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Supply Chain Professionals: Unilever

Supply Chain Professionals: Unilever

Unilever is no rookie when it comes to competitive supply chain management strategies, as the company highlighted close to $34 billion for total spend in their May 2018 Supply Chain Overview report. Within those figures, logistics and operations made up 44 percent of the total cost with marketing and business services closely following at 34 percent. The report also revealed the regions heavily involved with the total spend was split between Asia (32 percent), Europe (30 percent) and the Americas (27 percent), which all together made up 89 percent. The remaining 11 percent were split among regions such as the Middle East, Russia, Ukraine, Belarus and Africa. These numbers make it very clear that Unilever boasts a significant global presence and shows no signs of slowing down.

The company has also been making news headlines with efforts toward waste-elimination, which creates an environment supportive of cost reduction and maximizing the use of packaging. Through what’s known as the Loop, premium packaging that is delivered directly to the customer is returned and refilled. Aluminum and glass were among the materials announced in the waste-free shopping system. The goal is to reduce the number of packages being thrown away. Global brands such as Dove and AXE confirmed they will test the Loop system with a stainless steel designed to last for at least 100 cycles, according to Unilever.

“We want to put an end to the current ‘take-make-dispose’ culture and are committed to taking big steps towards designing our products for re-use,” says Unilever CEO Alan Jope. “We’re proud to be a founding partner of Loop, which will deliver our much-loved brands in packaging which is truly circular by design.”

Unilever is a prime example of what it takes to sustain growth when the environment isn’t willing to cooperate. The company released information revealing that 2018 proved to be successful with total growth of 3.1 percent, minus spreads and July Argentina growth. Argentina’s hyperinflation was to blame for the exclusion.

“Looking forward, accelerating growth will be our number one priority,” Jope vows. “With so many of our brands enjoying leadership positions, we have significant opportunities to develop our markets, as well as to benefit from our deep global reach and purpose-led brands. We will capitalize on our strengthened organization and portfolio, and our digital transformation program, to bring higher levels of speed and agility. Strong delivery from our savings programs will improve productivity and fund our growth ambitions.

“In 2019 we expect market conditions to remain challenging. We anticipate underlying sales growth will be in the lower half of our multi-year, 3-5 percent range, with continued improvement in underlying operating margin and another year of strong free cash flow. We remain on track for our 2020 goals.”

How to Prevent Kinks in the Global Supply Chain

Knoxville, TN – Working with talented professionals, customer service, agility and reducing cost are just a few of the key issues on the minds of senior level supply chain executives in the US manufacturing and retail sectors, says Dr. J. Paul Dittmann, executive director of the Global Supply Chain Institute at the University of Tennessee – Knoxville.

Meeting in Chicago recently, the Institute’s Advisory Board shared its insights on solutions to some of the most critical issues facing the global supply chain. The board is comprised of 25 high-level managers from some of the largest companies in the country.

According to Dittmann, the executives feel that having “the right people in the right positions” is the key to every solution with companies needing to develop “better processes to assess, identify, recruit, develop and retain top talent, especially since supply chain talent is increasingly scarce.”

Understanding the customer’s current and future needs was also seen as absolutely critical, he says. “They understand that their customers should lead their supply chain strategies and they know that their customers should be better educated on the cost-service tradeoffs.”

AGILITY, COST REDUCTION, REGULATORY COMPLIANCE

Near the top of the list, says Dittmann, are developing the “agility to adapt to changing environments,” given the increasing volatility in the global marketplace and a “need to stay current with technology on many fronts, from warehouse and transportation management systems to network optimization tools and inventory planning systems.”

Cost reduction “will always be a priority and supply chain executives know their companies expect them to take the lead in that area, while still improving service,” he says. “They know that they need to be more creative and proactive. They also understand that they must reduce cost while simultaneously redesigning their supply chains and leveraging the global environment.”

Also critical are developing efficient ways to comply with the growing list of government regulations, as well as optimizing performance despite the condition of the country’s “crumbling transportation infrastructure.”

Supply chain executives, says Dittmann, “understand they should have a better process to identify, prioritize and mitigate supply chain risks that can seriously damage their companies. Even weather must be considered, especially given the extreme challenges of last winter.”

08/27/2014