Introduction to HUL Shakti Launched in the year 2001 in the Nalgonda district situated in Andhra Pradesh A rural initiative that targets small villages with a population less than 5000 individuals. Objective is To create income-generating capabilities for underprivileged rural women by providing a sustainable micro enterprise opportunity, and to improve rural living standards through health and hygiene awareness Project Shakti contributes to 10% of rural turnover nationally for HUL It covered 1,00,000+ villages through a network of 45,000 Shakti Ammas across 15 states reaching 3 million homes Aim is to have 100,000 Ammas covering 500,000 villages and reaching 600 m people XIMB 2011
Structure and Functions Selection of Villages with a population of about 2000–3000 Personnel from HUL approach SHGs or Panchayat for selection of the Shakti entrepreneur and also provide assistance for credit One Shakti entrepreneur is appointed for one village Two villages need to be 2 kms apart from each other Initial investment of Rs 20,000 that is used to buy product for selling Profit margin of 10% higher than retailer is given to Shakti Amma XIMB 2011
Competitive Strategy Deep Penetration Higher Margins to Shakti entrepreneurs Integrating Business with Social Responsibility Partnership with non competitive company to sell their product through Shakti entrepreneurs XIMB 2011
Supply Chain Strategy Sustainable Sourcing Consistent Approach to Suppliers’ Assessment - Business Partner Code Rain Forest Alliance Certification Fair income for Farmers Door to Door Selling Community Involevement In Supply Chain Fixed Period Order XIMB 2011
Strategic Fit COMPETITIVE STRATEGIES Deep penetration Business with social responsibility High margin to Shakti entrepreneur ACHIEVING SUPPLY CHAIN STRATEGIES STRATEGIC • Sustainable Sourcing FIT FUNCTIONAL STRATEGIES • Door to Door Selling • Credit Facility through banks • Community Involvement in sales • Promotion through Below the Line and distribution activity • Fixed period order • Low transport cost XIMB 2011
Channel Structure – Rural Trade & Shakti HUL Rural Sales Promoter (RSP) C & F agent Third Party Urban Rural Redistribution Combined Direct Shakti Redistribution stockist Coverage (CDC) Dealer stockist Whole Whole Shakti seller Seller Redistributi Entrepreneur on Stockiest Urban Retailer Rural Retailer Salesman Consumer (RSSM) Consumer Consumer XIMB 2011
Supply Chain Model Contract Grower(Rainforest Re Distribution Manufacturing (80) Alliance) warehouse stockiestThird party C& Shakti suppliers F Distributor ShaktiSmall farm entreprene holders ur XIMB 2011
DRIVERS OF PERFORMANCE• Facilities : • Door to door facility to customer • Easily availability • Product available on demand • Flexibility• Inventory : • Moderate to Low Cycle inventory • Lead time of 1 day • Low Safety inventory • Holding cost of inventory is moderate to low
DRIVERS OF PERFORMANCE• Transportation • Mini truck as mode of transport • High Responsiveness• Information • Reliable and accurate forecasting • Push strategy• Sourcing • Sustainable Sourcing • Selection and Training
ADVANTAGES OF PROJECT SHAKTI• For Community Availability of quality products in villages Reduced the consumption of counterfeit products Door to door delivery of products Source of income generation Women empowerment and enhances their decision making ability.
Contd…• For Hindustan Unilever Deep penetration in remote and unreachable area Brand awareness for HUL in media blind area More accurate and reliable prediction and forecasting helpful in study consumer behaviour hence product development Goodwill that is intangible assets for company. It developed organised supply chain
Problems and Challenges• Develop and trained human resource requires high investment.• Problem in record keeping for Shakti entrepreneur.• There is stigma attached with door to door selling• To get more profit, Shakti entrepreneur tries to play both the role of retailer and dealer that affect penetration of products in village.
Recommendations Providing training with collaboration of other non-competing companies and with collaboration of NGOs. Low cost training by hiring local people as a trainer There should be three or four retailer under each Shakti entrepreneur so that product penetration is good and it increase efficiency of supply chain To Provide more opportunity to special community like Mannihar those have traditional business of selling
Learning and Conclusion This project provide us opportunity to analyse strategy fit of competitive and EXISTING CONTRIBUTIO supply chain strategy N TO THE PROJECT SHAKTI SOCIETY / It also gives us the opportunity to CSR understand how the social activities can ACTIVITIES be well incorporated in the operational strategy to derive maximum profit. SOCIAL BUSINESS INITIATIVE This project give learning how to serve the EXISTING society and along with the profit of BUSINESS organisation that provide the sustainability ACTIVITIES to any project XIMB 2011