Comprehensive Operations Management Report: Unilever Case Study

This report provides a comprehensive analysis of Unilever's operations management, encompassing product design, process selection, capacity planning, and inventory planning. The report begins by examining product design, highlighting its strengths, weaknesses, and offering recommendations for improvement. It then delves into process selection, assessing Unilever's current strategies, and offering insights into optimizing efficiency, output, and quality. Capacity planning is analyzed, including its strengths and weaknesses, along with recommendations for cost monitoring and budget adjustments. Inventory planning is also explored, focusing on its role in supply chain efficiency and customer satisfaction. The report further examines Unilever's quality management system and current practices, identifying strengths, weaknesses, and providing recommendations for improvement. The report concludes with a detailed discussion of the Ceylon Biscuit Company's quality management practices and proposes strategies for further standardization and enhanced product quality. This report serves as a valuable resource for understanding the key elements of effective operations management within a multinational consumer goods company like Unilever, including a focus on how these processes apply to the business.

OPERATION MANAGEMENT

Operations Management | Group Assignment | 1
Contents
Acknowledgement .......................................................................................................................... 2
Executive Summary ........................................................................................................................ 3
Introduction ..................................................................................................................................... 4
Task 1. ............................................................................................................................................. 5
1.1 Product Design ...................................................................................................................... 5
1.1.1 Strengths ........................................................................................................................ 5
1.1.2 Weaknesses .................................................................................................................... 5
1.1.3 Recommendations .......................................................................................................... 6
1.2 Process Selection .................................................................................................................. 6
1.2.1 Strengths ........................................................................................................................ 7
1.2.2 Weaknesses .................................................................................................................... 7
1.2.3 Recommendations .......................................................................................................... 8
1.3 Capacity Planning ................................................................................................................. 8
1.3.1 Strengths ........................................................................................................................ 9
1.3.2 Weaknesses .................................................................................................................. 10
1.3.3 Recommendations ........................................................................................................ 10
1.4 Inventory Planning .............................................................................................................. 10
1.4.1 Strengths ...................................................................................................................... 11
1.4.2 Weaknesses .................................................................................................................. 11
1.4.3 Recommendations ........................................................................................................ 12
Task 02 .......................................................................................................................................... 12
2.1 Unilever Quality Management System ............................................................................... 12
2.2 Current practices of the Ceylon biscuit company ............................................................... 14
2.3 Strengths and weaknesses ................................................................................................... 14
2.4 Recommendations ............................................................................................................... 16
References ..................................................................................................................................... 18
Figure 1: Company Logo ................................................................................................................ 4

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Acknowledgement
We would like to express our sincere gratitude and appreciation to all those who always guided us
and gave us the possibility to complete Operations Management Report. We take this opportunity
to express our utmost regards to our respected lecturers whose unparalleled knowledge, moral fiber
and judgment along with their know-how, was an immense support in completing this assignment
report in a highly successful manner. we would also like to acknowledge with much appreciate,
especially our classmates have made valuable comments for my report. We also specially thanks
for our parents that who encouraged us and about strengthening us at all the time.

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Executive Summary
This Operations Management Team Report discusses the four processes that begin with product
design, process selection, capacity planning and inventory design, and we have answered every
relevant question from the first question and linked this process to Unilever and also we have stated
how these processes are applicable to Unilever.
Furthermore, in 2nd question, we discussed the current Quality Access Management approach used
in the organization, after which we identify both the strengths and weaknesses of the current
Quality Access and provide a detailed explanation of both strengths and weaknesses. Finally, we
have received recommendations for improving the current quality access management to further
standardize the product.

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Introduction
Unilever
Unilever is a British multinational consumer goods company headquartered in London, England.
Unilever products include food, candy, energy drinks, baby food, soft drinks, cheese, ice
cream, tea, cleaning agents, coffee, pet food, bottled water, toothpaste, chewing gum, frozen
pizza, pregnancy tests, juice, margarine (Up field), beauty products, personal care, breakfast
cereals, pharmaceutical and consumer healthcare products. Unilever is the largest producer of
soap in the world. It is one of the multinational companies and its products are available in around
190 countries.
Unilever owns over 400 brands, with a turnover in 2017 of 53.7 billion euros, and thirteen brands
with sales of over one billion euros. Axe/Lynx, Dove, Omo, Heart brand ice
creams, Hellmann's, Knorr, Lipton, Lux, Magnum, Rexona/Degree, Sunsilk and Surf.
Unilever is organized into three main divisions – Foods & Refreshments (beverages and ice
cream), Home Care, and Beauty and Personal Care. It has research and development facilities in
China, India, the Netherlands, the United Kingdom, and the United States.
Figure 1: Company Logo

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Task 1.
1.1 Product Design
Product management is a critical degree in operational management. They consider designing
products or services at Unilever a very important step. This will actually affect the profitability of
the company’s product. According to the product design, the gadget must be designed for
production to assemble the required gadgets and processes. The basic steps in designing a product
are objective design and production planning. Directly affects toothpaste, chewing gum, frozen
pizza, pregnancy tests, juices, margarine (high field), beauty products, personal care, breakfast
cereals, medicines and consumer healthcare.
1.1.1 Strengths
 Unilever customer loyalty to the company is enhanced as the quality of the company's sales
products is guaranteed.
 Increasingly supports institutional sales growth.
 Problems and complaints from the consumer side can be minimized as it is tailored to the
customer's preferences.
1.1.2 Weaknesses
 If the same type of design product is released to the market by another company, the
demand for the company will decrease.
 Improper communication of customer needs can lead to increased costs and problems
 Weak product image

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1.1.3 Recommendations
 Building a good relationship with our customers and basically identifying what their needs
are to point out.
 To create new customer, they should provide some new offer.
 Unilever should convince the customers that unilever is a good brand. They serve good
quality products.
1.2 Process Selection
Unilevers process selection determines the most effective method to use and the best time frame
for that method. For example, managers of the company's popular products brand, such as energy
drinks, baby food, soft drinks, cheese, ice cream, and tea, may decide whether to supply the product
to the customer's order or to inventory according to the standard. he managers need to additionally
determine whether or not to arrange the method waft as a high-extent line waft or a low-extent
batch-manufacturing method.
Also, they have to decide whether to integrate towards the market and / or back to their suppliers.
All those choices help to show the methodology used to make the product.
The key to process selection is to balance the costs, efficiency, output and quality of each option
to meet company production goals. Some options may produce a higher output per hour while
costing twice as much as other options, for example, while other options are less costly but produce
more errors.

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1.2.1 Strengths
 It has a deep and broad portfolio of brands and a diversified product range, which makes it
uniquely, positioned to tap into the changing consumer preferences across the world.
 Its Research and Development initiatives are heavily funded and manage to bring to the
market innovative and cutting edge products in tune and in line with consumer preferences.
 Unilever has a distinct competitive advantage over its nearest competitor, Proctor and
Gamble because of its flexible pricing and expertise in distribution channels that manage
to reach the nook and the corner of the globe.
 The company finds its strengths in leveraging the economies of scale arising from its
breadth of operations as well as synergies between its many manufacturing facilities, which
totaled 270 locations around the world at last count.
 Unilever combines global thinking with local execution, which means that it pursues
Global strategies that let it win the hearts and minds of consumers who would like to use
its products that are globally famous yet retain a distinct local flavor.
1.2.2 Weaknesses
 The biggest weakness that Unilever faces is that it operates in an uber competitive market
where the other global giants like P&G and Nestle in addition to a host of local players
challenge its dominance at every turn and raise the stakes in the Trillion Dollar FMCG
(Fast Moving Consumer Goods) space.
 The other weakness is that its products can easily be replaced with substitutes especially in
the emerging markets in Africa and Asia where the rural consumers in the hinterland often
use traditional and natural alternatives to the products that Unilever markets.

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1.2.3 Recommendations
• The weaknesses of limited business diversification and imitable nature of products are
significant because they influence business stability and performance. In this regard, a
recommendation is to diversify Unilever’s business through acquisition of related firms not
in the consumer goods industry. Also, Unilever needs to consider product innovation as an
opportunity to boost business performance. It is recommended that the company must use
its strengths, such as economies of scale, for product innovation to address competition and
the threat of imitation.
1.3 Capacity Planning
Capacity planning is the practice of planning/determining production capacity and workforce
needs to make sure your supply chain is equipped to meet demand. Basic three steps to start
capacity planning is through measuring analyzing and formulation.
The 3 Types of Capacity Planning
The three types of capacity planning make sure you have enough, but not too much, of three major
resources for both the long- and short-term. You’ll want to plan weeks, months, or even a year in
advance.
Type of capacity planning Description
1. Product capacity planning Product capacity planning ensures you
have enough products or ingredients for
your deliverables. For a florist, this
would be flowers, vases, and cards. For a
pool maintenance company, this would

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be things like chlorine that are required to
do the job.
2. Workforce capacity planning Workforce capacity planning ensures
you have enough team members and
work hours available to complete jobs.
This type of planning will also show you
when you need to hire more employees
and help you determine how far in
advance you need to start recruiting
based on the length of your onboarding
process.
3. Tool capacity planning Tool capacity planning ensures you have
enough tools to complete jobs. This
includes any trucks, assembly line
components, or machinery you need to
manufacture and deliver your product.
Capacity planning helps company deliver on the things that are important to company customers.
Incorporating this type of strategic planning into company process will help you meet due dates,
effectively scale your business, and increase your bottom line. Reduces stock-out, increases
delivery capacity and also Facilitates risk management.
1.3.1 Strengths
 It greatly assists the company in monitoring costs and adjusting budgets as needed

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 Identify high and low sales periods to maintain product levels under different categories of
the company.
 If the company intends to open a new factory, they can assess the facilities required through
the existing capacity plan.
1.3.2 Weaknesses
 Increase in salaries payable monthly expenses
 Having to allocate more money from the company to pay salaries due to the high number
of employees for each task
1.3.3 Recommendations
 As the company's employees work daily shifts, daily payments can help the company
reduce costs and increase the company's profit.
 It is temporary because the number of employees per task is more than the requirement.
1.4 Inventory Planning
The inventory plan at Unilever touches on a number of distribution chain additions and includes
decision-making duties related to the purchase and deployment of shares, which can include
cooked goods, work progress and finished goods. These duties increase throughout features and
whilst well exercised, incorporate deliver, demand, distribution, manufacturing, shopping and
potential making plans. Because stock making plans entails the dedication of stock quantities,
timing, and alignment with manufacturing potential and income volume, it’s a strategic control

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vital which immediately affects your company’s cash-float and profitability. Good inventory
planning supports a number of vital business objectives including:
 Customer service and satisfaction
 Supply chain efficiency
 Control of costs
 Accurate sales and demand forecasting
1.4.1 Strengths
 Less inventory reduces material waste for production
 The material will be delivered in a short lead time, discouraging serious delays.
 Avoid any delays and you will get the product material in a short time.
1.4.2 Weaknesses
 After placing an order from the company, the cost of ordering will increase as the goods
are often purchased by the manufacturer.
 Decreased ability of the company to convert to emergency and large orders in a short period
of time.
 Inventory planning is not based on statistics or reports but is based on assumptions.

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1.4.3 Recommendations
 Make sure to keep records of the product information for items in company inventory. This
information should include barcode data, suppliers, countries of origin and lot numbers.
Company might also consider tracking the cost of each item over time so unilever aware
of factors that may change the cost, like scarcity and seasonality.
 An unreliable supplier can cause problems for the company's inventory. If a supplier in the
organization routinely delays or shortens an order, it is time to take action. Discuss issues
with the company's supplier and find out what the problem is. Be prepared to switch
partners, or deal with uncertain stock levels and the potential for inventory expiration as a
result.
Task 02
2.1 Unilever Quality Management System
Unilever thoroughly believe if they want to sustain stay in this market and maintain product cycle
follow the Six Sigma method . They do several things to maintain quality
Unilever research discovery system
They have made good research teams in varies countries to find data and information of
their product related things. Though that they apply additional stuffs to improve their quality
of products.

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Findings Description
Stone Age diet may hold key to
optimum nutrition
Unilever research is looking at what
man’s distant ancestors ate to see how it
could enhance modern-day nutrition.
How the brain shapes the taste of food Unilever R&D partnered the University
of Manchester in a project to understand
how a person’s brain shapes the taste of
their food, and how consumers make and
maintain healthy food choices.
Sound can change our perception of
food
Background sound played during a meal
can significantly affect how food tastes,
according to research conducted by
Unilever R&D in collaboration with the
University of Manchester.
Is it possible to age more healthily? Unilever is studying the relationship
between genes and ageing to develop
technologies that when translated into
products will help people remain healthy
in their mid and later years.

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2.2 Current practices of the Ceylon biscuit company
1. Preliminary testing of the quality of the product raw materials.
Before manufacturing a product, we have to pay more attention to the raw material used for the
product, we have to maintain the quality.
2. Testing and inspecting of product quality during the manufacturing process.
Throughout the production process, the Quality Control Manager conducts quality control audits
to ensure that all process activities are carried out in accordance with all required quality standards.
3. Final inspection and testing of quality of the finish good.
Identifying and pre-determining quality of the final product to ensure it meets the quality
requirement. Records are also made in this stage as evidence that the final product has passed
through the required inspection and testing specified and send to the management.
4. Quality planning and staff training.
The unilevers company is also concern in providing training to its employees in order to create
quality focused work culture.
2.3 Strengths and weaknesses
Strengths

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 The company maintains the integrity of supplying good quality products.
 All products are labeled for distribution without any damage and the final inspection of the
supply of well-packaged products is done. Through good packaging the company meets
the targeted quality and customer satisfaction.
 They have a large number of skilled workers, for example, when businesses have limited
resources, skilled labor is empowered to obtain profitable outcomes.
 Although the company has a limited number of manpower, training employees who handle
quality control increases company productivity.
 The company relies on the supplier to provide the raw material for the production of good
quality products by conducting its own quality inspection, which helps to reduce the
company's overhead costs.
Weaknesses
 Too much attention to quality leads to rejection and waste.
 Top employees and managers only pay lip service for employee intervention and open
communication, thereby holding meetings to identify employee quality issues
 Lack of public participation in quality management leads to higher costs and increased
effort, rejection, and reproduction.
 Inactivation time due to equipment failure leads to a low, quality end product

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2.4 Recommendations
This SWOT analysis of Unilever highlights a number of internal and external strategic factors that
managers must include in strategy development. For example, the weaknesses of limited business
diversification and imitable nature of products are significant because they influence business
stability and performance. In this regard, a recommendation is to diversify. Unilever’s business
through acquisition of related firms not in the consumer goods industry. Also, Unilever needs to
consider product innovation as an opportunity to boost business performance. It is recommended
that the company must use its strengths, such as economies of scale, for product innovation to
address competition and the threat of imitation.

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Conclusion
Through this report we can come to a conclusion that this report contains the required answers and
also the recommendations we have given is better than the current approach of the organization.
According this report the organization is using and outdated product process management and the
new system we recommended will be useful for the organization to develop the organization
further. Finally, we conclude that the above report mentions the current quality approach used by
the company and the new approach that is more efficient for the development of the company and
enhances the current quality of the organization.

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References
Anon., 2019. https://www.dreamsquadgroup.com/project/unilever-sri-lanka-product-quality-
management-analytics/. [Online]
[Accessed 09 01 2019].
Anon., n.d. https://www.managementstudyguide.com/swot-analysis-of-unilever.htm. [Online].
Anon., n.d. https://www.unilever.com.lk/. [Online].
Anon., n.d. https://www.unilever.com/sustainable-living/what-matters-to-you/product-safety-and-
quality.html. [Online].
THOMPSON, A., 2017. http://panmore.com/unilever-operations-management-10-decisions-
productivity. [Online]
[Accessed 21 02 2017].