Operation Management Report: Analysis of Unilever's Supply Chain Model

This report offers a comprehensive analysis of Unilever's operations management, focusing on its supply chain model. It begins with an introduction to Unilever, its history, and its position as a global consumer goods organization. The report then delves into the supply chain model, explaining its...Read More

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OPERATIONS MANAGEMENT

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Table of Contents
Introduction......................................................................................................................................2
Supply chain model.........................................................................................................................2
Process.............................................................................................................................................4
Challenges........................................................................................................................................5
Recommendations............................................................................................................................7
Conclusion.......................................................................................................................................8
Bibliography..................................................................................................................................10

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Introduction
In 1872, Unilever was founded by Antoon Jurgens. This is the first margarine factory within the
globe in Oss, Netherlands. Samuel van den Bergh, in 1888 forms Oss and opened the margarine
manufacturing firm in Kleve. In 1927, both the organization was merged to form the Margarine
Unie. Unilever was founded on 2 September 1929. Unilever is known as the British-Dutch
international customer goods organization. The product of the Unilever includes beverages,
foods, and personal care products (Bowers, 2010). In 2011, it has restrained as the third-largest
customer good organization by profits and world’s largest market of ice-cream. This has two
parent organizations known as Unilever PLC in UK and Unilever N.V. that is based in
Netherlands. These organizations operated virtually as the single company and run by the single
directors group and linked by the number of agreements. It generates more than 52 percent
revenue through the food sector. Unilever is also known as the seventh most valuable
organization in Europe. This organization is known as the oldest multinational organization as
product of the organization is available in 190 nations. There are 400 brands owned by Unilever.
The supply chain of Unilever is known as the sequence of a process that includes the distribution
and production of services and products. This is known as a network between suppliers and
organizations for distributing and producing goods. The following discussion will discuss the
supply chain model, process for improvement, challenges, and recommendations.
Supply chain model
Supply chain model is known as management tool that used to improve, address, and
communicate the decisions of supply chain management in an organization with customers and
suppliers (Colicchia, & Strozzi, 2012). It evaluates the process of businesses that needed to
satisfy the demands of customers. The supply chain model explains the process with the supply
chain and provides a base to improve processes. This organization is known as the global end-
user goods organization. Eight disciplines of the organization are customer quality, safety,
service, planning, engineering, manufacturing, logistics, and procuring. Unilever serves to 2
billion consumers and operated by 260 factories and 460 warehouses within 90 nations. The
organization follows the standard model of supply chain from the procurement of material to
distribute products to customers at a global level. Unilever's supply chain starts from the

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procurement of sources and raw materials. Suppliers and farmers uses sources and raw materials
to produce a product that is desired by consumers. The supply chain model of Unilever ensures
the availability of products within the market that help to generate income. The organization
focuses on the improvement of supply chain and makes the procedure more leverage to meet the
customers’ demands (Pettit, Fiksel, & Croxton, 2010).
Unilever through the high engagement of skilled labor worldwide has become more capable
enough to produce the business benefits by the improvement of the sustainable supply chain
model. It follows the effective organized sustainable practices and policies to maintain and hold
the workers around the logistics network and supply chain. Workers within the organization have
the accurate proficiency to manage and control the business by growth period and concentrate on
the sustainable supply chain model. Improvement within the sustainable level enables
organization to identify the main capability requirements of workers to accelerate the
organization's growth and attain the strategy of the business. It also helps the organization to
receive the contribution at a productive level and maximize the opportunities of growth and
provide quality and fast services to customers at a global level (Kashmanian, Wells, & Keenan,
2011).
Unilever has designed its supply chain model with the sustainability concept. The sustainability
concept is designed with elements like social, environmental, and economic development.
Unilever has embraced the environmentally sustainable practices of business to deliver the many
numbers of advantages. This has enabled the organization to become more responsive to
business and customer deals. Unilever with records in global and local sustainability makes
income by investments, the productivity of employees, and effective long-term following of
public. Sustainability of supply chain model of Unilever is not restricted to the environment
infused within the employment, business practices, other elements, and supply chain. Unilever
adopts the approach of sustainability and includes environmental factors to increase the worker's
and employees' experiences in supply chain. Supply chain model of the Unilever includes the
more option to drive recycling, efficiency, and minimize the emission of carbon from its sites of
manufacturing. This organization applied the concept of sustainability that seen within the
operational actions of the supply chain model (Reilly, & Weirup, 2012).

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The organization promotes sustainable methods of farming as increase yields considerably,
provide social and economic benefits. Sustainable supply chain model of Unilever procures
materials within the sustainable form and delivers quality products to customers. The supply
chain model of Unilever helps to secure supplies and minimize the vitality and risk within the
supply chains of raw material. This offers the prospect for innovation by concentrate on the
livelihood requirement of customers. It helps to build the strong name of the brand at a global
level. It provides high importance to share information with shareholders (Mirvis, 2011).
Process
To meet the demands of customers compare to competitors like P&G and many more it ensure
the constant supply chain model of merchandise to retail stores around the world. Unilever
ensures effective and efficient distribution by maintaining excellent quality standards of the
product. Organization database underpins the many numbers of core processes of business like
distribution and procurement to sales. Unilever deployed the management solution of CA datable
to simplify tasks of routine administration and decrease downtime. The increased performance of
database with effective utilization enables to minimize the operating cost and enhance efficiency
by ensures continuity of supply chain and processes of quality manufacturing. Unilever touches
individual’s lives compare to competitors in many ways with spanning 400 brands in 14
categories of products of personal care, home, and food. The organization is dedicated to support
people and get the more out of life through its extensive research of customers and products to
ensure that organization meets the changing lifestyles, tastes, and expectations of many
customers within the globe (Nishat, 2010).
Unilever through a vast portfolio of the product has a highly critical chain of supply and line of
production. This organization has the core objective to provide the service and product that
individuals can trust and ensure a great level of control by manufacturing, sourcing, and product
distribution. Unilever manages daily actions through the extensive system of enterprise resource
planning (ERP). This is supported through the large range of core processes of business like
distribution, sales, finance, and procurement. This kind of system helps the organization to cope
with the high organizational activities compare to competitors. Unilever spends $ 1 billion on
research and development with sustainable innovation and selective acquisition compare to $ 0.5

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billion more to competitors. It spends a huge amount on the investment compare to the
competitors to improve the efficiency and grow the availability of investment (Nidumolu,
Prahalad, & Rangaswami, 2009).
The organization is accelerating the growth to become more reliable and making new facilities
by upgrading others. The organization has updated the technology to become more flexible
within the production. This organization has invested in the training to develop a relationship
with schools and colleges around its factories to improve and upgrade a set of skills. Unilever in
its supply chain model has implemented effective manufacturing within its factories to buy the
best practices around the globe to improve performance. It is effectively looking to rebuild
manufacturing and meshes with investment within the regions. It focuses to build and set the
competitive structure of cost by providing the best services to customers through innovation and
build superior products. It has transformed the supply chain model to lead with the top rank in
Garner’s annual chain of supply. Unilever has introduced sustainable operations as the main
aspects of the transformation of the supply chain. The blueprint for achieving the vision has
grown the business by separate the environmental footprint and improves the positive social
impact. The main pillars to improve the supply chain model are health and well-being that
decreased the impact on the environment and increase livelihoods. The supply chain model of
Unilever focuses to improve health and hygiene. Unilever should focus to respect facilities and
dedicated to the overnight area of parking and allow optimizing the time and becoming safe. This
plan will increase the capacity by ensuring innovation, growth, and sustainability. The
transformation of the supply chain model will support to gain a competitive advantage within the
flexible fragmented customer environment (Nikoloyuk, Burns, & de Man, 2010).
Challenges
This has been observed that the organization is facing the issue of sustainability with a supply
chain model. Another issue is speed of order fulfillment. Customers have concerned that they
wait for long time period to get ordered products. This kind of issue arises due to the problem in
the decline in process of procurement of materials and resources. It creates a delay to deliver the
product. Another issue founded on employee welfare which is levels of wage, hours of work,

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employment stability, and the relationship between management and laborer’s (Vermeulen,
2010).
Supply chain risk affects the entire operational process of the organization if fails to predict the
risk and led to the decline outcome. Unilever is known as the worldwide business with the
effective chains of supply. The disruption of supply chain decreases the revenue and profit.
Organization business is depending on to securing the materials of high quality, effective
manufacturing, and timely product distribution to consumers. The supply chain model of
Unilever exposed to adverse actions like physical disruptions, industrial and environmental
accidents and bankruptcy of main suppliers that can impact the organization's capability to
deliver the orders to customers. It is important to reflect without impacting profitability and
growth. The organization has the vision to double the business size by minimizing the impact on
the environment in a more sustainable way of doing the activities of the business. The
organization is required to increase the positive social benefits of activities by decreasing the
impact on the environment. Organizational practices are not effective to set a clear commitment
regarding the impact on the environment.
The business actions of Unilever is within the toughest market of the globe as deals in premium
branded goods to the supermarket like Tesco, Morison’s, and Sainsbury’s. These are the toughest
negotiators and capable of delisting products and shrinking available to shelf space as they are
competitors. This is correct that competing in front of Unilever is cheaper. It is known that good
relationships with customers are vital for business growth. A strong relationship with customers
is necessary to develop at the time of purchase. Organization retail frequency is sometimes not
enough capable to go through with the private label offerings. Unilever argues that it moves
equivalent to Tesco as it refused to stock the product of Unilever as it takes problems with the
elements of the supply chain of Unilever. It challenges that Unilever's digital and physical chains
of supply improvement are critical and take time to become accurate. It makes a binary view
regarding the issue. The real challenge for Unilever's business is to work together and look at the
digital supply chain model. The organization has not come up with the digital landscape to
become more sustainable (Tummala, & Schoenherr, 2011).

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Recommendations
One of the segments of Unilever that can generate benefit from the improvement of sustainability
is in logistics. It focuses to improve and increase the operations of logistics and influence the
performance of Unilever's business. Sustainable management of logistics will enable the
organization to deal with the effective management of daily actions and producing finished
services and goods. With the improvement of sustainability, the organization will become more
capable to maintain rapidity by the increasingly global economy demand. Unilever's logistics
transportation is carried by roads. Sustainable improvement will help to use fuel efficiency
within all actions and keep the emissions low from road transport. To make the supply chain
more effective Unilever should redesign the network of supply chain and logistics to establish
the green corridors within the main locations of Unilever logistics. This will help to deliver
within the friendlier and fewer distribution miles in many different regions. It will decrease the
journey of road each year and increase the rail and sea use for moving products to targeted
markets. The improvement of the sustainable supply chain model will provide the framework to
deliver the real business benefits by minimizing costs and improve the services of customers by
lower GHG emissions (Tang, & Musa, 2011).
Organization to make the strong supply chain model should focus to implement the strict
regulations and rules for all partners of channels and retailer that deals in products of Unilever
around the globe. For storing the product Unilever should use the FSC verified bags for
sustainable packaging. Unilever should ensure that raw material suppliers should use sustainable
material of packaging. It should improve the means of transport regarding moving products.
Unilever should introduce the programs of energy saving in outlets and warehouses. Unilever
should focus on to improve the VLM methods through the streamlining of raw material supply
for minimizing the redundant storage within the warehouses. This will help the Unilever to attain
higher sustainability and increase productivity. It should incorporate the program of
manufacturing leadership development to improve the factory leader’s skills. The valuable
recommendation for Unilever will be appraised by assessing the impact on the flow of work of
the organization. The organization should monitor the outcome of the business productivity and
performance on a worldwide supply chain network (Trkman, & McCormack, 2009).

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Organizations to minimize the risk should adopt the crucial approach to mitigating the risk of the
supply chain. The organization should focus on compressing the time of worldwide shipping and
variation in cycle time. This will help the organization to map out the process of the value stream
and develop ways to minimize and eliminate delays at every phase. The organization should use
the tools of visibility to track shipments closely and take the required action. It should use the
event management technology of the supply chain for sending alerts to main employees and take
the appropriate actions to correct the delays. The sophisticated tool in the supply chain model
will help to deliver the visibility on price and measures the performance. The shippers will
become capable to monitor the performance of carriers and relations within the particular lanes.
It will minimize the time to measure the risk and response. Unilever will become capable to
respond to every disruption within the model of supply chain through measuring the
performance. Soliciting of information regarding the internal procedure of supply will offer
visibility within the security and control within the creation of progress or manufacturing. It will
also support to eliminating the risks of the supply chain and strengthening the network of the
supplier (Trexler, & Schendler, 2015).
Conclusion
In the limelight of the discussion, it can be concluded that in present worldwide environment of
business Unilever should promote a sustainable business strategy to maintain and sustain the
share of the market. This report analyzes the issues regarding the sustainability within the supply
chain model that impact the Unilever image. It is significant for Unilever to focus on sustainable
method to place it as the sustainable worldwide corporate citizen. The organization should infuse
sustainability importance to carry the operational work within a sustainable way. A sustainable
supply chain model will help to leverage the process of the supply chain. It is not limited to
minimize the energy, minimizing the carbon footprint, and depletion of resources to enhance the
organization's image within the market and among consumers. The improved sustainable supply
chain model will increase the bottom line of financial results by adhering to ecological practices.
Organization by working with its suppliers will become enough capable to develop the
sustainable supply chain that help to cut down cost and make new revenue sources, boost and
manage the brand value. Organizations by identifying and implement the sustainable supply
chain model practices will experience the positive feedback and relations of public that

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organizations would be apparent as an effective global citizen that can yield higher benefits.
Organization will effective implementation of sustainable practices will face less risk of supply
chain and counter such risks.
Bibliography
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