Supplier Selection of Unilever

Running head: SUPPLIER SELECTION OF UNILEVER
Supplier Selection of Unilever
Name of the Student:
Name of the University:
Author Note:

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SUPPLIER SELECTION OF UNILEVER
Table of Contents
Introduction:.......................................................................................................................2
Supplier Selection Criteria and Issues:.............................................................................3
High quality of raw materials:.........................................................................................3
Sustainability:.................................................................................................................4
ICT for Purchasing Operations:.........................................................................................5
Supply chain organisational dynamics:..........................................................................6
Electronic commerce:.....................................................................................................6
Knowledge management system:..................................................................................7
Purchasing cost analysis:..............................................................................................7
Cost analysis:.................................................................................................................8
Inventory analysis:.........................................................................................................8
Conclusion:........................................................................................................................9
References:......................................................................................................................10

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SUPPLIER SELECTION OF UNILEVER
Introduction:
The purpose of the assignment is to analyse the three aspects of purchase
management namely, supplier selection criteria, purchasing cost and use of information
technology in purchasing operations and management. The paper studies these three
aspects from the view point of a purchase manager of an organisation. The organisation
selected to study purchasing operations is the British-Dutch multinational FMCG
company, Unilever. Unilever is the owner and manufacturer of branded products like
Lux and Axe which are worth billions of dollars. The FMCG giant has to acquire raw
materials, work-in-progress and finished goods from thousands of suppliers all round
the globe, both from local and overseas suppliers. The purchase goals of Unilever is to
acquire these materials at economic prices to ensure smooth production.
Tesco is one of the biggest local retailers of Unilever in Britain and sells a
number of products like Dove and Lynx. The products offered by Tesco can be
categorised into frozen food, fresh food, bakery, drinks, baby products, health, beauty,
pets, household articles, home, entertainment products, inspiration & events. Tesco
obtains products from a vast supplier market consisting of suppliers of diverse
categories(tesco.com, 2017). For example, it acquires FMCG products like health and
beauty products from FMCG companies like Unilever and Colgate-Pamolive. It acquires
dairy products and meat products from dairy and meat packing firms like Nestle. The
competitors of Tesco in the United Kingdom are grocery chains like Morrisons and local
grocery stores who sell grocery items. As far as electronics items are concerned, Tesco
has to compete with the super market chains and stores like electronic products like
Samsung stores and Sony World. The organisational goals of Tesco is to provide its

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SUPPLIER SELECTION OF UNILEVER
customer segments chiefly in Britain with high quality goods and act responsibly
towards stakeholders’ interests. The organisational strategy of Tesco consists of several
components. The first strategy of Tesco is offering high quality products to meet the
demands of the customers at affordable prices to earn high revenue and market
position in Britain. The other two business strategies of Tesco are to reduce the waste
emission and recycle them to reduce environmental pollution. The company through
these strategies strive to benefits its stakeholders like customers, shareholders and the
community as a whole.
Supplier Selection Criteria and Issues:
Multinational FMCCG companies like Unilever purchase raw materials, work-in-
progress(WIP) goods, information and machinery from the suppliers according to
certain criteria. These goods are required by the production department of the company
to manufacture finished goods. The company has several purchasing goals of the
multinational company like production of finished products following its own international
standard which make it acquire materials from the suppliers. The following section
analyses the criteria Unilever should consider while selecting suppliers and decisions
required to be made for issues relating to the supplier selection:
High quality of raw materials:
The first criteria Unilever considers while selecting suppliers is that the suppliers
should provide the company with high quality raw materials. The purchase goals of the
multinational company is to acquire high quality raw materials which enable it to
manufacture and market high quality products. This enables the company to ensure that