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Becoming The Best
Unilever Supply Chain
Pier Luigi Sigismondi
From last year:
Unilever Supply Chain is Fit to Compete
With Passion to Win!2010/112009
Cost DrivenSupply Chain
Building
Foundations
2009
Lean and Agile value
chain
Fit to
Compete
2010/11
We are now Playing to Win
Supply Chain Creating Value
Winning is about
Sustainable Profitable Volume Growth
2009 2015
Gross Margin
%TO
Enabling Growth
DrivingGrowth
FundingGrowth
ImprovingMargin
Consistent Improvement in Quality
2009 2010 2011
Product Incidents
-68%
2009 2010 2011 YTD
Consumer Complaints
1.9%
-28%
YTD
Enabling Growth through Quality ExcellenceLifebuoy Case
Consistent Quality
Enabling Growth through Quality ExcellenceLifebuoy Case
Market Share >+80bps
Better consumer AttributesImproved Fragrance & Bar Structure
Consistent Quality
+=
Continuous improvement in all categories
Consistent Product Availability improvement
2008 2011 YTD
On Shelf product Availability More and More Stores
From 5 to 20 Countries
+700bps
Driving growth through Service Excellence
2011 2015
On Shelf product Availability Channels
Modern Trade
All Channels
From 20 to >150 Countries
Potential of 360bps UVG
+400bps
Superior Service in difficult times Flood in Thailand
Unilever Thailand
# 1
Consistent Working Capital improvement
Top League performance
-10%
-6%
-2%
2%
-2000
-1000
0
1000
2008 2009 2010
Closing WC Mio Euros WC %TO
+€2.1bn
Consistent Working Capital improvement
Top League performance
-10%
-6%
-2%
2%
-2000
-1000
0
1000
2008 2009 2010
Closing WC Mio Euros WC %TO
Funding growth through Excellence in Cash Management
+€2.1bn
Mexico Case
Integrated Business Planning&
Customer Integration
Step-up in CapEx to fuel growth
Increased focus on D&EIncreased focus on
growth and innovation
2008
Developed D&E
2008 20112011
+70%
+30%
Infrastructure and Savings
Growth and Innovation
IT
+40%
+70%
+50%
Increasing savings…
2006-2008 2009-2011
Sustainable Step Up in SC Savings…
1.9% +47%
2.8%
… but not reflected in higher margin
Savings %TO(avg)
Increasing savings…
2006-2008 2009-2011
Sustainable Step Up in SC Savings…
1.9% +47%
2009 2010 2011 H1
…but Gross Margin down
-230bps
2.8%
… but not reflected in higher margin
Savings %TO(avg)
Improving margins through Cost ExcellenceLow Cost Business Models
Replicable E2E Solutions Significant potential Reaping the benefits
Demand Volatility Management
Network Redesign
Direct Deliveries
Product Formulation
Improved A&P and TTS Investment
Indirects Management
1100bps
900bps
1350bps
850bps
920bps
Rollout to
Other Countries
&
New Categories
*
Operating Margin Improvement for Products in scope LCBM*
Commodity Risk Management is Essential Commodity Risk Management
Volatility
Start 2011 End 2011 2012
Reliability &Economic Protection
Unilever spend actively
hedged
Uncertainty
Commodity Price Trend Example
We are determined to be The Best
World ClassValue Chain
1. Global Scale & Local Agility
2. Lean Organisation
3. Speed
4. Partnership with Suppliers
5. Unilever Sustainable Living Plan
Enabler of Unilever’s Financial Growth Model
Unilever’s Supply Chain is UniqueSources of Competitive Advantage
Global Scale
€31bn ProcurementGlobal Sourcing from Low Cost Countries Scale in Logistics
76%
24%
Global Cluster
D&E >150 of 260 Factories
From Europe to Asia and Americas
Local Agility
> 160.000 Point of Sale Served > 7.000 Islands Served
Unique Route to Market Capabilities in Growing Markets
Local Agility: Differentiated Supply Chains
Local Agility: Differentiated Supply ChainsIndonesia Case
in General Trade
Individual, 24hrs Product Dispatch Drives profitable growth
New Route to Market
Before After
Normal Express Orders
>100%
Lean Organisation
Strong TeamLean Fast Decisions
3 layers between CSCO
and factory director
Shares vs main competitors
17
Direct
Reports
One Real Estate
Team
Four CapEx
signaturesOne
Purchasing Order
Savoury Over 2x
Skin Over 2x
Ice Cream Over 1.5x
…
One Information
PortalOne
Travel Cost & Compliance
Report
Speed: New launches in RECORD TIME
35 Markets
Global Sourcing
7 Factories
40 Moulds 9 Sizes7 Resins
Set-up in
<6 Months
Speed: New production lines in RECORD TIME
New production Lines
35% faster
In 30 Markets from 6 Factories
Speed: New Factories in RECORD TIME
€20M, -6 months €7M, -3 months €10M, -12 months
*€ Value Delivered , Time reduction versus Original Plan
Strategic Partnerships with Suppliers
Growing with suppliers through Innovation
Supplier Investment to
grow where Unilever grows
>€1.3bn Supplier Capacity
Investment
>90% D&E
>70Active supplier
initiated innovation
projects
500.000 smallholder
farmers linked into our supply
chain
Unilever Exclusive
Innovation
USLP
Unilever Sustainable Living Plan
ManufacturingSuppliers Customers
Sustainable sourcing of agricultural raw materials
TO
FROM
+20% Loading Efficiency56% pallets reduction
Rollout to other countries
14%100%
2010 2020
Absolute reduction Carbon Emissions
2.8
2.3
100
102
104
106
108
110
112
2008 2009 2010 2011
Total Load - Mio Tons CO2
Volume Index (2008 = 100)
20112010/112009
In Summary:
Cost DrivenSupply Chain
Building
Foundations
Supply Chain creating
Value
Playing to Win
Lean and Agile value
chain
Fit to
Compete
Be
The Best
World Class Value Chain
In Summary:
1. Operational Excellence: Foundation (Not a Destination)
2. Best in the Industry
3. Enabler of Unilever’s Financial Growth Model
Live Superior Service. Deliver Sustainable, Profitable Growth