Unilever Needed Faster Deliveries for its Fast Moving Consumer Goods

The Complete Unilever Story

Hindustan Unilever Limited (HUL), the regional entity of Unilever, is one of India’s biggest FMCG companies and a market leader in the consumer products space.

Unilever meets the massive demand for its products through 48 major manufacturing plants, over 2000 suppliers and associates, and an army of 10,000 major distributors that cover over 80% of the country’s urban population in addition to about 250 million rural customers.

Unilever’s brands are household names across a country of billions, not only because they’ve got a stellar portfolio of market-leading products, but also due to a strong distribution network. Maintaining a strong national distribution network is no small feat, especially in a developing market that is geographically diverse. Market presence and dominance are only possible if products reach even the remotest parts of the country, a distribution network that HUL has meticulously built and maintained over a century.

Some networks, however, run better than others.

Unilever faced some difficulty in running their distribution network once they crossed city limits, especially when supplying remote rural areas where supply chains, sales networks, and profitability tend to taper off.

They relied on leased third-party vehicles and full truckload (FTL) shipments to handle transport and distribution between manufacturing facilities and distribution hubs.

The time taken to complete shipments for some regions varied significantly. The variations meant resupply lead times estimates were unreliable, which led to a necessary — but wasteful — practice of maintaining safety stock across thousands of Unilever’s warehousing and distribution facilities.

The variability in its distribution networks also made it difficult to coordinate activities like new product launches or promotional events across the country.

Unilever was concerned about their ability to cost-effectively cater to markets where it was already an established presence, while also making inroads into regions where it wasn’t. The entry of new players vying for their own slice of the ~$900 Bn Indian FMCG market complicated matters as well.

Unilever decided to improve its well-established supply chain further, rooting out inefficiency and excess in its distribution network to make it more efficient, supply retailers faster, and most important of all — reduce safety stock and excessive inventory holding costs within its supply chain.

Unilever realized that the root cause of their excess inventory — and the added holding costs — was the uncertain transit time within its distribution network.

Unilever’s Ask

Overcoming Logistics Inefficiencies — How Unilever Tried to Reduce Inventory Lead Time

What HUL needed was more transport and delivery efficiency — better logistics efficiency and predictability to reduce inventory lead time & the need to maintain safety stock.

Unilever began by identifying some of its most important markets and routes where delivery on time was critical. Rather than rely on third-party transporters for these routes, Unilever deployed a dedicated fleet to handle milk runs between its warehouses and dealers.

The cost of managing a dedicated fleet was too high to make it viable for their primary distribution model.

Whether it was 3rd party market hired vehicles or dedicated fleets however, lead times still varied between 30-40% on any route. These variable vehicle delivery or TATs were a major issue affecting inventory holding and speed to market.

The Roambee Solution — Transit Time Reduction Through Live Shipment Tracking and Route Optimization

Roambee assured Unilever that it could make transit times more predictable, perhaps even reduce them, by ensuring that transport — both leased vehicles as well as their own dedicated fleet — is better tracked and managed.

Unilever also realized that they can’t depend on hired transporters to track shipments. Tracking shipments by tracking their dedicated fleet wasn’t an option either, it doesn’t work.

Unilever ultimately decided to track their shipments by, you guessed it, tracking their shipments.

Roambee's Answer

Live Shipment Location Tracking

Detailed Route & Transit Time Reports

Route Benchmarking

Logistics Performance Analytics

Roambee deployed its wireless portable monitoring devices the Bee to give Unilever live visibility into the location and movement of their shipments.

Roambee’s on-demand shipment tracking solution works just as well on market vehicles as it does on dedicated fleets, which means HUL can cover its entire distribution network on a single dashboard, using a single shipment tracking solution.

Unilever used a Bee to track each outbound shipment, giving them the ability to track all their shipments through a dedicated web portal, regardless of the type of shipment or transporter used.

The web portal could also be used to:

  • Create multiple approved routes with ease.
  • Generate and download detailed shipment tracking reports.
  • Create dashboards to monitor an individual shipment’s status and manage its logistics.
  • Flag delays due to unnecessary stops or route deviations, and track them as they happen.

Roambee’s reporting and analytics platform gave Unilever insight into their delivery network and transporters, especially the routes they take and the stops they make.

Roambee helped Unilever to:

  • Heatmap their distribution networks down to every individual route.
  • Identify all major choke points like border check posts or intermediate facilities.
  • Identify all major stops for rest, refueling, or resupply.

Which then allowed Unilever to:

  • Identify the most popular routes that their transporters favored.
  • Identify the stops — both avoidable and unavoidable — among these routes.
  • Zero in on their best options — routes that are faster and have fewer stops.
  • Ensure that all transporters in their network use the optimal routes.

Roambee’s live shipment tracking solution gives Unilever real-time alerts if there are any deviations from the norm like route changes or unscheduled stops. These alerts give Unilever enough of a heads-up to call drivers to avoid delays or resolve issues. It also helps Unilever to enforce their SLAs as well as evaluate and benchmark their transporters, improving their logistics operations further by engaging their best performers.

Through live shipment tracking, adhering to preferred logistics routes, reducing unnecessary or lengthy delays, and more reliable restocking schedules, Unilever shaved off a few days from the usual transit time among lanes where it was implemented, and reduced the need for excess safety stock across routes where Roambee’s supply chain tracking and optimization solution was deployed.

Unilever’s Gains

FTL/LTL Tracking

ETA Predictability

Better Fleet Utilization

Route Deviation Alerts

SLA Enforceability

Carrier Benchmarking

Reduced Need for Safety Stock

How Unilever is Supplying the Fast Growing FMCG Market Today

Unilever is switching over to a data-driven supply chain management and optimization system. The company uses live shipment data as well as in-depth transit time and lead time analysis to maximize the efficiency of its distribution network, while also minimizing its safety stock and inventory holding costs.

Besides improving its third-party fleet’s performance through stricter route and SLA enforceability using the Roambee data, Unilever is improving the utilization and cost-efficiency of its dedicated fleet.

Unilever is now improving predictability and throughput of its distribution networks, further strengthening its position as one of the top companies in India’s FMCG space.

Unilever is now saving more through better logistics efficiency.

Unilever is now spending less on safety stock.

Unilever got more control with Roambee.