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®ion=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®ion=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®ion=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 |
|
|
|
|
|
|
|
|
|