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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 coordination 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 companys 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 meet just by becoming efficient in itself. 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
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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 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. But it does not mean that this study unearths all supply chain management operation and study stops here. It does not. Because supply chain management is unique and it never stops. Following is the chapter classification of the study:
Chapter 1: COMPANY PROFILE This chapter describe the different aspects of Indian tobacco company including History of the company, Current operation, Client base, Product range etc.
Chapter 2: INTRODUCTION Introduction chapter deals with the background of the study as well as with study scope, objective of the study and also limitation.
Chapter 3: REVIEW OF LITERATURE Review of literature deals with the different theoretical aspects of the subject Supply Chain Management.
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Chapter 4: RESEARCH METHODOLOGY This chapter deals with the methods used in the study including sampling technique, sample description, instrumentation technique. Chapter 5: DATA ANALYSIS AND INTERPRETATION This chapter actually analyse the collected data through questionnaire and it also interprets the different charts and graphs. Chapter 6: FINDINGS AND RECOMMENDATIONS This is the concluding chapter, which describes the overall findings and it also focus on the recommendations for farther enhancement.
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FMCG INDUSTRY IN
INDIA
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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 SKUs (Stock Keeping Units). Also an Indian FMCG Company faces strong competition from the existing MNC-owned brands.
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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 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.
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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 entrepreneurs 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 distributors 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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Ensures product availability At the right place In the right quantity Ensures product replenishment Ensures profit for all intermediaries
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At a minimal cost
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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. 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 n 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.
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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 audiovisuals 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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COMPANY PROFILE
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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 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
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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 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 Icecream 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
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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. Hindustan Unilever Limited, 51.6% subsidiary of Unilever Plc, is the largest FMCG Company in the country, with a turnover of Rs118bn. The companys 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
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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 90s driven by its aggressive acquisition spree. From Rs38bn turnover (contributed 70% by soaps, detergents and personal products), HLLs 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) degrew 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 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 Rs2.4bn. Profitable growth has been the new mantra of the FMCG majors Chairman, M S Banga, who took over the reins from Keki Dadiseth 2 years ago. In contrast to Dadiseths strategy of expansion through acquisition, Mr. Bangas strategy revolves around rationalization. A focus on 30 power brands, which are major contributors to profitability, seeking new avenues of expanding distribution reach, improving
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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 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
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technology in all its operations. The Hindustan Lever Research Center (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. HLL believes that an organizations 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 HIVpositive, 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 endeavors to induce adoption of hygienic practices among 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.
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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.
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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 position 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.
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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 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.
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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. 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.
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Businesses
Home & Personal Care Personal Wash Fabric Wash Home Care Oral Care Skin Care Hair Care Deodorants & Talcs Color Cosmetics Foods Tea Coffee Branded Staples Culinary Products Ice Creams Modern Foods ranges New Ventures Hindustan Lever Network Ayush ayurvedic products & services Saga Purest water purifiers Exports HPC Beverages Marine Products Rice Castor
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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 ORAL CARE: Pepsodent Close-Up DEODRANTS: Axe
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Rexona COLOUR COSMETIC: Lakme AYURVEDIC PERSONAL AND HEALTH CARE: Ayush TEA: Brooke bond Lipton COFFEE Bru FOODS Kissan Knorr Annapurna ICE CREAM Kwality Walls
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M/S MANGALWADE TRADERS (URBAN DISTRIBUTOR) BIJAPUR Mangalwade traders are the urban distributors for Hindustan Lever Limited and also they are supplying the products to the wholesaler and retailer. Solapur Road Adarsh Nagar Gandhi Circle Banjar Cross Minaxi Circle Golgummaz They deal in products of HLL Lux, Pears, Hamam, Rexona, Liril,Life bouy Surf excel, Rin, Wheel Sunsilk, Clinic plus Pepsodent, Close-up Fair and lovely, Ponds Brooke bond, Lipton Bru etc..
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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 HULs 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)
Brands HUL s brands are household names across the country. They include Lifebuoy, Lux, Surf Excel, Rin, Wheel, Fair & Lovely, Pond s, Sunsilk, Clinic, Pepsodent, Closeup, 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 stockists, directly covers the entire urban population, and about 250 million rural consumers.
Mission
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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. 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
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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 Indias 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. HULs 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 enjoys international recognition within Unilever and outside for its quality, reliability and speed of customer service.
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HUL's Exports geography comprises, at present, countries in Europe, Asia, Middle East, Africa, Australia, North America etc
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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.
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An IT-powered system has been implemented to supply stocks to redistribution stockiest on a continuous replenishment basis. The objective is to catalyze HLLs growth by ensuring that 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.
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Primary
Secondary
Consumer
( (Shipment) (Retailing) ) P Purchase (Off take) There are several stages through which the money circulates. The distribution
intermediaries make the whole system of supply chain economically viable. Each layer
Fintermediaries implies fewer transaction complexities for all the layers, C C&FA R Retailer of Factory
augmenting the reach. The experience, specialization and knowledge of local conditions, contacts and scale through such aSubnetwork help achieve Operational SuperEfficiency.
S Stockist S Stockist
Distribu tor t
Consum er e
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.
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distribution network directly covers about 50,000 urban, reaching about 250 million consumers. CHANNEL STRUCTURE
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DISTRIBUTION CHANNEL
Current supply chain process network : Manufacturer (Chennai)
Retailers
End customer
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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 illustrate different supply chain stages:
Supplier
Manufacturer
Distributor
Retailer
Supplier
Manufacturer
Distributor
Retailer
Supplier
Manufacturer
Distributor
Retailer
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 1950s, which evolved into logistics management in the 1970s and then supply chain management in the 1990s.
HISTORY
OF
SUPPLY
CHAIN
1970s LOGISTICS
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DECISION PHASES IN A SUPPLY CHAIN 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. Supply Chain Strategy or Design During this phase, a company decides how to structure the supply chain. It decides what the chains 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.
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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. Cycles Customer Order Cycle Retailer Replenishment Cycle Distributor Manufacturing Cycle Manufacturer Procurement Cycle Supplier Stages Customer
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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 Theses 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 chains 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. 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 chains performance.
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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
Inventory
Transportation
Facilities
Information
OBSTACLES TO SUPPLY CHAIN ACHIEVMENTS A companys 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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RESEARCH METHODOLOGY
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Population for this research is 403 retailers and including wholesalers of Bijapur city sample is 100. Bijapur city Solapur Road Adrash Nagar Gandi Circle Banjar Cross Minaxi Circle Golagumaz 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 Four months. TOOLS USED FOR ANALYSIS 1. Sample testing in spss software 2. Graphical representation of analysis: Bar charts. DATA COLLECTION APPROACH PRIMARY DATA Primary data is collected in two phases within Bijapur 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.
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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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REVIEW OF LITERATURE
This chapter deals with various theoretical backgrounds necessary to carryout this project. Every study or project needs some amount of theoretical background and existing published literature is one of the major sources for that. For this project different kinds of literature review has been done. Several books, research papers are available in the supply chain field and Internet is also a useful way to get the important, key points regarding the subject. Following are the different sources of literature used in this project. Supply Chain Information (Books) Literally many books are available in the market on supply chain management. But Supply Chain Management by Sunil Chopra and Peter Meindl helped me a lot to get the baseline of the subject. Logistic Management by Donald J. Bowersox and David J. Closs also gave valuable input.
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Research Papers A no. of studies regarding supply chain management have been carried out in India as well as abroad, which gave valuable informations, few of them are
Supply Chain Analysis and Management by Vikas Chandra in Management Review. Case study analysis of IBM by Robert J. Bowman and of Wal-Mart by P.Mahon Chandran.
World Wide Web (Internet) The Internet, more particularly, World Wide Web used to gather information regarding current supply chain scenario in the world. In fact, browsing the net helped a great deal to understand everyday pragmatic supply chain business issues. PURPOSE Literature review is one of the prime parts of every project. The very basic purpose of the literature review is to gain insight on the theoretical backgrounds of the research problem. It helps the researcher to gain strong theoretical basis of the problem under study and also helps to explore whether any one has done research on the related issues. Thats why literature review helps one to find out the path of problem solving. In this regard the very basic purpose of literature review in this dissertation is same as mentioned above.
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METHODOLOGY For simplicity and proper understanding of the subject, the literature review has been divided into the following parts.
Basic introduction and different approaches to supply chain management. Identifying the key elements and drivers of supply chain and their importance. Understand the different assumptions necessary to make optimised supply chain network.
BENEFITS The major benefits of literature review are: It helps to identify the key variables of the supply chain network. It gave a strong theoretical background of the subject. It produced a macro view of different work in supply chain field.
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ANALYSIS INTERPRETATION
1) Are you aware of new product launched by HUL? Awareness Table No.1 Frequen cy 76 24 100 Percent 76.0 24.0 100.0 Valid Percent 76.0 24.0 100.0 Cumulativ e Percent 76.0 100.0
Valid
yes No Total
Graph 1
Awareness
80
40
20
0 yes No
Frequency
60
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 Frequen cy 76 24 100 Percent 76.0 24.0 100.0 Valid Percent 76.0 24.0 100.0 Cumulativ e Percent 76.0 100.0
Vali d
yes No Tota l
Graph 2
Help of company executive
80
60
40
20
F R E Q U E N CY
0 Yes No
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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 cant help to launching the new product
3) What do you feel that current supply chain system is Current supply chain Table No.3 Frequen Valid cy Percent Percent Vali Excellen d t Very good Good Average Total Graph 3
40
32 32 24 12 100
30
Frequency
20
10
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 Frequen Valid cy Percent Percent Vali Excelle d nt Very good Good Averag e Total 20 38 26 16 100 20.0 38.0 26.0 16.0 100.0 20.0 38.0 26.0 16.0 100.0
Graph 4
40
20
10
Frequency
30
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 agree that
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delivery system is good.And 20% agree that it is very good and remaining 16% said that it is an average. 5] What is your opinion about suppliers booking procedure. Suppliers booking procedure Table No.5 Frequen Valid cy Percent Percent Vali Excellen d t Very good Good Average Total Graph 5
Suppliers booking procedure
26 40 24 10 100
40
30
Frequency
20
10
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 Frequen Valid cy Percent Percent Vali Excellen d t Very good Good Average Total Graph 6 34 22 26 18 100 34.0 22.0 26.0 18.0 100.0 34.0 22.0 26.0 18.0 100.0
40
30
Frequency
20
10
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 Frequen Valid cy Percent Percent 94 94.0 94.0 6 6.0 6.0 100 100.0 100.0
Vali d
Yes No Tota l
Graph 7
100
80
Frequency
60
40
20
0 Yes No
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 Frequen Valid cy Percent Percent 96 96.0 96.0 4 4.0 4.0 100 100.0 100.0
Vali d
Yes No Tota l
Graph 8
100
80
Frequency
60
40
20
0 Yes No
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 suppliers response for quality problems Suppliers response for quality Table No.9 Frequen Valid Cumulativ cy Percent Percent e Percent Vali YES d 100 100.0 100.0 100.0
Graph 9
100
80
Frequency
60
40
20
0 YES
It is clear from the Table NO-9 that 100% retailers are satisfied with the quality of the product and also the suppliers 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 Frequen cy 96 4 100 Percent 96.0 4.0 100.0 Valid Percent 96.0 4.0 100.0 Cumulativ e Percent 96.0 100.0
Vali d
Yes No Tota l
Graph 10
100
80
Frequency
60
40
20
0 Yes No
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 Frequen Valid cy Percent Percent Few hours 30 30.0 30.0 2 days 26 26.0 26.0 4 days 22 22.0 22.0 More than 4 22 22.0 22.0 days Total 100 100.0 100.0
Vali d
Graph 11
30
20
Frequency
10 0 Few hours 2 days 4 days More than 4 days
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 Frequen Valid cy Percent Percent Vali Excellen 28 28.0 28.0 d t Very 26 26.0 26.0 good Good 28 28.0 28.0 Average 18 18.0 18.0 Total 100 100.0 100.0 Graph 12
30
20
Frequency
10 0 Excellent Very good Good Average
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.
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And 26% retailers are agreeing that distribution service is very good and remaining 18% retailers are agreeing that it is an average.
FINDINGS
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FINDINGS It is clear fromTable 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 cant 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 agree 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
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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. 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.
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SUGGESTION
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SUGGESTION
Promptness in delivery and time more e 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
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 Bijapur 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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CONCLUSION
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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 Bijapur 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
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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
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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 b. Very good a. Excellent b. Very good c. Good c. Good d. Average
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d. Average 7] Is their any sales return policy Yes No 8] Are you satisfied with credit policy of HUL Yes If No , specify No
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 ________________________________________________________________
THANK YOU
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