Sdm Proposal

A PROJECT PROPOSAL ON

A Study on Distribution Management of Hindustan Unilever Limited

By Harsha K. Indira Mohanty Manvi Malik Md. Saibur Rahman Md. Wasi Akhtar Vani Mahajan

A PROJECT PROPOSAL

ON

A Study on Distribution Management of Hindustan Unilever Limited

Submitted by

Submitted to

Harsha K.

Prof. P.V Murli Krishna

Indira Mohanty Manvi Malik Md. Saibur Rahman Md. Wasi Akhtar Vani Mahajan Date of Submission:

31st August, 2009

Description of the project

Hindustan Unilever Limited (‘HUL’), formerly Hindustan Lever Limited (it was renamed in late J une 2007 as HUL), is India's largest Fast Moving Consumer Goods company, touching the livesof two out of three Indians with over 20 distinct categories in Home & Personal Care Products and F oods & Beverages. These products endow the company with a scale of combined volumes of abo ut 4 million tonnes and sales of nearly Rs. 13718 crores. 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. The mission that inspires HUL's over 15,000 employees, including over 1,300 managers, is to "ad d vitality to life." HUL meets everyday needs for nutrition, hygiene, and personal care with brand s that help people feel good, look good and get more out of life. It is a mission HUL shares with it s parent company, Unilever, which holds 52.10% of the equity. The rest of the shareholding is dis tributed among 360,675 individual shareholders and financial institutions. HUL's brands ‐ like Lifebuoy, Lux, Surf Excel, Rin, Wheel, Fair & Lovely, Pond's, Sunsilk, Clini c, Pepsodent, Close‐up, Lakme, Brooke Bond, Kissan, Knorr‐Annapurna, Kwality Wall's – are ho usehold names across the country and span many categories ‐ soaps, detergents, personal product s, tea, coffee, branded staples, ice cream and culinary products. These products are manufactured over 40 factories across India. The operations involve over 2,000 suppliers and associates. HUL's distribution network comprises about 4,000 redistribution stockists, covering 6.3 million retail ou tlets reaching the entire urban population, and about 250 million rural consumers.

The distribution network of HUL is one of the key strengths that help it to supply most products t o almost any place in the coutry from Srinagar to Kanyakumari. This includes, maintaining favor able trade relations, providing innovative incentives to retailers and organizing demand generatio n activities among a host of other things. Each business of HUL portfolio has customized the net work to meet its objectives. The most obvious function of providing the logistics support is to get the company’s product to the end customer. The HUL’s distribution network has evolved with time. The first phase of the HUL distribution n etwork had wholesalers placing bulk orders directly with the company. Large retailers also placed direct orders, which comprised almost 30 per cent of the total orders collected. The company sale sman grouped all these orders and placed an indent with the Head Office. Goods were sent to thes e markets, with the company salesman as the consignee. The salesman then collected and distribu ted 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 pro ducts and quality service to the company's customers. In order to achieve this, one wholesaler in e

ach 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 re st of the trade. He then distributed stocks from the Registered Wholesaler through distribution uni ts maintained by the company. The Registered Wholesaler system, therefore, increased the distrib ution reach of the company to a larger number of customers. The highlight of the third phase was the concept of "Redistribution Stockist" (RS) who replaced t he RWs. The RS was required to provide the distribution units to the company salesman. The sec ond characteristic of this period was the establishment of the "Company Depots" system. This sys tem helped in transshipment, bulk breaking, and as a stockpoint to minimise stock‐outs at the RS level. In the recent past, 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 stoc k‐points to ensure that stock‐outs did not take place. The C&FA system has also resulted in cost s avings in terms of direct transportation and reduced time lag in delivery. The most important bene fit has been improved customer service to the RS. The role performed by the Redistribution Stockists includes: Financing stocks, providing wareho using facilities, providing manpower, providing service to retailers, implementing promotional ac tivities, extending indirect coverage, reporting sales and stock data, demand simulation and scree ning for transit damages.

Objective of the Project

The objective of this research is to understand the distribution network of HUL, and its functioning in Hyderabad city. The next step to this will be an in depth analysis on the Evolution of HUL’s distribution network. An important area of this research work will be to understand the Transportation & Logistics as well as the Channel design of HUL.

We will analyze the distribution network of HUL from the following aspects:

Evolution of HUL’s distribution network  Transportation & Logistics  Channel Design  Initiatives taken for channel member management.  Field force management  Analytical Framework

Methodology

To achieve the objective of the project following methodology will be used. Step 1- Understanding the project by studying the sales and development of FMCG products Step 2- Collecting the secondary data to understand the role of sales and development in marketing Step 3- Communication with the HUL sales and marketing division employees Step 4- Analyzing the primary data collected through interviews from the HUL employees Step 5- Preparation of the final report

Limitations of the study

There are quite a few limitations to this research work which can be stated as 

Owing to time and Budget constraints this study will be restricted to Hyderabad city only.



Owing to the busy schedule of the Sales task force at HUL fixing meetings with them might be difficult.

References

1. B. Joseph Pine, James H. Gilmore (1999), The Experience Economy: Wor k is Theatre & Every Business a Stage, Published by Harvard Business P ress, 254 pages. 2. HUL Website (http://www.hul.co.in/) 3. HUL CLSA Conference, Investor Presentation (24th Sept., 2008). 4. Reckitt Benckiser Website (http://www.reckittbenckiser.com/site/RKBR/T

emplates/Home.aspx?pageid=1) 5. Colgate – Palmolive Website (http://www.colgate.co.in/app/Colgate/IN/H

omePage.cvsp) 6. Emami Group Website (http://www.emamigroup.com/Brands)

7. CMIE 8. Wikipedia