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Introduction to Company
Indias largest FMCG company Renamed as HUL in June 2007 20 distinct categories in Home & Personal Care Products and Foods & Beverages Volumes of around 4 million tonnes and sales worth ` 13718 cr HULs mission driving its 15,000 employees add vitality to life HUL has over 40 factories in India Operations involve over 2,000 suppliers and associates
RS level
In recent past, Company Depot has been replaced by a system of third party Carrying and
delivery
C&FA has improved customer service to the RS
Project Streamline
40% rural population
Major Stakeholders
1. HUL
Retail network of 4 million outlets. Implementing an IT system to connect 3,500 stockists in 1200 towns who account for 80 per cent of company sales. Sourcing: HUL promotes sustainable agricultural practices by working with external agencies, farmers/small growers. They contribute towards
Adoption of technology Harnessing the land Achieving quality: Gathering certifications.
Manufacturing: Apart from employing world class facilities they look into broader issues such as reducing carbon footprint in their production activities.
Developing energy efficient production technologies like Ploughshare Mixer Technology Increasing the use of carbon neutral fuels Implementing a strategy for water is based on the 4-R principle: Reduce, Reuse, Recycle and Renew
Major Stakeholders
2. Carrying and Forwarding Agents (CNFs)
In the recent past Company Depots have been replaced by a system of third party Carrying and Forwarding Agents (C&FAs).
The C&FAs act as buffer stock-points to ensure that stock-outs did not take place.
C&FAs also act as gatekeepers between the manufacturers and end-users. Can serve as a key differentiator as channel experience strongly affects end-user's overall perception of the brand's image. Main functions are:
ACCUMULATION Bringing similar stocks from different suppliers, ALLOCATION- breaking down a homogeneous supply into smaller slots & ASSORTING-Building assortments that are readily consumable.
Major Stakeholders
3. Transport and Logistics
Critical part of the distribution as they are responsible for the timely delivery of the stocks along the chain and finally to the customer. Manufacturing site is usually located close to the suppliers, thus major transportation takes place in the delivery to the market. Trucks: Used to transport stocks from manufacturer to C&FAs and then to the RSs (Redistribution Stockists) Local/Cheap Transport: To deliver the products to the end consumers or retailers.
Major Stakeholders
4. Redistribution Stockists
HUL's products, are distributed through a network of about 7,000 redistribution stockists The major functions of RSs consist of: Financing stocks providing warehousing facilities providing manpower providing service to retailers implementing promotional activities reporting sales and stock data demand simulation and; screening for transit damages
Major Stakeholders
5. Wholesaler
Wholesaler is an intermediary who buys goods for resale usually from company distributors or stockists.
He has the ownership of the goods he sells and the operations are run like a typical store where the resellers (could be retailer's themselves or bulk buying individual customers) who come to him with an elaborate list and buy.
HUL considers it a necessary evil, in an ideal situation they would like to avoid them totally , but the fact is that in spite of the negatives like loss of control, and lack of transparency, they have an important role to play in Indian distribution channels.
Major Stakeholders
6. Retailer They cater to the end customers. While a traditional distribution chain is followed in the urban markets, the rural areas have a new strategy implemented for catering to the rural customers.
Major Stakeholders
Distribution at the Villages Shakti
The company has brought all markets with populations of below 50,000 under one rural sales organisation. Started in the late2000, Project Shakti had enabled Hindustan Lever to access 80,000 of India's 638,000 villages . HUL's partnership with Self Help Groups(SHGs) of rural women, is becoming an extended arm of the company's operation in rural hinterlands. Project Shakti has already been extended to about 12 states. The respective stategovernments and several NGOs are actively involved in the initiative.
SHAKTI PROFILE
C&FA
Shakti Ent#1
Shakti Ent#2
SHG1
SHG2
SHG3
CONSUMERS
Quantitative Measures
COST BENEFIT ANALYSIS NEED BASED PRODUCTION
Qualitative Measures
LEVERAGING INFORMATION TECHNOLOGY ADEXA ICOLLABORATION SUITE
RS NET INITIATIVE:
Target chasing Reporting on a daily basis. Technology Usage : Palmtops for effective reporting
Redistribution Stockists:
Sales Margin: 4.76% which includes cash discount, unloading expenses from depot, distribution expenses to retailers, incentive schemes & other incidental expenses. Incentive schemes: Before 2000 holiday packages and tours but after 2000 no non-monetary incentive for RS.
Wholesaler:
1.5 % max. discount from RS cash discounts and other schemes promoted by HUL (gets points under Vijeta Scheme). bulk discounts
Retailers
1.0% max. discount from RS Sales Margin: Depends on the product
Incentive schemes: Company programs (Scheme Discounts + Cash Discounts) TPR schemes based on Sales (1 % to 4 %). Vijeta scheme is not for retailers.
Thr
ay trat
y f
i her evel f Brand Experience
Brand C mmunicati n
Pr duct Availability
C&F
Stockist
CSD Canteen
Retail Outlets
Wholesaler
Consumers
Distribution at Villages
PHASE 1: VAN BASED Fixed Route Coverage 25 % Rural Population Town Based Distributor PHASE 3: SHAKTI ENTREPRENUER 50 % Rural Population
Large Villages: Accessible by Motor able Roads Villages accessible from nearer villages Small Villages
PHASE 2: SS (Star Seller) Distributor Based in the Village Follows Hub & Spoke Model 25 % Rural Population
What we plan???
Benefits
Kill competition in Non Leading categories
Other Recommendations
Pure It Low cost water purifier
Co-Creation
Involve customers in Value Creation
Thank You