Analysis of Unilever's Supply Chain Strategy and Processes

This report provides a comprehensive analysis of Unilever's supply chain strategy and processes. It begins with an introduction to supply chain management and the company's background, highlighting its global presence and diverse product portfolio. The report then examines Unilever's operations performance objectives, focusing on quality and its impact on consumer perception and internal operations. A detailed overview of Unilever's global supply chain is presented, including upstream and downstream activities, suppliers, and intermediaries. The analysis covers the company's mergers and acquisitions, its single supply chain strategy, and its efforts to optimize distribution networks. The report also explores the roles of suppliers and intermediaries in the supply chain, providing insights into Unilever's approach to managing its extensive network. Finally, the report concludes with an evaluation of the company's supply chain strategy and offers suggestions for further improvements.

Supply Chain Strategy & Processes
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Table of Contents
Introduction................................................................................................................................2
Company background................................................................................................................2
Operations performance objectives............................................................................................3
Global supply chain....................................................................................................................4
Analysis operations performance objective...............................................................................8
Conclusion..................................................................................................................................9
References................................................................................................................................10
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Introduction
Management of a network of enterprises involved in delivering goods and services to
customers is what the term "supply chain." The storage and movement of finished
commodities from production to the point of consumption are two characteristics integrated
into the system. Supply chain management also includes the movement and storage of raw
things. Each organization has a unique approach to transporting raw materials and completed
goods to their final destinations. The management devises a supply chain strategy that
includes an organization's resources (Lawrence et al., 2019). Rivals often take over
organizations that have been significant competitors. When a company like this is acquired, it
necessitates the development of a supply chain plan to accommodate the increased volume of
inventory. Unilever is a global conglomerate that sells a wide range of consumer goods
brands. The corporation manufactures beverages, snacks, personal care products, and
breaching agents. The corporation makes many acquisitions. Following the purchase of a
significant competitor, the supply chain management concerns will be examined in this
article.
Company background
Unilever plc, a British multinational consumer goods company based in London, is a
prominent player. Unilever's product collection includes food, condiments, ice cream,
cleaning supplies, and personal care products. More than 190 nations buy soap from
Unilever, the world's largest soap manufacturer.
In addition to Axe/Lynx, Ben & Jerry's, Dove, Omo/Persil, Heartbrand (Wall's) ice cream,
Hellmann's, and Knorr, other notable Unilever brands include Lux, Magnum, and
Rexona/Degree. Other exceptional Unilever products include Lifebuoy, Sunsilk, and
Sunlight.
Personal care and home living focus on Unilever's three core business units: food and drinks,
home health, and beauty (Azeez, 2019). Research and development centres are located in
China, India, the Netherlands, the United Kingdom, and the United States.
When the Margarine Unie margarine firm and the Lever Brothers soap company
amalgamated on September 2, 1929, the result was Unilever. The country became global
when oil and fat production began to expand in the second half of the twentieth century. “It
has purchased Lipton, Brooke Bond, Chesebrough-Ponds, Best Foods, Ben & Jerry's,
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Alberto-Culver, Dollar Shave Club, and Pukka Herbs since 1971. (2017). Unilever's specialty
chemicals division was sold to I.C.I. in 1997.” Health and beauty brands were prioritized
above slow-growing food goods during Paul Polman's tenure as C.E.O. in the 2010s.
Product
Unilever is a massive multinational corporation with operations in several nations worldwide.
Dubai is home to the Unilever chapter for the United Arab Emirates, known as Unilever Gulf
F.Z.E. Over 400 different brand names are produced by the corporation across its care, food,
and domestic care areas. One of the most well-known trademarks of the Unilever Company,
LUX, is a line of personal care products that include soaps and body creams (Kostiuchenko
and Zakorko, 2019). It has over 180,000 workers working in the company's 500 locations in a
variety of nations throughout the world, and it generates over €2.4 billion each year. Lux,
owned by Unilever, is a well-known brand in several countries.
The marketing approach of Lux has primarily concentrated on targeting specific niches. Lux
achieved a significant presence and a sizable market share in its target sectors due to its use
of niche marketing. In the United Arab Emirates, most of Lux's beauty products may be
found in the peach, cream, and strawberry varieties. The Aqua Sparkle and the Purple Lotus
are geared toward sophisticated customers looking for one-of-a-kind skin care products (Shen
and Sun, 2021). The demographic of the middle class that lives in cosmopolitan cities is who
Lux currently caters to. It aims to attract clients between the ages of 16 and 50. Women in
this age range have shown much interest in the Lux imagery cream. As a result, the
population of the urban middle class that is young and stylish is who Lux beauty creams are
marketed toward.
Operations performance objectives
Quality
Products are designed and manufactured with quality in mind at Unilever. Compared to the
previous year, customer complaints in 2010 were down 11%, and market quality issues
dropped 46%. A focus on quality decreases costs in this way, as shown in the numbers. If the
procedures at Unilever are of high quality, customers who 'consume' them will have less
reason to complain. Nevertheless, the customers of Unilever have nothing negative to say
about the company (Ongbali, 2021). They are pleased with Unilever's products and can eat
them again. As a result, Unilever earns more money. An entirely different effect is felt on
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internal operations. The quality of all Unilever goods is exceptionally high across the
company's procedures, actions, and very few errors are likely to occur.
In part, the quality and "superiority" of Unilever's products are being emphasized because
digital media allows the views of individual customers to exercise significant impact. The
"fundamentals" are still there, but Weed argued that the methods of using mainstream media
like television to connect with consumers are rapidly changing. "As a result of their positive
encounters with a brand's products and services, consumers purchase brand experiences and
then go on to make additional purchases (Abubakari and Thuranira, 2021). In other words,
this will never change, "he commented. To that end, the proliferation of mobile devices such
as smartphones and tablets has created a more "one-to-one" shopping experience that caters
to individual interests and habits.
Over 2.5 billion individuals in more than 190 countries use Unilever products. Consumers
have relied on Unilever's products for nearly 90 years because of their wide variety. Quality
monitoring is of the utmost importance in light of the company's global reach. A product's
packaging should live up to the brand promise if customers have high expectations. When it
comes to Unilever Dubai, it's all about insights and new ideas. If they don't meet their
customers' expectations, they won't be able to sustain long-term growth in the company.
Personal care goods, such as shampoos and lotions, are the focus of Unilever's quality control
department, and any difficulties that may develop must be dealt with swiftly. The quality
control department's job is to conduct all inspections and detect any discrepancies that may
be found on labels and packaging (Mees-Buss et al., 2019). To guarantee that only high-
quality goods are leaving the manufacturing plant, any faults must be quickly notified to the
department's chief. The organization was having trouble keeping up with the demands of this
procedure, and getting labels printed on time and efficiently was becoming increasingly
challenging. Unilever quickly realized that having a system like GlobalVision would be
helpful after they opened their Dubai plant in 2016.
Global supply chain
One can find Unilever on the web, which describes itself as a company that creates consumer
goods such as food and beverage brands and personal care and cleaning products. Rotterdam
is home to Unilever N.V., while London is home to Unilever PLC. A single non-executive
chairman is in charge of both firms. In addition to Kraft Foods, Procter & Gamble, Danone,
Nestle, Henkel, Reckitt Benckiser, and S.C. Johnson & Son are two of the major competitors.
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The company was founded in 1930 when a soap business and a margarine manufacturer
merged. Calvin Klein, Faberge, Elizabeth Arden, and Helene Curtis Industries are the other
companies the firm has acquired. F.F.I eventually acquired Elizabeth Arden. Fragrances
(Douglas et al., 2021). Mergers and acquisitions have resulted in the company's purchase of
more than 400 different brands. The company's main concentration is on products with yearly
sales of at least $1 billion.
2006 was a banner year for the corporation, with $50 billion in net sales across the globe. A
total of 150 countries worldwide are served by its services. Its trademarked brands can be
found in supermarkets around the world. Many changes have taken place in its supply chain
strategy throughout time. After production, finished goods were transported to retailers'
warehouses as part of a supply chain plan. Later, an extension to include raw materials
procurement and delivery to manufacturing facilities was made. As a result of the challenges
other companies posed to the company's supply chain, this procedure began in North
America (Onifade et al., 2018). Several distinct supply chains were utilized, resulting in a
diverse range of commodities being delivered to consumers. All of these factors were
considered while deciding on a distribution network for a specific product's distribution. In
2005 the corporation implemented a single supply chain strategy. Supply Chain 2010 is a
five-year initiative designed for North American supply chains. It was with A. T. Kearney
that the vision was hatched. The program's goal was to connect the supply chain with the
company's overall strategy and to handle the company's evolving product lineup. Various
supply networks had already been integrated into the program. Organizational structure and
working practices were to bind all networks together.
Upstream
The parties who procure the raw materials must transmit them to the manufacturer to be
included in the upstream supply chain. The downstream supply chain's post-manufacturing
activities include the final product distribution to the customer.
Suppliers
The company Unilever obtains its raw ingredients from a variety of different vendors. They
are essential to the process of value generation as well as the growth of the brand. Around the
world, consumers purchase 170 billion Unilever packs every year, and the company's goods
are used more than two billion times daily. Unilever employs over 171,000 people, and the
company brought in €46.5 billion in revenue in 2011.
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When individuals use Unilever's brands and services, they feel good about themselves, their
appearances, and their lives. A better future is being built as part of the company's ongoing
efforts. There are thirteen brands in its portfolio with revenues of one billion euros apiece,
and it has the leading global position in most of the sectors in which it works. Well-known
brands including Knorr, Hellmann's, Lipton's Dove, Vaseline, Persil, and Marmite are all
represented in this portfolio. As part of its "partner to win" campaign, Unilever hired the
State of Flux in early 2012 to conduct a supplier voice of the customer study. Specifically,
Unilever's partner was the subject of this study (Blanco, 2021). Aiming to more than double
its business by 2020, Unilever also wants to reduce its environmental effect and acquire
agricultural raw materials in an environmentally friendly manner. These suppliers are an
essential part of achieving this goal. Fairly granular research was conducted, and the results
included further breakdowns by category, market sector, and kind of supplier. The
information and analysis offered to Unilever's procurement stakeholders allowed them to
focus on areas of excellence, such as sustainability, and areas in need of improvement.
Because of this information, Unilever Procurement has ensured that they remain the
supplier's preferred partner in 2013 by implementing several improvements across the
organization.
Downstream
The "supply" and "demand" of the supply chain are distinct concepts. Supply chain managers
seek to balance supply and demand to avoid losing sales, inventory shortages, or over-
ordering. Up to a quarter of operating costs might be lost due to inefficient supply chains,
making it imperative that supply and demand be matched.
Intermediaries
The intermediaries provide the items manufactured by Unilever to the target clients. Through
the formation of an intricate distribution system, they make sure that local retailers are
adequately stocked with products manufactured by Unilever. Additionally, the intermediaries
assist in marketing the effects of the corporation to new markets.
One of the most successful brands on the international market is Lux, manufactured by
Unilever. The need for Lux is broken down into subcategories according to different regions
throughout the world. The market sector for the United Arab Emirates is one of the most
important and largest market segments in the Middle East (Shamsuddin et al., 2020). In
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addition to this, it is segmented based on the Socioeconomic Cluster (S.E.C.), which
categorizes customers according to the occupations they hold and the levels of education they
have attained. Customers' ability to make purchases is directly proportional to their level of
education as well as their occupation.
The Southeastern Conference is comprised of five different classes. The upper middle class,
as well as the lower middle class, are the primary customers of Lux. The luxury Lux soap
brand is aimed at consumers who belong to the upper-middle class, while the popular brand is
marketed to consumers who belong to the lower middle class. People living in cities, suburbs,
and rural areas can all purchase the goods because they are made available to all three
demographics. When selling Lux products, Unilever employs a variety of marketing methods,
one of which is the "4 Ps." The standards that are used in the production of Lux goods
(beauty soaps and creams) in the U.A.E. are the same as those that are used in the production
of comparable products in other countries (Ehiedu and Toria, 2022). The Lux product is
available to consumers in a wide variety of fragrances and packaging sizes. The demand for it
is directly proportional to its prices in comparison to those of other well-known brands. Due
to the high number of participants, the market for beauty soap is characterized by fierce
competition. Lux products by Unilever are priced competitively to appeal to consumers in the
middle class, which enables the corporation to keep a substantial portion of the market. The
United Arab Emirates is home to several production facilities owned by Unilever.
The company relies on other businesses and distributors to provide its distribution channels.
These businesses then sell Lux items to local retail outlets around the country. Additionally,
the distributors advertise the Lux items to end users on a direct level. Within the beauty
products sector, the corporation maintains one of the most comprehensive advertising
campaigns there is (Calzolari et al., 2021). Customers are encouraged to acquire Lux
products as a result of the celebrity endorsements that are featured in the company's
advertisements. Some of the brands that compete include Aromatic and Tibbet. Many
customers have come to regard Lux imagery cream as their preferred brand as a result of the
company's sophisticated distribution infrastructure and extensive advertising campaigns.
Analysis operations performance objective
Quality
The process of inspecting incoming packing materials was greatly enhanced following the
implementation of GlobalVision Print Inspection in 2018. Their printers send them labels and
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packing materials, and they utilize this technology to check them for mistakes. Labels are
applied to bottles and another packaging after they are received. Customers' quality analysts
can use GlobalVision to examine their printed goods against approved files developed by
their graphics department. No differences between approved files and produced items can
occur if the software is employed (Wen and Zhao, 2020). It was difficult for the quality
control department to guarantee flawless accuracy in the proofreading process while it relied
on hand-checked documents. Now that they've used GlobalVision, the department can
quickly and simply look through past inspections to make sure no mistakes have been sent
out. The time and money saved from inspecting only a small fraction of the labels are
enormous.
In terms of ethical food and transparency, Unilever has been at the forefront for a little while
longer. Sustainable living plan" was announced in 2010 with 9 pledges aimed at increasing
the social, sustainable, and economic imprint of the company's goods and services Their
ethical and responsible image set them apart from the competition, as they were one of the
first major food businesses to do so.
As a global food and beverage conglomerate, Nestle has its global headquarters in Vevey,
Switzerland's canton of Vaud. According to 2014 revenue figures, it was rated 64th on the
Fortune Global 500, 33rd on the Forbes Global 2000 list of the world's largest publicly traded
corporations, and one of the world's largest food and beverage organizations. The company's
first year of business was in 2014. More than 231 billion Swiss francs, or more than 247
billion U.S. dollars, were assigned to the company as of May 2015. It is now the world's
largest food company (Gamini and Rajapaksa, 2020). More than 2,000 brands are owned by
Nestle, which covers a wide range of products and markets. Breakfast cereals; infant foods;
nutritional supplements; seasonings; frozen or refrigerated prepared foods; pet food; and
bottled water are just a few examples of the wide range of products and services that fall
under this category. For twenty-nine of Nestlé's brands, annual sales exceed CHF 1 billion, or
roughly $1.1 billion in U.S. currency. Over 339,000 people work for Nestlé, which has
operations in 189 countries and 447 factories.
In the past, Nestlé was not widely renowned for its environmental and social stewardship.
They're one of the businesses that have to work hard to reclaim customers' trust. This
explains Nestlé's zealous pursuit of the title of "most transparent" corporation (Dahlmann and
Bullock, 2020). One of the first partners to begin testing the I.B.M. food trust platform was
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Nestlé in the first half of 2017. According to Nestle's digital transformation manager,
Benjamin Dubois, "customer desire for more openness and trust" led to the project's
evolution. As a result, consumers can get the most information possible on the things they
buy. Since then, Nestle's focus on satisfying shifting consumer needs and supply chain
transparency has grown significantly.
Conclusion
An organization's supply chain can be made more effective and efficient by implementing a
strategic supply chain management strategy. Raw materials and finished goods are both
included in supply chain management. In 2005, the company devised a supply chain plan.
The supply chain strategy was renamed the 2010 Supply Chain Strategy to connect it with the
company's overall strategy. The results of the research were used by the company's
executives to make predictions. The research focused on large retail outlets where people
bought the products. A wide range of topics, including distribution methods, client
requirements, and outsourcing, were investigated. Strategic supply chain management will be
impacted in several ways as a result of the acquisition. Customers' wants and demands, as
well as your company's market share and impact, should be considered while developing a
supply chain strategy.
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