PT Unilever Indonesia Tbk

Term Paper

Name : Adilla Ikhsani

No.Bp : 1610533041
I. Overview of the company
Vision

To earn Indonesia’s love and respect by touching the lives of every Indonesian every day.

Mission

 We work to create a better future every day.

 We help people feel good, look good and get more out of life with brands and services that
are good for them and good for others.
 We inspire people to take small, everyday actions that can add up to a big difference for the
world.
 We will develop new ways of doing business that will allow us to double the size of
business while reducing environmental impact and increasing social impact.

Business Company

Unilever Indonesia has been a leading player in Indonesia’s fast moving consumer goods
industry for 85 years.Unileber business is focused on a core purpose of making sustainable living
commonplace. The Company was first established as Lever’s Zeepfabrieken N.V. on 5 December
1933. In 1980, the Company changed its name to "PT Unilever Indonesia", as recorded in deed No.
171 by public notary Mrs. Kartini Muljadi, S.H., dated 22 July 1980. The Company subsequently
changed its name to "PT Unilever Indonesia Tbk" on 30 June 1997, recorded by public notary Mr.
Mudofir Hadi, S.H. in deed No. 92. This deed was approved by the Minister of Justice in Decision
Letter No.C2-1.049HT.01.04-TH.1998 dated 23 February 1998, and published in State Gazette No.
39 dated 15 May 1998, Supplement No. 2620. After becoming a public company in 1981, Unilever
Indonesia issued its shares on the Jakarta and Surabaya Stock Exchanges on 11 January 1982, and
its shares are now listed on the Indonesia Stock Exchange. Unilever Indonesia was the fifth largest
company on the Indonesia Stock Exchange based on market capitalisation as of the end of 2018.
The Company’s portfolio draws on its global and local heritage as well as innovation and local
insights, with a brand line-up that includes Sunlight, Royco, Walls, Bango, Pepsodent, Lux,
Lifebuoy, Dove, Sunsilk, Clear, Rexona, Vaseline, Rinso, Molto and many more.

These purpose-led brands are spearheading mission to drive profitable and sustainable growth
while making a positive impact on society and reducing environmental footprint. This is enshrined
in the Unilever Sustainable Living Plan (USLP), which sets out the blueprint for work in three focus
areas: Improving Health and Wellbeing, Reducing Environmental Impact, and Enhancing
Livelihoods. The mission is underpinned by commitment to the values and standards defined in
 Code of Business Principles (CoBP), which are designed to ensure that the interests of all
stakeholders are protected.

The Company has nine factories across two sites, the Jababeka Industrial Zone in Cikarang,
West Java, and Rungkut in Surabaya, East Java. The head office, which houses more than 1,200
employees, occupies purpose-built premises on a 3-hectare site in Bumi Serpong Damai, Tangerang.
The Company’s portfolio of 42 core brands and more than 1,000 stock keeping units (SKU) is
marketed through a network of more than 800 independent distributors serving hundreds of
thousands of stores throughout Indonesia.

Brands

Unilever is organised into four main divisions, there are :

1. Home Care (production and sale of home care products including powders, liquids and capsules,
soap bars and other cleaning products), Ex: Molto, Rinso, Cif, Sunlight, WipoL,etc

2. Personal Care (production and sale of skin care and hair care products, deodorants Product );Ex :
Dove, Clear, TRESemme, LUX, Closeup, Sunslik, Zwitsal, POND’S, etc

3. Foods (production and sale of soups, bouillons, sauces, snacks, mayonnaise, salad dressings,
margarines and spreads); Ex : SariWANGI, BANGO, Blue Band, Royco,etc

4. Refreshment (production and sale of ice cream, tea-based beverages, weight-management

products and nutritionally enhanced staples sold in developing markets);

Ex: Buavita, Cornetto, WALL’S, MAGNUM, Paddle pop, etc

Home and Personal Care contributed 69% of the Company’s net sales in 2018. With numerous
innovation initiatives and acceleration of the portfolio transformation, Home and Personal Care
delivered growth of 2.1%. Foods and refreshment brands continued to be the products of choice in
Indonesian households. In 2018, strong innovation, precision marketing on digital platforms and a
relentless focus on consumer needs helped our products to stay relevant in the market.

II. The Implementation of Management Accounting in Unilever

Unilever driving strong innovation across all categories, the Company booked net sales of
Rp41.8 trillion, growing by 1.5%, and recorded a net profit of Rp9.1 trillion.(Excluding the Spreads
category which unilever sold in July 2018, the Company delivered underlying sales growth of 2.4).
continued to lead in Unilever Indonesia’s core categories in 2018.
 Home and Personal Care posted growth of 2.1%, while Foods and Refreshment, excluding the
Spreads category, showed sales growth of 3%. After a very challenging first half, the Company
grew by a solid 5.1% in the second semester,and posted 2.4% growth (excluding Spreads category)
for the full year 2018.u\Unilever are sustainable living message and actions remained front and
centre, with almost 50% of turnover generated by purpose-led brands in 2018. This year saw the
Company develop customer-driven innovations and introduce transformative changes that are
empowering the business for sustained value creation over the long term.

The unprecedented changes in technology, markets and the way people consume are
challenging us to be better. In 2018 Unilever continued to evolve transformation, driving the
following strategic initiatives to transform Unilever Indonesia into a purpose-led, future-fit
business.

Production Management System

In Unilever, the production is done according to company standards and legal requirement
with required quality, quantity, time and cost. Monitoring and managing line planning is done so
that production reach its target. It also ensure occupational safety, food safety and environmental
standards are implemented consistently.

VALUE CHAIN

Unilever’s value chain is the process by which Unilever create brands, products and ultimately
shareholder value. Unilever response to the increasing cost inflation in 2018 was to drive
continuous productivity improvements across the end-to-end supply chain by applying zero-based
cost principles.Unilever also continued to collaborate closely with they business partners on
reshaping asset and cost base by identifying opportunities to take away non-value adding activities.
This has shortened they `lead time and removed unnecessary costs from the system. Begins with
acquiring insight into consumers’ needs, which vary considerably between developed and emerging
markets. Insight requires close engagement with consumers, often over prolonged periods, and
allows us to identify future trends to gain a competitive edge. That knowledge helps us to target
they subsequent R&D activities and Unilever investments in innovation. Creates a new platform for
us to work with they suppliers in the development of product and packaging innovations that
capture consumers’ interest and attention. Bringing these innovations to market as physical products
is a core function of Unilever’s supply chain, Unilever itself manufactures the majority of its
products and we maintain an international network of 240 manufacturing sites. In sourcing large
amounts of raw materials we also have a direct impact on the environment. By sourcing sustainably,
we can protect scarce resources, ensure security of supply for they business and reduce price
volatility while protecting the environment and enhancing people’s lives, which is at the heart of
Unilever Sustainable Living Plan (USLP).

Digital technology is fundamentally transforming end-to-end value chain, enabling greater

efficiency, accuracy and control across all processes, which in turn is driving productivity. In 2018
Unilever continued to invest in digital capabilities to add value for the business.In unilevers
planning and customer service functions, uniever have adopted robotic process automation and
machine learning, and implementing low cost automation in manufacturing and warehousing
operations, which is helping to unlock efficiencies for the future.

Unilevers have enhanced logistics operations by adopting a real-time track and trace system
that allows us to monitor goods at every step of the way until they reach the customer. This
capability has been deployed across a multimodal network of road and sea routes, giving us
valuable visibility across Indonesia’s complex geography. In addition, digitisation has been
deployed to strengthen the material procurement process and back end integration with suppliers, as
well as other core business processes. It is also enhancing they innovation platform. Going forward,
unilevers will continue to invest in unlocking the power of big data to optimise they operations.

JIT System
Unilever using just-in-time delivery system products. For example, when Unilever send
products to Carrefour. Carrefour will periodically count using sampling method regarding what
Unilever products are sold every day, (even more focused when the weekend). And asks Unilever to
deliver the amount of product that Carrefour need. Therefore, it is certain Unilever send the
products to the Carrefour in a timely manner according to the situation of goods stock in Carrefour,
because of that Unilever hpe that customer are satisfied with the Unilever products.

Cost of Quality

Unilever follow strictly the rules of the Japan Institute of Plant Maintenance, the name is Total
Productive Maintenance (TPM) is a business process improvement method, developed from the
perspective of maintenance management. TPM concentrates on productivity improvement,
primarily by way of maximizing the availability of equipment. In the European Union, Unilever is
one of the biggest propagandists of TPM. This food multinational has used this improvement
method for over 15 years, during which it has grown into an overarching process management
system. So, the implementation in Unilever is done pillar-by-pillar.

ACTIVITY BASED COSTING

Unilever not use activity based costing more because when Unilever first acquired the
Gloucester factory - along with three former Birds Eye Wall's frozen food sites - there was an old
system was hugely manually-intensive and all it did was produce paper-based reports, the main
purpose of which was to capture whether people had attended work or not. The allocation of staff
costs against specific products lines was a complex manual process involving four full-time clerks
and a HR department administrator.The costs were accrued against each unique stock keeping unit
(SKU) code although this was problematical due to many obsolete product variants.

Now, Unilever UK Ice Cream then decided to replace the legacy system and switch to a time-
based activity management solution. It has helped the company to cut administrative costs, reduce
absence, and gain a new insight into production activities. Unilever UK Ice Cream owns the Wall's
ice cream factory in Gloucester. Employing 486 people, there are ten ice cream production lines
making around three million ice cream products a day.Wall's-branded products include Cornetto,
Magnum, and Viennetta This would extend the analysis capabilities from the simple categories such
as 'production' or 'training' to more detailed activity codes.These would show which production line
or office-based task was involved. Unilever wanted to get everybody to clock including the site
manager, their business drivers were about simplification and moving to an activity-based costing
model.

BALANCED SCORECARD

Financial

To build a compelling vision that all finance team members globally which is a team with only nine
global members. The team includes vice presidents of finance and finance directors from different
Unilever businesses around the world.

This team was developed to bring financial strategy life. This is accomplished by:

 Stimulating and facilitating best-practice creation and sharing,

 Providing learning opportunities,

 Identifying necessary financial competencies and skills.

Tools for finance business partner :

Tool Result
This method provides the finance team within This method drove significant improvement in
customer development with tips on structure, trade ROI (return on investment), which fueled
resources to stay abreast of retail trends, and a increases in advertising
framework for assessing customers and and share growth.
channels based on opportunity and risk using
financial and nonfinancial metrics.

Customer

1. Consumer voice : hear and learning from consumer

Through their commitment in the field of consumer services, the so-called "Voice of Customer"
(Consumer Voice), Unilever Indonesia establish a good relationship with consumers. Consumer
voice provide rapid response to complaints and inquiries about the product, as well as improve
customer satisfaction of the product. Consumer voice is dedication Company against aspects of
consumer services, where Unilever staff serve customers during the five days a week during
business hours. Consumers are encouraged to use Consumer Services path to convey advice,
express satisfaction and grievances or question. Feedback will be handled and responded quickly
through a strict protocol by Consumer Complaints Service agent (Consumer Advisory Service-
CAS). Complaints will be included in the category normal, high priority or emergency. If the Agent
CAS can not give an answer, then the issue will be brought to the relevant department or division
through designated contacts.

2. Protecting consumers of fake product

Nowadays, many circulating fake a products on behalf of the brands of Unilever Indonesia,
such as Pond's products and image. These counterfeit products still are found in many markets in
Indonesia. Product is likely to contain hazardous substances, or no benefit, to the detriment of
consumers. Unilever follow these counterfeit products seriously and take the measures required to
fix this problem. Through a salesperson in various regions throughout Indonesia, Unilever regularly
monitor the state of the market. When products false use Unilever name was found in some stores,
we will send a warning letter for shopkeepers to pull the product proficiency level and stop selling
it. If they are found stil `continue selling fake products, so unilever party authorities (local police)
will conduct raids and confiscated their false

Business in Process
Unilever business strategy is called ‘the Compass’. First developed in 2009, it sets out their
ambitious vision to double the size of the business, whilst reducing they environmental footprint
and increasing their positive social impact and their purpose of making sustainability commonplace.
The Compass also defines four non-negotiable commitments within the business that Unilever
believe will help them achieve their purpose and vision, such as:
 winning with brands and innovation;
 winning in the market place;
 winning through continuous improvement; and
 winning with people, because developing and retaining the right quantity, quality and diversity
of people is crucial to growth strategy
Learning and Growth

Unilever embraced innovative business partnering to maximize the value of finance to build brand
value and drive growth. As one of the five thrusts, Innovative Business Partners helps Unilever
achieve its goal of delivering top one-third total shareholder return among its peer group and the
growth it promised to shareholders, this involved identifying competencies required to deliver the
company’s overall strategy with:

 Better measurement (consistent, external, brand health focus),

 Improved return on brand/customer investment,
 Better planning (brand and customer orientation, value-creation focus), and
 Improved innovation success rate through better analysis.

Tool Result
This tool aims to improve brand health by Dove Real Beauty Campaign-This tool
ensuring visibility and alignment around key supported a global marketing campaign to
brand-health measures celebratthe natural physical variation all
women embody and inspire them to have the
confidenceto be comfortable with themselves

III. Discussion

Making Sustainable Living Commonplace

“Transforming for a Sustainable Future” Unilever Indonesia

is committed to sustainable and inclusive growth. The
vision is to create profitable growth that not only benefits to
shareholders but drives positive change for society, and is decoupled from environmental footprint.

The business model brings together three key inputs—brands, operations and people—and
filters them through the lens of the Unilever Sustainable Living Plan (USLP). The brands have
strong equity, built on products that they customers and consumers value. Grow the brands by
identifying social and consumer needs, and innovating, manufacturing, marketing and distributing
products that meet them. The operations are the essential supplychain functions and assets of raw
material supply, factories, logistics, go-to-market expertise and marketing.Customer are the heart of
business, driving innovation and excellence.Unilever invest financial capital to sustain and improve
all these assetsand activities

How Unilever Drive Profit ? Profitable Volume Growth, Cost Leverage + Efficiency,
Innovation, Marketing Investment aim is to create a virtuous circle of growth. Profitable volume
growth is driven by investment in innovation and brands to deliver products that 2 billion
consumers, all over the world, use every day. The scale enables us to spread fixed costs and
improve profitability while investing behind the business. The investment funds R&D and
innovation to create new and improved products, backed by marketing to make the brands even
stronger. Strong brands drive profitable volume growth, and so the virtuous circle continues.

Unilever are use both strategy, that are cost leadership and differentiation. Because in cost
leadership Unilever compete for a wide range of customers based on price. Its products prices are
based on internal efficiency to obtain a margin that allows it to sustain its business above average
profit or returns and cost to the customers. Based on this cost and return analysis that determine the
price, make customers to purchase a particular product. This strategy works well when the product
or service is standardize, have generic qualities, fulfill customer needs and offer lowest price with
best quality. In order to become a cost leader a business should keep an eye on the price strategy
followed by its competitors and its continuous efforts to keep its prices low relative to its
competitors. This can include:

 Lower cost products with best quality

 Building efficient production facilities
 Maintain tight control over production and overhead costs
 Minimize cost of sales, R&D, and service
 Focusing on primary and support activities to reduce cost related to these activities
 Configuring the value chain

But Unilever seems like usually use differentation stategy to providing value to its customers
through unique features and characteristics of its products. This is done through high quality,
 features, high customer service, rapid product innovation, advanced technological features, image
management, etc Unilever creates value by:

 Lowering buyers costs with higher quality and quicker response to problems.
 Sustainability
 Higher quality products
 Creating barriers by perceptions of uniqueness and reputation
 Creating high switching costs through differentiation and uniqueness
 Efficient customer service and focus on customers need
CSR Activities that already done by Unilever

The Unilever Sustainable Living Plan is our blueprint for achieving our vision to double the
size of the business, whilst reducing our environmental footprint and increasing our positive social
impact.Faced with the challenge of climate change and the need for human development, we want
to move towards a world where everyone can live well and within the natural limits of the planet.
That’s why their purpose is ‘to make sustainable living commonplace’

Unilever ambition is to double the size of their business, whilst reducing their overall
environmental impact (including sourcing, consumer use and disposal). Unilever are also
committed to doing what we can to improve health, nutrition and hygiene, with a target to help
more than a billion people take action to improve their health and well-being, as well as sourcing all
their agricultural raw materials sustainably by 2020. All of these goals are itemised in around 50
time-based commitments in our Unilever Sustainable Living Plan

IV.Conclusion

Conclusion :

Unilever is globally successful company. They create brands for specific countries nd regions.
Products for example, found in south America will not found in south Asian countries. Since
difference in culture exists worldwide, tthe creation and supply of brands have to be taken seriously.
The Unilever products are able to gain customer satisfaction and trust. Their production and
distribution is expading rapidly. Unilever is starting to consider how they make Unilever’s corporate
commitments and activities more visible and relevant to their consumer

Suggestion :

Unilever has room for further improvement. A recommendation is to improve policies to

accommodate diversity. Higher diversity is inevitable in global business, and the company must
take advantage of it. Also, Unilever can implement improvements in information technologies.
These technologies can support workers in all areas through advanced tools for market research,
customer relations and internal communications. These improvements can help strengthen the
firm’s organizational culture of performance. I suggest to Unilever to emphasize again on their
product development strategy. Unilever as the market leader, must innovate and improve product
quality them.If Unilever not to innovate and improve product quality, consumers will feel bored to
their products, so that customer satisfaction will decrease, the red light for Unilever.

Hansen, Don R., Mowen, Maryanne M. & Guan, Liming, cost management, accounting and
control, 6th edition, South-Western Engage Learning, 2009

Young, S. Mark, Reading in Management Accounting, 3th edition, Prentice Hall Inc., 2001.

https://www.unilever.co.id/about/who-we-are/our-strategy/

https://www.unilever.co.id/brands/

https://www.unilever.co.id/id/Images/laporan-tahunan-2018_tcm1310-536968_1_id.pdf