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Dissertation on Success and Reverse Supply Chain Management of Unilever

Category: Supply Chain Management Paper Type: Dissertation & Thesis Writing Reference: APA Words: 5700

Table of Content

Executive Summary of Supply Chain Management Unilever.

Unilever success story and reverse supply chain management are the major considerations of this paper. This paper has discussed the Unilever success story in a detail that is based on the company strategies. Winning with brands and innovation, and winning in the marketplace are top strategies of Unilever and the company is developing its portfolio by C4G methods to influence the customers in all profits supports. In addition, Unilever believes in winning through continuous improvement and winning with people; the company is constantly investing in ‘always- on’ online programs that are accessible when people require them in their respective format. Supply chain strategies of Unilever are discussed in the next section. Suppliers of Unilever support the company to value, create innovate, capability and capacity, quality of delivery, and transformation in the drive market.

Furthermore, this paper briefly discusses the Unilever values creation model; the company has data that centers around the world employing around 27 people at each site that track the changes in consumer behaviors. In order to make sure that the company responds on time and effectively to the changing demands, a C4G program is operated in all divisions. In the years 2014 to 2018 Unilever has increased its sales by 3.3% a year and its operating margin as well to 18.4%. The USLP (Unilever Sustainable Living Plan) is a plan that aims taking account the social responsibility of the company and playing its part in the United Nations Sustainable Development Goals. As the company is growing, an importance is being given to environment and it is helping people to live a better life by increasing employment opportunities and playing a role in getting sustainable production methods. Unilever financial performance is also discussed in detail; the Gross profit margin increased by 0.4% and an increase of €877 million (2016: €563 million) was seen in net finance costs in 2018.


Success and Reverse Supply Chain Management: A Case of Unilever

Overview of Unilever

About Unilever

   Unilever is multi-cultural participation, Anglo-Dutch parentage formed that keeps a lot of the product of universal consumer brands in beverages, cleaning agents, personal care and foods products. Universal Dual Listing Company. Unilever NV containing in Netherlands, Unilever PLC and Rotterdam in England (London). Similarly, this procedure is of Reed Elsevier to that of Royal Dutch Shell preceding to their structure unified. Together companies of Unilever have similar directors also as a single business operate effectively. Widely the company is registered on the largest stock exchanges of world (Unilever, 2018).

History of Unilever

In 1930, Unilever was originated by merger through the British, Brother Lever; also the Dutch, Margarine Unie; PLC Unilever now in London, United Kingdom also N.V Unilever in Rotterdam, Netherlands correspondingly. In 1872 before the Jurgens, Van den also merger Bergh, the Dutch, factories built in the Netherlands for the Margarine production milk products then detail. During 1927, Margarine Unie (margarine Union) they formed together by two Businesses of European, Schacht, and Centre. On the other hand, Lever and Co were originated by British William Hesketh Lever also James (his brother), in 1884, as well as was soap manufacturing– in England for people Sunlight soap particularly for women. Wrote by William Lever: "to produce ordinary cleanliness; to reduce the effort for females; to promoting health also contributing to personal attention, for the people that life might be more rewarding and enjoyable that utilize by our products”. During 1890, Co & Lever develop Restraint Company named as Lever Brothers.

Unilever PLC Unilever and N.V Unilever, include a group of Unilever. Having the same directors for both companies. Brands of Unilever contain Beverage, Food, also Personal Care as well as Home. These products approximately include Magnum, Lipton and Breyer’s, Knorr, detergent (Omo), etc. Within May 2007, the first company of tea it developed to sourcing all its tea to commit in a durable style, Rainforest Alliance asking, an environmental internationally NGO, certifying to start in East Africa its tea estates. It's aim according to certified Western Europe, tea bags of all Lipton Yellow Label also PG Tips tea bags have been announced by 2010, globally all Lipton tea bags followed by 2015.

Covalence, the reputation of an ethical agency ranking, as Unilever located of its ranking at the top based on versus positive coverage of negative news used for 2007. During 2008, Unilever was grateful for its program Axe "Exquisite success in Progressive Technology of Media for Distribution and Creation of Commercial Interactive Advertising Distributed by Set of Digital Top Boxes" at the 59th Annual Technology & Engineering Emmy for Awards.

Unilever Success Story

The Unilever progressive story of rotates about the strategies of the company as follows:

Winning With Brands and Innovation of Unilever

Preferences of Customer are altering also radically as they are taking paths differently when brands are purchasing. Therefore, Unilever essentially modern faster to answer these variations. Whereas the innovation level by variety will be different, confide on requirements of the market also strategies of brand use by the company 70:20:10 guideline as an overall percentage. The project's innovation of ‘70' are roll-outs universal, like Baby Dove that in 19 markets during 2017was launched. Innovations locally advertised by brands global structure the part of'20' portfolio company, like the Comfort Sakura launch in Japan. The hyper-local ‘10' are presenting like the Yuya Sun silk variety in Mexico that directly answer to requirements locally. To permit this, more than 200 Country Category Business Teams (CBT), C4G has created that are units of entrepreneurial multifunctional that silos break down through marketing combining, R&D, development of customer also expertise the supply chain. Ownership they have of their own income also account loss and to take decisions are empowered for their requirements locally. Over CCBTs, aiming Unilever for innovations more relevant, they have spread rapidly. Already an improvement is progressively trying to find brands that are reliable also that they could believe. Brands of Company Sustainable Living are a differentiator key in this respect. During 2016, companies about 18 tops (40 brands) were Maintainable Living brands that associating a purpose authoritative by contributing products to the Plan Unilever Sustainable Living.

Winning in the Marketplace Unilever

Daily customers of Unilever range about 2.5 billion retail stores over 25 million. Constantly.  Unilever is developing a portfolio company by C4G company methods to influence the customers in all profits supports. This gives from prestige company variety in Personal Care, built from carefully selected acquisitions such as Carver Korea and Hourglass, Domex to down, the latest detergent for toilet invention is in the set-up of powder launched in only7months groups in India for the lowest income. Then also Unilever spread wide into latest geographies, by brands growing to meet growth upcoming pockets in North America tea like Pure Leaf also the Sunlight dishwasher in Eastern Europe & Central. to informing innovation the key is Data, collected from open information available, also then from company Centres of 25 People Data about the universe. Identify these insights and trends listening and engaging from socially by customers through ideas for the latest formats & launches. Together with innovation, development of clients is a growth key driver. Company Category Channel Development Leaders be seated on business CCBTs also closely work by marketing company authority’s consequently available products when and where customers want them, they prefer in the format, using Net Revenue Management, maintained through compelling as well as related communications. Electronic-commerce still growing channel and a key. Now online business Company is close to delivering 4% of turnover Unilever. More than 800 people have dedicated business of Unilever to building company by many channels online like Amazon, in China Taobao, websites for online grocery, also models of direct-to-consumer organized through Dollar Shave Club, T2 as well many brands of company prestige.

Winning through Continuous Improvement of Unilever

A significant role plays by C4G in driving development competitive, then also it is answerable for boundary development to offer growth profitably. Over financial sharper leading discipline above expenditure, also business budgeting zero-based method, as Unilever is costs reducing also discovering innovative and latest working ways. In the source of a chain, Unilever has pulled out the 5S: packages of smart crossways of entire groups. Cost savings 5S drives, but it is further than an exercise of conventional price saving. It observes that for improvements the business extra broadly over the value chain completely, powerful savings by buying cleverly, sourcing smartly also the collection of smart product, overall that influence Partner of the business programmer to Win. 5S also revenue drives also the margin by smart pricing as well as the smart mix that Unilever provides by the company programmer of Net Revenue Management. Alone in Home Care, the programme about 5S has provided savings material of €450 million during 2017. Development by Customer is utilizing the tools reality virtual to test ahead of the latest presentations, costs savings also times for cutting project likened to methods traditionally by means of physical store controversy. In the marketing, more of the company the Unilever is creating in the house the individual content whereas going further for making existing assets. The business of 17 U-Studios in 12 countries are making content for teams of brands quicker also about cheaper 30% than exterior agencies. Additionally, Unilever is consuming global company as well as the networks of the agency so as to access production efficiently locations and solutions. Unilever remains to apply a zero-based budget to advance the performance of areas such as investment in the brand as well as marketing.

Winning with People of Supply Chain Management Unilever

The C4G heart has a founder’s mindset with the power continuing making worth. This involves further support, more partnership, research moreover learn and test, approval of failure to advance vision also experience through trial by consumers and customers. The company considers the owner’s responsibility to provide results of the business. Over CCBTs Company also the Communities of Brand, they innovative with the international team also in the markets land them. Then they are also powerful, also with the resources supply to them, with speed to progress the innovations locally. Company of C4G responsibility for resources to provide licensee to people, improve performance by zero-based budget as well as the restoration of high growth areas in revenue. With another business culture also Unilever is changing the technique people rewarded, with further long-term incentive driven projects, both of whom are honors progress and performance on USLP (Unilever Sustainable Living Plan) goals.

Develop the right skills and capabilities for these different methods of working to ensure the Unilever also the latest entrepreneurial qualities of leadership, Unilever is constantly investing in, ‘always- on’ online programs that are accessible when people require them in their respective format. Retaining & Attracting the talent finest is vigorous the goal of creating durable living space is a clear difference to create and value the company, with employees believing 72% developed durable drives in the business. During 2017, the number one FMCG progress made in the globally 44 Unilever.

Supply Chain Strategies of Unilever

As the Unilever has accepted several strategies its objectives to achieve; hereafter strategies of supply chain like those that pressure management is kept in place. In a market, Unilever works that are unstable because a lot of emerging features, it has enforced strategy of agile. Agility has emerged the latest standard in several sectors under the conditions of the current market (Wanyonyi, 2013). Unilever's Vision of growing business for delivering, while expanding the environmental impact from the company’s development also improve social effects, is not approximately. Unilever ones can get their own. Daily, thousands of suppliers work for Unilever who are supporting the business in the countries to achieve success and were sold its products. Suppliers of Unilever support the company to value, create innovate, capability and capacity, quality of delivery also the service as well as transformation in the drive market by living maintainable and responsible. An important part of the Unilever development comes from modernization, into the marketplace the main-edge carrying products. Unilever as anticipates that about 70% of its modernizations are connected with suppliers of company strategy for working. Due to Unilever finance in mutually long-term for relationships valuable by suppliers of company key to win program over Partner, therefore Unilever could share co-innovate and capabilities for common development. The Winning Partner is about to create the together the next horizon also to unlock value an exclusive chance for Unilever and also for its partners. It supports the company to customer collaboration and strengthens for the supplier, it allows better-quality end-to-end working efficiently also mutual capacity building also for sharing (Unilever, 2018).

Unilever uses the approach on risk-based to determine that sites of supplier require to suffer further because of diligence that can involve the audits by the third party. The hazard-based method customs risk for the country of the risk as the issues identified have been efficiently edited. Unilever is effectively concentrated on the conditions betterment in the supply chain for workers, just the issues not identifying, also that with our suppliers we remain to work to talk on the issues that more difficult over tackling and identifying the root reasons. As the following image has been shown the Unilever Supply Chain overview:

Source: (Unilever, 2018)

Supply Chain Restructuring of Unilever

A portion of the plan for maintenance, Unilever obvious to cut its portfolio-wide brand from 1,600 to 400.  To activate yourself to concentrates around 400 keys of your brands that adding such names like soap Dove, tea Lipton, fragrances Calvin Klein, toothpaste Close Up, ice cream Magnum, and detergent for fabric Omo. Sources of Company this predictable change assists to better capabilities of the supply chain. Co-Chairman Niall FitzGerald (FitzGerald) as according to Unilever, " By the result, tail brands will fall in this course also the Unilever will be capable to improve and facilitate supply also generally the way in that Unilever’s do business." The maintenance plan of SCM was constructed in almost five focus areas. Obviously, the Unilever to make major changes in the chain of supply of 380 industrial plants through the world, by concentrating on factories about 150 key. About 100 sites of the factory were considered extensively to be closed or sold.  According to the sources of the company, the top two exercises were hopeful to charges about €2.3 billion. There were important areas are: applying administrative purchases; attractive, development and retention of World Class Supply Management Executives; producing non-production items for professionalism; enabling the e-sourcing in all facilities of worldwide; leveraging and accelerating supply chain simplification; also, information and management driving.

Throughout 2003, Unilever gained €1.6 billion in SCM savings and shopping steps. Conferring to sources of the company, the concentration on dealing the shopping techniques across the company and the process does not just help to reduce the costs of purchases, also then in the key suppliers its relationship strengthening. About its e-shopping and technology measures, as the company has developed in the technology as a leader, consumer package industry for the adoption of technology (ICMR, 2003).

Key Suppliers of Unilever

Every day working to make a future better, Unilever assists people to look good, feel good also out of life get more by services and brands that for them are good as well as good for some others. Some of the worlds are famous in its portfolio and brands including that are most loved ones are brands about thirteen €1 billion, as well as universal leadership in furthermost categories in that they work. The features of portfolio iconic brands like Hellmann’s, Knorr, Dove, Persil, Coif, Lipton, Vaseline, Pot Noodle and Marmite. Initial in 2012, a a portion of its  ‘ to get an initiative partnership,  Universal saves flow state to manage the partner's voice to fellow colleagues. These dealers are involved in delivering of Unilever’s discrimination to double the business size, when its overall impact of the environment and fill all raw materials of continuous agriculture through 2020. The training was the continuance of a preceding sound in 2011 of the supplier study (the State of Flux, 2019).

Unilever required to the progress to comprehend it had completed on dealing its companion to success dealers by a sketch on State of Flux’s data analytics expertise. The task was to carry process notice by determining perception supplier benchmarking supplier of Unilever’s management presentation against its contestants. This would assistance to notify the Unilever gaining strategy of the team's also preferences in the next year. Also, the supplier will support their performance measurement in addressing dealer ‘pain points’ meanwhile the earlier review was directed.

 The explanation of the sound flow of the supplier is unclear how suppliers rated the quality of their business relationship with Anilor then the relationship likened with other main contestants they helped. Flux State conducted a survey online by these suppliers 160 that involved 73% a response rate. Also, this was enhanced by interviews on the one-hour telephone through a supplier’s cross-section, two performances also a report ultimately. It allowed us to nominate areas specifically as Unilever is working well as well as areas can be better. An analysis actual granular offered additional breakdown through supplier type, sector’s of market as well as category. The information analysis also permissible procurement Unilever investors to areas of pinpoint of excellence like durability, also areas for improvement too. of this information as a consequence, the purchase of the Unilever has made a series of intrinsically interrupted to ensure that they have their own status in 2013 in the choice of winning their partner dealers (State of Flux, 2019).

Unilever Values Creation Model

The business activities of Unilever are supported by a complex value chain that is global and cyclical. The consumer insight is the first part of our value chain. The company has data centers around the world employing around 27 people each that track the changes in consumer behaviors. These insights are then used along with the information from the marketing and R&D department to come up with product development ideas. The research department spends about €900 million annually. The aim of the research is to get the big idea that is going to enormously benefit the company. These ideas are either generated from within the company or outside the company like from universities or specialist firms.

·         Approximately   €34 billion is spend on the goods and services by Unilever since it works with numerous suppliers.

·         The raw materials that are needed for the products are sourced from the supply chain sources.

·         The manufacturing factories are located globally.

·         There are more than 300 factories that are in 69 countries. A total volume of the output produced is around 19 million tones. Products are distributed with the help of 400 global distribution centers to 26 million retail stores.

·         These retail stores include hypermarkets, cash and carry, small convenience stores, large supermarkets and e stores.  Based on media Unilever is considered the second largest advertiser in the world. (Unilever, 2018).

The company makes tailored content mostly when it comes to marketing through digital channels. Unilever has strengths that help to perform better in the market than its competitors. These strengths include the fact that the company is present globally in around 190 countries and has a 58% turnover coming from emerging markets, the company has an efficient distribution channel, and 80% of the business leaders are the local ones. The strategy of the company and the Divisional strategies focus towards further utilizing these strengths to get the best results.  This ensures that the company utilizes capital efficiently, grows both competitive and bottom line and gets good cash flows and returns that leads to satisfied shareholders.  In order to make sure that the company responds on time and effectively to the changing demands a C4G program is operated in all divisions. Moreover, Unilever is making use of digital technologies like the Internet of Things, robotics and AI so that it’s easier to maintain communication with its partners and customers. The strategy and business model of the company are both are aimed towards achieving growth. In the years 2014 to 2018 Unilever has increased its sales by 3.3% a year and its operating margin as well to 18.4%. (Unilever, 2018).

If we take a look at the financial statements of the last 38 years we can see that the dividends that have grown by around of 8% each year. Unilever is working on its target of increasing its returns to shareholders since 2017. Other targets include the sales growth by 3-5% every year till 2020 and increasing the operating margin to 20% in 2020. The company is looking forward to positive years as it’s predicted that there will be further growth in dividends, profits and overall cash generation. Not only has this but the company also looked forward to its stakeholders.  The (USLP) Unilever Sustainable Living Plan is a plan that aims at taking in account the social responsibility of the company as well playing its part in the United Nations Sustainable Development Goals. Main purpose of USLP is to enhance growth of the company using eco efficient practices that will generate positive externalities. (Unilever, 2018).

 Supply Chain Sustainability of Unilever

Sustainability may not be on the top of the goal but its importance is increasing now. The procurement manager stated that making a sustainable supply chain is a challengeable task. Unilever is achieving this difficult goal by using data, technology and analytics. At an investor event that took place this year, Marc Engel who is the Chief Supply Chain Officer at Unilever worked hard to solve supply chain problems by citing real time data. He told that the quality issues have reduced by 20% and response time has been reduced greatly as well. The future plan of creating partnerships in Malawi means that the company will now be present in African continent too after being largely present in Kenya and Tanzania.

One important part of the business strategy of the company is to invest in sustainable tea. The company is looking forward to a positive response from the customers by introducing a sustainable sourced product. The company can use the blockchain method in order to effectively monitor the delivery of tea from farms to the store. However, Unilever is not the first one to use this technology of blockchain. As the company is growing importance is being given to environment and its helping people to live a better life by increasing employment opportunities and playing a role in getting sustainable production methods. This is being done by working with small scale farmers in order to increase their standards of living. Moreover, the sanitation and hygiene conditions are also being improved. An organization transformation plan was introduced in 2010 that shifted gears for Unilever. They decided to opt for the challenging task of having a sustainable supply chain. The company had to begin from the core to adopt this change and deal with new policies, processes and employee satisfaction.

·         First step of Supply Chain Management of Unilever

The first step towards achieving this all was to include sustainability as one of their long-term goals. This was not done solely because their competitors were doing this or due to some external forces rather because the company truly supported this.

·         Second step of Supply Chain Management of Unilever

For the next 10 years a vision was made for improved sustainability, sales, consumption and positioning. Today, sustainability is the backbone of Unilever.

·         Third step of Supply Chain Management of Unilever

The company made all this possible by fully utilizing its resources in getting sustainable production. This did not only require expert engineers but also agronomists that gave a different view and added the skills that were important for the teams. Moreover, Unilever made changes to its transportation processes to reduce costs and manufacturing processes by using eco friendly methods.

·         Fourth step of Supply Chain Management of Unilever

Furthermore, a Chief Sustainability Officer was assigned the duty of finding out the practices of its suppliers to make sure they were ethical.  The ones who were not were replaced. The appointment of a CSO was important.

Unilever Financial Performance 
Consolidated Income Statement of 
Unilever

The income statement shows improvement in turnover as it has risen to €53.7 billion that included the negative impact at currency of 2.1% (2016: 5.1% unfavorable currency affect) because of the appreciation of euro (Unilever, 2018).

Financials

2014-12

2015-12

2016-12

2017-12

2018-12

Revenue EUR Mil

48,436

53,272

52,713

53,715

50,982

Gross Margin %

42.7

43.1

43.6

Operating Income EUR Mil

7,980

7,515

7,801

8,857

12,535

Operating Margin %

16.5

14.1

14.8

16.5

24.6

Net Income EUR Mil

5,171

4,909

5,184

6,053

9,389

Earnings Per Share EUR

1.79

1.72

1.82

2.15

3.48

Dividends EUR

1.13

1.19

1.26

1.39

1.54

Payout Ratio % *

60.6

68.3

71.4

64.8

67.9

Shares Mil

2,882

2,855

2,854

2,814

2,695

Book Value Per Share * EUR

5.96

5.88

5.39

7.02

5.07

Operating Cash Flow EUR Mil

5,543

7,330

7,047

7,292

6,753

Cap Spending EUR Mil

-2,036

-1,667

-1,532

Free Cash Flow EUR Mil

5,543

7,330

5,011

5,625

5,221

Free Cash Flow Per Share * EUR

1.57

2.29

2.58

2.29

2.5

Working Capital EUR Mil

-7,295

-7,333

-6,672

-6,194

-4,291

Source: http://financials.morningstar.com/ratios/r.html?t=UN&region=usa&culture=en-US

The operating profit increased as well by 13.5% as the reports show it was €8.9 billion (2016: €7.8 billion). This figure includes the amount of non-underlying items that is €543 million. We can have a look at the breakup of the amount for operating profit. It basically includes non-underlying items worth of €638 million, disposal-related costs, takeovers and restructuring, worth of €159 million and the cost of disposal of companies that is worth of €334 million (Unilever, 2018).

An increase to €877 million (2016: €563 million) was seen in net finance costs. This is because it included a finance charge of €382 million that was for the buying back of the preference shares. €399 million was the net cost of borrowings that was lower than of last year’s that was €70. This decrease can be explained by a reduction in interest rates to 2.7% and reduction in the interests of one-off credits in Brazil. Pension financing increased to €96 million, last year it was €94 million. The effective tax rate reduced too as it was 20.8% from 26.2%. This happened because the U.S tax reform. The Net profit generated from joint ventures increased by 22%. This happened because of the profits from joint venture between Pepsi and Lipton and a joint venture was disposed off in India. Income from non-current investments also increased from €104 million to €18 million as it included the gain by the sale of non-current asset. Due to better operating margins Earnings per share increased to €2.15, the tax reform of the US and a gain on sell off of Ads worth of €309 million. Per share earnings increased by 10.7%, to €2.24. The after-tax effect is not included in this analysis. (Unilever, 2018).

Cash Flow of Unilever

Regardless of the contribution of €0.6 billion to the pension funds the free cash flow increased to €5.4 billion. Cash inflow from operating activities increased as well to €9.5 billion. This increase was due to lower capital expenditure and greater operating profit that led to 3.0% of the revenue compared to 3.6% of revenue in the previous year. This was affected by contribution to pension funds. Net outflow from investing activities was €5.9 billion (2016: €3.2 billion) it was because of the takeover in the year (see note 21). Net outflow in financing activities was €1.4 billion lower than the €3.1 billion of the last year. The decrease is because of the increase in the level of borrowing accompanied by share buyback program of worth €5 billion (Unilever, 2018).

Finance and Liquidity of Supply Chain Management of Unilever

In order to maintain a good liquidity position around €0.8 billion (or 26%) of the company’s cash and cash equivalents are kept by the central finance and parent companies. These companies give loans to the subsidiaries of Unilever. The subsidiaries get money invested through borrowing from third party and retained earnings. The company has the ability to access global debt markets that include short term and long-term debt programmes. The risks are reduced by using interest rate swaps and foreign exchange contracts.

The rest of the €2.4 billion (74%) of the Group’s cash and cash equivalents are held in foreign subsidiaries that are responsible for giving out reserves on a regular basis. In the case of many countries this is done by giving out dividends that are free of tax. This balance is made up of €154 million as compared to €206 million in 2017 and €240 million in 2016) of cash that is kept in some countries where the company has to deal with restrictions that hinders its ability to use the balances in an effective way. However, the group has sufficient other capital resources hence, it can successfully meet all its cash obligations. The regular monitoring of exposures and counter-party limits is done by Unilever. The facilities for obtaining credit are also available for use. On 31- December 2018 there were $7,865 million undrawn bilateral committed credit facilities. (Unilever, 2018).

Liquidity/Financial Health

2014-12

2015-12

2016-12

2017-12

2018-12

Current Ratio

0.63

0.63

0.68

0.73

0.78

Quick Ratio

0.27

0.25

0.43

0.4

0.51

Financial Leverage

3.52

3.39

3.45

4.42

5.14

Debt/Equity

0.53

0.64

0.68

1.18

1.84

Source: http://financials.morningstar.com/ratios/r.html?t=UN&region=usa&culture=en-US

Underlying Sales Growth of Supply Chain Management of Unilever

The Underlying Sales Growth (USG) shows the growth in sales without taking into account any takeovers, disposals and changes in currency effects. This measure is important because it provides a better insight of just the performance of the company’s products in the markets. This key measure is used frequently. All other impacts are excluded for a 12 months period. However, the measure does include the revenues the brands that were acquired and then launched in new markets. The price effect is excluded from the measure in case the consumer price inflation (CPI) rates has increased at great level. The two such countries identified by the company are Venezuela where in Q4 2017 inflation rates raised above 1,000% and the situation was expected to not change for some time and Argentina, so according to Q3 2018 it is taken into account. When the sales figure was adjusted for these price changes there was a total reduction of 32.4% for the year. A regular check will be made in the case of these two countries. Before this the only countries where prices changes were excluded were those where inflation reached levels of 1,000% or above. Now Unilever is following the IAS 29, and excluding price changes when calculating sales to get a real picture.

Growth

2014-12

2015-12

2016-12

2017-12

2018-12

Revenue %

Year over Year

-2.73

9.98

-1.05

1.9

-5.09

3-Year Average

1.39

1.25

1.92

3.51

-1.45

5-Year Average

3.99

3.78

2.55

0.91

0.47

10-Year Average

1.89

2.99

2.89

2.93

2.32

Source: http://financials.morningstar.com/ratios/r.html?t=UN&region=usa&culture=en-US

Conclusion on of Supply Chain Management of Unilever

In a nutshell, Unilever is one of top companies originated by merger of different entities. Brands of Unilever contain beverages, food, personal care products, and home accessories. This report has discussed the Unilever success story in a detail that is based on the company strategies. Winning with brands and innovation, and winning in the marketplace are top strategies of Unilever and the company is developing its portfolio by C4G methods to influence the customers in all profits supports. More than 800 people have been working for Unilever to build a company by different online channels such as Amazon. In addition, Unilever believes in winning through continuous improvement and winning with people; the company is constantly investing in ‘always- on’ online programs that are accessible when people require them in their respective format. Supply chain strategies of Unilever are discussed in the next section. Suppliers of Unilever support the company to value, create innovate, capability and capacity, quality of delivery, and transformation in the drive market. Throughout 2003, Unilever has earned €1.6 billion in SCM savings and shopping steps. Unilever assists people to look good, feel good also out of life get more by services and brands that are good for them. The supplier of Unilever support their performance measurement in addressing dealer ‘pain points’.

In addition, this paper has briefly discusses the Unilever values creation model; the company has data that centers around the world employing around 27 people at each site that track the changes in consumer behaviors. Unilever owns more than 300 factories in 69 countries and a total volume of the output produced is around 19 million tones and the company is considered the second largest advertiser in the world. In order to make sure that the company responds on time and effectively to the changing demands, a C4G program is operated in all divisions. In the years 2014 to 2018 Unilever has increased its sales by 3.3% a year and its operating margin as well to 18.4%. The USLP (Unilever Sustainable Living Plan) is a plan that aims taking account the social responsibility of the company and playing its part in the United Nations Sustainable Development Goals. As the company is growing, an importance is being given to environment and it is helping people to live a better life by increasing employment opportunities and playing a role in getting sustainable production methods. Unilever financial performance is also discussed in detail; the Gross profit margin increased by 0.4 % and an increase to €877 million (2016: €563 million) was seen in net finance costs. €399 million was the net cost of borrowings that was lower than the previous year i.e. €70. The effective tax rate reduced to 20.8% from 26.2% because the U.S tax reform. The company has the ability to access global debt markets that include short term and long-term debt programs. Last but not least, Unilever is doing its best in every respective area of the company.

References of Supply Chain Management of Unilever

ICMR. (2003). Unilever Restructures its Supply Management Practices. Retrieved from http://www.icmrindia.org/casestudies/catalogue/Operations/Unilever-Supply%20Management-Operations%20Case%20Study.htm

State of Flux. (2019). UNILEVER. Retrieved from https://www.stateofflux.co.uk/ideas-insights/case-studies/unilever

Unilever. (2018). MAKING SUSTAINABLE LIVING COMMONPLACE. Unilever.

Unilever. (2018, May). UNILEVER’S SUPPLY CHAIN. Retrieved from https://www.unilever.com/Images/unilever-supply-chain-overview---may-2018_tcm244-523172_1_en.pdf

Wanyonyi, M. W. (2013). SUPPLY CHAIN STRATEGIES AND GREEN LOGISTICS PERFORMANCE AT UNILEVER IN KENYA. University of Nairobi.

 Appendix A, on Supply Chain Management of Unilever



Appendix B, on Supply Chain Management of Unilever


UNILEVER NV ADR  (UN) CashFlowFlag BALANCE SHEET
Fiscal year ends in December. EUR in millions except per share data. 2014-12 2015-12 2016-12 2017-12 2018-12
Assets
Current assets
Cash
Cash and cash equivalents 3382 3317 3230
Short-term investments 300 377 680
Total cash 3682 3694 3910
Receivables 5029 4804 3329 3439 4350
Inventories 4278 3962 4301
Prepaid expenses 504 452 693
Other current assets 7318 7882 2091 5436 2227
Total current assets 12347 12686 13884 16983 15481
Non-current assets
Property, plant and equipment
Gross property, plant and equipment 21207 19398 19924
Accumulated Depreciation -9534 -8987 -9577
Net property, plant and equipment 11673 10411 10347
Equity and other investments 570 565 696
Goodwill 17624 16881 17341
Intangible assets 22174 25059 9809 11520 12152
Deferred income taxes 1286 1185 1354 1085 1117
Prepaid pension benefit 694 2173 1728
Other long-term assets 12220 13368 821 667 594
Total non-current assets 35680 39612 42545 43302 43975
Total assets 48027 52298 56429 60285 59456
Liabilities and stockholders' equity
Liabilities
Current liabilities
Short-term debt 5266 7694 2947
Capital leases 5536 4789 9 11 13
Accounts payable 12606 13788 8591 8217 9121
Taxes payable 1081 1127 1312 1627 1943
Accrued liabilities 3655 3666 3724
Other current liabilities 419 315 1723 1962 2024
Total current liabilities 19642 20019 20556 23177 19772
Non-current liabilities
Long-term debt 10933 16007 21258
Capital leases 134 120 115
Deferred taxes liabilities 2061 1913 1923
Accrued liabilities 159 146 121
Pensions and other benefits 3947 3254 3867 2734 2602
Minority interest 612 643 626 758 720
Other long-term liabilities 10175 12943 1739 1801 1373
Total non-current liabilities 14734 16840 19519 23479 28112
Total liabilities 34376 36859 40075 46656 47884
Stockholders' equity
Common stock 484 484 464
Other Equity -7443 -13633 -15286
Additional paid-in capital 134 130 129
Retained earnings 23179 26648 26265
Accumulated other comprehensive income 13651 15439
Total stockholders' equity 13651 15439 16354 13629 11572
Total liabilities and stockholders' equity 48027 52298 56429 60285 59456
Appendix C, on Supply Chain Management of Unilever

Appendix D, on Supply Chain Management of Unilever


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