Unilever wants to improve its planning and differentiation

A supply chain is never ‘finished’, and especially not at Unilever. Now that the improvement programme of his predecessor Vincent Weijers has been completed, Harm van Tongeren has picked a new spot on the horizon. During the final of the Supply Chain Professional of the Year award, he explained more about his new improvement programme. “We want more supply chain differentiation.”

By Marcel te Lindert

With its new improvement programme, Unilever intends to achieve profitable growth by being innovative and delivering even better supply chain performance. The programme is built on various pillars, according to Van Tongeren, who has been Vice President Supply Chain Benelux at Unilever since August 2015. The first pillar comprises the end-to-end planning process, which is currently too fragmented in practice. “We want to gain a better understanding of the impact of our back-end planning on our front-end operations.”

Among other things, Unilever wants to transition to integrated business planning with a 24-month planning horizon. Planners will gain more time for fundamental matters by being relieved of time-consuming tasks such as data cleansing, which will soon be done at a support centre on a different continent so that the work can be performed at night.

Furthermore, Van Tongeren wants to improve the learning curve for planners, implement a new system for promotions and increase flexibility by adding smart tools on top of the SAP ‘monster’. “We also want to differentiate more. In effect, we currently have one, generic supply chain for all our products, but the fact of the matter is that personal-care products entail different considerations than food.”

Direct-to-consumer

At the same time, Unilever is keen to further sharpen its customer focus. Van Tongeren is introducing the concept of the ‘perfect promise’: how can Unilever always deliver on its promises to customers? And how can it improve its collaboration with customers in terms of planning and forecasting, for example? “In addition, we want to prepare for e-commerce and direct-to-consumer channels, although to be honest we are still in the early stages. I can’t see us joining other manufacturers to supply directly to consumers in the near future.”

Besides improving its planning and intensifying its collaboration, Unilever is keen to further improve its logistics competences, including in the area of sustainability. “One thing that surprises me is that no one can tell me our precise load factor – not even our logistics service provider. We want trucks to always be full, and preferably on the return journey too. In order to be able to send fuller loads and deliver products faster, we will have to collaborate with other manufacturers, including with companies such as Nestlé and Procter & Gamble. Only then will we really be able to reduce our environmental impact. But partnerships with companies like Ikea and Samsung could be interesting too,” stated Van Tongeren.

Growth as a KPI

Van Tongeren drew up the improvement programme together with his leadership team, who also jointly agreed on how the programme should be rolled out. “Should we tell people how we need to do things, or should we let the team decide? We opted for the latter. The risk of that approach was that the team might come up with different improvement ideas than our own, but luckily there was a 90 percent overlap. The big advantage of this approach is that it’s driven by the team’s energy. That’s just as important as the actual substance of the plan, if not more so.” A further change has been to include growth in the supply chain team’s set of KPIs. “In the past, we used to be criticised within Unilever for having our own set of KPIs. Now that achieving growth is an objective for everyone, there are stronger ties with the other disciplines within the company.”