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Ankit Chhabra (104) Sankalp Kohli (110) Abhijit Arora (303) Arpan Mehra (309) Anshum Kawatra (308)

Anshul Jindal (306)

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

HULs Product Portfolio

Distribution Network of HUL


35 C&FAs, 4,000 redistribution stockists, covering 6.3 million retail outlets Reaches the entire urban population, and about 250 million rural consumers Its evolution over time - 1st Phase Initially, wholesalers and retailers used to place direct orders Company salesman used to take these orders and later distribute the goods Cash payment was then remitted to the company 2nd Phase Registered wholesalers were appointed Sales man then took products from RW and distributed further

Distribution Network of HUL


3rd Phase
RW were replaced by RS (Redistribution Stockist) Company Depot system was also established CD helped in transhipment, bulk breaking, and acted as a stock point to minimise stock-outs at the

RS level
In recent past, Company Depot has been replaced by a system of third party Carrying and

Forwarding Agents (C&FAs)


C&FAs act as buffer stock-points to ensure minimum stock-outs The C&FA system resulted in cost savings in terms of direct transportation and reduced time lag in

delivery
C&FA has improved customer service to the RS

Role performed by Redistribution Stockists


Providing warehousing facilities Providing manpower Providing service to retailers Implementing promotional activities Extending indirect coverage Reporting sales and stock data Demand simulation and screening for transit damages

Distribution at rural centres


Areas with populations below 50,000 Network covers about 50,000 villages, reaching 250 million consumers, through 6000 sub-stockists HUL approached rural market with two criterias - the accessibility and viability HUL launched Indirect Coverage (IDC) in 1960s. Indirect Coverage (IDC) method replaced company vans by vans belonging to Redistribution Stockists, which serviced a select group of neighbouring markets

Distribution Network of HUL


New Distribution Channel Project Shakti
80000 villages

Project Streamline
40% rural population

Hindustan Lever Network


80% urban population

Mother Depot and Just In Time

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

Soap, detergents - 8% on MRP Cosmetics Food items 10% on MRP 8% on MRP

 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

Organizational Structure (Delhi Branch)


Regional Manager North Regional Sales Manager Area Sales Manager Sales Officer Territory Sales In charge Salesman

Key Challenges Faced


HUL

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

Key Initiatives of HUL


Servicing Channel partners and customers with continuous daily replenishment Delayering of sales force to improve response times and service levels Revamping of its sales organization in the rural markets Implementation of supply chain system Launching of various projects

HUL, Absolute F M CG leader

How many of them do you use???

What we plan???

Middle Class Value Pack

Benefits
Kill competition in Non Leading categories

Leveraging the Top position

Faster inventory turnover

Other Recommendations
Pure It Low cost water purifier

Co-Creation
Involve customers in Value Creation

Thank You

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