Management Control System Of

Hindustan Lever Limiteds (HUL)

Presented By: Mamta Verma(1012) N. Krishna Iyer(1024) Shweta Modi (1039)

HUL formerly Hindustan Lever Limited Formed in 1933 as Lever Brothers India Limited Market leader in Indian products such as tea, soaps, detergents Indias largest exporters of branded Fast Moving Consumer Goods.

Recognized by the Government of India as a Golden

Super Star Trading House

Offers high level of service with flexibility and

responsiveness thorough out the supply chain

Key focus in the exports business:

1. Home & Personal Care (HPC)

2. Food and Beverages (F&B)

MISSION Hindustan Unilevers mission is to add Vitality to life. Meet everyday needs

for nutrition, hygiene, and personal care with brands that help people feel
good, look good and get more out of life GOALS

1.

First priority is to be a successful business and investing for growth and

balancing short-term and long-term interests

2.

Caring about consumers, employees and shareholders, business partners

and the world in which we live

3. To succeed requires the highest standards of behavior from all of us

Departments Home and Personal Care Legal Finance and IT

Foods
Sales and Customer Development Supply Chain Human Resource Corporate Responsibility

HUL has an integrated approach towards recruitment, which

looks at both skills and competencies Competencies Competencies are personal characteristics that can be assessed in a clearly observable behavior. Skills would refer to the

expertise one has and is measured by demonstrated capability.

This would refer to the academic achievements and the knowledge one gains over time

Procedure
There are 4 regional branches in each of the 4 big metros 1. Look at the CV 2. Short-listing 3. Preliminary interview 4. Screening 5. Final interview

Labor relations
Active unions and Collective bargaining Indian Labor legislation protects freedom of association, the right to organize and collective bargaining Wages, bonuses and social security

The national minimum wage is set by the government and

adapted from time to time

 How-ever there are indications that these wage levels are not
fair and realistic HUL contributes to the Provident Fund and pays a Dearness Allowance The LTS provides for the workers rights to paid and sick leave The policy on paid leave, sick leave and casual leave is such that it discourages people to be absent

Training
15 months of intensive training

The Levers Business Leadership Training Program (BLTP) is

probably the most thorough warming up that a trainee can ever get The rigorous training will help the recruits develop an almost natural ability to take calculated risks, cope with the pressures of corporate life and hone the leadership skills

CONTROLLING
Internal Control: Audit committee meet six times Review the internal control measures & providing an update to the Board Looks into controls and security of the Companys critical IT applications,

Into all major divisions, and look after deviations from the
Code of Business Principles

Production Improvement:

reduction in specific energy and water consumption levels

by the use of alternative sources of energy and recycling/reuse of energy / water

the continuing excellence in TPM implementation across units

Entering 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:-

MFG/PRO used in HUL starting from Raw material requirement to final dispatch of product

Getting order MFG/PRO does accounting entry of it. Get online order Production Consolidate all orders from website to Raw Material is transferred to excel sheet Production unit. Send excel sheet to Operation MFG/PRO prepares Department Production Report Daily Production is MRP (Material Requirement Planning) is recorded. done in MFG/PRO Dispatch MFG/PRO will calculate how much is in MFG/PRO will guide how much to stock & how much is required dispatch. Raw material Management Remaining will be stored in warehouse. Required Material is ordered to supplier. MFG/PRO will sent mail to the head Raw material received from supplier. office. MFG/PRO Prepares GRR (Goods Receipt Payment Report) Payment to Supplier Quality Control Material will be transferred to Q.C. Department: (1) Q.C. Pending (2) Q.C. Accepted (3) Q.C. Rejected Q.C. Accepted is transferred to warehouse. Q.C. Rejected is sent back to suppliers.

Waste checking Waste capturing will be done manually MFG/PRO will compare Material reduced & Finished Stock Increased Difference would be treated as waste

PAY GINI Software Used for HR department Services by this Software Attendance

Salary Calculation
PF Calculation Accounts of all Employees

FLOW OF INPUT MATERIAL

TRANSACTION PROCESSING SYSTEM

Raw material received entry Finished goods output entry The security gate head update the log book daily and send it to the accounts department

HULs reward philosophy is to provide market competitive salary and

benefits with a strong linkage between performance and pay

Fixed Salary Variable Salary that is linked to company and individual

performance
Equity compensation (at eligible levels) that is linked to long term (3 year) company performance and their potential. o Benefits and Perquisites aimed at providing the employees choices. o Retirement benefits that are market competitive

It fosters a balance among different strategic measure in an

effort to achieve goal congruence In HUL Every department right from marketing, logistics, sales, finance and Human resource are internally connected

It is very important for an organization like HUL to have an

internal fixed process - very less profit margin

good competition from proctor and gamble HR strategy of HUL is so good that the employee satisfaction is to the highest level - motivation in the employees and allows them to be very open in their minds

HLL staple control

Manvinder Singh Banga Chairman- 2002
Mid 1990 the companys core brand were maturing Declined to 7% , 5%, 4% in 1999, 2000, 2001 resp. Historically the companys growth strategy: HLL prioritized opportunities which built upon existing assets & capabilities They avoided spreading their management talent too thinly

They had received a great deal of recognition for the giants

strides they had made in developing innovative approaches to product development sales, & marketing Indians rural poor

1995- Kissan Annapoorna for staple foods Iodized Salt

Indias population was poor by global standards, with an average

annual income of about $2,200 at PPP -1999 Their products and services had been designed for developedworld customers, and this resulted in cost structures that priced the poor out of the market

Finding innovative ways to serve poorer customers was one

possible avenue, one that a handful of multinationals were turning their attention to in the early years of the 21st century

It believed that by 2010, half of its sales would come from the developing world, up from 32% of its sales in 2000 Many companies assumed that high-tech R&D couldnt possibly fit in the budget for low price products, and that

developing products for the poor was simply a matter of

making existing products cheaper by lowering quality
HLLs research-intensive approach was the development of a Breeze 2 in 1

Marketing to the rural poor

Finally, HLL found new ways to sell Much in the style of Avon and Amway, it encouraged villagers by the dozens to go into business for themselves selling HLL products

HLL believed they could expand their presence in foods dramatically The logic was threefold: The market was tremendousfood accounts for 50% of all economic consumption in India

HLLs existing system for selling and distributing throughout

rural India could be used to improve the economics for most food products HLL had proven it possible to create nationwide, mass-market brands despite Indias overwhelming ethnic and cultural

diversity

In 1993, through an acquisition, they expanded into processed fruit and vegetable products, such as ketchups, jams, and cold beverages

The team learned that 80% of the food purchased off the shelf in India is raw and unprocessed the team investigated markets for several staple like

wheat, rice, beans, salt, spices, and others

Management Control of the Staple Foods

HLL staffed the Kissan Annapurna team internally. Anil Dua, the senior brand manager

HLL had a great deal of experience in launching new brands

As a result, they were able to make reasonable estimates of the cost of creating a new brand no mathematical formula, but substantial data on other brands Each year, they identified a limit to the total losses they were willing

to take as the new operation ramped up

This limit was not negotiated directly

if the total budget was out of line with previous brand-building

experience, the plan would be reconsidered Over the life of the brand, the greatest uncertainties were associated with the research into the iodine encapsulation technique

Each month, the financial results were reviewed at the

corporate level, with a detailed variance analysis of plan vs. actual. Changes to action plans were made based on these performance evaluations

A few key performance measures were regularly reviewed, including

the fraction of customers that were upgrading from unbranded products This variable was an important input to their financial projections. They also closely monitored percentage gross margin, which they

viewed as a direct indication of the value customers placed on a

brand No dramatic changes in the business plan as the iodized salt business

evolved.
There were regional hurdles to overcome, but no changes that affected the overall plan

India is a fast developing country with a huge population whose per capita income is growing rapidly and there is huge opportunity for FMCG companies

The opportunities are as follows:

Increasing per capita income is driving FMCG growth in India Indias consuming class is growing rapidly