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n n nilever is a global manufacturer of home, The reduction in the number of brands is a key part of
personal care,and food products, and like the company's path to growth, but it does not necessarily
many multinational companies todag! is mean a reduction in the number of vroducts. For 0
looking for the best ways to expand its
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markets and meet the rising challenges of

managing its crucial supply chain.
The company's current strategy is to focus its research
and development and marketingon the leading brands, that
is, those that are most in demand from consumers. To
better optimise this strategy, the company recently
identifiedits top 400 brands - the ones that were pmducing
90% of its income. It then seized the opportunity to reduce
the number of brands from 1,600 down to these 400 and,
through extensiveknowledge of trends identified todax will I

continue to develop the brands to meet the needs of E' :-

consumers' futureneeds The company wants to put more
eggs in fewer baskets, and expend its efforts and resources
into growing the big, profitable brands, in order to create
"fuel for growth". . .

111 COMPUTING 8 CONTROL ENGINEERING I OECEMBEWIANUARY 2003104 I~IEEORC/IOMPUTINGMACAZINE 51 -

 example, Dove bar soap is a well known brand throughout
the world, and has proved to be a key brand for expansion
of Unilever's product portfolio into related areas.From the
original bar of soap we now have Dove Deodorant, Dove
Hair Care, Dove ExfoliatingW, Dove Facial Care products,
and Dove 'Supreme Silk'liquid and body soaps. Given the
need for local recipe formulations in some areas of the
world (Asians, for example, require different hair care
products) it is apparent that brand segmentation becomes
a major strategy to he managed by the companp
A PACKAGING PERSPECTIVE
Much of Unilever's innovation today is impacting the
packaging area. Why is this? For broad areas of its
manufacturing enterprise, process plants have become
disciplined yet flexible in their operation. They switch
products by simply changing the recipe. But packaging
must of necessity be more consumer relevant. Packaging
shapes, colours, and sizes are what make the products
stand out, and make them easier t o use. A recent
innovation, for example, is the plastic shampoo bottle that
stands on its head, so the customer can squeeze "the last
drop" out of the bottle with ease.
. ~~.~..
IEE COMPUTING B CONTROL ENGINEERING 1 DECEMBERIIANUARY 2W3/04 I WJEE.ORC/COMPUTINCMAGAZlNE
32
Packaging innovations such as these am what c!riving
the business, and much of the compaiy's emplus% is being
put into this area. Most product innovation these days
~.
impacts packaging, not the process. . , .
In fact Unilever differentiates between two types of
receivers of its products: consumers and customers. The
consumers are the end users, the ones who wiliactually
use the product. But just a s important are the customers,
which for UniIever are the large retail outlets that sell the
products to the consumers. These are the two key
packaging areas for the company - consumer relevance
and customer relevance - and Unilever is passionit$ about
satisfying both.
In the US, for example, there are three disdnct types of.
customers, or retail outlets, that must be served with
different packaging needs. Supermarkets need to have the
products bundled specifically for shelf replenishpIt: six
or eight detergent bottles, for example, in an easy,to o@n
carton. Smaller, low-cost retail outlets generally want
smaller, cheaper sizes of detergent bottles while thelarge
warehousestyle bulk sales stores maywant s@"ge &e
bottles bundled together. But it's all'the sa ent,
whether it is in 16 or 3INoz bottles ., i
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FUEL FOR GROWTH
Unilever's focus on its top over the past eight ye
have yielded good results in6 margins have ne
doubled, from 9% to 15%, and at the same time fixed assets thing to roll
and working capital as a per cent of sales has decreased Unilever war
from 38% to 21%. This means the operation is clearly mnovationsal
working much more efficientlv. Gone are I
 produce enough product to satisfy worldwide sales.Instead,
companies have to identify the main manufamingplants
around the world and execute their strategies, making
optimum use of all of them. To this end, manufacturing
excellence is taking us down the road towards the 'virtual
site' concept, that is, treating multiple factories as one, and
planning their activities as if they an one site.
In the virtual site concept, all factories in the group are
managed as it' they were one factory There is one common,
robust strategy and one process for deploying the strategy
Data are shared among the sites in the virtual factory, and
costs are continually driven down

NEW TECHNOLOGY HORIZONS

The RFID concept will bring new capabilities to consumer
goods packaging, and already some experiments have been
tried in the US and the UK. In fact, in the US Walmart will
soon require RFID tags on all shipping pallets. In the long
run, low cost RFID tags will be on individual products so
that customers can walk into a store, select the products
they want. and walk out the door without going through a
check out counter. Their purchases will be automatically
recorded and debited to their credit cards
Besides reducing the number of personnel required to
do the work of checking out customers in the retail store,
this will bring about the era of 'real time demand signals'.
As soon as a customer buys a product, the networked
WALMART, THE LARGEST OF THE
RETAIL STORE CHAINS, WILL SOON
REQUIRE RFID TAGS O N ALL
SHIPPING PALLETS
computer system will send a signal back thmugh the entire
supply chain, so everyone from the distributor to the
manufacturer has a tally of the purchase, and all similar
purchases. This will bring manufacturing scheduling and
resource planning to a new level of operation.
A question all manufacturers have to ask about their
strategic direction is, Do we need to own all our
development laboratories and manufacturing facilities?
Can large companies like Unilever work successfully as
developers and innovators of exciting new products,
without having to actually own the production facilities?
At the moment, this approach to business is not
completely understood, but it appears possible that large
companies could exist as 'virtual' organisations, developers

34 IEE COMPUTING 8 CONTROL ENGINEERING 1 DECEMBEWJANUARY2003104 I ~lEE.ORGICOMPUTlNGMAG4IlNE

 Operation,

and ownws or tlic in1ellcctu:il priqicrtii!~of groducts,

without having lo actually 11rnilui:c lhi~in.'I'licy could use
third parlies to ilii tlia pilol work and exiicriinmlalinn,nud
froin this dcCine a gonerd rccigc. The ri!i:ipi! could thcn I1c
posted in a collalmalivr wiirkplacc, where suitable tliird
parly nianuf;ictiiri!rs conk1 bid for Ihr work. liven
marketing, p x k a g c design, ;ind xlvei,tisirig cnuld ho
cumplclely outsuurced
Yet anolher tech iii110g:y dcvelopnicnt that companies i u i !
1oulting;ii tiiday is tlic conct!pl n l 'inldligcnt ;igc:cnts'.Tla!sc
have been drvclnl~etlas a par1 [IC ongoing iirlificial
intelligcncc msearch.
An intr?lligetilagent is a dislincl soltwmc iiiacoss,which
mi independently,;ind can react to cli;rngc indnccd
upon it by olhcr agcnts and ils cnvironmcnL. Onc
intclligciil agent is ;ilik! Io 'co-operate' \vi th nthcr'apcnts.
InleLligi?nt;1g1~111sarc especi;llly useful in ~~rot~lenis tlial arc
highly rlistributed,snc11 ;Iclcclronic tr;insactions, p;irdlel
coniputing, and rlistrihi~tedpl;iniiiiig i ~ t ~scheduliiig.
tl
Mobile telephoni! nclwnrks usi: intulligcnl agents to
negotiuto lhi! ronle through tho wirclrss anti telephi~nr
network, Cmii tho caller to tho rocoivct: InLelligcnt agent
technology is a1i~c;irlywcll cstahlislierl, iinrl fbr lhc supply
chain, the agents will pruviile ;I nicaiis or allacliiiig
'intelligcncc IO indivk1u;il ortk!rs or products.
In inanuf;rctiiiing, intclligcnt agents cnuld be the hasis
lnr arevnlution in llic way manuf;a:liir'i!~Ignods work thoir
way lhrougli the f;iclnry If, for cxaniple, if a plant liarla
series of very llcxihle pacliaging inactlines where ilny
niai:liiiic cnuld perhriii any packing process Cilliiig, ~

capping, Labeling, i:avlnoning ~ i n dthere was a very

llcxihle transport system amiing the inacliines, so that thi!
ontptit frnin 11ncmachine n~iilrlgo lo Ilie iliIitit if m y uthar
mar:binc, theii each niacliinr may be cnnsidcrcd a
“resource agenl." aivl dcal directly with 'I>rotluclagelits'.
A n 'order ;rgciil' tnigtit requesl 111 a ~rrntllictagenl, "I

I IEE LOMPUIINCI 8 C
 1. Clearly defined global strategy and an effective and
robust strategy into action processes
2. Focus on cost reduction, to he achieved throughregula
monitoring of a standard set of globally shared KPIs
along with consistent data acquisition
3.Consistent global approach to delivery of manufactwing
excellence
4. Convergent organisation. Clearly defined skill
defmitions of all supply chain roles
5. Established process to enable a rapid and cost effective
implementation of innovation
0 Facilitate and deploy appropriate technology
36 IEE COMPUTING 8 CONTROL ENGINEERING I DECEMBERllANUhRY2UU3l04 I W~EE.ORC/COMPUTINGMAGAZlNE
0 Establish a process to deliver the new assets on time
andinfull
0 Implement a 'quick start' process to bring all new
assets to full production in the shortest possible time
0 Identify and ensure convergence of the key
technological themes in packing and processing
A key challenge is to striie the correct balance between
leveraging the hest aspects of the global and local
approaches to the management of a global supply chain.
Unilever's current approach is to work through a smaller
number of larger manufacturing sites which operate
through common business pmesses that are close to their
customers, and work collaboratively across the different
product technology platforms. This will in turn drive the
need for global standards in business processes, IT
infrastructure and capital equipment. The ever changing
demands of the global supply chain and the increasing
business pressures which are being brought to bear will
also increase the need to implement more technologidy
advanced tools, techniques and solutions. Key areas of
focus for Unilever will include systems for planning,
scheduling, manufacturing execution and asset
performance improvement, along with the infrastructure
required to integrate all of these disparate components.
This article is excerpted from a presentation by Steve Cox,
VP Hair and Oral Care, Unilever. For more information
about conference presentations, visit www.iee.org/
onComms/PN/controlauto/cpg2003.dm