Comparision of Supply Chain of Hul and P&G P

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TERM PAPER REPORT
ON

Comparative analysis of Supply chain process followed by HUL and P&G in India with main focus on “Distribution Channels”

SUBMITTED BY:
Nishant Kumar Gupta
&
Gaurav Kumar

AMITY INTERNATIONAL BUSINESS SCHOOL, NOIDA AMITY UNIVERSITY – UTTAR PRADESH

PLAN OF ACTION

1. Introduction - Hindustan Unilever Limited
 
Hindustan  Unilever  Limited  (‘HUL’),  formerly  Hindustan  Lever  Limited  (it  was  renamed  in  late Jun2007 as 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. These products endow the company with a scale of combined volumes of about 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  "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  52.10%  of  the  equity.  The  rest  of  the  shareholding  is  distributed among 360,675 individual shareholders and financial institutions. 

HUL's  brands like  Lifebuoy,  Lux,  Surf  Excel,  Rin,  Wheel,  Fair  &  Lovely,  Pond's,  Sunsilk,  Clinic, Pepsodent,  Closeup,  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.  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  outlets  reaching  the entire urban population, and about 250 million rural consumers. 

Distribution Network of HUL
Network Evolution 

The HUL’s distribution network has evolved with time. The first phase of the HUL distribution network 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 salesman grouped all these orders and placed an indent with the Head Office. Goods were sent to these markets, with the company salesman as the consignee. The salesman then collected and distributed the products to the respective wholesalers, against cash payment, and the money was remitted to the company. 

The focus of the second phase, was one wholesaler in each market 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 rest of the trade. He then distributed stocks from the Registered Wholesaler through distribution units maintained by the company. The Registered Wholesaler system, therefore, increased the distribution 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 the RWs. The RS was required to provide the distribution units to the company salesman. The second characteristic of this period was the establishment of the "Company Depots" system. This system 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 stock‐points...
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