Unilever's Operations Management, 10 Decisions & Productivity

Unilever’s Operations Management, 10 Decisions & Productivity
Unilever’s operations management (OM) is responsible for keeping high productivity

throughout the global organization of the consumer goods business. Operations
managers develop procedures and processes to support the organization in achieving
higher performance in the 10 strategic decisions pertaining to operations and
productivity. Unilever’s operational performance directly supports financial performance.
Thus, it is essential for the company’s operations management to address concerns in
these strategic decision areas to maintain high productivity. As a leading consumer
goods firm, Unilever has evolving operations management approaches to keep the
business highly productive.
In the 10 strategic decision areas of operations management, Unilever focuses on high

productivity through effectiveness and efficiency in business processes. The resulting
high performance ensures Unilever’s long-term success in the global consumer goods
market.
Unilever’s Operations Management, 10 Decision Areas
1. Design of Goods and Services. The objective in this strategic decision area is to
develop products that suit the organization. Unilever’s operations management attends
to product development issues and challenges. Success is achieved through continuous
innovation to address consumer expectations. In Unilever’s marketing mix, the high
variety of consumer goods creates a complex set of needs for this decision area. For
example, the company must maintain high productivity in developing new variants of
soaps and lotions, while keeping beverage development highly productive. Operational
requirements are based on these productivity and process needs to support the
development and production of Unilever’s consumer goods. Operations managers at
Unilever ensure design for effective output levels. These output levels correspond to
market demand and organizational capacity.
2. Quality Management. In this strategic decision area, operations managers deal with
satisfying consumers’ expectations on product quality. Unilever’s approach involves
implementing quality standards in operational processes to satisfy product quality
requirements. For example, the company applies a threshold for defects and related
issues in production operations. These operations management standards are derived
from Unilever’s market research data, as well as conventions in the consumer goods
industry. To maintain high productivity in quality management, corporate standards and
local standards are applied for certain product lines to support the company’s generic
and product development strategies (Read: Unilever’s Generic Strategies & Intensive
Growth Strategies).
3. Process and Capacity Design. The objective of operations management in this

strategic decision area is to ensure adequate resources and develop processes to
support production. Unilever applies robotics and automation in most of the production
processes under its control. This approach maximizes operational efficiency and
productivity. For example, Unilever’s automation of the production of its home care
products prevents inconsistency in quality. Operations managers can also adjust
production capacity to address fluctuations in demand based on seasons and special
occasions. Moreover, Unilever conducts regular evaluations of processes and capacity
requirements to keep the business productive, while minimizing issues in operations.
4. Location Strategy. Efficiency and cost-effectiveness of locations of operations are

the objectives in this strategic decision area of operations management. Unilever aims
to minimize production costs and transport costs of its consumer goods to reach target
markets. The company’s operations managers maintain facility locations that optimize
proximity to labor markets, suppliers, and target consumers. For example, Unilever’s
production hubs are typically proximal to the largest consumer goods markets. The
company also avoids locations that have political and cultural issues that adversely
affect operational productivity. This approach contributes to keeping Unilever’s business
processes productive.
5. Layout Design and Strategy. Efficient movement of information and resources is

the operations management objective in this strategic decision area. Efficient flow of
information is achieved through computing technologies and networks in Unilever’s
facilities. For example, operations managers easily access pertinent data through
mobile and online consoles. Such data is applied to decide on business process
adjustments to ensure productivity in Unilever’s facilities. Also, the company’s
operational requirements are the direct basis for layout designs. For instance, Unilever
maintains productive inventory operations through aisle layouts that minimize the travel
distance of consumer goods across distribution facilities.
6. Job Design and Human Resources. This strategic decision area of operations
management considers the sufficiency of human resources to support business
operations. Operational efforts in this area support Unilever’s organizational culture of
performance. For example, operations managers ensure job design and corporate
culture alignment to support productivity and business performance. In this
organizational aspect, Unilever’s operations management directly influences human
resource capacity and the financial performance of the consumer goods business.
7. Supply Chain Management. In this strategic decision area, operations managers

must ensure that the supply chain supports business strategies. Unilever’s consumer
goods supply chain is extensively automated. The company’s operations management
approach leads to high productivity. For example, managers focus on decisions based
on supply and demand variations in Unilever’s target markets. Minimal managerial time
is consumed in addressing information flow for parties involved in the supply chain
because online databases enable easy access to pertinent supply chain operations
data. Also, operational efficiency of Unilever’s supply chain is maintained through
regular monitoring and proactive problem solving. The resulting productive supply chain
supports business performance and adds to the company’s strengths (Read: Unilever’s
SWOT Analysis: Strengths, Weaknesses, Opportunities & Threats).
8. Inventory Management. Optimal inventory ordering and holding are the objectives in
this strategic decision area of operations management. Unilever is concerned with
maintaining an adequate inventory of consumer goods to enable the business to
respond to changes in the market. For example, the company’s inventory size is
sufficient to address sharp increases in demand. Thus, operations managers must
accurately determine how much materials and consumer goods are needed in
Unilever’s inventory. These amounts must sufficiently support the company’s
productivity goals in its operations. To do so, Unilever applies the perpetual method and
periodic method of inventory management. In addition, operational goals for the
inventory are met through just-in-time (JIT) inventory management. JIT minimizes
holding time and corresponding costs in Unilever’s inventory operations.
9. Scheduling. This strategic decision area focuses on short-term and intermediate

schedules for resource utilization. For human resources, Unilever relies on localized
operations management to address needs in local or regional consumer goods markets.
For example, regional operations managers implement and adjust schedules based on
regional market conditions. This approach makes Unilever’s operations flexible in
satisfying target consumers. The flexibility also contributes to high operational
productivity.
10. Maintenance. Operations managers aim at high reliability and stability of business
processes in this strategic decision area. Unilever maintains redundancy measures to
ensure process capacity when demand suddenly peaks. Also, the company’s
operations management involves a flexible scheme that allows some degree of
organizational movement of personnel within facilities. For example, Unilever assigns
designated personnel to other areas for sufficient capacity and productivity when
demand fluctuates in the consumer goods market. In addition, operational issues are
proactively addressed through regular monitoring, evaluation and problem solving. For
instance, Unilever has dedicated teams that analyze business processes to preventively
implement solutions that keep operations highly productive.
Productivity Criteria at Unilever
The productivity of Unilever’s operations is evaluated using a number of criteria or

measures. With a global consumer goods organization and a diversified product mix, a
wide variety of these measures are used to support operations management decisions.
The following are some notable productivity criteria used at Unilever:
 Batches shipped (Distribution facility productivity)

 Units produced (Manufacturing productivity)
 Inquiries addressed (Unilever’s consumer advisory service productivity

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Unilever’s Operations Management, 10 Decisions & Productivity

Unilever’s operations management (OM) is responsible for keeping high productivity

In the 10 strategic decision areas of operations management, Unilever focuses on high

Unilever’s Operations Management, 10 Decision Areas

3. Process and Capacity Design. The objective of operations management in this

4. Location Strategy. Efficiency and cost-effectiveness of locations of operations are

5. Layout Design and Strategy. Efficient movement of information and resources is

7. Supply Chain Management. In this strategic decision area, operations managers

9. Scheduling. This strategic decision area focuses on short-term and intermediate

Productivity Criteria at Unilever

The productivity of Unilever’s operations is evaluated using a number of criteria or

 Batches shipped (Distribution facility productivity)

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