ONE &All

Abdul GafoorAsif PashaNeelesh. JRaghu.NRavindra AppugolShiva Kumar .K

- 5

Presentation on HUL

HUL Present Head Quarters in Mumbai

Unilever products touch the lives of over 2 billion people every day – whether that's through feeling great because they've got shiny hair and a brilliant smile, keeping their homes fresh and clean, or by enjoying a great cup of tea, satisfying meal or healthy snack.

Our vision

Our MissionUnilever'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.

Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods Company with a heritage of over 75 years in India and touches the lives of two out of three Indians.

The Company has over 16,000 employees and has an annual turnover of around Rs.19, 401 crores (financial year 2010 - 2011).

Introduction to HUL

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.

HUL is a subsidiary of Unilever, one of the world’s leading suppliers of fast moving consumer goods with strong local roots in more than 100 countries across the globe with annual sales of about €44 billion in 2011. Unilever has about 52% shareholding in HUL.

The company has a distribution channel of 6.3 million outlets and owns 35 major Indian brands.

HUL – The Journey so far…

A little bit of the History of HUL formation

Nothern

Solan(HP)

Basti(UP)

Etah(UP)

Haridwar(Uttaranchal)

Jalaun (UP)

Rajpur(Punjab)

Hamirpur(Punjab)

Southern

Bangalore(KA)

Chennai(TM)

Cochin(Kerala)

Dharwad(KA)

Hydrabad(AP)

Hosur(TN)

Mangalore(KA)

Pondichery

Segment classification of Plants

Western

Mumbai(MH)

Kalwa(MH)

Daman&Diu

Nasic(MH)

Pune(MH)

Kandla(Gujrat)

Silvasa

Goa

Eastern

Haldia(WB)

Jalpaiguri(WB)

Kolkata(WB)

Chinnadwara(MP)

Assam

Assam

Manufacturing locations

HUL Product Profile

Segment Sub-Segment Brand Comment

Household Care

Fabric Wash Market Share: 38%

Surf Patented Technology, Premium SegmentRin Largest Selling detergent barSunlight Unilever’s oldest, first brand WB, KeralaWheel Largest Selling Indian detergent

Dish WashMarket Share: 58% Vim First & largest selling dish washer barSurface Cleaning Domex

Personal WashMarket Share: 52%

Lifebuoy World’s largest selling Soap Lux Global brandDove Global Brand: Premium, Skin friendlyPears Premium SegmentBreeze Basic SegmentLiril Focuses on young female populationHamam South Indian Regional Brand – TN

Personal Products 

Hair care Market Share: 47%

Clinic Shampoo India’s largest selling shampoo (D,ND)Dove Global Brand: Premium, Hair friendlySunsilk Largest beauty shampoo brandAyush Herbal - Doing well in South India

Skincare Market Share: 52%

Ponds Global brand, First mover (1947)Fair & Lovely Patented Formulation, Asian brandLakme Skin Care Bought from Tatas, Salon Business

VaselineGlobal brand, Monopoly in Indian Petro-Jelly

Aviance Customized Personal care Solutions

Segment Sub-Segment Brand Comment

Personal Products

ToothpasteMarket Share: 30%

Close-up India’s first Gel, Youth brandPepsodent Second largest selling toothpaste

Toothbrush    DeodorantsMarket Share: 32% Axe, Rexona Clear leader in deodorant segmentColour Cosmetics Lakme Natural ColorantsInfant Care HuggiesFeminine Care Kortex Late entrant - Smaller Player

Food & Beverages 

Processed Foods

Kissan Jam Squeeze, KetchupKnorr Soups & Ready to CookAnnapurna Salt, Flour

Beverages

TeaMarket Share: 23%

3 Roses Mindsharp, Taj, Brooke Bond, Lipton -

CoffeeMarket Share: 45% Bru

Ice Cream & Bakery Products

Gelato, Quality Walls  

Brain Food Amaze Demographic advantage of IndiaPure-it     Creating new markets

Beauty and Wellness

  

Lakme Beauty Salons

Moving from products to Services in Premium segments

Ayush Therapy Centres

Moving from products to Services in Premium segments

SWOT Analysis

Strong R&D, healthy cash coffers to support innovation

Strong position in most of the categories of its presence

Unmatched distribution network , a must to cater rural markets

Presence across price points to straddle across entire income pyramid

Healthy Shareholder Returns in the form of RoE and dividend yield

Native Know How

STRENGTHS

49% of HUVR's sales come from detergents and personal wash

Increase in Ad Spending, which may affect the margins

WEAKNESSES

• Change in Rural India’s source of income

• Government Focus• Futures Market• Increase in MSP• Massive Election SpendingGrowing opportunities in Rural India

• Favorable Demographics• Increasing Consumer

aspirations• Buoyant topline for FMCG

companiesConsumer sector on a secular growth trend

• Consumer expenditure in food sector rose by 13%

• Valued at USD240mn – packaged foods – 5%, 14%(g)

• Modern retailing gaining coverage

Opportunity in Food Sector

OPPORTUNITIES

Stiff competition from local as well as MNC players

THREATS

Soaps and De-tergents

48%

Personal Products26%

Beverages11%

Exports4%

Foods (Bakery)1%

Other Operations 8%

Ice Creams2%

Revenue Share

Soaps and Detergents

Personal Products

Beverages

Exports

Foods (Bakery)

Other Operations ( Wa-ter etc.)

Ice Creams

HUL – Product Portfolio

7,000 redistribution stockiest covering about one million retail outlets.

The general trade comprises grocery stores, chemists, wholesale, kiosks and general stores.

Hindustan Unilever provide tailor made services to each of its channel partners.

HUL is using the point of purchase method for much higher level of direct contact, through in-store facilitators, sampling, education and experience.

HUL’s distribution system

Distribution at the Villages The company has brought all markets with

populations of below 50,000 under one rural sales organization.

In rural India, the network directly covers about 50,000 villages, reaching 250 million consumers

Distribution at the Supermarkets

HUL aim is not only to enable easy access to their brands, but also to touch consumers with a 3 way convergence of:

•Product availability•Brand communication•And higher levels of brand experience

Hierarchical network for distribution of product

factory

Just in time depot

Customer service provider

Big box retailer

consumer

CSRHUL also renders services to the community,

focusing on health & hygiene education, empowerment of women, and water management.

It is also involved in education and rehabilitation of underprivileged children, care for the destitute and HIV-positive, and rural development.

HUL has also responded to national calamities, for instance with relief and rehabilitation after the 2004 tsunami caused devastation in South India

RESEARCH, DEVELOPMENT AND INNOVATIONS The R&D Centre started in Mumbai in 1958 by the

Company, continues to produce a stream of high value technologies which differentiate the brands with strong consumer propositions.

The R&D Centre has now undergone significant expansion with more than 700 highly qualified scientists and technologists working at the R&D laboratories in Mumbai and Bangalore.

The R&D programme in India is strongly aligned with Unilever’s global R&D priorities and geared towards delivering bigger, better and faster innovations with a robust pipeline of radically new technologies with innovative consumer propositions in Health and Hygiene, Laundry, Skin Care, Water Purification, Tea, Ice Cream and Naturals segments.

INFORMATION SYSTEM

“ An information system

(IS) can be any organized combination of people, hardware, software, communications networks, and data resources that stores and retrieves, transforms, and disseminate information in an organization”.

MEANING OF INFORMATION SYSTEM

CLASSIFICATION OF INFORMATION SYSTEM

ESSDSS

KMS

MIS

TPS

MIDDLE LEVEL MANAGEMENT

OPERATIONAL LEVEL

MANAGEMENT

TOP LEVEL MANAGEME

NT

TRANSACTION PROCESSING SYSTEM

(TPS) IN HUL

A transaction processing system (TPS)is an information system that records company transactions.( a transaction is defined as an exchange between two or more business entities.)

MEANING

A Transaction Processing System (TPS) is a type of information system that collects, stores, modifies and retrieves the data transactions of an enterprise.

DEFINITIO

N

Data entryData captureData validationProcessing and revalidationData storageOutput generation

PROCESS OF TPS

MAJOR TRANSACTIONS OF HULGross sales of the company is Rs 20305.54

crores.Net sales of HUL during the year is Rs 19401

crores.Purchases made during the year(2009-10) is

Rs 15480 crores.Raw materials purchased during the

year(2010-11)is Rs 17900 crores.New recruitments being 500 employees in

2011.Total salaries paid during the year is 85 crores.

An Organization’sTPS

FinancialTPS

MarketingTPS

HumanResources

TPS

Etc.

Accounting

TPS

Drill down reports

Exception reports

Demand reports

Key-indicator reports

Scheduled reports

Databasesof

externaldata

Databasesof

validtransactions

Transactionprocessingsystems

Businesstransactions

Businesstransactions

ExtranetExtranet

InternetInternet

Etc.

TPS IN RAW-MATERIAL DEPARTMENT

SUPPLIERSCompany had purchased the Raw-material of Rs

17900 crores.PUSHPAK PRODUCTS INDIA PVT LTD Radiant Commodities Private Limited Arsh Plastics FFC Aromas Pvt. Ltd. PAN FOODS LIMITED International Print O Pac Limited BALAJI INDUSTRIES SUPERFCHEM CONSUPACK COMPANY Gears & Pinions Pvt Ltd AmolRaj Printers

Raw material cost - FY2011 profitability affected by higher raw material cost:

During FY2011 Hindustan Unilever Ltd (HUL)'s adjusted (consolidated) bottom line remained almost flat at Rs2,134.4 crore despite a double-digit top line growth of about 11% year on year (YoY) during the year. The bottom line was flat mainly on account of a 243-basis-point year-on-year (Y-o-Y) decline in the operating profit margin (OPM) on account of higher raw material prices.

- Operating cash flows declined YoY: The net cash generated from the operating activities stood at Rs1,910.2 crore in FY2011 as against Rs3,479.6 crore in FY2010. The decline in the cash generated from operations can largely be attributed to the increase in the commodity prices during the year.

- Return ratios remained strong: The return ratios remained strong with the return on equity (RoE) and return on capital employed (RoCE) standing at 79.4% and 101.1% respectively in FY2011 as against 87.7% and 103.5% respectively in FY2010. 

TPS IN SALES &MARKETING DEPARTMENT

MARKETINGSales and marketing -- Sales function deals

with all aspects of selling to customers; the marketing function carries out marketing research, organizes advertising and product promotion

Company’s total sales during the year is Rs20305.54

Company’s net sales during the year is Rs 19401.11

Hindustan Unilever ltd share price in the market is 391.50

Segmentation of net sales1. Soaps and

detergent-8653crores.

2. Personal products-5762 crores.

3. Beverages-2308 crores

4. Processed foods-892 crores.

5. Ice creams-2726. Exports-10867. Others-4268

crores.

TPS IN DISTRIBUTION DEPARTMENT

HUL’s distribution system7,000 redistribution stockiest covering about

one million retail outlets.

The general trade comprises grocery stores, chemists, wholesale, kiosks and general stores.

Hindustan Unilever provide tailor made services to each of its channel partners.

HUL is using the point of purchase method for much higher level of direct contact, through in-store facilitators, sampling, education and experience.

Distribution StrategyDistribution at the Villages The company has brought all markets with populations of

below 50,000 under one rural sales organization. The team comprises an exclusive sales force and exclusive

redistribution stockists. The team focuses on building superior availability of

products. In rural India, the network directly covers about 50,000

villages, reaching 250 million consumers, through 6000 sub-stockists.

Distribution at the Supermarkets HUL has set up a full-scale sales organisation, for this

channel to serve modern retailing outlets. Product tests and in-store sampling is provided to

consumers.

DISTRIBUTION NETWORK The operations involve over 2,000

suppliers and associates. HUL's distribution network, comprising

about 7,000 redistribution stockiest. 6.3 million retail outlets reaching the

entire urban population, and about 250 million rural consumers.

The products of HUL are manufactured in 40 factories across India.

Hierarchical network for distribution of product

factory

Just in time depot

Customer service provider

Big box retailer

consumer

TPS IN FINANCE & ACCOUNTS DEPARTMENT

Income segmentsSoaps and detergents - 1295.66croresPersonal products - 701.82Beverages - 293.62Food products - 26.69Exports - 107.97Ice-creams - 53.39Other operations - 213.54

Soaps and De-tergents

48%

Personal Products26%

Beverages11%

Exports4%

Foods (Bakery)1%

Other Operations 8%

Ice Creams2%

Revenue Share

Soaps and Detergents

Personal Products

Beverages

Exports

Foods (Bakery)

Other Operations ( Wa-ter etc.)

Ice Creams

HUL – Product Portfolio

REPORT TO WHOM?Each department prepares reports at the

bottom level and these reports send to departmental managers with some suggestions.

Finance manager - Pavan ChaturvediMarketing manager - Srinivasa MadhavanHR manager - Anish SinghAccounting manager- Ramesh DoraiswamiProduction manager - Ameya Borker

Suggestions from all the above analysis the operational

level management came to know about two things.

1) The raw-material cost during the year is more.

2) The revenues generated from Ice-creams and bakery products is very less.

feed back from the customer tells that the taste of bakery items should be improved. So we suggest the management to take some measures to make it profitable.

MANAGEMENT

INFORMATION SYSTEM (MIS) IN HUL

MIS meaning“ Management Information system (MIS) is a network of communication channels and information processing centers collecting information from difference sources for the purpose of decision making”.

MIS functions in HUL

Collect data from various data base (TPS)

Store process & analyze the data collected by TPS.

Reporting or presenting the information to DSS

MIS in HULEntering Pass:

Software used - Setup gate pass software

Details required - Name:-

Age:-

Sex:-

Qualification:-

Arriving & Departing time:-

Name of Concern person:-

Photo Identification:-

Purpose of Meeting etc:-

SAP in HUL

SAP is the largest European software enterprise.SAP is the 3rd largest software company in the world.It ranked after Microsoft, IBM, in terms of market

capitalization.Sap stands for:-

“System , Application and products in data processing”.

An Organization’sMIS

FinancialMIS

MarketingMIS

HumanResources

MIS

Etc.

Accounting

MIS

Drill down reports

Exception reports

Demand reports

Key-indicator reports

Scheduled reports

Databasesof

externaldata

Databasesof

validtransactions

Transactionprocessingsystems

Businesstransactions

Businesstransactions

ExtranetExtranet

InternetInternet

Etc.

Strength of having MIS in HUL To retrieve information about internal operations

from databases that have been updated by TPS To obtained data about the business environment

from external sources so as to process them to serve the managers in a better way which is a key to success of HUL

To provide managerial end users with information products that support much of their day to day decisions making needs.

To make available, right information at right place at the right time and the lowest cost which was seen in the year 2009-10 in case of raw material scarcity and inflation.

KNOWLEDGE MANAGEMENT SYSTEM

(KMS) IN HUL

“Knowledge Management System (KM System) refers to a system for managing knowledge in organizations for supporting creation, capture, storage and dissemination of information”.

KMS in HUL

All Departments of all units of HUL are connected

through Intranet

Each employee is given separate login id.

employee can excess only with that department

Linkage of all employees

Internet is provided to only specific class employees

USER KANDLA SEZ

CONCERN EMPLOYEE

CONT….

LAN is used to connect all departments in HUL

(K-SEZ unit).

All computers are taken on Rental Bases to reduce

cost.

Telecommunication in HUL All engineers & management level employees are

provided mobile & SIM connection by company

All were connected through Reliance, but now they

changed the SIM of all and now they all are Connected

through Airtel.

KMS is comprised of four components

Content management applications

Expertise locator applications

Collaboration

Portal

Why KMS is a Strengths of HUL?

They have built a strong data infrastructure that has comparatively better edge over the competitors like Emami, Nirma, Dabur India, Godrej Consumer Product, P & G Hygiene, etc..

Any small change in organization structure has almost no negative impact on the HUL.. (eco..

HUL are more successful to use their human skills, technology more efficiently compare to other companies.

Benefits & Issues of KMS in HUL

In HUL, Sharing of valuable organizational information throughout organizational hierarchy right from the CEO or top management to worker supervisors.

There is no overlapping of any kind irrelevant or junk data in HUL which Can avoid re-inventing the wheel, reducing redundant work.

Also have reduced the training time for new employees of HUL since last financial years.

Retention of Intellectual Property after the employee leaves if such knowledge can be codified.

As the fast moving consumer goods (i.e., FMCG) is mainly involved in HUL the proper Time management right from the warehouse to outlay is very vital to compete with the competitors.

SuggestionsAs the operational level Management suggest that the cost of raw-material increased & the sales of Ice-Cream & food product reduced, Finally, KMS suggest the top level management to take a wise decision to overcome these problems.

DECISION SUPPORT SYSTEM (DSS) IN HUL

DECISSION SUPPORT SYSTEMA Decision Support System (DSS) is a collection of integrated software applications and hardware that form the backbone of an organization’s decision making process.

Database Model base

External databaseaccess

Access to theinternet, networks,and other computersystems

Dialogue manager

DBMS MMS

Externaldatabases

Conceptual Model of a DSS

Characteristics and Capabilities of DSS1. Provide support in semi-structured and

unstructured situations, includes human judgment and computerized information

2. Support for various managerial levels3. Support to individuals and groups4. Support to interdependent and/or

sequential decisions

CON….

5. Support all phases of the decision-making process

6. Support a variety of decision-making processes and styles

7. Are adaptive8. Have user friendly interfaces9. Goal: improve effectiveness of decision

making10. The decision maker controls the decision-

making process

CON…11. End-users can build simple systems

12. Utilizes models for analysis

13. Provides access to a variety of data sources, formats, and types

Benefits of DSS in HULImproves personal efficiencySpeed up the process of decision making

Increases organizational controlEncourages exploration and discovery on the part of the decision maker

Speeds up problem solving in an organization

 

CON…Facilitates interpersonal communication

Generates new evidence in support of a decision

Creates a competitive advantage over competition

Helps automate managerial processes

Application of DSS in HUL

HUL has a dynamic decision support system to predict the value of customer for new product development.

In recent years, HUL have focused on how to enter markets and meet customer requirements by improving product attributes and processes to boost their market share and profits.

HUL adopts reporting tools, processes, and methodologies for decision support system and provide end users with rich reporting, monitoring, and data analysis

CON…HUL estimate the net customer

lifetime value from customer purchasing behavior toward a specific product by adopting DSS

HUL rely on decision support tools, techniques, and models to help them assess and resolve everyday business questions

HUL adopts DSS for the formulation of effective marketing strategies that increase customer loyalty and generate greater profits in the long run

Suggestion Since the middle level management

suggest to solve the problem, DSS takes decision after a careful analysis that we have decided to purchase raw material from the various place & reduce the cost of production & add various favors to the ice-cream & the bakery items to improve the quality & overcome the problem.

EXECUTIVE SUPPORT SYSTEM (ESS) IN HUL

Executive Support System(ESS) or EIS

“An executive information system (EIS) is a type of management information system intended to facilitate and support the information and decision-making needs of senior executives by providing easy access to both internal and external information relevant to meeting the strategic goals of the organization. It is commonly considered as a specialized form of decision support system (DSS).”

Components of an ESS Executive work stations depend on mainframe or

minicomputer systems for access to ESS software. This package work with DBMS and telecommunication software to provide easy access to internal, external and special database with almost instantaneous response times.

Executives, through ESS can ‘drill down’ quickly to lower levels of detail in areas of particular interest to them.

ESS also stresses trend analysis and exception reporting. Thus, an executive can quickly discover the direction the key factors are heading and the extent that critical factors are deviating from expected result.

Characteristics of ESIFlexibility and ease of use.Produces validated, correct, relevant and

timely information.Involve user friendly interface, self help

Graphical User Interfaces (GUI)Access from various locations providing

secure, reliable, confidential access.Is customised/tailor made to suit the

management style.

Applications of ESS:Forecasting-EIS provides an approach to sales

forecasting for the year 2012, which can allow the market executive to compare sales forecast with past sales of 2011.

Manufacturing – since HUL is a huge company with many products, manufacturing operational control focuses on day-to-day operations like working capital, inventory etc and the central idea of this process is effectiveness and efficiency.

Financial -- A financial executive needs to use financial ratios and cash flow analysis to estimate the trends and make capital investment decisions as they are likely to enter into many new products and services in upcoming financial years 2012-2015.

Marketing- They need make judgments about risk and uncertainty of a project and its impact on the company in short term and long term.

ESS progra

m

MIS Data

DSS Model

Administrative Support

Workstation

ESS Model

Executive work

station

OAS

Data

TPS Data

Graphics

Reports

Reque

stRespons

es

Architecture of ESS Application:

Strengths of having ESS in HUL :As HUL deals with the lots of product lines, the

Flexible data management capabilities is very important.

decision-maker participation.Estimating current and future potential for the

targeted market areas.Monitoring short-term corrective measures and

developing long-term strategic plans. Filters data for management, improves tracking

information.Provides timely delivery of company summary

information.

INFORMATION TECHNOLOGYThe Company continues to invest in

Information Technology, leveraging it as a source of competitive advantage.

The enterprise-wide SAP platform forms the backbone of IT and encompasses all core business processes in the Company and for collaboration with our suppliers and customers.

It provides a comprehensive data warehouse with analytics capability that helps in better and speedier decisions.

Contin… ITAll distributors run a standard distributor

management system. The distributors’ salesmen use handheld

devices for accepting retail orders which enable faster tracking and real-time sales information.

Contin… ITAs the IT systems become more

sophisticated and mission critical, there is a continuous focus on IT security and reliable disaster recovery management processes.

These are periodically reviewed and tested for efficiency and adequacy.