Hul Distribution Network

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A study of
Distribution Channel of
Hindustan Unilever Limited

Anubhav Jaiswal
HUL works to create a better future every day and helps people feel good, look good and get more out of life with brands and services that are good for them and good for others. With over 35 brands spanning 20 distinct categories such as soaps, detergents, shampoos, skin care, toothpastes, deodorants, cosmetics, tea, coffee, packaged foods, ice cream, and water purifiers, the Company is a part of the everyday life of millions of consumers across India. Its portfolio includes leading household brands such as Lux, Lifebuoy, Surf Excel, Rin, Wheel, Fair & Lovely, Pond’s, Vaseline, Lakmé, Dove, Clinic Plus, Sunsilk, Pepsodent, Closeup, Axe, Brooke Bond, Bru, Knorr, Kissan, Kwality Wall’s and Pureit. 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
HUL distribution is a key strength for the company to supply their products to anywhere in the country. This includes, maintaining favourable trade relations, providing innovative incentives to retailers and organizing demand generation activities among a host of other things. Each business of HUL portfolio has customized the network 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 distribution network has seen a lot of evolvement over time. From Wholesalers placing order directly with the company, to Registered Wholesalers, to Redistribution Stockist (RS), the network has grown to cover a major part of the Indian urban and rural population. In present day scenario, the company depots have been replaced by third part Carrying and Forwarding agents (C & FA’s). These are buffer stock points to prevent stock outs. These C & FA’s play a major role in reducing cost due to time lag and direct delivery. These provide the RS with a better customer care. A detailed view

HUL follows a 3-level channel for marketing and an intensive distribution of products. The products are distributed to the 6.3 million retail outlets reaching out the entire urban population and 250 million rural populations with the help of 4000 Redistribution Stockists. The 35 C&FA’s spread throughout the country make sure the RS never run out of stock. The 40 manufacturing plants of HUL have a covered area of about 2 million square miles. HUL in Urban Centers

A manufacturing unit usually takes care of a large region for supplying. The C&FA’s provide the RS with the stock by means of trucks or railroads. The last mile is done through the cheapest mode available at the region.

HUL In villages
HUL has two criteria for covering villages- accessibility and viability. A redistribution stockist is appointed for a town that is responsible for all the business and outlets in that area. The 25% of villages with low potential are taken care through sub-stockists, every fortnight. The sub-stockists deliver the products to the outlet using transportation suitable to interconnecting roads such as scooters, cycles etc. Along with the RS, HUL also focuses on these markets through the wholesale channel as well, with proper incentives for the wholesalers. HUL has also formed an exclusive sales team and redistribution stockists to serve about 50, 000 villages covering 250 million consumers, through 6000 sub-stockists.

Figure [ 1 ] - HUL Distributon Network

In Goa, HUL has 1 Carrying and Forwarding agent who takes care of the supply to the state, located at Panaji. There are 2 Redistribution Stockists who sell further to retailers and Wholesalers.

Figure [ 2 ] - Distribution Channel...
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