Wenerios Tsagkalidis, VP Supply Chain at Unilever spoke at the SCL Event UK 2013

1. Wenerios Tsagkalidis
VP Supply Chain

2. Unilever Ice Cream SC Europe
Wednesday, February 20, 2013

3. Unilever Supply Chain Journey
Past 2006 Present
• Localised supply chain • Establishment of • Regional supply chain
(make, source, plan, European SC operations
deliver) • Single IT platform • Global functions
created

4. Unilever Sustainable living plan
We aim to double the size of our company while reducing our
environmental impact and increasing the positive social
benefits of our business.
Sustainability initiatives in the Supply Chain:
• Sustainable sourcing (e.g. Rain Forest Alliance Chocolate)
• New IC Cabinet energy consumption reduced by 25%
• Combined heat and power plants in factories
• Reducing water usage focusing on factories in water scarce areas
• Effective logistics (improving truck fill, intermodal transport,
warehousing hubs)

5. Challenges in Ice Cream
Sales Pattern
30% Innovation
70% sales in 5
each year
months
1 2 3 4 5 6 7 8 9 10 11 12
Balance between Highly weather
capacity and sensitive
stocks Ensuring quality
through the
cold chain

6. Safety at the heart of all we do
• 150% Reduction in accidents in 6
years
• Safety led from the top
• Large behavioural and machine
safety programs in place for ALL
employees

7. End to End Quality Always in focus
THE COLD CHAIN
PRIMARY DISTRIBUTION SECONDARY DISTRIBUTION
Focus from design, through supply chain, point of sale and consumer.

8. Customer service is key
Customer service journey on metrics
• Case Fill
CF • Measure availability of stock in our warehouse
• Customer Case Fill On Time
CCFOT • Measure timeliness of deliveries to customers
• On Shelf Availability
OSA • Measure availability of our product on shelves

9. • Case Fill
CF • Measure availability of stock in our warehouse
• Customer Case Fill On Time
CCFOT • Measure timeliness of deliveries to customers
• On Shelf Availability
Maximising service through European network
OSA • Measure availability of our product on shelves
• Factories act on a local, regional and global level
• Supply into local markets, giving
flexibility to be close to demand.
• Supply innovations and specialist
technology on a regional level.
•Supplying specialitiesPlanning function mirrors supply
and
set up
products for market tests on
• Mix of local, regional and global
a global level. planning
• Optimise capacity usage
• Manage seasonal fluctuations

10. • Case Fill
CF • Measure availability of stock in our warehouse
• Customer Case Fill On Time
CCFOT • Measure timeliness of deliveries to customers
Service through responsiveness OSA
• On Shelf Availability
• Measure availability of our product on shelves
1. Segment portfolio based on SKU importance (volume and GM)
2. Align SC flexibility (lead time for more and uplift) to product segmentation
Examples of actions:
• Aligning raw and pack safety stocks to market needs
• Develop substitute sourcing options
• Lead time reduction programs with suppliers
Benefits:
• Take advantage of short term sales opportunities
• Improvement of service metrics

11. • Case Fill
CF • Measure availability of stock in our warehouse
• Customer Case Fill On Time
CCFOT • Measure timeliness of deliveries to customers
• On Shelf Availability
OSA • Measure availability of our product on shelves
Improving on Shelf Availability
• TPM “5 Step” approach with major retailers on loss reduction
from back of store to cabinet
• Improved packaging design allowing easier identification of
Unilever products back of store
• Perfect store initiative: Unilever task forces sent to visit POSs
and improve brand and product visibility.

12. Managing stock vs assets
• With high seasonality we need an effective tool for balancing
the trade off between stock and assets. Two extremes:
1. High capacity; low utilisation; low stocks
2. Low capacity; high utilisation; high stocks
Solution: Calculate 50,0
Total cost (Fixed + variable + trasport
Base
capacity requirements
49,0
+ storage + IWC + FC)
Additional
capacity
minimising total supply
48,0
Proposed
47,0
chain cost. 46,0
60,00 65,00 70,00 75,00 80,00 85,00
Line Utilisation in %

13. Improving competitive cost
• 34% reduction in business waste in 4 years
• Alignment of marketing, customer development & supply chain to
solve obsolete risks.
• Improved forecasting through technology and planning processes.
• Top class manufacturing through best practice and benchmarking:
• Manufacturing excellence programs
• Regional Virtual Sites
• Technology platforms

14. THANK YOU
Questions?