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Unilever

Procurement & Sourcing Strategy

Group Members• Syed Hasan Naqvi

• Umais Qureshi

• Shad Ashraf Ali

• Khizer Mukarram

• Muzammil

• Faizan

“Unilever is a brand which is trusted everywhere that focus on productivity and performance. Unilever encourage

our customer, our people to develop new ideas.”

Unilever

OUR MISSION

Unilever, we have ambitious plans to grow our business while reducing our overall environmental impact, and only through

partnering with our suppliers will sustainable and profitable growth be

achievable.

OUR VALUESFewer than four key values underpin the way in which Unilever is doing their business  Respect

It guides to treat the people with honesty, fairness and Dignity 

IntegrityIt guides to do the right thing for the long term success of Unilever 

PioneeringIt gives the passion for winning and for creating a better future

ResponsibilityIt is all about taking care of our customers and the employees of Unilever

UNILEVER’S PORTFOLIO OF CATEGORIES

UNILEVER GLOBAL STRUCTURE• Europe • North Asia (Greater China & North East Asia)• SEAA (South East Asia and Australasia)• South Asia• NAMET & RUB (North Africa, Middle East, Turkey and Russia)• Africa (Central Africa & South Africa)• North America• Latin America

Europe North Asia (Greater China & North East Asia)SEAA (South East Asia and Australasia)South AsiaNAMET & RUB (North Africa, Middle East, Turkey and Russia)

Africa (Central Africa & South Africa)North America

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Procurement Application Tools

The Applications below are essential to any Unilever Procurement Professional.

Material Price Forecasting (SAP BPC)

Improved harmonized tool for setting Standard Prices and calculating Price Trends SAP (Material Management)

Process direct procurement

ARIBA BUYER

Process Indirect Procurement expenditures request and Process IP invoices here ISIS

Use this tool to manage your savings projects and report savings results.

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Conflicting challenges between Procurement and Planning Purchasing wants  Stable volume requirements Flexible delivery time Little variation in mix Large quantities Manufacturing wants

High quality High productivity Low production cost

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Challenges of Procurement Team   Managing spend creep and ensure the cost control Managing the lead time The visibility of the saving (ISIS) is one of the challenge face

by Unilever Compliance of contract Maintaining the On time is full (OTIF) or Customer cases fill

on time (CCFOT). Effective use of sourcing Quality applied

UNILEVER PROCUREMENT FUNCTION

Unilever consist of two categories of procurement:

• Direct Procurement (Raw Materials / Packaging materials)

• Indirect Procurement (Non Productive Items)

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OBJECTIVE OF THE PROCUREMENT FUNCTION

• To evaluate the supply market and their trends i.e. forecasting

• To ensure that the material will be available as per desired timeline.

• To ensure that the product is as per required quality

• To ensure that violation of specs is not stated.• To ensure that the material be delivered at

right place and with right quantity.12

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SELECT SUPPLIERDEVELOP

APPROACHTARGET

SUPPLIERS GO-TO-MARKET EVALUATE RESPONSES

NEGOTIATION & AWARD

• Capabilities• Time• Quality• Service• Cost• Reliability• Capacity• Ethical • Culture• Order process• Suitability• Responsible

sourcing (USQS / Positive assurance)

• Observance to UL supplier code

• Existing suppliers

• Past suppliers

• Market research

• Supply market knowledge

• Different supply markets

• Consider substitutes

• Determine whether pre-screened suppliers can meet all the criteria

Note that whilst an RFP is most common, choose the method that matches the needs of the organisation• Include all

information suppliers need to present their best case, including:

• Confidentiality req’s

• Timeframe• Evaluation

criteria • Specifications• Performance

req’s• Historical

volumes • Pricing details• Financial

statements

• Evaluation criteria will include (may be weighted):

• Service• Capability• Quality• Lead time• Cost• Score &

select short list of suppliers for negotiations

• Invite short-listed suppliers for negotiations

• Prepare negotiation strategy:

• Review all items that will have an influence on the outcome

• Agree negotiation team & assigned roles

• Prepare negotiation strategy

• Once supplier(s) have been chosen, final contracts can be prepared. Suppliers should have signed up to the UL terms & conditions, or at the least highlighted areas of concern 1313

SELECT SUPPLIERDEVELOP

APPROACHTARGET

SUPPLIERS GO-TO-MARKET EVALUATE RESPONSES

NEGOTIATION & AWARD

• Capabilities

• Time• Quality• Service• Cost• Reliabilit

y• Capacity• Ethical • Culture• Order

process• Suitabilit

y• Responsi

ble sourcing

• Observance to UL supplier code

• Existing suppliers

• Past suppliers

• Market research

• Supply market knowledge

• Different supply markets

• Consider substitutes

• Determine whether pre-screened suppliers can meet all the criteria

• Include all information suppliers need to present their best case, including:

• Confidentiality req’s

• Timeframe• Evaluation

criteria • Specifications• Performance

req’s• Historical

volumes • Pricing details• Financial

statements

• Evaluation criteria will include (may be weighted):

• Service• Capability• Quality• Lead time• Cost• Score &

select short list of suppliers for negotiations

• Invite short-listed suppliers for negotiations

• Prepare negotiation strategy:

• Review all items that will have an influence on the outcome

• Agree negotiation team & assigned roles

• Prepare negotiation strategy

• Once supplier(s) have been chosen, final contracts can be prepared. Suppliers should have signed up to the UL terms & conditions, or at the least highlighted areas of concern

USQS – ARAVO – WHAT DOES IT BRING?

For Procurement

• Ability to identify approved suppliers for the products and services we want to buy.

• Understanding of potential risk of buying products or services in all geographies.

• Knowing that we have chosen the best as our partners.

For Your Suppliers

• Joining the system enables suppliers to qualify to work with Unilever  and gives visibility throughout Unilever’s global businesses.

PROCUREMENT PROCEDURE• Purchase Requisitions• Request for PFIs or Quotations • Purchase Order• LC or Bank Contract• Follow-up for Shipment details and Docs• Status of Arrival and Clearance• GR/IR is prepared• Payments

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Ariba Spend Management is a group of integrated web based modules which is used to manage spend within the business. In Unilever, we use the following modules:-

• Ariba Source – used to manage electronic RFQ / RFI with our suppliers.

• Ariba Contract – used to approve and store all our IP contracts. Also used to upload supplier catalogues (agreed price lists)

• Ariba Buyer – used to manage requisitions, orders and goods receipts

• Ariba Network – a Business to Business (B2B) connector which allows Unilever to send or receive electronic documents (i.e. orders, order confirmations, invoices, invoice status, etc..) with our suppliers.

ARIBA SPEND MANAGEMENT

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ARIBA BUYERBENEFITS

• Single global instance which is available to any Unilever employee with access to the Unilever Network.

• Simple and intuitive screens allow the end users to raise requisitions with minimal training.

• Costing saving opportunities can be increased and maverick spending reduced as demand is routed via the procurement teams.

• Preloaded catalogues allow the user to browser and select items from preferred suppliers and at negotiated prices.

• Automated flows ensure audit controls are in place and can be approved via email (including mobile devices connected to Unilever’s mail system.

• Reporting on spend categories allows procurement to identify new savings opportunities.

• Audit controls are build in to reduce the possibility of fraud.

PARTNER TO WIN

Our Partner to Win Programme touches every aspect of our strategy and creates a supplier

‘halo’ enabling all our suppliers to aspire to the highest standards and to learn and implement

great strategies from our top-tier supply partners.

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UNILEVER RESPONSIBLE SOURCING STRATEGYThe principles of the Unilever Responsible Sourcing policy procurement managers will be able to assess a supplier’s compliance with Unilever’s Supplier Code in the areas of:• Labour standards• Health and safety, • Environmental management practices• Business integrity• and determine the potential level of reputational

risk that the supplier may pose to brands, business and corporate reputation.

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SERVICE MEASURES

Dispatch Rate (DR) – is a percentage of cases DISPATCHED out of what customer expects to receive

Customer Case Fill (CCF) – is a percentage of cases ACCEPTED by the customer

On Time (OT) – shows cases delivered by Unilever at CUSTOMER EXPECTED TIME

Customer Case Fill on Time (CCFOT) - is the percentage of cases ACCEPTED by the customer ON TIME out of the total number of cases expected by the customer

Service Efficiency (SE) – is percentage of PERFECT ORDERS (orders with no date or quantity change ) out of total number of orders

We use a number of key performance indicators to measure ourService and progress in becoming the Best Supply Chain in the industry.

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CONCLUSION

The overall report shows the work proficiency of Unilever that how smoothly and specially the supply chain management which is performing its activities more efficiently and effectively.

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THANK YOU

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