PROJECT BY

BHAVANA,POOJA,RASHI,NAVEEN & PARASURAMU

PURPOSE
● To demonstrate the impact of redesigning business

● policy and relationship apart from process

● reengineering across the HLL network.

● It explains the successful use of enterprise systems to

● enhance business value across the business network

DESIGN / APPROCH
● The approach of the BNS is studied through a case
● study of one of the largest fast moving consumer
● goods networks the “ HLL Net”
INTRODUCTION
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
HUL's brands - like Lifebuoy, Lux, Surf Excel,
combined volumes of about 4 million tonnes and
Rin, Wheel, Fair & Lovely, Pond's, Sunsilk,
sales of nearly Rs.13718 crores.
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 37 factories across India.
The operations involve over 2,000 suppliers and
 HISTORY
the summer of 1888, visitors to the Kolkata harbour no
tes full of Sunlight soap bars, embossed with the word
ade in England by Lever Brothers“. With it, began an e
rketing branded Fast Moving Consumer Goods (FMCG)
1931, Unilever set up its first Indian subsidiary, Hindu
aspati Manufacturing Company, followed by Lever Bro
ia Limited (1933) and United Traders Limited (1935).
se three companies merged to form HUL in November
1912, Brooke Bond & Co. India Limited was formed.
a Oil Mills Company (TOMCO) merged with HUL, effect
m April 1, 1993.
January 2000, in a historic step, the government decid
ard 74 per cent equity in Modern Foods to HUL.
What is BNS?
Business network systems are backpack inter-organizational
information systems with the potential of data sharing,
forecasting and transaction processing capabilities.

v Traditionally EDI has been used to enhance business

networking, and now extended enterprise resource planning
(ERP) systems, supply chain management systems,
customer relationship management systems (CRM) and e-
business portals are being used to establish BNSs

v A BNS is further defined as a system supporting the

relationships between multiple organizational units that can
be either internal or external.
 BNSs types
BNS types Scope of Enterprise Business
exchange of systems impact AND
business in where it is
their network used.
Transaction – Structured Extended Coordination in
oriented BNS data on ERP,EDI,SCM bus.partners
transactions . inc.
BAXTER in
USA FOR
MANAGING
HOSPITAL
SUPPLY,SAB
RE in the
airline ind.

Relationship – Sharing of CRM and PRMEnhances

HLL Before ERP

1,000 suppliers and 7,000 stockiest filling up

shelves in over one million retail outlets.

HLL has 100 factories, 13 sales branches and 121

warehouse depots, along with 93 third-party
manufacturing sites.

HLL has 23 central offices, two research centers .

HLL Before ERP

C&F agents used to plan distribution based on

demand raised by stockists. C&F agents as well
as stockists were given 60-90 days credit for the
goods.

In 1995,HLL’s net current assets as a percentage

of capital employed was 44 percent, and
inventory was 20 percent of divisional turnover
for detergent and 24 percent of divisional
turnover for personal products.
HLL After ERP(MFG/PRO)

HLL previously had a stock replenishment cycle

time of two weeks after ERP implementation, it
came down by three and half days, which
translates into substantial savings in inventory
costs.

After ERP current assets as a percentage of

capital employed was down to 8 percent, and
inventory in key divisions was down to 5-6% of
turnover.
HLL after ERP

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Second level
● Third level

● Fourth level

● Fifth level
HLL after ERP

The stock level in the detergent fell from six

week of sales to less than three weeks of sale.
Finish goods stock level at distribution fell from 3
weeks to one week.
HLL stockists who used to get 60-90 days of
credit from HLL are now offered a special
discount if they pay in advance. As a result,
stockists place orders only for stocks that can be
replenished quickly. This has drastically reduced
the channel inventory in the entire network.
H.L.L DISTRIBUTION NETWORK SYSTEM
AFTER IMPLEMENTING BNS SYSTEM

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Second level
● Third level

● Fourth level

● Fifth level
Trends in net current assets
NEW INNOVATION IN SCM
Conclusion
ü HLL, a 51.6 percent subsidiary of
Unilever, is the largest fast-moving
consumer goods (FMCG) company in
India. FMCG is a low-technology market
and product differentiation is not easy.
ü For a company like HLL the challenge is
obviously to manage the differing supply
chain. It needs to have strong
distribution channels to achieve a high
level of penetration needs of its often
vastly different businesses. The case
study of HLL Net demonstrates the
successful use of enterprise systems to
 This research has presented evidence that if
an extended enterprise system is
accompanied by redesign of the business
policy and relationship apart from process
reengineering across the business network,
it further enhances the business value of
network.
 In 1997, HLL implemented the MFG/PRO ERP package across its
234 sites (100 manufacturing sites, 13 sales branches and 121
warehouse depots). The objective was to integrate
manufacturing, financial and distribution processes to improve
working capital management and reduce channel inventory
across its business network. Also, it standardizes business
processes across different business units and establishes BNS.
 HLL’s vision is “Connect, Attract and Fulfill” on a massive scale.
 Transportation and telecommunications infrastructures are
really not up to the mark in India. Without good communication
facilities, there is no point in having ERP. So HLL had to install a
VSAT system for reliable communication system. HLL has 128
VSATs installed in this network.
 Redesigning BNS helps to reduces the potential of the harmful
bullwhip effect.
 HLL previously had a stock replenishment cycle time of two
weeks.After ERP implementation, it came down by three and
half days, which translates into substantial savings in inventory
costs