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U nilever Procurement & S ourcing S trategy 1

Unilever

Procurement & Sourcing Strategy

Group Members

Syed Hasan Naqvi

Umais Qureshi

Shad Ashraf Ali

Khizer Mukarram

Muzammil

Faizan

Unilever

“Unilever is a brand which is trusted

everywhere that focus on productivity and performance. Unilever encourage our customer, our people to develop new ideas.”

OUR MISSION

Unilever, we have ambitious plans to grow our business while reducing our overall environmental impact, and only through partnering with our

suppliers will sustainable and profitable growth be

achievable.

OUR VALUES

Fewer than four key values underpin the way in which Unilever is doing their business

Respect It guides to treat the people with honesty, fairness and Dignity

Integrity

It guides to do the right thing for the long term success of Unilever

Pioneering It gives the passion for winning and for creating a better future

Responsibility

It is all about taking care of our customers and the employees of Unilever

UNILEVER’S PORTFOLIO OF CATEGORIES

UNILEVER’S PORTFOLIO OF CATEGORIES

UNILEVER GLOBAL

STRUCTURE

Europe

North Asia (Greater China & North East Asia)

SEAA (South East Asia and Australasia)

South Asia

NAMET & RUB (North Africa, Middle East, Turkey and Russia)

Africa (Central Africa & South Africa)

North America

Latin America

North America Europe North Asia Africa (Central Africa & South (Greater China Africa) & North
North America
Europe
North Asia
Africa (Central
Africa & South
(Greater China
Africa)
& North East
Asia)
NAMET &
RUB (North
Africa, Middle
SEAA (South
East Asia and
Australasia)
East, Turkey
and Russia)
South Asia

Procurement Application Tools

The Applications below are essential to any Unilever Procurement Professional.

Material Price Forecasting (SAP BPC)

Improved harmonized tool for setting Standard Prices and calculating Price Trends

SAP (Material Management)

Process direct procurement

ARIBA BUYER

Process Indirect Procurement expenditures request and Process IP invoices here

ISIS

Use this tool to manage your savings projects and report savings results.

Conflicting challenges between Procurement and Planning

Purchasing wants

Stable volume requirements

Flexible delivery time

Little variation in mix

Large quantities

Manufacturing wants

High quality

High productivity

Low production cost

Challenges of Procurement Team

Managing spend creep and ensure the cost control

Managing the lead time

The visibility of the saving (ISIS) is one of the challenge face by Unilever

Compliance of contract

Maintaining the On time is full (OTIF) or Customer cases fill on time

(CCFOT).

Effective use of sourcing

Quality applied

UNILEVER PROCUREMENT FUNCTION

Unilever consist of two categories of procurement:

Direct Procurement (Raw Materials / Packaging materials)

Indirect Procurement (Non Productive Items)

OBJECTIVE OF THE PROCUREMENT FUNCTION

To evaluate the supply market and their trends i.e. forecasting

To ensure that the material will be available as per desired timeline.

To ensure that the product is as per required quality

To ensure that violation of specs is not stated.

To ensure that the material be delivered at right place and with right quantity.

SELECT SUPPLIER SELECT SUPPLIER DEVELOP DEVELOP TARGET TARGET EVALUATE EVALUATE NEGOTIATION NEGOTIATION & &
SELECT SUPPLIER
SELECT SUPPLIER
DEVELOP DEVELOP
TARGET
TARGET
EVALUATE EVALUATE
NEGOTIATION NEGOTIATION & &
GO-TO-MARKET GO-TO-MARKET
APPROACH
APPROACH
SUPPLIERS
SUPPLIERS
RESPONSES RESPONSES
AWARD AWARD
Note that whilst an
Include all
• •
Capabilities
Capabilitie
• •
Existing
Existing
Evaluation Evaluation
• •
Prepare Prepare negotiation negotiation
RFP is most
information
Time
s
suppliers
suppliers
strategy: strategy:
criteria criteria will will
common, choose the
suppliers need
• Quality
Time
• •
Past Past
• •
Review all items
Review all items
method that matches
include include (may (may
to present their
• Service Quality
suppliers suppliers
that that will will have have an an
the needs of the
best case,
be be
• Cost
Service
• •
Market Market
influence influence on on the the
organisation
including:
weighted): weighted):
Reliability Cost
research
research
outcome outcome
Confidentiality Include information all
Service
Service
Capacity Reliability
Supply
Supply
Agree negotiation
Agree negotiation
• Ethical
Capacity
market
market
• •
Capability Capability
team team & & assigned assigned
req’s suppliers need
Culture Ethical
knowledge
knowledge
roles roles
to Evaluation Timeframe present their
Quality Quality
• Order process
Culture
• •
Different Different
• •
Prepare negotiation
Prepare negotiation
best criteria case,
• •
Lead time
Lead time
• Suitability
Order
supply supply
strategy strategy
including:
Cost Cost
• Responsible
process
markets markets
• •
Once Once supplier(s) supplier(s)
Confidentiality Specifications
• •
Score Score & &
Performance
• sourcing (USQS •
Suitability
Consider
Consider
have have been been chosen, chosen,
req’s
select select short short
/ Positive
Responsib
substitutes
substitutes
final contracts can
final contracts can
Timeframe req’s
list list of of
assurance)
le
• •
Determine
Determine
be be prepared. prepared.
Evaluation volumes Historical
• Observance to
sourcing
whether
whether
suppliers suppliers for for
Suppliers Suppliers should should
• UL supplier
Observan
pre- pre-
negotiations
negotiations
have have signed signed up up to to
• Pricing criteria Specifications Financial details
code ce to UL
screened screened
the the UL UL terms terms & &
Performance
• •
Invite Invite short- short-
statements
supplier
suppliers suppliers
conditions, conditions, or or at at the the
req’s
listed listed
code
can can meet meet
least least highlighted highlighted
suppliers suppliers for for
all the
all the
• Historical
volumes
areas areas of of concern concern
negotiations
negotiations
criteria
criteria
• Pricing details

Financial statements

1313 1313

USQS ARAVO WHAT DOES IT BRING?

For Procurement

Ability to identify approved suppliers for the products and services we want to buy.

Understanding of potential risk of buying products or services in all geographies.

Knowing that we have chosen the best as our partners.

For Your Suppliers

Joining the system enables suppliers to qualify to work with Unilever and gives visibility throughout Unilever’s global businesses.

PROCUREMENT PROCEDURE

Purchase Requisitions

Request for PFIs or Quotations

Purchase Order

LC or Bank Contract

Follow-up for Shipment details and Docs

Status of Arrival and Clearance

GR/IR is prepared

Payments

ARIBA SPEND MANAGEMENT

Ariba Spend Management is a group of integrated web based modules which is used to manage spend within the business. In Unilever, we use the following modules:-

Ariba Source used to manage electronic RFQ / RFI with our suppliers.

Ariba Contract used to approve and store all our IP contracts. Also used to upload supplier catalogues (agreed price lists)

Ariba Buyer used to manage requisitions, orders and goods receipts

Ariba Network a Business to Business (B2B) connector which

allows Unilever to send or receive electronic documents (i.e. orders,

order confirmations, invoices, invoice status, etc

)

with our suppliers.

ARIBA BUYER

BENEFITS

Single global instance which is available

to any Unilever employee with access to the Unilever Network.

Simple and intuitive screens allow the

end users to raise requisitions with

minimal training.

Costing saving opportunities can be increased and maverick spending reduced as demand is routed via the procurement teams.

Preloaded catalogues allow the user to browser and select items from preferred suppliers and at negotiated prices.

Automated flows ensure audit

controls are in place and can be

approved via email (including mobile devices connected to Unilever’s mail system.

Reporting on spend categories allows procurement to identify new savings opportunities.

Audit controls are build in to reduce the possibility of fraud.

PARTNER TO WIN

Our Partner to Win Programme touches every aspect of our strategy and creates a supplier ‘halo’ enabling all our suppliers to aspire to the highest standards and to learn and implement great strategies from our top-tier supply partners.

UNILEVER RESPONSIBLE SOURCING STRATEGY

The principles of the Unilever Responsible Sourcing policy

procurement managers will be able to assess a

supplier’s compliance with Unilever’s Supplier Code in the areas of:

Labour standards

Health and safety,

Environmental management practices

Business integrity

and determine the potential level of reputational

risk that the supplier may pose to brands, business and corporate

reputation.

SERVICE MEASURES

We use a number of key performance indicators to measure our Service and progress in becoming the Best Supply Chain in the industry.

Dispatch Rate (DR) is a percentage of cases DISPATCHED out of what customer expects to receive

Customer Case Fill (CCF) is a percentage of cases ACCEPTED by the

customer

On Time (OT) shows cases delivered by Unilever at CUSTOMER EXPECTED TIME

Customer Case Fill on Time (CCFOT) - is the percentage of cases

ACCEPTED by the customer ON TIME out of the total number of cases

expected by the customer

Service Efficiency (SE) is percentage of PERFECT ORDERS (orders with no date or quantity change ) out of total number of orders

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CONCLUSION

The overall report shows the work proficiency of Unilever

that how smoothly and specially the supply chain

management which is performing its activities more efficiently and effectively.

THANK YOU