A PROJECT REPORT

ON

A STUDY OF SUPPLY CHAIN MANAGEMANT OF

HINDUSTAN UNI-LEVER Ltd. IN NCR

IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR

THE POST GRADUATE DIPLOMA IN MANAGEMENT

SUBMITTED BY:
GAURAV SAINI

Enrollment No. 19A1020093

Specialization: OPERATION

UNDER SUPERVISION
OF
MISS. RADHIKA AGARWAL

(Session-2022)

SUBMITTED TO

Institute of Management Technology, Centre for Distance Learning

A-16, Site-3, UPSIDC Industrial Area, Meerut Road, Ghaziabad – 201 003,
Uttar Pradesh, India

i
DECLARATION CERTIFICATE

I GAURAV SAINI certify that this project work titled “A Study of Supply Chain

Management of Hindustan Uni-Lever Ltd. In NCR.” submitted by me for the

partial fulfilment of the requirement for the award of Post Graduate Diploma In

Management is my own bonafide work and carried out by me under the

supervision of MISS. RADHIKA AGARWAL. The work embodied in this project

report has not been submitted for the award of any other degree or diploma to any

Institute or University.

I hereby declare that I have faithfully acknowledged and given credits to published

work that I have referred from other published sources, by citing and mentioning the

credits in bibliography. I further declare that the work presented in this report is

original and has not been copied from any other sources. If my work is found copied

or plagiarized, the institution holds the right to reject my submitted project report.

Date:

(Signature of the Student)

GAURAV SAINI
Enrollment No. 19A1020093

ii
CERTIFICATE FROM GUIDE

This is to certify that Mr. GAURAV SAINI a Student of IMT- Centre for Distance

Learning, Ghaziabad has completed the project work on “A Study of Supply Chain

Management of Hindustan Uni-Lever Ltd. In NCR.” under my guidance and

supervision.

I certify that this is an original work and has not been copied from any source.

(Signature of Guide)
RADHIKA AGARWAL
Email Id : [email protected]

iii
ACKNOWLEDGEMENT

I have prepared this project report titled, A Study of Supply Chain Management of

Hindustan Uni-Lever Ltd. In NCR. as a part of my PGDM Programme. I have derived

the contents and approach of this study paper through discussions with colleagues as

well as with the help of various procurement centric websites and course material. I

would like to give my sincerethanks to a host of friends and the teachers who, through

their guidance, enthusiasm and counselling helped me enormously.

Apart from this, I hope this study paper would stimulate the need of thinking and

discussion on the topics like this one.

GAURAV SAINI

Enrollment No. 19A1020093

TABLE OF CONTENT

S.No. TITLE

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

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)

OVERVIEW & OBJECTIVE OF THE RESEARCH

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.
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 feedback from customers also.
It should do something to give after sales service and collect feedback from the
customers.

The basic objective of this project is as mentioned above to find ways so that HUL
remain market leader by considering all the needs & wants and fulfilling their demand

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 MANAGEMENT

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
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. Nitin Paranjpe

2. CEO & Managing Director     Mr. Sanjiv Mehta 

3. Finance & IT Director         Mr. Ritesh Tiwari

4. Executive Director                    Mrs. Prabha Narasimhan

5. Directors

                                                       I. Mr. Ashish Gupta 

                                                        II. Mr. Leo Puri 

                                                       III. Sanjiv Misra 

                                                       IV. Mr. O. P. Bhatt 

                                                        V. Mrs. Ashu Suyash

                                                       VI. Mrs. Kalpana Morparia

RESEARCH METHODOLOGY/ PROBLEM AND SAMPLING TECHNIQUE

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

Indirect personal Interview Published Sources Unpublished Sources

Information from correspondents Govt. publication

Mailed questionnaire Report Committees &Commissions

Question filled by enumerators. Private Publication

Research Institute
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%

4. 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.

RECOMMENDATIONS / SUGGESTIONS

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.

LIMITATIONS OF STUDY
 The sample size may not adequately represent the national market.

 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.

BIBLIOGRAPHY

BOOKS
 Gunasekaran, A. & Kobu, B. (2007). Performance measures and metrics in logistics and
supply chain management: A review of recent literature (1995-2004) for research and
applications. International Journal of Production Research, 45(12), 2819-2840.

 Gunasekaran, A., Patel, C., & McGaughey, R.E. (2004). A framework for supply
chain performance measurement. International Journal of Production Economics,
87(3), 333-347.

 Gunasekaran, A., Patel, C., & Tirtiroglu, E. (2001). Performance measures and
metrics in a supply chain environment. International Journal of Operations &
Production Management, 21(1/2), 71-87.

 Abernathy, F H, Dunlop, J T, Hammond, J H and Weil, D (2002), ‘Globalization in

the Apparel and Oil Industries: What is New and What is Not?’

 Accenture (2003), ‘Connecting with the Bottom Line: A Global Study of Supply
Chain Leadership and Its Contribution to the High-Performance Business’

 Au, K F, Ho, D C K, ‘Electronic Commerce and Supply Chain Management: value-

adding service for clothing manufacturers’, Integrated Manufacturing Systems 13/4
(2002) 247-254

 Bae, J, May-Plumlee, T (2005), ‘Customer focused Oil and Apparel Manufacturing

System: Toward and Effective E-Commerce Model’, vol. 4 issue 4

 Bitran, G R, Gurumurthiο, S and Sam, S L (2006), ‘Emerging Trends in Supply Chain

Governance’, Paper 227

 Ballou, Ronald H., Business Logistics Management, International Edition,

Prentice Hall, New Jersy, 1999, p. 660.
 Basics of distribution management – A logistical approach Satish K.
Kapoor and Purna Kansal. PHI – 2016.
 Research Methodology ---C R Kothari

 Research Methodology ---Sanjay Narula

INTERNET

 WWW.HUL.CO.IN

 [email protected]

 http://en.wikipedia.org/wiki/Logistics

NEWS PAPER

 Times of India

 Hindustan Times

Annexure
(Questionnaire)
Name of the shop:

City:

Authorized Dealer:

Sir/mam please answers these questions:-

From whom do you prefer for the supply of goods?

a. Distributor
b. Whole seller
c. Direct from organization

When you place the order?

a. After end of stock

b. Being less stock
c. During schemes

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

a. Yes
b. No

Which types of decision strongly affect the supply chain?

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

Does the Procurement, Distribution and the Logistics decisions are

a. Centralized
b. Decentralized
Which type of Framework do you consider in SCM?

a. Strategic
b. Structural
c. Functional

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

a. P&G
b. HUL
c. ITC
d. Dabur

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

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Thank you for your effort!