Unilever has said it is significantly improving “operational execution” and efficiency, as well as dramatically cutting complexity, after completing the global rollout of a single SAP enterprise resource planning system.
The company’s annual profits were down 30 percent at €5 billion (£4.4 billion), but an extensive reorganisation and cost cutting exercise had helped remove €1.4 billion from costs, it said.
SAP standardisation had had a “positive impact” on the cost cutting process, it said, particularly in Western Europe where the system rollout was completed in 2008. It worked with Accenture on the programme.
Four months ago, the household goods manufacturer, which makes products including Marmite, Dove soap and Domestos bleach, said it had removed £960 million from costs, aided by the SAP programme and tough supplier management initiatives. Unilever has moved to cut suppliers “dramatically”, after at one point using 160 vendors for 1,200 applications.
Paul Polman, chief executive at Unilever, said today that the company had moved a number of its main processes from being country-based to regional, and was now targeting a global management of the processes in order to “leverage scale”. This change includes IT functions.
“We will bring [human resources] and finance transactions, IT services, information management services, office and facilities services together under one roof,” he told investors. “In so doing we will improve service and reduce costs.”
But Unilever said that while its business processes were improving, the complexity was “still too high” and it was targeting more simplification this year. It currently runs 22 multi-country divisions.