2. SUMMARY OF THE CASE STUDY
Unilever is one of the most famous reputed firm, which is globally covered all over the countries.
Unilever have cooperation with a company Proctor Gamble and Nestle (PGN). In order to meet with
some of the products Unilever focuses on 14 brands, each netting more than 1 billion annually
including more products; personnel care brands, deodorant and such conditioner brands and more
over top sellers they include ice – cream brands, best food products, and soup, seasoning, and tea
brands Lipton and Knorr. Altogether, the Anglo – Dutch multinational boasts over 400 brands, sell its
products in over 190 countries, and employs more than 17, 5000 people worldwide. Unilever is
organised as the two separate holding company: Unilever PLC (Public Limited Company),
headquartered in London, United Kingdom, and Unilever N.V., headquartered in Rotterdam, The
Netherlands. The main aim of the firm is to have a single economic entity to operate the two legal
divisions nearly as possible. The Unilever Group – with unity of management, operations purpose,
mission.
3. In order to grow its business in developing and emerging markets, Unilever needed to unify its
core business processes, including supply chain management. Standardized processes were
essential to effectively manage volatile prices and changing commodity supplies. This was not
feasible prior to 2007. Almost every business in each of the more than 190 countries in which
Unilever operated functioned as an independent division. Approximately 30000 transactions
per minute including every order received, invoice issued, material produced, and product
shipped were processed through 250 different enterprises resource planning (ERP) SYSTEMS. In
order to run the campiness worldwide business on ERP systems, every transaction for each
order it receives, material it produces, item it ships and invoice that issues runs through
Unilever’s backbone ERP systems. Trying to run a global business that was doubling its
transaction volume with 250 systems proved too challenging. In order to add layers of IT
infrastructure to prepare for rapid business growth. Unilever’s globalisation strategy involved
the exact opposite action. For consolidating and simplifying its technology platform so that it
would support the company operating as single global entity. Unilever transitioned to run its
worldwide business on only four instances of SAP ERP, with the ultimate goal for managing as
one global platform by 2015.
4. With transactions slated to reach the 60000 per minute range, Unilever was still investigating
additional tools to increase transaction processing speed. To remain a leader in modern demand –
driven supply chain management, Unilever began adding SAP HANA (High – performance Analytic
Appliance) software to some of its key SAP ERP applications at the end of 2012. HANA is an in-
memory date platform that is deployable as an onpremise appliance, or in the cloud. It is a very well
suited for performing real-time analytics and processing extremely large numbers of transactions very
rapidly. One of Unilever’s first project was implementing SAP CO-PA (Controlling – Profitability
Analysis) Accelerator powered by SAP HANA. The enhanced financial analysis software reduced the
number of days to produce the month – end close from three to just one. This experience was
valuable for Unilever on several levels. It allows the company to start with a single critical business
process that could easily be rolled back into a traditional database if necessary, gain experience, and
lay the ground-work for future HANA implementations. The success of this project and its enthusiastic
embrace by end users convinced Unilever that other business process could indeed benefit from the
addition of the SAP HANA inmemory computing platform.
5. Unilever’s Enterprise Data Warehouse (EDW) system extracts, transforms, and integrates ERP transaction
data with external data for use in reporting and data analysis. The next target of the SAP HANA initiative
was to accelerate, simplify, and harmonize all ERP transaction systems so that the data being fed into its
global EDW was of the highest quality possible. Valuable business insights depend on real–time analysis of
accurate data. The profitability analysis accelerator analyses reams of financial data and outputs valuable
statistics about cost and profit drivers. By mid-2013, the SAP CO-PA Accelerator had been added to all four
regional ERP centres over a 16week timeframe and was being managed as a single global platform. SAP
Cash Forecasting was added to SAP ERP Financials to minimize liquidity risk and maximise the use of
working capital and cash. Product Cost Planning (CO-PC-PCP) was incorporated to help Unilever plan the
costs for materials independently from orders; set prices for materials, operations, production lines and
processes; analyse the costs manufacture materials, and assess product profitability. The time to analyse
the approximately 150 million records produced each month was halved, and product cost forecasts could
be generated in 30 seconds, down from 7min.
6. On the macro level, the SAP HANA initiative transformed Unilever’s attitude towards IT. Until
HANA, IT pushed solutions to functions in need of modernization. Now, optimized functions
pinpoint business opportunities and stakeholders ripe for HANA solutions. Unilever believes this
swing from push to pull is a driver for innovation and a growth agenda. Unilever wanted to
maximise product availability on store shelves during new product launches and promotional
campaigns. Since trade promotion processes drive a significant portion of its sales, in order to
enhance the speed and efficiently with which they could be planned, budgeted, and executed and
in how stock was allocated. Earlier Unilever used a process in which stock was sequentially
assigned to orders as they were received. There was no mechanism for assigning to orders as they
received. There was no mechanism for assigning limited stock between customers running a
promotion and those who were not. Consolidation of its ERP platforms and the transactions and
processing speed of the HANA platform are the keys to improved performance, reporting
scalability that will enable Unilever to full fill its ambitious growth, social impact and
environmental problem.
7. PROBLEMS
• Unilever need to unify its core business process, including supply
chain management.
• Unilever wanted to maximize product availability on store shelves
during new product launches and promotional campaigns.
8. SOLUTIONS
• Use ERP system which helps to run a global business that was
doubling its transaction.
• Unilever began adding SAP HANA (High Performance Analytical
Appliance). It is very well suited for performing real time analytics if
introduce SAP CO-P (controlling – profitability analysis) which helps
for the reduction of number of days of production.
• If add SAP cash forecast of they can minimize liquidity risk and
maximise the use working capital and cash.
9. CASE QUESTIONS
• What the management problems typical of global systems was Unilever experiencing?
What management, organization and technology factors were responsible for those
problems?
Unilever need to unify its core business processes including supply chain management and
to maximize product availability on store shelves they have to adopt ERP systems SAP, HANA
if, it is not adapting these technologies they will not get the ability to input raw materials
cost and quickly calculate product price. No any improved and understanding of the supply
chain for the manager decision making and they cannot able to performing real time
analysis.
10. • How did Unilever’s new systems and use of SAP HANA supports its business strategy? How
effective was the solution chosen by the company?
Unilever began adding SAP HANA software to some of its keys SAP ERP applications at the end of
2012. HANA is an in-memory data platform that is deployable as an on-premise appliance, or in the
cloud. HANA accelerated trade promotion management tools different inventory maximum scenarios
and it is very well suited for performing real time analytics and processing extremely large numbers
of transactions very rapidly.
11. • How did Unilever’s new system improve operations and management decision making?
Production cost analysis confirmed for Unilever that HANA’s ability to accelerate business processes
was well worth the investment, substantially improving real-time decision making. The second
tangible benefit was the ability to input raw material cost and quickly calculate product price. For
understanding its margins – the percent profit after all costs have been deducted – enabled Unilever
to analyse ways to improve them. These factors make improvement in operations and management
decision making.
12. • What influence does the global business environment have on firms like Unilever and how does that
affect its choice of system?
Consolidation of ERP platform and the transaction and processing speed of the HANA platform are the
keys to improved performance, reporting to fulfil its ambitious growth, social impact and
environmental goals. The global business environment has a firm like this other company can also
follow this and they can achieve great success in global business environment this will help the
developing country to become to become developed country and also it helps to increase global
economy of the business world.
