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Unilever switches on global real time supply chain systems

Unilever switches on global real time supply chain systems

IT crucial to coping with volatile commodities, says chief executive

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Unilever has fully implemented global supply chain and procurement systems, which are based around its SAP enterprise resource planning platform.

The consumer goods giant, which manufactures brands including PG Tips tea, Persil washing powder and Bertolli olive oil, said the SAP-based systems were contributing to €800 million (£678m) of savings from procurement – alongside other major cost cutting – and were central to the future of its business operations.

Unilever is now “better equipped” to manage “volatile” prices and changing commodity supplies, Paul Polman, chief executive, told investors.

The new supply chain system, rolled out with Accenture, offers a real time view of goods, and is based around standardised processes in SAP ERP. It relies on networks created and maintained by BT.

In an Accenture case study document, Unilever’s supply chain company (USCC) chairman Peter Ernsting said that without the new platform, “USCC technically would not exist”.

The changes are also crucial to a major drive to halve the environmental impact of Unilever’s operations and supply chain within a decade, with technology expected to be crucial in supporting the efforts. Over the same decade, Unilever is attempting to double annual revenues to €80 billion.

Under a project known as Sirius, Unilever has also deployed a harmonised process model based around SAP ERP, SAP NetWeaver business intelligence and Microsoft ProClarity analytics.

Using the systems, Polman said, Unilever was “faster, more disciplined, with strong savings programmes and a leaner cost structure”. The company also has a global IT support function.

The company is determined to design and manufacture products “faster” and become an “execution powerhouse”, he said, adding that Unilever’s operations globally were “now aligned”. Unilever is designing, manufacturing, marketing and distributing products to over 30 countries in an average of under a year, he said.

Unilever’s net profits jumped by a quarter to €4.6 billion (£3.9 billion), on the back of the cost cutting and as annual turnover rose 11 percent to €44.3 billion (£37.6 billion).

Other key technology at the company includes Oracle databases, where all the data is stored, and CA database management.

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