Unilever is putting standardised regional business processes and streamlined IT systems at the heart of its ‘One Unilever’ programme to rationalise its operations and generate big cost savings, it has revealed.
The Anglo-Dutch consumer products group confirmed last week it would shed up to 20,000 jobs – or 11% of its workforce – over the next four years with the aim of saving £1bn a year by 2010, when its ‘One Unilever’ programme is due for completion.
Patrick Cescau, group CEO, said that the converged IT systems phased in by Unilever in recent years meant it could now push into a reorganisation of the business into about 25 multi-country businesses.
“We already have the clustering of smaller countries in places like Central America and the Nordic region. But we now have the chance to go further – perhaps consolidating to as few as 25 MCOs across Unilever,” he said.
“A simpler organisation, converged IT systems, a more focused and increasingly harmonised portfolio of global brands and products gives even greater scope for streamlining and more flexible manufacturing.”
Cescau said Unilever had last year established a new supply chain organisation for Europe, based in Switzerland, which had led to the Europe operation as a whole being able to raise its target for on-shelf availability to 95% from 92%.
“That potentially is a lot of additional sales,” said Cescau.
Unilever uses ERP systems from SAP, as well as some functions from SAP Supply Chain Management. In December last year it strengthened its ERP commitment with SAP by signing a Global Enterprise Agreement.
Unilever's decision to manage its business on a regional basis rather than trying to roll out a single global architecture also mirrors a decision taken earlier this year by steel giant Arcelor Mittal.
Mittal said in May that it had abandoned a project to standardise business processes and consolidate on a single ERP system worldwide to avoid unnecessary complexity.
It decided instead to standardise business processes and SAP systems in each of 10 business segments, based on market and geography.