HUL has decided to increase its reach in rural areas.

What
are the implications of this decision for the department
that manages the supply chain for HUL products?

Submitted to: Submitted by:

Dr Silky Jain Deepesh Deeksham
17/IFT/003
 Supply chain & HUL
• The supply chain is a vital part of any organization, especially those selling
products. It involves many levels through which the product reaches from the
manufacturer to the customer.
• There are already a lot of issues involved in the supply chain in urban cities.
• This implies that there might be a lot more while spreading the business in rural
areas.
• If we talk about HUL, it is a very well-known firm.
• This can be a reason for them not facing as many issues as any other small
business would.
• But, HUL too will face certain positive and negative implications if they are
wanting to reach rural places.
Implications for HUL
1. Organizational relationships
• A supply chain works best when the
correct number of organizations join hands
to do a particular work.
• If we talk about HUL, they might be
having great support in the cities, but the
same cannot be said about rural places.
• The supply chain officer of HUL will have
to make sure to get in touch with
organizations that will help them in
expanding their services in the rural areas.
• A strong partnership will eventually lead to
loyalty and even more efficient working.
2. Inventory management
• The inventory management game has come a long
way now.
• Previously, everyone believed that the more the
inventory, the better the business will run.
• With frequent changes in trends, it has now become a
necessity to rely more on JIT and lean manufacturing.
• This helps to eliminate waste and save a lot of costs.
• While trying to expand business in the rural areas, the
supply chain of HUL will face an issue where JIT
might not work immediately.
• It will take a few months for them to understand the
likes and dislikes of the people of those areas and
their consumption.
• This way, even though things might not look great at
first, they will fall into place with time and
determination.
3. Cost issues
• The cost at which the products are sold
in urban areas might not be affordable
for those in rural areas.
• This could create a problem where
even the intended amounts of products
are not sold.
• At this time, HUL could manufacture
the same product in a smaller size.
• This will result in the people buying
the same quality product which will
also be affordable for them.
4. Customer service
• A major implication HUL might face while
spreading their business in rural areas is the
provision of customer services.
• To remain competitive, firms implement supply
chain management to improve customer service
through increased frequency of reliable product
deliveries.
• Some respondents stated that increasing demands
on customer service levels is driving partnerships
with vendors and suppliers.
• The ability to serve their customers with higher
levels of quality service, including speedier
delivery of products, is an important concept that
results in partnering.
• Having a successful relationship with a supplier or
vendor results in trust and the ability to be
customer-driven, customer intimate and customer-
focused.
5. Logistics
• Having access to low cost, reliable transportation
is important to be a successful supplier.
• The idea of backhauling is becoming an
important concept to make transportation more
efficient and less costly.
• Rural areas will always suffer from
transportation capabilities and it will get worse.
• Supply chain management cannot help a
company resolve distance issues.
• They choose where they want to locate and if the
distance is a detriment, it is the company's fault.
• Rural suppliers will need other assets to
overcome the distance disadvantage.
• They can also look out for third party logistics to
get their products to the rural areas.
Thank You