RESEARCH REPORT

On
A Study of Supply Chain Management of Hindustan

Uni-Lever Ltd. In NCR.

Submitted towards the partial fulfilment for the award of Degree in

MASTER OF BUSINESS ADMINISTRATION of
GALGOTIAS UNIVERSITY

(2016-18)
SUBMITTED BY
Chanda
MBA (2nd semeester)
ROLL NO.- 16GSOB201123
UNDER THE SUPERVISION OF
(Miss. Bindu singh)
 TABLE OF CONTENTS

S.No. TITLE

1. Executive Summary
2. Overview
3. Objective Of Research
4. Introduction
5. Objective
6. Supply Chain Management
7. Hindustan Unilever Ltd.
8. Strategy of HUL
9. Research Methodology
10. Research Problem
11. Sampling Technique
12. Data Analysis and Interpretation
13. Conclusion
14. Recommendations/ Suggestions
15. Limitation
16. Findings
17. Bibliography
18. Annexure
Questionnaire
 ACKNOW LEDGEMENT

Concentration, dedication and application are necessary but not sufficient to achieve any
goal. These must be awarded by guidance; assistance and co-operation of some person to
make it enable .Many people have given their valuable time and ideas to enable me to
complete the research and the report. I am deeply indebted to all for their ideas and
assistance, while bearing the entire responsibility for weakness in the report. I am highly
obliged to MR. SOMAYA SAXENA, HUL ZONAL HEAD for providing me an
opportunity to undergo this research report.

I am also indebted to MISS. BINDU SINGH & ALL FACULTY MEMBERS OF

GALGOTIAS UNIVERSITY GR. NOIDA who have been a constant source of
inspiration and provided guidance to me at every point of time. My gratitude to all those,
who RESPONDED TO MY QUESTIONNAIRE in a welled, fined manner and helped
me acquiring knowledge.

Lastly, I thanks all those, who have directly or indirectly, helped me in this project.

CHANDA
 DECLARATION

I, CHANDA, a student of MASTER OF BUSINESS ADMINISTRATOR hereby

declare that the research report entitled A Study of Supply Chain Management of
Hindustan Uni-Lever Ltd. In NCR has been compiled by me on the basis of my
research report and has not been submitted any where in any manner. It is a report, which
is based on various interviews, surveys that is conducted during my research report
period in NOIDA as a student of M.B.A. from “GALGOTIAS UNIVERSITY.”

CHANDA
EXECUTIVE SUMMARY

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

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

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

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

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

OBJECTIVE OF THE RESEARCH

Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods
company, touching the lives of two out of three Indians with over 20 distinct categories in
Home & Personal Care Products and Foods & Beverages
The main objective of this project is to find, what are the steps
Hindustan Unilever Ltd. is adapting to be market leader and to differentiate itself from its
competitors. What is the steps company is utilizing to find current trend in the market?

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

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

Not, only product but it has to look upon the services and 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
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.

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

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

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

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

The components of SCM are:

• Demand planning (forecasting)

• Demand collaboration (collaborative resolution process to determine consensus
forecasts)
• Order promising (When one can promise a product to a customer taking into
account lead times and constraints)
• Strategic network optimization (what plants and DC's should serve what markets
for what products) (monthly - yearly)
• Production and distribution planning (Coordinate the actual production and
distribution plans for a whole enterprise) (daily)
• Production scheduling (For a single location create a feasible production
schedule) (minute by minute)
• Transportation planning (For multiple supply, manufacturer, distributor and
warehousing points in a network)
• Transportation execution (Enactment of long term plans on a per shipment basis,
typically performed by focused organizations called forwarders)

• Tracking and Measuring (An ever increasing aspect of supply chain management
designed to highlight potential against the plan and possible process
improvements)

• Plan of reduction of costs and management of the performance (diagnosis of the

potential and the indicators, the organization and planifiaction strategic, masters
dysfunctions in real time, evaluation and accounting reporting, evaluation and
reporting quality)
OBJECTIVES

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

research report will be:

❖ To find the importance of supply chain management in HUL

❖ To measure the time decreased due to supply chain.

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

We classify the decisions for supply chain management into two broad categories --
strategic and operational. As the term implies, strategic decisions are made typically over
a longer time horizon.
These are closely linked to the corporate strategy (they sometimes {\it are} the corporate
strategy), and guide supply chain policies from a design perspective. On the other hand,
operational decisions are short term, and focus on activities over a day-to-day basis.
The effort in these type of decisions is to effectively and
efficiently manage the product flow in the "strategically" planned supply chain.

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

Location Decisions

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

Once the size, number, and location of these are determined, so are the possible paths by
which the product flows through to the final customer. These decisions are of great
significance to a firm since they represent the basic strategy for accessing customer
markets, and will have a considerable impact on revenue, cost, and level of service.
These decisions should be determined by an optimization routine that considers
production costs, taxes, duties and duty drawback, tariffs, local content, distribution
costs, production limitations, etc. (See Arntzen, Brown, Harrison and Trafton [1995] for a
thorough discussion of these aspects.) Although location decisions are primarily strategic,
they also have implications on an operational level.

Production Decisions

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

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

production facility.

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

Transportation Decisions

The mode choice aspects of these decisions are the more strategic ones. These are closely
linked to the inventory decisions, since the best choice of mode is often found by trading-
off the cost of using the particular mode of

Transport with the indirect cost of inventory associated with that mode. While air
shipments may be fast, reliable, and warrant lesser safety stocks, they are expensive.
Meanwhile shipping by sea or rail may be much cheaper, but they necessitate holding
relatively large amounts of inventory to buffer against the
inherent uncertainty associated with them.
Therefore customer service levels, and geographic location play vital roles in such
decisions. Since transportation is more than 30 percent of the logistics costs, operating
efficiently makes good economic sense.
Shipment sizes (consolidated bulk shipments versus Lot-for-Lot), routing and scheduling
of equipment are key in effective management of the firm's transport strategy.

Supply Chain Modeling Approaches

Clearly, each of the above two levels of decisions require a different perspective. The
strategic decisions are, for the most part, global or "all encompassing" in that they try to
integrate various aspects of the supply chain. Consequently, the models that describe
these decisions are huge, and require a considerable amount of data. Often due to the
enormity of data requirements, and the broad scope of decisions, these models provide
approximate solutions to the decisions they describe.
The operational decisions, meanwhile, address the day to day operation of the supply
chain. Therefore the models that describe them are often very specific in nature. Due to
their narrow perspective, these models often

Consider great detail and provide very good, if not optimal, solutions to the operational
decisions.
To facilitate a concise review of the literature, and at the same
time attempting to accommodate the above polarity in modeling, we divide the modeling
approaches into three areas --- Network Design, ``Rough Cut" methods, and simulation
based methods. The network design methods, for the most part, provide normative
models for the more strategic decisions.

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

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

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

Supply Chain Management: Background

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

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

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

A typical supply chain starts with raw material purchase, and continues with various
production, transport and storage activities absorbing other necessary managerial and
overhead resources ending with product or service delivery to final consumer. As a result
we can find out that typical elements of a supply chain will be suppliers, manufacturers,
warehouses, distribution centers and retailers. Simchi-Levi et al. define Supply Chain
Management as follows:

Supply chain management is a set of approaches utilized to efficiently

integrate suppliers, manufacturers, warehouses and stores, so that
 merchandise is produced and distributed at the right
quantities, to the right locations, and at the right time, in order to minimize
system-wide costs while satisfying service level requirements.”

Goods and information flows in supply chain

Supply Chain Management and Logistics

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

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

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

Main Areas in Supply Chain

There are lots of activities which are common among almost all supply chains. These
common activities make possible to produce a basic model with which makes it possible
for various kinds of supply chain satisfy their unique set of market demands and win

Operating challenges. This basic model includes following decision making areas in
which all elements in the supply chain must make decisions individually or together:
1-production: the goal is to produce what the market desires, at the right time and with
enough production volume. For reaching such goals we need to take into account the
corresponding limitations such as capacities and desired level of quality and also take
into account other necessary functions such as workload capacity, equipment
maintenance, etc.

2-inventory: what level of inventory from different SKUs must be stocked in various
stages throughout the supply chain? Inventory level act as buffer and keep the business
safe from demand fluctuations. As holding inventory costs money it is very important to
make decisions about optimal levels of inventory.

3-location: along the supply chain will be various kinds of facilities. Concerning this
issue another important decision will be the optimal location for various facilities,
warehouses and storage points. Another related decision will be about the setting up of
new facilities.

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

- Information: this part of decision making concerns about the necessary level of data
collection and data sharing. There are good points in making deep information sharing
but it also produces lots of corresponding risks. This is also true about data collection, a
rich database leads to more precise decision makings but it also can be expensive.
 The Five major Supply Chain drivers
(Source: Michael Hugos essentials of SCM)
 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 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.

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).

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
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.
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.
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].

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.

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.

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.

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

INTRODUCTION OF HUL

(Hindustan Unilever Limited)

Hindustan Unilever Limited (HUL) is India's largest fast moving

consumer goods company, with leadership in Home & Personal Care Products and Foods

& Beverages. HUL's brands, spread across 20 distinct consumer categories, touch the

lives of two out of three Indians. They endow the company with a scale of combined

volumes of about 4 million tonnes and sales of Rs.13,718 crores

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

35 Power Brands, HUL meets 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

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 harbour 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 recognised 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,
Kwality Wall's – are household names across the country and span many categories -
soaps, detergents, personal products, tea, coffee, branded staples, ice cream and culinary
products.

They are manufactured over 37 factories across India. The operations involve over 2,000
suppliers and associates. HUL's distribution network, comprising about 2,500
redistribution stockists, 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 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, 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.

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

-: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

RESEARCH METHODOLOGY

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

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

method and analysis procedures.

RESEARCH DESIGN

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

the Information needed. It is a plant or organizing framework for doing the study and
collecting the data. Designing a research plan requires decisions

all the data sources, research approaches, Research instruments, sampling plan and

contact methods.

Research design is mainly of following types: -

1. Exploratory research.

2. Descriptive studies

3. Casual studies

SAMPLE DESIGN

– SAMPLE UNIT: NCR

– SAMPLE SIZE: 80
– SAMPLE SELECTION: Random, convenient

DATA COLLECTION METHOD

PRIMARY DATA

❖ Interview
 ❖ Questionnaire

SECONDARY DATA

❖ Interview

❖ Magazines

❖ News paper

DATA COLLECTION METHOD

PRIMARY SECONDARY

Direct personal Interview

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

RESEARCH PROBLEM AND ITS RELEVANCE

RESEARCH PROBLEM

HUL is facing the problem rather challenges from

• Large no. of players in the market

• Continuous changes in the taste and preferences of the customers

Such problems were identified as Research Problems and the objective statement was
formed on its basis.
RELEVANCE OF THE RESEARCH
The relevance of the research is to find out

• Acceptability among the customers

• Promotional analysis

SCOPE OF THE RESEARCH

The scope of the research has been limited to the NCR- DELHI
Keeping in mind the objective stated, questionnaire was designed for the people.
Subsequently a research was conducted.
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
5. Procter & Gamble
6. Britannia
7. ITC
8. Gillette
METHODOLOGY FOR RESEARCH PROBLEM

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

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

2. External and Internal Analysis

• Understanding customer problem
• Understanding the market structure

3. Situational Analysis
• Tastes & preferences
• Needs & income
• Major Competitors
ITC
Dabur
Procter & Gamble
Cavin Care
Amul
Johnson & Johnson, etc
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
purchasing. I also tried to find out that are they satisfied with the quality or present
stature of product, did they want any change in the existing product.

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

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

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

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

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

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

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

Finally, an effort was made to extract meaningful information from analyzed data, which
acted as a base for the recommendations.
1. From whom do you prefer for the supply of goods?

direct from organization

19% distributor
25%

whole seller
56%

2. When you place the order?

 after end of stock
21%
during schemes
32%

being less stock

47%

3. Are you satisfied with the service of supply chain management of HUL?
 no
11%

yes
89%

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

 front end decisions
29%

back end decisions

71%

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

 decentralized
17%

centralized
83%

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

 strategic
23%
functional
31%

structural
46%

7. Which companies products supply chain do you find suitable and easy?
 itc
13%

hul
36%

dabur
22%

p&g
29%

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.

LIMITATIONS OF STUDY

1. The sample size may not adequately represent the national market.
 2. This study has not been conducted over an
extended period of time, it do not consider any changes due to changes
in the sudden needs of the customer because of some seasonal change
or any kind of festivals.

Recommendations

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

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

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

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

• Dealers should take care for the inventory management so that they would be in
the race as P&G,Dabur and Itc are the competitors of the Hul.

Bibliography:

Books and Authors:

 ❖ Research Methodology ---C R Kothari

❖ Research Methodology ---Sanjay Narula

Websites:

❖ www.hul.com

❖ customercare@hul.co.in

News Papers:

❖ Times Of India.

❖ Hindustan Times.

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?

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

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

a. Centralized
b. Decentralized

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

a. Strategic
b. Structural
c. Functional

7. Which companies products supply chain do you find suitable and easy?
 a. P&G
b. HUL
c. ITC
d. Dabur

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

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Thank you for your effort!