Comprehensive Report: Supply Chain Management of Unilever (Analysis)

This report provides a comprehensive analysis of Unilever's supply chain management (SCM). It begins with an overview of the company, its product lines, and its major competitors. The report then delves into the stages of Unilever's SCM, starting with the sourcing of raw materials from global suppliers, followed by manufacturing facilities where raw materials are processed. It examines the role of wholesalers, distributors, and retailers in distributing the finished products to end consumers. The report highlights the importance of logistics networks in facilitating the movement of materials and goods. Furthermore, it explores the relationships between suppliers and customers, focusing on the three-tier SCM strategies employed by Unilever. Finally, the report identifies a key problem: Unilever's reliance on third-party logistics, and recommends that the company acquire logistics companies to improve efficiency and streamline its SCM.

Running head: SCM OF UNILEVER
SCM of Unilever
Name of the Student:
Name of the University:
Author Note:

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SCM OF UNILEVER
Part 1: Company, product line overview and major competitors:
Company Unilever Plc.
Headquarters London (the United
Kingdom)
Rotterdam (Netherland)
Primary Listing London Stock Exchange Secondary listing: Several
CEO Paul Polman
Net Income 7.801 billion Euros (2016)
Presence Global
Business model Subsidiary
Product line overview Main competitors
Food and drinks Knorr, Bru coffee, Cornetto
icecream
Nestle
Home care Cif, Domestos, Surf Reckit Benckiser, P&G
Personal care Axe, Dove, Clear, Lakme,
Pepsodent
P&G, L’Oreal, Maybelline
New York, Colgate
Palmolive
Water purifier Pure it LG, PUR(owned by P&G)
Part 2: Stages of supply chain design and raw material locations:
The following are the stages of the supply chain management of Unilever:
Stage 1: Sourcing of raw materials:
Unilever sources the raw materials from suppliers from different locations all over the
world. The company maintains stringent quality codes which suppliers of raw materails have to

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SCM OF UNILEVER
qualify to supply their raw materials which are then stored in the warehouses. The suppliers of
raw materials consist of farmers and distributors, which sell raw materials to companies
(unilever.com. 2018).
Stage 2: Manufacturing facilities:
Unilever process these raw materails at its manufacturing facilities situated in most of its
leading markets. The company acquires local manufacturers in the markets where it has no
manufacturing facilities of its own. The raw materials at this stage are located in the warehouses
for processing into finished products (Christopher 2016).
Stage 3: Wholesalers and distributors:
Unilever distributes its finished products in the markets though a wide chain of
wholesalers and distributors. Distributors enter into contracts with the company to its sell goods
in large areas to wholesalers and retailers. The wholesalers acquire goods from the companies to
sell them to retailers in smaller areas (Brandenburg et al. 2014).
Stage 4: Retailers:
The retailers acquire goods of Unilever from wholesalers and distributors. They sell the
products to the end consumers.
Logistics:
The logistics networks facilitate storing of the raw materails, work-in-progress goods and
finished goods throughout the stages of SCM. The transporting companies and the warehouses
form the logistics networks of Unilever (Fahimnia, Sarkis and Davarzani 2015.).

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SCM OF UNILEVER
Part 3: Relationship between suppliers and customers:
Unilever maintains a strong relationship with suppliers and consumers through SMC
strategies. The SCM strategies forming and executing take place at three tiers, which are shown
as below:
Tires Position Description
T1: Strategic SCM Upper level
management
Forming SCM strategies, market evaluation, new product
advancement opportunities and counteracting issues and
challenges
T2: Tactical SCM Middle level
management
Demand planning, planning of inventory and supply of
planning. Using of total quality management techniques
like just in time methods to order supplies.
T3: Operational
SCM
Lower level
management
Scheduling of orders, transportation, etc.
Unilever maintains strong relationship with suppliers by incorporating their business
demands at the three-tier SCM stretegy shown above. Again, the company maintains strong
relationship with consumers by offering them high quality products. The company in order to
streamline this supply chain often acquires farms and manufacturing plants, which is known as
vertical integration (unilever.com. 2018). The company however, does not adopt strong
horizintal integration of its SCM and is dependent on third party logistics companies to get its
raw materials, WIP and finished goods transported to desired locations.

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SCM OF UNILEVER
Stage 1: Suppliers of raw
materials Logistics Stage 2: Manufacturing plants of
Unilever. Raw materials stored in
warehouses and processed intio
finished goods
Logistics
Stage 3: Wholesalers and
distributors. Raw materials are
now in form of finished gopods
Stage 4:
Retailers
Logistics
End customers

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SCM OF UNILEVER
Figure 1. SCM stages
(Source: Author)
Part 4: Recommendations for problems:
The problem identified is that Unilever has no horizontal integration of its SCM and is
dependent on third party logistics companies to distribute its raw materials and finished products.
This often delays production and supply of products to cosnumers. Thus, one can recommend
and suggest that the company must acquire logistics companies, which would circulate its
products faster and improve its SCM.

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SCM OF UNILEVER
References:
Brandenburg, M., Govindan, K., Sarkis, J. and Seuring, S., 2014. Quantitative models for
sustainable supply chain management: Developments and directions. European Journal of
Operational Research, 233(2), pp.299-312.
Christopher, M., 2016. Logistics & supply chain management. Pearson UK.
Fahimnia, B., Sarkis, J. and Davarzani, H., 2015. Green supply chain management: A review and
bibliometric analysis. International Journal of Production Economics, 162, pp.101-114.
Unilever global company website. 2018. Brands. [online] Available at:
https://www.unilever.com/brands/?category=408118 [Accessed 14 Mar. 2018].