Group assignment unilever’s supply chain report

If the supply chain is managed well, the company or business can not only earn high profits but also be a premise to defeat competitors in the industry.. Unilever's supply chain model an

THE STATE BANK OF VIETNAM MINISTRY OF EDUCATION & TRAINING

HO CHI MINH UNIVERSITY OF BANKING

œlLE] t9

GROUP ASSIGNMENT UNILEVER’S SUPPLY CHAIN REPORT

Class ID: MAG307 2311 9 TA 123

Lecturer: Nguyen Thi Thanh Nhan

Group: 01

Lê Thị Cảm Tú 050609212303 Diệp Thị Kim Xuân 050609211768 Nguyễn Thuỳ Kim Tuyến | 050609211645 Nguyễn Ngọc Yến Vy | 050609212340

Lý Phương Mai 050609210725 Trần Kiều Trinh 050609212290 Trần Vũ Như Ý 050609211783

Ho Chi Minh City, January 10 2024

TABLE OF CONTENTS

LIST OF ABBREVIATIONS 2

l9 4a 4

In on 5

I1 , . - -5Ữ£'-ÕẼ£ẼỶŸỶÃỶÃỶÃ 5

I0 á A2 1ã 6

I9 3 an e 6

In 6

II con on 7

1.2.3 Flexible PrIe ĩc 2c 11211 1122111 1111111112111 1011 011111 1 81111111111 HH HH HH Hàn 7 1.3, Unilever’s value cha1m - ác 2121111211 11121911 1311111015011 1711151111111 01 11H Ha 8 IS oi vi 2,200 106 .ä 8

1.3.2 Marketing and SaÌ€§ c1 11 1211 1011111 1501111121111 01101 0118111110111 0 yết 8 1.3.3 Mamufacturing 0 ÕÃẼŸ£ 8

II P0 in ố 8

I6 1ơo 1 - 9

2 Unilever's supply chain analysis 9 P)1):)0)1-yHadidddddiadaa45aỶ 9

"9 2o nh .a 10

VN 0n 10

"8k 9J‹ an nhan 11

P9 ii .dad14{4.::OA11_ 11

"889 on 11

2.3.2 Umilever Vietnam's distribution sysfem n1 2 vs Hy ve 12 PC NNÌ 0i aiẳ 12

2.3.4, SOULCING: 51 13

VN cuoi co nh e 13

2.5 Global supply chaIn nefWOTK ác c HH cv H1 H111 02111101101 811 g1 1 ray 14

PN Na n1 14

INTRODUCTION

In the context of an increasingly strong market economy and an increasingly expanding economic scale, combined with increasingly fierce competition, businesses face countless challenges to maintain and develop This implies facing a competitive environment in which optimizing business operations becomes a top priority In this scenario, competing to develop and maintain a position on the business battlefield becomes more important than ever

Supply chain management activities have a great impact on a company's ability

to reach out, its ability to dominate the market, as well as gain trust from customers

in an ever-competitive economic era fierce competition If the supply chain is managed well, the company or business can not only earn high profits but also be a premise to defeat competitors in the industry

A typical example that is extremely famous and known to many consumers is Unilever - a world-leading multinational company specializing in Fast Moving Consumer Goods (FMCG) Unilever's supply chain model and supply chain management activities are considered their pride in applying many of the most advanced technologies and techniques to make the supply chain operate flexibly and effectively Thanks to supply chain management activities and supply chain models, Unilever has always maintained its position as the world's leading manufacturer of fast-moving consumer goods Unilever is a brand that still maintains its position and has developed very strongly during the COVID-19 period until today

1 About Unilever

1.1 Overview

Figure 1.1.1 Logo of Unilever ( unilever.com) Unilever is a leading global multinational company specializing in FMCG Unilever manufactures a diverse range of products, including cosmetics, laundry detergents, toothpaste, shampoo, food, and many other items The corporation has its headquarters in London, UK, and Rotterdam, the Netherlands Currently, Unilever employs over 149,000 people worldwide, with more than 400 brands present in over

190 countries 14 of its brands lead the global market, and 13 brands achieved more than one billion Euros in revenues in 2022 According to Katar, Unilever has 14 brands listed among the top 50 most chosen FMCG global brands Every day, over 3.4 billion people worldwide use Unilever products As a truly global company with

a network of 25 million retail outlets, Unilever generated a revenue of 60.1 billion Euros in 2022, with 59% coming from emerging markets

At present, Unilever is operating five main product lines, namely:

- Beauty and Wellbeing: Dove, Sunsilk, Vaseline

- Personal Care: Rexona, Dove, Lifebuoy, LUX,

- Home Care: OMO, Cif, Comfort

- Nutrition: Knorr, Hellmann’s, Horlicks

- Ice Cream: Wall’s, Magnum, Ben & Jerry’s,

Unilever has achieved the esteemed title of 'Supply Chain Masters,’ signifying that the company has consistently secured top-five composite scores in the Gartner Supply Chain Top 25 for at least seven out of the last 10 years (2012-2022)

Supply Chain

Masters

Masters have attained top-five composite scores

in the Gartner Supply Chain Top 25 for at least seven out of the last 10 years (2012-2022)

Amazon P&G Apple Unilever McDonald's

Figure 1.1.2 The Gartner Supply Chain Top 25 for 10 years ( 2012 - 2022)

(gartner.com) 1.1.1 Mission

Mission: “To meet everyday needs for nutrition, hygiene and personal care with brands that help people look good, feel good and get more out of life.”

To date, this mission is increasingly evident in every Unilever product, as the entire product portfolio aims at a common goal — to enhance health, beauty, and comfort for individuals This commitment is exemplified by Unilever's diverse range

of renowned brands, spanning from laundry detergent, shampoo, and toothpaste to beverages such as Omo, Dove, Close-up, Lipton, and more

1.1.2 Vision Vision: “To be the global leader in sustainable business We will demonstrate how our purpose-led, future-fit business model drives superior performance, consistently delivering financial results in the top third of our industry.”

Globally, Unilever envisions making sustainable living commonplace Unilever believes that doing good can enhance business and that a truly successful business in the future must serve society This is also reflected in the formation of The Unilever Compass for Sustainable Growth In this plan, Unilever strives to separate business growth from environmental impact while increasing positive influence on society

1.1.3 Unilever in Vietnam

In 1995, Unilever was established in Vietnam, comprising two modern manufacturing plants in Ho Chi Minh City and Bac Ninh province, with a total investment of up to USD 300 million Unilever Vietnam is a joint venture involving three independent enterprises: Lever Vietnam Joint Venture Company, Elida P/S, and Best Food Company Some notable products of the company include laundry detergent (Omo, Surf), Lifebuoy, toothpaste (P/S, Closeup), Pond's, shampoo (Sunsilk, Dove), and Sunlight

Currently, Unilever Vietnam has an extensive nationwide sales network, comprising over 150 distribution centers and approximately 300,000 retail outlets With rapid growth, as of now, in addition to the company's 1,500 employees, Unilever indirectly generates 15,000 jobs for third parties, including suppliers and distributors After 27 years of doing business in Vietnam, Unilever has gained the trust and high regard of consumers The company's revenue and profit have consistently grown at

an average rate of about 30-35% per year, contributing approximately 1% to the country's GDP With around 35 million products sold into the market daily, Unilever plays a significant role in the daily lives of the Vietnamese people

1.2 Competitive strategy Unilever is a global brand that has a strong presence worldwide To gain a competitive edge over its rivals, the company has focused on three main strategies that have helped Unilever to expand its customer base and achieve its sales growth objectives

1.2.1 Diversification This is a readily apparent competitive strategy of Unilever Unilever owns a range of diverse products across various sectors such as cosmetics, personal care products, food, and beverages This diversification allows them to serve multiple market segments and meet the diverse needs of consumers This strategy helps Unilever respond to the varied demands of customers, mitigate market risks, and capitalize on opportunities in various market sectors

1.2.2 Differentiation Unilever utilizes differentiation as a secondary competitive strategy to expand its customer base by creating unique and high-quality products that meet consumer needs The company's strategic objective in using this approach is to implant innovation and address consumers' growing health concerns To differentiate itself from competitors and expand opportunities within the industry, the company has extended its product line after studying changing consumer interests

Through differentiation, Unilever positions its product offerings in a way that stands out and is distinct from other available options Their commitment to sustainability and social responsibility is a key aspect of this strategy They have developed sustainable sourcing practices, reduced environmental impact, and launched initiatives to address social issues This differentiation strategy helps Unilever build brand loyalty and attract conscious consumers

TRESemm6é - Professional hair care:

TRESemmé, a Unilever brand, focuses on the professional hair care market The brand offers a range of salon-quality hair care products, including shampoos, conditioners, and styling products TRESemmé's focus is on providing consumers with products that deliver professional results, and it competes more specifically in the higher-end hair care segment

1.2.3 Flexible Price Unilever strategically employs a flexible pricing approach across its diverse product portfolio This strategy includes dynamic online pricing to adapt to market changes, promotional pricing for sales stimulation, regional pricing variations based

on local factors, and a tiered pricing model offering both premium and economy brands Additionally, Unilever maintains responsiveness by adjusting prices to fluctuations in raw material costs and market conditions This comprehensive pricing strategy reflects Unilever's adaptability in navigating the complexities of the global FMCG market

Regional Pricing Adjustments in Asian Markets: Unilever may adjust product prices regionally Prices of certain Unilever products in Asian markets, for instance, might vary to reflect local economic conditions and competition

1.3 Unilever’s value chain 1.3.1 New product development Customer insights

Unilever uses the latest tools and data analysis to meet the needs of today's and tomorrow's consumers and respond quickly to changing consumer trends

Innovation Unilever’s Research & Development teams use consumer insights, and the best ideas from experts outside Unilever to make better brands and products Every year, this company invests around €900 million in Research & Development 1.3.2 Marketing and Sales

In the marketing and sales stages, Unilever focuses on creating effective strategies to promote and distribute its diverse range of products

Marketing

As one of the largest advertisers globally, through advertising and marketing, they keep connections with customers and share our latest innovations, educate consumers about our product content, and provide recommendations on usage Unilever is committed to and actively shaped global industry standards, emphasizing that their advertising and marketing will consistently be "legal, decent, honest, and

truthful."

Sales Their products reach the hands of consumers through millions of retail outlets

in around 190 countries - ranging from large traditional stores to online-only retailers and small family-owned shops

1.3.3 Manufacturing They operate over 280 factories to make the products consumers love They also work with over 1,000 collaborative third-party manufacturing sites

1.3.4 Distribution Sourcing Unilever works with around 52,000 supplier partners in 150 countries, spending around €41 billion on raw materials and services to help our business run Logistics

They have around 500 logistics warehouses globally, which distribute their products to millions of sales outlets and retailers across 190 countries They also work with distribution and logistic providers

1.3.5 Consumer The final consumer is the last link in Unilever's value chain In this stage, the focus shifts to delivering the finished products to individuals or households Every day 3.4 billion people use Unilever’s products

2 Unilever's supply chain analysis

2.1 Supplier Unilever’s supply chain is very diverse and highly dynamic as we respond to changing consumer preferences They need suppliers for logistics and operations, marketing and business services, contract manufacturing, raw materials, and packaging Suppliers help them meet consumer needs by innovating, creating capacity, and delivering quality materials and services for products At the end of

2022, they spent €43.2 billion and worked with 52,000 suppliers in over 160 countries

— from multinational companies to SMEs and smallholder farmers All suppliers must complete Unilever’s registration process to assess compliance with the mandatory requirements

Capex & MRO, 4%

Figure 2.1 Percentage of spend for supplier category ( (2023) Unilever’s

supply chain unilever.vn )

In Vietnam, Vinachem is one of the strategic suppliers with a long-term collaborative relationship and is part of Unilever's global supply chain

Partner with Purpose (UPwP) is Unilever’s program from 2020 onwards, taking purpose-led partnerships to a new level to fuel market-leading innovations, protect and regenerate nature, and make sustainable living commonplace The UPwP program intends to increase focus on advanced partnerships that are built on a shared purpose - to develop a Partner Ecosystem that fuels responsible growth, improving the health of our planet

2.2, Operation Unilever has a distinct competitive advantage over its closest competitor by having manufacturers spread across the world Unilever has 280 factories, including Unilever-owned plants and contract manufacturers worldwide Unilever's contract manufacturers are primarily located in the U.S., Brazil, and China In Vietnam, Unilever currently has 5 factories in Hanoi, Cu Chi, Thu Duc, and Bien Hoa Industrial Zone These factories utilize raw materials and supplies from various manufacturers and suppliers to manufacture products for Unilever Unilever's manufacturing facilities consistently ensure the highest quality of output while optimizing operations and cost savings

2.2.1 Manufacturing The manufacturing process varies depending on the product category Ingredients are sourced globally, and the manufacturing process involves cooking, blending, and other processes to create the final product Unilever maximizes its production costs, which arise from large sources of raw materials found in nature, by using recycled plastic packaging Recycling technology drives innovation in packaging design, improves performance, and helps reduce weight, allowing Unilever Vietnam to cut unnecessary excess plastic Unilever invested in setting up manufacturing plants and transferred production technology and production methods

to factories in every country in the world Accordingly, in each country, manufacturing plants will be transferred systematically to meet international standards of quality, environment, and health safety

10