unilever case study supply chain

An Insight into Unilever Supply Chain Strategy

Unilever is one of the world’s largest consumer goods companies, and its success is largely due to its sophisticated supply chain strategy. Unilever supply chain strategy is based on three pillars: supply chain optimization, digitalization and automation. In this blog post, we will explore Unilever supply chain strategy in more detail and discuss the benefits…

Unilever is one of the world’s largest consumer goods companies, and its success is largely due to its sophisticated supply chain strategy. Unilever supply chain strategy is based on three pillars: supply chain optimization, digitalization and automation. In this blog post, we will explore Unilever supply chain strategy in more detail and discuss the benefits it has provided to the company. We will also provide an overview of the research and resources that have helped Unilever develop and improve its supply chain strategy.

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Unilever Supply Chain Strategy

Unilever is a leading global consumer goods company that has been in business for almost 100 years. It is a leader in the production of food, personal care, and household products that are sold in over 190 countries. Unilever has become one of the most successful companies in the world through its supply chain strategy.

Unilever chose to focus on building relationships with its suppliers, which has enabled it to develop a reliable and consistent supplier base. This has enabled the company to reduce costs and ensure quality products. Unilever’s supplier relationships are based on mutual trust and respect, which has allowed the company to build long-term partnerships with its suppliers. Unilever also works with suppliers to develop innovative solutions to reduce costs, improve quality, and increase efficiency.

Unilever also has a focus on sustainability, which includes its efforts to reduce waste and emissions. The company is committed to using sustainable packaging, reducing water usage, and using renewable energy. Additionally, Unilever has implemented a number of initiatives to reduce its environmental impact. This includes the use of renewable energy sources, sustainable forestry, and the use of recycled materials.

Unilever also has a focus on innovation and product development. The company invests heavily in research and development, which has enabled it to develop new products and processes that have improved its supply chain. Unilever aims to continually innovate and improve its products and processes to remain competitive in the global market.

To summarise, Unilever supply chain strategy is based on building strong relationships with its suppliers, focusing on sustainability, and investing in innovation and product development. This has enabled the company to become one of the most successful companies in the world.

But in general Unilever supply chain strategy is based on three pillars: supply chain optimization, digitalization and automation. We will explain each one below.

Supply Chain Optimization

Supply chain optimization is a key element of Unilever supply chain strategy. The company uses analytics and data-driven insights to identify opportunities for cost savings and efficiency improvements in its supply chain. Unilever supply chain optimization initiatives include streamlining processes, eliminating waste, and reducing inventory levels. These strategies enable Unilever to reduce costs and boost profits.

Digitalization

Digitalization is another important element of Unilever supply chain strategy. The company has invested heavily in digital technologies to improve its supply chain operations. Unilever has implemented a number of digital solutions such as robotic process automation, predictive analytics, and blockchain technology . By leveraging digital technologies, Unilever can gain real-time visibility into its supply chain operations and make informed decisions quickly and accurately.

Automation is the third pillar of Unilever’s supply chain strategy. The company has implemented a range of automated solutions to streamline operations and reduce costs. Automation technologies such as artificial intelligence and machine learning in logistics have enabled Unilever to automate mundane tasks, improve efficiency, and reduce human error. Unilever also uses automation to manage its supply chain inventory more effectively.

In conclusion, Unilever supply chain strategy is based on supply chain optimization, digitalization, and automation. These three pillars have enabled the company to become one of the most successful and innovative companies in the world. Unilever supply chain strategy has enabled the company to reduce costs, boost profits, and remain competitive in the global market.

In the previous blogs, we looked into the supply chains of famous and leading companies, which you can read about each of them in the section below.

Benefits of Unilever Supply Chain Strategy

Unilever is one of the world’s leading companies in the consumer goods industry, producing a diverse range of products in multiple countries. Over the years, Unilever has developed a successful supply chain strategy that has allowed the company to remain competitive and maintain its competitive advantage. The benefits of Unilever’s supply chain strategy can be seen in its ability to reduce costs, improve efficiency and customer service, and increase its market share.

Firstly, Unilever supply chain strategy has helped the company reduce costs. Unilever has established a global network of suppliers, which has enabled the company to source materials and products from multiple sources at lower prices. This has resulted in a reduction in overall costs, which has allowed the company to remain competitive in the industry. Additionally, Unilever supply chain strategy has enabled the company to reduce its carbon footprint by using sustainable sources for its supplies. This has helped the company to reduce its environmental impact and meet its environmental goals.

Secondly, Unilever supply chain strategy has helped the company to improve efficiency and customer service . By utilizing a global network of suppliers, Unilever has been able to reduce lead times and improve its responsiveness to customer demand. This has resulted in improved customer service and satisfaction, as customers have been able to receive their orders more quickly. Additionally, Unilever supply chain strategy has enabled the company to reduce the risk of stock-outs, as the company has been able to ensure that its products are consistently available to its customers.

Finally, Unilever supply chain strategy has helped the company to increase its market share. By improving its efficiency and customer service, Unilever has been able to build a strong customer base, which has helped the company to increase its market share. Additionally, Unilever supply chain strategy has enabled the company to reduce the cost of its products, which has allowed the company to offer competitive prices and attract more customers.

In conclusion, Unilever supply chain strategy has been instrumental in its success as a global consumer goods company. By focusing on supply chain optimization, digitalization and automation, Unilever has been able to reduce costs, increase efficiency and improve customer satisfaction. Unilever’s approach demonstrates the importance of a well-planned and well-executed supply chain strategy in achieving success.

What is Unilever’s supply chain strategy?

Unilever’s supply chain strategy is focused on creating a more efficient and agile supply chain that is sustainable and resilient. This includes leveraging digital technologies to reduce costs, improve transparency and traceability, and enhance customer experience.

How does Unilever ensure the sustainability of its supply chain?

Unilever is committed to sustainability across its supply chain and takes a holistic approach to reduce its environmental impact. This includes making sure that materials are sourced responsibly, reducing waste, and investing in renewable energy, among other initiatives.

What new technologies are Unilever using to improve its supply chain?

Unilever is using a range of new technologies, from AI and blockchain to predictive analytics and IoT, to improve its supply chain operations. This includes automating processes and creating more efficient forecasting and logistics systems.

How does Unilever manage its global supply chain?

Unilever has a global supply chain that spans over 100 countries, and it is managed using a combination of centralized and decentralized models. This allows the company to benefit from economies of scale while also having the flexibility to tailor operations to local markets.

What are the key elements of Unilever’s supply chain strategy?

The key elements of Unilever’s supply chain strategy are agility, sustainability, innovation, customer focus, and efficiency. These elements are helping the company improve its operations and create value for its stakeholders.

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Unilever Supply Chain: Lessons Learned on Digital Transformation

From the leftover Ben & Jerry’s in your freezer to the travel-size Dove lotion abandoned somewhere at the bottom of your toiletry bag, the business responsible for these familiar household staples is the multinational consumer goods company, Unilever.

A dominating force in the consumer goods industry, Unilever operates in over 280 factories and 500 warehouses, delivering to 190 countries.

Unilever strategic supply chain sets them apart from the rest and gives them the agility to process over 25 million customer orders annually, generating an annual revenue of $74.14B.

Let’s look at lessons you can learn from Unilever’s commitment to partnering with purpose, integrating technology, and business structure, and how it can help transform your supply chain for the future.

TL;DR 

• Unilever’s Global Reach : Manages a complex supply chain with over 280 factories, 500 warehouses, and sources from 52,000 suppliers in over 150 countries.
• Digitalization and Automation : Implements advanced technologies like AI and blockchain for improved data visibility and process automation.
• Sustainability Initiatives : Commits to reducing environmental impact through sustainable sourcing, packaging, and waste reduction.
• Strategic Partnerships : Unilever partners with purpose to stay current on industry trends and updates.
• Technological Innovations : Utilizes Kinaxis’s Rapid Response for integrated supply chain planning across its global operations.
• Positive Outcomes : Achievements include reduced operational costs, improved planner productivity, and enhanced service levels despite lower inventory.
• Future Outlook : Continues to climb the S-Curve with ongoing transformations poised to bring further efficiencies and innovations.

Strategic Pillars of Transformation

Unilever’s initiatives are driven by one agenda: to make sustainable living commonplace. Each of their pillars, focused on process improvement and optimization, works towards that goal.

Unilever knew they needed a structure to guide them to their goals around sustainability and social responsibility.

Thus, their pillars of transformation were born. Here are three main transformation pillars that mold their operations and drive their supply chain toward success:

Digitalization and Automation

Sustainability initiatives.

• Strategic Partnerships

Designed to improve efficiency, help the environment, and lead in technology, each pillar supports the other.

Let’s see exactly how the three pillars have transformed Unilever.

PepsiCo’s Supply Chain Journey to Innovation

At the core of Unilever’s transformation is their use of technology.

For instance, Unilever uses key technologies such as mobile devices, artificial intelligence tools, and others to help their workers make quicker and faster decisions and achieve greater efficiency.

This practice has largely contributed to Unilever’s position in the exclusive ‘Masters’ category for the fifth year running in Gartner’s Supply Chain Top 25 .

Here are some technologies Unilever leverages:

Unilever needs supply chain visibility to gain a top-sight view of what’s happening to forests globally. To do that, requires real-time data they can trust.

Mobile Devices for Real-Time Data

To accomplish this, Unilever uses mobile devices. With the software, Unilever can spot traffic patterns between farms and mills. This insight helps Unilever understand who’s sourcing from whom.

Chief Procurement Officer, Willem Uijen explains, “The latest digital capabilities will help us better identify high-risk areas and target interventions where they’re most needed.”

Furthermore, the greater visibility allows Unilever to answer questions about their supply chain like:

• Who is growing the crops that go into their supply chain?
• Are they being grown near protected forests?
• Which farms are mills buying crops from?

Additionally, supply chains dealing with poor visibility can benefit from solutions like mobile barcoding. Namely, for its ability to capture data for inventory in real time , which is then used in the field on mobile devices for real-time monitoring.

How to Achieve 100% Paperless Inventory with Mobile

Machine learning.

In addition to the automation tools, machine learning algorithms are revolutionizing smart supply chain management by automating decision-making processes.

For some context, machine learning is a subfield of artificial intelligence (AI) that allows machines to mimic human behavior and perform complex tasks in a way similar to how humans solve problems.

That said, Unilever’s use of machine learning helps them optimize their portfolio of brands and make quicker decisions. Using SKU simplification, the tool delists low-performing products to focus on core SKUs, and gives their team an assessment of their portfolio.

Overall, the tool helps Unilever’s team determine whether a particular item should be kept on the shelf or discontinued and most importantly, to make faster better-informed decisions.

Leveraging Artificial Intelligence (AI)

To make full use of its data, Unilever also introduced Aera Technology, an AI-driven platform, to leverage and enhance decision-making processes. Its ability to analyze vast amounts of data helps identify patterns to provide actionable insights.

Unilever has ambitious sustainability plans to drive climate action to reach net zero, reduce plastic, and raise the overall living standards in their value chain.

For instance, they have several active programs to keep them on track. Here are some of their additional programs at work:

Driving down their logistics emissions

Unilever had aimed to reduce their carbon footprint and achieve net zero by 2030 across its value chain. Their plan of action included:

• Improving efficiency to reduce the distance traveled and the number of trucks used.
• Switching to renewable energy to decarbonize our warehouse footprint.
• Varying their modes of transport and conducting various pilots with electric vehicles and alternative fuels.

Using innovation to lower the footprint of our products

Unilever is also changing product formulations  to lower emissions.

For example, Unilver uses biodegradable, renewable carbon where possible – carbon from plants, to avoid releasing emissions.  Their most recent product is a dilute-at-home laundry detergent from Persil/OMO.

The Benefits of Sustainable Packaging

Using technology for more sustainable supply chains.

To ensure they’re up to speed on the top technology in their industry, Unilever continuously collaborates with partners to trial new tech. Their latest focus: satellite imaging.

With this tool, Unilever can enhance their forecasting and mitigate early risks of deforestation.

Their implementation of these technologies has allowed them to:

• Map 67 million hectares of forests.
• Assess 77,000 villages to support sourcing from low-risk smallholders.
• Analyze almost 4,000 palm estates to direct suppliers to deforestation-free sources.

Creating a Sustainable, Smart, and Lean Supply Chain

The role of s-curves in unilever’s transformation.

Equally important to Unilever’s transformation is the S-Curve framework. Its purpose: to assess the state of a project and its performance. Its effect: transformation.

As for Unilever, they use the S-Curve framework to measure the progress of each phase of product development or technology integration.  

This way, Unilever can pace the implementation of new technologies and methodologies, ensuring that each transformation phase is fully optimized before transitioning to the next.

Additionally, the model allows Unilever to manage the lifecycle of innovation within its supply chain, guiding the progression from inception, through rapid growth, to maturity.

Let’s explore how each phase works to enhance Unilever’s processes.

Phase #1 Initial Adoption and Experimentation

Firstly, Unilever begins with a pilot program to evaluate its effectiveness.

In doing this, Unilever can learn and adapt innovations. This slow phase is important for learning and adapting the innovations to fit Unilever’s unique operational context.

Phase #2 Rapid Growth and Scaling

Secondly, Unilever evaluates how the software is tested. If the result is positive, the team prepares to implement it at scale.

This way, Unilever can see accelerated growth as the innovation is rolled out across multiple facets of the supply chain.

However, the challenges here are managing the logistics of a global rollout and training employees to adapt to new systems.

Phase #3 Maturity and Optimization

The next phase is to take the stabilized process and optimize it. At this time, the focus is on maximizing value. After evaluating the efficiency and cost-effectiveness of the new systems, they begin making incremental improvements.

With this, Unilever can focus on maximizing value and evaluate how cost-effective a new system is and if small improvements need to be made.

Phase #4 Preparation for the Next Transformation

Finally, Unilever begins planning the next S-Curve, looking ahead at emerging trends.

More specifically, Unilever ensures that its supply chain remains resilient, responsive, and aligned with the evolving demands of a dynamic global market.

Consequently, Unilever’s supply chain is shaped to not only be efficient, but robust enough to face future challenges and capitalize on new opportunities.

Operating in a complex supply chain is challenging. That’s why improving operations with technology and methods like the S-Curve can help simplify even the most robust processes.

Also Read: Inside Johnson & Johnson’s Supply Chain

Case study: cpg company achieves real-time visibility.

Similar to Unilever, another CPG company, Domtar , was looking to transform its supply chain.

Wrestling with their relevancy in an intense market and complex tracking methods, Domtar’s knew their hand-written processes could no longer support their business operations.

To solve this, Domtar digitalized their manual processes with mobile data collection.

With the software, they gained real-time visibility, 100% paperless processes, and greater operational efficiency.

CPG company achieves 100% paperless processes

Partnerships with purpose.

Unilever believes in partnering with purpose. And it’s their strategy behind collaboration that gives them their competitive edge.

For example, they draw on the collective power of their 54,000 supplier ecosystem to integrate new technologies and make strides in solving issues around nature and society. 

Their most recent partnership was with a recycling, resource, and waste management company.

Through the partnership, Unilever was able to replace its paper-based process with a mobile barcoding solution.

As a result, Unilever brought extra PCR capacity to the UK and developed detectable black plastic packaging for Unilever’s TRESemmé and Lynx brands. This way, previously undetectable black plastics could be picked up by recycling plant scanners.

Unilever’s partnerships enhance customer service and provide a transparent end-to-end partner experience that promotes a true partnership mindset.

Strategic partnerships are vital for a supply chain’s success. Additionally, adopting a technology partner is an excellent strategy to ensure your solutions are truly enhancing your operational processes.

Partner with RFgen Software for Supply Chain Visibility

Lessons learned from the unilever supply chain.

What lessons can your supply chain learn from the Unilever supply chain? One notable lesson is that Unilever doesn’t wait for industry trends to start innovating.

For instance, Unilever actively seeks partners to challenge and push them towards innovation. Unilever’s supply chain thrives because it continues to adapt to industry, environmental, and technological shifts.

If your supply chain is going to lead in a competitive market, it must follow Unilever’s lead and continuously push towards a better and smarter supply chain.

If you are ready to implement a new solution to transform your supply chain, our experts would love to chat. Schedule a call with one of our team members at RFgen Software today.

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Unilever’s Global Supply Chain Reboot: Zero100 Case Study

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Global Head of Customer Operations, Unilever

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Vice President of Customer Operations, Africa, Unilever

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Lead for Customer Experience, Mexico, Unilever

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Unilever's 'Groundbreaking' Supply Chain Investments Lean Into AI and Geolocation

Supply chains are at the center of challenges consumer goods (CG) are facing in today’s strained landscape. From inflation driving skyrocketing pricing to material and labor shortages slowing down processes, CG brands are having to get inventive. 

In response, Unilever has been transforming its supply chain strategy, embracing what it calls groundbreaking technologies, such as artificial intelligence (AI) and satellite imaging, that are improving transparency and traceability with sustainability at the forefront. 

As part of its transformation journey, and to combat climate change, Unilever is looking to achieve a deforestation-free supply chain for palm oil, paper and board, tea, soy, and cocoa by the end of next year. This means moving far beyond certifications to truly shift into a sustainability mindset that has a more holistic approach.

The company has broken its approach into three separate segments:

• Build greater traceability and transparency within the supply chain
• Focus sourcing on suppliers who share Unilever’s sustainability ambitions
• Empower farmers and smallholders in communities and landscapes Unilever sources from

Read Also:  Unilever Ranked Among ‘Most Sustainable’ CG Companies in 2022

“Our focus on these areas means we continue to build the skills, capabilities, and networks to progress towards our goal and beyond,” said Unilever in a statement .

The Technology

The primary technologies Unilever is integrating into this approach include satellite imaging, AI, and geolocation data. 

Working with Google Cloud, which Unilever refers to as its “command center,” the brand garners a 360-degree view of its supply chain by combining nearly 40 years of continuous satellite imagery, along with data storage and machine learning, to monitor mills, landscapes, and farms. This allows the company to estimate which farms and plantations are supplying the mills. 

Using anonymized data signals of traffic patterns with mobile devices, the company has also been able to detect these potential sourcing links. 

Additionally, by adding a layer of AI to satellite imaging, Unilever can detect any changes in tree cover — particularly useful for areas with heavy cloud cover like South East Asia — to determine how much carbon is stored by forests and the associated climate threat if trees are felled. 

This past July, Unilever also partnered with San Diego-based biotechnology specialists Geno to jointly invest $120 million in commercialized plant-based alternatives to feedstocks like palm oil and fossil fuels used to make cleansers for home care, beauty, and personal care products.

The company is in the process of exploring several other solutions. Among them is a crowdsourcing pilot in Aceh, Indonesia, that trained contributors to take photos of oil palm fruit collection points and upload them to a digital platform to provide Unilever with more visibility into “unseen parts of the supply chain.”

The company is also interested in using blockchain to create a permanent digital record of the value chain journey, analyzing data from mills, refineries, and processors to make sustainability credentials “traceable and immutable,” even if materials derive from different sources.

[Read more: How Unilever’s Blockchain Pilot Will Scale Palm Oil Traceability ]

“The latest digital capabilities will help us better identify high-risk areas and target interventions where they’re most needed,” said Willem Uijen, Unilever chief procurement officer, in a statement. “Technology will also be a force for good as we leverage these capabilities to help us understand areas that need protection and those that have high potential for regeneration.”

The Results

Unilever is looking at overall increased visibility by implementing these technologies. This allows for a closer look at the “critical” first mile — an area vulnerable to sourcing-related obstacles like deforestation. 

This approach has allowed Unilever to predict which areas are most at risk for deforestation, allowing the brand to be more proactive in its decision-making and installing preventative measures to protect forests and ecosystems.

A key to this sustainability strategy is the company’s move to the cloud . Unilever will have 95% of its business operations in the cloud by the end of the year, according to CEO Alan Jope. As a result, the company expects increased digital and innovation opportunities, including supporting its sustainability efforts like geospatial deforestation tracking.

“We continue to test and scale technology solutions for greater traceability and transparency in our supply chain, so we can partner with suppliers, governments and NGOs, to help protect and regenerate nature for generations to come,” said Willem.

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• DOI: 10.21608/ajme.2023.258370
• Corpus ID: 252304061

SUSTAINABILITY OF SUPPLY CHAIN UNILEVER CASE STUDY

• Y. M. Almutairi
• Published in المجلة العربية للقياس والتقويم 2022
• Environmental Science, Business

Figures from this paper

35 References

Sustainable supply chain, towards supply chain sustainability: economic, environmental and social design and planning, sustainable global agrifood supply chains: exploring the barriers, creating shared value in the buyer-supplier relationship through the implementation of sustainability requirements, factors for implementing green supply chain management in the construction industry, how does sustainable development of supply chains make firms lean, green and profitable a resource orchestration perspective, sustainability as opportunity: unilever’s sustainable living plan, improving environmental practices in agricultural supply chains: the role of company-led standards, sustainable supply chain management practices, supply chain dynamic capabilities, and enterprise performance, motives and performance outcomes of sustainable supply chain management practices: a multi-theoretical perspective, related papers.

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• August 17, 2023
• AI Case Studies

Case Study: Unilever’s Integration of AI in the Supply Chain

Unilever, a global leader in consumer goods, serves 3.4 billion daily consumers worldwide. The company has a robust manufacturing and distribution system, reaching customers across the globe through its global supplier base. With its commitment to responsible, sustainable innovation, Unilever aims to continue to serve consumers while minimizing environmental impact. Integrating artificial intelligence (AI) within its supply chain and operations is one of Unilever’s strategies to achieve its goals.

Key Takeaways

• By leveraging AI in the supply chain, Unilever has been able to increase sales for retailers by 15-35%, creating an opportunity for targeted promotions and valuable market research.
• Unilever’s AI-driven approach has allowed for innovation in both vending machines and e-commerce applications, offering seamless experiences and energy-efficient solutions.
• Sustainability is at the core of Unilever’s use of AI in its supply chain, with groundbreaking technologies such as satellite imaging enhancing traceability and transparency, and driving towards a deforestation-free supply chain.
• Unilever’s collaboration with partners like Google Cloud and biotechnology specialists has enabled them to make substantial investments in commercialized plant-based alternatives and to detect environmental changes, contributing significantly to their sustainability goals.

Deep Dive: Unilever’s Integration of AI in the Supply Chain

Unilever’s approach to integrating AI into its supply chain focuses on sustainability, innovation, efficiency, and consumer responsiveness. Collaborating with partners like Google Cloud, the company seeks to create a 360-degree view of its supply chain while also driving new scientific discoveries to decrease emissions.

Implementation

Unilever implemented AI across different facets of its business. From incorporating image capture and AI technology within its freezers for seamless inventory management to using satellite imaging and AI to monitor farms and landscapes for better traceability. The company has also used machine learning technology to reformulate products like Cornetto ice creams, making them sustainable without changing the taste. A partnership with carbon recycling companies to manufacture greener chemicals for products like laundry detergents was another significant implementation.

The implementation of AI has led to increased sales for retailers, improved energy efficiency in ice cream cabinets, and allowed Unilever to predict areas at risk for deforestation. The utilization of machine learning and artificial intelligence has helped in rapid discovery, cutting the emissions in surfactants production by 82%, and enhancing efficiency across various stages of the supply chain.

Challenges and Barriers

Transitioning to AI-powered processes wasn’t without challenges. Balancing the power consumption of the AI technologies, recreating products to be more environmentally friendly, and ensuring alignment with sustainability targets required significant efforts. Collaboration with various external partners and aligning with internal departments were also complex tasks that needed careful planning and execution.

Future Outlook

Unilever’s investment in AI signifies a commitment to continuous innovation and sustainability. The company aims to explore further solutions, including blockchain, for traceability, crowdsourcing pilots for visibility into unseen parts of the supply chain, and further research into plant-based alternatives. The path forward is marked by increased collaboration with specialist start-ups, firms, and academia to enhance products and processes.

Unilever’s integration of AI in its supply chain showcases a forward-thinking approach to harnessing technology for sustainable growth. Through concerted efforts, strategic partnerships, and commitment to innovation, Unilever has set a noteworthy example in leveraging AI to create tangible benefits for consumers, retailers, and the planet. The company’s journey offers valuable insights and lessons for other organizations aiming to align technological advancements with sustainability goals.

Sources: How Unilever is using AI to make its products more sustainable Unilever’s ‘Groundbreaking’ Supply Chain Investments Lean Into AI and Geolocation How Unilever Is Transforming Ice Cream With AI How AI and digital help us innovate faster and smarter Multinationals turn to generative AI to manage supply chains

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How Technology Makes Continuous Innovation Possible: A Case Study with Unilever

Supply Chain Planning | By Nilufer Durak • 10/05/2023

In the corridors of Unilever, a team of dedicated supply chain planners from demand to supply to transportation embarks on a daily journey. Their day doesn’t begin with traditional routines but with diving deep into a digital universe where data alerts serve as guiding stars. With the E2E exception-base autonomous planning, the system automates decisions from demand forecasts, production plans, and order fulfillment strategies to delivery with minimal need for manual intervention.

This is not eliminating the planners entirely but focusing their attention where it’s best. Planners are empowered with more free time to focus on more value-adding strategic and tactical decisions by evaluating Key Performance Indicators (KPIs) dashboards, and when their attention is required, the system will alert them automatically.

At the core of this transformative tale lie three indispensable assets: Digital, the foundation of the platform providing a single source of truth for the entire organization; Intelligent, the infusion of AI and machine learning, transforming raw data into actionable insights, empowering Unilever to predict market trends, anticipate demands, and stay ahead of the ever-shifting market landscape; and Autonomous, the pinnacle where end-to-end supply chain decisions are made seamlessly, free from human touch.

End-to-End Supply Chain Planning Platform

The end-to-end process begins with data. Automatic data diagnostics ensures the quality of the data it receives, fixes the inconsistencies where it can, and alerts the planners in case their attention is required. The result is an end-to-end planning process operating on the highest quality data possible.

Then, Demand Planning, driven by AI, predicts market fluctuations by analyzing demand drivers, including weather, market dynamics, and new products, providing forecasts that minimize the need for overrides and provide insights to enable data-driven decisions. Supply Planning crafts production plans that optimize available capacity and resources, not just optimal but synchronized with operational constraints, ensuring the right product mix at the right time and cost.

Customer Service Fulfillment becomes an art of efficiency, with real-time data optimizing replenishment, allocation, and truckload fill. The system allocates stock based on various parameters, enhancing service and volume maximization, enabling 100% autonomous planning!

Transportation Planning streamlines the intricate web of logistics by ensuring efficient truck planning, reducing fulfillment time and the carbon footprint. With such a level of sophistication and precision delivered by automated recommendations, 90% of them are executed as is, and planners focus only on exceptions.

Achievements

Through this transformation, Unilever has achieved multiple milestones.

Centralized Demand Planning became the cornerstone that streamlined operations, leading to not just efficiency but an alignment across functions across the entire organization. Advanced Analytics provides the Unilever team with automatic insights, enabling Unilever to gaze into the future with clarity, foreseeing market trends, and preparing for every twist and turn in the market landscape.

Real-time Visibility gives the team a bird’s-eye-view of the entirety of the operations, allowing for faster decision-making, erasing data silos, and fostering collaboration among teams previously isolated in their individual silos. End-to-end synchronized Planning ensured every cog in the machinery moved in perfect unison, creating a workflow so seamless that it felt like a choreographed dance.

Finally, for the cherry on top, Unilever adopted Goal Programming, which allows the company to set multiple objectives, model constraints simultaneously as opposed to a pre-selected order, and generate an optimal plan that considers all objectives. This process prevents the functions from working against each other and considers the impact of every decision on the whole chain.

Continuous Innovation Is the Core of Successful Partnerships

At the end of the day, if the environment for continuous improvement and proactive innovation is not present, even the best of technologies lose relevance in today’s dynamic setting.

The key here is high user acceptance rates, streamlined workflows, reduced manual intervention, and enabling Unilever to achieve the holy grail of supply chain management: exception-based, no-touch planning. It’s a testament to the power of collaboration, innovation, and unwavering dedication to efficiency. It’s not just about machines and algorithms; it’s about the people who understand the soul of the supply chain, who breathe life into every line of code, transforming it from mere instructions into a symphony of efficiency.

End-to-end decision automation is not a distant vision for giants like Unilever but also for mid-market companies.  You, too can make innovation a way of life, not just a buzzword.

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Unilever and its Supply Chain: Embracing Radical Transparency to Implement Sustainability

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DESCRIPTION Dutch trade has become ever more sustainable, over the last years. A number of imported natural resources and products, such as coffee, timber, palm oil, cacao, fish and soya, more and more often carry a sustainability label. The sustainable market share was able to soar, also because of the efforts by social organisations, consumers and the business community. Dutch market parties voluntarily have been contributing to the certification of sustainable production and trade, using widely supported voluntary sustainability standards. The government has been playing a facilitating role by supporting these initiatives financially, by their own purchasing policy, and by entering into declarations of intent with the various market parties. In this respect, the Netherlands is one of the frontrunners in the European Union.

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• Unilever tea (A): Revitalizing Lipton’s supply chain

The case documents Unilever’s journey to revitalize Lipton brand through sourcing all its tea from Rainforest Alliance Certified (TM) farms. It provides a framework for discussions around the challenges of aligning supply chains behind the re-positioning of a high-value brand as sustainable. It also explores the business case for sustainable sourcing of agricultural raw materials and raises questions on the potential to improve the economic health of the entire supply chain.

Understand the business case for major brands to convert to sustainable sourcing. Understand the challenges of aligning suppliers behind a major market transformation effort. Illustrate the dilemmas of adapting to a changing business context while staying on course with long-term objectives. Change the traditional perception of business responsibility in pushing forward the agenda for action on sustainable agriculture and other “mega-issues.”

IMD retains all proprietary interests in its case studies and notes. Without prior written permission, IMD cases and notes may not be reproduced, used, translated, included in books or other publications, distributed in any form or by any means, stored in a database or in other retrieval systems. For additional copyright information related to case studies, please contact Case Services .

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• Unilever tea (B): Going beyond the low-hanging fruits

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Now it’s personal: Unilever’s digital journey leads to real results for consumers and employees

What does “digital transformation” mean for an established global manufacturing enterprise like Unilever, maker of iconic brands such as Dove, Vaseline and Ben & Jerry’s?

For Unilever CIO Jane Moran, it means empowering employees to carry out the company’s mission of meeting consumers’ rising expectations.

Unilever CIO Jane Moran. (Photo courtesy of Unilever)

“What’s transformative is the way we’re connecting people, making data accessible to a broader employee base and giving them the skills to analyze the data to make better informed decisions,” Moran says. “That can have obvious benefits, like increasing efficiency, but also an impact on topics that are central to our business, such as sustainability.”

From project to platform

One of Unilever’s major goals in its digital journey is to become driven by data insights to predict the future — no mean feat for a global giant worth $55 billion, operating in 190 countries.

To realize this change, Unilever shifted from a project-based approach to a platform strategy, supported by Microsoft technology and hands-on support. Azure, Microsoft’s cloud computing service, provides the architectural backbone for the company’s digital transformation.

“That has allowed us to be much more agile and much more scalable,” says Moran. “We can’t deliver unless we have a platform-based approach and it’s very powerful. We’re really exploiting that now at Unilever.”

Digitally rewiring the supply chain

For Unilever, the capabilities of digital technology offer an opportunity to transform its supply chain to meet the needs of customers who “expect customization, on-demand products and brands with purpose,” Moran says.

“We are digitally rewiring our supply chain, focusing on generating real-time, democratized information, artificial intelligence planning, capitalizing on robotics and building digitally connected factories. All this will allow us to readily predict and respond to whatever the future throws at us,” adds Dave Penrith, Unilever chief engineer.

Unilever chief engineer Dave Penrith. (Photo courtesy of Unilever)

Unilever is using IoT (Internet of Things) and intelligent edge services in the Azure IoT platform to enable its digital twin, which is a next-generation digital model of a physical environment — in this case, a Unilever factory. The machines and equipment in the factory are connected so that they can send a mass of data — everything from temperatures to production cycle times — into the model.

This creates a representation of every machine and process, offering visibility across all levels of the plant. The collected data is mined for insights and patterns using advanced analytics and machine learning algorithms, which can predict outcomes based on historical data.

“The more data it gets, the more it learns. The more it learns, the faster it learns, and it starts to learn at an increasingly exponential rate,” Penrith says.

The algorithm can reach a level of accuracy where it can be allowed to directly control part of a machine or process. This allows operators to make better-informed decisions and frees them up from repetitive manual tasks for more value-added functions.

The digital twin has already had an impact on operations. Once Unilever switched control of moisture levels in a soap-making machine to the digital twin algorithm, operators did not want it switched off because it gave them so much control over consistency.

In another instance, the digital twin has used data on how long it takes to produce one batch of liquid, such as shampoo or detergent, to predict the correct order of processes in order to get the most efficient batch time. The less time each batch takes, the higher the production capacity of the plant, fully utilizing the asset and avoiding having to invest in capability elsewhere.

The digital twin solution was custom-built by Unilever’s engineering team in partnership with The Marsden Group, a Microsoft partner, and is hosted on Microsoft’s Azure platform.

Right now, Unilever is operating eight digital twins across North America, South America, Europe and Asia. The company is streaming data from 15 of its 300 global plants, with plans to connect 70 factories by the end of the year and another 100 or so in 2020 – “everything from soap to soup,” Penrith says.

Digital tools allow employees to easily visualize and interpret data.

Diving into data

In its mission to become data-insights driven, Unilever is using Power BI, a business analytics tool, to help employees access the data they need. Employees can use Power BI to visualize data in whatever way works for them to solve the problem they’re facing, and it also allows them to create their own reports, rather than relying on a technology team.

Being able to uncover data and visualize it in Power BI has allowed Unilever to increase productivity by eliminating false or unimportant alerts on production lines. Previously, operators were responding to 3,000 alerts every day in this complex site, each of which took a few minutes to assess, acknowledge and clear. This put operators into constant reactive mode and slowed down production lines. Unilever has been able to reduce the number of alerts requiring action by 90% per day, ensuring far fewer interruptions and more timely interventions.

Power BI is just one tool in an interconnected system that cultivates the “democratization of data,” says Penrith. “With Power BI connected to all our historical data, live data, analytics and models, our people get real-time intelligence, all sitting in Microsoft Teams, with conversation happening all the time so our employees and factories can support and collaborate with each other.”

Empowering with PowerApps

A big part of that interconnected system is finding ways to help people fix their own issues. One tool the company is using to achieve this is Microsoft PowerApps, which allows employees to build custom apps themselves, without a developer.

For example, one Unilever factory quality assurance employee saw a demo for PowerApps — and then created a quality assurance PowerApp herself.

The app is now available in all of Unilever’s factories, a vast upgrade from the manual process that was previous used for quality checks. The app enables real-time adjustment to the manufacturing process and saves time, freeing up employees for more valuable tasks. It also saves paper, contributing to Unilever’s sustainability mission.

A Unilever factory in Valinhos, Brazil.

Connecting a global team

Unilever also wanted to offer its people — nearly 155,000 employees worldwide — the tools to further connect with one another and share lessons and ideas. Unilever uses Microsoft 365, a bundle of services that includes Windows 10, as well as productivity apps such as SharePoint, Outlook, Word, PowerPoint and Excel, and collaboration and communication tools such as Teams and Yammer.

This suite of tools has made a big impact on productivity and collaboration, according to Moran.

“Using digital tools like Teams and Yammer have really helped our organization to collaborate and share, and you can’t appreciate how great that is,” she says. “It’s taken off at the top of our company, and now everyone is using this to share wonderful stories about what they’re doing every day. It has allowed everyone to have a voice.”

For Penrith, Microsoft Teams has had a major impact on communication. The company created a global Teams environment for all Unilever engineers that allows them to connect and share knowledge.

“That’s been a real game changer,” he says. “Overnight, we connected 2,000 engineers, most of whom may never really have spoken to each other before … it takes away any false boundaries that people may have, and it links colleagues from around the whole world.”

Penrith has a blog area within Teams where everyone can reply to everyone else, and they can also contact him directly on the platform. Penrith now spends more time on Teams than on email and has seen a 60% to 70% drop in the number of emails arriving to his inbox.

Unilever’s digital transformation empowers employees to carry out the company’s mission of meeting consumers’ rising expectations.

Digital enables sustainability, too

Unilever’s digital conversion has also helped to support the company’s commitment to sustainability, particularly in terms of energy efficiency.

One example is the amount of energy used at factories that make Dove soap. Unilever has used Teams to set up a community for Dove factories where they can access energy usage data for all factories, as well as share best practices for conserving energy. Everyone in the community can see how much energy each factory uses per batch of Dove soap and work together on reducing that usage.

Data-driven decisions

Unilever’s technological transformation has already resulted in substantial success across the organization, from the supply chain to research and development, human resources, sales, finance, logistics and more, supporting the company’s ultimate goal of serving consumers.

“We are creating a culture and organization which is data-intelligent across our end-to-end supply chain, supported with the data, analytics and insights to make smarter, faster decisions to understand, anticipate and exceed consumer expectations,” says Penrith.

At the Microsoft Inspire 2019 conference , Microsoft’s executive vice-president of Worldwide Commercial Business, Judson Althoff, spoke to Unilever executives about how Microsoft technology is fueling Unilever’s digital transformation. Above, Althoff greets employees at a Unilever factory in Valinhos, Brazil .

Supply Risk Management at Unilever: Managing Spend at Risk

This case study serves to discuss a class of risk management strategies in supply chains. It underlines the importance of seeing supply risk management in its whole context encompassing the following parametres: - Operating decisions, affecting the supply profile for the commodity in question, including inventory choices, lot-sizing, cost-service tradeoffs, number of and supply chain design. - Procurement decisions, affecting the supply profile for the commodity in question, such as cover policy constraints, regional vs. global procurement, open costing procedures, etc. - Additional hedging decisions related to the commodity in question, such as taking positions in correlated markets.

The objective is to discuss a class of risk management strategies in supply chains, with a particular focus on financial hedging tools designed to limit procurement exposure (i.e., control the maximum spend) within the context of highly volatile commodity markets). More specifically, the case is concerned with teaching: - The necessity of managing financial risk in the commodity markets: drivers of cost/benefit - A description of financial hedging instruments (and the pre-requisites) - The valuation of instruments such as call options and swaps through Monte Carlo simulation - Trade-offs between expected spend versus exposure (i.e., the efficient frontier) with a particular application in plastics (HDPE) - Implementation challenges for hedging instruments

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Mastering the Art of Supply Chain Collaboration and Teamwork

Effective supply chain collaboration and teamwork are critical components for any business seeking to optimize its operations and achieve sustainable success. In today's interconnected and globalized market, the ability to coordinate seamlessly across various stages of the supply chain can significantly enhance efficiency, reduce costs, and improve customer satisfaction.   

Understanding the intricacies of supply chain collaboration involves recognizing the importance of communication, trust, and shared goals among all stakeholders. By fostering a collaborative environment, companies can anticipate and respond to market changes more swiftly, mitigate risks, and leverage the expertise of their partners. Through practical examples and insights, below we highlight how businesses can master the art of supply chain teamwork, ultimately leading to a more resilient and competitive enterprise.  

What Is Supply Chain Collaboration?  

You may have heard of supply chain management, but you may not have heard of supply chain collaboration . So, what is supply chain collaboration , exactly?   

The Definition and Scope  

Supply chain collaboration involves the strategic alignment and cooperation among various entities within a supply chain—including suppliers, manufacturers, and distributors—to achieve mutual goals and enhance overall performance. This collaboration is characterized by shared information, joint planning, and synchronized operations to optimize efficiency and responsiveness.  

Historical Evolution and Current Trends  

This concept has evolved significantly over time. Historically, supply chains were local and limited in scope, but the Industrial Revolution expanded their reach and complexity. Modern supply chains now leverage advanced technologies such as artificial intelligence (AI) and predictive analytics to drive efficiency and innovation. Current trends emphasize the importance of resilience, sustainability, and digital integration in maintaining robust, adaptable supply chains.  

The Importance of Collaboration in Modern Supply Chains  

Collaboration in modern supply chains is essential for achieving seamless integration and coordination among various partners. This cooperation ensures all entities within the supply chain work toward common goals, thus enhancing overall effectiveness and adaptability. By fostering strong relationships and open communication, businesses can better navigate the complexities of today's global market, leading to improved performance and competitiveness.  

Enhancing Efficiency and Reducing Costs  

Collaboration in modern supply chains is pivotal for enhancing efficiency and reducing costs . When companies work together effectively, they can streamline operations, reduce redundancies, and share resources. This leads to lower operational costs and improved resource allocation. Integrating advanced technologies like artificial intelligence and the Internet of Things (IoT), businesses can automate processes, gather real-time data, and make informed decisions quickly to further drive down costs and boost efficiency.  

Improving Product Quality and Customer Satisfaction  

In addition to cost savings, collaboration significantly improves product quality and customer satisfaction . Effective communication and information sharing among supply chain partnerships ensure that products meet quality standards and are delivered on time. Enhanced visibility into the supply chain allows companies to anticipate and address potential issues before they impact the customer. This proactive approach not only improves the reliability of deliveries but also fosters trust and loyalty among customers.   

Key Elements of Effective Supply Chain Collaboration  

Now that you have a grasp of what supply chain collaboration is, it’s worth exploring several key elements that successful supply chain collaboration relies on to ensure seamless operations and mutual benefits for all parties involved. This includes transparent communication, shared goals and objectives, synchronized workflows, and the integration of advanced technologies.   

Communication Technologies and Platforms  

Effective supply chain collaboration hinges on utilizing advanced communication technologies and fostering trust and transparency among partners. Modern communication platforms enable real-time information sharing and seamless coordination, thus making them crucial for managing complex supply chains efficiently.  

Trust and Transparency Among Partners  

Additionally, cultivating trust and maintaining transparency in supply chain partnerships is fundamental. Open communication and mutual accountability help build strong relationships, ensuring all parties work toward common goals and can swiftly address any issues that arise​.  

Aligning Goals and Objectives  

Aligning goals and objectives is critical for supply chain collaboration. It involves ensuring all partners have a shared understanding of the overarching goals and work together to achieve them. This alignment fosters synergy, reducing conflicts and enhancing operational efficiency. When goals are not aligned, collaborations can suffer, as seen in cases where a lack of strategic alignment leads to missed opportunities and inefficiencies.  

Strategies for Enhancing Collaboration  

There are a number of strategies for enhancing collaboration in the supply chain:  

Developing a Collaborative Culture  

Creating a collaborative culture is essential for supply chain success. This involves fostering an environment where open communication, mutual respect, and shared goals are prioritized. Organizations should ensure that their leadership supports collaboration and provides the necessary resources for teams to work together well. Developing a culture of collaboration can significantly enhance trust and cooperation among supply chain partnerships, ultimately leading to better outcomes and innovation​.  

Leveraging Big Data and Analytics  

Big data and analytics play a central role in enhancing supply chain collaboration. By leveraging advanced data analytics, companies can gain valuable insights into demand patterns, inventory levels, and supply chain efficiencies. These insights enable more informed decision-making and help partners align their strategies more closely. Effective use of big data can lead to improved forecast accuracy, optimized inventory management, and a more responsive supply chain overall​.  

Implementing Joint Planning and Forecasting  

Joint planning and forecasting are critical strategies for improving supply chain collaboration. This involves the alignment of business objectives, setting mutual targets, and developing shared plans to achieve these goals. Companies can benefit from joint business planning by ensuring that all stakeholders are on the same page, which helps minimize conflicts and maximize efficiency. Productive joint planning requires clear communication, transparency, and a commitment to shared success from all partners involved​.  

Challenges and Solutions in Supply Chain Collaboration  

While supply chain collaboration can be rewarding, it comes with potential challenges , too. That said, solutions are also accessible when such challenges arise.  

Overcoming Barriers to Information Sharing  

Information sharing is fundamental to effective supply chain collaboration, yet it is often hindered by several barriers. Trust issues are a significant obstacle, as companies may be reluctant to share sensitive data with external partners. Establishing mutual trust and developing a common understanding of data value and accuracy are crucial steps in overcoming these barriers. In addition, creating standardized protocols for data exchange can help ensure consistent understanding among all stakeholders​.  

Managing Conflicts and Building Consensus  

Managing conflicts and building consensus within supply chain collaborations involve addressing professional differences, cultural disparities, and communication gaps. Different organizational structures, values, and practices can create misunderstandings and conflicts. Promoting a collaborative culture that values open communication and mutual respect is essential for overcoming this​.  

One effective strategy is to establish clear communication channels and regular meetings where stakeholders can align their objectives and address any concerns promptly. Investing in multicultural training programs can also help partners understand diverse perspectives and work ethics, fostering a more cohesive and cooperative environment​.  

Case Studies of Successful Supply Chain Collaboration  

Successful supply chain collaboration can drive significant improvements in efficiency, cost reduction, and customer satisfaction. This section highlights notable case studies from the tech and retail industries, demonstrating how supply chain partnerships and innovative approaches have led to breakthrough results.  

Tech Industry Innovations  

In the tech industry, Cisco's collaborative efforts with its suppliers have set a benchmark. Through leveraging cloud-based platforms and data analytics, Cisco enhanced its visibility across the supply chain, improved response times, and reduced lead times. This collaboration allowed Cisco to manage risks better and optimize its supply chain processes, leading to a more resilient and efficient operation.   

Another noteworthy example is Intel , which collaborates closely with its suppliers and customers to synchronize production and delivery schedules—thereby minimizing inventory costs and enhancing service levels.  

Retail Sector Breakthroughs  

The retail sector has seen substantial benefits from collaborative supply chain practices as well. A prime example is the partnership between Walmart and Procter & Gamble (P&G) . By sharing real-time sales data and coordinating inventory management, Walmart and P&G significantly reduced stockouts and enhanced supply chain efficiency. This collaboration both improved product availability and reduced costs through optimized logistics and inventory management.   

Similarly, Tesco's collaboration with its suppliers (including Coca-Cola and Unilever ) focuses on sharing detailed sales forecasts and aligning logistics strategies. These efforts have led to reduced out-of-stock rates and improved overall supply chain performance.  

Future Trends in Supply Chain Collaboration  

As the landscape of supply chain management continues to evolve, staying ahead requires a keen understanding of emerging trends . Two significant areas of focus for the future are the integration of AI and machine learning into supply chains as well as the growing emphasis on sustainability and ethical practices.   

The Role of AI and Machine Learning  

AI and machine learning are set to play transformative roles in supply chain collaboration. These technologies enable predictive analytics that help companies anticipate demand, optimize inventory, and streamline logistics. By analyzing vast amounts of data, AI can identify patterns and provide actionable insights that improve decision-making and operational efficiency. For instance, advanced AI algorithms can predict potential disruptions and suggest alternative strategies, enhancing supply chain resilience and agility. To add, machine learning models can continuously improve from new data, ensuring supply chains adapt to changing market conditions and customer preferences​.  

Sustainability and Ethical Practices  

The push for sustainability and ethical practices in supply chains is gaining momentum as consumers and regulators demand more transparency and responsibility. Companies are increasingly focusing on reducing their environmental impact by minimizing waste, lowering carbon emissions, and adopting circular economy principles. This includes initiatives like using renewable energy sources, optimizing transport routes to reduce fuel consumption, and implementing sustainable sourcing practices.   

Furthermore, ethical considerations (such as fair labor practices and ensuring supplier compliance with human rights standards) are becoming integral to supply chain strategies. By embedding sustainability and ethical practices into their operations, companies can not only meet regulatory requirements but also enhance their brand reputation and customer loyalty​.  

Learn More About Supply Chain Collaboration Through a Degree Program  

If you want to take your supply chain management skills to the next level, University of the Cumberlands offers comprehensive bachelor’s and online master’s programs in supply chain management—designed to equip you with the knowledge and expertise needed to excel in this dynamic field. Our curriculum is tailored to address the latest industry trends, including AI integration, sustainability, and ethical practices.   

Request more information or apply today to start your transformative educational journey that can open doors to exciting opportunities in the realm of supply chain management.  

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FedEx plans 4 facility closures, layoffs in North Carolina and South Carolina

The Ship Center shut downs coming in September will impact 310 employees, according to WARN notices.

Dive Brief:

• FedEx will close four North Carolina and South Carolina facilities on Sept. 3, impacting 310 employees, according to Worker Adjustment and Retraining Notification (WARN) Act notices filed this month.
• The company is shutting down three Ship Centers in the South Carolina cities of West Columbia, Florence and Myrtle Beach, plus another Ship Center in Conover, North Carolina, as it continues to consolidate its network footprint to save costs and increase efficiency.
• FedEx said in an emailed statement to Supply Chain Dive that it will offer some affected employees opportunities at other nearby locations, and the company is providing relocation assistance or severance where applicable.

FedEx laying off employees at 4 locations

Source: Worker Adjustment and Retraining Notification (WARN) Act notices

Dive Insight:

The layoffs come in the thick of FedEx's Network 2.0 initiative , consolidating its separate Express and Ground networks to reduce the number of stations and delivery routes it uses. By cutting facilities and routes that overlap with others, FedEx can get packages to customers in a more efficient manner.

But FedEx's push to right-size its network is leading to many company couriers losing their jobs. For example, the Conover closure coming in September will impact 66 couriers, although some workers will remain employed at other locations.

"Decisions of this nature are never made lightly, and are the result of much thought and consideration for the needs of our business," FedEx said in its statement.

The majority of employees impacted by two Ship Center closures in Colorado and Ohio last year were couriers as well, as was the case with earlier closures in Texas, Georgia and Mississippi .

In a March earnings call , FedEx Executive Vice President and CFO John Dietrich said the company has trimmed its employee ranks by nearly 22,000 over the past year.

FedEx's layoffs aren't limited to the U.S. The company is planning to cut up to 2,000 back-office and commercial jobs in Europe as part of a cost-savings push in the region.

Recommended Reading

• FedEx charges ahead with Network 2.0, rolling out to dozens more locations in 2024 By Max Garland • March 22, 2024
• FedEx layoffs: Cost cuts target up to 2,000 Europe jobs By Max Garland • June 12, 2024

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Editors' picks

AutoZone ups availability with growing distribution network

The auto parts retailer is leveraging its existing network to carry more inventory while nearing completion of additional facilities.

De minimis crackdown: What shippers should know

The U.S. government is ramping up enforcement on low-cost goods entering the country, suspending brokers like Seko Logistics from a key import program.

Company Announcements

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Back to overview

Case Study: Using Supply Chain Planning to Increase Available Capacity

Are you struggling with capacity planning and feeling the pressure of growing customer demand?

Discover how one major company turned their production challenges into an impressive success story using Arkieva’s supply chain planning tools.

By rethinking their approach and optimizing their existing resources, they achieved astounding improvements in throughput, on-time shipments and overall efficiency—all without the need for new assets.

Company Overview: A business unit of a major chemical company faced a significant problem: while sales were growing by 10% annually, the production capacity was struggling to keep up with demand.

Industry: Chemical

Challenges: Operating internationally, the company had multiple plants, each operating independently in terms of capacity planning. As a result, it wasn’t feasible to utilize slack capacity at one plant to relieve an overload at another. Demand was allocated sequentially to the lowest-cost plant that could manufacture the product, causing low-cost and flexible plants to be overloaded while other plants were underutilized.

Solutions:  Before assessing how to increase capacity, the company decided first to optimize the use of its existing capacity with Arkieva’s supply chain planning tools. Making the data accessible significantly increased planning effectiveness, as planners could now see the impacts of changes on other orders.

Quantifying and publishing the transition costs had an unexpected outcome: once the sales team understood the impact, they began exercising self-restraint when requesting schedule changes, reducing the number of change requests by over 30%.

Building on this success, the business developed a quantitative model to balance supply and demand across all plants.

• Demand Planning
• S&OP Management

Results After 12 Months: 

• Throughput volume increased by 20%, far exceeding the norm of a 3-5% increase.
• On-time shipments soared from 80% to over 95%.
• The cash flow cycle time was reduced by 9%.
• Raw material inventories decreased by 2%, despite the increased throughput.
• Shipping costs remained flat, primarily due to reduced expediting.
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Examining the response to covid-19 in logistics and supply chain processes: insights from a state-of-the-art literature review and case study analysis.

1. Introduction

• RQ1 (scientific): How have researchers studied the impact of COVID-19 on logistics and supply chain processes? Which industrial sectors were mostly studied and why? Which additional topics can be related to COVID-19 and logistics/supply chain?
• RQ2 (practical): What effects of COVID-19 on logistics and supply chain processes were experienced by companies?

2. Materials and Methods

2.1. systematic literature review, 2.1.1. sample creation, 2.1.2. descriptive analyses, 2.1.3. paper classification.

• Macro theme: sustainability, resilience, risk, information technology, economics, performance, planning and food security. This classification represents paper’s core topic.
• Industrial sector: aerospace, agri-food, apparel, automotive, construction, e-commerce, electronic, energy, fast-moving consumer goods, food, healthcare, logistics, manufacturing and service.
• Data collection method: questionnaire/interview, third-party sources or case study. This classification represents the method used by the authors to collect the data useful to their study.
• Research method: statistical, decision-making, simulation, empirical, literature review or economic. This category describes the tool used by the authors to conduct the study and reach the related goals.
• Specific method, e.g., descriptive statistics, structural equation modeling (SEM), multi-criteria decision making (MCDM), etc.; this feature describes more accurately the type of work carried out by the authors and the tools used.
• Country: it reflects the geographical area in which the study was carried out, in terms, for instance, of the country in which a sample of people has been interviewed or where empirical data were collected, or where the simulation was set. This method of classification, although more elaborated, was preferred over traditional approaches, in which the country of the study is defined based merely on the affiliation of the first author of the paper, because the exact knowledge of the country in which the study was carried out is, for sure, a more representative source of information about the research. This is true in general, but it is even more important for this subject matter, as the management of the COVID-19 pandemic was made on a country or regional basis, with significant differences from country to country; knowing the exact location of the study helps in better interpreting the research outcomes. Possible entries in this field also include “multiple countries” and “not specified”, with the obvious meanings of the terms.

2.1.4. Cross-Analyses

2.1.5. interrelated aspects, 2.2. case study, 2.2.1. data collection.

• Economic data: some key economic data were retrieved from the company’s balance sheet, from 2019 up to the latest available document, which refers to 2022.
• Organizational data: these data describe changes in the operational, decision-making and business structure of the company in terms, e.g., of number of employees hired, number of drivers, etc.
• The related data were collected and elaborated between July and September 2023.

2.2.2. Survey Phase

2.2.3. analysis and summary, 3. results—systematic literature review, 3.1. descriptive statistics, 3.2. common classification fields, 3.2.1. macro theme, 3.2.2. industrial sector, 3.2.3. data collection method, 3.2.4. research method, 3.2.5. country, 3.3. cross-analyses, 3.3.1. macro theme vs. industrial sector, 3.3.2. research method vs. macro theme, 3.4. interrelated aspects, 4. results—case study, 4.1. company overview, 4.2. pre-covid-19 period, 4.3. covid-19 period, 4.4. post-covid-19 period, 4.5. analysis and summary.

• Strengths : at present, Company A benefits from a robust network of relationships with customers and suppliers (e.g., drivers), which was leveraged during the pandemic period to provide a rapid response to the increased request by the consumers. The company has also leveraged the usage of digital technologies, which made logistics activities more efficient and, again, allowed the company to respond to consumer demand in the pandemic period.
• Weaknesses : Company A has suffered from low economic results, in particular in the post-COVID-19 period, mainly due to the high production costs. Efforts must be made by the company to reduce expenses. At the same time, however, the service level, in terms of delivery lead time or on-time delivery, should be safeguarded.
• Opportunities : the growth of e-commerce, experienced in the COVID-19 period but expected to last over time, creates opportunities for increasing the volume of items handled by Company A. Indeed, the survey phase demonstrated that the company’s consumers have shifted towards the usage of online sales; hence, the company could consider investing in this area to increase its market share. By leveraging the e-commerce logistics and diversifying service, expansions could also be possible at an international level. Even if the company has already embraced the implementation of digital technologies, some emerging technologies (e.g., drones or advanced traceability systems) could also be introduced for further improving the logistics efficiency. Finally, sustainability is another opportunity to be leveraged, because of the current push towards the adoption of environmental-friendly logistics solutions. Examples of those solutions include a reduction in CO 2 emissions, and the usage of electric vehicles or zero-impact materials.
• Threats : the growth of e-commerce can be seen as an opportunity, but because many logistics companies have already entered this field, the sector is characterized by very high competition, which could limit the market share of Company A; this could instead be seen as a threat needing to be properly managed. Another threat comes from the increased cost of fuel, which, for sure, for a logistics company plays an important role in determining the cost of the transport activities (also, having previously observed that the company suffered from a limited revenue in recent years). This factor could further push towards the adoption of environmentally friendly transport modes (e.g., electric vehicles), which have been previously mentioned as an opportunity for leveraging in the logistics sector.

5. Conclusions

5.1. answer to the research questions, 5.2. scientific and practical implications, 5.3. suggestions for future research directions, author contributions, institutional review board statement, informed consent statement, data availability statement, conflicts of interest.

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Monferdini, L.; Bottani, E. Examining the Response to COVID-19 in Logistics and Supply Chain Processes: Insights from a State-of-the-Art Literature Review and Case Study Analysis. Appl. Sci. 2024 , 14 , 5317. https://doi.org/10.3390/app14125317

Monferdini L, Bottani E. Examining the Response to COVID-19 in Logistics and Supply Chain Processes: Insights from a State-of-the-Art Literature Review and Case Study Analysis. Applied Sciences . 2024; 14(12):5317. https://doi.org/10.3390/app14125317

Monferdini, Laura, and Eleonora Bottani. 2024. "Examining the Response to COVID-19 in Logistics and Supply Chain Processes: Insights from a State-of-the-Art Literature Review and Case Study Analysis" Applied Sciences 14, no. 12: 5317. https://doi.org/10.3390/app14125317

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