HUL turns to AI to make supply chain more agile, efficient

Yogesh Mishra, executive director, supply chain at HUL.

Hindustan Unilever Limited (HUL) operates one of the most intricate and expansive supply chain networks in the consumer goods industry. With more than 25 factories producing a diverse portfolio of more than 2,000 products distributed through a network of over 30 warehouses, the consumer goods giant’s supply chain is designed for agility and efficiency.

In an interview to Moneycontrol, Yogesh Mishra, executive director, supply chain at HUL, talks about the focus on rapid changeovers, utilisation of nano factories for smaller batch production and implementation of artificial intelligence to predict supplies and prices. Edited excerpts:

HUL often talks about its strong commitment to India's growth. How does this philosophy influence your supply-chain strategy?

Our philosophy "what is good for India is good for HUL" shapes our proactive and customer-centric approach in supply-chain management. It motivates us to continuously innovate and optimise our operations to meet the evolving needs of Indian consumers effectively. Currently, HUL operates over 25 factories producing more than 2,000 SKUs (stock-keeping units) annually, distributed through 30-plus warehouses across India. Our focus on rapid changeovers and nano factories enables us to produce a diverse range of products efficiently, including over 250 SKUs from these advanced facilities.

How has “Project Nakshatra” redefined HUL's readiness in supply-chain management?

“Project Nakshatra” plays a crucial role in our strategy to enhance the agility and responsiveness of our supply chain. By establishing multi-category, multi-format factories closer to demand centres and co-locating suppliers and warehouses, we aim to reduce lead times and optimise our logistics network effectively.

How is technology, especially digital transformation, modernising operations?

To unlock the next level of efficiency and agility, we are moving towards an end-to-end digital ecosystem with comprehensive programmes across all pillars of the supply chain — plan, source, make, and deliver. Apart from AI/ML-based forecasting enabling higher forecast accuracy, we have created a cognitive intelligence engine enabling real-time decision-making.

We are driving competitive buying through an advanced ML (machine learning)-enabled solution, aiding sourcing decisions by accurately predicting supplies and prices to drive profitability.

Pioneering efforts in lights-off manufacturing, aimed towards man-less operations, and facilitated by technologies like our line loss-capturing app DFOS (Digital Factory Operating System), have unlocked 7,500 tonnes per annum of incremental capacity. Manufacturing Control Tower connects all our sites, enabling real-time benchmarking and insights for continuous performance improvement.  To achieve next-day delivery, we introduced automated digital fulfilment centres named Samadhan, separating demand capture and fulfilment. Successfully piloted in Chennai, we are expanding Samadhan to Mumbai.

How do sustainability initiatives integrate into your supply chain practices?

Sustainability is deeply integrated into our supply-chain practices. We've implemented energy-management systems to monitor and optimise energy consumption, reducing greenhouse gas emissions and enhancing operational efficiency. Initiatives like the Boiler Digital Twin, utilising agricultural waste, not only curb environmental impact but also support local communities by providing sustainable livelihoods.

What are the key initiatives or innovations on the horizon for HUL's supply chain?

Moving forward, we're focused on establishing a Supply Chain Nerve Centre to enhance decision-making and visibility across our operations. This will act as an enterprise brain to drive faster decision-making, providing end-to-end visibility and enabling global optimisation across plan, source, make, and deliver instead of localised decision-making. Additionally, we're committed to adopting future-oriented manufacturing practices and continuous improvement initiatives to achieve significant cost savings and operational efficiencies.

Innovation and continuous improvement are at the core of our supply-chain strategy, enabling us to optimise processes, enhance agility, and deliver superior products and services promptly to our consumers.

What impact do you expect these initiatives to have on HUL's leadership in the consumer goods industry?

These initiatives reinforce HUL's position as a leader in supply-chain excellence within the consumer goods industry. By embracing innovation, sustainability, and operational efficiency, we're confident in our ability to meet future challenges and consistently exceed customer expectations.