Strategic Supply Chain Management and Logistics

[Name of Student]
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Table of Contents
Introduction ..................................................................................................................................... 3
Unilever Company ...................................................................................................................... 3
1.1 Importance of effective supply chain management in achieving organizational objectives .... 3
1.2 The link between supply chain management and business functions in an organization ......... 4
Customer Development ............................................................................................................... 4
Information Technology.............................................................................................................. 4
Supply chain ................................................................................................................................ 4
1.3 Key drivers for achieving an integrated supply chain strategy in an organization ................... 5
2.1 Effectiveness of strategies used by an organization to maintain supplier relationships ........... 5
2.2 Using information technology to create strategies to develop an organizations relationship
with its suppliers ............................................................................................................................. 6
2.3 Systems to maintain an organizations relationship with its suppliers ..................................... 6
3.1 Information technology to assist integration of different parts of the supply chain of an
organization..................................................................................................................................... 7
3.2 information technologys contribution to the management of the supply chain ...................... 7
3.3 Effectiveness of information technology in managing the supply chain of an organization .... 7
The role of logistics in supply chain management system in Unilever ....................................... 8
Role of logistics in supply chain management in an organization .............................................. 9
4.3 What are some of the factors that must be considered when improving logistics and
procurement practices in your organization? .................................................................................. 9
Establishing a governing body: ................................................................................................... 9
Transportation: ............................................................................................................................ 9
Establishing alliances with key suppliers .................................................................................. 10
5.1 Plan a strategy to improve an organizations supply chain..................................................... 10
5.2 Assess how a supply chain improvement strategy will benefit overall business performance
in the organization......................................................................................................................... 10
5.3 Explain how barriers will be overcome in the organization when implementing a supply
chain improvement strategy .......................................................................................................... 10
References ..................................................................................................................................... 12
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Introduction
Previously businesses often made the fault of failing to consider how the whole chain of
activities has the capability to alter the success of the business, rather the businesses focused only
on the activities taking place solely within its own domain. This meant that many external factors
went unplanned. Studies have shown that supply chain management is not a fad rather it is a
concept that has a lot of importance in todays business world (Jayarem and Batchtel 1997).

Unilever Company

The concept of supply chain and logistic management basically entails understanding that
the delivery of any good result is due to a combined effort of many organizations. Hence the
smooth and strategic management of these channels is the key to smart management. The
embodiment of this ideology can be observed in many organizations. An example of it can be
seen in Unilever which is a British Dutch multinational consumer goods company. Unilever is
part of the top 500 companies of the world and a company that has increasingly realized the
importance of strategic management of its supply chain for continued growth (Chae, 2015).

1.1 Importance of effective supply chain management in achieving organizational

objectives
The supply chain can directly influence the achievement of goals for a company. Often
enough a well-established supply chain can ensure that a company can focus on its core
competency without the hassle of worrying over the externalities of the business. When a
company is large and operates over multiple locations, then the effective supply chain
management can mean the difference between success and failure. With a company like Unilever
that has over 264 manufacturing sites worldwide and has its products available in over 170
companies, mismanagement along the supply chain can be catastrophic (Dhawan etal 2010).
One of the strategic objectives that Unilever had when expanding its operations was to increase
its effectiveness and cost through economies of scale. Expanding operations means newer
distribution channels, factories and plants. If Unilever is to achieve its objective of cost
reduction, then supply chain has to be managed, from production to distribution, in such a way
that costs are cut and efficiency is achieved (Research Matic 2017). Hence the ability for
Unilever to have success is tied directly with what it does with its supply chain.
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1.2 The link between supply chain management and business functions in an organization
There are some typical business functions that every organization has. These include production,
R&D, marketing, human resource, and finance. Unilever too functions with these basic
department and more.

Customer Development

One such function is the function of customer development. At Unilever this function has
a lot of value and is used to ensure sustainable growth. This basically entails understanding the
value that customers have and using their insights to launch products that can be trend setter
(Unilever 2017) .Supply chain factors directly into this. For these insights to be put into action,
new suppliers and distributers have to be brought on board and his in turn engages the entire
supply chain

Information Technology

IT is another important functions brings with it management information systems that

companies like Unilever are increasingly using. Having as wide a network that it does, IT is
integral in keeping it connected which also included functions across the supply chain
(Christopher, Christopher, Holweg and Holweg, 2017).

Supply chain

Finally, supply chain itself is a very important business function independent from its in
other functions across the stream. The supply chain team brings at Unilever pools is expertise
from over eight areas. These are the engineering, manufacturing, procurement, logistics,
customer service, planning, quality, and safety (Unilever 2017). By connecting all these aspects
of the business, Unilever is able to bring the kind of products it does to the market.
Supply chain function of the business here ties directly with the external environment of the
company and for Unilever too a strong supply chain means a better understanding of the
environment that can then be used to fine tune other business functions. What is important here
is that Unilever increasingly view this area as a completive strength as Procter and Gamble does.
Such a view can ensure that the business objectives discussed before are fulfilled (Cross,
Vanhaverbeke, Roijakkers and Pop, 2017).
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1.3 Key drivers for achieving an integrated supply chain strategy in an organization
There are certain factors that have to be carefully evaluated within the supply chain to
ensure that it is best integrated for success. They are primarily related to a companys inventory,
transportation system and information. The degree of responsiveness of these channels is
responsible for either making this area a competitive strength for an organization or a
competitive weakness. Given that the operations of Unilever span over continents, the
management of these key drivers is essential (Dhawan, Goodman, Harris and Mitchell, 2010).
Procurement and distribution process have to be extremely integrated for Unilever.
Strategic tactics are required and have to be used with the raw material providers to develop a
win-win scenario for both parties involved. The company cannot risk losing the important
strategic connections that it does have with some of its suppliers and vendors hence these divers
have to be strategically managed. The company controls many of its manufacturing concern.
However, the dynamics alter with changing locations and this has to be factored it. According to
Lambert and Cooper (2000), a continuous and smooth information flow is integral for the
integration of supply chain. The key processes that have to be included in this cycle are customer
relationship management, their demand management, order fulfillment, manufacturing flow
management as well as the management of supplier relationship. Information has flow
seamlessly in these channels if an integrated function is required (Fawcett and Waller, 2015).

2.1 Effectiveness of strategies used by an organization to maintain supplier relationships

As mentioned above, information and its flow through the various segments of the
business is of imperative importance. This is ensured through the information management
systems that the organizations put in place. In order to optimize the relationships, IT has to be
used smartly. One area that has to be tackled is that of suppliers. Given that the company has a
huge manufacturing concern, effective management of suppliers is essential if the company
wants to continue on the path of growth. The sourcing of the material particularly has to be
managed. Given that Unilever is a food company, many farmers and dairy producers have to be
brought on board or incorporated with in the business (Gualandris, Klassen, Vachon and
Kalchschmidt, 2015).
Something that a company like Unilever can do to ensure smooth functioning with its
suppliers is segmenting them based on their size, their contribution and the degree of criticalness.
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After portioning them off in such a way, the company can then make strategies for each strata.
Additionally, this can help them know which of the suppliers that they have hold the most
importance and then treat them accordingly. Higher value supplier should hence be managed
more strategically than those who are easily replaceable (Laursen and Andersen, 2016).

2.2 Using information technology to create strategies to develop an organizations

relationship with its suppliers

The way to then manage these high end suppliers is through better utilization of
information. Information technology comes into play here. Unlike some of the earlier theories, it
is increasingly being bandied about that centralization of operations is the way to go in bigger
organizations. Information systems are being developed that have the capability of doing this.
This can help cut down the cost of coordination with the suppliers. While e-collaboration method
like emails and spreadsheets can be used and have historically often used, there is an increased
need for real time information that these methods cant provide. Hence the trend of tailor made
management systems are coming into play (Laursen and Andersen, 2016).

2.3 Systems to maintain an organizations relationship with its suppliers

Not only is important to just develop these relationships, they also have to be maintained.
Unilever uses is information systems for both these purposes. The information systems being ued
include the Unilever Supplier Qualification System (USQS) that is used for all product and
service suppliers that the company has. This also helps the company to ensure that the people
that it does bring on board are willing to follow or comply with the principles that the company
considers to be crucial. Hence not only are the relationships maintained that way, by ensuring the
compliance to the companys principals, a smoother relationship is ensured. This also gives the
company a single platform that brings together the supplier for better assessment (Unilever
2017). Additionally, this also helps the company to understand the risk involved and then to
better manage this risk through the real time data available. This in turn translates to a more
effective relationship management.
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3.1 Information technology to assist integration of different parts of the supply chain of an
organization
Suppliers re one part of the supply chain that have to be catered. However, the other parts
can also not be ignored. Hence IT systems are used to not just ensure smooth relation with this
set of stakeholders, but with others too. One thing that has made this all possible is the internet.
With the help of the internet, it is now possible to connect the different information system so
that information from that of supplier to the customers can b liked together seamlessly (Lee and
Vachon, 2016). Real time data from all corners an hence be obtained simultaneously and
decisions made accordingly. The same is also happening in Unilever. Allocation of resources can
also be guided through these systems while also lowering the transaction costs. Additionally
manufacturing no longer has to rely on past forecasts. Rather, now the information technology
ensures that the customer demand guides the supply through the integration of these systems
along the supply chain (Ng, Scharf, Pogrebna and Maull, 2015).

3.2 information technologys contribution to the management of the supply chain

In the late twentieth century, the information was transmitted along the supply chain through
written and paper methods. This was a slow and tedious process and resulted in often critical
information to be overlooked. Companies often did not even understand the need for monitoring
its supply chain. This changed with the onslaught of techno lot (Unilever, 2015). IT enabled
organizations like Unilever to for the first time understand how by building information channels
and systems the company can have many long term benefits. Hence the contribution of IT to the
supply chain management is great. It has also provided a way for the companies to deal with the
increasing uncertainty in their environment (Mishra 2004).

3.3 Effectiveness of information technology in managing the supply chain of an

organization

Information technology and internet overall have a strong impact on many organizations
in the case of Unilever, not only has the information technology helped them develop their
relations, but it has also helped them plan for sustainability along their supply chain. It has been
able to bring on board suppliers that ascribe to its ideas of environmental management. It has
also been able to source its produce only from the areas that have complied with the codes and
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edicts that the company has put forward for environmental protection. And finally, it has been
able to develop and ecosystem that has incorporated the ideals of the organization in place and
linked it to parties that have similar ideology (Wisner, Tan and Leong, 2014).

ELL has successfully developed E-business solutions for improving customer service.
Some other things that Unilever has been able to do include enhancing the efficiency of the
company personnel and ensuring that they focus more in the critical areas. Not only has that,
these solutions also enabled it to hunt for the best talent that can manage its systems. The
information that the organization now have is more current and useful since it is based on real
time. Finally, the supply chain has grown and with it the company. New brands have been added
to the portfolio to ensure that the company stays on the path for growth (Unilever, 2015).

The role of logistics in supply chain management system in Unilever

As the size of the organization grows, with it grows its logistical costs. Logistics is
basically the function that ensures delivery of the products from its suppliers to customers. It
incorporates all the other aspects along the way like the storage and distribution details. The
movement of materials is inevitable and every organization has to do it. Raw materials have to
be picked up from farmers and other producers and have to be taken to the factories. From there
the finished products have to be picked up and taken to the distributors (Unilever, 2015). For
Unilever his chain often spreads across continents. Logistic costs can hence be very high. For
Unilever, the added pressure is of perishable goods. With FMCGs extra caution has to be taken.
If logistical details are mishandled, particularly if storage isnt properly customized, millions in
revenue can be lost because of spoilt food items. Logistic needs a huge amount of effort
(Unilever, 2015).

In addition to items like food, materials, liquids, etc, there are other items that also come within
the umbrella of logistics. The transfer of information is a logistical detail, so is the supply of
energy. The objective of logistical management however is simple, minimizing the waste along
the way and ensuring timely delivery of resources. There are four key areas along the way that
have to be accounted for. These include the management of the channel, materials, distributions
and finally the supply (Unilever, 2015).
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Logistics have an important role in ensuring material management. As mentioned above,

with perishable goods involved, the logistical details have to be altered, specialized warehouses
and delivery system are required to ensure that all goes smoothly. Channel is then the way they
are transferred. The transportation medium used also has to be specialized these details gave to
be incorporated within the supply chain management systems. Only then can their effectiveness
be ensured in the long run (Unilever, 2015).

Role of logistics in supply chain management in an organization

The products that Unilever produce include Blueband, Lipton, Knoor, Magnumm. These
are food products. The company vows to produce items that have the ability to please the
customers. Dairy, coca, and other food items have to be procured for these products. These
procurement channels come under supply chain and the logistical details then become the means
through which the company achieves them. The company has in place a huge effective system
that it used to ensure that it expands into areas of both foods as well as non-foods. Different
logistical channels have been created or the non-foods segment (Unilever, 2015).

4.3 What are some of the factors that must be considered when improving logistics and
procurement practices in your organization?

There are some factors that must be considered if effective supply chain and logistical
management is to be ensured. Procurement is one of the key functions of the supply chain. Some
other factors that should be considered are as follows:

Establishing a governing body:

This body can ensure that the companys objectives are in line with the way its supply
chain is functioning. It can also ensure effective order processing so that the logistic department
can perform its task in a better way.

Transportation:

The transportation cost should be kept low. Strategies can be put in place that ensures that
this happens and that the costs are cut along the entire supply chain.
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Establishing alliances with key suppliers

Good companies know that their success lies in working closely with their suppliers. A
two way route has to be developed that enables messages from both ends to be received and
processed. Tis can enable joint and effective management of the relationship on both ends.
Additionally, inventory management and warehousing are other important features. They have
also been mentioned above and should not be ignored by the companies like Unilever and Nestle
(Unilever, 2015).

5.1 Plan a strategy to improve an organizations supply chain

There should be a properly planned strategy for the ensuring that a better supply chain is
established. This strategy can have many focusing points. One of the most important aspects
remains cost reduction. This is closely followed by time reduction which can also be a way of
saving up time. A proper system can also reduce the transactions that an organization would have
to make thereby again cutting on costs (Unilever, 2015).

5.2 Assess how a supply chain improvement strategy will benefit overall business
performance in the organization

At this stage it is quite evident that a strong supply chain means a better business. It is not
a fad but increasingly a fact. In fact a strong network would ensure better relations with
partners, seamless execution of tasks, and goal achievement. A better customer service can be
put in place and better suppliers can be found for the company.

5.3 Explain how barriers will be overcome in the organization when implementing a supply
chain improvement strategy

The best way to ensure better collaboration is by ensuring that there are strong internal
connections. Not only that, better communication can also help overcome this barrier. Once
people intimate the stakeholders of the company about the advantage of going with such a
system, many objections would automatically dissolve. Identifying different key aspects and
understanding tem is also a key. Change is harder when it isnt internalized. Unilever would have
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to continue doing the same if it wants success with the systems it has. The supply chain
managers have a vital role to play. What they do with the company can affect the kind of cost
base it develops. Hence effectiveness along this branch can translate to effectiveness across the
board.
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References

Chae, B. K. (2015). Insights from hashtag# supplychain and Twitter Analytics: Considering
Twitter and Twitter data for supply chain practice and research. International Journal of
Production Economics, 165, 247-259.

Christopher, M., Christopher, M., Holweg, M., & Holweg, M. (2017). Supply chain 2.0 revisited:
a framework for managing volatility-induced risk in the supply chain. International
Journal of Physical Distribution & Logistics Management, 47(1), 2-17.

Cross, G., Vanhaverbeke, W., Roijakkers, N., & Pop, O. (2017). How Unilever Realises Its
Mission Of Making Sustainable Living Commonplace Through Partnering.

Dhawan,E., Goodman,E., Harris,S. and Mitchell.C (2010). Unilever and its Supply Chain:
Embracing Radical Transparency to Implement Sustainability. Unilever contact: David
Pendlington.

Fawcett, S. E., & Waller, M. A. (2015). Designing the supply chain for success at the bottom of
the pyramid. Journal of Business Logistics, 36(3), 233-239.

Gualandris, J., Klassen, R. D., Vachon, S., & Kalchschmidt, M. (2015). Sustainable evaluation
and verification in supply chains: Aligning and leveraging accountability to
stakeholders. Journal of Operations Management, 38, 1-13.

Laursen, L. N., & Andersen, P. H. (2016). Supplier involvement in NPD: A quasi-experiment at

Unilever. Industrial Marketing Management, 58, 162-171.

Lee, K. H., & Vachon, S. (2016). Supply Chain Sustainability Risk. In Business Value and
Sustainability (pp. 245-280). Palgrave Macmillan UK.

Ng, I., Scharf, K., Pogrebna, G., & Maull, R. (2015). Contextual variety, Internet-of-Things and
the choice of tailoring over platform: Mass customisation strategy in supply chain
management. International Journal of Production Economics, 159, 76-87.

Unilever. (2015). Business to business. Retrieved from

https://www.unilever.com/careers/business-function/business-to-business.html Accessed
on [21st July17]

Wisner, J. D., Tan, K. C., & Leong, G. K. (2014). Principles of supply chain management: A
balanced approach. Cengage Learning.