Recommendations Report: Unilever Supply Chain Strategy Analysis

This report provides a detailed analysis of recommendations for improving Unilever's supply chain, focusing on enhancing distribution processes and leveraging technological advancements. The report begins by outlining the need for optimized distribution centers and suggests the implementation of new ones to maximize profitability. It emphasizes the importance of resource management and physical distribution, proposing integration strategies to improve product flow. Furthermore, the report recommends the integration of Internet of Things (IoT) technologies, such as drones and driverless vehicles, to enhance warehousing and fleet management. The implementation of these technologies is expected to improve efficiency and reduce costs. The report also addresses potential problems, such as inventory buildup and knowledge gaps, and concludes by highlighting Unilever's strengths in implementing the proposed strategies. It suggests that Unilever can optimize its distribution network and implement IoT technologies, while also expanding its market share.

Recommendations Report

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Recommendations Report
Introduction
The report seeks to elucidate the implementation of the recommendations documented in
the Supply Chain Strategy Analysis of the Unilever Company. From the recommendations, the
Unilever Company needs to improve its distribution process to maximize profitability. Towards
this end, changes required include opening new distribution centers while at the same time
improving the capacity and capability of the existing distribution centers. Such measures will
result in an improved distribution process that will enable the organization to gain increased
profits from the market. On the other hand, the second recommendation provided new
technologies as a feasible way of improving profitability in the company. Specifically, the
implementation of Internet of Things (IOT) in warehouses and the company fleet will enhance
distribution through better warehousing and fleet management. The changes needed in the
distribution process and the implementation of the recommendations remain the backbone of the
report at hand.
Recommendation 1
The need to realize improved efficiency and optimization in the company’s distribution
centers towards reaching the customers in cost-effective strategies remains paramount. Logistics
studies further emphasize the centrality of efficiency in physical distribution as well as resources
management in improving profitability (Yadavalli and Balcou 2017). By focusing on the links
occurring between the company and its distribution centers, questions that require attention look
into the allocation of company products and their specific sizes to distribution centers (Tocquer
2017). With a well calculated production and distribution system, the product delivery
throughout the company network will increase profitability. In this case, two aspects of

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optimizing the productivity of the distribution centers include resource management and physical
distribution.
Figure 1.0
Resource management mainly concerns the flow of products from the company and takes
account of matters such as transportation and control of inventory. On the other hand, physical
distribution concerns the conveyance of the company’s finished goods from the distribution
centers to the consumers. It considers concerns such as shipping, product handling, and
warehousing. Accordingly, the two aspects need integration into the company’s distribution
control with an emphasis on in-house integration of the overall product flow within the
distribution centers (Yadavalli and Balcou 2017). Integration becomes possible through efficient
distribution management. This process will be made possible by maximizing the distribution
centers and setting up new ones to cover targeted locations.
Distribution management gives emphasis to an improved focus on the consumer and
apart from the typical roles of resources management and physical distribution, it calls for
customer service, forecasting, and order dispensation. Having a robust distribution approach
remains vital to an operative framework for inventory management and success in the market. It

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enables a company to gain a superior understanding of what it requires to reduce delivery
intervals, eliminate product deterioration, and enhance customer service. The distribution
approach will enable Unilever to keep an eye on fundamental aspects such as the warehouses,
transport fleet, inventory management facilities, as well as consumers (Gichuki 2017). It will
also allow for close monitoring of the number, location, and network undertakings of the
distribution centers. Through the maximization of current distribution centers and inception of
new ones, Unilever will efficiently manage its logistics and distributing its products in a well-
organized manner that reduces the time taken in order processing.
Recommendation 2
The second recommendation requires the Unilever Company to enhance its technological
capacity in the supply chain through the internet of things approach. Consequently, it is expected
that it will facilitate the transfer of technology to its distributors to keep the process seamless. It
will involve the transference of the internet of things technologies such as drones and driverless
vehicles into their distribution networks followed by a systematic integration across its entire
network (Hill, 2017).
Figure 2.0

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The transfer of knowledge and technology closely relates to distribution efficiency as it
assuredly improves performance across the distribution chain through maximum utilization of
the company’s warehouse and fleet capabilities. With the goal of implementing the internet of
things across its global distribution chain, the Unilever Company’s transfer of knowledge and
technology specifically focus on enhancing the distributors’ performance. The improved
performance comes through training, total quality management (TQM), and inventory
monitoring.
For all its overseas plants, Unilever needs to reduce transportation costs in its distribution
chain by maximizing the existing distributors and adding more distribution centers to cover
specified geographic locations. The distribution centers will receive drones and driverless
vehicles along with the expertise to operate the technologies. With one distribution center acting
as the server, all other centers will require its authorization before making any changes in the
distribution networks assigned to them (Chopra and Meindl 2016). The management will
challenge each existing distribution center to become more productive or face closure.
Priority will remain on upgrading the distribution process and speeding up the processing
and delivery of products. It will also institute a program of continuous improvement while
stepping up its efforts to decrease reliance on traditional delivery methods to innovative
approaches such as drones and driverless delivery vehicles (Christidis and Devetsikiotis 2016).
Drones will improve efficiency in the warehouse through facilitating a faster, effortless and more
flexible approach of product movement in warehouse management. They will also be used to
record inventory levels in the warehouse, effectively eliminating the need for extra labor.
Similarly, the use of driverless vehicles will result in improved safety, efficiency and delivery in
the distribution chain due to their availability on a 24-hour basis.

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Currently, the Unilever Company possesses a strong distribution network mechanism in
collaboration with different partners throughout its supply chain. It also uses RFID technology
which facilitates product tracking throughout the supply chain. Incorporating the same in the
distribution centers will improve their capabilities while providing technological support for their
distributors (Cavusgil, Knight, & Riesenberger 2016). The same measure proves useful in
assisting the distribution centers in achieving a reduction in their costs of operation by
introducing newer and better technology and equipment. However, successfully implementing
the technological changes in the distribution centers will largely depend on the extent of
institutionalization among the distribution centers. A high level of institutionalization means that
the company’s distribution processes rapidly achieve a position of regularity in the company.
Consequently, the realization of change takes place rapidly through internalized
implementation. The distribution centers will be able to rapidly abide by the company’s new
technological practices while attaching great value to the newly introduced technologies.
Nevertheless, having an effective internalized implementation will depend on organizational,
social, and relational factors (Golo 2015). From a social perspective, the institutional distance
between the distribution centers and the company remain paramount in determining the
implementation of the technologies. The relational dimension affects the perception of the major
players in the distribution chain and the past relationship with the company.
Conversely, the organizational factor interacts with the culture within the distribution
centers and their adaptability to change. Going by the company’s facts, conducting a
technological change across its distribution centers remains highly feasible. The company
possesses various distribution centers all over the world and sufficient finance to procure the
technology (Cavusgil, Knight, & Riesenberger 2016). It also possesses the infrastructural

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capability that will come in handy towards accomplishing an absorptive process of performance
improvement across the distribution chain. However, the bottom-line for the Unilever
Company’s implementation of this recommendation will be to ensure that the distributors in the
supply chain adjust to the needs of the technologically advanced clients in different geographical
locations.
Possible Problems
Although the recommendations seem suitable for the company, it is expected that some
problems may arise during the implementation process. The first problem is anticipated to arise
from the company’s widespread branches all over the world. Unilever mainly operates through
distribution centers in different countries hence a bottleneck may arise from inventory buildup
(Jain and Sharma 2018). With more distribution centers, it is expected that the organization will
require intensive marketing and possible price reductions to drive the demand for its products.
This would force the company to cut down on other costs such as administration and staffing to
maintain an upward trend in profitability. The second problem is expected to arise from the
knowledge gap that exists between the company and its distribution centers with regard to the
new technologies. Since Unilever seeks to enhance profitability in its distribution centers, the
training of staff across the globe is expected to take up significant periods of time (Bartlett
2016). With a distribution network extending from Europe to Africa, the regions facing
insufficient technological know-how may consume extensive periods of time and money to keep
them at par with their counterparts. This is expected to manifest in developing countries and may
require extra vigilance to maintain competitiveness in the market.

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Conclusion
In conclusion, the Unilever Company stands at a pole position to implement the
recommended strategies towards improving productivity. From the company’s strengths, it is
feasible to optimize the distribution process through fine-tuning their existing centers while
gradually introducing new distribution centers that target specific geographic areas. With its
large collection of quality products, favorable pricing will enable the company to increase its
market share in the global economy (Hasan 2015). Along with working on its distribution,
Unilever also stands to gain from implementing the internet of things technologies especially
drones and driverless delivery vehicles. These will improve efficiency in delivery while
contributing to inventory management. With its financial and infrastructural capabilities,
Unilever will find it possible to test the two recommendations in a given region and use the
results to inform further action. In this case, it will involve expanding the implementation across
its entire supply chain network.

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References
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Gichuki, C.M., 2017. Effect of Agile Supply Chain Strategy on Competitive Advantage of Firms
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Hasan, M.M., 2015. Marketing Analysis of Unilever. Total Quality Management, 11, p.13.
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