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Unilever 10-year sustainability plan relies on supply chain technology overhaul

Unilever 10-year sustainability plan relies on supply chain technology overhaul

Household goods maker will draw on ERP, business intelligence and standardised processes

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Unilever has announced a major drive to halve the environmental impact of its operations and supply chain within a decade, with technology expected to be crucial in supporting the efforts.

The SAP-based company, which makes brands including PG Tips tea, Persil washing powder and Bertolli olive oil, has been standardising its internal systems and supply chain technology to improve efficiency and cut wasted processes. It is likely to draw heavily on enterprise resource planning, business intelligence and business process management to achieve its environmental aims.

Much of Unilever’s monitoring and control of its business comes through the company’s SAP ERP platform, which is now used globally. It is also in the midst of creating a “global supply chain function” with standardised processes, which relies on networks created and maintained by BT. These systems appear set to be used widely as part of the sustainability efforts.

The environmental campaign comes in the year Unilever chief executive Paul Polman said the company was attempting to double its €40 billion (£33.9 billion) annual revenue, suggesting this would be possible over a similar period.

This week he maintained that “growth at any price is not viable”, adding in an interview with the Guardian that the company has “to develop new ways of doing business”.

Under the plan, Unilever has vowed to overhaul operations by heavily controlling how it produces and procures goods and distributes them. It vowed to slash its own greenhouse gas emissions, waste and water usage, and to make sure its entire supply chain does the same. According to the plan, within a decade it will only procure sustainable agricultural produce.

It will also step up research to produce goods that require much less wastage, including water, from consumers.

The scheme is similar to one at rival Procter & Gamble, which is working towards powering its factories only with renewable electricity and using 100 percent recycle material in its packaging.

Unilever, working with consultancy Accenture as part of the One Unilever efficiency overhaul, has been working on two major technology projects that will likely play an integral part in the sustainability drive. It had not provided exact detail at the time of writing.

Under the first of the two plans, called Sirius, it has deployed a harmonised process model based around SAP ERP, SAP NetWeaver business intelligence and Microsoft ProClarity analytics. A second project, called Mountain, has seen Unilever form a standardised supply chain model.

It is expected to draw heavily on the business intelligence and ERP systems to produce annual sustainability reports.

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 company now has a “real time” view of its supply chain, which will be crucial in controlling emissions and processes.

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

In its third quarter results earlier this month, Unilever grew net profit by 21 percent year on year to €1.3 billion (£1.1 billion), aided by the cost cutting and improved processes. It noted the importance of the new supply chain centre to common, more effective operations globally.

SAP UK & Ireland User Group Annual Conference

21-23 November 2010, Manchester,

Further information available here

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