Dissertation Project Report on

“A RESEARCH OF SUPPLY CHAIN MANAGEMENT OF HINDUSTAN

UNI LEVER LIMITED”

Submitted Towards Partial Fulfillment

Of

Post Graduate Diploma in Management Academic Session

2020-22

(Approved by AICTE, Govt. of India)

Submitted to Submitted By:

Prof. Rini Manoj Kumar

Roll no. 2020036

1
 JAIPURIA SCHOOL OF BUSINESS,
INDIRAPURAM, GHAZIABAD

DECLARATION OF THE STUDENT

This is to declare that I, Mr. Manoj Kumar, student of PGDM from Jaipuria
School of Business, Indirapuram, Ghaziabad has successfully completed
Dissertation for a period of 8 weeks, 27 February to 20 April 2022, under the
supervision of Prof. Rini.

This research report is my original work and it has not been submitted elsewhere
for the award of any Degree/Diploma.

Student Signature

Student Name

Manoj Kumar

Roll No.:

2020036
2
 CERTIFICATE

TO WHOMESOEVER IT MAY CONCERN

This is to certify that Mr. Manoj Kumar, student of PGDM from Jaipuria School of
Business, Indirapuram, Ghaziabad has successfully completed Dissertation for a
period of 8 weeks, from 27 February 2022 to 20 April 2022 As per the assessment she
is hard working and her performance has been excellent/satisfactory during the
training program.

We wish him/her all the success for his/her future endeavors.

Signature

0
 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 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.

4
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 . 
 

5
 Acknowledgement

I would like to thank the management of my college Jaipuria School Of Business for
giving me this opportunity. First of all I would like to thank our director sir Dr.
Tapan
K. Nayak for providing such platform and foremost I am extremely grateful to my
supervisors Dr. Vivek Soni. The period of project was almost 60 days. 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 Dr. Vivek Soni (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 him 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 through out our grand project.
I would also like to thanks my parents for helping and encouraging me. their guidance
was very valuable in transferring the class room concepts to the practical. These 60
days were very important to me as it helped me in going beyond the class room and
get a practical feel of how things worked.

I would also like to thank all the, participants and people at large who I have
interacted with during the course of my project.

6
 Table of contents
Student’s declaration I
Certificate from the Institution Ii
Executive Summary Iii
Acknowledgement Iv
Chapter Title Page

No. No.
1 Introduction 10-48
10-38
 Introduction

 Introduction of the company

39-48
2 Literature review 49-52

3 Research Methodology 52-63

53-54
 Objective

 Rational of the study 55-56

 Scope of the study 57

 Research Design 58

 Data sampling 60-62

 Limitation of the study

63
4 Data analysis and Interpretation 64

65-72
 Analysis
5 Findings and Conclusion 73-75

74
 Findings & Conclusion
75
 Recommendation
References 76-77

78-80
Questionnaire

7
 CHAPTER 1

INTRODUCTION

8|Page
INTRODUCTION

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.

We meet everyday 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.

9|Page
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.

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.

10 | P a g e
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.

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.

11 | P a g e
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 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

12 | P a g e
ignored or 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
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.

13 | P a g e
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
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.

14 | P a g e
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
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

15 | P a g e
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 metric to monitor the supply chain so that it can
deliver high qualities and values to customers.

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).

16 | P a g e
 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).

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).

17 | 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.

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.

18 | P a g e
 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

19 | P a g e
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.

20 | P a g e
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.

21 | P a g e
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

22 | P a g e
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

23 | P a g e
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.

24 | P a g e
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.)

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

25 | P a g e
collection, a rich database leads to more precise decision makings but it also can be
expensive.

The Five major Supply Chain drivers

(Source: Michael Hugos essentials of SCM)

26 | 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

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

27 | P a g e
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.

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.

28 | P a g e
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.

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).

29 | 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.

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.

30 | 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.

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.

31 | P a g e
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.

32 | 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

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].

33 | P a g e
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.

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.

34 | P a g e
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.

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.

35 | P a g e
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 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.

36 | 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

37 | 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.

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

38 | P a g e
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 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.

39 | P a g e
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 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 share holders during the 74th AGM on 18 May 2007.

40 | P a g e
Brooke Bond and Surf Excel breached the 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
Backbay Reclamation, Mumbai to the new campus in Andheri (E), Mumbai.

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.

41 | 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.

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.

42 | P a g e
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 redistribution stockiest, covering 6.3
million retail outlets reaching the entire urban population, and about 250 million rural consumers

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

43 | P a g e
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 .  
 

In 2001, the company embarked on an ambitious programme, 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 Programme, 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,

44 | P a g e
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 programme – Lifebuoy Swasthya Chetana. The
programme 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.

MISSION 

 Unilever's mission is to add Vitality to life. We meet everyday 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.

45 | P a g e
 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

 
 

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.

46 | P a g e
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.

-: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 

47 | P a g e
 CHAPTER 2

LITERATURE REVIEW

48 | P a g e
  Logistics is a part of supply chain. Before 1950’s, concept of logistics was
thought as a military terms that deals with procurement, maintenance and
transportation (Ronald, 2007).
 In past the concept of logistics can be seen as physical distribution and storage
of materials. In a history of mankind, wars have been lost and won through
logistics strength and capabilities. As an argument, it was discussed in past
that once Britain had to lose the war with American, due to lack of logistics
failure. Later, Arc Shaw in 1915 addresses the logistics importance and its
strategic approaches in business. (Christopher, 2011)
 Since then, the concept of logistics evolves as supply chain management when
for the first time in history, Oliver and Weber discussed the term supply chain
management through an article in 1982 as logistics strategies. Through the
article, they have discussed about integrated Logistics framework in which
materials flow from the raw material supplier to the end costumer (Ivanov,
2010).
 Since then many researches have been done in the topic supply chain
management. According to Waters (2004), Logistics is a function of supply
chain management which is responsible for the flow of materials through the
supply chain. This logistics function involves different set of activities such as
Procurement, Inward transport, Receiving, Warehousing, Stock control,
material handling, outward transportation, physical distribution management
and communication. Therefore visualisation of supply chain is wider than than
the concept of logistics. The main aim of supply chain management is to fill
the gap created between supplier and the end customer. (Waters, 2004) Supply
chain refers to a chain of organisation involves through upstream and
downstream linkage and through operation produce value in the form of
finished products and delivers it to the final customer. The structural
visualisation of supply chain can be traced through a single product moving
through a series of organisation adding value to the product. (Christopher,
2011)

49 | P a g e
  From the manufacturing point of view, different tiers supplier moving
materials into an organisation is referred as upstream suppliers, whereas
different tiers of customers involved to deliver the finished products to the
final customer is referred to as downstream customers. Different tiers of
suppliers and customers are distinguished based on direct supply to the 9
manufacturer I.e first tier supplier and receive directly from the factory i.e first
tier customer. (Waters, 2004)
 The concept of supply chain management refers to a managment concept
which covers the conventiona tasks of an organization into an systematic
management level , through various suppliers and customers working together
to achieve a taget of efficientness and effectiveness (Harwick, 1997).
 Supply chain management is the recognized as a organised, well planned
collaboration of the conventional commerce activity and strategy over these
commerce activity between specific firm’s and over commerce in a supply
chain so as to fix the extensive effect of specific firm’s and the overall supply
chain (Mentzer, 2001).
 Beside this it also includes coordination and collaboration with network
partners such as suppliers, intermediaries, Third party logistics service
providers, and customers. Actually, supply chain management integrate
supply and demand management within and across companies. To fulfil the
demand of the product to the right customer at right time at right location and
the right quantity, supply chain management conduct operation. (Ronald,
2006)
 Bull whip effect refers to the twist in overall demand which occurs due to
fluctuation of sales of product from down stream customer as Wholesaler,
retailer and local chain shop to the upstream supplier as: Manufacturer and
raw material suppliers. Due to this effect occurs in supply chain, it is difficult
to fullfill the customer demand at right time. Bullwhip effect takes place when
there is not a proper balance between supply and demand. (Admin, 2012)
Such type of supply and demand effect supply chain can be overcomed by
upadating information and sharing skills with supply chain partners.

50 | P a g e
 Integration of modern technology like Communications channel and
improving the followup times bull effect will be optimized. Following are
some cause due to which bullwhip effects occurs during the supply chain:
(Admin, 2012)

51 | P a g e
 CHAPTER 3

RESEARCH METHODOLOGY

52 | P a g e
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 feed back from customers
also. It should do something to give after sales service and collect feed back 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

53 | 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.

54 | P a g e
 RATIONAL OF THE STUDY

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

55 | P a g e
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.

56 | P a g e
 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

DATA COLLECTION METHOD

PRIMARY SECONDARY

Direct personal Interview

Published Sources
Unpublished Sources
Indirect personal Interview

Information from correspondents Govt. publication

Mailed questionnaire Report Committees &
Commissions
Question filled by enumerators Private Publication
Research Institute

57 | 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.

MAJOR FINDINGS

Major competitors
1. Dabur
2. Jhandu
3. Johnson &Johnson
4. Cavin Care

58 | P a g e
5. Procter & Gamble
6. Britannia
7. ITC
8. Gillette

DATA SAMPLING

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

59 | 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.

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

60 | P a g e
 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.

61 | 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.

62 | P a g e
 CHAPTER 4

DATA ANALYSIS AND INTERPRETATION

63 | 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?

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

whole seller
56%

2. When you place the order?

65 | P a g e
 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?

66 | P a g e
 no
11%

yes
89%

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

67 | P a g e
 front end decisions
29%

back end decisions

71%

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

68 | P a g e
 decentralized
17%

centralized
83%

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

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

structural
46%

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

70 | P a g e
 itc
13%

hul
36%

dabur
22%

p&g
29%

71 | P a g e
 CHAPTER 5

FINDING AND CONCLUSION

72 | P a g e
 FINDING AND 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.

73 | 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.

74 | P a g e
 REFERENCE

 Thomas, (2021). Services: Types of warehouse equipment. [Online] Available

at: ( Accessed on: 11 November 2021).
 Toyota forklifts, (2021). Resource Library: TOYOTA WAKIE STACKER
FORKLIFTS. [Online] Available at: (Accessed on: 15 November 2021).
 Trinh, D. (2018). Improving Supply Chain Management at Unilever Vietnam.
Bachelor Thesis. Degree Program in Business Administration. Metropolia
University of Applied Sciences. [Online] Available at: <
https://publications.theseus.fi/.>.
 Unilever, (2020). Annual Report and Accounts 2020. [Online] Available at:
(Accessed 30 September 2021).


 Williams, B. D., & Tokar, T. (2008).A review of inventory management

research in major logistics journals: Themes and future directions. The
International Journal of Logistics Management.
 Waters, C. D. J. (2019). Logistics: an introduction to supply chain
management. Red Globe Press. 44 Yao, Y., Evers, P. T., & Dresner, M. E.
(2007). Supply chain integration in vendor-managed inventory. Decision
support systems, 43(2), 663-674.
 Zhou, H., Benton Jr, W. C., Schilling, D. A., & Milligan, G. W. (2011).
Supply chain integration and the SCOR model. Journal of Business Logistics,
32(4), 332-344. [Online] Available at: (Accessed on: 15 August).

Books and Authors:

 Research Methodology ---C R Kothari

 Research Methodology ---Sanjay Narula

Websites:

75 | P a g e
 www.hul.com
 customercare@hul.co.in

News Papers:

 Times Of India.
 Hindustan Times.

76 | 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

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?

77 | P a g e
 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?

78 | P a g e
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------

Thank you for your effort!

79 | P a g e