Unilever’s Relationships

Supply Chain Management

Thales Fonseca Nogueira

AGENDA

• Company overview

• Unilever’s Supply Chain

• Kraljic’s supply positioning matrix

• Supplier and partners selection - Partner to win

• Final considerations and Q&A

COMPANY OVERVIEW

General facts[1]

[2]

•Fast Moving Consumer Goods (FMCG’s)

•Turn over of €49.8 billion in 2013

•160,000+ suppliers worldwide

•~48% of agricultural raw materials sourced sustainably

COMPANY OVERVIEW

Worldwide operations[1]

COMPANY OVERVIEW

Brands[3][4][5]

•400+ brands

Ice Cream & Beverages

Personal Care

Savoury, Dressings & Spreads

SUPPLY CHAIN

4th best supply chain globally[7][8]

•End-to-end globally aligned supply chain

•Unilever Supply Chain Company - 2005

*According to Gartner European Supply Chain top 25

KRALJIC’S MATRIX

Supply’s impact on financial results

Low

Low

High

High

Supply risk

Leverage products• Alternative sources of supply available

• Substitution possible

Bottleneck products• Monopolistic market• Large entry barriers

Routine products• Large product variety• High logistics complexity• Labour intensive

Strategic products• Critical for product’s cost price

• Dependence on supplier

Tough competitive stance by buyer

Competitive systems tendering + E-commerce

Performance based partnership

Secure supply + search for alternatives

BuyerStrength

Number of available suppliers

HIGH

LOW

HIGH LOW

SELECTING PARTNERS AND SUPPLIERS

SELECTING PARTNERS AND SUPPLIERS

Compromised to sustainability[9]

•Unilever sustainable living plan - Double the size while reducing environmental impact

•Works for suppliers and costumers

•Aims 100% agricultural raw materials sustainably

•

Unilever’s turnover in 2009, 2010 and “2020”

SELECTING SUPPLIERS

Managing Suppliers[10][11][12]

•Unilever Supplier Qualification System (USQS)

• Helps standardizing and streamlining engagement with suppliers

• Responsible Sourcing Policy

• Certifications and audits in order to create good partners

•

PARTNERSHIP WITH SUPPLIERS

Partner to win[13]

•Created in 2011

•More long-term partnerships

•Co-creating new capabilities

•Joint Business Development Plan (JBDP)

• Value created > 1Billion€ p/a

•

PARTNERSHIP WITH SUPPLIERS

Collaborative development[14]

•Unilever helps suppliers to

• Reduce duplicated effort

• Free up resources to focus implementing improvements within the supply chain

• Case Study – Hazelnut suppliers in Turkey

• Set up projects to share best practices

• Labour conditions

•

FINAL CONSIDERATIONS

QUESTIONS•Are partnerships common in this industry?

• In the FMCG industry partnerships are very common, once strict criteria must be fulfilled, those suppliers who manage to are more likely to become partners.

• Do participants in this supply chain trust each other?• Yes, in this kind of industry trustworthy relationships are essential to get continuous improvement.

• Are relationships likely to change in the next 5 years?• Relationships are not very likely to change, once this industry is extremely based on supplier – buyer relationships.

• How can relationships be improved?• More collaboration with smaller suppliers

•

REFERENCES

• http://www.unilever.com/aboutus/introductiontounilever/unileverataglance/ [1]

• http://www.unilever.com/aboutus/supplier/ [2]

• http://www.unilever.co.uk/brands-in-action/view-brands.aspx[3]

• http://www.statista.com/statistics/254217/global-revenue-share-of-the-unilever-group-by-product-segment/[4]

• http://www.unilever.nl/Images/mc_facts-financial_tcm13-269250_tcm164-316123.pdf [5]

• http://www.gartner.com/newsroom/id/2843417 [6]

• http://www.gartner.com/technology/supply-chain/top25.jsp [7]

• http://www.unilever.com/images/ir_2_9_European_Supply_Chain_P_Ernsting_web_tcm13-86740.pdf [8]

• http://www.unilever.co.uk/sustainable-living-2014/unilever-sustainable-living-plan/[9]

• http://www.unilever.com/aboutus/supplier/usqs/[10]

• http://www.unilever.com/mediacentre/pressreleases/2012/longtermsupplierpartnershipskey.aspx[11]

• http://www.unilever.com/sustainable-living-2014/enhancing-livelihoods/fairness-in-the-workplace/advancing-human-rights-with-suppliers/responsible-sourcing-policy/ [12]

• http://www.unilever.com/mediacentre/pressreleases/2012/longtermsupplierpartnershipskey.aspx [13]

• http://www.unilever.com/sustainable-living-2014/enhancing-livelihoods/fairness-in-the-workplace/advancing-human-rights-with-suppliers/targets-and-performance/[14]

•

Thanks very much for listening!

Any questions?