Unilever Supply Chain report on supplier and partner relationships and the impacts it has on the sustainable supply chain of Unilever

Topics: Sustainability, Supply chain management, Supply chain Pages: 17 (4218 words) Published: February 17, 2015


Table of contents
I. Summary2
II. Introduction2
III. Discussion4
IV. Analysis7
SWOT Analysis
V. Conclusion12
VI. References13
VII. Appendix15
12 principles by the Responsible Sourcing Policy
5 Levers for change
Global Reporting Initiative G3 Index
Millenium Development Goals

Table of Figures
Figure 1 - Unilever's Sustainable Living Plan with turnovers from 2009, 2010* and 2020**3 Figure 2 - Unilever's Greenhouse Gas Footprint5
Figure 3 - Leaders in sustainability, % of analysts polled6 Figure 4 - Kraljic's Matrix of Unilever's Supply Positioning7 Figure 5 - Market Segmentation Matrix 8
Figure 6 - Swot Analysis Table10

Summary
This report’s aim is to study and understand how Unilever builds its relationships with suppliers and partners in order to achieve a worldwide reference supply chain. After that, a link between relationships and Unilever’s objective to achieve a sustainable supply chain will be drawn. Subsequently a SWOT analysis regarding the aforementioned topics and some other external topics (e.g. emerging market development situation) will be done in order to relate the Strengths and Opportunities to the Weaknesses and Threats the firm faces. Finally, recommendations for improvement will be made, taking what has been analysed in consideration, to overcome weaknesses and threats. Along this report, explanations will be given for the firm’s turnover drop from €51billion in 2012 to €49billion in 2013, decision to seek a sustainable supply chain, and reasons behind relationships with high level of collaboration, coordination and cooperation.

Introduction
In the year of 1930, the British ‘Lever Brothers’ margarine and soap producer joint ventured the Dutch butter and margarine market leader ‘Margarine Unie’, creating Unilever. Through the years, Unilever expanded its product range and set operations around the globe, turning itself into a globalised company acting effectively in the Fast Moving Consumer Goods (FMCG) industry. However, in the year of 1999 in a radical restructuring strategy took place and about 1200 brands were eliminated; the ~400 that were maintained represented ~90% of sales [1]. Nowadays, Unilever has around 2 billion consumers using its products every day [2] competing directly with P&G, Nestlé and Reckitt Benckiser [3]. The key to the success of Unilever’s globalised business model lays on its end-to-end aligned supply chain. Present in more than 190 countries and operating with around 100,000 suppliers every day [2], Unilever has reached an outstanding level of supply chain management, being recognized as the fourth best in the world in 2014, falling behind Apple, McDonalds and Amazon according to Gartner [4]. Therefore, it is vital that the relationships between the company and its suppliers are clear and win-win characterised. In 2010, Unilever’s Sustainable Living Plan was released, stating that it would have doubled its turnover from €40 billion in 2009 to €80 billion whilst halving its environmental footprint by 2020, as shown in Figure 1.

Figure 1 - Unilever's Sustainable Living Plan with turnovers from 2009, 2010* and 2020** [5]

To achieve such a goal, the company reinforced its relationships with suppliers and developed a complex sustainable supply chain plan, in which suppliers need to fulfil 12 fundamental sustainable requirements in order to become one of Unilever’s suppliers [2]. Besides, in 2011 a programme called ‘Partner to Win’ was created in order to close the bond between the company and its suppliers to generate development to both sides [6]. This report’s goals are to understand and analyse the efforts Unilever has been doing in the past years to achieve a Sustainable Supply Chain (SSC), how it has grown the relationship with its suppliers and partners from selection to maintenance and what impact such relationships have in to Unilever’s sustainable supply chain model. Furthermore, the report will provide a SWOT analysis...

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[3] Hoovers.com, (2015). Unilever Names of Competitors. [online] Available at: http://www.hoovers.com/company-information/cs/competition.Unilever.f5614c5e74535482.html [Accessed 17 Jan. 2015].
[4] Aronow, S., Hofman, D., Burkett, M., Nilles, K
[5] Adapted from: Unilever, (2014). Annual Reports and Accounts 2013. [online] Available at: http://www.unilever.com/images/Unilever_AR13_tcm13-383757.pdf [Accessed 17 Jan. 2015].
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[8] BBC News, (2014). Sao Paulo sleepwalking into water crisis. [online] Available at: http://www.bbc.co.uk/news/world-latin-america-29947965 [Accessed 19 Jan. 2015].
[9] Unilever.com, (2015). Unilever Supplier Qualification System | About us | Unilever Global. [online] Available at: http://www.Unilever.com/aboutus/supplier/usqs [Accessed 20 Jan. 2015].
[10] Unilever, (2014). Responsible Sourcing Policy. [online] Available at: http://www.Unilever.com/images/slp-Unilever-Responsible-Sourcing-Policy-2014_tcm13-388879.pdf [Accessed 20 Jan. 2015].
[11] Unilever.com, (2015). Partner to Win | About us | Unilever Global. [online] Available at: http://www.Unilever.com/aboutus/supplier/partnertowin/ [Accessed 20 Jan. 2015].
[13] Fairtrade.net, (2015). Fairtrade International / About / What is Fairtrade?. [online] Available at: http://www.fairtrade.net/what-is-fairtrade.html [Accessed 21 Jan. 2015].
[14] Unilever.com, (2015). UNGC Index | Sustainable Living | Unilever Global. [online] Available at: http://www.Unilever.com/sustainable-living-2014/our-approach-to-sustainability/reporting-our-progress/UNGC-index/ [Accessed 21 Jan. 2015].
[15] Global Reporting Initiative, (2006). Sustainability Reporting Guidelines. [online] Available at: http://www.globalreporting.org/resourcelibrary/G3-Guidelines-Incl-Technical-Protocol.pdf [Accessed 21 Jan. 2015].
[16] Unilever.com, (2015). GRI Index | Sustainable Living | Unilever Global. [online] Available at: http://www.Unilever.com/sustainable-living-2014/our-approach-to-sustainability/reporting-our-progress/GRI-index/ [Accessed 21 Jan. 2015].
[17] Stateofflux.co.uk, (2015). Unilever - State of Flux. [online] Available at: http://www.stateofflux.co.uk/ideas-insights/case-studies/Unilever [Accessed 25 Jan. 2015].
[18] GlobalScan/SustainAbility, (2015). The 2014 Sustainability Leaders. A GlobeScan/SustainAbility Survey. p.13.
[19] Jens Hamprecht Daniel Corsten Manfred Noll Evelyn Meier, (2005),"Controlling the sustainability of food supply chains", Supply Chain Management: An International Journal, Vol. 10 Iss 1 pp. 7 – 10
[20] Unilever.ch,
[23] Unilever, (2015). Inspiring Sustainable Living. Expert insights into consumer behaviour & Unilever 's Five Levers For Change. [online] Available at: http://www.Unilever.com/images/slp_5-Levers-for-Change_tcm13-387353.pdf [Accessed 25 Jan. 2015].
[24] Humphries, A. and Wilding, R. (2004). Long Term Collaborative Business Relationships: The Impact of Trust and C³ Behaviour. Journal of Marketing Management, 20(9-10), pp.1107-1122.
[25] Kirkaldy, A. Lecture 11 – Relationships, 2014
[26] Kirkaldy, A
[28] Keith Goffin, Marek Szwejczewski, Colin New, (1997) "Managing suppliers: when fewer can mean more",International Journal of Physical Distribution & Logistics Management, Vol. 27 Iss: 7, pp.422 – 436
[29] BBC News, (2015)
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