REPORT

On

A Study of Supply Chain Management

of

Hindustan Uni-Lever Ltd.

(2022-23)
SUBMITTED BY
Husain Shiyaji
TYBMS (Semester V)
ROLL NO.- 180
UNDER THE SUPERVISION OF
OVERVIEW

Hindustan Unilever is well known organization in India. The mission that inspires HUL's over 15,000

employees is to "add vitality to life". With 35 Power Brands, 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.

OBJECTIVE OF THE REPORT

Hindustan Unilever Limited (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

The main objective of this project is to find, what are the steps Hindustan Unilever Ltd. is adapting to
be market leader and to differentiate itself from its competitors. What is the steps company is utilizing
to find current trend in the market?

Most of the product of HUL comes in the category of convenience products. They are frequently used
and bought by the customers. There is large no. of players in the market, who are supplying similar
product to the customers.

Now, customers have become smart, they have great knowledge of market, product and suppliers.
So, they are looking for the product which is providing something extra.

HUL has a wide range of product in FMCG sector, covering almost every needs and wants of the
customers. It has products for child, young & adult, male & female, etc. so, it has to differentiate its
products taking into account the needs and demands of all the sectors of the society.

Not, only product but it has to look upon the services and feed back from customers also. It should do
something to give after sales service and collect feed back from the customers.

The basic objective of this project is as mentioned above to find ways so that HUL remain market
leader by considering all the needs & wants and fulfilling their demand
INTRODUCTION OF HUL

(Hindustan Unilever Limited)

Hindustan Unilever Limited (HUL) is India's largest fast moving consumer goods company, with

leadership in Home & Personal Care Products and Foods & Beverages. HUL's brands, spread across

20 distinct consumer categories, touch the lives of two out of three Indians. They endow the company

with a scale of combined volumes of about 4 million tonnes and sales of Rs.13,718 crores.

The mission that inspires HUL's over 15,000 employees is to "add vitality to life". With 35 Power

Brands, 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. A Fortune 500 transnational, Unilever sells

Foods and Home and Personal Care brands in about 100 countries worldwide.

COMPANY BACKGROUND

Hindustan Unilever Limited (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. They endow the company with a scale of combined volumes of
about 4 million tonnes and sales of Rs.10,000 crores. HUL is also one of the country's largest
exporters; it has been recognized 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 51.55% of the equity. The rest of the shareholding is distributed
among 380,000 individual shareholders and financial institutions.

 
HUL'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 over 40 factories
across India. The operations involve over 2,000 suppliers and associates. HUL's distribution network
comprising about 4,000 redistribution stockists, covering 6.3 million retail outlets reaching the entire
urban population, and about 250 million rural consumers.  
 
HUL has traditionally been a company, which incorporates latest technology in all its operations. The
Hindustan Unilever Report Centre (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.

 
HUL believes that an organization’s worth is also in the service it renders to the community. HUL 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 HIV-positive, and rural development. HUL has also responded in case of national calamities /
adversities and contributes through various welfare measures, most recent being the village built by
HUL in earthquake affected Gujarat, and relief & rehabilitation after the Tsunami caused devastation
in South India. .  
 In 2001, the company embarked on an ambitious programme, Shakti. Through Shakti, HUL 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 Programme, and creating access to relevant information through the iShakti community
portal. The program now covers 15 states in India and has over 31,000 women entrepreneurs in its
fold, reaching out to 100,000 villages and directly reaching to 150 million rural consumers. By the end
of 2010, Shakti aims to have 100,000 Shakti entrepreneurs covering 500,000 villages, touching the
lives of over 600 million people.  

 HUL is also running a rural health programme – Lifebuoy Swasthya Chetana. The programme
endeavors to induce adoption of hygienic practices among rural 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.  
 If Hindustan Unilever 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.

MISSION 

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 behavior 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

An Introduction to Supply Chain Management

A supply chain is a network of facilities and distribution options that performs the functions of
procurement of materials, transformation of these materials into intermediate and finished products,
and the distribution of these finished products to customers.

Supply chains exist in both service and manufacturing organizations, although the complexity of the
chain may vary greatly from industry to industry and firm to firm.

Below is an example of a very simple supply chain for a single product, where raw material is
procured from vendors, transformed into finished goods in a single step, and then transported to
distribution centers, and ultimately, customers.

Realistic supply chains have multiple end products with shared components, facilities and capacities.
The flow of materials is not always along an arborescent network, various modes of transportation
may be considered, and the bill of materials for the end items may be both deep and large.

Traditionally, marketing, distribution, planning, manufacturing, and the purchasing organizations along
the supply chain operated independently. These organizations have their own objectives and these
are often conflicting. Marketing's objective of high customer service and maximum sales dollars
conflict with manufacturing and distribution goals.

Many manufacturing operations are designed to maximize throughput and lower costs with little
consideration for the impact on inventory levels and distribution capabilities. Purchasing contracts are
often negotiated with very little information beyond historical buying patterns.

The result of these factors is that there is not a single, integrated plan for the organization---there
were as many plans as businesses. Clearly, there is a need for a mechanism through which these
different functions can be integrated together. Supply chain management is a strategy through which
such integration can be achieved.

Supply chain management is typically viewed to lie between fully vertically integrated firms, where a
single firm, and those own the entire material flow where each channel member operates
independently. Therefore coordination between the various players in the chain is key in its effective
management. Cooper and Ellram [1993] compare supply chain management to a well-balanced and
well-practiced relay team.
Such a team is more competitive when each player knows how to be positioned for the hand-off. The
relationships are the strongest between players who directly pass the baton, but the entire team
needs to make a coordinated effort to win the rac

The components of SCM are:

 Demand planning (forecasting)

 Demand collaboration (collaborative resolution process to determine consensus forecasts)
 Order promising (When one can promise a product to a customer taking into account lead
times and constraints)
 Strategic network optimization (what plants and DC's should serve what markets for what
products) (monthly - yearly)
 Production and distribution planning (Coordinate the actual production and distribution plans
for a whole enterprise) (daily)
 Production scheduling (For a single location create a feasible production schedule) (minute by
minute)
 Transportation planning (For multiple supply, manufacturer, distributor and warehousing
points in a network)
 Transportation execution (Enactment of long term plans on a per shipment basis, typically
performed by focused organizations called forwarders)
 Tracking and Measuring (An ever increasing aspect of supply chain management designed to
highlight potential against the plan and possible process improvements)
 Plan of reduction of costs and management of the performance (diagnosis of the potential
and the indicators, the organization and planifiaction strategic, masters dysfunctions in real
time, evaluation and accounting reporting, evaluation and reporting quality)

OBJECTIVES

This shows that on what basis the report report will be, as the objectives of the report report will be:

 To find the importance of supply chain management in HUL

 To measure the time decreased due to supply chain.
 How they (Channel Partners) maintain the customer preferences and demands with the help
of supply chain.

Supply Chain Decisions

We classify the decisions for supply chain management into two broad categories -- strategic and
operational. As the term implies, strategic decisions are made typically over a longer time horizon.

These are closely linked to the corporate strategy (they sometimes {\it are} the corporate strategy),
and guide supply chain policies from a design perspective. On the other hand, operational decisions
are short term, and focus on activities over a day-to-day basis.

The effort in these type of decisions is to effectively and efficiently manage the product flow in the
"strategically" planned supply chain.

There are four major decision areas in supply chain management: 1) location, 2) production, 3)
inventory, and 4) transportation (distribution), and there are both strategic and operational elements in
each of these decision areas.

Location Decisions

The geographic placement of production facilities, stocking points, and sourcing points is the natural
first step in creating a supply chain. The location of facilities involves a commitment of resources to a
long-term plan.

Once the size, number, and location of these are determined, so are the possible paths by which the
product flows through to the final customer. These decisions are of great significance to a firm since
they represent the basic strategy for accessing customer markets, and will have a considerable
impact on revenue, cost, and level of service.

These decisions should be determined by an optimization routine that considers production costs,
taxes, duties and duty drawback, tariffs, local content, distribution costs, production limitations, etc.
(See Arntzen, Brown, Harrison and Trafton [1995] for a thorough discussion of these aspects.)
Although location decisions are primarily strategic, they also have implications on an operational level.

Production Decisions

The strategic decisions include what products to produce, and which plants to produce them in,
allocation of suppliers to plants, plants to DC's, and DC's to customer markets.

As before, these decisions have a big impact on the revenues, costs and customer service levels of
the firm. These decisions assume the existence of the facilities, but determine the exact path(s)
through which a product flows to and from these facilities.

Another critical issue is the capacity of the manufacturing facilities--and this largely depends the
degree of vertical integration within the firm. Operational decisions focus on detailed production
scheduling. These decisions include the construction of the master production schedules, scheduling
production on machines, and equipment maintenance.

Other considerations include workload balancing, and quality control measures at a production facility.
Inventory Decisions

These refer to means by which inventories are managed. Inventories exist at every stage of the
supply chain as either raw material, semi-finished or finished goods. They can also be in process
between locations.

Their primary purpose to buffer against any uncertainty, which might exist in the supply chain. Since
holding of inventories can cost anywhere between 20 to 40 percent of their value, their efficient
management is critical in supply chain operations.

It is strategic in the sense that top management sets goals. However, most reporters have
approached the management of inventory from an operational perspective.

These include deployment strategies (push versus pull), control policies --- the determination of the
optimal levels of order quantities and reorder points, and setting safety stock levels, at each stocking
location. These levels are critical, since they are primary determinants of customer service levels.

Transportation Decisions

The mode choice aspects of these decisions are the more strategic ones. These are closely linked to
the inventory decisions, since the best choice of mode is often found by trading-off the cost of using
the particular mode of

Transport with the indirect cost of inventory associated with that mode. While air shipments may be
fast, reliable, and warrant lesser safety stocks, they are expensive. Meanwhile shipping by sea or rail
may be much cheaper, but they necessitate holding relatively large amounts of inventory to buffer
against the inherent uncertainty associated with them.

Therefore customer service levels, and geographic location play vital roles in such decisions. Since
transportation is more than 30 percent of the logistics costs, operating efficiently makes good
economic sense.

Shipment sizes (consolidated bulk shipments versus Lot-for-Lot), routing and scheduling of equipment
are key in effective management of the firm's transport strategy.

Supply Chain Modeling Approaches

Clearly, each of the above two levels of decisions require a different perspective. The strategic
decisions are, for the most part, global or "all encompassing" in that they try to integrate various
aspects of the supply chain. Consequently, the models that describe these decisions are huge, and
require a considerable amount of data. Often due to the enormity of data requirements, and the broad
scope of decisions, these models provide approximate solutions to the decisions they describe.

The operational decisions, meanwhile, address the day to day operation of the supply chain.
Therefore the models that describe them are often very specific in nature. Due to their narrow
perspective, these models often Consider great detail and provide very good, if not optimal, solutions
to the operational decisions.

To facilitate a concise review of the literature, and at the same time attempting to accommodate the
above polarity in modeling, we divide the modeling approaches into three areas --- Network Design,
``Rough Cut" methods, and simulation based methods. The network design methods, for the most
part, provide normative models for the more strategic decisions.

These models typically cover the four major decision areas described earlier, and focus more on the
design aspect of the supply chain; the establishment of the network and the associated flows on them.
"Rough cut" methods, on the other hand, give guiding policies for the operational decisions.

These models typically assume a "single site" (i.e., ignore the network) and add supply chain
characteristics to it, such as explicitly considering the site's relation to the others in the network. A
simulation method is a method by which a comprehensive supply chain model can be analyzed,
considering both strategic and operational elements.

However, as with all simulation models, one can only evaluate the effectiveness of a pre-specified
policy rather than develop new ones. It is the traditional question of "What If?" versus "What's Best?".

Supply Chain Management: Background

A typical supply chain includes a number of companies and activities that contain other necessary
activities in necessary businesses needed to design, produce, deliver and utilize a product (which can
be alternatively a service).

All these business activities and processes can be involved in one or multiple supply chains.

Napoleon a master war strategist, made this quote several hundred years ago: “An army marches on
its stomach”, which means the army won’t move when soldiers are hungry. This quote can be
regarded as one of the first remarks which insist on the importance of efficiency in the supply chain.

Till around 1990s the subject of supply chain management has been a popular managerial
topic ;although it may has used in different names, and nowadays it is being given even more
attention.

A typical supply chain starts with raw material purchase, and continues with various production,
transport and storage activities absorbing other necessary managerial and overhead resources
ending with product or service delivery to final consumer. As a result we can find out that typical
elements of a supply chain will be suppliers, manufacturers, warehouses, distribution centers and
retailers. Simchi-Levi et al. define Supply Chain Management as follows:
Supply chain management is a set of approaches utilized to efficiently integrate suppliers,
manufacturers, warehouses and stores, so that merchandise is produced and distributed at the right
quantities, to the right locations, and at the right time, in order to minimize system-wide costs while
satisfying service level requirements.”

Goods and information flows in supply chain

Supply Chain Management and Logistics

As far as traditional logistics goes, it normally includes activities which are limited to single company
or organization in order to coordinate all the activities necessary to deliver the product to the market.
These activities can be procurement, distribution, maintenance, and inventory control and
management.

In the concept of supply chain management we need a modern concept for logistics which enjoys the
concept of traditional logistics just as a part of it. In the supply chain view all the organizations are
seen as a single entity and so we need to see all the networks among these organizations.

For doing this we need a systems approach in order to coordinate all these business activities inside
networks in addition to organizations to reach the final goal which is nothing but ultimate consumer
satisfaction. With such a systems approach we will be able to coordinate business activities which
seems to be in conflict with each other in a low level point of view.

Main Areas in Supply Chain

There are lots of activities which are common among almost all supply chains. These common
activities make possible to produce a basic model with which makes it possible for various kinds of
supply chain satisfy their unique set of market demands and win Operating challenges. This basic
model includes following decision making areas in which all elements in the supply chain must make
decisions individually or together:

1-production: the goal is to produce what the market desires, at the right time and with enough
production volume. For reaching such goals we need to take into account the corresponding
limitations such as capacities and desired level of quality and also take into account other necessary
functions such as workload capacity, equipment maintenance, etc.

2-inventory: what level of inventory from different SKUs must be stocked in various stages throughout
the supply chain? Inventory level act as buffer and keep the business safe from demand fluctuations.
As holding inventory costs money it is very important to make decisions about optimal levels of
inventory.

3-location: along the supply chain will be various kinds of facilities. Concerning this issue another
important decision will be the optimal location for various facilities, warehouses and storage points.
Another related decision will be about the setting up of new facilities.

4-transportation: the need to move inventory from one point to another point throughout the supply
chain is another crucial function in supply chain management which needs another important issue in
decision making. The question is how the goods must be moved and what kind of transportation mode
must be chosen? The answer can be quietly different for different kinds of products, and also kinds of
markets (e.g. geographical location, demographical issues, infrastructures, etc.)

- Information: this part of decision making concerns about the necessary level of data collection and
data sharing. There are good points in making deep information sharing but it also produces lots of
corresponding risks. This is also true about data collection, a rich database leads to more precise
decision makings but it also can be expensive.
 The Five major Supply Chain drivers

SCM Goal

Supply chain management is responsible for providing a flow of material with a high level of velocity
and relevant information which makes the supply chain transparent and efficient enough to produce
the product or service without any interruption and on a timely manner.

On the other hand various kinds of demand fluctuations make distortions in business processes which
make a bumpy rout for SCM execution. For making an efficient supply chain, as a goal, SCM is
responsible for considering and reducing total supply chain cost. Such a holistic cost can be a
composition of following elements:
• acquisition costs and Raw materials
• Inbound and outbound transportation costs
• Facility investment costs
• Direct and indirect manufacturing costs
• Direct and indirect distribution centre cost
• Inventory carrying costs
• Interfaculty transportation costs

Uncertainty in SCM
One key issue known to impact on the effectiveness of a supply chain is that of uncertainty (Davis,
1993). Uncertainty can emerge up in both sides of demand and supply and as a result affects the
manufacturing functions from both sides. The “supply chain complexity triangle” provides an
explanation for this far from equilibrium behavior and gives a useful insight into the generation of
uncertainty within supply chains (Wilding, 1997b). when we come to find the roots of such level of
uncertainty in the supply chain the whole issue boils down to three interacting but independent effects.

These effects considerably amplify the uncertainty within the systems inside the supply chains. These
effects are called demand amplification, parallel interactions and deterministic chaos. Figure 2.5
depicts these three effects and their interactions.

Parallel interactions : here the concern is the interactions that happens among companies and
actors which act within the same echelon level e.g. a supplier affects not only the activities of its
customer but other identical suppliers.

Deterministic chaos in supply chains

The Collins English dictionary describes chaos as meaning “complete disorder and confusion”.
However, within this thesis the term chaos describes deterministic chaos. According to Kaplan and
Glass (1995, p. 27) and Abarbanel (1996, p. 15), Chaos is defined as aperiodic, bounded dynamics in
a deterministic system with sensitivity dependence on initial conditions, and has structure in phase
space.

Now let’s take a closer look at the terms which are used in the abovementioned definition:

• A periodic: means that the same state, situation or activity is never repeated twice

• Bounded: through the iterations the state remains finite and cannot adopt an infinite value.
• Deterministic: this condition excludes the random nature from the definition, which affects the
dynamic environment

• Sensitivity to initial conditions: two points that are close together at first find distance as time
proceeds.

• Structure in phase space: Non-linear systems are described by means of multidimensional vectors.
The space in which these vectors lie is called phase space. According to (Abarbanel, 1996) the
dimension of phase space is an integer. Scientists and reporters have noticed that chaotic systems
enjoy apparent and distinct patterns.

Stacey (1993a, p.228) emphasizes this by defining chaos as order (a pattern) within disorder (random
behavior).

Professor Ian Stewart proposes the following simplified definition (Stewart, 1989, p. 17) Stochastic
behavior occurring in a deterministic system. According the exact meaning of Stochastic which means
without any law, or with random behavior and the meaning of deterministic which means having fixed
laws, the definition can be simplified as follows:

“Chaos is a lawless behavior which is controlled by a set of laws”

According to such view we can conclude that Chaos doesn’t have any Chance-based element and as
a result a predictable system should be expected theoretically. The reason by which such systems are
less predictable in practice is the effect of non-linearity. On the other hand as the system is sensitive
to its conditions in the first point, any infinitesimal changes made within initial conditions of the
variables will surely affect the ultimate response.

On the other hand we can find a reverse implication from chaos theory in which events with random
behavior can be predicted and this is different from what is basically believed about events with
random nature.

There were lots of events in the past which was considered too complicated to be predicted due to the
hugely disordered information data base collected in the past. Today lots of them can be simply
explained by simple rules.

Of course according to the nature of the chaotic systems we should consider the limitations for the
possible level of acc as mentioned previously the behavior of a system with chaotic nature cannot be
expected to happen twice, in an exact manner but may h append within a limited level of accuracy
curacy in the prediction
Chaos resulting from supply chain decision-making processes

The Beer game is the name for a management game that has developed around three decades ago
to illustrate the dynamic behavior of supply chains. Although the games happen in a very simple
business system, it shows how relating feedback loops between different business partners bring
complexity into the supply chain.

The game is usually conducted with four teams each of which act as independent business partners
which usually are: retailer, wholesaler, distributor and manufacturer.

A result from reporters at MIT, investigating upon the decision making process that takes place during
the game is stated by (Larsen et al., 1989), which says participants in the game apply simple rules for
making orders through the game. After numerous runs of the game analysts recognized that the
players considerably conform to these rules. There are of course some variations in application of
these rules which more or less depends on the participant personality. Some players meticulously
count their entire inventory but some other ignores it occasionally.

Some other have a slow response to demand variations while some others react vigorously. As the
participants more or less adopt common rules in decision making, it is possible to develop a
simulation for more study. The simulations were planned to be run over a pretty short time e.g. 60
weeks. The point that should be mentioned here is that such a simulation with this short period of run
cannot bring up the complex behavior of the supply chain.

The result from the simulation run revealed that even in such a simple model one of the four
participating teams in the supply chain distort normal ordering patterns and subsequently the
correspondent inventory levels which should be called nothing but deterministic chaos.

According to (Mosekilde et al., 1991), such a chaos produces costs to the system that are significantly
sub-optimal, beyond the minimum possible costs by over 500 per cent.

The result also shows that all slight changes e.g. daily minor errors, delays, change of mind, etc. that
seems never can happens in a routine and regular base , have drastic effect on the supply chain
efficiency when are considered from an aggregated view.

Network Design Methods

As the very name suggests, these methods determine the location of production, stocking, and
sourcing facilities, and paths the product(s) take through them. Such methods tend to be large scale,
and used generally at the inception of the supply chain.

The earliest work in this area, although the term "supply chain" was not in vogue, was by Geoffrion
and Graves [1974]. They introduce a multicommodity logistics network design model for optimizing
annualized finished product flows from plants to the DC's to the final customers. Geoffrion and
Powers [1993] later give a review of the evolution of distribution strategies over the past twenty years,
describing how the descendants of the above model can accommodate more echelons and cross
commodity detail.

Breitman and Lucas [1987] attempt to provide a framework for a comprehensive model of a
production-distribution system, "PLANETS", that is used to decide what products to produce, where
and how to produce it, which markets to pursue and what resources to use. Parts of this ambitious
project were successfully implemented at General Motors.

Cohen and Lee [1985] develop a conceptual framework for manufacturing strategy analysis, where
they describe a series of stochastic sub- models, that considers annualized product flows from raw
material vendors via intermediate plants and distribution echelons to the final customers. They use
heuristic methods to link and optimize these sub- models. They later give an integrated and readable
exposition of their models and methods in Cohen and Lee [1988].

Cohen and Lee [1989] present a normative model for resource deployment in a global manufacturing
and distribution network. Global after-tax profit (profit-local taxes) is maximized through the design of
facility network and control of material flows within the network. The cost structure consists of variable
and fixed costs for material procurement, production, distribution and transportation. They validate the
model by applying it to analyze the global manufacturing strategies of a personal computer
manufacturer.

Finally, Arntzen, Brown, Harrison, and Trafton [1995] provide the most comprehensive deterministic
model for supply chain management. The objective function minimizes a combination of cost and time
elements. Examples of cost elements include purchasing, manufacturing, pipeline inventory,
transportation costs between various sites, duties, and taxes.

Time elements include manufacturing lead times and transit times. Unique to this model was the
explicit consideration of duty and their recovery as the product flowed through different countries.
Implementation of this model at the Digital Equipment Corporation has produced spectacular results
--- savings in the order of $100 million dollars. arly, these network-design based methods add value to
the firm in that they lay down the manufacturing and distribution strategies far into the future. It is
imperative that firms at one time or another make such integrated decisions, encompassing
production, location, inventory, and transportation, and such models are therefore indispensable.

Although the above review shows considerable potential for these models as strategic determinants in
the future, they are not without their shortcomings. Their very nature forces these problems to be of a
very large scale. They are often difficult to solve to optimality. Furthermore, most of the models in this
category are largely deterministic and static in nature.
Additionally, those that consider stochastic elements are very restrictive in nature. In sum, there does
not seem to yet be a comprehensive model that is representative of the true nature of material flows in
the supply chain.

Rough Cut Methods

These models form the bulk of the supply chain literature, and typically deal with the more operational
or tactical decisions. Most of the integrative report (from a supply chain context) in the literature
seems to take on an inventory management perspective.

In fact, the term "Supply Chain" first appears in the literature as an inventory management approach.
The thrust of the rough-cut models is the development of inventory control policies, considering
several levels or echelons together.

These models have come to be known as "multi-level" or "multi-echelon" inventory control models.
For a review the reader is directed to Vollman et al. [1992].

Multi-echelon inventory theory has been very successfully used in industry. Cohen et al. [1990]
describe "OPTIMIZER", one of the most complex models to date --- to manage IBM's spare parts
inventory. They develop efficient algorithms and sophisticated data structures to achieve large-scale
systems integration.

Although current report in multi-echelon based supply chain inventory problems shows considerable
promise in reducing inventories with increased customer service, the studies have several notable
limitations.

First, these studies largely ignore the production side of the supply chain. Their starting point in most
cases is a finished goods stockpile, and policies are given to manage these effectively. Since
production is a natural part of the supply chain, there seems to be a need with models that include the
production component in them.

Second, even on the distribution side, almost all published report assumes an arborescence structure,
i. e. each site receives re-supply from only one higher level site but can distribute to several lower
levels.

Third, reporters have largely focused on the inventory system only. In logistics-system theory,
transportation and inventory are primary components of the order fulfillment process in terms of cost
and service levels. Therefore, companies must consider important interrelationships among
transportation, inventory and customer service in determining their policies.

Fourth, most of the models under the "inventory theoretic" paradigm are very restrictive in nature, i.e.,
mostly they restrict themselves to certain well known forms of demand or lead time or both, often quite
contrary to what is observed.
The preceding sections are a selective overview of the key concepts in the supply chain literature.
Following is a list of recommended reading for a quick introduction to the area.

A supply chain is a network of facilities and distribution options that performs the functions of

procurement of materials, transformation of these materials into intermediate and finished products,

and the distribution of these finished products to customers.

Supply chains exist in both service and manufacturing organizations, although the complexity of the

chain may vary greatly from industry to industry and firm to firm.

Supply Chain Decisions

Decisions for supply chain management into two broad categories -- strategic and operational. As the

term implies, strategic decisions are made typically over a longer time horizon.

These are closely linked to the corporate strategy (they sometimes {\it are} the corporate strategy),

and guide supply chain policies from a design perspective. On the other hand, operational decisions

are short term, and focus on activities over a day-to-day basis.

The effort in these type of decisions is to effectively and efficiently manage the product flow in the

"strategically" planned supply chain.

 Location Decisions

 Production Decisions

 Inventory Decisions

 Transportation Decisions

Supply Chain Management Solution for Hindustan Unilever

Supply Chain Management Solution for Hindustan Unilever : Case Study Existing Situation With
nearly 1000 products, HLL distributes them nationally through a network of four warehouses, more
than 40 agents, 7,500 wholesalers and a number of large institutional customers. HLL, in its endeavor
to move from the existing push-based planning system to a pull-based system, wanted to build a
Supply Chain Management (SCM) solution that would ensure informed decisions are made during
procurement, manufacturing, replenishment and distribution. Specifically, the distribution operation
was suffering because of a high margin of errors. There were frequent instances of excess finished-
goods inventory reaching HLL’s distribution centers. This problem was compounded by increasing
instances of out-of-stock inventory, which led to demand-supply mismatches. Finally, the system was
not able to handle the dynamic nature of the company’s source-destination network, and adversely
affected the demand-fulfillment rates.

HLL needed a solution that could provide visibility across its supply chain. Considering the diverse
nature of the company’s customer base, the solution needed to prioritize the demand-fulfillment
process based on individual profiles. The company also required precise vehicle loading plans for the
source-destination lane in tune with its dynamic network. Tool Selection In an effort to streamline its
distribution network, HLL initiated a comprehensive project to seamlessly integrate its supply chain
and promote collaboration. The key objectives of the initiative were: Implementation of a Supply Chain
Planning and Optimization Tool. Development and implementation of a Web-enabled solution to
extend visibility across the company’s network of wholesalers.

Adexa’s iCollaboration Suite 5. (Supply Chain Planner and Strategic Planner) was selected as the tool
for production, distribution and materials functions. The Supply Chain Planner’s (SCP) powerful
constraint-based planning capability delivers detailed-level plans. On the other hand, Strategic
Planner allows HLL to decide on the product mix and manufacturing locations, and optimizes the
source-destination network, on a long-term basis. Our Approach Mind Tree has a portfolio of process
models, management tools, and operational best practices, which can be customized to address any
SCM engagement. Mind Tree has a specific methodology for Adexa.

Adexa-certified consultants from Mind Tree worked closely with HLL’s IT application team and
consultants from Adexa in designing a detailed system architecture, system building and model, and
system-verification steps. Solution Mind Tree evaluated the key supply-chain processes for each of
HLL’s lines of business. The solution is geared to fulfill supply and demand. It gives precise
production plans for all the factories and a replenishment-based distribution plan for all the distribution
centers. All entities in the supply chain were modeled on the Adexa iCollaboration suite.

The key inputs for building the SCM model were distribution demand for all stock keeping units
(SKUs); factory-wise capacities; and linkages between the distribution centers, finished goods
warehouses, factories and suppliers. With inputs from HLL’s team, Mind Tree contributed towards
modeling the following requirements with respect to key resource and material constraints: Shop-floor
complexities (SKU-specific levels for bill of material,resource and capacity constraints) to arrive at a
feasible production plan using discrete and continuous modes of consumption. Site-specific holidays
as capacity patterns. Collaborative production planning optimizing individual plan utilization, time
fences, cus-tomized threshold logic, and post-processing time for quality clearance at plants.
Equitable demand fulfillment (both planned and extraordinary) for finished goods based on customer
prioritization across the supply chain.
Periods of cover and safety stock at distribution centers for SKU rationalization, handling consumer
promotions, etc. Handling in-transits on source-destination lane. Meeting the demands from individual
whole salers by direct dispatches from factories.Precise vehicle load plans for shipments from the
factories and warehouses. Dynamic allocation of source factories to each distribution center.

Data integration between the SCP and ERP systems was addressed with the implementation of
MFG/PRO. Implemented specific requirements through plug-in business rules in Supply Chain
Planner such as work-order sizing and method (pro-duction/transportation) selection. For
implementing the requirements mentioned above, MindTree developed an exclusive set of the
following algorithms: Demand prioritization and equalization logic, based on pre-determined
“starvation levels”.Balancing and scheduling logic. Transportation logic.

Vehicle loadability logic. Results This Adexa implementation has improved HLL’s proactive planning
capability and manufacturing and distribution efficiency, which have helped ensure a more responsive
supply chain. The solution has also helped the company gain visibility across its supply chain, reduce
distribution lead-time, and minimize the total supply-chain cost. Stock availability, measured in terms
of Stock Service Index, has significantly increased, moving from 65% to 90%.The company has also
realized a more equitable distribution of stocks with overall mal-distribution reducing from 19% to 6%
of total volume transported. Manual intervention has come down from 40% to sub-zero levels.

Direct dispatches from the factories to the wholesaler network have increased. Finally, in terms of
volume, indirect dispatches from finished goods warehouses have come down from a range between
70-80% to between 30-40%. Tools Used Sun Solaris (OS), Windows NT, Adexa iCollaboration 5. 0
(Supply Chain Planner and Strategic Planner) and TCL/UCL.

Conclusions

Over time, the market scenario has

become truly global and hyper-
competitive due to rapid
innovations in the fi eld of
information and communication
technologies, and their subsequent
adaptation by corporate enterprises,
lending a new pace to globalisation.
This acquainted
consumers with new ways of living,
consuming and demanding,
increasing their expectations.
This business scenario has increased
uncertainty and variability in demand
patterns, causing
huge pile ups of inventory of fi
nished products throughout the
demand chains, resulting in
a signifi cant increase in marketing
and distribution costs. Demand chain
management has a
major thrust on top line growth
through optimum utilisation of
resources of the fi rm, along
with its business partners. It is a new
strategic tool to generate revenue, or
maintain revenue,
or even reduce the erosion of revenue
in dynamic economic and market
situations (Agrawal,
2007). Thus, management of demand
chains strategically is the need of the
hour for superior
market responsiveness. Success
comes through integrated and
collaborative efforts of the
fi rm and its demand chain members.
It would create a new work
environment that encourages
rapid response to customers’ needs
and attentive follow-through to grow.
To substantiate the logic of best
practices of demand chain
management, a comparative
study of two leading fi rms of the
Indian FMCG industry, namely HUL
and P&G India, has
been conducted in detail on various
parameters. In this comparative
study, it has been found
that P&G India has better demand
chain management practices than
HUL. Being a private
limited fi rm, P&G India is not a
listed fi rm in the Indian stock
market, so actual fi gures for
operating and net profi ts are not
available. Informally, though,
industry sources are of the
opinion that its operating profi t is
the highest in the Indian FMCG
industry.
The above analyses and discussions
clearly depict that DCM enhances fi
rms’ market
responsiveness capability through
integration of marketing competency
and supply chain
capability. Thus, one should not
forget about the supply chain and
concentrate only on the
demand chain. Without supply chain
capabilities, fi rms cannot have
market responsiveness
based on marketing competencies.
For this purpose, a high degree of
integration of marketing
and supply chain processes and
activities is needed, and the outcome
is largely called DCM.
SCM is driven by low cost of
materials and an uninterrupted fl ow
of goods, while DCM is
driven by information-centric
sensing of customer demand and the
fi rm’s ability to respond
them quickly in a cost-effi cient
manner. As a result, a “Market
Responsiveness Grid” is
proposed for more specifi c and
manageable value propositions by
integrating marketing
competencies and supply chain
capabilities
Over time, the market scenario has
become truly global and hyper-
competitive due to rapid
innovations in the fi eld of
information and communication
technologies, and their subsequent
adaptation by corporate enterprises,
lending a new pace to globalisation.
This acquainted
consumers with new ways of living,
consuming and demanding,
increasing their expectations.
This business scenario has increased
uncertainty and variability in demand
patterns, causing
huge pile ups of inventory of fi
nished products throughout the
demand chains, resulting in
a signifi cant increase in marketing
and distribution costs. Demand chain
management has a
major thrust on top line growth
through optimum utilisation of
resources of the fi rm, along
with its business partners. It is a new
strategic tool to generate revenue, or
maintain revenue,
or even reduce the erosion of revenue
in dynamic economic and market
situations (Agrawal,
2007). Thus, management of demand
chains strategically is the need of the
hour for superior
market responsiveness. Success
comes through integrated and
collaborative efforts of the
fi rm and its demand chain members.
It would create a new work
environment that encourages
rapid response to customers’ needs
and attentive follow-through to grow.
To substantiate the logic of best
practices of demand chain
management, a comparative
study of two leading fi rms of the
Indian FMCG industry, namely HUL
and P&G India, has
been conducted in detail on various
parameters. In this comparative
study, it has been found
that P&G India has better demand
chain management practices than
HUL. Being a private
limited fi rm, P&G India is not a
listed fi rm in the Indian stock
market, so actual fi gures for
operating and net profi ts are not
available. Informally, though,
industry sources are of the
opinion that its operating profi t is
the highest in the Indian FMCG
industry.
The above analyses and discussions
clearly depict that DCM enhances fi
rms’ market
responsiveness capability through
integration of marketing competency
and supply chain
capability. Thus, one should not
forget about the supply chain and
concentrate only on the
demand chain. Without supply chain
capabilities, fi rms cannot have
market responsiveness
based on marketing competencies.
For this purpose, a high degree of
integration of marketing
and supply chain processes and
activities is needed, and the outcome
is largely called DCM.
SCM is driven by low cost of
materials and an uninterrupted fl ow
of goods, while DCM is
driven by information-centric
sensing of customer demand and the
fi rm’s ability to respond
them quickly in a cost-effi cient
manner. As a result, a “Market
Responsiveness Grid” is
proposed for more specifi c and
manageable value propositions by
integrating marketing
competencies and supply chain
capabilities
Over time, the market scenario has
become truly global and hyper-
competitive due to rapid
innovations in the fi eld of
information and communication
technologies, and their subsequent
adaptation by corporate enterprises,
lending a new pace to globalisation.
This acquainted
consumers with new ways of living,
consuming and demanding,
increasing their expectations.
This business scenario has increased
uncertainty and variability in demand
patterns, causing
huge pile ups of inventory of fi
nished products throughout the
demand chains, resulting in
a signifi cant increase in marketing
and distribution costs. Demand chain
management has a
major thrust on top line growth
through optimum utilisation of
resources of the fi rm, along
with its business partners. It is a new
strategic tool to generate revenue, or
maintain revenue,
or even reduce the erosion of revenue
in dynamic economic and market
situations (Agrawal,
2007). Thus, management of demand
chains strategically is the need of the
hour for superior
market responsiveness. Success
comes through integrated and
collaborative efforts of the
fi rm and its demand chain members.
It would create a new work
environment that encourages
rapid response to customers’ needs
and attentive follow-through to grow.
To substantiate the logic of best
practices of demand chain
management, a comparative
study of two leading fi rms of the
Indian FMCG industry, namely HUL
and P&G India, has
been conducted in detail on various
parameters. In this comparative
study, it has been found
that P&G India has better demand
chain management practices than
HUL. Being a private
limited fi rm, P&G India is not a
listed fi rm in the Indian stock
market, so actual fi gures for
operating and net profi ts are not
available. Informally, though,
industry sources are of the
opinion that its operating profi t is
the highest in the Indian FMCG
industry.
The above analyses and discussions
clearly depict that DCM enhances fi
rms’ market
responsiveness capability through
integration of marketing competency
and supply chain
capability. Thus, one should not
forget about the supply chain and
concentrate only on the
demand chain. Without supply chain
capabilities, fi rms cannot have
market responsiveness
based on marketing competencies.
For this purpose, a high degree of
integration of marketing
and supply chain processes and
activities is needed, and the outcome
is largely called DCM.
SCM is driven by low cost of
materials and an uninterrupted fl ow
of goods, while DCM is
driven by information-centric
sensing of customer demand and the
fi rm’s ability to respond
them quickly in a cost-effi cient
manner. As a result, a “Market
Responsiveness Grid” is
proposed for more specifi c and
manageable value propositions by
integrating marketing
competencies and supply chain
capabilities
Over time, the market scenario has
become truly global and hyper-
competitive due to rapid
innovations in the fi eld of
information and communication
technologies, and their subsequent
adaptation by corporate enterprises,
lending a new pace to globalisation.
This acquainted
consumers with new ways of living,
consuming and demanding,
increasing their expectations.
This business scenario has increased
uncertainty and variability in demand
patterns, causing
huge pile ups of inventory of fi
nished products throughout the
demand chains, resulting in
a signifi cant increase in marketing
and distribution costs. Demand chain
management has a
major thrust on top line growth
through optimum utilisation of
resources of the fi rm, along
with its business partners. It is a new
strategic tool to generate revenue, or
maintain revenue,
or even reduce the erosion of revenue
in dynamic economic and market
situations (Agrawal,
2007). Thus, management of demand
chains strategically is the need of the
hour for superior
market responsiveness. Success
comes through integrated and
collaborative efforts of the
fi rm and its demand chain members.
It would create a new work
environment that encourages
rapid response to customers’ needs
and attentive follow-through to grow.
To substantiate the logic of best
practices of demand chain
management, a comparative
study of two leading fi rms of the
Indian FMCG industry, namely HUL
and P&G India, has
been conducted in detail on various
parameters. In this comparative
study, it has been found
that P&G India has better demand
chain management practices than
HUL. Being a private
limited fi rm, P&G India is not a
listed fi rm in the Indian stock
market, so actual fi gures for
operating and net profi ts are not
available. Informally, though,
industry sources are of the
opinion that its operating profi t is
the highest in the Indian FMCG
industry.
The above analyses and discussions
clearly depict that DCM enhances fi
rms’ market
responsiveness capability through
integration of marketing competency
and supply chain
capability. Thus, one should not
forget about the supply chain and
concentrate only on the
demand chain. Without supply chain
capabilities, fi rms cannot have
market responsiveness
based on marketing competencies.
For this purpose, a high degree of
integration of marketing
and supply chain processes and
activities is needed, and the outcome
is largely called DCM.
SCM is driven by low cost of
materials and an uninterrupted fl ow
of goods, while DCM is
driven by information-centric
sensing of customer demand and the
fi rm’s ability to respond
them quickly in a cost-effi cient
manner. As a result, a “Market
Responsiveness Grid” is
proposed for more specifi c and
manageable value propositions by
integrating marketing
competencies and supply chain
capabilities
Over time, the market scenario has
become truly global and hyper-
competitive due to rapid
innovations in the fi eld of
information and communication
technologies, and their subsequent
adaptation by corporate enterprises,
lending a new pace to globalisation.
This acquainted
consumers with new ways of living,
consuming and demanding,
increasing their expectations.
This business scenario has increased
uncertainty and variability in demand
patterns, causing
huge pile ups of inventory of fi
nished products throughout the
demand chains, resulting in
a signifi cant increase in marketing
and distribution costs. Demand chain
management has a
major thrust on top line growth
through optimum utilisation of
resources of the fi rm, along
with its business partners. It is a new
strategic tool to generate revenue, or
maintain revenue,
or even reduce the erosion of revenue
in dynamic economic and market
situations (Agrawal,
2007). Thus, management of demand
chains strategically is the need of the
hour for superior
market responsiveness. Success
comes through integrated and
collaborative efforts of the
fi rm and its demand chain members.
It would create a new work
environment that encourages
rapid response to customers’ needs
and attentive follow-through to grow.
To substantiate the logic of best
practices of demand chain
management, a comparative
study of two leading fi rms of the
Indian FMCG industry, namely HUL
and P&G India, has
been conducted in detail on various
parameters. In this comparative
study, it has been found
that P&G India has better demand
chain management practices than
HUL. Being a private
limited fi rm, P&G India is not a
listed fi rm in the Indian stock
market, so actual fi gures for
operating and net profi ts are not
available. Informally, though,
industry sources are of the
opinion that its operating profi t is
the highest in the Indian FMCG
industry.
The above analyses and discussions
clearly depict that DCM enhances fi
rms’ market
responsiveness capability through
integration of marketing competency
and supply chain
capability. Thus, one should not
forget about the supply chain and
concentrate only on the
demand chain. Without supply chain
capabilities, fi rms cannot have
market responsiveness
based on marketing competencies.
For this purpose, a high degree of
integration of marketing
and supply chain processes and
activities is needed, and the outcome
is largely called DCM.
SCM is driven by low cost of
materials and an uninterrupted fl ow
of goods, while DCM is
driven by information-centric
sensing of customer demand and the
fi rm’s ability to respond
them quickly in a cost-effi cient
manner. As a result, a “Market
Responsiveness Grid” is
proposed for more specifi c and
manageable value propositions by
integrating marketing
competencies and supply chain
capabilities
Over time, the market scenario has
become truly global and hyper-
competitive due to rapid
innovations in the fi eld of
information and communication
technologies, and their subsequent
adaptation by corporate enterprises,
lending a new pace to globalisation.
This acquainted
consumers with new ways of living,
consuming and demanding,
increasing their expectations.
This business scenario has increased
uncertainty and variability in demand
patterns, causing
huge pile ups of inventory of fi
nished products throughout the
demand chains, resulting in
a signifi cant increase in marketing
and distribution costs. Demand chain
management has a
major thrust on top line growth
through optimum utilisation of
resources of the fi rm, along
with its business partners. It is a new
strategic tool to generate revenue, or
maintain revenue,
or even reduce the erosion of revenue
in dynamic economic and market
situations (Agrawal,
2007). Thus, management of demand
chains strategically is the need of the
hour for superior
market responsiveness. Success
comes through integrated and
collaborative efforts of the
fi rm and its demand chain members.
It would create a new work
environment that encourages
rapid response to customers’ needs
and attentive follow-through to grow.
To substantiate the logic of best
practices of demand chain
management, a comparative
study of two leading fi rms of the
Indian FMCG industry, namely HUL
and P&G India, has
been conducted in detail on various
parameters. In this comparative
study, it has been found
that P&G India has better demand
chain management practices than
HUL. Being a private
limited fi rm, P&G India is not a
listed fi rm in the Indian stock
market, so actual fi gures for
operating and net profi ts are not
available. Informally, though,
industry sources are of the
opinion that its operating profi t is
the highest in the Indian FMCG
industry.
The above analyses and discussions
clearly depict that DCM enhances fi
rms’ market
responsiveness capability through
integration of marketing competency
and supply chain
capability. Thus, one should not
forget about the supply chain and
concentrate only on the
demand chain. Without supply chain
capabilities, fi rms cannot have
market responsiveness
based on marketing competencies.
For this purpose, a high degree of
integration of marketing
and supply chain processes and
activities is needed, and the outcome
is largely called DCM.
SCM is driven by low cost of
materials and an uninterrupted fl ow
of goods, while DCM is
driven by information-centric
sensing of customer demand and the
fi rm’s ability to respond
them quickly in a cost-effi cient
manner. As a result, a “Market
Responsiveness Grid” is
proposed for more specifi c and
manageable value propositions by
integrating marketing
competencies and supply chain
capabilities
Over time, the market scenario has
become truly global and hyper-
competitive due to rapid
innovations in the fi eld of
information and communication
technologies, and their subsequent
adaptation by corporate enterprises,
lending a new pace to globalisation.
This acquainted
consumers with new ways of living,
consuming and demanding,
increasing their expectations.
This business scenario has increased
uncertainty and variability in demand
patterns, causing
huge pile ups of inventory of fi
nished products throughout the
demand chains, resulting in
a signifi cant increase in marketing
and distribution costs. Demand chain
management has a
major thrust on top line growth
through optimum utilisation of
resources of the fi rm, along
with its business partners. It is a new
strategic tool to generate revenue, or
maintain revenue,
or even reduce the erosion of revenue
in dynamic economic and market
situations (Agrawal,
2007). Thus, management of demand
chains strategically is the need of the
hour for superior
market responsiveness. Success
comes through integrated and
collaborative efforts of the
fi rm and its demand chain members.
It would create a new work
environment that encourages
rapid response to customers’ needs
and attentive follow-through to grow.
To substantiate the logic of best
practices of demand chain
management, a comparative
study of two leading fi rms of the
Indian FMCG industry, namely HUL
and P&G India, has
been conducted in detail on various
parameters. In this comparative
study, it has been found
that P&G India has better demand
chain management practices than
HUL. Being a private
limited fi rm, P&G India is not a
listed fi rm in the Indian stock
market, so actual fi gures for
operating and net profi ts are not
available. Informally, though,
industry sources are of the
opinion that its operating profi t is
the highest in the Indian FMCG
industry.
The above analyses and discussions
clearly depict that DCM enhances fi
rms’ market
responsiveness capability through
integration of marketing competency
and supply chain
capability. Thus, one should not
forget about the supply chain and
concentrate only on the
demand chain. Without supply chain
capabilities, fi rms cannot have
market responsiveness
based on marketing competencies.
For this purpose, a high degree of
integration of marketing
and supply chain processes and
activities is needed, and the outcome
is largely called DCM.
SCM is driven by low cost of
materials and an uninterrupted fl ow
of goods, while DCM is
driven by information-centric
sensing of customer demand and the
fi rm’s ability to respond
them quickly in a cost-effi cient
manner. As a result, a “Market
Responsiveness Grid” is
proposed for more specifi c and
manageable value propositions by
integrating marketing
competencies and supply chain
capabilities
Over time, the market scenario has
become truly global and hyper-
competitive due to rapid
innovations in the fi eld of
information and communication
technologies, and their subsequent
adaptation by corporate enterprises,
lending a new pace to globalisation.
This acquainted
consumers with new ways of living,
consuming and demanding,
increasing their expectations.
This business scenario has increased
uncertainty and variability in demand
patterns, causing
huge pile ups of inventory of fi
nished products throughout the
demand chains, resulting in
a signifi cant increase in marketing
and distribution costs. Demand chain
management has a
major thrust on top line growth
through optimum utilisation of
resources of the fi rm, along
with its business partners. It is a new
strategic tool to generate revenue, or
maintain revenue,
or even reduce the erosion of revenue
in dynamic economic and market
situations (Agrawal,
2007). Thus, management of demand
chains strategically is the need of the
hour for superior
market responsiveness. Success
comes through integrated and
collaborative efforts of the
fi rm and its demand chain members.
It would create a new work
environment that encourages
rapid response to customers’ needs
and attentive follow-through to grow.
To substantiate the logic of best
practices of demand chain
management, a comparative
study of two leading fi rms of the
Indian FMCG industry, namely HUL
and P&G India, has
been conducted in detail on various
parameters. In this comparative
study, it has been found
that P&G India has better demand
chain management practices than
HUL. Being a private
limited fi rm, P&G India is not a
listed fi rm in the Indian stock
market, so actual fi gures for
operating and net profi ts are not
available. Informally, though,
industry sources are of the
opinion that its operating profi t is
the highest in the Indian FMCG
industry.
The above analyses and discussions
clearly depict that DCM enhances fi
rms’ market
responsiveness capability through
integration of marketing competency
and supply chain
capability. Thus, one should not
forget about the supply chain and
concentrate only on the
demand chain. Without supply chain
capabilities, fi rms cannot have
market responsiveness
based on marketing competencies.
For this purpose, a high degree of
integration of marketing
and supply chain processes and
activities is needed, and the outcome
is largely called DCM.
SCM is driven by low cost of
materials and an uninterrupted fl ow
of goods, while DCM is
driven by information-centric
sensing of customer demand and the
fi rm’s ability to respond
them quickly in a cost-effi cient
manner. As a result, a “Market
Responsiveness Grid” is
proposed for more specifi c and
manageable value propositions by
integrating marketing
competencies and supply chain
capabilities
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 shares of the company.
And also helpful for the purpose of the retailers' satisfaction stretches from introducing more and more
new product launches activities, good margipa and better services from distributor. It is expected that
with a moderate implementation of basic suggestions bebound 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% sales executive
76% of the retailers aware of new product launch by the company so that they are aware of the
different schemes company. promotional activity is in Bijapur city. the launching of the new product
which means that done through the sales executive mouth to the retailer 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.

Present market is consumer market. Market covered with full of substitute products from different
competitive huts. To sustain in the market, Quality should be improved in order to face the
competition. Maintain good relations with the distributors. So that they can sell more products Loose
packing creating problems in handling the products. To overcome this problem packing should be
tight and attractive. Print price tags in big letters to identify the products very easily by the customer..

To conclude, it is very much limited time to clearly understand the supply chain management. Apart
from this we need to focus on each retailer’s 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 Mostly dealers buy goods from the distributors and customers buy goods
from the dealers.