

timely manner.

On the other hand various kinds of demand fluctuations make distortions in business

processes which make a bumpy rout for SCM execution. For making an efficient supply

chain, as a goal, SCM is responsible for considering and reducing total supply chain cost.

Such a holistic cost can be a composition of following elements:

• acquisition costs and Raw materials

• Inbound and outbound transportation costs

• Facility investment costs

• Direct and indirect manufacturing costs

• Direct and indirect distribution centre cost

• Inventory carrying costs

• Interfaculty transportation costs

33 | P a g e
Uncertainty in SCM

One key issue known to impact on the effectiveness of a supply chain is that of

uncertainty (Davis, 1993). Uncertainty can emerge up in both sides of demand and supply

and as a result affects the manufacturing functions from both sides. The “supply chain

complexity triangle” provides an explanation for this far from equilibrium behavior and

gives a useful insight into the generation of uncertainty within supply chains (Wilding,

1997b). when we come to find the roots of such level of uncertainty in the supply chain

the whole issue boils down to three interacting but independent effects.

These effects considerably amplify the uncertainty within the systems inside the supply

chains. These effects are called demand amplification, parallel interactions and

deterministic chaos. Figure 2.5 depicts these three effects and their interactions.

34 | P a g e
 Supply chain complexity triangle (wilding 1998)

Parallel Interactions: here the concern is the interactions that happens among

companies and actors which act within the same echelon level e.g. a supplier affects not

only the activities of its customer but other identical suppliers.

Deterministic chaos in supply chains

The Collins English dictionary describes chaos as meaning “complete disorder and

confusion”. However, within this thesis the term chaos describes deterministic chaos.

According to Kaplan and Glass (1995, p. 27) and Abarbanel (1996, p. 15), Chaos is

defined as aperiodic, bounded dynamics in a deterministic system with sensitivity

dependence on initial conditions, and has structure in phase space.

35 | P a g e
Now let’s take a closer look at the terms which are used in the abovementioned

definition:

• A periodic: means that the same state, situation or activity is never repeated twice

• Bounded: through the iterations the state remains finite and cannot adopt an infinite

value.

• Deterministic: this condition excludes the random nature from the definition, which

affects the dynamic environment

• Sensitivity to initial conditions: two points that are close together at first find distance as

time proceeds.

• Structure in phase space: Non-linear systems are described by means of

multidimensional vectors. The space in which these vectors lie is called phase space.

According to (Abarbanel, 1996) the dimension of phase space is an integer. Scientists and

researchers have noticed that chaotic systems enjoy apparent and distinct patterns.

Stacey (1993a, p.228) emphasizes this by defining chaos as order (a pattern) within

disorder (random behavior).

36 | P a g e
Professor Ian Stewart proposes the following simplified definition (Stewart, 1989, p. 17)

Stochastic behavior occurring in a deterministic system. According the exact meaning of

Stochastic which means without any law, or with random behavior and the meaning of

deterministic which means having fixed laws, the definition can be simplified as follows:

“Chaos is a lawless behavior which is controlled by a set of laws”

According to such view we can conclude that Chaos doesn’t have any Chance-based

element and as a result a predictable system should be expected theoretically. The reason

by which such systems are less predictable in practice is the effect of non-linearity. On

the other hand as the system is sensitive to its conditions in the first point, any

infinitesimal changes made within initial conditions of the variables will surely affect the

ultimate response.

On the other hand, we can find a reverse implication from chaos theory in which events

with random behavior can be predicted and this is different from what is basically

believed about events with random nature.

37 | P a g e
There were lots of events in the past which was considered too complicated to be

predicted due to the hugely disordered information data base collected in the past. Today

lots of them can be simply explained by simple rules.

Of course, according to the nature of the chaotic systems we should consider the

limitations for the possible level of acc as mentioned previously the behavior of a system

with chaotic nature cannot be expected to happen twice, in an exact manner but may h

append within a limited level of accuracy curacy in the prediction.

38 | P a g e
Chaos resulting from supply chain decision-making processes

The Beer game is the name for a management game that has developed around three

decades ago to illustrate the dynamic behavior of supply chains. Although the games

happen in a very simple business system, it shows how relating feedback loops between

different business partners bring complexity into the supply chain.

The game is usually conducted with four teams each of which act as independent

business partners which usually are: retailer, wholesaler, distributor and manufacturer.

A result from researchers at MIT, investigating upon the decision-making process that

takes place during the game is stated by (Larsen et al., 1989), which says participants in

the game apply simple rules for making orders through the game. After numerous runs of

the game analysts recognized that the players considerably conform to these rules. There

are of course some variations in application of these rules which more or less depends on

the participant personality. Some players meticulously count their entire inventory but

some other ignores it occasionally.

Some other have a slow response to demand variations while some others react

vigorously. As the participants more or less adopt common rules in decision making, it is

possible to develop a simulation for more study. The simulations were planned to be run

over a pretty short time e.g. 60 weeks. The point that should be mentioned here is that

such a simulation with this short period of run cannot bring up the complex behavior of

the supply chain.

39 | P a g e
The result from the simulation run revealed that even in such a simple model one of the

four participating teams in the supply chain distort normal ordering patterns and

subsequently the correspondent inventory levels which should be called nothing but

deterministic chaos.

According to (Mosekilde et al., 1991), such a chaos produces costs to the system that are

significantly sub-optimal, beyond the minimum possible costs by over 500 per cent.

The result also shows that all slight changes e.g., daily minor errors, delays, change of

mind, etc. that seems never can happens in a routine and regular base, have drastic effect

on the supply chain efficiency when are considered from an aggregated view.

40 | P a g e
Network Design Methods

As the very name suggests, these methods determine the location of production, stocking,

and sourcing facilities, and paths the product(s) take through them. Such methods tend to

be large scale, and used generally at the inception of the supply chain.

The earliest work in this area, although the term "supply chain" was not in vogue, was by

Geoffrion and Graves [1974]. They introduce a multicommodity logistics network design

model for optimizing annualized finished product flows from plants to the DC's to the

final customers. Geoffrion and Powers [1993] later give a review of the evolution of

distribution strategies over the past twenty years, describing how the descendants of the

above model can accommodate more echelons and cross commodity detail.

Breitman and Lucas [1987] attempt to provide a framework for a comprehensive model

of a production-distribution system, "PLANETS", that is used to decide what products to

produce, where and how to produce it, which markets to pursue and what resources to

use. Parts of this ambitious project were successfully implemented at General Motors.

Cohen and Lee [1985] develop a conceptual framework for manufacturing strategy

analysis, where they describe a series of stochastic sub- models, that considers annualized

product flows from raw material vendors via intermediate plants and distribution

echelons to the final customers. They

41 | P a g e
use heuristic methods to link and optimize these sub- models. They later give an

integrated and readable exposition of their models and methods in Cohen and Lee [1988].

Cohen and Lee [1989] present a normative model for resource deployment in a global

manufacturing and distribution network. Global after-tax profit (profit-local taxes) is

maximized through the design of facility network and control of material flows within the

network. The cost structure consists of variable and fixed costs for material procurement,

production, distribution and transportation. They validate the model by applying it to

analyze the global manufacturing strategies of a personal computer manufacturer.

Finally, Arntzen, Brown, Harrison, and Trafton [1995] provide the most comprehensive

deterministic model for supply chain management. The objective function minimizes a

combination of cost and time elements. Examples of cost elements include purchasing,

manufacturing, pipeline inventory, transportation costs between various sites, duties, and

taxes.

Time elements include manufacturing lead times and transit times. Unique to this model

was the explicit consideration of duty and their recovery as the product flowed through

different countries. Implementation of this model at the Digital Equipment Corporation

has produced spectacular results --- savings in the order of $100 million dollars.

42 | P a g e
Clearly, these network-design based methods add value to the firm in that they lay down

the manufacturing and distribution strategies far into the future. It is imperative that firms

at one time or another make such integrated decisions, encompassing production,

location, inventory, and transportation, and such models are therefore indispensable.

Although the above review shows considerable potential for these models as strategic

determinants in the future, they are not without their shortcomings. Their very nature

forces these problems to be of a very large scale. They are often difficult to solve to

optimality. Furthermore, most of the models in this category are largely deterministic and

static in nature.

Additionally, those that consider stochastic elements are very restrictive in nature. In

sum, there does not seem to yet be a comprehensive model that is representative of the

true nature of material flows in the supply chain.

43 | P a g e
Rough Cut Methods

These models form the bulk of the supply chain literature, and typically deal with the

more operational or tactical decisions. Most of the integrative research (from a supply

chain context) in the literature seems to take on an inventory management perspective.

In fact, the term "Supply Chain" first appears in the literature as an inventory

management approach. The thrust of the rough-cut models is the

development of inventory control policies, considering several levels or echelons

together.

These models have come to be known as "multi-level" or "multi-echelon" inventory

control models. For a review the reader is directed to Vollman et al. [1992].

Multi-echelon inventory theory has been very successfully used in industry. Cohen et al.

[1990] describe "OPTIMIZER", one of the most complex models to date --- to manage

IBM's spare parts inventory. They develop efficient algorithms and sophisticated data

structures to achieve large-scale systems integration.

Although current research in multi-echelon-based supply chain inventory problems

shows considerable promise in reducing inventories with increased customer service, the

studies have several notable limitations.

First, these studies largely ignore the production side of the supply chain. Their starting

point in most cases is a finished goods stockpile, and policies are given to manage these

44 | P a g e
effectively. Since production is a natural part of the supply chain, there seems to be a

need with models that include the production component in them.

Second, even on the distribution side, almost all published research assumes an

arborescence structure, i. e. each site receives re-supply from only one higher level site

but can distribute to several lower levels.

Third, researchers have largely focused on the inventory system only. In logistics-system

theory, transportation and inventory are primary components of the order fulfillment

process in terms of cost and service levels. Therefore, companies must consider important

interrelationships among transportation, inventory and customer service in determining

their policies.

Fourth, most of the models under the "inventory theoretic" paradigm are very restrictive

in nature, i.e., mostly they restrict themselves to certain well known forms of demand or

lead time or both, often quite contrary to what is observed.

The preceding sections are a selective overview of the key concepts in the supply chain

literature. Following is a list of recommended reading for a quick introduction to the area.

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.

45 | P a g e
Supply Chain Decisions

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.

 Location Decisions

 Production Decisions

 Inventory Decisions

 Transportation Decisions

46 | P a g e
 INTRODUCTION OF HUL

(Hindustan Unilever Limited)

Soon after followed Lifebuoy in 1895 and other famous brands like Pears, Lux and Vim.

Vanaspati was launched in 1918 and the famous Dalda brand came to the market in 1937.

In 1931, Unilever set up its first Indian subsidiary, Hindustan Vanaspati Manufacturing

Company, followed by Lever Brothers India Limited (1933) and United Traders Limited

(1935). These three companies merged to form HUL in November 1956; HUL offered

10% of its equity to the Indian public, being the first among the foreign subsidiaries to do

so. Unilever now holds 67.25% equity in the company. The rest of the shareholding is

distributed among about three lakh individual shareholders and financial institutions.

The erstwhile Brooke Bond's presence in India dates back to 1900. By 1903, the

company had launched Red Label tea in the country. In 1912, Brooke Bond & Co. India

Limited was formed. Brooke Bond joined the Unilever fold in 1984 through an

international acquisition. The erstwhile Lipton's links with India were forged in 1898.

Unilever acquired Lipton in 1972, and in 1977 Lipton Tea (India) Limited was

incorporated.

Pond's (India) Limited had been present in India since 1947. It joined the Unilever fold

through an international acquisition of Chesebrough Pond's USA in 1986.

47 | P a g e
Since the very early years, HUL has vigorously responded to the stimulus of economic

growth. The growth process has been accompanied by judicious diversification, always in

line with Indian opinions and aspirations.

The liberalization of the Indian economy, started in 1991, clearly marked an inflexion in

HUL's and the Group's growth curve. Removal of the regulatory framework allowed the

company to explore every single product and opportunity segment, without any

constraints on production capacity.

Simultaneously, deregulation permitted alliances, acquisitions and mergers. In one of the

most visible and talked about events of India's corporate history, the erstwhile Tata Oil

Mills Company (TOMCO) merged with HUL, effective from April 1, 1993. In 1996,

HUL and yet another Tata company, Lakme Limited, formed a 50:50 joint venture,

Lakme Unilever Limited, to market Lakme's market-leading cosmetics and other

appropriate products of both the companies. Subsequently in 1998, Lakme Limited sold

its brands to HUL and divested its 50% stake in the joint venture to the company.

HUL formed a 50:50 joint venture with the US-based Kimberly Clark Corporation in

1994, Kimberly-Clark Lever Ltd, which markets Huggies Diapers and Kotex Sanitary

Pads. HUL has also set up a subsidiary in Nepal, Unilever Nepal Limited (UNL), and its

factory represents the largest manufacturing investment in the Himalayan kingdom. The

UNL factory manufactures HUL's products like Soaps, Detergents and Personal Products

both for the domestic market and exports to India.

The 1990s also witnessed a string of crucial mergers, acquisitions and alliances on the

Foods and Beverages front. In 1992, the erstwhile Brooke Bond acquired Kothari General

48 | P a g e
Foods, with significant interests in Instant Coffee. In 1993, it acquired the Kissan

business from the UB Group and the Dollops Icecream business from Cadbury India.

As a measure of backward integration, Tea Estates and Doom Dooma, two plantation

companies of Unilever, were merged with Brooke Bond. Then in 1994, Brooke Bond

India and Lipton India merged to form Brooke Bond Lipton India Limited (BBLIL),

enabling greater focus and ensuring synergy in the traditional Beverages business. 1994

witnessed BBLIL launching the Wall's range of Frozen Desserts. By the end of the year,

the company entered into a strategic alliance with the Kwality Ice-cream Group families

and in 1995 the Milk food 100% Ice-cream marketing and distribution rights too were

acquired.

Finally, BBLIL merged with HUL, with effect from January 1, 1996. The internal

restructuring culminated in the merger of Pond's (India) Limited (PIL) with HUL in

1998. The two companies had significant overlaps in Personal Products, Speciality

Chemicals and Exports businesses, besides a common distribution system since 1993 for

Personal Products. The two also had a common management pool and a technology base.

The amalgamation was done to ensure for the Group, benefits from scale economies both

in domestic and export markets and enable it to fund investments required for

aggressively building new categories.

In January 2000, in a historic step, the government decided to award 74 per cent equity in

Modern Foods to HUL, thereby beginning the divestment of government equity in public

sector undertakings (PSU) to private sector partners. HUL's entry into Bread is a strategic

49 | P a g e
extension of the company's wheat business. In 2002, HUL acquired the government's

remaining stake in Modern Foods.

In 2003, HUL acquired the Cooked Shrimp and Pasteurized Crabmeat business of the

Amalgam Group of Companies, a leader in value added Marine Products exports.

HUL launched a slew of new business initiatives in the early part of 2000’s. Project

Shakti was started in 2001. It is a rural initiative that targets small villages populated by

less than 5000 individuals. It is a unique win-win initiative that catalyses rural affluence

even as it benefits business. Currently, there are over 45,000 Shakti entrepreneurs

covering over 100,000 villages across 15 states and reaching to over 3 million homes.

In 2002, HUL made its foray into Ayurvedic health & beauty centre category with the

Ayush product range and Ayush Therapy Centers. Hindustan Unilever Network, Direct to

home business was launched in 2003 and this was followed by the launch of ‘Pureit’

water purifier in 2004.

In 2007, the Company name was formally changed to Hindustan Unilever Limited after

receiving the approval of shareholders during the 74th AGM on 18 May 2007. Brooke

Bond and Surf Excel breached the Rs 1,000 crore sales mark the same year followed by

Wheel which crossed the Rs. 2,000 crore sales milestone in 2008.

On 17th October 2008, HUL completed 75 years of corporate existence in India.

In January 2010, the HUL head office shifted from the landmark Lever House, at Back

bay Reclamation, Mumbai to the new campus in Andheri (E), Mumbai.

50 | P a g e
On 15th November, 2010, the Unilever Sustainable Living Plan was officially launched in

India at New Delhi.

In March, 2012 HUL’s state of the art Learning Centre was inaugurated at the Hindustan

Unilever campus at Andheri, Mumbai.

In April, 2012, the Customer Insight & Innovation Centre (CiiC) was inaugurated at the

Hindustan Unilever campus at Andheri, Mumbai

HUL completes 80 years of corporate existence in India on October 17th, 2013.

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 tones and sales of Rs.13,718 crores

HUL works to create a better future every day and helps people feel good, look good and

get more out of life with brands and services that are good for them and good for others.

With over 35 brands spanning 20 distinct categories such as soaps, detergents, shampoos,

skin care, toothpastes, deodorants, cosmetics, tea, coffee, packaged foods, ice cream, and

water purifiers, the Company is a part of the everyday life of millions of consumers

across India. Its portfolio includes leading household brands such as Lux, Lifebuoy, Surf

Excel, Rin, Wheel, Fair & Lovely, Pond’s, Vaseline, Lakmé, Dove, Clinic Plus, Sunsilk,

Pepsodent, Close-up, Axe, Brooke Bond, Bru, Knorr, Kissan, Quality Wall’s and Pure it.

51 | P a g e
The Company has over 16,000 employees and has an annual turnover of27408crores

(financial year 2013 - 2014). HUL is a subsidiary of Unilever, one of the world’s leading

suppliers of fast-moving consumer goods with strong local roots in more than 100

countries across the globe with annual sales of €49.8 billion in 2013. Unilever has

67.25% shareholding in HUL.

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.

52 | P a g e
PAST MILESTONE

CRONOLOGY

In the summer of 1888, visitors to the Kolkata harbor noticed crates full of Sunlight soap

bars, embossed with the words "Made in England by Lever Brothers". With it, began an

era of marketing branded Fast Moving Consumer Goods (FMCG). Soon after followed

Lifebuoy in 1895 and other famous brands like Pears, Lux and Vim. Vanaspati was

launched in 1918 and the famous Dalda brand came to the market in 1937.

PRESENT STATURE

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.

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.

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,

Quality 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 37 factories across India. The operations involve over 2,000

suppliers and associates. HUL's distribution network, comprising about 2,500

redistributions stockiest, covering 6.3 million retail outlets reaching the entire urban

population, and about 250 million rural consumers

53 | P a g e
 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 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 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 -

54 | P a g e
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 .  

55 | P a g e
In 2001, the company embarked on an ambitious program, Shakti. Through Shakti, HUL

is creating micro-enterprise opportunities for rural women, thereby improving their

livelihood and the standard of living in rural communities. Shakti also includes health and

hygiene education through the Shakti Vani Program, and creating access to relevant

information through the iShakti community portal. The program now covers 15 states in

India and has over 31,000 women entrepreneurs in its fold, reaching out to 100,000

villages and directly reaching to 150 million rural consumers. By the end of 2010, Shakti

aims to have 100,000 Shakti entrepreneurs covering 500,000 villages, touching the lives

of over 600 million people.  

 HUL is also running a rural health program – Lifebuoy Swasthya Chetana. The program

endeavors to induce adoption of hygienic practices among rural Indians and aims to bring

down the incidence of diarrhea. It has already touched 70 million people in

approximately 15000 villages of 8 states. The vision is to make a billion Indians feel safe

and secure.  

 If Hindustan Unilever straddles the Indian corporate world, it is because of being single-

minded in identifying itself with Indian aspirations and needs in every walk of life.

56 | P a g e
MISSION 

 Unilever's mission is to add Vitality to life. We meet every day needs for nutrition,

hygiene and personal care with brands that help people feel good, look good and get more

out of life.

Our deep roots in local cultures and markets around the world give us our strong

relationship with consumers and are the foundation for our future growth. We will bring

our wealth of knowledge and international expertise to the service of local consumers - a

truly multi-local multinational .

Our long-term success requires a total commitment to exceptional standards of

performance and productivity, to working together effectively, and to a willingness to

embrace new ideas and learn continuously.

To succeed also requires, we believe, the highest standards of corporate behavior towards

everyone we work with, the communities we touch, and the environment on which we

have an impact.

This is our road to sustainable, profitable growth, creating long-term value for our

shareholders, our people, and our business partners

57 | P a g e
 VISION

Unilever products touch the lives of over 2 billion people every day – whether that's

through feeling great because they've got shiny hair and a brilliant smile, keeping their

homes fresh and clean, or by enjoying a great cup of tea, satisfying meal or healthy

snack.

A clear direction

The four pillars of our vision set out the long-term direction for the company – where we

want to go and how we are going to get there:

 We work to create a better future every day

 We help people feel good, look good and get more out of life with brands and

services that are good for them and good for others.

 We will inspire people to take small everyday actions that can add up to a big

difference for the world.

 We will develop new ways of doing business with the aim of doubling the size of

our company while reducing our environmental impact.

We've always believed in the power of our brands to improve the quality of people’s lives

and in doing the right thing. As our business grows, so do our responsibilities. We

recognize that global challenges such as climate change concern us all. Considering the

wider impact of our actions is embedded in our values and is a fundamental part of who

we are.
58 | P a g e
 -:Organizational Structure:-

1. Chair Man                                Mr. Harish Manwani  

2. CEO & Managing Director     Mr. Douglas Baillie 

3. Finance & IT Director         Mr. D. Sundaram 

4. Executive Director                    Mr. Nitin Paranjpe 

5. Directors

                                                        I. Mr. Sanjiv Kakkar 

                                                        II. Mr. A. Narayan 

                                                       III. Mr. V. Narayanan 

                                                       IV. Mr. D. S. Parekh 

                                                        V. Mr. C. K. Prahalad 

                                                       VI. Mr. S. Ramadorai 

59 | P a g e
 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

60 | P a g e
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

61 | P a g e
 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

62 | P a g e
 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.

63 | P a g e
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 research was conducted.

64 | P a g e
METHODOLOGY:

There is large no. of FMCG companies in the market, to find the defining strategies used,

the methodology used is interview and survey method.

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.

Data analysis:

Analyzing codes to each question were awarded. Thereafter every questionnaire was

written. After which the data were analyzed.

65 | P a g e
MAJOR FINDINGS

Major competitors

1. Dabur

2. Jhandu

3. Johnson &Johnson

4. Cavin Care

5. Procter & Gamble

6. Britannia

7. ITC

8. Gillette

66 | P a g e
METHODOLOGY FOR RESEARCH PROBLEM

Following steps were 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

A Compressive study of Secondary and Primary data (Informal Interviews) was collected

through specific questionnaires for people and shop-owners & distributors.

67 | P a g e
 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

68 | P a g e
 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.

69 | P a g e
 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?

70 | P a g e
 direct from organization
19% distributor
25%

whole seller
56%

2. When you place the order?

71 | P a g e
 after end of stock
21%
during schemes
32%

being less stock

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

72 | P a g e
 no
11%

yes
89%

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

73 | P a g e
 front end decisions
29%

back end decisions

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

74 | P a g e
 decentralized
17%

centralized
83%

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

75 | P a g e
 strategic
23%
functional
31%

structural
46%

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

76 | P a g e
 itc
13%

hul
36%

dabur
22%

p&g
29%

77 | P a g e
 CONCLUSIONS

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.

78 | P a g e
 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.

79 | P a g e
 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.

80 | P a g e
 BIBLIOGRAPHY:

Books and Authors:

 Research Methodology ---C R Kothari

 Research Methodology ---Sanjay Narula

Websites:

 www.hul.com

 [email protected]

News Papers:

 Times Of India.

 Hindustan Times.

81 | P a g e
 QUESTIONNAIRE

Name of the shop:

City:

Authorized Dealer:

Sir/mam please answers these questions:-

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

a. Distributor

b. Whole seller

c. Direct from organization

2When you place the order?

a. After end of stock

b. Being less stock

c. During schemes

82 | P a g e
 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

83 | P a g e
 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?

---------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------

Thank you for your effort!

84 | P a g e