Impact in The Effectiveness of The Supply Chain Integration of HUL

A
PROJECT REPORT
ON
“Impact in the effectiveness of the Supply chain Integration of HUL”
Submitted in partial fulfilment for the award of
THE DEGREE
OF
MASTER IN BUSINESS ADMINISTRATION (MBA)
Submitted by:-
NAME: HIMANSHU MISHRA
ROLL NO.: A19201160332
SESSION: JAN’16-JUN’16
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Project Report of Himanshu Mishra (Roll No.: A19201160332)
TABLEOFCONTENTS
Declaration 3
Certificate 4
Acknowledgement 5
Executive Summary 6-7
Chapter I Introduction 8-33
Chapter II Literature Review 34-39
Chapter III Objectives and Scope 40-41
Chapter IV Research Methodology 42
Chapter V Data Collection 43
Chapter VI Data Analysis 44-55
Chapter VII Findings 56-57
Chapter VIII Suggestions 58
CHAPTER IX Conclusion 59
Bibliography 60
Annexure 61-62
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DECLARATION
I hereby declare that the dissertation titled “Impact in the effectiveness of the Supply
chain Integration of HUL” submitted for the Amity School of Distance Learning, Amity
University, Noida is my original work and the dissertation has not been plagiarized or formed the
basis for the award of any other diploma or degree, associate ship, fellowship or any other
similar titles.
Place: Noida
Date: 24th July‟2017
Signature of the Student
(Himanshu Mishra)
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CERTIFICATE
This is to certify that the dissertation titled “Impact in the effectiveness of the Supply
chain Integration of HUL” is the bona fide research work carried out by Mr. Himanshu Mishra
student of Amity School of Distance Learning, Amity University, Noida, in partial fulfilment of
the requirements for the award of the Degree of Master of Business Administration and that the
dissertation has not formed the basis for the award previously of any degree, diploma, associate
ship, fellowship or any other similar title.
Date: 24th July’2017
Signature of the Guide
Sunil Agarwal
Manager - Operations
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ACKNOWLEDGEMENT
I am grateful to Amity School of Distance Learning for giving me an opportunity to
pursue MBA. I wish to thank my University who has been a perpetual source of inspiration and
offered valuable suggestions to improve my Research work.
I am thankful to my Research Guide Mr Sunil Agarwal, for abundant guidance, support,
and encouragement throughout my study.
I wish to express my gratitude to various people from the organization for providing me
valuable information.
I would like to express my thanks to my family, friends and colleagues for their unfailing
support.
Date: 24th July’2017
(Himanshu Mishra)
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EXECUTIVE SUMMARY
The nature of competition is rapidly changing, and with this change comes the need to
redefine and reappraise the modes of management prevailing, so as to equip us with more
appropriate ways to manage in the 21st century. Supply chain is the field of study that is still
evolving. As of now there are no agreed definitions, concepts or a conceptual framework.
However, it is imperative for business to realise the importance of this concept and not lose time
awaiting the evolution of formal definitions.
Supply chain management is a customer-oriented approach, designed to deliver

maximum value to the customer. It is basically oriented towards the control and co-ordination of
three flows i.e. Material Flow, Information Flow and Cash Flow. Previous survey and research
findings indicates that purchasing and supply management in India lack strategic direction and
focus, while by their very nature these are essentially strategic activities, requiring top
managements time and involvement. It is therefore possible for company‟s that recognise and act
on this need to gain competitive advantage over companies that do not.
The global competition environment has made reduce costs, improved quality, improved
responsiveness and customer service, flexibility and better product availability a top priority
agenda for business. In meeting this challenge, a business can no longer expect that the
objectives can be meeting just by becoming efficient in it. The situation requires therefore value
to reach the customers, this efficiency be evident even in the suppliers, the distribution channel,
and all associated activities and partners. Competition is no longer between individual businesses
but between groups of companies that are linked together in a chain for delivering customer
value. Business is no longer a gladiatorial combat, it is a team game. This engenders the need for
supply chain management to ensure that all the elements participating in the customer value
chain can be integrated, co-ordinated and managed effectively to reach the common objective in
terms of cost, quality, responsiveness, service and flexibility
Though today supply chain management practices are beginning to evolve and firms are
beginning to realise the criticality of integrated supply chain management to gain competitive
advantage. Yet supply chain management to this day remains a relatively untapped arena for
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productivity improvement. Emerging information technology has yet to make dent in Indian
supply chain management. And that is where this dissertation has been targeted.
An effort has been made to analyse the different key factors of supply chain management
with a special reference to Fosroc Chemicals (India) Pvt. Ltd. and also to recommend useful
suggestions which will help the company to optimise their business processes.
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CHAPTER 1
INTRODUCTION
FMCG INDUSTRY IN INDIA

As the name suggests, products of daily usage under the heads of personal care, fabric
care, household care, packaged foods, beverages and tobacco characterize the sector. These are
part of the monthly purchase basket. Such products generally have a non-cyclical consumer
demand, low unit value, are mostly branded products, involve high marketing expenditure and
have to be widely distributed. This sector has observed a 2% decline in the past 4 year period.
FMCG pundits attribute this to various theories like FMCG commanding lower share of the
wallet, what with several other newer expenditures in mobiles, computers, automobile etc. Other
reasons to the decline may be down trading in brands or lower rural off takes. The industry has a
lot of potential since the product penetration and the per capita use is still low in India. As a
matter of fact TV, which is the major source of information, reaches out to 80% of urban and
46% of the rural population. The key entry barriers into this section are the Brand, Supply Chain
Management and the complexity involved in managing SKU‟s (Stock Keeping Units). Also an
Indian FMCG Company faces strong competition from the existing MNC-owned brands.
THE CHALLENGE INVOLVED
India has around 7.3 million retail outlets of which 3.0 million are in the 3768 towns and
4.3 are in the 627,000 villages. This fact is significant since the biggest challenge is to reach out
to every nook of such a huge and diverse nation as India. As aptly said by Mr. Pusalkar, Supply
Chain can be well learnt here.
For a typical mid-size FMCG company, the numbers would be as…
 C&FA (Carrying & Forwarding Agent) 30
 Distributors & Super-stockiest 1,200
 Sub-stockiest 1,000
 Retailers reached
 Retailers directly covered 500,000
 Retailers via wholesalers 1,000,000
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 TOTAL 1,500,000
 Consumers 10,000,000
The 7.3 million outlet strong retailing industry provides direct employment to more than
18 million people which roughly means one in every 25 families in India is engaged in the
business of retailing.
The rural markets are emerging to be the growth drivers of the future. The industry seeks
to cater to a large rural population of the order of 700 million people. Of the 7.3 million retailers
58% are in rural areas. In most categories penetration is low and innovative packaging such as
sachets and promotion is required. Achieving cost effectiveness to make the products reach rural
outlets is essential.
THE ECONOMICS
For an FMCG company, the direct customer is the distributor. The several intermediaries
between the company and the actual consumers (C&FA, Distributors, Super-stockiest, Sub-
stockiest, Wholesalers, and Retailers) need compensation for the costs incurred, namely the
inventory holding costs, manpower costs, credit provided to the next intermediary, transportation
costs, overheads, and entrepreneur‟s risks and efforts. The remuneration is provided as a
combination of gross margin (mark-up) on sales, commission on sales, and reimbursements.
Typical Margins in such Supply Chain are:-
 Distributor – 5%
 Retailer – 7-15%
 Wholesaler – 1-1.5%
 Super-stockiest – 2%
 Sub-stockiest – 5%
A distributor‟s investment consists of inventory, Accounts receivable and accounts

payable. He draws his income from gross margin or commission on sales. The expenses include
discount expense, distribution expense and overheads. Typically an FMCG distributor expects a
25% ROI.
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EMERGING TRENDS IN FMCG BUSINESS
The industry has lately observed a rise of regional stalwarts such as Ghadi detergent,
Baagh Bakri Tea etc. who are very strong in their respective geographical areas. Another
emerging trend has been the rush to design products for the mass market in villages. C.K.
Prahlad‟s famous “Bottom of the Pyramid” theory is the guiding principle.
The market is moving really fast as constant innovations are required in product,
packaging and distribution. With the growth of information technology, the retailer has
transformed from the old “gala owner” to a much better informed businessman. Direct Selling
(e.g. Amway) as a parallel way of marketing is picking up. Increasing role of influencers (such
as “Media influence the consumer buying decision process) has also emerged. There has been
an influx of imports and ever increasing presence of multinational companies in this sector.
The retailing business is also becoming more organized. Organized retailing comprises
professionally managed single or chain of self-service stores. This has implications such as
shorter supply-chain, move from inventory build-up method to collaborative planning,
forecasting, and replenishment system, greater dependence on few „sophisticated‟ buyers,
customer management strategy etc. To sum up all.
A „world-class‟ FMCG Sales & Distribution system.
 Ensures product availability
 At the right place
 In the right quantity
 Ensures product replenishment
 Ensures „profit‟ for all intermediaries
 At a minimal cost
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GROWTH IN SALES OF FMCG COMPANIES
All top 10 categories record growth, the only exception being packaged tea. Spurred by
high rural demand and retail sales, the fast-moving consumer goods (FMCG) sector posted 10.6
per cent growth year on year in February, the highest in the past five years, according to data
provided by market research agency AC Nielsen.
The rise does not come on a low base since the sales growth in February 2005 was 8.1
per cent year on year. And what is more, the growth has been broad-based with all the top 10
categories growing, the only exception being packaged tea.
Besides, five of these categories have posted double-digit growth. And for the first time
in four years, all the companies tracked by AC Nielsen have posted a growth in sales.
The revival in the sector has been evident for some time now and the December quarter
saw strong top line growth.
For example, Dabur saw its revenue grow 26 per cent year on year, while Colgate‟s sales
grew 21 per cent. Besides, most companies now have far more pricing power than they did a
year ago, which is reflected in the better operating margins last quarter.
Colgate‟s margin, for instance, was up 10 percentage points at 23 per cent, while that of
Godrej consumer Products was up 270 basis points at 23.8 per cent.
According to analysts, Hindustan Lever in February experienced the highest growth in

five years while others such as Tata Tea and Dabur saw sales grow at a much faster pace
compared with the December quarter. Tata Tea‟s sales rise, for instance, is the highest since June
2007 while Britannia‟s is the highest in 27 months.
Analysts believe that the pick-up in the larger categories such as biscuits, washing
powder, detergent cakes, shampoos and tea indicates a rise in demand for such categories in rural
areas.
This, they point out, is the main driving force behind the performance of companies such
as Hindustan Lever, which recorded double-digit top line growth last quarter, the first time in six
years. Very few segments in the FMCG space were now seeing a deceleration in growth and the
momentum was expected to continue, analysts added.
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Even as the sector continues its strong run, the BSE FMCG index hit an all-time high of
2,103.5 on Friday with three of its components, ITC, Nestle and McDowell hitting all-time
highs.
ITC, incidentally, has the highest weight of 48 per cent in the index. The FMCG index
has outperformed the Sensex for the better part of 2005 and has been a big out performer so far
in 2006.
Distribution Strategy:
One of the ways could be using company delivery vans which can serve two purposes- it
can take the products to the customers in every nook and corner of the market and it also enables
the firm to establish direct contact with them and thereby facilitate sales promotion. However,
only the bigwigs can adopt this channel. The companies with relatively fewer resources can go in
for syndicated distribution where a tie-up between non-competitive marketers can be established
to facilitate distribution. Annual “melas” organized are quite popular and provide a very good
platform for distribution because people visit them to make several purchases. According to the
India and Market Research Bureau, around 8000 such melas are held in India every year. Urban
markets have the practice of fixing specific days in a week as Market Days (often called “Haats‟)
when exchange of goods and services are carried out. This is another potential low cost
distribution channel available to the marketers. Also, every region consisting of several urban
market is generally served by one satellite town (termed as “Mandis” markets) where people
prefer to go to buy their durable commodities. If marketing managers use these feeder towns they
will easily be able to cover a large section of the urban population.
Promotional Strategy:
Firms must be very careful in choosing the vehicle to be used for communication. Only
68% of the urban population has access to a newspaper. So, the audio visuals must be planned to
convey a right message to the urban area. The rich, traditional media forms like folk dances,
puppet shows, etc with which the consumers are familiar and comfortable, can be used for high
impact product campaigns.
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INTRODUCTION TO THE COMPANY
Hindustan Lever Limited (HLL) and its constituent companies have been in India since
1931. Over these decades, while HLL has benefited from the developments in the country, it has
contributed equally to these developments.
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.
Their deep roots in local cultures and markets around the world give us their strong
relationship with consumers and are the foundation for their future growth. We will bring their
wealth of knowledge and international expertise to the service of local consumers - a truly multi-
local multinational.
Their 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 their road to sustainable, profitable growth, creating long-term value for their
shareholders, their people, and their business partners
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.
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 HLL in November 1956; HLL offered 10% of its equity
to the Indian public, being the first among the foreign subsidiaries to do so. Unilever now holds
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51.55% equity in the company. The rest of the shareholding is distributed among about 380,000
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 in1986.
Since the very early years, HLL 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
HLL's and the Group's growth curve. Removal of the regulatory framework allowed the
company to explore every single product and opportunity segment, without any constraints on
production capacity.
Simultaneously, deregulation permitted alliances, acquisitions and mergers. In one of the

most visible and talked about events of India's corporate history, the erstwhile Tata Oil Mills
Company (TOMCO) merged with HLL, effective from April 1, 1993. In 1995,
HLL and yet another Tata company, Lakme Limited, formed a 50:50 joint venture,
Lakme Lever 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 HLL
and divested its 50% stake in the joint venture to the company.
HLL 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. HLL
has also set up a subsidiary in Nepal, Nepal Lever Limited (NLL), and its factory represents the
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largest manufacturing investment in the Himalayan kingdom. The NLL factory manufactures
HLL'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 Ice cream 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 July 1993, Brooke Bond India
and Lipton India merged to form Brooke Bond Lipton India Limited (BBLIL), enabling greater
focus and ensuring synergy in the traditional Beverages business. 1994 witnessed BBLIL
launching the Wall's range of Frozen Desserts. By the end of the year, the company entered into
a strategic alliance with the Kwality Ice-cream Group families and in 1995 the Milk food 100%
Ice-cream marketing and distribution rights too were acquired.
Finally, BBLIL merged with HLL, with effect from January 1, 1996. The internal
restructuring culminated in the merger of Pond's (India) Limited (PIL) with HLL in 1998. The
two companies had significant overlaps in Personal Products, Specialty 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 of economies both domestic and export market.
In January 2000, in a historic step, the government decided to award 74 per cent equity in
Modern Foods to HLL, thereby beginning the divestment of government equity in public sector
undertakings (PSU) to private sector partners. HLL's entry into Bread is a strategic extension of
the company's wheat business. In 2002, HLL acquired the government's remaining stake in
Modern Foods.
In 2003, HLL acquired the Cooked Shrimp and Pasteurized Crabmeat business of the
Amalgam Group of Companies, a leader in value added Marine Products exports.
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Hindustan Unilever Limited, 51.6% subsidiary of Unilever Plc, is the largest FMCG
Company in the country, with a turnover of Rs118bn. The company‟s business sprawls from
personal and household care products to foods, beverages and specialty chemicals. The company
has a dominating market share in most categories that it operates in such as toilet soaps,
detergents, skincare, hair care, color cosmetics, etc. It is also the leading player in food products
such as packaged tea, coffee, ice cream and other culinary products.
Brand equities are built over a period of time by technological innovations, consistent
high quality, aggressive advertisement and marketing. Availability near the consumer through a
wide distribution network is another crucial success factor, as products are of small value,
frequently purchased, daily use items. HLL is strong on both these fronts with leading brands,
which are market leaders in their respective categories, and a 1mn strong direct retail reach.
HLL is the market leader in the detergent and toilet soap industry with market share of 60%
and 40% respectively. Nirma is a close competitor in detergents and has been slowly gaining
ground in toilet soaps too. The other significant competitor in detergents is P&G. In oral care
segment, HLL has emerged as a strong No 2 player with 36% market share. In the hair care
segment, HLL dominates the shampoo market with a 64.5% share and is the No 2 player in hair
oils. HLL has a 54% market share in skin creams. In the foods business, Tata Tea in packet tea,
Nestle in coffee and culinary products, GCMMF (Amul) in ice creams, and Godrej Pillsbury in
staple food are the main competitors.
HLL grew at a fast pace in the mid 90‟s driven by its aggressive acquisition spree. From
Rs38bn turnover (contributed 70% by soaps, detergents and personal products), HLL‟s turnover
has now grown to Rs118bn, with soaps and personal products contributing 57% to turnover and
beverages and food products contributing to 29% of turnover. Growth during the last few years
has largely been driven by the personal products business.
However the pace of growth has slackened significantly in the last two years with several
key segments registering a growth in 2001 soaps business (Rs21bn) de-grew by 1% and
detergent sales (Rs20bn) grew by 7%. Other personal products (household care, oral acre, skin
care, hair care, color cosmetics) registered a 14% yo-yo growth to Rs24.6bn. Expansion of the
foods business, which has been identified as a major growth area, has not been as fast as
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anticipated. Beverage sales move largely with commodity price trends, which have remained on
a downtrend. Branded tea business degree by 10% in F12/01 to rs16bn, while the Rs3bn coffee
business registered a 7% yo-yo growth. Ice-cream business has failed to takeoff registering a 3%
growth. The staple food business, once considered a high potential growth area witnessed a
decline of 10% yoy to Rs. 2.4bn.
Profitable growth has been the new mantra of the FMCG major‟s Chairman, M S Banga,
who took over the reins from Keki Dadiseth 2 years ago. In contrast to Dadiseth‟s strategy of
expansion through acquisition, Mr. Banga‟s strategy revolves around rationalization. A focus on
30 power brands, which are major contributors to profitability, seeking new avenues of
expanding distribution reach, improving profitability of foods businesses have been the thrust
areas. Non-FMCG businesses are either being are hived off or are being strengthened by
partnerships with players who have the technological expertise in those businesses. The strategy
has paid results with profits registering a 24% yo-yo growth in 2001, despite a flat top line
growth.
PRESENT STRUCTURE
Hindustan Lever Limited (HLL) 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 have the company with a scale of
combined volumes of about 4 million tones and sales of Rs.10, 000 cores.
HLL is also one of the country's largest exporters; it has been recognized as a Golden
Superstar Trading House by the government of India.
The mission that inspires HLL's 36,000 employees, including over 1,350 managers, is to
"add vitality to life." HLL 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 HLL 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.
HLL'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
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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 in close to 80 factories. The operations involve over 2,000 suppliers and
associates. HLL's distribution network, comprising about 7,000 redistribution stockiest directly
covers the entire urban population, and HLL has traditionally been a company, which
incorporates latest technology in all its operations. The Hindustan Lever Research Centre
(HLRC) was set up in 1958, and now has facilities in Mumbai and Bangalore.
HLRC and the Global Technology Centres in India have over 200 highly qualified
scientists and technologists, many with post-doctoral experience acquired in the US and Europe.
HLL believes that an organization‟s worth is also in the service it renders to the
community. HLL 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. HLL has also responded
in case of national calamities / adversities and contributes through various welfare measures,
most recent being the village built by HLL in earthquake affected Gujarat, and relief &
rehabilitation after the Tsunami caused devastation in south India.
Over the last three years the company has embarked on an ambitious program, Shakti.
Through Shakti, HLL is creating micro-enterprise opportunities for rural women, thereby
improving their livelihood and the standard of living in rural communities. Shakti also includes
health and hygiene education through the Shakti Vani Program, and creating access to relevant
information through the Shakti community portal. The program now covers about 50,000
villages in 12 states. HLL's vision is to take this program to 100,000 villages impacting the lives
of over 100 million rural Indians.
HLL is also running a health program – Lifebuoy Swasthya Chetana. The program
endeavours to induce adoption of hygienic practices among Indians and aims to bring down the
incidence of diarrhoea. 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.
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If Hindustan Lever 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.
LATEST DEVELOPMENT
Hindustan lever is now Hindustan Unilever Limited FMCG major Hindustan lever has
informed that it has received government approval changes its name to “Hindustan Unilever
Limited” following which its new corporate identity represented by a new logo will come into
effect, “the identity symbolize the benefits we bring to our consumers and the communities we
work in our new identity will help us confidently position ourselves in every aspect of our
business” Hindustan Unilever CEO Doung Boillie said.
“The new name and the new logo will leverage the positioning, sale and synergy that
comes with being part of Unilever globally. It positions our organization on a global scale and
through the combination of retaining „Hindustan‟ in the name brings the very best of local and
global to the forefront. For us this is really an opportunity, collectively as an organization, to
renew and strengthen our commitment to continue our endeavour to earn the love and respect of
India, by making a real difference to every Indian,” Mr. Baillie added.
MANAGEMENT STRUCTURE
Hindustan Lever Limited is India's largest Fast Moving Consumer Goods (FMCG)
Company. It is present in Home & Personal Care and Foods & Beverages categories. HLL and
Group companies have about 36,000 employees, including 1350 managers.
The fundamental principle determining the organization structure is to infuse speed and
flexibility in decision-making and implementation, with empowered managers across the
company's nationwide operations. For this, HLL is organized into two self-sufficient divisions -
Home & Personal Care & Foods - supported by certain central functions and resources to
leverage economies of scale wherever relevant.
Board
Divisions
Central functions
Businesses
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Board
At the apex is the Board, headed by the Chairman, and comprising 5 whole time Directors and
5 independent non-executive Directors. The day to day operations are supervised by the National
Management comprising the Vice Chairman, Managing Director (HPC), Managing Director
(Foods) and the Finance Director.
Divisions
Each division is self-sufficient with dedicated resources and assets in sales, marketing,
commercial, and manufacturing. The two divisions are further reorganized into categories.
Typically, each category and each function - Sales, Commercial, Manufacturing - is

headed by a Vice President. They with their respective Managing Director comprise that
Division's Management Committee.
For managing sales operations, HLL divides the country into four regions, with regional
branches in Delhi, Kolkata, Chennai and Mumbai. Headed by a Regional Manager, they
comprise Regional Sales Managers and Area Sales Managers, assisted by dedicated field forces,
comprising Sales Officers and Territory Sales In charges. In Marketing, each category has a
Marketing Manager who heads a team of Brand Managers dedicated to each or a group of
brands.
The commercial team of a Division is responsible for its supply chain management.
There are teams dedicated to sourcing, planning and logistics. Each Division has a
nationwide manufacturing base, with each factory peopled by teams of Production, Engineering,
Quality Assurance, Commercial and Personnel Managers.
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Central functions
HLL's Central Functions are Finance, Human Resources, Technology, Research,
Information Technology, Legal & Secretarial, and Corporate Affairs. Their services are shared
across the company. But, wherever necessary, managerial resources are dedicated exclusively to
a business. For example, each Division now has dedicated HR managers.
HLL believes that while it leverages the scale of a large corporate, it must also retain the
soul of a small company. Its organization structure, which has and will continue to evolve with
time, is aimed at achieving this knitting.
Businesses
Home & Personal Care
• Personal Wash
• Fabric Wash
• Home Care
• Oral Care
• Skin Care
• Hair Care
• Deodorants & Talc‟s
• Colour Cosmetics
Foods
• Tea
• Coffee
• Branded Staples
• Culinary Products
• Ice Creams
• Modern Foods ranges
New Ventures
• Hindustan Lever Network
• Ayush ayurvedic products & services
• Saga
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• Purest water purifiers
Exports
• HPC
• Beverages
• Marine Products
• Rice
• Castor
BRANDS OF HLL:
HOME AND PERSONAL CARE:
Lux
Breeze
Liril
Dove
Lifebuoy
Pears
Hamam
Rexona
LAUNDRY:
Surf Excel
Rin
Wheel
SKIN CARE:
Fair and Lovely
Ponds
HAIR AND CARE
Sun silk Natural
Clinic
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ORAL CARE:
Pepsodent
Close-Up
DEODRANTS:
Axe
Rexona
COLOUR COSMETIC:
Lakme
AYURVEDIC PERSONAL AND HEALTH CARE:

Ayush
TEA:
Brooke bond
Lipton
COFFEE
Bru
FOODS
Kissan
Knorr Annapurna
ICE CREAM
Kwality Wall‟s
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HUL's INITIATIVE IN URBAN DEVELOPEMENT
Hindustan Lever Limited (HLL) and its constituent companies have been in India since
1931. Over these decades, while HLL has benefited from the developments in the country, it has
contributed equally to these developments.
HLL has consciously woven India's imperatives with the company's strategies and
operations. The company‟s main contributions include developing and using relevant
technologies, stimulating industrialization, boosting exports, adding value to agriculture and
generating productive employment and income opportunities.
HLL has been proactively engaged in urban development since 1976 with the initiation of
the integrated urban Development Program in the Uttar Pradesh, in tandem with the
company‟s dairy operations. This Program now covers 500 cities in the district. Subsequently,
the factories that HLL continued establishing in developed regions of the country have been
engaged in similar program in urban areas.
These factory-centered activities mainly focus on training to distributor, Retailers which

can helpful for the generating alternative income, health & hygiene and infrastructure
development.
The company has acquired a wealth of experience and learning from these activities.
KEY LEARNINGS ON URBAN DEVELOPEMENT
The principal issue in rural development is to create income-generating opportunities

for the rural population. Such initiatives are successful and sustainable when linked with the
company‟s core business and is mutually beneficial to both the population for whom the program
is intended and for the company.
Based on these insights, HLL launched new variety of the product every year keeping
with the purpose of integrating business interests with national interests
FMCG major Hindustan Unilever Limited (HUL), formerly known as Hindustan Lever
Limited, employs 36,000 people, including over 1,350 managers. It is one of the earliest MNCs
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to have entered India. It was in the summer of 1888 that Unilever of England first marketed
Sunlight soap in India. This was followed by brands like Pears and Vim. Vanaspati was launched
in 1918 and Dalda 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.
A number of prominent companies came into the HUL fold as result of Unilever‟s
international acquisitions. These included Brooke Bond (1984), Lipton (1972) and Pond‟s
(1986). In 1993, Tata Oil Mills Company (TOMCO) merged with HUL. Two years later, HUL
and yet another Tata company, Lakme Limited, formed a 50:50 joint venture, Lakme Lever
Limited. Subsequently in 1998, Lakme Limited sold its brands to HUL and divested its 50 per
cent stake in the joint venture to the FMCG giant.
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, Nepal Lever Limited (NLL), and its factory represents the
largest manufacturing investment in the Himalayan kingdom. In a historic step, HUL picked up
74 per cent of the equity of Modern Foods from the Indian government. In 2002, HUL acquired
the government s remaining stake in Modern Foods.
Business
HUL‟s business activities are divided into four broad areas:
Home and personal care (personal wash, fabric wash, home care, oral care, skin care, hair care,
deodorants and talcs, colour cosmetics)
Foods (tea, coffee, branded staples, culinary products, ice creams, Modern Foods ranges)
New Ventures (Hindustan Lever Network, Ayush ayurvedic products and services, Sangam,
Pureit water purifiers)
Exports (HPC, beverages, marine products, rice)
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Brands
HUL s brands are household names across the country. They include Lifebuoy, Lux, Surf Excel,
Rin, Wheel, Fair & Lovely, Ponds, Sunsilk, Clinic, Pepsodent, Close-up, Lakme, Brooke Bond,
Kissan, Knorr-Annapurna and Kwality Wall‟s.
Location
HUL products are manufactured in 80 factories. The operations involve over 2,000 suppliers and
associates. HUL s distribution network, comprising about 7,000 redistribution stockiest, directly
covers the entire urban population, and about 250 million rural consumers.
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.
QUALITY POLICY
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 behaviour

towards everyone we work with, the communities we touch, and the environment on which we
have an impact.
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This is our road to sustainable, profitable growth, creating long-term value for our
shareholders, our people, and our business partners.
What Makes HLN's Promise Unique and Competitive
 Reputation of Hindustan Unilever HLN requires one of the lowest investments for entry
(Rs.2450 only to register as a consultant)
 A richly rewarding Compensation (earning opportunity) Plan providing 7 types of
earning backed by a powerful business development system
 Widest reach amongst Direct Selling companies in India (over 250 servicing points )
 Widest range of top quality Home Care, Personal Care and Food products
 Highly affordable prices
 Focussed training system and tools to aid self development
Today, HUL is one of India‟s largest exporters of branded Fast Moving Consumer Goods.
It has been recognized by the Government of India as a Golden Super Star Trading House
Over time HUL has developed into a viable & competitive sourcing base for Unilever
world wide in Home and Personal Care & Foods & Beverages category of products. HUL is also
a global marketing arm for select licensed Unilever brands and also works on building categories
with core country advantage such as branded basmati rice.
HUL Exports offers high level of service with flexibility and responsiveness thorough
out the supply chain. It has a dedicated organization structure to support this endeavour and this
has helped in growth of these businesses in particular. Intrinsic cost competitiveness in the end to
end Supply chain with appropriate technology and competitive capital investment operations
while delivering best in class quality enables HUL to position itself as a key sourcing hub for
Unilever and also become a preferred partner for Global customers in categories we operate.
HUL‟s key focus in the exports business is on two broad categories. It is a sourcing base
for Unilever brands in Home & Personal Care (HPC) and Food and Beverages (F&B) for
supplies to other Unilever companies. It also focuses on becoming a preferred supplier to both
non-Unilever and Unilever clients in three categories in which India, as a country, has
competitive advantage – Branded Rice, Marine Products and Castor and its Derivatives. HUL
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enjoys international recognition within Unilever and outside for its quality, reliability and speed
of customer service.
HUL's Exports geography comprises, at present, countries in Europe, Asia, Middle East,
Africa, Australia, North America etc
HUL DISTRIBUTION NETWORK
The company salesman grouped all these orders and placed an indent with the Head
Office. Goods were sent to these markets, with the company salesman as the consignee. The
salesman then collected and distributed the products to the respective wholesalers, against cash
payment, and the money was remitted to the company.
The focus of the second phase, which spanned the decades of the 40s, was to provide
desired products and quality service to the company's customers. In order to achieve this, one
wholesaler in each market was appointed as a "Registered Wholesaler," a stock point for the
company's products in that market. The company salesman still covered the market, canvassing
for orders from the rest of the trade. He would then distribute stocks from the Registered
Wholesaler through distribution units maintained by the company. The Registered Wholesaler
system, therefore, increased the distribution reach of the company to a larger number of
customers.
The highlight of the third phase was the concept of "Redistribution Stockiest" (RS) who
replaced the RWs. The RS was required to provide the distribution units to the company
salesman. The RS financed his stocks and provided warehousing facilities to store them. The RS
also undertook demand stimulation activities on behalf of the company.
The second characteristic of this period we realized that the RS would be able to provide
customer service only if he was serviced well. This knowledge led to the establishment of the
"Company Depots" system. This system helped in transhipment, bulk breaking, and as a stock
point to minimize stock-outs at the RS level.
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In the recent, a significant change has been the replacement of the Company Depot by a
system of third party Carrying and Forwarding Agents (C&FAs). The C&FAs act as buffer
stock-points to ensure that stock-outs did not take place. The C&FA system has also resulted in
cost savings in terms of direct transportation and reduced time lag in delivery. The most
important benefit has been improved customer service to the RS.
The role performed by the Redistribution Stockiest has also undergone changes over the
years. Financing stocks, providing manpower, providing service to retailers, implementing
promotional activities, extending indirect coverage, reporting sales and stock data, screening for
transit damages are some of the functions performed by the RS today.
HLL has grown manifold over the years. In the process, the number of factories and the
number of SKUs too have increased. In order to rationalize the logistics and planning task, an
innovative step has been the formation of the Mother Depot and Just in Time System (MD-JIT).
Certain C&FAs were selected across the country to act as mother depots. Each of them has a
minimum number of JIT depots attached for stock requirements. All brands and packs required
for the set of markets which the MD and JITs service in a given area are sent to the mother depot
by all manufacturing units. The JITs draw their requirements from the MD on a weekly or bi-
weekly basis.
At present, HLL's products, manufactured across the country, are distributed through a
network of about 7,000 redistribution stockiest covering about one million retail outlets. The
distribution network directly covers the entire urban population.
In addition to the ongoing commitment to the traditional grocery trade, HLL is building a
special relationship with the small but fast emerging modern trade. Our scale enables us to
provide superior customer service including daily servicing, improving their range availability
whilst reducing inventories. We are using the opportunity of interfacing more directly with our
consumers in this retail environment through specially designed communication and promotions.
This is building traffic into the stores while yielding high growth for our business.
An IT-powered system has been implemented to supply stocks to redistribution stockiest

on a continuous replenishment basis. The objective is to catalyze HLL‟s growth by ensuring that
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the right product is available at the right place in right quantities, in the most cost-effective
manner. For this, stockiest have been connected with the company through an Internet-based
network, called RS Net, for online interaction on orders, dispatches, information sharing and
monitoring. RS Net covers about 80% of the company's turnover. Today, the sales system gets to
know every day what HLL stockiest have sold to almost a million outlets across the country. RS
Net is part of Project Leap, HLL's end-to-end supply chain, which also includes a back-end
system connecting suppliers, all company sites and stretching right up to stockiest.
RS Net has come as a force multiplier for HLL Way, the company's action-plan to
maximize the number of outlets reached and to achieve leadership in every outlet, by
unshackling the field force to solely focus on secondary sales from the stockiest to retailers and
market activation. HLL Way has also led to implementing best practices in customer
management and common norms and processes across the company. Powered by the IT tools it
has further improved customer service, while ensuring superior availability and impact visibility
at retail points.
SUPPLY CHAIN
The primary objective of supply chain management is to fulfill customer demands
through the most efficient use of resources. A supply chain, logistics network, or supply network
is a coordinated system of entities, activities, information and resources involved in moving a
product or service from the supplier to the customer.
Typically a simple supply chain model will be as follows:-
Primary Secondary Consumer Purchase

(Shipment) (Retailing) (Off take)
Factory C&FA Distributor Retailer Consumer
Sub-
Super- Stockies
Stockiest t
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There are several stages through which the money circulates. The distribution
intermediaries make the whole system of supply chain economically viable. Each “layer of
intermediaries” implies fewer transaction complexities for all the “layers”, augmenting the reach.
The experience, specialization and knowledge of local conditions, contacts and scale through
such a network help achieve Operational Efficiency.
Without having to focus upon distribution, the brand managers can concentrate on their
core activity of product development, sourcing and marketing. The companies get a cost
advantage since most intermediaries are family owned businesses with low overhead and
operational costs. The brand owners get a better return on capital employed as intermediaries
hold the inventories.
THE CHALLENGE OF THE URBAN MARKETS

35% of India's population resides in urban. Penetrating the urban markets is, therefore,
one of the key challenges for any marketer. While urban markets present a great opportunity to
companies, they also impose major challenges. At HLL, they have been at the forefront of
experimenting with innovative methods to reach the urban consumer. And lot of competition
face by HLL and the increase the profit margin of retailers
Indirect coverage
Under the Indirect Coverage (IDC) method, company vans were replaced by vans
belonging to Redistribution Stockiest, which serviced a select group of neighbouring markets.
Operation Harvest
The reach of conventional media and, therefore, awareness of different products in urban
markets is weak. It was also not always feasible for the Redistribution Stockiest to cover all these
markets due to high costs involved. Yet, these markets are important since growth opportunities
are high.
Operation Harvest endeavoured to supplement the role of conventional media in India

and, in the process, forge relationships and loyalty with urban consumers. Operation Harvest also
involved conducting of product awareness programs on vans.
Cinema van operations these are typically funded by the Redistribution Stockiest. Cinema Van
Operations have films and audio cassettes with song and dance sequences from popular films,
32 | P a g e
also comprising advertisements of HLL products Single Distribution Channel. For India, HLL
has established a single distribution channel by consolidating categories. In a significant move,
with long-term benefits, HLL has mounted an initiative, Project Streamline, to further increase
reach with the help of distributers-stockiest. It has already appointed 6000 such sub-stockiest. As
a result, the distribution network directly covers about 50,000 urban, reaching about 250 million
consumers.
CHANNEL STRUCTURE
CARRY AND RE-DISTRIBUTOR STOCKIEST

RE-DISTRIBUTOR STOCKIEST
Supermarkets- Self- service stores where there is a room for shoppers to browse and interact
with the products.
Family grocer- Over the counter store mainly for monthly household shopping
Kiosk- A tiny over the counter store, easily accessible for emergency purchases. It stocks solely
low unit packs.
Wholesale- Sells stock to small retailer and end user.
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DISTRIBUTION CHANNEL
Current supply chain process network:
Manufacturer (Chennai)
C & F (Hubli)
Distributor
Wholesalers
Retailers
End customer
Notation:
1) C & F: Carriage Forward
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CHAPTER 2
LITERATURE REVIEW/THEORITICAL PRESPECTIVE
BACKGROUND OF THE STUDY

This phase of the report deals with the different theoretical aspects of the supply chain
management. A strong theoretical base will help us to understand the subject and it will also
highlight the need to explore the particular subject. Major theoretical aspects are discussed under
the following heads:
WHAT IS A SUPPLY CHAIN

A supply chain consists of all stages involved directly or indirectly in fulfilling a
customer request. This not only includes the manufacturer and supplier but also transporters,
warehouses, retailers and customers themselves. Within each organisation such as a
manufacturer the supply chain includes all functions involved in filling a customer request. There
functions include but not limited to new product development, marketing, operations,
distribution, finance and customer service.
A supply chain is dynamic and involves the constant flow of information, product and
funds between different stages. Each stages of supply chain perform different process and
interact with other stages of supply chain. Customer is an integral part of the supply chain. The
primary purpose for existence of any supply chain is to satisfy customer needs, in the process
generating profits for itself. Supply chain activities begin with customer order and end when a
satisfied customer has paid for his/her purchase.
The term supply chain conjures up images of product a supply, moving from supplier to
manufacturer to distributors to retailers to customers along a chain. It is important to visualise
information, funds and product flows along both direction of this chain. The term may also imply
that only one player is involved in each stage. In reality a manufacturer may receive raw
materials from several suppliers and then supply several distributors. Therefore most supply
chain is an actually network.
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It may be more accurate to use the term Supply Chain Network or supply web to
describe the structure of most supply chain.
A typical supply chain involves a variety of stages. The following diagram illustrates
different supply chain stages:
Supplier Manufacturer Distributor Retailer Customer
THE SUPPLY CHAIN RENAISSANCE

The conceptual basis of Supply Chain is not new. Actually supply chain has gone through
several evolutionary stages starting with physical distribution management in the 1950‟s, which
evolved into logistics management in the 1970‟s and then supply chain management in the
1990‟s.
HISTORY OF SUPPLY CHAIN
1950’s PHYSICAL DISTRIBUTION
1970’s LOGISTICS
1990’s
DECISION PHASES IN ASUPPLY
SUPPLYCHAIN
CHAINLOGISTICS
SUPPLY CHAIN PHASES
Successful supply chain management requires several decisions to the flow of

information, product and funds. These decisions fall into three categories or phases depending on
the frequency of each decision and the time frame over which a decision phase has an impact.
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Supply Chain Strategy or Design
During this phase, a company decides how to structure the supply chain. It decides what
the chain‟s configuration will be and what processes each stage will perform. Strategic decisions
made by companies include the location and capacities of production and warehousing facilities,
products to be manufactured or stored at various locations, mode of transportation to be made.
Consequently, when companies make these decisions, they must take into account uncertainty in
anticipated market conditions over the next few years.
Supply Chain Planning
As a result of the planning phase, companies define a set of operating policies that govern
short-term operations. This configuration establishes constrains within which planning phase
with a forecast for coming year or a compatible time frame of demand in different market.
Companies in the planning phase try to incorporate whatever flexibility may have been built into
supply chain in the design phase and exploit it to optimise performance in the shorter term.
Supply Chain Operation

The time horizon here is weekly or daily, and during this phase companies make
decisions regarding individual customer order. At the operation level supply chain configuration
is considered fixed and planning policies already defined. The goal of this phase is to implement
the operation in best possible manner.
VIEWS OF SUPPLY CHAIN

A supply chain is sequence of processes and flows that take place within and between
different supply chain stages and combine to fill a customer need for a product. There are
different ways to view the processes performed in a supply chain:
1. Cycle view
The processes in a supply chain are divided into a series of cycles, each performed at the
interface between two successive stages of a supply chain.
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Cycles Stages
Customer
Customer Order Cycle
Retailer
Replenishment Cycle
Distributor
Manufacturing Cycle
Manufacturer
Procurement Cycle
Supplier
2. Push/Pull View
The processes in a supply chain are divided into two categories depending on whether
they are executed in response to a customer order or in anticipation of customer order. Pull
processes are initiated by a customer order and Push processes are initiated and performed in
anticipation of customer orders.
DRIVERS OF SUPPLY CHAIN PERFORMANCE

To understand how a company can improve supply chain performance in terms of
responsiveness and efficiency, we must examine the four drivers of supply chain performance:
inventory, transportation, facilities and information. These derivers determine whether strategic
fit is achieved or not.
Inventory
These include all raw materials, work in progress and finished goods within a supply
chain. Inventory is an important supply chain driver because changing inventory policy can
dramatically alter the supply chain‟s efficiency and responsiveness.
Transportation
This entails moving inventory from point to point in the supply chain. Transportation can
take from of many combinations of modes and routs, each with its own performance
chrematistics.
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Facilities
These are the places in the supply chain network where inventory is stored, assembled or
fabricated. Two major types of facilities are production sites and storage sites. Flexibility in
facilities has significant impact on supply chain‟s performance.
Information
It consists of all data and analysis regarding inventory, transportation, facilities and
customers throughout the supply chain. Information potentially the biggest driver of performance
in supply chain as it directly affects each of the other driver.
Following figure illustrate the each driver and its impact.
Competitive Strategy
Supply Chain Strategy
Efficiency Responsiveness
Supply Chain Structure
Inventory Transportation Facilities Information
OBSTACLES TO SUPPLY CHAIN ACHIEVMENTS

A company‟s ability to find a balance between responsiveness and efficiency along the
responsiveness spectrum that best matches the type of demand it is targeting is the key to
achieving strategic fit. In deciding where this balance should be located on the responsiveness
spectrum, companies face many obstacles.
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On one hand, these obstacles have made it much more difficult for companies to create
the ideal balance. On the other hand, they have afforded companies increased opportunities for
improving supply chain management.
The following headings describe the recent obstacles faced by the companies:
 Increasing Variety of Products

 Decreasing product Life Cycle
 Increasingly Demanding Customer
 Fragmentation of supply chain ownership
 Globalisation
 Difficulty in Executing New Strategies
KEY SUPPLY CHAIN PRINCIPLES

Efficient supply chain management can be undoubtedly identified as one of the single
most important factor for a company, which wants to be a leader in the targeted market.
Following are some of the key principle to create efficient supply chain management.
 Link supply chain strategies to corporate objective

 Active support from top management
 Deep understanding of cost drivers
 Cooperative supplier relations
 Cross-functional approach
 Intelligent development of advance technology
 Proper investment
 Creating a culture of continuous improvement
 Proper measurement of each supply chain drivers
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CHAPTER 3
OBJECTIVES AND SCOPE
OBJECTIVES OF THE STUDY

The main purpose of the project has been to identify the areas of strength and weaknesses
of Supply Chain network of Indian Tobacco Company and suggest an action plan for
improvement in those areas, which have key impact in the effectiveness of the Supply chain
Integration.
Following are the specific objectives of the study:
 To study the effectiveness of the current supply chain system
 To analyse the strategic plan regarding supply chain integration
 To focus the general problem creating areas in the supply chain network
 To recommend new ways for better supply chain integration to gain more competitive
advantage and for better customer response
SCOPE OF THE STUDY

Today‟s companies are facing a tough competition in every aspect due to Globalisation
and Liberalised economy. Hence the companies have to move from traditional view of business
like product and selling philosophy to a customer and marker philosophy. So the companies can
go about winning customer and more market share and outperform competitors by doing a better
job of meeting and satisfying customer needs.
Companies wanting to win, let alone survive, need a new philosophy. Only customer-
centred companies that can deliver will be adept at in building customer, not just producing
product in a large quantity.
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The research has been designed to suggest the company under study, i.e. Indian Tobacco
Company to find the best possible supply chain network in compare to its competitors to gain an
extra competitive advantage.
LIMITATIONS OF THE STUDY

Every effort has been made to keep the study as objective and unbiased as possible. An
attempt has been made to capture the true picture of the Supply Chain Network both in
quantitative and qualitative terms. But Supply Chain covers a broad domain area, so some
constraints or limitations are unavoidable and it affected this project also.
The following are the specific limitations of the project:
 The study has been conducted within the vicinity of Bangalore operation of the
company.
 The interaction with the respondents was limited.
 This study report focuses the supply chain network mainly practiced by industrial
manufacturer.
 Findings or suggestions of the study were based on the assumption that the
respondents have disclosed correct information.
 There may be errors due to bias respondents.
 The recommendations or suggestions are yet to be implemented.
Though there exists some limitations but it has not affected the quality of the study. The study
paves way for conducting further study.
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CHAPTER 4
RESEARCH METHODOLOGY
Sample design:
Population for this research is 403 retailers and including wholesalers of New Delhi city sample
is 100.
New Delhi city
Sampling Method:
The process o drawing sample units from the population is called sampling method. In
order to have the unbiased results in the survey, the appropriate method of sampling i.e.
“stratified sampling‟ adopted. It also includes convenience sampling.
Duration of the Project

Two months.
TOOLS USED FOR ANALYSIS
1. Sample testing in spss software

2. Graphical representation of analysis:
Bar charts.
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CHAPTER 5
DATA COLLECTION
DATA COLLECTION APPROACH

PRIMARY DATA
Primary data is collected in two phases within New Delhi city-Primary data has been
used to carry out the research successfully. The SECONDARY DATA HAS BEEN
COLLECTED FROM VARIOUS JOURNALS AND publications. For the purpose of gathering
primary data a structure and non- disguised questionnaire was designed to collect data from the
retailer. The questioner contains both open-ended and close ended questions.
THE SOURCES OF THE DATA ARE AS FOLLOWS

The study relies to a great extent on primary data and to some extent on secondary data:
PRIMARY DATA:
Questionnaire
Observation and interview technique
SECONDARY DATA:
Information is collected through internet
From various text books
Journals and magazines
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CHAPTER 6
DATA ANALYSIS
1) Are you aware of new product launched by HUL?

Awareness
Table No.1
Cumulative
Frequency Percent Valid Percent Percent
Valid yes 76 76.0 76.0 76.0
No 24 24.0 24.0 100.0
Total 100 100.0 100.0
Graph 1
Awareness
80
60
Frequency
40
20
0
yes No
Awareness
Table No 1 reveals that 76% of the retailers aware of new product launch by the company
and 24% of the retailer not aware of the new product launched by the company.
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2) Do the company executives help in launching new product?
Help of company executive
Table No.2
Cumulative
Valid yes 76 76.0 76.0 76.0
No 24 24.0 24.0 24.0
Total 100 100.0 100.0 100.0
Graph 2
80
60
F
R
E
Q 40
U
E
N
C
20
Y
0
Yes No
It is clear from the Table No-2 that 76% sales executive help the launching of the new
product and 24% retailer not agree that sales executive can‟t help to launching the new product
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3) What do you feel that current supply chain system is?
Current supply chain
Table No.3
Cumulative
Valid Excellent 32 32.0 32.0 32.0
Very good 32 32.0 32.0 64.0
Good 24 24.0 24.0 88.0
Average 12 12.0 12.0 100.0
Total 100 100 100.0
Graph 3
current supply chain
40
30
Frequency
20
10
0
Excellent Very good Good Average
current supply chain
From Table No-3 it is clear that 32% retailer agree that the current supply chain is excellent. And
32% retailer said that the current supply chain is very good. And 24% retailers agree that the
current supply chain is good and remaining 12% said that they are satisfied with the current
supply chain.
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4] Are you satisfied with time to time delivery of HUL Company?
Time to Time delivery
Table No.4
Cumulative
Very good 38 38.0 38.0 58.0
Good 26 26.0 26.0 84.0
Average 16 16.0 16.0 100.0
Total 100 100.0 100.0
Graph 4
40
30
Frequency
20
10
0
It may inferred that according to the Table N0-4 that 38% retailer agree that there is a
time to time delivery of the product is excellent. And 26% retailers are agreeing that delivery
system is good and 20% agree that it is very good and remaining 16% said that it is an average.
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5] What is your opinion about suppliers booking procedure?
Suppliers booking procedure
Table No.5
Cumulative
Very good 40 40.0 40.0 66.0
Good 24 24.0 24.0 90.0
Average 10 10.0 10.0 100.0
Total 100 100.0 100.0
Graph 5
40
30
Frequency
20
10
0
Information gathered Table NO-5 it reveals that 40% retailers agreed that the suppliers
booking procedure is very good. And 26% retailers said that the excellent booking procedure.
And remaining are satisfied the suppliers booking procedure.
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6] Rate suppliers local call off co-operation
Local call off co-operation
Table No.6
Cumulative
Very good 22 22.0 22.0 56.0
Good 26 26.0 26.0 82.0
Average 18 18.0 18.0 100.0
Total 100 100.0 100.0
Graph 6
local call off co-operation
40
30
Frequency
20
10
0
local call off co-operation
From the Table N0- 6 it is clear those 34% sales executives are excellent co-operative to
the retailers. And 26% are doing well in co-operation and 22% are very good and 18%are
average in local call off co-operation.
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7] Is their any sales return policy
Sales return policy
Table No.7
Cumulative
Valid Yes 94 94.0 94.0 94.0
No 6 6.0 6.0 100.0
Total 100 100.0 100.0
Graph 7 Sales return policy
100
80
Frequency
60
40
20
0
Yes No
Sales return policy
From the Table No-7 it reveals that 94% retailers are aware of the sales return policy of
the company and the 6% cant aware of the sales return policy of the HUL.
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8] Are you satisfied with credit policy of HUL?
Satisfied with credit policy
Table. No 8
Cumulative
Valid Yes 96 96.0 96.0 96.0
No 4 4.0 4.0 100.0
Total 100 100.0 100.0
Graph 8 Satisfied with credit policy
100
80
Frequency
60
40
20
0
Yes No
Satisfied with credit policy
According to Table N0-8 it is clear that 96% of the retailer is satisfied with the credit
policy system which can provided by the company and 4% are not satisfied with the credit policy
of the company.
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9] What is the supplier‟s response for quality problems?
Supplier’s response for quality
Table No.9
Valid Cumulative
Frequency Percent Percent Percent
Valid YES 100 100.0 100.0 100.0
Graph 9
Suppliers response for quality
100
80
Frequency
60
40
20
0
YES
Suppliers response for quality
It is clear from the Table NO-9 that 100% retailers are satisfied with the quality of the
product and also the supplier‟s response for quality is very good.
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10] Do they handle complaints given by you?
Handel complaints given by you
Table No. 10
Cumulative
Valid Yes 96 96.0 96.0 96.0
No 4 4.0 4.0 100.0
Total 100 100.0 100.0
Graph 10
Handel compliants given by you
100
80
Frequency
60
40
20
0
Yes No
Handel compliants given by you
Table No- 10 it shows that 96% retailers a complaint is handled by the distributor .and
4% are not agree that the complaints are handle.
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11] What is time taken to handle your complaint?
Time taken to handle the complaint
Table No.11
Cumulative
Valid Few hours 30 30.0 30.0 30.0
2 days 26 26.0 26.0 56.0
4 days 22 22.0 22.0 78.0
More than 4 days 22 22.0 22.0 100.0
Total 100 100.0 100.0
Graph 11
Time taken to handel the complaint
30
20
Frequency
10
0
Few hours 2 days 4 days More than 4 days
Time taken to handel the complaint
Table NO-11 inferred the information 30% retailers agree that the few hours taken for
complaints handled. And 26% retailers agree that 2 days require for complaints handle 22%
retailers said that 4 days is require for the complaints handle and 22% retailers agree Those more
than 4 days are requiring for complaints handle.
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12] What is your opinion about HUL company distributor service?
HUL company distributor service
Table No.12
Cumulative
Very good 26 26.0 26.0 54.0
Good 28 28.0 28.0 82.0
Average 18 18.0 18.0 100.0
Total 100 100.0 100.0
Graph 12
30
20
Frequency
10
0
The presented in Table NO-12 that 28% retailers are agreed that HUL company
distributor service is excellent and 28% retailer‟s opinion is that good distributor service.
And 26% retailers are agreeing that distribution service is very good and remaining 18% retailers
are agreeing that it is an average.
57 | P a g e
CHAPTER 7
FINDINGS
 It is clear from Table No 1 reveals that 76% of the retailers aware of new product launch by
the company and 24% of the retailer not aware of the new product launched by the company.
 It is clear from the Table No-2 that 76% sales executive help the launching of the new
product and 24% retailer not agree that sales executive can‟t help to launching the new
product
 It is clear from the Table No-3 it is clear that 32% retailer agree that the current supply chain
is excellent. And 32% retailer said that the current supply chain is very good. And 24%
retailers agree that the current supply chain is good and remaining 12% said that they are
satisfied with the current supply chain.
 It may inferred that according to the Table N0-4 that 38% retailer agree that there is a time
to time delivery of the product is excellent. And 26% retailers are agreeing that delivery
system is good and 20% agree that it is very good and remaining 16% said that it is an
average.
 Information gathered Table No-5 it reveals that 40% retailers agreed that the suppliers
booking procedure is very good. And 26% retailers said that the excellent booking procedure.
And remaining are satisfied the suppliers booking procedure.
 It is clear From the Table N0- 6 it is clear that 34% sales executive are excellent co-
operative to the retailers. And 26% are doing good in co-operation and 22% are very good
and 18%are average in local call off co-operation
 It is clear From the Table No-7 it reveals that 94% retailers are aware of the sales return
policy of the company and the 6% cant aware of the sales return policy of the HUL.
58 | P a g e
 According to Table N0-8 it is clear that 96% of the retailer is satisfied with the credit policy
system which can provided by the company and 4% are not satisfied with the credit policy of
the company
 It is clear from Table No- 10 it shows that 96% retailers a complaint is handled by the
distributor .and 4% are not agree that the complaints are handle.
 It is clear from Table NO-11 inferred the information 30% retailers agree that the few hours
taken for complaints handled. And 26% retailers agree that 2 days require for complaints handle
22% retailers said that 4 days is require for the complaints handle and 22% retailers agree that
more than 4 days are require for complaints handle.
 The presented in Table NO-12 that 28% retailers are agreed that HUL company distributor
service is excellent and 28% retailers opinion is that good distributor service .And 26% retailers
are agreeing that distribution service is very good and remaining18% retailers are agreeing that it
is an average.
59 | P a g e
CHAPTER 8
SUGGESTIONS
 Promptness in delivery and time more to be exercised in this regard to maintain the
customer relation.
 Creating awareness regarding the schemes and informing retailers about the schemes and
new launches by products and providing the broachers of the Products to the retailers.
 Providing quick delivery of goods when required urgently by the wholesalers and retailers.
 Improve speed of dispatches of goods according to the order.
 Providing cash discounts to the wholesalers and retailers according to their transaction of the
business.
 Providing the uniform to the sales executive which can helpful for the increase the image
in the minds of the sales executive and also to the retailers?
 Modernization and standardization of New Delhi retailers‟ network must be carried out in
order to exchange ideas on successful selling strategies and identifying areas of
improvements “Sales through Services” and a Retailer Development Program must be
carried out.
 Distributor should maintain stock of all HLL products
 Discount and company incentive should be passed on to the retailer by the distributors and
distributor should periodically review the performance of their retailer.
 It is advised to the sales representative, to give an opportunity to retailers to put their point of
view during visit.
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CHAPTER 9
CONCLUSION
Hindustan Unilever ltd Company is the largest manufacturer of the FMCG Product
which is having more than 700 products.
The importance of supply chain management which can helpful for the time to time
delivery of the product and also helpful for the increase the market share of the company. And
also helpful for the purpose of the retailers‟ satisfaction stretches from introducing more and
more new product launches activities, good margin and better services from distributor.
It is expected that with a moderate implementation of basic suggestions be bound to

improve. The company is having good supply chain network, strong sales force and advanced
techniques like the palmtop, good computer software package makes HUL in a good position.
76% of the retailers aware of new product launch by the company so that they are aware
of the different schemes of the company.
76% sales executive help the launching of the new product which means that promotional
activity is to be done through the sales executive mouth to the retailers in New Delhi city.
It is clear that 32% retailer agree that the current supply chain is excellent. And 32%
retailer said that the current supply chain is very good. So the retailers are satisfied with the
current supply chain.
To conclude, it is very much limited time to clearly understand the supply chain
management. Apart from this we need to focus on each retailers view carefully in regular time
intervals (periodically) so to the best possible is presented here. Still there is a lot of scope for
developing on this subject, as excellence is not limited always.
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BIBLIOGRAPHY
A] List of Books
 Supply Chain Management- Sunil Chopra

 Research Methodology- C. R. Kothari
 Statistics for Management- Richard I. Levin & David S. Rubin
 Marketing Management- Philip Kothler
B] Websites
 www.hul.com
 www.supplychain.com
 www.supplycore.com
 www.logisticsworld.com
62 | P a g e
QUESTIONNAIRE
Respected sir,
Name: .
1. Nature of business. :
Phone No:
1] Are you aware of new product launched by HUL?
a. Yes No
2] Do the company executives help in launching new product?

a. Yes
b. No
3] What do you feel that current supply chain system is

a. Excellent
b. Very good
c. Good
d. Average
4] Are you satisfied with time to time delivery of HUL Company?

a. Excellent
b. Very good
c. Good
d. Average
5] What is your opinion about suppliers booking procedure?

a. Excellent c. Good
b. Very good d. Average
6] Rate suppliers local call off co-operation.
a. Excellent
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b. Very good
c. Good
d. Average
7] Is their any sales return policy

Yes No
8] Are you satisfied with credit policy of HUL?

Yes No
If No, specify
9] What is the supplier‟s response for quality problems?

Yes No
If No, specify
10] Do they handle complaints given by you?

Yes No
11] What is time taken to handle your complaint?

a. Few hours
b. 2 days
c. 4 days
d. More than 4 days
12] What is your opinion about HUL company distributor service?

a. Excellent
b. Very good
c. Good
d. Average
13] Is there any suggestion please mention
64 | P a g e

Impact in The Effectiveness of The Supply Chain Integration of HUL

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“Impact in the effectiveness of the Supply chain Integration of HUL”

Submitted in partial fulfilment for the award of

MASTER IN BUSINESS ADMINISTRATION (MBA)

NAME: HIMANSHU MISHRA

ROLL NO.: A19201160332

Executive Summary 6-7

Chapter I Introduction 8-33

Chapter II Literature Review 34-39

Chapter III Objectives and Scope 40-41

Chapter IV Research Methodology 42

Chapter V Data Collection 43

Chapter VI Data Analysis 44-55

Chapter VII Findings 56-57

Chapter VIII Suggestions 58

Date: 24th July‟2017

Signature of the Student

ship, fellowship or any other similar title.

Date: 24th July’2017

Signature of the Guide

I am grateful to Amity School of Distance Learning for giving me an opportunity to

offered valuable suggestions to improve my Research work.

I am thankful to my Research Guide Mr Sunil Agarwal, for abundant guidance, support,

and encouragement throughout my study.

Date: 24th July’2017

Supply chain management is a customer-oriented approach, designed to deliver

FMCG INDUSTRY IN INDIA

THE CHALLENGE INVOLVED

For a typical mid-size FMCG company, the numbers would be as…

 C&FA (Carrying & Forwarding Agent) 30

 Distributors & Super-stockiest 1,200

 Retailers directly covered 500,000

 Retailers via wholesalers 1,000,000

Typical Margins in such Supply Chain are:-

A distributor‟s investment consists of inventory, Accounts receivable and accounts

A „world-class‟ FMCG Sales & Distribution system.

 Ensures product availability

 At the right place

 In the right quantity

 Ensures product replenishment

 Ensures „profit‟ for all intermediaries

According to analysts, Hindustan Lever in February experienced the highest growth in

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

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

Typically, each category and each function - Sales, Commercial, Manufacturing - is

AYURVEDIC PERSONAL AND HEALTH CARE:

These factory-centered activities mainly focus on training to distributor, Retailers which

KEY LEARNINGS ON URBAN DEVELOPEMENT

The principal issue in rural development is to create income-generating opportunities

HUL‟s business activities are divided into four broad areas:

Exports (HPC, beverages, marine products, rice)

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

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

What Makes HLN's Promise Unique and Competitive

HUL DISTRIBUTION NETWORK

An IT-powered system has been implemented to supply stocks to redistribution stockiest

Typically a simple supply chain model will be as follows:-

Primary Secondary Consumer Purchase

Factory C&FA Distributor Retailer Consumer

THE CHALLENGE OF THE URBAN MARKETS

Operation Harvest endeavoured to supplement the role of conventional media in India

CARRY AND RE-DISTRIBUTOR STOCKIEST

Wholesale- Sells stock to small retailer and end user.