unilever supply chain network and advertisingDocument Transcript
REPORT ON SUPPLY CHAIN NETWORK & ADVERTISING
CAMAPGINS OF UNILEVER
This report has contributed a major accumulation to our knowledge of
the topic. Weare Thankful to Allah for making it possible for us, and to
our course instructor whoSupported us throughout this research
We are also thankful to the management of Lever Brothers Pakistan
Limited, RF,especially Mr. NASIR ALI KHAN who provided useful
guidance and information forunderstanding the practical work of the
organization to understand the global
presence of Unilever Company.
TABLE OF CONTENT
Product Lines of UniLever Pakistan Limited
Management Activities in Lever Brothers Pakistan Limited
Operations of Lever Brothers Pakistan Limited
Issue of Packing and Raw Material
Supply chain management
Unilever advertising campaigns
How global branding enables companies to reach the global market
through their distribution methods for this aspect they capture electronic
media for the purpose e-procurement, e-sourcing and local aspect of
reaching the market and proving their customer quality product to reach
the highest level of success and growth is the crux of this thesis. It
basically revolves around the global success of unilever and how it
helped the company to be the best in the business, even in the global
recession. The introduction to the topic and the company itself and then
the research and findings about the company‟s global scenario makes it
up. The analysesthat have been undertaken are the quality of raw
material their availability on time information about the stock
distribution channels, market, electronic media tools and customers.
Abrief survey is also represented which highlights the consumer
perception of globalbrands. The global marketing strategy as well as its
advertising has been discusses.
Besides that some overview about economic crises in all over the world
has been giventhat how economic crises has spread, and it impacts
unilever as well, but how unilevercope the economic crises. A few
recommendations to further the success of Unileverare made to
conclude the report.
Unilever Pakistan, one of the most successful consumer goods manufacturer in Pakistan, is now facing
another issue before a completing its exit from stock exchanges.
The global food giant Unilever owns a majority 75% stake in Unilever Pakistan and 4 months ago in
November – they announced and planned to buy back the remaining shares that are listed on stock
exchanges in Pakistan, a move that is aligned with Unilever‘s global strategy of consolidating its
operations in Asia and Africa. According to sources close to the matter, this delisting process will help the
Company in lowering its cost of capital.
It will be interesting to note that the delisting does not
bar existing shareholders from holding on to their share
in the Company‘s equity. The buyback offer is only an
option – a road which minority shareholders may or
may not take.
Although this delisting process of Unilever Pakistan
also received mixed response from influential minority
stakeholders who balked on the proposed buy-back
price of Rs 9,700 per share.
The New York based hedge fund Acacia Partners,
which holds 543,000 shares representing a stake of 4.1% in Unilever Pakistan, wrote the following
strong-worded letter to all stock exchanges in Pakistan.
―We believe the proposed de-listing of the company (Unilever Pakistan) would, if approved, be a great
tragedy for minority investors, the stock exchanges of Pakistan and the country overall‖
Acacia Funds also urged that the exchange refuse the buy-back price offered by Unilever. The minority
shareholder demands two to three times the price offered by Unileverare quoted at the stock exchange of
several European countries. They deal in all kinds of products from animal foodstuff to foods and
detergents plus other personal and consumer products. Unilever has its subsidiaries in over 80 countries of
the world, to which it spreads its vast knowledge and resources.
William Lever (its originator) commences business in England as a grocer. He established Lever Brothers
in 1827 in England Sunlight was the first product of Lever Brothers, which makes the beginning of the
marketing of branded products at the same time Margarine Uni was established in Nether Land by Simon
Van Berg and Anton Jurgens. These two companies in term of:
Buying raw material
Selling finished goods
Consequently both the companies losing out money in term of profit These problems led to think of the
mergers in 1930. These two companies merged together and renamed the business as Unilever PLC / the
word UNI is taken from margarine Uni and Lever is taken from Lever Brothers. Its head quarter was
established in England and Rotter Dam.
1 What UniLever is?
Unilever is dedicated to meeting the everyday needs of people everywhere. Around the world
UniLever foods and home and personal care brands are chosen by many millions of individual
consumers each day. Earning their trust, anticipating their aspirations and meeting their daily needs
are the tasks of UniLever local companies. They bring to the service of their consumers the best in
brands and both UniLever‘s international and local expertise.
For more than 70 years Unilever has been providing consumers with quality products and services.
UniLever has a portfolio of global, regional and local brands. Some, such
as Bertolli,Dove, Hellmann‟s, Lipton, Lux, Magnum, Omo and Vaseline, are popular around the
world. Others are the first choice for consumers in particular countries. As traditional structures and
lifestyles around the world are being rapidly transformed, Unilever continues to respond to
consumers‘ present needs and, at the same time, to anticipate their future ones. Our strength lies in
the deep understanding we have of local culture and markets. Unilever‘s strategy is to focus research
and development and marketing on our top performing brands, that is, those that are most in demand
from consumers. Through our extensive knowledge of trends
identified today, we will continue to develop our brands to meet
the needs of our consumers tomorrow. , feel and smell great.
UniLever products are at home everywhere: favorites with
consumers throughout the world, from the emerging markets of
Asia and Latin America to the developed economies of Western
Europe and North America.
UniLever meets the needs of consumers around the world, in both
new and established markets. Consumers vary from country to
country in their preferences and habits and UniLever adapt many
of its brands to suit local tastes. For example, among UniLever‘s
many teas, it produces around 20 separate brands of black tea
specifically tailored for consumption in over 20 different
countries and UniLever is constantly sharpening the flavors to suit all its local markets. In some
societies, consumers have traditionally washed up by sponging ash, sand or detergent onto their
dishes, before rinsing. Learning from these established practices, we developed our Vim dish wash
bar, to bring improved cleaning to existing washing routines. Shopping habits also vary and the
availability of our brands is a key concern of local managers. UniLever adapt the distribution of its
brands to suit local realities. In Europe, customers benefit from swifter, easier dispatch through
online ordering of frozen foods. While, in Tanzania, UniLever has piloted bicycle delivery of
products to villages inaccessible to motor transport. Building on a presence that in places stretches
back nearly a century, it keeps closely in tune with local consumers. UniLever is, in every sense, a
Unilever‘s research and development teams help to anticipate and meet consumer needs.
UniLever‘sresearch and development expertise allows to anticipate the evolving needs of consumers
and to create the innovations to meet them. Internet technology is improving the way UniLever share
best practice and innovation around the world.
UniLever‘s R&D activity is focused on six major laboratories and a network of innovation centers
around the world. Recent successes have demonstrated UniLever‘s practical ability to respond to
consumers and bring innovations to the marketplace. They include laundry tablets, which it has
rolled out in more than 30 countries; Lipton Cold Brew tea bags, which take away the need to boil
water when making ice tea; and its cholesterol-owering spreads, which have been widely rolled out
under the Take Control, Becel and Flora brands. UniLever continues to look for new innovation
opportunities. For instance, UniLever research into the human genome means they can now decode
the make-up of skin. This can reveal such secrets as an individual‘s tendency for dryness or their skin
protein mix. Such knowledge forms the foundation for new, more personal products.
UniLever‘s global IT system helps them to share information around the business and to use their
scale and scope to meet consumer needs and reduce their costs. UniLever drives to provide better
value for customers and consumers, they have always valued the sharing of information across
product sectors and geographical locations. IT has boosted this knowledge-sharing culture, allowing
us to make the most of the vast amount of Information held by our people around the world.
UniLever‘s computer networks provide over 90,000 employees worldwide with common tools for
sharing information –allowing them to deal with millions of electronic messages every working day.
They also have a Unilever Intranet, which helps them to manage innovation and best practice around
the world. Global teams, for example, pool information, marketing success stories and knowledge via
dedicated sites, making this knowledge available to UniLever‘s people locally, wherever they are.
UniLever is committed to doing business in a responsible and sustainable way. In partnership with
organizations around the world, UniLever works to reduce their impact on the environment and to act
as a responsible corporate citizen.
Unilever believes in sustainable development – meeting the needs of the present without
compromising resources for future generations. This commitment begins and ends with their
consumers. UniLever believes that by constantly evolving to meet their changing needs, they can
continue to develop their business in both a profitable and an environmentally sustainable way. In
working towards sustainable development, they focus on three areas that are directly relevant to their
business. These are fish conservation, clean water stewardship and sustainable agriculture. An
example of their work in the area of fish conservation is the Fish Sustainability Initiative, which aims
to meet their objective of sourcing all supplies from sustainable fisheries by 2005. Filegro, an
Alaskan salmon-based dish, was our first product to come from a sustainable fishery, as certified by
the Marine Stewardship Council. In clean water stewardship, as in other areas, UniLever joins with
partners to achieve maximum impact. For example, through their sponsorship of the Global Nature
Fund‘s Living Lakes initiative, they work with a network of private and government organizations to
help communities better manage their local lakes and wetlands. In sustainable agriculture, UniLever
has set up of an expert external advisory board. Its task is to advise and inform its business and
suppliers on new sustainability standards.
Unilever‘s commitment to corporate social responsibility is an integral part of their operating
tradition. It is outlined in their Corporate Purpose and in their Code of Business Principles. It finds
practical expression in the worldwide standards they have set their selves: to ensure the health and
safety of Unilever people at work, to secure the quality and safety of products and to minimize the
environmental impact of their operations. UniLever aims to be as professional in their management
of its social responsibilities as they are in any other area of business. UniLever recognize the need to
be explicit about what their social commitment means in practice: to articulate their policies, and to
demonstrate its performance. UniLever reports on their approach and progress in its Social Review.
Unilever has a tradition of support for the local community wherever it operates, in particular in the
areas of education, environment and health. For example, in India access to oral care is limited, with
few dentists per head of population. In 2000, UniLever‘s oral health and hygiene education
programme brought advice and care to over 2.5 million schoolchildren. In China, Unilever has
sponsored Qinghai province‘s first Art Hope School. In a region where few can afford the cost of
basic schooling, it offers the opportunity of a general education and free tuition in traditional dance,
music and modern art.
Internet technology is providing a two-way communication channel, helping UniLever to get to
know its consumers better.
Competition in markets is intense. To further develop their relationships with consumers and
communicate the benefits of their brands, UniLever uses a variety of media, not only highly creative
television advertising campaigns but also new one-to-one communication via the internet. UniLever
brand communication has always made the news. In the 1950s, they produced the first ever television
commercial in the UK. As the 21st century began, they screened the UK‘s first interactive TV
commercials, marketing their Colman‟s and Oliviobrands.
1.1 Lever Brothers Pakistan Limited
Lever Brothers Pakistan Limited is largest fast moving consumer Products Company in Pakistan.
Lever Brothers Pakistan Limited is a part of UniLever- a global company. Lever Brothers Pakistan
Limited is producing more than 50 brands in Pakistan.
1: We are the leading consumer product company in Pakistan, a multinational with deep root in
2: We attract and develop high talented people who are excited, empowered and committed to deliver
double digit growth.
3: We serve every day needs of all consumers every where for food, hygiene and beauty through
brands products and service that deliver the best quality and value.
4: We strive to remain and every simple and enterprising business.
5: We use our superior consumer understanding to products breakthrough innovation in brand and
6: Our brands capture the hearts of consumer through outstanding communication.
7: Through managing a responsive supply chain we maximize value from supplier to customer.
8: We are exemplary through our commitment to business ethics, safety, health, environment and
involvement in the community
Statement of Chairman& Chief Executive of Lever Brothers Pakistan Limited
― I am quite convinced that 2002 is poised to be a passionate year for us, which is why we should
reflect on some exciting possibilities it has to offer:
Power of teamwork, based on truth and trust.
Passionate pursuit to grow and win.
Fun environment at work, inspired by enterprise culture.
Brands which rank highest in consumer‘s minds and hearts.
System that transform the shape of our business.
The challenge for us is to liberate our energies to help grow our business, and to lead and deliver the
results that we have committed ourselves to. I would encourage everyone to believe in and grasp the
―art of possibility‖ and focus on the Must Wins for our business.‖
2 Product Lines of UniLever Pakistan Limited
Lifebuoy (carbolic soap)
Lifebuoy Gold (2 varieties)
Lux (4 varieties)
Rexona (3 varieties)
Liril (2 varieties)
FABRIC AND HOME CARE
Sunlight Washing Powder & Soap
Vim Dish Washer/Scourers
Sunsilk Shampoo (4 varieties)
Fair & Lovely skin cream and lotion
Ponds skin cream
Close-up Tooth paste
Pepsodent Tooth Paste
OIL AND DAIRY BASED FOOD
Dalda Cooking Oil (Soya Bean)
Dalda Sunflower oil
A whole range of products for the bakery & oils for the industry.
Yellow label Danedar
Cornetto (3 varieties)
Feast (2 varieties)
Star Cup (4 varieties)
Peddle Pop (3 varieties)
Solo (3 varieties)
2.1 PRODUCTION UNITS
Different factories of LBPL are operating in different areas of Pakistan. Brief information about these
units is given below:
RAHIMYAR KHAN (RF)
The largest and the oldest of LBPL is situated in Rahim Yar Khan. Basically at this factory personal
products, soaps, glycerin and dish wash bar are manufactured.
KARACHI TEA FACTORY (KF)
This factory was established in 1950 and it is situated in west Wharf area. Formerly it was owned and
managed by Lipton Pakistan Ltd. In the last 43 years many modifications are made here. And the
factory has expanded considerably. In this factory only tea is produced and packaged.
KARACHI EDIBLE FACTORY
It is situated on Hub River in S.I.T.E. A&B Oil Industries established the factory in 1958 and the
production of the vegetable oil began in 1962. In 1965 Lever acquired the factory. Banaspati,
cooking oil and margarine are produced here and distributed all over the country.
ICE CREAM FACTORY
This is recently established on Multan Road in district Kasur. The plant was commissioned in 1994
having the most modern and latest machines installed. Walls Ice cream is being manufactured here.
LBPL, when acquired the Polka, also purchased its two factories, one in Lahore and other in Karachi.
BEST FOODS FAISALABAD
Recently LBPL has acquired Rafhan Maize Products from Best Foods International.
TEA PROCESSING PLANT (MANSEHRA)
The new Lever Black Tea Processing Plant has been set up at Dhodial, 12 km north of Mansehra on
the main Karakoram Highway on 2.5 acres of land with the Processing Plant built-in area of 11,800
sq. ft. The plant is expected to process 50 kg per hour or approximately a ton of made tea a day.
The plant has cost Rs. 11 million whereas Rs. 12 million has been spent on the building and
infrastructure. The plant has been inaugurated on 7th of September, 2001.
2.2 Lever Brothers Pakistan Limited (Rahim Yar Khan Factory)
Lever Brothers Pakistan Limited (Rahim Yar Khan Factory) is situated at Leghari road near the main
city. The factory deals in major three types of products, which are categories as under:
Laundry and Detergents
Personal wash has a wide range of soaps and the main soap of Lever Brothers Pakistan Limited is
Life Buoy, Lux, Rexona and Fair&Lovely soap.
Personal product include Oral (Close Up tooth paste), Hair care (Sun Silk, Life Buoy) and Creams
(Fair&Lovely and Ponds).
Laundry and Detergents includes Laundry (Surf Excel and Wheel) and Detergents (Vim bar and
Wheel magic bar)
Location is the process of determining a geographical site for a firm‘s operation. Organizations must
weigh many factors when assessing the desirability of a particular site that can be
Proximity to customers
Proximity to suppliers
LBPL Rahim Yar Khan Factory is situated in the middle of the city. It was established in 1948. The
main reason for choosing this location for the factory was:
The land for the factory was donated by the NAWAB of the Bahawalpur State.
It was the ideal location to cover the Indo-Pak border areas.
It was the central location of Pakistan so it was a convenient location from the distribution point of
Availability of the cotton seeds because south Punjab is cotton area.
Government tax free area
Availability of inexpensive labor
PROXIMITY TO MARKETS
The site of R.Y. Khan Plant was chosen in 1948. The main reason was its central location. This
location is the middle of Lahore and Karachi that were the main markets at that time. So the company
can easily cover whole market from Karachi to Lahore.
PROXIMITY TO SUPPLIERS AND RESOURCES
At that time the company was only producing oil for which cotton area was suitable. This site was
suitable for processing the raw material that was cotton and R.Y. Khan was main cotton area.
TAXES AND REAL ESTATE COST
It was the tax-free area. The land was gifted by the ABBASI family, so there was no real estate cost.
Transportation cost is also a major determinant, which directs the location decision. Transportation
cost is a major factor not only in terms of the raw material but also in terms of raw material. As R.Y
Khan is situated at the center of Pakistan, the movement of finished goods cost minimum here across
Pakistan. R.Y. Khan Railway Station is situated along with the factory so transportation through rail
is very easy.
AVAILABILITY OF UTILITIES
The factory is facilitated with electricity, natural gas and telephone.
2.3 Lever Brothers Pakistan Limited (Rahim Yar Khan Factory)
The factory site was selected in 1946. The construction of the factory started in 1949. First of all
factory started the production of the Edible Oil by establishing the Edible Fats Plant in 1952. The
factory started the production of soap n soapry unit in 1954. Then the company expands the business
by establishing the Animal Feed Plant in 1960. Company decided to enhance the product range and
establish the Personal Product Plant in 1981. Non Soap Detergent (NSD) based on sulphonic acid,
instead of conventional manufacturing of soap base on Tallow, started in 1983. Then the company
decided to expansion in soapry plant in 1991. Company installed sulphonation in 1992.
SITE SELECTION 1946
CONSTRUCTION STARTED 1949
EDIBLE FATS PLANT 1952-1997
ANIMAL FEED PLANT 1960-1980
PER. PRODUCTS PLANT 1981
NSD BAR PLANT 1983
SOAPERY EXPANSION 1991
SULPHONATION PLANT 1992
The total area of the factory is 95 acres out of which 28% (27 acres ) for factory and 63%( 60 acres)
for the Estate. 9% (8 acres) area is allocated for evaporation beds and solid waste dumping.
TOTAL AREA 95 ACRES
FACTORY: 27 ACRES (28 %)
ESTATE: 60 ACRES (63 %)
EVAPORATION BEDS & SOLID WASTE DUMPING SITE 08 ACRES (9 %)
2.4 Organization Structure
Board of Directors
Chairman & Chief Executive
Mr.Soomro Mohammad Ibrahim
Messrs A.F.Ferguson & Co
State Life Building No. 1-C
I.I.Chundrigar Road Karachi
Avari Plaza. Fatima Jinnah Road, Karachi
3. Management Activities in Lever Brothers Pakistan Limited
Path to Growth
Introduced in 2000, path to growth is UniLever‘s corporate strategic agenda which aims to double
the size of the business in seven years and to grow profits faster than the competition, thereby
ensuring that we are the leaders in similar type companies in providing top value to our shareholders.
Six Strategic Thrusts
The six strategic thrusts that make up the path to growth are
1. Reconnect with Consumer
By having real insights into consumer needs, preferences and future needs. This means knowing and
understanding consumers‘ lifestyles, habits and attitudes and creatively adapting brands to their
2. Brand Focus
Grow their leading international brands by concentrating our resources behind them while still
supporting ‗golden‘ regional brands and local jewels. Innovation will be the keystone to ensuring our
brands are attuned to consumers‘ future needs.
3. Pioneer New Channels
Widen their means of ‗going to market‘ i.e. reaching consumers and customers. This means
developing new channels such as direct selling, home-vending, fashion outlets, travel, food service
and out-of home.
4. World Class Supply Chain
To close the gap to global world class within three years by establishing brand synergies, superior
logistics and supply chain and by establishing a world program.
Everything that they do by reducing complexity, duplication and by making the best use of I.T. to
provide high quality information once.
6. Enterprise Culture
By creating a culture which shapes the mindset and actions among all employees towards winning in
the market-place by building an organization fit for growth.
4. Operations of Lever Brothers Pakistan Limited (Rahim Yar Khan Factory)
Material store is a place where raw material is store. The management structure of material store is as
Material Store Department consists of two hangers and one perfume store. Total area of each hanger is
256 x 107 feet. Material store has an over flow depot outside the factory.
Material Store Department handles near about 650 items of raw material.
4.1 Function of Material Store
Two main functions of material stores are
1. Receipt of Material
2.Issue of Material
1. Material Receipt Process:
Material store receive two type of material
Oil and Fat, DFA, Liquid Caustic
Packing and Raw Material
The process of receiving these materials is different from each other. We will discuss these processes one by one.
(a). Receipt of Oil and Fat, DFA, Liquid Caustic:
The process of receiving Oil and Fat includes following steps.
Step 1: Weigh Bridge:
First step in material receipt system is weigh bridge where vehicles reach. Capacity of weigh bridge is 80
tons. There are two operators on the weigh bridge.
The Function of weigh bridge in goods receipt process is as follows.
Truck or other type of vehicle driver come on weigh bridge and gives truck invoice to weigh bridge
operator which is issue by the supplier of material. The weigh bridge operator check the type of material
load on truck and note the truck number and its timing of arrival. If material is packing and raw then it is
sent to material store for unloading. If material is Oil and Fat tankers are sent to sampling point. Lab
assistant takes sample from tanker. Operator of weigh bride makes a sample chit and then this chit is sent
with sample of material to lab for inspection. Sample chit consists of date, sample no, indent no, supplier
name, quality, quantity, and truck no. The operator is informed by telephone from lab that sample is ok.
Then operator on weigh bridge take the first weight of loaded tanker and feed data in system with the help
of software Weighbridge which includes serial number, supplier name, truck number, material name,
sample no and first weight. Print of this data is attached to truck invoice. Then operator makes a weigh
bridge slip and give it to driver and send driver to unloading point. Weigh bridge slip contains date, party
name, truck no, material name, and signature of weigh bridge operator. One portion of weigh bridge slip
is filled by the operator on Weigh Bridge and other part is filled by the operator on receipt on material.
The part of weigh bridge slip which is filled by the operator on receive contains received, material name,
truck no, and tank no where material is unloaded.
After unloading tankers come back to weigh bridge. Driver gives back the weigh bridge slip to operator
and unloaded tankers are weighted. The operator feed this weight in Weighbridge software and calculates
net weight. Then print of data is attached to truck invoice. Operator checks the difference between net
weight and weight written on truck invoice. If it is minor difference than it is ignored. If it is major
difference than it is mentioned on truck goods receipt which operator makes after second weight. Two
copies of TGR are given to driver and two for office. Truck good receipt contains following data.
Supplier name, date of receipt, city name, date of sending, quantity, packing type, description of goods
and truck no.
Operator feed this data is daily sheet, which is made in excel. Daily sheet contains data about date of
receipt, arrival time, truck no, TGR no, indent no, item code, supplier, commodity, sample no, dispatch
weight, received weight, difference, out time, system posted(yes/no), remarks, weigh bridge operator.
Process Map of Weigh Bridge
Step 2: Unloading of Oil and Fat, DFA, Caustic:
Oil and Fat, DFA and Liquid Caustic are unloaded on different point and process of unloading is
Private Company Tankers:
Five tankers of 25 tons each can be unloaded at a time. Truck driver brings truck to tallow decanting area
and give weigh bridge slip to operator on unloading. Operator note the time when unloading start.
If tallow is in freeze condition in tanker than with the help of steam operator melt the tallow and then
unload tallow in drop tank. From drop tank tallow is shift to Decanters. Tallow area contains two
decanters having capacity of 200 tons each. Temperature of these decanters is maintained according to
material. This material is than shifted to storage tank from decanters. Before shifting material to storage
tank the operator on receipt clear the pipe line to storage tank with help of steam and when line clear than
material is shifted with help of pipe line. After unloading operator note time and fill the weigh bridge slip
and give it back to driver.
Lever Brothers Tankers (Big Belly):
Company has its own tankers, which are called Big Belly. These tankers have facility to maintain the
temperature of material. Material loaded in big belly is directly stored in storage tank with the help of
pump. But before unloading pipeline is clear with the help of steam.
Truck loading DFA reaches at unloading point. DFA is unloaded and store in storage tank directly from
tanker with the help of pipeline and pump.
(d). Liquid Caustic
Truck loading caustic reach at unloading point. Driver gives weigh bridge slip to operator. Caustic is first
unloaded in drop tanks and from drop tanks caustic is shift to storage tank with help of pump. Two drop
tanks are use to unload the tankers. Capacity of these two drop tanks is 25 tons each. Two storage tanks
ST 66 and ST 25 is use to store the caustic. Capacity of these tanks is 150 tons each. After unloading
operator fill the weigh bridge slip and give it back to driver.
(e). Receipt of Packing and Raw Material
Packing and raw material is unloaded in two hangers. One is hanger no 2 where personal product packing
and soapry chemicals. Other is hanger no 3 where packing soapry and raw material is stored. Truck
loading packing and raw material first reach to weigh bridge where operator on weigh bridge not the truck
number and time of arrival and send it to hangers for unloading.
Operator on receipt of packing and raw material check the truck invoice which contain name of material,
type of material, purchase order number, and quantity. Operator unloads the truck and keep material to
their specific place. During unloading operator also take sample of material which is sent to lab for
inspection. Operator checks the material, count it and match the quantity received with quantity written
on truck invoice. After unloading material truck good receipt is prepared which contain supplier name,
quantity received packing, and description of product and discrepancy. Tow copies of this receipt is given
to driver and two copies are keep in office. TGR contains the following data. Supplier name, date of
receipt, city name, date of sending, quantity, packing, description of goods, discrepancy if any. After TGR
is issued the data is posted in Ledger. Following data is posted in ledger. Date, truck no, purchase order
number, name of company, invoice number, item code, description, quantity, pack, price, GRIR no,
quantity ordered, and remarks. With the help on entries in ledger than data is feed in MFG Pro.
Process Map of Receipt of Packing & Raw Material
2. Material Issue Process:
Issue process of oil and fat, DFA, liquid Caustic, packing and raw material is different with each other.
Issue Process of Oil and Fat:
Storage tanks are kept full. Operator notes the level of material store in storage tank with the help of
meter gage. Then he shifts oil and fat from storage tanks to pan room tanks. During issue he takes sample
of material and makes a sample slip and send sample with sample slip to lab. After issuing operator note
the level of tank. Then quantity of issue is calculated by subtracting last level noted from current level
note. Then operator fills the issue sheet and makes two copies of it. One is given to operator of PAN room
who is present there. Oil and fat issue sheet contains following type of data. Batch no, shift, quality, tank
no, staffing, sample no, net, refinery/pan room tank no, signature of Material Store Department operator,
signature of pan room operator, and remarks. Other copies are sent to office where related officer with the
help of this sheet feed data in MFG Pro and makes a quality order and send it to lab.
Issue Process of DFA.
Operator notes the level of DFA storage tank. DFA is directly issue to PAN room from storage tank.
After issuing operator check the level of storage tank and notes the difference on issue sheet. One copy of
issue sheet is given to PAN room operator and other copy is send to office. Next day pan room sends an
issue note to office and related officer feed data in MFG Pro.
Issue Process of Liquid Caustic.
Operator notes the level of storage tank. Level of tank is measured with help of measuring tape. After
issuing operator check the level of storage tank and notes the difference on issue sheet. One copy is issue
sheet is given to operator of PAN room and other is send to office. Next day PAN room sends an issue
note to office where related officer feed data in MFG Pro.
5. Issue of Packing and Raw Material
Issue of packing and raw material handle three operators. One operator issues packing material to
personal product department. Second issues packing material to soapry and raw material to NSD. Third
operator issues chemicals to soapry and personal product department, perfumes and colors.
Issue note is sends to material store one day before issue from manufacturing departments. Related officer
in store notes the name of material and quantity of issue on notebook of related operator.
Next day operator note the quantity of issue on lot card from where he is issuing and notes this lot number
in his notebook. With the help of fork lifter material is send to manufacturing departments. After issuing
material operator notes this lot number in issue note. Related officer post this data in MFG Pro.
5.1 Return of Material:
Issued material can be return to material store from manufacturing departments because of two reasons.
Goods not required
Rejected due to any problem.
If goods are returned on first base than manufacturing department send a return note with material to
store. This material is stored near the lot from where it was issued. A new lot number is posted on this
material. Related officer post return note in system. This material will issue first on requirement.
If goods are return on second basis than first a lab assistant check the material. If material is rejected than
it is stored sprat place specific for rejected material.
A card which contain lot number from where it was issued and number of issue note against which it was
issued is posted on this material. Related officer sends e-mail to Supplier Company. The Supplier
Company inspects the material and if it is rejected than it send fresh material to company.
6. Buying Department
The word ―buying‖ means purchase of any thing or any merchandise or item. This function is performed
by buying department in any organization.
Buying or purchase is one of the major functions of any company of organization. Without it no one
organization can run successfully in the field of business. So we may say that buying is the soul of
company. Without buying all departments of the company will be failed.
6.1 Objectives of buying department
The main objectives of any buying department is to purchase merchandise and services with the object of
ensuring the specification, quality, price, time of payment and timing of supplies are consistent with the
overall need and objectives of the business.
Following functions are performed by the buying department of R.F.
To buy all production raw materials including all types of material and packing material.
To buy administration department requesting items.
To buy all engineering requesting items (all types of machinery & spare parts).
Purchase of medicine for surgery.
Purchaser of W.C.S.O. seasonally for K.F & R.F.
All types of factory purchases through buying department.
Sales of scraped or surplus items of various department relating capital goods.
6.2 Procedure of the purchase of goods
The company has maintained a fine system of buying. In fact, buying department R.F. performs its
functions on local basis. But imported raw material & packing material is bought by the central buying
department head office. The procedure of buying can be explained with the help of following charts:
Summary of quotations is made
GRIR is prepared
GRIR is accepted
Any department which has a need of something sends purchase requisition regarding its requirement to
buying department, who arranges for the purchase of required items as soon as possible. Three copies of
purchase requisition are prepared. These copies distributed as follow:
1st &2nd for buying
3rd for requisitioning department (request for purchase items)
Calling summary of quotations & placing of order
First of all the buying department invites to general public for quotations and to some particular parties.
After receiving quotations summary of quotations is prepared and made comparison with price quality
etc. After that the party is decided on which an order is to be placed according to the terms & conditions.
Then purchase order is prepared in the favor of succeeded party. All information regarding delivery and
freight is mentioned in purchase order. Four copies of purchase order are prepared and distributed as
1. White for accounts department
2. Pink for requisitioning department
3. Green for buying department
4. Blue for payment department
Receipt of goods & preparation of GRIR
When goods are received from supplier then GRIR is prepared by material store department and sends to
lab for inspection. If goods are accepted in the laboratory then these are placed in the concern store other
wise not. Four copies of GRIR are prepared and distributed as follow:
1st for account department
2nd for buying department
3rd for concern department
4th for laboratory
In case if the material is not accepted then a sundry sales (SSA) advice or sundry sales credit will be made
to return the goods to the supplier. Three copies of SSA are prepared:
First for requisitioning department
Second for accounts department or distribution department
Third for buying department
When GRIR is accepted then one copy of it is submitted to payment department, where the payment
department prepares payment sheet and makes advice to the cash office for payment after satisfying the
7. SUPPLY CHAIN MANAGEMENT
The firm has segmented structure of supply chain Management. The purchasing, production control and
distribution departments have responsibility for material management.
SITARA CHEMICALS is the supplier of local raw material of soda ash, caustic soda etc.
Supplier selection is based on price, quality and delivery.
2 to 3 weeks for basic (imported) material
2 weeks for packaging material
13- 20 weeks
“A forecast is the prediction of future events used for the planning purposes”.
There the three forecasting techniques are available for the purpose of the forecasting of the demand,
which are as under.
Time Series Method.
The usage of these techniques depends upon the availability of the data about the past.
Forecasting at LBPL
The forecasting technique, which is being followed by LBPL, is the qualitative technique.
Sales Force Estimate
Sales force estimate of forecasts compiled by the members of the company‘s sales force (their dealers in
each region) about the future demand of the product. They are using this technique because they believe
that their estimates are correct since the dealers are much near to the market. Marketing Department is
actually involved much in forecasting. They observe the trend of the market and they set their target of
sale then they tell to the production that what is their target then production department make productions
according to the target set by marketing department.
Demand for the future periods is also determined by the time series method. Historical data about the past
demand is the basis for the time series. The data is used for the demand projection for the coming periods.
Marketing research is also conducted by the firm. Data obtained is used to determine the customer
demand pattern, and trends.
It is the maximum output that a process or firm can economically sustain under normal conditions. When
operating close to peak capacity, a firm can make minimal profits or even lose money despite high sales
Operations manager must examine the three dimensions of capacity before making capacity decisions:
Sizing capacity cushions
Timing and sizing expansion
Linking capacity and other operating decisions
The capacity cushion is the amount of reserve capacity that a firm maintains to handle sudden increases in
demand or temporary loses of production capacity it measures the amount by which the average
utilization falls below 100 percent.
CAPACITY CUSHION = 100% - UTILIZATION RATE (%)
Another issue of capacity strategy is when to expand and by how much there are two extreme strategies:
The Expansionist Strategy, which involves large infrequent jumps in capacity. In this strategy
organization remains ahead-of-demand.
The Wait and See Strategy could be to follow the leader, expanding when others do. Management may
choose one of these two strategies or one of closely linked to strategies operate between these extremes.
Capacity decision should be considered throughout the organization. When managers make decisions
about location, resource flexibility and inventory, they must consider the impact on capacity cushions.
Capacity cushion buffer the organization against uncertainty as do resource flexibility, inventory and
longer customer lead times. If a system is well balanced and a change is made in some other decision
area, then the capacity cushion may need changes to compensate.
The categories and sizes of the soaps manufactured at RF are given below:
LIFEBUOY( Red & White) 140gms.
LUX PINK 140gms
Pink & White 140gms
LIRIL FRESH 140gms
RAIN FRESH 95gms
Main point about the capacity are given below
Capacity is measured in terms of output.
Measuring unit is per ton
Sizing capacity cushions are used for the capacity
Planned lead-time for changing a dice is 8 hours.
4 lines are available for the hard soap (lifebuoy).
Capacity of per line is 210 tablets / min.
Shift production is 40 tons / shift
Daily production is 120-tons/ day with 3 daily shifts.
For toilet soaps 3 lines and 5 machines are available.
Capacity for toilet soaps is 190/ min while the average capacity is 180/ min.
Annual production capacity for life buoy is 30000 tons to 35000 tons.
Utilization = Avg. Capacity/ Capacity
Utilization for toilet soap is 95%
Utilization for hard soap is 97% Effective capacity
Utilization for toilet soap is 90% Peak Capacity
Utilization for hard soap is 93%
This department provides very useful services to the company and is responsible for costing of the
products. This department does the yield calculations of the followings:
Soapery fatty acids
For the calculation of yield, these elements are taken into consideration:
When oil and fats are received by the material store, sample is taken for measuring percentage of Free
Fatty Acids (FFA) and moisture. All these materials are received by the stores and then issued to
At the quarter end, cost department do the stock taking of all the tanks of oil and fats and also draw a
sample for determining moisture. Now the cost department see that what is the difference between the
physical n=and book stock. This deference will be the loss or gain and charged to the production account.
For the purpose of bleaching the Activated Earth is used. The Activated Earth absorbs some amount of
tallow. This absorption is called bleaching loss. Cost department calculates this loss.
When the finished products are packed some packing loss or gain took place at this stage. Some products
are packed above the standard weight and some less. Packing loss or gain is also determined.
Some losses are not seen in manufacturing process, these are called Un-accounted losses.
Reports of Cost Department
Cost department looks into the yield and performance of the factory with the help of various reports.
These are following:
1. Daily stock report
2. Production accounts
3. Daily production report
4. Power & Steam production report
1. Daily Stock Report
This report tells that how much raw material is transferred to plant, what is the weight of activated earth
used, how much fats are spoon-fed, soap cleaned, lye transfer to glycerin section, lye treated and refined
glycerin effected into drums. With the help of these information, this department takes care of yield.
2. Production accounts of the products
Cost department makes production accounts of all products with the help of followings:
Raw material cost
Variable direct material
Raw material cost
Value of material consumed is taken from consumption schedule and is charged to production accounts
after making adjustment of opening and closing stock.
Cost of chemicals and taken from consumption schedule and prorated on products pack wise and in these
cases whose closing stocks are chemical mixed value is charged to production accounts after adjustment
in opening and closing stock.
Packing material but is taken from consumption schedule and then total cost is charged to production
accounts of the products.
Variable direct material
It is just as packing material but at present crude glycerin stock has accumulated hence we have to keep
variable chemicals value equivalent to its weight in stocks.
Steam and power are taken from variable direct schedule in total against their location but same case with
crude glycerin, which has been explained, in variable direct chemicals.
3. Power & Steam production report
Weekly steam production report is received and from these quarter reports are prepared. Meter reading of
all steam main meter and sub-meter are done at quarter end. Cost of steam is calculated and transferred to
all the production departments where steam is used. Cost of burners used in factory is subtracted from
total Sui gas bill.
Meter reading of WAPDA main meter, and own generator and sub-meter in the factory are done at
quarter end. Power is allocated on all factory location on the basis of sub-meter; the technical
management gives the standard bases. The cost of power is changed to production accounts.
4. Daily production report
The reports of daily production are submitted by the production department to cost department. This
report helps in watching what is the production of certain product on certain day, and how many
transferred to warehouse and what is the present balance on department floor.
Cost control documents preparation
Following documents are prepared for cost control purpose.
Standard yield vs. Actual yield
Standard chemical valuation vs. Actual chemical which is used in production
Standard stem & power vs. Actual steam & power
Standard man hours vs. Actual man hours
Calculation of variable cost of sales
Cost department prepares daily, monthly and annual cost reports. These reports are used by the
management for control purpose whether the cost is according to the standards are not. The area of
difference is pointed out and a better control is exerted for the future. It is also important because if a
company is able to lower its production it works more than to increase the market share. It is easy for a
company to lower its cost because it is in its own control while the market is beyond the control of
In Lever Brother the cost of sales is calculated in a very simple way according to the standards of
The report starts with the opening stock of Material, Steam/Power and Distribution. In these opening
stocks the cost of oil and fats which comes from oil & fat consumption report, the chemical cost which is
obtained form chemical consumption report, cost of packing material obtained of packing material
consumption report, cost of steam/power obtained from steam/power consumption report, for that day
production is added and it gives variable cost of production. From this variable cost of production the
closing stocks of material, steam/power and distribution that day is deducted which gives total cost of
7.2 DISTRIBUTION PROCEDURE OR SUPPLY CHAIN NETWORK
First of all production is transferred to distribution warehouse by the production department. Distribution
department has two warehouses, which are capacity wise 700+150 tons (for soap and personal products)
and 500+200 tons (for cooking oil. Distribution department arranges the dispatch plan that is provided by
the consumer services head office. Therefore products are dispatched according to the dispatch plan.
Company has various sales depots located in different cities throughout the country. Such as:
Ø Rahim Yar Khan (central)
Ø Rahim Yar Khan (south)
Ø Dera Ismail Khan
Distribution department sends products directly to distributors or to sales depots as per instruction of sales
department head office. Sales department makes sales contracts with different parties and supply by
advising distribution in Rahim Yar Khan Factory.
All sales depots are controlled by head office. Sales department send plans for despatch to these depots
which take necessary action according to plan.
Rahim Yar Khan South depot covers the area of Baluchistan and Sind while Central covers the area of
Punjab and NWFP. There is another depot named ―over flow depot‖ in Rahim Yar Khan. When there is
shortage of space in factory warehouse, production is transferred to this depot.
Distribution department Rahim Yar Khan Factory sends despatch plans to over flow depots. This depot
arranges the supply accordingly. For all the despatches a despatch advice is prepared in which the full
detail of the products are maintained. Five copies of despatch advice are prepared.
· One copy is sent to consignee through transporter.
· One copy of D.A is sent to customer service head office.
· One copy is sent to accounts department.
· One is for distribution department Rahim Yar Khan
· One copy is given to transporter that is called acknowledgement.
7.3 DISTRIBUTION CHANNELS
LBPL has a centralized distribution system in which the products are distributed from one warehouse to
the selected distributor of the company, and then the distributor make the product available to the
wholesalers and at the end the product is transformed to the retailers to be purchased by the final
The company had direct relations only with the distributors for making the product available to the target
market. It deals with the distributors on net and advance payment bases and does not give any credit
facility to them. However the company provides different commissions incentives. There are many
certified distributors of LBPL operating in almost all major areas of the country.
Sometimes when the company introduces the same product line in different innovation style then it uses
the following channel of distribution. The company has specifically directed its distributors to provide
that innovative products to retailers skipping out the wholesalers in the channel. The basic reason for
doing this was to eliminate the wholesaler commission so that the price can be placed at relatively lower
Channel is like this
Manufacturer (LBPL) Company warehouse
Consumer Retailer Distributor
In short the intense coverage of market is the basic aim of LBPL distribution policy.
Quality is the use of techniques and activities to achieve, sustain and improve quality. It involves
integrating the following related techniques and activities:
1. Specification of what are needed.
2. Design of the product or service to meet the specifications.
3. Production or installation to meet the full intent of the specification.
4. Inspection to determine conformance to the specification.
5. Review of usage to provide information for the revision of specification if needed.
6. Utilization of these activities provides the customer with the best product or service at lowest cost. The
aim should be continuous quality improvement.
· OFI – Opportunity For Improvement
· Always looking for improvement.
· The continuous improvement of all services through total involvement of all employees.
· The developing and the strengthening of partnership with external and internal customers and suppliers.
· Providing innovative and higher quality products and services to achieve total customer satisfaction by
understanding their requirements and anticipating their future expectations or needs.
· Monitoring annual targets for quality improvements in all areas.
· Creating a culture of customer focus striving to become the lowest cost producer through agreed annual
cost reduction program.
· Value people by understanding and drawing upon their strength i.e. abilities and knowledge and make
efforts for their training and development.
When raw material is received the quality of raw material is inspected according to the standards.
According to these standards if the personnel of receiving department will inspect according to the
standards. If there are a lot of 500 and they choose 13 samples from the whole lot then they select the
sample from the upper and lower and right and left side of the whole packet. It means that they select the
sample by way of diversifying the area. If the 2 units of the sample are rejected then the whole lot will be
rejected and if the lot is rejected then they call back the vendors and vendor check that lot again. If the lot
is very much needed by the production department then they place a written request. The 100% inspection
is done on it. In this case, they call the vendors or their inspectors and they check it on 100% basis. But
this happens in very rare cases.
On the other hand if the lot is accepted then it is remarked as GRL (good received lot) and sent to the
store. While four copies of GRL are made and sent to the following four departments:
1. Purchase Department
2. Quality Control Department
4. For computer entry
DURING THE PROCESS:
When the product is in-line then quality inspector check it at every stage of process. If these inspectors
will sign it for next process then product will go for next process. If they do not sign it then the work will
stop. Then for the accepted and rejected production, the quality inspector will give report. This report has
also included the sign of supervisor of process area. So that analyzing the rejection and acceptance %age
for next rectification and improvement.
Then report will pass to the production manager so on this base they can make the weakly and monthly
report. And it will pass to the top management. In this inspection is done at every stage and will pass
towards the top management. The ISO has given them standard for the whole process. It also includes the
initial cost but the running cost is more safe and effective because the chances of rejection are reduced.
We can say that the chances of rejection will be controlled. In this way the quality level is much improved
and it reduces the customer complaints. Monthly charts are also made and management also takes
If there is a need of corrective action then they will request. The immediate action will be taken on that
form and until the corrective action will not be taken they production level will be ceased.
Quality control department has given their dimensions. And if there is any deviation from these
dimensions then even the MD of the company cannot start the production. And charts are also following
these dimensions everywhere in the production area.
9. Unilever digital communication for supply chain
Unilever, speaking at the recent Melcrum Digital Communication Summit in London. His session,
‗Connecting employees to the heart of Unilever‘s Sustainable Living Plan‘ provided fantastic insight into
a behavioural change management strategy to put sustainability in the spotlight across the entire
organisation – the way employees work, the value chain and even the way consumers use Unilever
Here are a few points that I took away from this very informative session …
Align internal/external - A significant part of an IC strategy in today‟s digital world should be
aligning internal communications with external. Unilever did this by creating integrated campaigns
that targeted both internal and external stakeholders to share the progress the business was making,
generate solutions and invite interested parties to help shape Unilever‟s plans. One tactic used was to
create a 24-hour „web jam‟ forum with a variety of live events, discussion and online participation that
was open to both external and internal participants.
Focus on content first, channel second – Focus first on the content – what content is needed for the
messaging? How does it need to be localised or segmented to the audiences that will be receiving it?
THEN look at what is the right channel to communicate the message. When generating content, Neil
noted the „three Ps‟ that interest employees: People (what are others doing?), Product (for example,
here, how are they sustainable)? and Participation (how can I participate?).
Create a user journey overview: Plan the entire user journey across all the channels you will be using
to communicate so you can ensure consistent messaging is going out. Ensure local teams get the help
they need to minimise the effort to implement the content. This can include supplying localised by
Employee generated content is powerful - User generated content is VERY engaging. Especially in
the form of storytelling, which we as humans respond to and helps us understand the message.
Unilever opened up two-way channels to give employees many ways to tell their stories. Everyone was
invited to submit „sustainability heroes‟ in their workplace, participate in local events – and post their
photos from the day. Plus, existing channels were „socialized‟ – such as adding forum chat into
SOCIAL MEDIA: Connecting with Partners and Consumers the
. About SPR Companies IT Professional Services Firm Over
35 years in the Midwest
3 Agenda True Issues facing the Supply Chain. What role doe
Social Media play in the Strategy of the Business? Overview of
key Social Media Tools. Overview of key Social Media Listening
Tools. How can Social Media play a role in the solution of the
issues facing the Supply Chain
5. Supply Chain Challenges Because of the relative economic instability,
the typical trend analysis and projection models are not meeting business
requirements. Simply said, predictive analytics, by definition, do not
function well in times that are unpredictable. When you can‘t predict the
future with some level of reliability, it is even more important that the
business knows exactly what is going on in real time or near real time.
With this in mind, we can think of two areas of importance where social
media might provide value to improving supply chain performance and risk
avoidance: Monitoring both planned and actual consumer behavior (I‘m
gonna buy vs. I just bought) is critical. What value does a social media
solution bring in comparison to POS information Brand reputation is
always critical, but even more so now with top-tier CPG brands losing
market share to less costly private label products. It is critical to have
immediate responses to customer feedback, issues, concerns, and
complaints. Is there a role for social media here Are there any privacy
issues around the commercial utilization of social media information
gathering and how can they be minimized Supply chain professionals are
concerned with the customer ―population‖ as opposed to a 1
What are the current and projected representative demographics of those
participating in the area of social media
6. Supply Chain Challenges Increasing supply chain responsiveness leading to a more customerdriven process: The ability to treat inventory in transit as available for the safety stock
calculations and have the ability to make mid-course changes to shipments. Third-party logistics
outsourcing. Re-negotiating partner agreements. Innovate with the tools you have or take those
same activities and hand them off to a 3PL, and let them do the innovating. The risk of
becoming too reliant on outsourcing is allowing ourselves to be less alert and aware of changes.
When contracting with a 3PL, we expect them to provide expertise in areas of importing and
exporting for example -- specifically in regulatory matters, such as the Transportation Safety
Administration appose new cargo screening regulations and 10+2 regulations on shipment
documentation. There is a need to keep up to date on the latest regulations affecting international
trade. http://logipi.com/public/item/244464C-Level involvement in supply chain: There is much
more attention on the C-suite—with the chief operating officer, your chief executive officer—
there‘s more recognition on their part of the impact of logistics and supply chain, whether it‘s
managing the inventory, managing the sourcing, managing the transportation. It‘s now more and
more that the C-suite executives are starting to really get the impact of supply chain.
7 Leadership Impact of Social MediaInnovationAhead of CompetitionOut of Price
WarsDifferentiationMission & VisionDirectionFocusFlexibility EngagementExecution
Framework Delivery to GoalsAccountabilityOwnershipRO StrategicPlan Metrics for
AccountabilityFeedbackAchievement TargetsGuidanceNet Promoter Social Solution
SuitesMarketplace Message CommunicationMemorable & ImpactValueInfluenceMarket
7. SOCIAL SOLUTION SUITEStrategic ObjectiveKey Metric TargetNet ScoreKey Metric
Result InfluenceFeedbackPROMOTERBUZZMARKET PLACEMESSAGE Demographics
Psychographics IndustryMONITOR METRICSSOCIAL WEBCAMPAIGN Social Channels
Set Metric Targets Timing
8. What tools will drive your success Social networksVideo sharingPhoto sharingMicro
bloggingLink sharingSocial calendaring
9. Social Media Listening Tools that incorporate with unilever
10. Listening ToolsFree pay
11. Key MetricsUnique visitorsPages visitedTime on siteBounce ratePosts Comment ratioSearch
engine rankingSentiment (NPS)ReviewsRecommendationsReferralsTweetsRetweets
12. Unilever always focuses on Brand reputation because it is always critical, but even more so
now with top-tier CPG brands losing market share to less costly private label products. It is
critical to have immediate responses to customer feedback, issues, concerns, and complaints in
that case unilever always try to be best in providing
services to customers
Several examples of online tools to facilitate supply chain
transparency exist or are in the pipeline. These tools include
World of Good, Good Guide, and Source Guide. Source Guide
is an open source tracking tool that creates supply chain transparency through crowdsourcing. Wikipedia
defines crowdsourcing as, ―a neologistic compound of "crowd" and "outsourcing" for the act of
outsourcing tasks, traditionally performed by an employee or contractor to a large group of people or
community (a crowd), through an open call.‖34 Corporations are beginning to turn towards crowd sourcing
solutions for their design needs. Some examples of crowd sourcing are Next Stop Design, Future
Melbourne, and Local Motors.35 Crowdsourcing is also on the horizon for supply chain transparency.
Something that is co-created by so many parties could have the potential to be respected as more valid
than something that is coming unilaterally from a single company such as Unilever. Unilever could
sponsor an open source tracking tool which non-profits, customers, academics, and lay people could
help to flesh it out.
While it seems risky for a company to allow random strangers to post seemingly unreliable data about
their company online, the fact of the matter is that open source
crowdsourcing is coming down the pipeline in this arena and
companies will be better off utilizing open source supply chain
tracking and providing accurate information than not. For example,
Wikipedia is an open source platform that contains crowdsourced
information about Unilever
Unilever meets two of the key corporate strategic thrusts: World Class Supply Chain and Simplification
by implementing NPI strategic sourcing and e-procurement enablement. These are two of the six thrusts
for implementation of world-class supply management:
# Implement executive buying
# Attract, develop and retain world-class buyers
# Professionalize NPI sourcing
# Enable e-procurement globally
# Accelerate and leverage simplification
# Drive information and measurement
Aggregation of demand and access to new suppliers through real time partnership has enabled Unilever to
improve efficiencies of the extended supply chain. Workflow automation has helped in simplification of
the internal processes, which has created scale for Unilever to leverage. For Unilever e-procurement
represents the opportunity for sustaining the benefits gained from strategic sourcing through information,
compliance and business process simplification. There are four ways of defining the benefits of eprocurement:
# A structural enabler for re-engineering the NPI procurement process enabling further benefits to be
gained through strategic sourcing, business simplification, visibility of total spend and effective
integration routes both internally, e.g. ERP, and externally.
# The means for conducting electronic business upstream using lowest cost links, i.e. cXML.
# A business model prompting re-evaluation of the mechanisms for connecting customers, enterprises and
suppliers (incl. Exchanges and Marketplaces)
# A single front-end interface both externally to suppliers and internally for ERP and other areas of
Strategically e-procurement complements Unilever's overall e-initiatives. Learning from these and the
strategic sourcing expertise gained during implementation, has improved business ability for the future eprocurement of both NPI and direct materials. Workflow automation and simplification to global sourcing
processes has resulted in increased productivity and reduction of transaction costs. Data made available
can then be applied to harmonies items purchased, rationalize needs with suppliers and monitor and
reduce usage, thus further increasing Unilever's buying opportunities.
Unilever sells its products in nearly all countries throughout the world and manufacture in many of them.
The company exports a wide range of products to countries where it does not makes them. For example,
inside the European Union, Unilever makes many of its products in only a few member countries, for sale
in all of them. The chosen manufacturing conﬁguration is generally determined by an optimized regional
sourcing strategy, which takes account of requirements for innovation, quality, service, cost and
Global Supply Chain Management Solutions Providers
In an effort to streamline its daily operations, Unilever has partnered with several technology and logistics
providers on a worldwide basis. Some of the major provider
SCM Technologies in Unilever’s Business Model
Unilever's overall technology vision includes a strong push from client-server to thin-client architecture,
Web technologies that bring the company closer to its customers, and business analytics to make
management information easier to access, according to Rick Ballou, IT business-area director for
Unilever Home and Personal Care North America.
With a market capitalization of $28 billion, the consumer-products giant reported that its recent IT
achievements include the rollout of business-intelligence software from Hyperion, and "SAP ERP wallto-wall" as a global standard. Unilever also has seen significant cost savings from its investment in
Ariba's sourcing technology, which has resulted in a reduction of the office-supply purchasing budget by
millions of dollars, and a consolidation of data centers from 18 to five; eventually, the number will fall to
A cross-functional global committee already is working on the shift from desktop client-server to portal
technology. On the B2B front, in addition to its RFID efforts, Unilever is participating in an industrywide effort to standardize data elements throughout the supply chain through UCCNet. Unilever has also
expressed their continued interest in CRM.
Unilever collaborates on statistical and market promotion forecasts for key products with a few large
customers, using a collaborative system from Waltham, Mass.-based Syncra Systems Inc.
The organization as whole had multiple ERP and CRM systems from several vendors, and 34 custombuilt data warehouses. Unilever currently runs 100 separate, complete SAP enterprise resource-planning
Similar on these lines, some of the major SCM technologies and IT solutions implemented in the business
model of The Unilever Group are discussed below: ISIS Supply Management Information System: ISIS is Unilever‘s integrated supply management
information system. It helps its local, regional and global supply managers make appropriate sourcing
decisions, allowing them to collate and analyse information quickly and easily. The system enables its
managers to negotiate with suppliers in a transparent and efficient way, benefiting both parties.
E-procurement Solutions from Ariba: Unilever selected the Ariba Buyer software for e-procurement
following a rigorous selection process and initial pilot in North America. Although initial success has
been achieved Unilever believes that these are still early days and that the return of investment has still to
be proven. While e-procurement is an inevitability for future supply chain optimisation the supply market,
particularly in Europe, is still suffering from under-development. There is an emerging recognition that eProcurement can affect total supply chain operation rather than just transactional activity. Until recently
few have taken action to implement or sponsor the necessary changes. Encouragingly though, Unilever
believes that this position is changing and unquestionably e-Procurement provides a catalyst for positive
improvement in supply management profile.
Enterprise-Scale Data Warehouse and Business Intelligence Solutions: In order to gain a clear view of
business performance across its 34 companies in 19 countries, Unilever Latin America has embarked
upon an enterprise-scale data warehouse and business intelligence project called Sinfonia.
At the heart of Sinfonia, KALIDO® enterprise data warehouse creation and management software
(KALIDO) provides a solution that will grow to encompass one of the largest databases in the world by
2007. KALIDO delivers an aggregated view of data across Unilever Latin America at high speed
throughout constant business change such as acquisitions and market consolidation. KALIDO is now
making it possible for Unilever Latin America (Unilever LA) to build and manage a fully functional,
adaptive data warehouse throughout its lifecycle while simultaneously rolling out an underlying regional
SAP system in a 4 to 5 year sister project called Harmonia.
The flexibility of KALIDO is enabling Unilever LA to maintain business continuity as the Sinfonia and
Harmonia projects continue to roll out. The KALIDO data warehouse will grow both in geographic
coverage and in scope, and is expected to reach 12 TB in size. Throughout this period of growth it will
deliver consistent business information, taking increasing volumes of data from the ongoing SAP
Unilever LA is converging processes, systems and information to enable a truly regional approach to
business. Using the KALIDO enterprise data warehousing solution, the organization is successfully
delivering a large-scale enterprise data warehouse, on time and within budget, while simultaneously
rolling out a region-wide SAP system.
The new information architecture Sinfonia, powered by KALIDO, will deliver high-quality data to 4,000
users by 8 am every day across five time zones. The solution will enable better understanding of regional
supply chain processes, brands, customers and suppliers, and will allow Unilever to respond rapidly to
new opportunities, even against a backdrop of constant internal and external business change.
Finally, KALIDO will facilitate strategic planning and drive improved decision-making, by delivering
tailored information at high speed to key business users, enabling Unilever LA to realize substantial cost
savings and improved ability to capitalize on business opportunities.
Supply Chain Information Systems: Using a variety of information systems and several other supply chain
management technologies, Unilever aims to enhance its supply chain business model. The following
diagram describes the company‘s supply chain system vision
Discussed below are the various types of information systems used within the business model of The
Unilever Group with their specific usage: # R&D System R&D System (LIMS): Used for formula development
# Specifications Systems: Used for Packaging, Raw Material, Formula, Master BOM, Finished Products
and Process Specifications
# Manufacturing Planning Systems: Used for MRP, Production Orders, Purchase Orders, Standard Costs,
RM/Pack/WIP Inventory, Financial Transactions, Material Masters and Production Reporting
# Planning Systems: Used for Demand Planning (DP), Demand Req Planning (DRP), Constrained Prod
Planning (CPP), VMI and Finite Scheduling
# MFG Execution Systems (Various): Used for Finished Goods Production, Compounding/Batching,
Quality/Lab Systems and Plant Maint Systems
# Order to Cash Systems: Used for Order Entry/Management, Terms of Sale, Deduction Tracking, Stock
Allocation and Invoicing
# Finished Goods Management Systems: Used for Shipping, FG Warehouse, Transportation, Finished
Goods Production (PIN) and Traceability
of "Goods" Initiative – RFID
Unilever's Supply Chain Innovation team wants to understand how better tracking
of products will affect manufacturing plants, distribution centers and stores.
Unilever anticipates that manufacturing plants will have to reduce the length of
product runs and make other refinements to react more quickly sto changes in
demand.And retailers will have to provide more timely information to suppliers.
In continuation to this strategy, on July 29, 2002, Unilever launched its third phase of a supply chain-tracking
project under Britain's "Chipping of "Goods" initiative. The company planned to put RFID tags on 30,000 six-packs
of Lynx deodorant and monitor them as t`hey move from a manufacturing plant to three Safeway stores. As part of
the initiative, Unilever's U.K. home and personal care products company, Lever Fabergé, is putting RFID tags on
six-packs of Lynx deodorant at its factory in Leeds. After the individual
Unilever‘s roots go back to the latter half of
the nineteenth century when the Industrial
Age spawned working-class households
with money to spend. Entrepreneurs began
to package products under brand names and
promote them to millions of the new
It was the dawn of modern advertising and
merchandising. Lever was one of the firsts
to discover the efficacy of mass
Obviously, the budget for marketing and
advertising has grown dramatically ever since
Advertising has always been a keystone of the business. (E.g. Unilever Best foods UK
spends almost £100 million a year on advertising; The PG Tips chimps‘ family
advertising campaign was first screened at Christmas in 1956. The chimp adverts are now the
longest running TV advertising campaign of any brand, having featured in over 100
Advertising has been an important aspect that Unilever has been investing a lot in. An
evidence of this can be indicated by the fact that in 2002, Unilever accounted for the
biggest advertising deal in the history of United Kingdom. The deal worth of £320 was
signed between Unilever and Carlton Sales and Granada Media Sales. The agreement
locked in trading terms for Unilever‘s UK operating companies; Birds Eye, Wall‘s, Lever
Fabergé, Unilever Bestfoods and Unilever Cosmetics International and secured a
competitive advantage for them through a period which is likely to be one of continuing
change for the UK‘s broadcasting structure. This ground-breaking four-year deal marked another
step on Unilever‘s Path to Growth strategy, enabling the company to concentrate its resources
behind its focused portfolio of leading brands using the most powerful medium, television
10.1 Other mediums of advertisement
There a number of ways to advertise both local and global brands in the market. Some of the
very common means through which advertisement is done include:
Electronic Media has been the major factor in determining the global success of Unilever.
In today‘s world where an average middle class individual has access to 30 to 40
channels through the cable minimum, he has the ability to view different types of
advertisement just flipping the channels. Thus the consumer of today is so well posted on the fact
that whenever a new product is launched, be it in the United Kingdom or in the United States, a
consumer living in Asia would be well aware of the features of the
products and he would know who the company is targeting.
Print Media advertisement is one of the common ways of advertising.
Whenever there is a new campaign being launched or that any event
like that of “Daaghnahi tow seekhnakia” by Surf Excel is
introduced, the print media including the magazines, newspapers and
brochures are relied upon a lot. In print media, the importance of
placing the advertisement plays an imperative part in increasing the
sales of the product.
Billboards has become one of the most influencing way to advertise in
our world. At first
there were people who used to paint different types of products on the
boards, then came the time when the ads on these billboards used to get computerized and now
what you can see on a billboard is massive. You can see a whole advertisement like you watch
on your own televisions or the type of moving and animated type of advertisements that you can
see on the billboards happen to be very much in fashion.
Unilever also has nearly all of its products on the billboards when either its launching a
new ad, coming up with price promotions or re launching any product. These ads seem to be
appearing all the time, which is really good for the company, as they are easily
attracting the customers in every possible manner.
10.2 Innovative Types of Advertising
Unilever always has been a pioneer in leading the advertising industry especially in
countries like Pakistan. The advertisement they had of Lipton, took the country by storm
when they introduced their ad of ―ChayeChahyay‖, which showed a male model and a
female standing on the platform of a railway station. This was a very famous
advertisement of the 1980‘s and the general consumers liked this new concept. Nearly
two years ago the new advertising campaign of Lipton took the country by storm again.
And this time the ad was exactly the same as that of the 1980‘s, the jingle was same but
obviously new models had to be used. This jingle of the ad became so famous that this
jingle was forwarded to thousands on the mobiles and most people had their ring tones
sent as this jingle. Hence, using this type of innovative advertising technique has greatly
increased the recall value of the customer.
Giving out free Samples
When the new Sunsilk Black was introduced in Pakistan, what the company did was, to
create awareness amongst the youth they went to schools and colleges and distributed
free samples of the products and gave out little brochures which told the qualities that the
product had and the proper method of getting a black and shiny hair look.
AOL Time Warner and Unilever announced their multi-million dollar advertising
alliance. AOL Time Warner, the world's largest advertiser, announced a multi-million
dollar enhanced cross-platform advertising and marketing partnership under which AOL
International Quality of advertisements
The Axe 'getting dressed' TV ad has won a Gold Lion at Cannes for international
advertising quality. This is the second time in four years that a European Axe film has
scooped the top award. The ad shows a spontaneous encounter between a young couple who meet in a supermarket.
It's a poignant, romantic tale: in essence, a modern day urban fairy tale. Young men watching the ad are reassured
by the message that Axe is an effective 24-hour deodorant.
Time Warner will bring Unilever's wide array of leading consumer product brands to
millions of consumers through innovative marketing campaigns across AOL Time
Warner's broad range of online, on-air and print media in 2002.
10.3 Unilever Is Dipping Into Social Media in Asia
Unilever is turning on the cyber charm in Asia with a burst of social-media activities for brands like
Pond's, Lux and Comfort. One effort in China, an experiment to use bloggers in a blind test of Pond's Age
Miracle moisturizer, will become a regional marketing strategy for the skin-care brand.
Unilever chose a stealthy, digital campaign to generate buzz, establish the product's credibility and
encourage Chinese women to give Pond's Age Miracle a try.
In the market for just a year, Pond's Age Miracle hasn't leaped off store shelves. The anti-aging cream
faces strong competition from entrenched brands such as Clinique, L'Oreal, Lancome and Procter &
Gamble's SK-II and Olay brands. Like most Asian women,
Chinese women are fastidious about their skin-care
regimen and loyal to favorite products.
After weighing the costs of an ad blitz in traditional
media, Unilever opted for a stealthy digital campaign
to generate buzz, establish the product's credibility and encourage Chinese women to give Pond's
Age Miracle a try. Unilever and Ogilvy PR Worldwide created a blind trial program among
affluent women. On sites such as Onlylady.com , Unilever asked for volunteers to try out an
unidentified anti-aging solution and quickly signed up with 150 official testers.
It was a risky decision. China's blog community is large, active and influential. More than 100
million Chinese claim to communicate via forums and discussion boards and 41 million are
heavy social-media contributors, according to Netpop. If women hated Pond's Age Miracle, the
brand would tank.
To Unilever's relief, bloggers gushed over the mysterious moisturizer in hundreds of posts during
a seven-day trial last month. Even after the trial ended, nine out of 10 continued to endorse the
brand as enthusiastic, and unpaid, brand ambassadors.
"This is the first time used we've used social media in China. There is no doubt we will use it
more to connect with consumers," said Shanghai-based Laercio Cardoso, VP-marketing for
Unilever's home and personal-care brands in China. He's developing social-media campaigns for
two other Unilever beauty brands due out at the end of this year.
That enthusiasm doesn't come as a surprise Thomas Crampton, Hong Kong-based director of 360
digital influence for Asia/Pacific at Ogilvy PR.
"We're conducting social media campaigns in a wide range of ways with many types of clients
across Asia. The hunger for it is huge," he said.
The China launch strategy was closely monitored by Unilever's global Pond's team in Singapore,
which now plans to create similar blind trials to market Pond's Age Miracle in key Southeast
Asian markets such as Thailand, Indonesia, the Philippines and Vietnam. Although Pond's is a
global skin-care brand, it's especially popular in Southeast Asia.
"Everyone was excited by the response in China," said Singapore-based MutyaLaxaBuensuceso,
Unilever's global brand director for Pond's. "[And] the cost of those
sites are a tenth that of traditional media, so it's very cost efficient as
Unilever's Lux campaign features Bollywood star Priyanka.
Asia is also a Unilever lab for using Facebook as a marketing tool. The region is home to dozens
of Facebook fan sites and communities dedicated to Pond's. One in the Indonesian city of
Bandung has close to 10,000 members. Unilever is using that site as a test to reach young Asian
women, developing tailor-made Facebook activities like games, invitations to events, a branded
merchandise program offering discounts to local lifestyle hangouts and a mobile app with girlfriendly content.
Elsewhere in Asia, Unilever engaged consumers of Comfort fabric softener in Vietnam with an
interactive campaign by local digital agency Who Digital. In a five-week contest, husbands were
invited to submit stories about love. Each week, advertorials in local magazines published five
winners. Consumers could also create and send love messages on a Vietnamese-language web
Unilever's Singapore-based global Lux team is promoting that hair-care brand worldwide this
fall with a TV spot by JWT, Singapore, called "Behave Beautiful," starring Bollywood star
Priyanka. Lux isn't sold in the U.S., but is a billion-dollar Unilever beauty soap and hair-care
Last month, in a global first, Unilever invited top beauty bloggers from countries like India,
Malaysia, and Indonesia to encourage followers to view the Priyanka spot and then create and
upload their own "Behave Beautiful" clips to the Lux YouTube channel.
Unilever exec: Create mobile-specific native advertising to engage consumers
Unilever's Wish-Bone's creative mobile ad
NEW YORK – A Unilever executive at the Media Tech Summit
2013 conference said that marketers should work towards creating
content and native advertising that works directly within the
context of mobile as opposed to taking what they know from
older media and translating it to mobile.
During the ―Future of Native Advertising‖ session this week,
execs from Unilever and News Corp. discussed the importance of
contextually relevant advertising that mirrors the product in which it is placed. The session was
moderated by Jordan Kretchmer, chief executive officer of LiveFyre.
Unilever‘s Cafe Zero bets on GPS, video to drive in-store traffic
Unilever‘s Café Zero recently ran a campaign in Holland that
not only built buzz around a seasonal product, but also drove
users to nearby locations to try the drink.The mobile ads ran
within the Sanoma Media-owned news company NU.nl's
iPhone application. The ads were targeted to users and took
advantage of mobile video as a way to hook impressions.
―The main goal of the campaign was to raise brand awareness
for a 30-second commercial,‖ said Norman van Ameyden, account manager of mobile sales
at Sonoma Media, Hoofddorp, Netherlands.
Unilever CPGs step up their mobile marketing game
Consumer packaged goods companies are starting to get more
innovative in using mobile applications, rich media ads and QR
codes to have a more direct relationship with consumers.
For the most part, CPGs have been slow to adopt mobile marketing
with the exception of some a few visionaries such as Procter &
Gamble and Unilever. This is starting to change, with a wider group
of marketers startingto embrace mobile while some of the early
adopters are stepping up their game.
UNILEVER FACILITATE ONLINE PEOPLE
where there is talking pages, yellow pages, mobile and find a
person to click in get information immediately about unilever
and its products or business information and phone numbers &
Unilever has doing mass advertisement on TV and social media to attract and interact with
To make their product for persons to make purchase first rather than‖ I‘m gona buy it‖ to ―I just
Unilever is committed to diversity in a working environment where there is mutual
trustand respect and where everyone feels responsible for the performance and
reputation of our company. They are committed to safe and healthy working
conditions for allEmployees. We will not use any form of forced, compulsory or
child labor. AndCommitted working with employees to develop and enhance each
individual's skills andCapablities.
Unilever is providing branded products and services which consistently offer value
interms of price and quality, and which are safe for their intended use. Products
andservices will be accurately and properly labeled, advertised and communicated.
Unilever l conducts its operations in accordance with internationally accepted
principles of good corporate governance. We will provide timely, regular and
reliable information on our activities, structure, financial situation and performance
to all shareholders.
Unilever is establishing mutually beneficial relations with our suppliers, customers
and business partners. Unilever is making continuous improvement in its supply
chain management and standard of advertisement and policy.
More than 150 million times a day someone, somewhere is choosing a Unilever
product. A good brand is vital to an organization and this report has reflected how
Unilever has managed to be just that. It is clear from the analysis and survey
carried out that the company is adopting global branding to its highest standards
and that is exactly how the global presence of any company is taken to its highest
levels of success. So far unilever has been able to be one of the best I the business.
That is what global branding is all about. It allows companies the access to
consumers all over the world and increases their customer base to a large extent. It
allows them to expand their horizons and to make a global impact of their products
all over the world. They have more market segments to target and can increase
their product line to a large extent. Different countries market their products. These
are the benefits of companies going global and they have been reflected above in
this report in the form of unilever’s global success.