Executive Briefings

How Unilever Derives Value From Its Supply Chain

Pier Luigi Sigismondi, chief supply chain officer of Unilever, enumerates the ways in which the company's supply chain adds value to the business. He also talks about issues of sustainability and supply-chain segmentation.

Unilever is a huge operation. It owns 260 factories and 460 warehouses, with operations in 90 countries, serving some 2 billion consumers. When it comes to supply-chain management, the company's challenge extends well beyond the old "right product, time, place and cost" metrics. These days it needs to address such issues as sustainability, speed of order fulfillment and strategic partnerships with suppliers. Efforts must proceed at both the global and local levels.

"Sustainability for us is at the core of our business model," Sigismondi says. That commitment extends to such areas as the procurement of raw packaging materials. Unilever's goal is to sustainably source 100 percent of its raw materials by 2020.

Sustainability programs can take many forms. In India, consumers do most of their laundry by hand, using up to four buckets of water per load. Unilever is redesigning its products to use only half the amount of water previously required. The result, says Sigismondi, is greater consumer convenience, less water consumption and less waste.

The company has already made substantial progress toward its goal. From a supply-chain perspective, it has eliminated 600 tons of carbon over the past three years. In the process, says Sigismondi, "we're seeing massive cost savings. Twenty percent of our energy is coming from renewable sources." The target number, he added, is 40 percent.

Of the total greenhouse gases emitted by the company's global operations, as much as 35 percent is related to suppliers and the way Unilever sources its packaging, he says. Just 2 percent is generated by the factories, and 3 percent by distribution activities. A full 68 percent of the total carbon footprint is related to consumer use, Sigismondi notes.

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Keywords: supply chain, supply chain management, retail supply chain, supply management, supply chain sustainability, green supply chains, global logistics, logistics management, supply chain planning, sourcing solutions

Unilever is a huge operation. It owns 260 factories and 460 warehouses, with operations in 90 countries, serving some 2 billion consumers. When it comes to supply-chain management, the company's challenge extends well beyond the old "right product, time, place and cost" metrics. These days it needs to address such issues as sustainability, speed of order fulfillment and strategic partnerships with suppliers. Efforts must proceed at both the global and local levels.

"Sustainability for us is at the core of our business model," Sigismondi says. That commitment extends to such areas as the procurement of raw packaging materials. Unilever's goal is to sustainably source 100 percent of its raw materials by 2020.

Sustainability programs can take many forms. In India, consumers do most of their laundry by hand, using up to four buckets of water per load. Unilever is redesigning its products to use only half the amount of water previously required. The result, says Sigismondi, is greater consumer convenience, less water consumption and less waste.

The company has already made substantial progress toward its goal. From a supply-chain perspective, it has eliminated 600 tons of carbon over the past three years. In the process, says Sigismondi, "we're seeing massive cost savings. Twenty percent of our energy is coming from renewable sources." The target number, he added, is 40 percent.

Of the total greenhouse gases emitted by the company's global operations, as much as 35 percent is related to suppliers and the way Unilever sources its packaging, he says. Just 2 percent is generated by the factories, and 3 percent by distribution activities. A full 68 percent of the total carbon footprint is related to consumer use, Sigismondi notes.

To view video in its entirety, click here


Keywords: supply chain, supply chain management, retail supply chain, supply management, supply chain sustainability, green supply chains, global logistics, logistics management, supply chain planning, sourcing solutions