Unilever operations and supply chain management's Operations and Supply Chain Management Transformation

Question

Task: How has Unilever operations and supply chain management's approach to operations and supply chain management contributed to its competitive edge in the global FMCG market?

Answer

Introduction

Unilever operations and supply chain management is among the largest consumer product manufacturing companies globally. Unilever operations and supply chain management specializing in the manufacture, distribution, and sale several trusted brand and specializes in manufacturing Beverages, Food, personal care and cleaning products. The company was established in 1930 and is today distributed across the globe. The company has a total of 169,000 employees as of 2017 and registered a net income of 5.5 Billion Pounds in 2016. The company has registered constant growth over the years but automation and advances in technology have resulted in the number of employees working for Unilever operations and supply chain management to reduce from 290,000 in the year 2000 to 169,000 in 2017. This has resulted in the current workforce needing to take up alternative responsibilities which has added pressure to the Unilever operations and supply chain management operations management.

Unilever operations and supply chain management's Operation Management

Unilever operations and supply chain management has distributed its operations globally which has resulted in the head office needing to coordinate and manage operations on a global scale. This has resulted in the need to distribute responsibilities among operation managers who have been assigned specific roles that allow each operation manager to monitor and report on the work stations performance. There are ten decision areas that the operation managers have been assigned to manage namely:

1. Products/ Service Design,

2. Quality management,

3. Process and Capacity Design,

4. Location Strategy,

5. Layout Design and Strategy,

6. Human Resources and Job Design,

7. Supply Chain Management,

8. Inventory Management,

9. Resource scheduling and Management,

10. Maintenance

Each of these operations plays a critical role towards ensuring the brands smooth operations and also ensures the brand remains competitive on the global market (Thompson 2017). To manage each of the operational tasks effectively, operation managers have been assigned to monitor, manage and report their operation progress following a hierarchy leadership platform. This eliminates the requirement for highly ranked officials to manage operations and frees their thus allowing them to monitor global operations, expansion planning and brand development.

Unilever operations and supply chain management's Supply Chain Transformation

Declining sales and revenue generation due to increasing competition in the consumer good and service market meant that Unilever operations and supply chain management had to adopt a radical supply chain transformation to remain in operation. The first move would see Unilever operations and supply chain management adopt a new approach to managing its supply chain by focusing on the following areas:

1. Understanding the supply chain influences to growth,

2. Emphasis on Improving Profit margins through Automation,

3. Increasing capital efficiency,

4. Developing a Unilever operations and supply chain management Sustainable Living Programme.

In addition to the above-mentioned areas, Unilever operations and supply chain management also fully integrated its back office operations at the supply chain control tower of its operations centre in Poland. This would allow for better monitoring of operations at different manufacturing plants and data analysis to help determine areas that needed further improvement. As digital technology and the internet made connectivity easier Unilever operations and supply chain management back office operations would also become more efficient with regard to monitoring and report on different Unilever operations and supply chain management manufacturing and supply chain operations (Marle 2016).

Another major development related to the supply chain transformation was the way Unilever operations and supply chain management took charge of handling its European Logistics. Traditionally, Unilever operations and supply chain management had depended on contracted logistics companies to distribute its products to customers across different regions in Europe but this was leading to high costs and low revenue generation. Instead, Unilever operations and supply chain management would now develop its own supply chain network known as the point to point network which adopted a courier type approach of distributing Unilever operations and supply chain management products across Europe. The point to point network would comprise of 9 main hubs across Europe which would result in reducing the movement of a truck by 20%.

Unilever operations and supply chain management's Operation & Supply Chain Management

Unilever operations and supply chain management has 260 factories and over 460 ware houses across the globe results in Unilever operations and supply chain management having huge operations and supply chain management task on its hands. This was one of the main reasons linked to Unilever operations and supply chain management revamping its operations and supply chain management due to the company gradually registering lower profits as the brand expanded. This is contrary to expansion laws where a business should actually be registering rising profits with expansions which have resulted in Unilever operations and supply chain management adopting some radical approaches towards regaining optimum operations and spiking its profit margins (SupplyChainBrain ND).

Operation Management

Unilever operations and supply chain management had achieved an all-time high of 290,000 employees in the year 2000 but this high number of employees also meant that higher expense would be incurred by the business. This would prompt Unilever operations and supply chain management to begin a process and manufacturing automation transformation at many of its factories and ware houses which would see the company lay off a large number of employees. while this may sound negative the company had been forced to adopt automation for its processing to keep costs low and maintain its competitiveness against brands when where developing from emerging economies. Several competitors had already automated their operations which resulted in slashing production costs considerably and to remain in business Unilever operations and supply chain management had to adopt the same strategy.

Supply Chain management

The supply chain transformation adopted by Unilever operations and supply chain management would allow the business cut its supply chain costs directly by 20% which was a major achievement in terms of cost cutting. It also meant that Unilever operations and supply chain management was able to improve its supply chain management operations which would help improve efficiency and ensure its 2 billion customers were satisfied. The supply chain management would also be backed up by back office operations which helped distribute managerial responsibilities thus ensuring Unilever operations and supply chain management smooth operations and constant availability of its products and services to its esteemed customers.

Unilever operations and supply chain management's Lean Thinking

Unilever operations and supply chain management would also require developing a different approach linked to manufacturing so as to reduce overhead expenses and costs related to manufacturing products which remained on shelves for long periods. This meant that Unilever operations and supply chain management would need to put in place a lean thinking task force who would analysis the brand's product consumption over a specific period and determine changes in consumer purchasing interest. This data would allow Unilever operations and supply chain management would determine periods when certain of its products attracted more demand from consumers and when the products had lower demand (LeCoque 2012). This would, in turn, allow Unilever operations and supply chain management organize is factory production lines accordingly and organize the production of fast flowing products thus helping reduce costs incurred during the manufacturing process. It would also mean less capital was invested in products that sat on shelves and allows the business to have more liquid capital at all times.

Unilever operations and supply chain management's Capacity Planning

Another Area Unilever operations and supply chain management would need to focus its attention was towards capacity planning which involves the expansion of the production capacity of certain products which have high consumer demand. OMO, Skip laundry detergents, Knorr, Robertson’s, Knorrox, Aromat and Rajah have all registered over whelming demand among consumers globally. This makes it important for Unilever operations and supply chain management to increase its production capacity for these brands as opposed to other products which may register lower demand (Unilever 2013). This would also allow Unilever operations and supply chain management to focus its efforts towards certain products thus allowing the brand to increase its profits and reduce overhead expenses related to mass productions of a wide array of products.

Conclusion

Being able to adopt the above-mentioned measures has allowed Unilever operations and supply chain management to cut down its manufacturing costs and also allowed the business increase is productivity and supply chain management. All these factors have contributed towards the business operations and growth thus allowing Unilever operations and supply chain management to maintain it’s competitive and edge on the global consumer product market. Today Unilever operations and supply chain management is ranked 5th position among the top 10 FMCG Companies in the World (Lists 2017).

References:

LeCoque, J 2012, Operational Savings: How P&G, Unilever operations and supply chain management Benefit from Shorter Product Hold Times, viewed 31 July 2017, .

Lists, TB 2017, Top 10 FMCG Companies in the World 2017, viewed 31 July 2017, .

Marle, G 2016, Major supply chain revamp pays dividends for Unilever operations and supply chain management across Europe, viewed 31 July 2017, .

SupplyChainBrain ND, How Unilever operations and supply chain management Derives Value From Its Supply Chain, viewed 31 July 2017, .

Thompson, A 2017, Unilever operations and supply chain management’s Operations Management, 10 Decisions & Productivity, viewed 31 July 2017, .

Unilever operations and supply chain management 2013, Unilever operations and supply chain management to invest €75m in capacity and capability, viewed 31 July 2017, .